Document:

SUNCOAST NATURALS, INC.
                           CERTIFICATE OF DESIGNATION
                      SERIES "A" REDEEMABLE PREFERRED STOCK

     Pursuant to the  authority  conferred  upon the Board of  Directors  by the
Certificate of Incorporation  of Suncoast  Naturals,  Inc. (the  "Corporation"),
said Board of Directors acting in a Special Meeting on December 31, 2002 adopted
a Resolution  providing for the issuance of 100,000 shares of the  Corporation's
Preferred  Stock ($.01 par value)  designated  "Series 'A' Redeemable  Preferred
Stock",  which  Resolution  was  subsequently   approved  and  ratified  by  the
Shareholders of the Corporation acting on written consent in accordance with the
provisions of the General  Corporation  Law of the State of Delaware,  and which
Resolution is as follows:

     "RESOLVED,  that pursuant to the authority vested in the Board of Directors
of the Corporation by the Certificate of  Incorporation,  the Board of Directors
does hereby  provide for and  authorize  the  issuance of 100,000  shares of the
Preferred Stock ($.01 par value) of the Corporation to be designated "Series 'A'
Redeemable  Preferred Stock" of the presently  authorized but unissued shares of
Preferred Stock.  The voting powers,  designations,  preferences,  and relative,
participating,  optional or other  special  rights of the Series "A"  Redeemable
Preferred   Stock  (the  "Series  A  Stock")   authorized   hereunder   and  the
qualifications,  limitations and restricting of such  preferences and rights are
as follows:

     1.  Dividends.  The  holders of the  Series A Stock  shall be  entitled  to
receive,  in preference to the holders of the Corporation's  Common Stock, when,
as and if declared by the Corporation's Board of Directors,  annual dividends at
the rate of $.10 per share and no more. Dividends on the Series A Stock shall be
cumulative, and declared but unpaid dividends shall not bear interest.

     2. Voting.  The holders of Series A Stock shall have no voting  rights.  No
other Series or Class of Preferred Stock which may subsequently be designated or
authorized  by the Board of Directors  shall be granted or otherwise be entitled
to any voting rights.

     3. Redemption  Right.  The  Corporation  shall have the right to redeem the
shares  of  Series A Stock  at any time  following  the  date of  issuance.  The
Redemption  Price for each  share  shall be $10.00  per share  plus an  interest
factor  which  shall  accrue  from  the  date of  issuance  through  the date of
redemption.  The  interest  rate shall be a fixed annual rate equal to the prime
rate announced by Citibank,  NA, New York City, on the date of issuance, and may
be payable in cash or accrued until redemption. In the event that all shares are
not put by the holder to the Corporation or redeemed by the Corporation prior to
December 31, 2007, all such shares shall be redeemed by the  Corporation at face
value, together with accrued interest, if any, as of that date.

     4. Put Option.  On or after March 31, 2003,  and for each calendar  quarter
thereafter,  the  holders  of Series A Stock  shall have the right to put to the
Corporation  for  redemption  that number of shares which equals 50% of any cash
distribution  or  dividend  declared,  made or paid by the  Corporation  in such
calendar  quarter  to  any  shareholder  of  the  Corporation,  divided  by  the
redemption price of $10.00 per Share.

<PAGE>

     5. Liquidation,  Dissolution,  Winding Up. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation,  either voluntarily
or  involuntarily,  the amount that shall be paid to the holder of each share of
Series A Stock (the  "liquidation  value" of each  share)  shall be fixed at the
amount of $10.00 per share and the  additional  sum  representing  declared  but
unpaid dividends and accrued interest thereon, if any."

Dated:  December 31, 2002

SUNCOAST NATURALS, INC.

By: ____________________________
    WILLIAM J. REILLY, President

Attest:_________________________
       THOMAS HAGAN, SecretaryTHIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT  PURPOSES ONLY AND MAY BE TRANSFERRED
ONLY IN COMPLIANCE  WITH THE  SECURITIES  ACT OF 1933,  AS AMENDED.  THIS LEGEND
SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.

                                CONVERTIBLE NOTE

$150,000.00                                                        June 11, 2003
                                                             New York, New York

     1. Consideration FOR VALUE RECEIVED,  SUNCOAST  NATURALS,  INC., a Delaware
corporation (the "undersigned" or the "Company"),  hereby promises to pay to the
order of GOLDSTRAND  INVESTMENTS,  INC., a Delaware corporation (the "holder" or
the "Registered  Holder"),  at its offices  located at 1040 First Avenue,  Suite
190, New York 10022, or at such other place as the holder shall designate to the
undersigned  in writing,  in lawful money of the United  States of America or in
New York  Clearing  House  Funds,  the  principal  amount of One  Hundred  Fifty
Thousand  Dollars  ($150,000.00)  on the Maturity Date (as defined  below).  The
Company  promises to pay the entire said principal  sum,  together with interest
thereon,  in  accordance  with the  terms of this Note (as  hereinafter  defined
below).

     2. Payment.  On October 13, 2003 (the "Maturity  Date"),  the Company shall
pay to the holder the entire unpaid  principal  amount on this Note. The Company
shall also pay to the holder  interest on said principal sum of this Note at the
rate of twelve percent (12%) per annum, accruing from and after the date hereof.
Such interest  payments shall  commence on July 1, 2003 and shall  thereafter be
paid on the first business day of each  consecutive  calendar month,  and on the
Maturity Date, accelerated or otherwise.

     Principal and interest  shall be payable at the most recent  address as the
Registered Holder shall have designated to the Company in writing. No payment of
the principal of this Note may be made prior to the Maturity Date by the Company
without the consent of the Registered Holder.

     3. Overdue Interest  Payments.  Interest on the  indebtedness  evidenced by
this Note after default or maturity  accelerated  or otherwise  shall be due and
payable  at the  rate of  eighteen  (18%)  percent  per  annum,  subject  to the
limitations of applicable law.

     4. Holidays. If this Note or any installment hereof becomes due and payable
on a Saturday, Sunday or public holiday under the laws of the State of New York,
the due date hereof shall be extended to the next  succeeding  business day. All
payments  received  by the holder  shall be applied  first to the payment of all
accrued interest payable hereunder.

