Document:

ex10_4.htm

    
      

    

    Exhibit
      10.4

      
 

      

      [FORM
        OF SENIOR SECURED CONVERTIBLE NOTE]

      

      NEITHER
        THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
        THE
        SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
        LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
        OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
        FOR
        THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
        OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
        UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
        SAID
        ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
        CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
        ARRANGEMENT SECURED BY THE SECURITIES.  ANY TRANSFEREE OF THIS NOTE
        SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii)
        AND
        18(a) HEREOF.  THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND,
        ACCORDINGLY, THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN
        THE
        AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
        NOTE.

      

      EnterConnect
        Inc.

      

      Senior
        Secured Convertible Note

      

      
        	
                Issuance
                  Date:  December 20, 2007

              	
                Original
                  Principal Amount: U.S. $[●]

              

      

      

      FOR
        VALUE RECEIVED,
        ENTERCONNECT INC., a Nevada corporation (the "Company") hereby promises to
        pay
        to [HIGHBRIDGE INTERNATIONAL LLC] [OTHER BUYERS] or registered assigns ("Holder") the amount set
        out
        above as the Original Principal Amount (as reduced pursuant to the terms
        hereof
        pursuant to redemption, conversion or otherwise, and including the amount
        of any
        Capitalized Interest (as defined below), the "Principal") when due, whether
        upon the Maturity Date (as defined below), acceleration, redemption or otherwise
        (in each case in accordance with the terms hereof) and to pay interest ("Interest") on any outstanding
        Principal at the applicable Interest Rate, from the date set out above as
        the
        Issuance Date (the "IssuanceDate")
        until the same becomes
        due and payable, whether upon an Interest Date (as defined below), the Maturity
        Date, acceleration, conversion, redemption or otherwise (in each case in
        accordance with the terms hereof).  This Senior Secured Convertible
        Note (including all Senior Secured Convertible Notes issued in exchange,
        transfer or replacement hereof, this "Note") is one of an
        issue of
        Senior Secured Convertible Notes issued pursuant to the Securities Purchase
        Agreement (collectively, the "Notes" and such other
        Senior
        Secured Convertible Notes, the "OtherNotes").  Certain
        capitalized terms used herein are defined in Section 29.

      

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      (1)     MATURITY.  On
        the Maturity Date, the Company shall pay to the Holder an amount in cash
        representing all outstanding Principal, accrued and unpaid Interest and accrued
        and unpaid Late Charges (as defined in Section 24(b)), if any.  The
        "MaturityDate"
        shall be December 20,
        2010, as may be extended at the option of the Holder (i) in the event that,
        and
        for so long as, an Event of Default (as defined in Section 4(a)) shall have
        occurred and be continuing on the Maturity Date (as may be extended pursuant
        to
        this Section 1) or any event shall have occurred and be continuing on the
        Maturity Date (as may be extended pursuant to this Section 1) that with the
        passage of time and the failure to cure would result in an Event of Default,
        and
        (ii) through the date that is ten (10) Business Days after the consummation
        of a
        Change of Control in the event that a Change of Control is publicly announced
        or
        a Change of Control Notice (as defined in Section 5(b)) is delivered prior
        to
        the Maturity Date.  Other than as specifically permitted by this Note,
        the Company may not prepay any portion of the outstanding Principal, accrued
        and
        unpaid Interest or accrued and unpaid Late Charges, if any.

      

      (2)     INTEREST;
        INTEREST
        RATE.  a)  Interest on this Note shall commence
        accruing on the Issuance Date and shall be computed on the basis of a 360-day
        year comprised of twelve (12) thirty (30) day months and shall be payable
        in
        arrears for each Calendar Quarter on January 1,
        April 1, July 1 and October 1 of each
        year (each, an "Interest Date")
        with the first Interest Date
        being January 1, 2008.  Interest shall be payable on each Interest
        Date, to the record holder of this Note on the applicable Interest Date,
        (i) in
        cash in an amount equal to one-half of the Interest due on such Interest
        Date
        and (ii) by adding the remaining amount of Interest due on such Interest
        Date to
        the outstanding Principal amount of this Note ("Capitalized Interest")
        .

      

      (b)     Prior
        to the
        payment of Interest on an Interest Date, Interest on this Note shall accrue
        at
        the Interest Rate and be payable by way of inclusion of the Interest in the
        Conversion Amount on each Conversion Date in accordance with Section
        3(b)(i).  From and after the occurrence and during the continuance of
        an Event of Default, the Interest Rate shall be increased to eighteen percent
        (18.0%) per annum.  In the event that such Event of Default is
        subsequently cured, the adjustment referred to in the preceding sentence
        shall
        cease to be effective as of the date of such cure; provided that the Interest
        as
        calculated and unpaid at such increased rate during the continuance of such
        Event of Default shall continue to apply to the extent relating to the days
        after the occurrence of such Event of Default through and including the date
        of
        cure of such Event of Default.

      

      (3)     CONVERSION
        OF
        NOTES.  This Note shall be convertible into shares of the
        Company's common stock, par value $0.001 per share (the "Common Stock"), on the terms
        and conditions set forth in this Section 3.

      

      (a)     Conversion
        Right.  Subject to the provisions of Section 3(d), at any time
        or times on or after the Issuance Date, the Holder shall be entitled to convert
        any portion of the outstanding and unpaid Conversion Amount (as defined below)
        into fully paid and nonassessable shares of Common Stock in accordance with
        Section 3(c), at the Conversion Rate (as defined below).  The Company
        shall not issue any fraction of a share of Common Stock upon any
        conversion.  If the issuance would result in the issuance of a
        fraction of a share of Common Stock, the Company shall round such fraction
        of a
        share of Common Stock up to the nearest whole share.  The Company
        shall pay any and all taxes that may be payable with respect to the issuance
        and
        delivery of Common Stock upon conversion of any Conversion Amount.

      

      
        
          
            
            

          

          
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      (b)     Conversion
        Rate.  The number of shares of Common Stock issuable upon
        conversion of any Conversion Amount pursuant to Section 3(a) shall be determined
        by dividing (x) such Conversion Amount by (y) the Conversion Price (the "Conversion
        Rate").

      

      (i)     "Conversion
        Amount" means the
        sum of (A) the portion of the
        Principal to be converted, redeemed or otherwise with respect to which this
        determination is being made, (B) accrued and unpaid Interest, if any, with
        respect to such Principal and (C) accrued and unpaid Late Charges, if any,
        on
        such Principal and Interest.

      

      (ii)     "Conversion
        Price" means, as of
        any Conversion Date (as defined below) or other date of determination, $0.60,
        subject to adjustment as provided herein.

      

      (c)     Mechanics
        of
        Conversion.

      

      (i)     Optional
        Conversion.  To convert any Conversion Amount into shares of
        Common Stock on any date (a "Conversion Date"), the Holder
        shall (A) transmit by facsimile (or otherwise deliver), for receipt on or
        prior
        to 11:59 p.m., New York Time, on such date, a copy of an executed notice
        of
        conversion in the form attached hereto as Exhibit I (the "Conversion
        Notice") to the
        Company and (B) if required by Section 3(c)(iv), surrender this Note to a
        common
        carrier for delivery to the Company as soon as practicable on or following
        such
        date (or an indemnification undertaking with respect to this Note in the
        case of
        its loss, theft or destruction).  On or before the first (1st)
        Trading Day following the date of receipt of a Conversion Notice, the Company
        shall transmit by facsimile a confirmation of receipt of such Conversion
        Notice
        to the Holder and the Company's transfer agent (the "Transfer
        Agent").  On or before the second (2nd)
        Trading Day following the date of receipt of a Conversion Notice (the "Share DeliveryDate"),
        the Company shall (1)
        (x) provided that the Transfer Agent is participating in Depository Trust
        Company's ("DTC") Fast
        Automated Securities Transfer Program credit such aggregate number of shares
        of
        Common Stock to which the Holder shall be entitled to the Holder's or its
        designee's balance account with DTC through its Deposit Withdrawal Agent
        Commission system or (y) if the Transfer Agent is not participating in the
        DTC
        Fast Automated Securities Transfer Program, issue and deliver to the address
        as
        specified in the Conversion Notice, a certificate, registered in the name
        of the
        Holder or its designee, for the number of shares of Common Stock to which
        the
        Holder shall be entitled and (2) pay to the Holder in cash,
        by wire
        transfer of immediately available funds, an amount equal to the sum of (x)
        the
        Make-Whole Amount and (y) the accrued and unpaid Interest, if any, and Late
        Charges, if any, to but excluding the Conversion Date; provided, however,
        that
        the Company shall not pay any amounts of accrued and unpaid Interest or Late
        Charges to the extent that the Conversion Amount being so converted includes
        such amounts of accrued and unpaid Interest or Late Charges as indicated
        on the
        Conversion Notice.  If this Note is physically surrendered for
        conversion as required by Section 3(c)(iii) and the outstanding Principal
        of
        this Note is greater than the Principal portion of the Conversion Amount
        being
        converted, then the Company shall as soon as practicable and in no event
        later
        than three (3) Business Days after receipt of this Note and at its own expense,
        issue and deliver to the holder a new Note (in accordance with Section 18(d))
        representing the outstanding Principal not converted.  The Person or
        Persons entitled to receive the shares of Common Stock issuable upon a
        conversion of this Note shall be treated for all purposes as the record holder
        or holders of such shares of Common Stock on the Conversion Date.

      

      
        
          
            
            

          

          
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      (ii)     Company's
        Failure to Timely
        Convert.  If the Company shall fail to issue a certificate to
        the Holder or credit the Holder's balance account with DTC, as applicable,
        for
        the number of shares of Common Stock to which the Holder is entitled upon
        conversion of any Conversion Amount on or prior to the date which is three
        (3)
        Trading Days after the Conversion Date (a "Conversion Failure"), then (A)
        the Company shall pay damages to the Holder for each day of such Conversion
        Failure in an amount equal to one and one-half percent (1.5%) of the product
        of
        (I) the sum of the number of shares of Common Stock not issued to the Holder
        on
        or prior to the Share Delivery Date and to which the Holder is entitled,
        and
        (II) the Closing Sale Price of the Common Stock on the Share Delivery Date
        and
        (B) the Holder, upon written notice to the Company, may void its Conversion
        Notice with respect to, and retain or have returned, as the case may be,
        any
        portion of this Note that has not been converted pursuant to such Conversion
        Notice; provided that the
        voiding of a Conversion Notice shall not affect the Company's obligations
        to
        make any payments which have accrued prior to the date of such notice pursuant
        to this Section 3(c)(iii) or otherwise. In addition to the foregoing, if
        within
        three (3) Trading Days after the Company's receipt of the facsimile copy
        of a
        Conversion Notice the Company shall fail to issue and deliver a certificate
        to
        the Holder or credit the Holder's balance account with DTC for the number
        of
        shares of Common Stock to which the Holder is entitled upon such holder's
        conversion of any Conversion Amount or on any date of the Company's obligation
        to deliver shares of Common Stock as contemplated pursuant to clause (ii)
        below,
        and if on or after such Trading Day the Holder purchases (in an open market
        transaction or otherwise) Common Stock to deliver in satisfaction of a sale
        by
        the Holder of Common Stock issuable upon such conversion that the Holder
        anticipated receiving from the Company (a "Buy-In"), then the Company
        shall, within three (3) Trading Days after the Holder's request and in the
        Holder's discretion, either (i) pay cash to the Holder in an amount equal
        to the
        Holder's total purchase price (including brokerage commissions and other
        out-of-pocket expenses, if any) for the shares of Common Stock so purchased
        (the
"Buy-In Price"), at
        which point the Company's obligation to issue and deliver such certificate
        or to
        credit the Holder's balance account with DTC for the number of shares of
        Common
        Stock to which the Holder is entitled upon such Holder's conversion of any
        Conversion Amount shall terminate, or (ii) promptly honor its obligation
        to
        deliver to the Holder a certificate or certificates representing such Common
        Stock and pay cash to the Holder in an amount equal to the excess (if any)
        of
        the Buy-In Price over the product of (A) such number of shares of Common
        Stock,
        times (B) the Closing Bid Price on the Conversion Date.