     5. Issuance of Notes.  This Note has been issued by the Company pursuant to
the  authorization of the Board of Directors of the Company (the "Board").  This
Note together

<PAGE>

with any Notes from time to time issued in replacement thereof, whether pursuant
to  transfer  and  assignment,  partial  conversion  thereof or  otherwise,  are
collectively referred to herein as "Notes".

     6. Conversion.  (a) Subject to the provisions hereof, the holder shall have
the right, at its sole and exclusive  option,  at any time prior to the Maturity
Date, to convert all or any portion of the outstanding  principal amount of this
Note into such number of shares of Common Stock,  par value $.001 per share,  of
the Company (the "Common  Stock"),  at the fixed rate of $0.66 of such principal
amount  per  share  (the  "Conversion  Price").  Accordingly,   based  upon  the
Conversion  Price,  in the event  that the holder  elects to convert  the entire
principal amount of this Note, then the entire  $150,000.00  principal amount of
this Note shall be converted into 225,000 shares of Common Stock.  The shares of
Common Stock  issuable upon  conversion  of this Note,  if any, are  hereinafter
collectively referred to as the "Conversion Shares".

     (b) The holder shall  exercise its right to convert the Notes  hereunder by
faxing an executed and completed  Notice of  Conversion to the Company,  and the
holder shall deliver,  within (3) business days thereafter,  the original Notice
of Conversion  (and the related  original Notes) to the Company by hand delivery
or by express courier, duly endorsed.  Each date on which a Notice of Conversion
is faxed to the Company in accordance with the provisions hereof shall be deemed
to  be  a  "Conversion   Date".  The  Company  will  transmit  the  certificates
representing  the Conversion  Shares issuable upon conversion of this Note, upon
such conversion,  to the holder via express courier as soon as practicable,  but
in all events no later than three (3) business days after the  Conversion  Date.
For purposes of this Agreement,  such conversion of the Notes shall be deemed to
have been made immediately prior to the close of business on the Conversion Date
(the "Delivery Date").

     (c)  If the  entire  outstanding  principal  amount  of  this  Note  is not
converted,  then the  Company  shall also issue and deliver to such holder a new
Note of like tenor in the principal  amount equal to the principal  amount which
was not converted and dated the Conversion Date. Each conversion shall be deemed
to have been effected  immediately prior to the close of business on the date on
which a Notice of  Conversion  shall have been  delivered as  aforesaid  and the
person or persons in whose name or names any  certificate  of  certificates  for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of the Conversion Shares  represented  thereby
at such time on such date.

     (d) All of the Conversion Shares shall, upon delivery,  be duly authorized,
validly issued and fully paid and nonassessable.

     (e) The  issuance  of  certificates  for the  Conversion  Shares  upon  any
conversion  of this Note shall be made without  charge to the holder for any tax
or other expense in respect to the issuance of such  certificates,  all of which
taxes  and  expenses  shall  be  paid  by the  Company,  and  such  certificates
evidencing  the  Conversion  Shares  shall  be  issued  only in the  name of the
registered holder of this Note.

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<PAGE>

     (f) The  Company  hereby  covenants  and agrees  with the holder  that,  in
addition  to all costs and  expenses  to be paid and  reimbursed  by the Company
pursuant to the terms of the Offering,  the Company will pay or cause to be paid
the following:  (a) on or prior to the date hereof, all fees,  disbursements and
expenses  of the  holder's  counsel  in  connection  with  the  preparation  and
execution  of the Notes up to a maximum of  $15,000.00;  and (b) all other costs
and expenses  incident to the  performance of its  obligations in respect of the
registration of the Conversion Shares or otherwise under this Note.

7. REGISTRATION RIGHTS.

     (a)  Registration  Rights Granted.  The Company hereby grants the following
registration rights to the holder:

     The Company shall file a registration statement on Form SB-2 (or such other
form that it is  eligible  to  use)(the  "Registration  Statement")  in order to
register  all of the  Conversion  Shares for resale and  distribution  under the
Securities Act of 1933, as amended (the "Securities  Act"),  with the Securities
and Exchange  Commission  (the  "Commission")  on or prior to June 13, 2003 (the
"Filing Date"),  and shall cause such Registration  Statement to, in all events,
be declared  effective  within 120 days  following the Filing Date,  i.e., on or
prior to October 13, 2003 (the "Effective Date").  Following the Effective Date,
the Registration Statement shall thereafter remain effective until the resale of
all of Conversion  Shares pursuant to Section  7(b)(ii) below. The Company shall
register all (but not less than all) of the  Conversion  Shares  hereunder.  The
Registration  Statement  set forth in this Section 7(a) shall  include and cover
all of the Conversion Shares plus up to (but not exceeding) 1,625,000 additional
shares of Common Stock.  Accordingly,  the Registration Statement shall cover an
aggregate of 1,850,000 shares of Common Stock.

     (b)  Registration  Procedures.  The  Company  shall,  as  expeditiously  as
possible:

         (i)  prepare  and file with the  Commission,  on or prior to the Filing
Date, the Registration Statement as set forth in Section 7(a) above with respect
to the Conversion Shares;  and cause such Registration  Statement to be declared
effective  on or  prior  to the  Effective  Date;  and  cause  the  Registration
Statement  to remain  effective  thereafter  for the period set forth in Section
7(b)(ii)  below;  and promptly  provide to the holder  copies of all filings and
Commission letters of comment;

         (ii)  prepare  and  file  with  the  Commission   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
until the resale of all of the Conversion Shares hereunder;

         (iii)  furnish to the holder such number of copies of the  Registration
Statement  and the  prospectus  included  therein  (including  each  preliminary
prospectus)  as the holder  reasonably may request to facilitate the public sale
or disposition of the securities covered by the Registration Statement;

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<PAGE>

         (iv)  register  or  qualify  the  Conversion   Shares  covered  by  the
Registration  Statement  under  the  securities  or  "blue  sky"  laws  of  such
jurisdictions  as may be requested by the holder;  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;

         (v) list the Conversion Shares covered by such  Registration  Statement
with any  securities  exchange on which the Common  Stock of the Company is then
listed;

         (vi)  immediately  notify  the  holder  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; and

         (vii) make  available  for  inspection  by the holder and any attorney,
accountant  or other  agent  retained  by the  holder,  all  publicly  available
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
publicly available information reasonably requested by the attorney,  accountant
or agent of such holder.

     (c) Registration  Defaults.  In the event,  however,  that the Registration
Statement is: (i) not filed with the Commission for any reason  whatsoever on or
prior to June 13, 2003; or (ii) not declared effective by the Commission for any
reason whatsoever on or prior to October 13, 2003, then any such failure to file
or be  declared  effective  shall  constitute  an event of default  pursuant  to
Section 11(d) hereof (the  "Registration  Default").  Upon the occurrence of any
such Registration  Default, then the holder shall be entitled to exercise all of
its rights and remedies under this Note and the Pledge Agreement (as hereinafter
defined)  in  addition  to any other  rights and  remedies  which  holder may be
entitled to exercise at law, in equity or otherwise. Notwithstanding anything to
the contrary  contained in this  Agreement,  the  Convertible  Note or any other
document or instrument,  upon the occurrence of any Registration  Default,  then
the  holder  may,  at its sole and  exclusive  option,  elect not to accept  any
payment of principal,  interest or other sums under the Convertible Note, or any
other cure by the Company  and/or  Pledgor  (as  hereinafter  defined),  and may
exercise  (in  addition  to any other  available  rights or  remedies at law, in
equity or  otherwise)  any or all of the rights and  remedies  set forth in this
Note and/or Pledge Agreement.

     (d)  Registration  Expenses.  All  expenses  incurred  by  the  Company  in
complying with this Section 7, 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
reasonable  counsel  fees)  incurred in  connection  with  complying  with state
securities  or "blue  sky"  laws,  fees of the  NASD,  transfer  taxes,  fees of
transfer agents and registrars,  fees of (and disbursements incurred by) counsel
for the holder and

                                       4

<PAGE>

costs of insurance,  are included in the "Registration Expenses" hereunder.  The
Company shall solely and exclusively  pay as and when due all such  Registration
Expenses.

     (e) Indemnification.

         (i) In the event of a registration  of any Conversion  Shares under the
Securities  Act pursuant to this Section 7, the Company will  indemnify and hold
harmless the holder, and its officers,  directors and each other person, if any,
who controls the holder within the meaning of the  Securities  Act,  against any
losses, claims,  damages or liabilities,  joint or several, to which the holder,
or such  persons  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  any  registration   statement
(including the Registration  Statement) under which such Conversion  Shares were
registered  under the Securities Act pursuant to this Section 7, 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 reimburse the holder, and each
such  person for any  reasonable  legal or other  expenses  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the Company will not be liable 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 conformity with information
furnished  by the holder or any such person in writing  specifically  for use in
any such document.

         (ii) In the event of a registration of the Conversion  Shares under the
Securities  Act pursuant to this Section 7, the holder will  indemnify  and hold
harmless the Company, and its officers, directors and each other person, if any,
who controls the Company within the meaning of the Securities  Act,  against all
losses, claims,  damages or liabilities,  joint or several, to which the Company
or such  persons  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 Conversion  Shares were registered  under the Securities Act pursuant
to this  Section 7  (including  the  Registration  Statement),  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 reimburse the Company and each
such  person for any  reasonable  legal or other  expenses  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however,  that the holder will be liable 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 so made in conformity with information
furnished  in writing to the Company by the holder  specifically  for use in any
such document.

         (iii)  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

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<PAGE>

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 which it may have to
such  indemnified  party other than under this Section  7(e)(iii) and shall only
relieve it from any liability which it may have to such indemnified  party under
this Section 7(e)(iii) if and 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 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 7(e)(iii) for any legal expenses  subsequently incurred
by such  indemnified  party in  connection  with  the  defense  thereof;  if the
indemnified party retains its own counsel,  then the indemnified party shall pay
all fees, costs and expenses of such counsel;  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
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, then the indemnified parties shall have the right to
select  separate  counsel and to assume such legal  defenses  and  otherwise  to
participate in the defense of such action, with the reasonable expenses and fees
of such separate counsel and other expenses related to such  participation to be
reimbursed by the indemnifying party as incurred.

8. Representations of the Company.

     The Company hereby represents and warrants to the holder as follows:

     a.  Organization.  The Company is a  corporation  duly  organized,  validly
existing and in good standing  under the laws of the State of Delaware.  Each of
the Company's subsidiaries is a corporation duly organized, validly existing and
in good  standing  under the laws of its  respective  jurisdiction.  Each of the
Company and its  subsidiaries is duly qualified as a foreign  corporation in all
jurisdictions  in which the failure to so qualify would have a material  adverse
effect on the  Company,  and its  subsidiaries.  Schedule  8(a)  sets  forth all
subsidiaries  of the Company  wherein the Company owns any  outstanding  capital
stock or equity interests of any such entities.

     b.  Capitalization.  On the date  hereof,  the  authorized  capital  of the
Company consists of: (i) 25,000,000  shares of Common Stock, par value $.001 per
share, of which 3,850,000 are issued and outstanding;  and (ii) 1,000,000 shares
of  unclassified  Preferred  Stock,  of which 100,000 shares Series A Redeemable
Preferred Stock are issued and outstanding.  Schedule 8(b) sets forth all of the
options,  warrants and  convertible  securities  of the  Company,  and any other
rights to acquire  securities  of the  Company  (collectively,  the  "Derivative
Securities")  which are outstanding on the date hereof,  including in each case:
(i) the name and class of such  Derivative  Securities;  (ii) the issue  date of
such  Derivative  Securities;,  (iii) the number of shares of Common  Stock into
which such Derivative Securities are convertible as of the date hereof, (iv) the
conversion or exercise price or prices of such Derivative Securities as of

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<PAGE>

the date hereof (v) the  expiration  date of any  conversion or exercise  rights
held by the  owners of such  Derivative  Securities;  and (vi) any  registration
rights associated with such Derivative Securities or outstanding Common Stock.

     c. Conversion Shares. The Conversion Shares, when issued, shall be duly and
validly issued, fully paid and non-assessable,  and shall not subject the holder
thereof to  personal  liability  by reason of being such a holder.  There are no
preemptive rights of any stockholder of the Company,  as such, to acquire any of
the Conversion Shares.