      

      
        
          
            
            

          

          
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      (iii)     Registration;
        Book-Entry.  The Company shall maintain a register (the "Register") for the
        recordation
        of the names and addresses of the holders of each Note and the principal
        amount
        of the Notes held by such holders (the "Registered
        Notes").  The entries in the Register shall be conclusive and
        binding for all purposes absent manifest error.  The Company and the
        holders of the Notes shall treat each Person whose name is recorded in the
        Register as the owner of a Note for all purposes, including, without limitation,
        the right to receive payments of Principal and Interest hereunder,
        notwithstanding notice to the contrary.  A Registered Note may be
        assigned or sold in whole or in part only by registration of such assignment
        or
        sale on the Register.  Upon its receipt of a request to assign or sell
        all or part of any Registered Note by a Holder, the Company shall record
        the
        information contained therein in the Register and issue one or more new
        Registered Notes in the same aggregate principal amount as the principal
        amount
        of the surrendered Registered Note to the designated assignee or transferee
        pursuant to Section 18.  Notwithstanding anything to the contrary set
        forth herein, upon conversion of any portion of this Note in accordance with
        the
        terms hereof, the Holder shall not be required to physically surrender this
        Note
        to the Company unless (A) the full Conversion Amount represented by this
        Note is
        being converted or (B) the Holder has provided the Company with prior written
        notice (which notice may be included in a Conversion Notice) requesting
        reissuance of this Note upon physical surrender of this Note.  The
        Holder and the Company shall maintain records showing the Principal, Interest
        and Late Charges, if any, converted and the dates of such conversions or
        shall
        use such other method, reasonably satisfactory to the Holder and the Company,
        so
        as not to require physical surrender of this Note upon conversion.

      

      (iv)     Pro
        Rata Conversion;
        Disputes.  In the event that the Company receives a Conversion
        Notice from more than one holder of Notes for the same Conversion Date and
        the
        Company can convert some, but not all, of such portions of the Notes submitted
        for conversion, the Company, subject to Section 3(d), shall convert from
        each
        holder of Notes electing to have Notes converted on such date a pro rata
        amount
        of such holder's portion of its Notes submitted for conversion based on the
        principal amount of Notes submitted for conversion on such date by such holder
        relative to the aggregate principal amount of all Notes submitted for conversion
        on such date.  In the event of a dispute as to the number of shares of
        Common Stock issuable to the Holder in connection with a conversion of this
        Note, the Company shall issue to the Holder the number of shares of Common
        Stock
        not in dispute and resolve such dispute in accordance with Section
        23.

      

      (d)     Limitations
        on
        Conversions.

      

      (i)     Beneficial
        Ownership.  The Company shall not effect any conversion of this
        Note, and the Holder of this Note shall not have the right to convert any
        portion of this Note pursuant to Section 3(a), to the extent that after giving
        effect to such conversion, the Holder (together with the Holder's affiliates)
        would beneficially own in excess of 4.99% (the "MaximumPercentage")
        of the number of
        shares of Common Stock outstanding immediately after giving effect to such
        conversion.  For purposes of the foregoing sentence, the number of
        shares of Common Stock beneficially owned by the Holder and its affiliates
        shall
        include the number of shares of Common Stock issuable upon conversion of
        this
        Note with respect to which the determination of such sentence is being made,
        but
        shall exclude the number of shares of Common Stock which would be issuable
        upon
        (A) conversion of the remaining, nonconverted portion of this Note beneficially
        owned by the Holder or any of its affiliates and (B) exercise or conversion
        of
        the unexercised or nonconverted portion of any other securities of the Company
        (including, without limitation, any Other Notes or Warrants) subject to a
        limitation on conversion or exercise analogous to the limitation contained
        herein beneficially owned by the Holder or any of its
        affiliates.  Except as set forth in the preceding sentence, for
        purposes of this Section 3(d)(i), beneficial ownership shall be calculated
        in
        accordance with Section 13(d) of the Securities Exchange Act of 1934, as
        amended
        (the "Exchange
        Act").  For purposes of this Section 3(d)(i), in determining
        the number of outstanding shares of Common Stock, the Holder may rely on
        the
        number of outstanding shares of Common Stock as reflected in (x) the Company's
        most recent Form 10-KSB, Form 10-QSB, Form 8-K, or other public filing with
        the
        SEC, as the case may be, (y) a more recent public announcement by the Company
        or
        (z) any other notice by the Company or the Transfer Agent setting forth the
        number of shares of Common Stock outstanding.  For any reason at any
        time, upon the written or oral request of the Holder, the Company shall within
        one (1) Business Day confirm orally and in writing to the Holder the number
        of
        shares of Common Stock then outstanding.  In any case, the number of
        outstanding shares of Common Stock shall be determined after giving effect
        to
        the conversion or exercise of securities of the Company, including this Note,
        by
        the Holder or its affiliates since the date as of which such number of
        outstanding shares of Common Stock was reported.  By written notice to
        the Company, the Holder may from time to time increase or decrease the Maximum
        Percentage to any other percentage not in excess of 9.99% specified
        in such notice; provided that (i) any such increase will not be effective
        until
        the sixty-first (61st)
        day
        after such notice is delivered to the Company, and (ii) any such increase
        or
        decrease will apply only to the Holder and not to any other holder of
        Notes.