     d. Reporting Company Status.  The Common Stock is not presently  registered
under  Section  12 of the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange Act").  Pursuant to Section 13 hereof, the Company shall promptly file
with the Commission  all reports and documents  required to be filed to register
the Common  Stock,  and shall  thereafter  file and  maintain  all  reports on a
current basis,  pursuant to the Exchange Act. e. Authorized  Shares. The Company
has legally  available a sufficient  number of authorized and unissued shares of
Common  Stock as may be  necessary to effect the  conversion  of this Note.  The
Company  understands and  acknowledges  the  potentially  dilutive effect to the
Common Stock of the issuance of shares of Common Stock upon  conversion  of this
Note. The Company further  acknowledges  that its obligation to issue Conversion
Shares upon conversion of this Note is absolute and unconditional  regardless of
the dilutive  effect that such issuance may have on the  ownership  interests of
other  stockholders of the Company and  notwithstanding  the commencement of any
case under 11 U.S.C. ss. 101 (the "Bankruptcy  Code").  In the event the Company
becomes a debtor under the  Bankruptcy  Code,  the Company  hereby waives to the
fullest  extent  permitted any rights to relief it may have under 11 U.S.C.  ss.
362 in respect of the conversion of this Note. The Company agrees,  without cost
or expense to the holder,  to take or consent to any and all action necessary to
effectuate relief under 11 U.S.C. ss. 362.

     f. Legality. The Company has the requisite corporate power and authority to
and to issue and deliver this Note and the Conversion Shares.

     g.   Transaction   Agreements.   This   Note  and  the   Pledge   Agreement
(collectively,  the  "Primary  Documents"),  and the  transactions  contemplated
hereby and  thereby,  have been duly and validly  authorized  by the Company and
this Note has been duly executed and delivered by the Company, and this Note is,
and the Primary Documents, when executed and delivered by the Company, will each
be,  a legal,  valid  and  binding  agreement  of the  Company,  enforceable  in
accordance with their respective terms, except to the extent that enforcement of
this  Note and each of the  Primary  Documents  may be  limited  by  bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect  relating to creditors'  rights  generally  and to general  principles of
equity.

     h.  Non-Contravention.  The execution and delivery of this Note and each of
the other Primary  Documents,  and the  consummation by the Company of the other
transactions  contemplated by this Note and each of the other Primary Documents,
does not and will not conflict  with or result in a breach by the Company of any
of the terms or provisions  of, or constitute a default  under,  the Articles of
Incorporation  or By-laws of the Company,  or any indenture,  mortgage,  deed of
trust or other  agreement or instrument  to which the Company  andlor any of its
subsidiaries is a party, or by which the Company andlor its  subsidiaries or any
of their

                                       7
<PAGE>

respective properties or assets are bound, or any existing applicable law, rule,
or regulation or any applicable decree, judgment or order of any court or United
States federal or state regulatory  body,  administrative  agency,  or any other
governmental  body having  jurisdiction over the Company and/or its subsidiaries
and/or any of their respective properties or assets.

     i.  Approvals.  No  authorization,   approval  or  consent  of  any  court,
governmental  body,  regulatory  agency,  self-regulatory  organization,   stock
exchange or market or the stockholders of the Company is required to be obtained
by the Company for the entry into or the  performance of this Note and the other
Primary Documents.

     j. SEC Filings.  None of the reports or documents filed by the Company with
the Commission contained, at the time they were filed, any untrue statement of a
material  fact or  omitted  to state any  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.

     k. Full  Disclosure.  There is no fact  known to the  Company  (other  than
general  economic  conditions  known to the public  generally) that has not been
disclosed in writing to the holder (i) that could reasonably be expected to have
a material  adverse  effect upon the  condition  (financial or otherwise) or the
earnings,  business  affairs,  properties  or assets of the  Company  andlor its
subsidiaries  or (ii) that  could  reasonably  be  expected  to  materially  and
adversely affect the ability of the Company to perform the obligations set forth
in the Primary Documents.  The representations and warranties of the Company set
forth herein do not contain any untrue  statement of a material fact or omit any
material fact necessary to make the statements contained herein, in light of the
circumstances under which they were made, not misleading.

     1. Title to Properties; Liens and Encumbrances. Each of the Company and its
subsidiaries has good and marketable title to all of its material properties and
assets,  both  real  and  personal,  and has  good  title  to all its  leasehold
interests.

     m.  Patents  and Other  Proprietary  Rights.  Each of the  Company  and its
subsidiaries  has good title and ownership of all patents,  trademarks,  service
marks, trade names, copyrights, trade secrets,  information,  proprietary rights
and processes  necessary for the conduct of its business as now conducted and as
proposed to be conducted, and such businesses do not and would not conflict with
or constitute an infringement on the rights of others.

     n. Permits.  Each of the Company and its  subsidiaries  has all franchises,
permits,  licenses and any similar  authority  necessary  for the conduct of its
business as now conducted. Neither the Company nor any of its subsidiaries is in
default  in any  respect  under any of such  franchises,  permits,  licenses  or
similar authority.

     o. Absence of Litigation. There is no action, suit, proceeding,  inquiry or
investigation  before or by any court,  public  board or body pending or, to the
knowledge  of the  Company,  after  reasonable  inquiry,  threatened  against or
affecting the Company  andlor any of its  subsidiaries,  in which an unfavorable
decision,  ruling  or  finding  would  have a  material  adverse  effect  on the
properties, business, condition (financial or other) or results of operations of
the Company andlor its  subsidiaries,  or the  transactions  contemplated by the
Primary Documents, or

                                       8
<PAGE>

which would adversely affect the validity or  enforceability of or the authority
or  ability of the  Company  to  perform  its  obligations  under,  the  Primary
Documents.

     p. No Default.  Each of the Company and its  subsidiaries is not in default
in the  performance  or  observance  of any  obligation,  covenant or  condition
contained  in any  indenture,  mortgage,  deed of trust or other  instrument  or
agreement to which it is a party or by which it or its property may be bound.

     q. Transactions with Affiliates. There are no agreements, understandings or
proposed  transactions  between the Company and/or its  subsidiaries  and any of
their respective officers, directors and/or affiliates.

     r.  Employment  Matters.  Each of the  Company and its  subsidiaries  is in
compliance in all material respects with all presently applicable  provisions of
the Employee  Retirement Income Security Act of 1974, as amended,  including the
regulations and published  interpretations  thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company and/or its  subsidiaries  would have any
liability;  the Company  andlor its  subsidiaries  has not incurred and does not
expect  to  incur  liability  under  (i)  Title  IV of  ERISA  with  respect  to
termination  of, or withdrawal  from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published  interpretations  thereunder (the "Code"); and each "pension plan"
for which the Company and/or its  subsidiaries  would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material  respects and nothing has occurred,  whether by action or by failure to
act, which would cause the loss of such qualification.