      

      
        
          
            
            

          

          
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      (ii)    
Eligible
        Market
        Regulation.  The Company shall not be obligated to issue any
        shares of Common Stock upon conversion of this Note, and the Holder of this
        Note
        shall not have the right to receive upon conversion of this Note any shares
        of
        Common Stock, if the issuance of such shares of Common Stock would exceed
        the
        aggregate number of shares of Common Stock which the Company may issue upon
        conversion or exercise, as applicable, of the Notes and Warrants without
        breaching the Company's obligations under the rules or regulations of any
        applicable Eligible Market (the "Exchange Cap"), except that
        such limitation shall not apply in the event that the Company (A) obtains
        the
        approval of its stockholders as required by the applicable rules of such
        Eligible Market for issuances of Common Stock in excess of such amount or
        (B)
        obtains a written opinion from outside counsel to the Company that such approval
        is not required, which opinion shall be reasonably satisfactory to the Required
        Holders.  Until such approval or written opinion is obtained, no
        purchaser of the Notes pursuant to the Securities Purchase Agreement (each
        a
        "Purchaser" and,
        collectively, the "Purchasers") shall be issued
        in the aggregate, upon conversion or exercise, as applicable, of Notes or
        Warrants, shares of Common Stock in an amount greater than the product of
        the
        Exchange Cap multiplied by a fraction, the numerator of which is the principal
        amount of Notes issued to each Purchaser pursuant to the Securities Purchase
        Agreement on the Closing Date and the denominator of which is the aggregate
        principal amount of all Notes issued to the Purchasers pursuant to the
        Securities Purchase Agreement on the Closing Date (with respect to each
        Purchaser, the "Exchange Cap
        Allocation").  In the event that any Purchaser shall sell or
        otherwise transfer any of such Purchaser's Notes, the transferee shall be
        allocated a pro rata portion of such Purchaser's Exchange Cap Allocation,
        and
        the restrictions of the prior sentence shall apply to such transferee with
        respect to the portion of the Exchange Cap Allocation allocated to such
        transferee.  In the event that any holder of Notes shall convert all
        of such holder's Notes into a number of shares of Common Stock which, in
        the
        aggregate, is less than such holder's Exchange Cap Allocation, then the
        difference between such holder's Exchange Cap Allocation and the number of
        shares of Common Stock actually issued to such holder shall be allocated
        to the
        respective Exchange Cap Allocations of the remaining holders of Notes on
        a pro
        rata basis in proportion to the aggregate principal amount of the Notes then
        held by each such holder.

      

      
        
          
            
            

          

          
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      (4)     RIGHTS
        UPON EVENT OF
        DEFAULT.

      

      (a)     Event
        of
        Default.  Each of the following events shall constitute an
        "Event of
        Default":

      

      (i)     the
        failure
        of the applicable Registration Statement required to be filed pursuant to
        the
        Registration Rights Agreement to be declared effective by the SEC on or prior
        to
        the date that is sixty (60) days after the applicable Effectiveness Deadline
        (as
        defined in the Registration Rights Agreement), or, while the applicable
        Registration Statement is required to be maintained effective pursuant to
        the
        terms of the Registration Rights Agreement, the effectiveness of the applicable
        Registration Statement lapses for any reason (including, without limitation,
        the
        issuance of a stop order) or is unavailable to any holder of the Notes for
        sale
        of all of such holder's Registrable Securities (as defined in the Registration
        Rights Agreement) in accordance with the terms of the Registration Rights
        Agreement, and such lapse or unavailability continues for a period of ten
        (10)
        consecutive days or for more than an aggregate of thirty (30) days in any
        365-day period (other than days during an Allowable Grace Period (as defined
        in
        the Registration Rights Agreement));

      

      (ii)    
the
        suspension from trading or failure of the Common Stock to be listed on an
        Eligible Market for a period of five (5) consecutive Trading Days or for
        more
        than an aggregate of ten (10) Trading Days in any 365-day period;

      

      (iii)     the
        Company's
        (A) failure to cure a Conversion Failure by delivery of the required number
        of
        shares of Common Stock within ten (10) Trading Days after the applicable
        Conversion Date or (B) notice, written or oral, to any holder of the Notes,
        including by way of public announcement or through any of its agents, at
        any
        time, of its intention not to comply with a request for conversion of any
        Notes
        into shares of Common Stock that is tendered in accordance with the provisions
        of the Notes;

      

      (iv)     at
        any time
        following the tenth (10th)
        consecutive Business Day that the Holder's Authorized Share Allocation is
        less
        than the number of shares of Common Stock that the Holder would be entitled
        to
        receive upon a conversion of the full Conversion Amount of this Note (without
        regard to any limitations on conversion set forth in Section 3(d) or
        otherwise);

      

      
        
          
            
            

          

          
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      (v)     the
        Company's
        failure to pay to the Holder any amount of Principal, Redemption Price,
        Interest, Late Charges or other amounts when and as due under this Note or
        any
        other Transaction Document (as defined in the Securities Purchase Agreement)
        or
        any other agreement, document, certificate or other instrument delivered
        in
        connection with the transactions contemplated hereby and thereby to which
        the
        Holder is a party, except, in the case of a failure to pay Interest and/or
        Late
        Charges when and as due, in which case only if such failure continues for
        a
        period of at least three (3) Business Days;

      

      (vi)     the
        occurrence of any default under, redemption of or acceleration prior to maturity
        of any Indebtedness of the Company or any of its Subsidiaries (as defined
        in
        Section 3(a) of the Securities Purchase Agreement), other than with respect
        to
        any Other Notes;

      

      (vii)    
the
        Company
        or any of its Subsidiaries, pursuant to or within the meaning of Title 11,
        U.S.
        Code, or any similar Federal, foreign or state law for the relief of debtors
        (collectively, "Bankruptcy
        Law"), (A) commences a voluntary case, (B) consents to the entry of an
        order for relief against it in an involuntary case, (C) consents to the
        appointment of a receiver, trustee, assignee, liquidator or similar official
        (a
        "Custodian"), (D) makes
        a general assignment for the benefit of its creditors or (E) admits in writing
        that it is generally unable to pay its debts as they become due;

      

      (viii)          
        a court of competent jurisdiction enters an order or decree under any Bankruptcy
        Law that (A) is for relief against the Company or any of its Subsidiaries
        in an
        involuntary case, (B) appoints a Custodian of the Company or any of its
        Subsidiaries or (C) orders the liquidation of the Company or any of its
        Subsidiaries;

      

      (ix)     a
        final
        judgment or judgments for the payment of money aggregating in excess of $250,000
        are rendered against the Company or any of its Subsidiaries and which judgments
        are not, within sixty (60) days after the entry thereof, bonded, discharged
        or
        stayed pending appeal, or are not discharged within sixty (60) days after
        the
        expiration of such stay; provided, however, that any judgment which is covered
        by insurance or an indemnity from a creditworthy party shall not be included
        in
        calculating the $250,000 amount set forth above so long as the Company provides
        the Holder a written statement from such insurer or indemnity provider (which
        written statement shall be reasonably satisfactory to the Holder) to the
        effect
        that such judgment is covered by insurance or an indemnity and the Company
        will
        receive the proceeds of such insurance or indemnity within thirty (30) days
        of
        the issuance of such judgment;

      

      (x)     other
        than as
        specifically set forth in another clause of this Section 4(a), the Company
        breaches any representation, warranty, covenant or other term or condition
        of
        any Transaction Document, except, in the case of a breach of a covenant which
        is
        curable, only if such breach continues for a period of at least ten (10)
        consecutive Business Days;

      

      (xi)     any
        breach or
        failure in any respect to comply with Sections 8 or 14 of this
        Note;

      

      
        
          
            
            

          

          
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      (xii)     the
        Company
        or any Subsidiary shall fail to perform or comply with any covenant or agreement
        contained in any Security Agreement to which it is a party, any Pledge Agreement
        to which it is a party (each of the foregoing as defined in the Security
        Documents);

      

      (xiii)     any
        material
        provision of any Security Document (as determined by the Collateral Agent)
        shall
        at any time for any reason (other than pursuant to the express terms thereof)
        cease to be valid and binding on or enforceable against the Company or any
        Subsidiary intended to be a party thereto, or the validity or enforceability
        thereof shall be contested by any party thereto, or a proceeding shall be
        commenced by the Company or any Subsidiary or any governmental authority
        having
        jurisdiction over any of them, seeking to establish the invalidity or
        unenforceability thereof, or the Company or any Subsidiary shall deny in
        writing
        that it has any liability or obligation purported to be created under any
        Security Document;

      

      (xiv)     any
        Security
        Agreement, any Pledge Agreement or any other security document, after delivery
        thereof pursuant hereto, shall for any reason fail or cease to create a valid
        and perfected and, except to the extent permitted by the terms hereof or
        thereof, first priority Lien in favor of the Collateral Agent for the benefit
        of
        the holders of the Notes on any Collateral (as defined in the Security
        Documents) purported to be covered thereby;

      

      (xv)     any
        bank at
        which any deposit account, blocked account, or lockbox account of the Company
        or
        any Subsidiary is maintained shall fail to comply with any material term
        of any
        deposit account, blocked account, lockbox account or similar agreement to
        which
        such bank is a party or any securities intermediary, commodity intermediary
        or
        other financial institution at any time in custody, control or possession
        of any
        investment property of the Company or any Subsidiary shall fail to comply
        with
        any of the terms of any investment property control agreement to which such
        Person is a party (it being understood that only accounts pursuant to which
        the
        Collateral Agent has requested account control agreements should be subject
        to
        this clause (xv));

      

      (xvi)     any
        material
        damage to, or loss, theft or destruction of, any Collateral, whether or not
        insured, or any strike, lockout, labor dispute, embargo, condemnation, act
        of
        God or public enemy, or other casualty which causes, for more than fifteen
        (15)
        consecutive days, the cessation or substantial curtailment of revenue producing
        activities at any facility of the Company or any Subsidiary, if any such
        event
        or circumstance could reasonably be expected to have a Material Adverse Effect
        (as defined in the Securities Purchase Agreement); or

      

      (xvii)     any
        Event of
        Default (as defined in the Other Notes) occurs with respect to any Other
        Notes.