     s. Insurance.  Each of the Company and its subsidiaries  maintains property
and  casualty,  general  liability,  personal  injury and other similar types of
insurance  with  financially  sound and  reputable  insurers  that is  adequate,
consistent with industry  standards and its historical  claims  experience.  The
Company has not  received  notice from,  and after  reasonable  inquiry,  has no
knowledge of any threat by, any insurer (that has issued any insurance policy to
the Company and/or any of its  subsidiaries)  that such insurer  intends to deny
coverage  under  or  cancel,  discontinue  or not  renew  any  insurance  policy
presently in force.

     t. Taxes.  All applicable  tax returns  required to be filed by the Company
and each of its subsidiaries have been prepared and filed in compliance with all
applicable laws, or if not yet filed have been granted  extensions of the filing
dates which extensions have not expired. All taxes, assessments,  fees and other
governmental charges upon the Company and its subsidiaries, or upon any of their
respective  properties,  income  or  franchises,  shown in such  returns  and on
assessments  received by the Company or its  subsidiaries  to be due and payable
have been paid,  or adequate  reserves  therefor have been set up if any of such
taxes are being contested in good faith.

     u.  Investment  Company  Act. The Company is not  conducting,  and does not
intend to conduct its  business in a manner  which would cause it to become,  an
"investment  company," as defined in Section 3(a) of the Investment  Company Act
of 1940, as amended.

                                       9
<PAGE>

     v. Agent Fees.  The Company has not incurred any liability for any finder's
or brokerage fees or agent's  commissions in connection  with the offer and sale
of the transactions contemplated by this Agreement.

     w.  Private  Offering.  The offer,  sale and  issuance of this Note and the
Conversion  Shares as  contemplated  hereby  are  exempt  from the  registration
requirements  of the Securities Act. The Company agrees that neither the Company
nor anyone acting on its behalf will offer this Note or the  Conversion  Shares,
or any similar securities, for issuance or sale, or solicit any offer to acquire
any of the same  from  anyone  so as to  render  the  issuance  and sale of such
securities  subject to the registration  requirements of the Securities Act. The
Company has not offered or sold this Note or the Conversion  Shares, by any form
of general solicitation or general advertising, as such terms are used in Rule 5
02(c) under the Securities  Act.  Holder shall be able to duly resell,  and duly
register for resale  pursuant to the Securities Act and other  applicable  laws,
all of the Conversion Shares under the Registration Statement in accordance with
Section 7 hereof.

     9. Covenants.

     (a) The Company shall pay or caused to be paid all taxes,  assessments  and
governmental  charges  lawfully  levied or assessed upon the Company  andlor its
subsidiaries,  and for their respective properties or any part thereof, and upon
its or their income for  profits,  and any part  thereof,  before the same shall
become  delinquent;   and  shall  duly  observe,  and  conform  to,  all  lawful
requirements  of any  governmental  authority  relative  to any of its or  their
properties,  and all covenants,  terms and conditions upon or under which any of
its or their properties are held;  provided that nothing  contained herein shall
require  the  Company  and/or  any of it  subsidiaries  to  pay  any  such  tax,
assessment  or  governmental  charges so long as the validity  thereof  shall be
contested in good faith by appropriate  proceedings  and adequate  reserves with
respect thereto shall have been set aside on the books of the Company.

     (b) The Company andlor each of its subsidiaries at all times shall maintain
its corporate existence and right to carry on its business and will duly procure
all  necessary  renewals  and  extensions  thereof  and use its best  efforts to
maintain,  preserve  and  renew  all  of  its  rights,  powers,  privileges  and
franchises.

     (c) The  Company  shall  not:  (i) sell,  assign  (by  operation  or law or
otherwise) or otherwise  dispose of, or grant any option with respect to, any of
the Common  Stock;  (ii)  create or suffer to exist any pledge,  lien,  security
interest  whatsoever upon or with respect to any of the Common Stock, except for
the liens under the Pledge Agreement;  (iii) take any other action to permit the
Company to issue any  additional  Common Stock or shareholder  interests,  or to
issue any  securities  convertible  into,  or granting  the right to purchase or
exchange for, any such Common Stock or shareholder  interests of the Company; or
(iv) take any action or enter into any agreement or undertaking  restricting the
right or ability of the holder to exercise any of its rights and remedies as set
forth in the Pledge Agreement.

     (d) The Company shall at no time close its stock transfer books against

                                       10
<PAGE>

the  transfer  of any  shares  of  Common  Stock  issued  or  issuable  upon the
conversion  of  this  Note  in any  manner  which  interferes  with  the  timely
conversion of such Note.

     (e) As used in this Note,  the term "Common  Stock" shall include all stock
of any class or classes  (however  designated) of the Company,  authorized on or
after the date  hereof,  the  holders of which  shall  have the  right,  without
limitation  as to amount,  either to all or to a share of the balance of current
dividends  and  liquidating   dividends  after  the  payment  of  dividends  and
distributions  on any shares  entitled to  preference,  and the holders of which
shall  ordinarily  be entitled to vote for the election of the  directors of the
Company.

     (f) The Company  and/or its  subsidiaries  shall not, by  amendment  of its
Articles   of   Incorporation   or  By-laws  or  through   any   reorganization,
recapitalization,  transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action,  avoid or seek to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder  by the  Company,  and will at all times  assist in good  faith in the
carrying  out of all the  provisions  of this Note and in the taking of all such
action as may be necessary  or  appropriate  in order to protect the  conversion
rights of the Registered Holders of this Note against impairment.

     (g) In the event of any taking by the Company of a record of the holders of
any class of securities for the purpose of determining  the holders  thereof who
are  entitled to receive any  dividend  (other  than a cash  dividend)  or other
distribution,  any right to subscribe  for,  purchase or  otherwise  acquire any
shares of stock of any class or any other securities or property,  or to receive
any other right, the Company shall mail to each Registered  Holder of the Notes,
at least ten (10) days prior to the date specified  therein, a notice specifying
the date on which  any  such  record  is to be  taken  for the  purpose  of such
dividend,  distribution or right, and the amount and character of such dividend,
distribution or right.

     10.  Limitation on Certain Corporate Acts. The Company hereby covenants and
agrees  that,  upon any  consolidation  or merger or upon the transfer of all or
substantially  all  of  the  property  or  assets  of  the  Company  and/or  its
subsidiaries,  the due and punctual payment of the principal and interest on all
the Notes  according  to their tenor and the due and  punctual  performance  and
observance of all the terms,  covenants  and  conditions of this Note to be kept
and  performed  by the Company  shall be  expressly  assumed by the  corporation
formed by such consolidation,  or into which the Company shall have merged or by
the  purchaser  of such  property  or assets;  and such  assumption  shall be an
express condition of such merger or consolidation agreement or agreement for the
transfer of property or assets.

     11.  Events  of  Default.  In case one or more of the  following  events of
default shall have occurred:

     (a) default in the due and punctual  payment of interest upon, or principal
of, this Note as and when the same becomes due and payable  hereunder  either at
maturity or otherwise; or

     (b) failure to deliver the Conversion Shares required to be delivered

                                       11
<PAGE>

upon  conversion of this Note in the manner and at the time required  hereunder;
or

     (c)  failure of the  Company to have  authorized  the number of  Conversion
Shares equal to the number of shares of Common Stock issuable upon conversion of
this Note; or

     (d) the Registration  Statement shall not be: (i) filed with the Commission
for any  reason  whatsoever  on or  prior  to June 13,  2003;  or (ii)  declared
effective by the Commission for any reason whatsoever on or prior to October 13,
2003 (i.e., the Registration Default); or

     (e)  failure on the part of the  Company to duly  observe or perform any of
its other  covenants  or  agreements  contained  in, or to cure any  breach of a
representation or covenant contained in, this Note, the Primary Documents or any
other agreement or instrument entered into in connection therewith; or

     (f) a decree  or  order by a court  having  jurisdiction  has been  entered
adjudging the Company and/or any of its subsidiaries  bankrupt or insolvent,  or
approving a petition  seeking  reorganization  of the Company  and/or any of its
subsidiaries  under any  applicable  bankruptcy law and such decree or order has
continued undischarged or unstayed for a period of thirty (30) days; or a decree
or order of a court having  jurisdiction  for the  appointment  of a receiver or
liquidator  or trustee or assignee in  bankruptcy  or  insolvency of the Company
and/or any of its subsidiaries or of all or  substantially  all of its property,
or for the winding-up or liquidation of its affairs,  has been entered,  and has
remained in force undischarged or unstayed for a period of thirty (30) days; or

     (g) the Company and/or any of its subsidiaries institutes proceedings to be
adjudicated  a voluntary  bankrupt,  or  consents to the filing of a  bankruptcy
proceeding  against  it,  or files a  petition  or  answer  or  consent  seeking
reorganization  under  applicable  law,  or  consents  to the filing of any such
petition  or to the  appointment  of a  receiver  or  liquidator  or  trustee or
assignee in bankruptcy or insolvency of it or of all or substantially all of its
property,  or makes an  assignment  for the benefit of  creditors,  or admits in
writing its  inability to pay its debts  generally as they become due; or if the
Company  and/or any of its  subsidiaries  shall suffer any writ of attachment or
execution  or any  similar  process  to be issued or  levied  against  it or any
significant  part of its  property  which is not  released,  stayed,  bonded  or
vacated  within  thirty  (30) days  after its issue or levy;  or if the  Company
and/or any of its  subsidiaries  takes corporate action in furtherance of any of
the aforesaid purposes or conditions; or

     (h) if any event of default  shall  occur  under any  indenture,  mortgage,
agreement,  instrument or  commitment  evidencing or under which there is at the
time  outstanding any indebtedness of the Company and/or any of its subsidiaries
in excess of $25,000.00,  or which results in such  indebtedness in an aggregate
amount (with other defaulted  indebtedness) in excess of $25,000.00 becoming due
and  payable  prior to its due  date  and if such  indenture  or  instrument  so
requires,  the holder or holders  thereof (or a trustee on their  behalf)  shall
have declared such indebtedness due and payable; or

                                       12
<PAGE>

     (i) if a  final  judgment  which,  either  alone  or  together  with  other
outstanding  final  judgments  against the  Company or any of its  subsidiaries,
exceeds an aggregate of $25,000.00  shall be rendered against the Company and/or
any of its subsidiaries  and such judgment shall have continued  undischarged or
unstayed for thirty (30) days after entry thereof;

then, in each and every such case (other than those specified in clauses (f) and
(g) above),  so long as such event of default has not been  remedied  and unless
the principal  amount of all the Notes has already  become due and payable,  the
holder of this Note,  by notice in  writing  to the  Company,  may  declare  the
principal amount of this Note and any interest  accrued thereon,  if not already
due  and  payable,  to be  due  and  payable  immediately,  and  upon  any  such
declaration  the same shall  become and shall be  immediately  due and  payable,
anything  herein  contained  to the  contrary  notwithstanding;  and,  upon  the
occurrence of the events specified in clauses (f) and (g) above,  such principal
and interest shall automatically become and shall be due and payable immediately
without any action on the part of the holder,  anything herein  contained to the
contrary notwithstanding.

     12.  Pledge  Agreement.  In order to secure all of the  obligations  of the
Company  under this Note and any document or  instrument  executed in connection
therewith, the holder, as Pledgee, and William J. Reilly, President and Chairman
of the Company,  as Pledgor ("Reilly" or "Pledgor"),  have entered into a Pledge
Agreement,  dated as of the date hereof (the  "Pledge  Agreement"),  pursuant to
which Reilly has pledged and granted to holder a security interest  constituting
a first  priority  lien on, and has  delivered  to the holder,  an  aggregate of
2,000,000 shares of Common Stock of the Company,  representing all of the shares
of Common Stock owned beneficially by Pledgor (the "Pledged Stock"). Each of the
shares of Pledged Stock shall be freely transferable  without any legend or stop
order issued in  connection  therewith.  The Company shall furnish to holder and
its counsel all  documentation as may be required in order to evidence that each
of the  shares  of  Pledged  Stock is  freely  transferable,  including  without
limitation, an opinion of the Company's counsel in form and substance acceptable
to the holder and its counsel.  The Pledge Agreement shall also provide that any
Registration Default and any other event or default set forth in this Note shall
constitute an event of default thereunder.