      

      
        
          
            
            

          

          
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      (b)     Redemption
        Right.  Upon the occurrence of an Event of Default with respect
        to this Note or any Other Note, the Company shall within one (1) Business
        Day
        deliver written notice thereof via facsimile and overnight courier (an "Event of Default Notice") to
        the Holder.  At any time after the earlier of the Holder's receipt of
        an Event of Default Notice and the Holder becoming aware of an Event of Default,
        the Holder may require the Company to redeem all or any portion of this Note
        by
        delivering written notice thereof (the "Event of Default Redemption
        Notice") to the Company, which Event of Default Redemption Notice shall
        indicate the Conversion Amount of this Note the Holder is electing to require
        the Company to redeem.  Each portion of this Note subject to
        redemption by the Company pursuant to this Section 4(b) shall be redeemed
        by the
        Company at a price equal to the greater of (i) the product of (A) the Conversion
        Amount to be redeemed and (B) the Redemption Premium and (ii) the product
        of (A)
        the Conversion Rate with respect to such Conversion Amount in effect at such
        time as the Holder delivers an Event of Default Redemption Notice and (B)
        the
        greater of (1) the Closing Sale Price of the Common Stock on the date
        immediately preceding such Event of Default, (2) the Closing Sale Price of
        the
        Common Stock on the date immediately following such Event of Default and
        (3) the
        Closing Sale Price of the Common Stock on the date the Holder delivers the
        Event
        of Default Redemption Notice (the "Event of DefaultRedemption
        Price").  Redemptions required by this Section 4(b) shall be
        made in accordance with the provisions of Section 11.  To the extent
        redemptions required by this Section 4(b) are deemed or determined by a court
        of
        competent jurisdiction to be prepayments of the Note by the Company, such
        redemptions shall be deemed to be voluntary prepayments.  The parties
        hereto agree that in the event of the Company's redemption of any portion
        of the
        Note under this Section 4(b), the Holder's damages would be uncertain and
        difficult to estimate because of the parties' inability to predict future
        interest rates and the uncertainty of the availability of a suitable substitute
        investment opportunity for the Holder.  Accordingly, any Redemption
        Premium due under this Section 4(b) is intended by the parties to be, and
        shall
        be deemed, a reasonable estimate of the Holder's actual loss of its investment
        opportunity and not as a penalty.

      

      (5)     RIGHTS
        UPON FUNDAMENTAL
        TRANSACTION AND CHANGE OF CONTROL.

      

      (a)     Assumption.  The
        Company shall not enter into or be party to a Fundamental Transaction unless
        (i)  the Successor Entity assumes in writing all of the obligations of the
        Company under this Note and the other Transaction Documents in accordance
        with
        the provisions of this Section 5(a) pursuant to written agreements in form
        and
        substance satisfactory to the Required Holders and approved by the Required
        Holders prior to such Fundamental Transaction, including agreements to deliver
        to each holder of Notes in exchange for such Notes a security of the Successor
        Entity evidenced by a written instrument substantially similar in form and
        substance to the Notes, including, without limitation, having a principal
        amount
        and interest rate equal to the principal amounts and the interest rates of
        the
        Notes held by such holder, having similar conversion rights as the Notes
        and
        having similar ranking to the Notes, and satisfactory to the Required Holders
        and (ii) the Successor Entity (including its Parent Entity) is a publicly
        traded corporation whose common stock is quoted on or listed for trading
        on an
        Eligible Market.  Upon the occurrence of any Fundamental Transaction,
        the Successor Entity shall succeed to, and be substituted for (so that from
        and
        after the date of such Fundamental Transaction, the provisions of this Note
        referring to the "Company" shall refer instead to the Successor Entity),
        and may
        exercise every right and power of the Company and shall assume all of the
        obligations of the Company under this Note with the same effect as if such
        Successor Entity had been named as the Company herein.  Upon
        consummation of the Fundamental Transaction, the Successor Entity shall deliver
        to the Holder confirmation that there shall be issued upon conversion or
        redemption of this Note at any time after the consummation of the Fundamental
        Transaction, in lieu of the shares of Common Stock (or other securities,
        cash,
        assets or other property) issuable upon the conversion of the Notes prior
        to
        such Fundamental Transaction, such shares of publicly traded common stock
        (or
        their equivalent) of the Successor Entity, as adjusted in accordance with
        the
        provisions of this Note.  The provisions of this Section shall apply
        similarly and equally to successive Fundamental Transactions and shall be
        applied without regard to any limitations on the conversion of this
        Note.

      

      
        
          
            
            

          

          
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      (b)     Redemption
        Right.  No sooner than fifteen (15) days nor later than ten
        (10) days prior to the consummation of a Change of Control, but not prior
        to the
        public announcement of such Change of Control, the Company shall deliver
        written
        notice thereof via facsimile and overnight courier to the Holder (a "Change of ControlNotice").  At
        any
        time during the period beginning on the date of the Holder's receipt of a
        Change
        of Control Notice and ending twenty (20) Trading Days after the consummation
        of
        such Change of Control, the Holder may require the Company to redeem all
        or any
        portion of this Note by delivering written notice thereof ("Change of Control Redemption
        Notice") to the Company, which Change of Control Redemption Notice shall
        indicate the Conversion Amount the Holder is electing to redeem.  The
        portion of this Note subject to redemption pursuant to this Section 5 shall
        be
        redeemed by the Company in cash at a price equal to the greater of (i) the
        product of (x) the Conversion Amount being redeemed and (y) the quotient
        determined by dividing (A) the greater of (1) the Closing Sale Price of the
        Common Stock immediately prior to the consummation of the Change of Control,
        (2)
        the Closing Sale Price of the Common Stock immediately following the public
        announcement of such proposed Change of Control and (3) the Closing Sale
        Price
        of the Common Stock immediately prior to the public announcement of such
        proposed Change of Control by (B) the Conversion Price, and (ii) 125% of
        the
        Conversion Amount being redeemed (the "Change of Control Redemption
        Price").  Redemptions required by this Section 5 shall be made
        in accordance with the provisions of Section 11 and shall have priority to
        payments to stockholders in connection with a Change of Control.  To
        the extent redemptions required by this Section 5(b) are deemed or determined
        by
        a court of competent jurisdiction to be prepayments of the Note by the Company,
        such redemptions shall be deemed to be voluntary
        prepayments.  Notwithstanding anything to the contrary in this Section
        5, but subject to Section 3(d), until the Change of Control Redemption Price
        is
        paid in full, the Conversion Amount submitted for redemption under this Section
        5(c) may be converted, in whole or in part, by the Holder into Common Stock
        pursuant to Section 3.  The parties hereto agree that in the event of
        the Company's redemption of any portion of the Note under this Section 5(b),
        the
        Holder's damages would be uncertain and difficult to estimate because of
        the
        parties' inability to predict future interest rates and the uncertainty of
        the
        availability of a suitable substitute investment opportunity for the
        Holder.  Accordingly, any redemption premium due under this Section
        5(b) is intended by the parties to be, and shall be deemed, a reasonable
        estimate of the Holder's actual loss of its investment opportunity and not
        as a
        penalty.

      

      
        
          
            
            

          

          
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      (6)     RIGHTS
        UPON ISSUANCE OF
        PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

      

      (a)     Purchase
        Rights.  If at any time the Company grants, issues or sells any
        Options, Convertible Securities or rights to purchase stock, warrants,
        securities or other property pro rata to the record holders of any class
        of
        Common Stock (the "Purchase
        Rights"), then the Holder will be entitled to acquire, upon the terms
        applicable to such Purchase Rights, the aggregate Purchase Rights which the
        Holder could have acquired if the Holder had held the number of shares of
        Common
        Stock acquirable upon complete conversion of this Note (without taking into
        account any limitations or restrictions on the convertibility of this Note)
        immediately before the date on which a record is taken for the grant, issuance
        or sale of such Purchase Rights, or, if no such record is taken, the date
        as of
        which the record holders of Common Stock are to be determined for the grant,
        issue or sale of such Purchase Rights.

      

      (b)     Other
        Corporate
        Events.  In addition to and not in substitution for any other
        rights hereunder, prior to the consummation of any Fundamental Transaction
        pursuant to which holders of shares of Common Stock are entitled to receive
        securities or other assets with respect to or in exchange for shares of Common
        Stock (a "Corporate
        Event"), the Company shall make appropriate provision to insure that the
        Holder will thereafter have the right to receive upon a conversion of this
        Note,
        at the Holder's option, (i) in addition to the shares of Common Stock receivable
        upon such conversion, such securities or other assets to which the Holder
        would
        have been entitled with respect to such shares of Common Stock had such shares
        of Common Stock been held by the Holder upon the consummation of such Corporate
        Event (without taking into account any limitations or restrictions on the
        convertibility of this Note) or (ii) in lieu of the shares of Common Stock
        otherwise receivable upon such conversion, such securities or other assets
        received by the holders of shares of Common Stock in connection with the
        consummation of such Corporate Event in such amounts as the Holder would
        have
        been entitled to receive had this Note initially been issued with conversion
        rights for the form of such consideration (as opposed to shares of Common
        Stock)
        at a conversion rate for such consideration commensurate with the Conversion
        Rate.  Provision made pursuant to the preceding sentence shall be in a
        form and substance satisfactory to the Required Holders.  The
        provisions of this Section shall apply similarly and equally to successive
        Corporate Events and shall be applied without regard to any limitations on
        the
        conversion or redemption of this Note.

      

      (7)     RIGHTS
        UPON ISSUANCE OF
        OTHER SECURITIES.

      

      (a)     Adjustment
        of Conversion
        Price upon Issuance of Common Stock.  If and whenever on or
        after the Subscription Date, the Company issues or sells, or in accordance
        with
        this Section 7(a) is deemed to have issued or sold, any shares of Common Stock (including
        the issuance or sale of shares of
Common Stock owned
        or held by or for the account of the Company, but
        excluding shares of Common
        Stock deemed to have been issued or sold by the Company in connection with
        any
        Excluded Security) for a consideration per share (the "New Issuance Price") less than
        a price (the "Applicable
        Price") equal to the Conversion Price in effect immediately prior to such
        issue or sale (the foregoing a "Dilutive Issuance"), then
        immediately after such Dilutive Issuance, the Conversion Price then in effect
        shall be reduced to the New Issuance Price.  For purposes of
        determining the adjusted Conversion Price under this Section 7(a), the following
        shall be applicable:

      

      
        
          
            
            

          

          
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      (i)    
Issuance
        of
        Options.  If the Company in any manner grants or sells any
        Options and the lowest price per share for which one share of Common Stock is issuable
        upon the exercise of any such Option or upon conversion or exchange or exercise
        of any Convertible Securities issuable upon exercise of such Option is less
        than
        the Applicable Price, then each such share of Common Stock underlying
        such Option shall be deemed to be outstanding and to have been issued and
        sold
        by the Company at the time of the granting or sale of such Option for such
        price
        per share.  For purposes of this Section 7(a)(i), the "lowest price
        per share for which one share of
Common Stock is issuable
        upon the exercise of any such Option or upon
        conversion or exchange or exercise of any Convertible Securities issuable
        upon
        exercise of such Option" shall be equal to the sum of the lowest amounts
        of
        consideration (if any) received or receivable by the Company with respect
        to any
        one share of Common Stock
        upon granting or sale of the Option, upon exercise of the Option and upon
        conversion or exchange or exercise of any Convertible Security issuable upon
        exercise of such Option.  No further adjustment of the Conversion
        Price shall be made upon the actual issuance of such share of Common Stock
        or of
        such Convertible Securities upon the exercise of such Options or upon the
        actual
        issuance of such Common Stock upon conversion or exchange or exercise of
        such
        Convertible Securities.