     13. Transferability; Certain Additional Covenants and Acknowledgments.

     a. This Note is not transferable,  in whole or in part, except as otherwise
provided in this Section 13. The Registered Holder may submit a written request,
in person or by his duly authorized attorney, for a transfer of this Note on the
register of the Company  maintained  at its principal  offices.  The Company may
deem and treat the person in whose name this Note is  registered as the absolute
owner hereof,  for the purpose of receiving payment of the principal thereof and
interest  hereon,  whether or not the same shall be  overdue,  and for all other
purposes whatsoever, including but without limitation, the giving of any written
notices required hereunder,  and the Company shall not be affected by any notice
to the  contrary.  Notwithstanding  the  foregoing,  the  holder may at any time
assign  or  transfer  all or any  part  of its  rights  hereunder  to any of its
affiliates without the consent or approval of the Company.

     b.  Transfer  Restrictions.  Holder  acknowledges  that  this  Note and the
Conversion Shares have not been registered under the Securities Act, and may not
be transferred

                                       13

<PAGE>

unless:  (A)  subsequently  registered  thereunder;  or (B) such  securities are
transferred  pursuant  to an  exemption  from  such  registration.  As set forth
herein,  the Conversion  Shares shall be so duly registered under the Securities
Act pursuant to the Registration Statement.

     c.  Filings.  The  Company  undertakes  and  agrees  that it will  make all
required  filings  in  connection  with the sale of this Note or the  Conversion
Shares,  to the holder as required by United States laws and regulations,  or by
any  domestic  securities  exchange  or trading  market,  and to provide  copies
thereof to the holder promptly after such filing or filings.

     d. Reporting  Status.  As promptly as possible  following the filing of the
Registration  Statement,  the Company shall also file with the  Commission  Form
10-SB  (or  other  form  that the  Company  is  eligible  to use) and all  other
documentation  required to register the Common Stock under the Exchange  Act. In
addition,  so long as the holder  beneficially  owns this Note or any Conversion
Shares,  the Company shall at all times file and maintain in a timely manner all
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act, and shall not terminate its status as an issuer required to
file  reports  under the  Exchange Act even if the Exchange Act or the rules and
regulations thereunder would permit such termination.

     e. State Securities  Filings.  The Company shall from time to time promptly
take such action as the holder or any of its representatives, if applicable, may
reasonably  request to qualify this Note and the Conversion Shares, for offering
and sale under the securities laws (other than United States federal  securities
laws) of the jurisdictions in the United States as shall be so identified to the
Company,  and to comply with such laws so as to permit the  continuance of sales
therein,  provided  that in  connection  therewith,  the  Company  shall  not be
required to qualify as a foreign corporation or to file a general consent to the
service of process in any jurisdiction.

     f. Use of Proceeds.  The Company shall use all of the net proceeds from the
issuance of this Note and the Conversion Shares  exclusively for working capital
purposes.

     g.  Reservation  of Common  Stock.  The  Company  shall at all  times  have
authorized  and reserved  for the purpose of issuance of a sufficient  number of
shares of Common Stock to provide for the Conversion Shares.

     h.  Tax  Treatment.  For  all  tax  purposes,  the  parties  hereto  hereby
acknowledge,  covenant and agree that the Notes have not been issued  with,  and
shall not be treated as having been issued  with,  original  issue  discount for
purposes of Section  305(e)  andlor  Sections  1271 through 1275 of the Internal
Revenue Code of 1986, as amended.

     14. Transfer Agent Instructions.

     a. The Company  represents that no instruction,  prior to the  registration
and sale of the Conversion  Shares  issuable upon exercise of this Note, will be
given by the Company to the transfer agent and that the Conversion  Shares shall
otherwise be freely  transferable on the books and records of the Company as and
to the extent provided in this Note, the Offering  Documents,  the  Registration
Statement and applicable law.

                                       14
<PAGE>

     b. In lieu of delivering physical certificates  representing the Conversion
Shares, provided the Company's transfer agent is participating in the Depositary
Trust Company ("DTC") Fast Automated Securities Transfer program, on the written
request of the holder,  who shall have previously  instructed the holder's prime
broker to confirm  such request to the  Company's  transfer  agent,  the Company
shall cause its transfer agent to  electronically  transmit such Common Stock to
the holder by  crediting  the  account of the  holder's  prime  broker  with DTC
through its Deposit  Withdrawal Agent  Commission  ("DWAC") system no later than
the applicable Delivery Date.

     15. Remedies Cumulative. The rights, powers and remedies given to the payee
under this Note shall be in addition to all rights, powers and remedies given to
it by virtue of the Pledge  Agreement,  Primary  Documents  and any  document or
instrument executed in connection therewith, or any statute or rule of law.

     16.  Non-Waiver.  Any  forbearance,  failure  or  delay  by the  holder  in
exercising any right, power or remedy under this Note, the Primary Documents any
documents or instruments executed in connection therewith or otherwise available
to the holder shall not be deemed to be a waiver of such right, power or remedy,
nor shall any single or partial exercise of any right,  power or remedy preclude
the further exercise thereof

     17.  Modifications and Waivers.  No modification or waiver of any provision
of this Note, the Primary Documents or any documents or instruments  executed in
connection therewith shall be effective unless it shall be in writing and signed
by the  holder,  and any such  modification  or waiver  shall  apply only in the
specific instance for which given.

     18.  Attorneys'  Fees. If this Note shall not be paid when due and shall be
placed  by  the  Registered  Holder  hereof  in the  hands  of an  attorney  for
collection, through legal proceedings or otherwise, or if this Note shall not be
converted  into  Conversion  Shares  on the  Conversion  Date,  and an action is
brought by the Registered  Holder with respect  thereto,  then the Company shall
pay attorneys' fees to the Registered Holder hereof, together with all costs and
expenses of  collection  or  enforcement  incurred in  connection  with any such
action.

     19. Enforcement;  Specific Performance.  (a) In case any one or more events
of default set forth herein shall occur and be continuing, the Registered Holder
then may  proceed to protect  and enforce the rights of such holder by an action
at law, suit in equity or other appropriate proceeding, whether for the specific
performance  of any agreement  contained  herein or for an injunction  against a
violation  of any of the terms  hereof or thereof,  or in aid of the exercise of
any power granted hereby or thereby or by law.

     (b) The Company  expressly  agrees that the Registered  Holder may not have
adequate  remedies at law if the Company does not perform its obligations  under
this Note.  Upon a breach of the terms or covenants of this Note by the Company,
the Registered Holder shall, each in addition to all other remedies, be entitled
to obtain  injunctive  relief,  and an order  for  specific  performance  of the
Company's obligations hereunder.

                                       15
<PAGE>

     20.  Governing Law. This Note and the rights and obligations of the parties
hereto,  shall be governed,  construed and interpreted  according to the laws of
the State of New York.  The Company  agrees that any final  judgment in any such
action or proceeding shall be conclusive and binding, and may be enforced in any
federal or state  court in the United  States by suit on the  judgment or in any
other  manner  provided by law.  Nothing  contained in this Note shall affect or
limit the right of the  Registered  Holder  to serve  any  process  or notice or
motion or other  application  in any other manner  permitted by law, or limit or
affect  the right of the  Registered  Holder to bring any  action or  proceeding
against  the  Company  or  any of  its  property  in  the  courts  of any  other
jurisdiction.  The Company hereby  consents to the  jurisdiction  of the federal
courts whose  districts  encompass any part of the City of New York or the state
courts of the State of New York  sitting  in the City of New York in  connection
with any dispute  arising  under this Note,  and hereby  waives,  to the maximum
extent permitted by law, any objection,  including any objections based on forum
non conveniens, to the bringing of any such proceeding in such jurisdiction.

     21. Waiver of Presentment,  etc. The undersigned hereby waives presentment,
demand for payment, protest, notice of protest and notice of non-payment hereof.

     22.  Headings.  The  headings  contained  in this  Note  are for  reference
purposes only and shall not affect the meaning of interpretation of this Note.

     23. Notices.  Any notice to any party required or permitted hereunder shall
be given in writing (unless  otherwise  specified herein) and shall be effective
upon  personal  delivery,   via  facsimile  (upon  receipt  of  confirmation  of
error-free  transmission)  or two (2) business  days  following  deposit of such
notice with a nationally  recognized  courier service,  with postage prepaid and
addressed to such party at the address set forth in the first  paragraph of this
Note with a copy to the Company at the address set forth below, and to the other
parties  thereunto  entitled  at  the  following  addresses,  or at  such  other
addresses as a party may  designate by five (5) days advance  written  notice to
each of the other parties hereto.

Company:        Suncoast Naturals, Inc.
                5422 Carrier Drive
                Suite 309
                Orlando, FL 32819
                Tel: (407) 226-8889
                Fax:

                                       16
<PAGE>

With a copy to:

                William J. Reilly, Esq.
                5447 NW 42 Avenue
                Boca Raton, FL 33496
                Tel: 561- 995-4625
                Fax: 561-995-4626

Registered Holder:      Goldstrand Investments, Inc.
                        1040 First Avenue, Suite 190
                        New York, NY 10022
                        Tel: (212) 317-5970
                        Fax: (212) 317-9026

With a copy to:

                        Joshua Glikman, Esq.
                        Shiboleth, Yisraeli, Roberts & Zisman, L.L.P.
                        350 Fifth Avenue
                        Suite 6001
                        New York, NY 10118
                        Tel: (212) 244-4111
                        Fax: (212) 563-7108

     24. Amendments and  Modification.  Changes in or additions to this Note may
be made, and compliance  with any covenant or condition  herein set forth may be
omitted only if the Company shall obtain the written consent from the Registered
Holder of this Note.

     25. No Usury. Notwithstanding anything to the contrary set forth herein, in
no event shall the total amount of all charges  payable  under this Note,  which
are or could be held to be in the nature of  interest  exceed the  maximum  rate
permitted to be charged under  applicable  law. In the event that the Registered
Holder  shall  receive  any  payment  which  is or would  be in  excess  of that
permitted to be charged under any such  applicable  law, then such payment shall
have  been,  and  shall be  deemed  to have  been,  made in error  and  shall be
automatically  retained by Registered Holder and used to reduce the principal of
this Note.

                                       17
<PAGE>

     26. No Redemption.  This Note shall not be subject to any redemption by the
Company,  and shall not be subject to subordination to any other indebtedness of
the Company.

                                       18
<PAGE>

     IN WITNESS  WHEREOF,  the Company has caused this Note to be executed as of
the date first written above.

                                        SUNCOAST NATURALS, INC.

                                        By:  /s/ William J. Reilly
                                            --------------------------------
                                            Name:  William J. Reilly
                                            Title: President

                                       19

<PAGE>

                              NOTICE OF CONVERSION

The conversion  form  appearing  below should only be executed by the Registered
Holder  desiring  to  convert  all or part of the  principal  amount of the Note
attached hereto.

                                CONVERSION FORM

                Date:_______________________________________

                TO: SUNCOAST NATURALS, INC.

     The undersigned  hereby  exercises the conversion  privilege upon the terms
and  conditions  set forth in the  attached  Note,  to the extent of the maximum
number of shares of Common Stock issuable  pursuant to the terms of Section 6 of
the  Note,  and  accordingly,  authorizes  the  Company  to  apply  $___________
principal  amount of the  attached  Note to payment  in full for such  shares of
Common Stock.  Please register such shares and make delivery thereof as follows:
Registered in the Name of (Giving First or Middle Name in Full)

                Name___________________________
                         (Please Print)

                Address______________________

                                       20

<PAGE>

                             DELIVERY INSTRUCTIONS

     To be completed ONLY if Certificates are to be mailed to persons other than
the Registered Holder.

        Name______________________________________________________________
             (Please Print)

        Address __________________________________________________________

        Signature ________________________________________________________

                                       21

<PAGE>

                                   ASSIGNMENT

     FOR VALUE  RECIEVED,  the undersigned  hereby sells,  assigns and transfers
unto  ____________________________________  the within the Convertible  Note and
all rights thereunder,  hereby  irrevocably  authorizing the Company to transfer
said Note on the books of the Company,  with full power or  substitution  in the
premises.

             Dated ________________________________________________

             Signature ____________________________________________

             Print Name ___________________________________________

                                       22

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