      

      (ii)     Issuance
        of Convertible
        Securities.  If the Company in any manner issues or sells any
        Convertible Securities and the lowest price per share for which one share
        of
        Common Stock is issuable upon such conversion or exchange or exercise thereof
        is
        less than the Applicable Price, then each such share of Common Stock underlying
        such Convertible Securities shall be deemed to be outstanding and to have
        been
        issued and sold by the Company at the time of the issuance or sale of such
        Convertible Securities for such price per share.  For the purposes of
        this Section 7(a)(ii), the "lowest price per share for which one share of
        Common
        Stock is issuable upon such conversion or exchange or exercise" shall be
        equal
        to the sum of the lowest amounts of consideration (if any) received or
        receivable by the Company with respect to any one share of Common Stock upon
        the
        issuance or sale of the Convertible Security and upon the conversion or exchange
        or exercise of such Convertible Security.  No further adjustment of
        the Conversion Price shall be made upon the actual issuance of such share
        of
        Common Stock upon conversion or exchange or exercise of such Convertible
        Securities, and if any such issue or sale of such Convertible Securities
        is made
        upon exercise of any Options for which adjustment of the Conversion Price
        had
        been or are to be made pursuant to other provisions of this Section 7(a),
        no
        further adjustment of the Conversion Price shall be made by reason of such
        issue
        or sale.

      

      (iii)     Change
        in Option Price or
        Rate of Conversion.  If the purchase price provided for in any
        Options, the additional consideration, if any, payable upon the issue,
        conversion,  exchange or exercise of any Convertible Securities, or
        the rate at which any Convertible Securities are convertible into or
        exchangeable or exercisable for Common Stock changes at any time, the Conversion
        Price in effect at the time of such change shall be adjusted to the Conversion
        Price which would have been in effect at such time had such Options or
        Convertible Securities provided for such changed purchase price, additional
        consideration or changed conversion rate, as the case may be, at the time
        initially granted, issued or sold.  For purposes of this Section
        7(a)(iii), if the terms of any Option or Convertible Security that was
        outstanding as of the Subscription Date are changed in the manner described
        in
        the immediately preceding sentence, then such Option or Convertible Security
        and
        the Common Stock deemed issuable upon exercise, conversion or exchange thereof
        shall be deemed to have been issued as of the date of such change.  No
        adjustment shall be made if such adjustment would result in an increase of
        the
        Conversion Price then in effect.

      

      
        
          
            
            

          

          
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      (iv)     Calculation
        of Consideration
        Received.  In case any Option is issued in connection with the
        issue or sale of other securities of the Company, together comprising one
        integrated transaction in which no specific consideration is allocated to
        such
        Options by the parties thereto, (A) the Options will be deemed to have been
        issued for a value determined by use of the Black Scholes Option Pricing
        Model
        (the "Option Value") and
        (B) the other securities issued or sold in such integrated transaction shall
        be
        deemed to have been issued for the difference of (x) the aggregate consideration
        received by the Company, less (y) the Option Value.  If any Common
        Stock, Options or Convertible Securities are issued or sold or deemed to
        have
        been issued or sold for cash, the consideration received therefor will be
        deemed
        to be the net amount received by the Company therefor.  If any Common
        Stock, Options or Convertible Securities are issued or sold for a consideration
        other than cash, the amount of the consideration other than cash received
        by the
        Company will be the fair value of such consideration, except where such
        consideration consists of publicly traded securities, in which case the amount
        of consideration received by the Company will be the Closing Sale Price of
        such
        securities on the date of receipt.  If any Common Stock, Options or
        Convertible Securities are issued to the owners of the non-surviving entity
        in
        connection with any merger in which the Company is the surviving entity,
        the
        amount of consideration therefor will be deemed to be the fair value of such
        portion of the net assets and business of the non-surviving entity as is
        attributable to such Common Stock, Options or Convertible Securities, as
        the
        case may be.  The fair value of any consideration other than cash or
        publicly traded securities will be determined jointly by the Company and
        the
        Required Holders.  If such parties are unable to reach agreement
        within ten (10) days after the occurrence of an event requiring valuation
        (the
        "Valuation Event"), the
        fair value of such consideration will be determined within five (5) Business
        Days after the tenth (10th)
        day
        following the Valuation Event by an independent, reputable appraiser jointly
        selected by the Company and the Required Holders.  The determination
        of such appraiser shall be deemed binding upon all parties absent manifest
        error
        and the fees and expenses of such appraiser shall be borne by the
        Company.

      

      (v)     Record
        Date.  If the Company takes a record of the holders of Common
        Stock for the purpose of entitling them (A) to receive a dividend or other
        distribution payable in Common Stock, Options or in Convertible Securities
        or
        (B) to subscribe for or purchase Common Stock, Options or Convertible
        Securities, then such record date will be deemed to be the date of the issue
        or
        sale of the Common Stock deemed to have been issued or sold upon the declaration
        of such dividend or the making of such other distribution or the date of
        the
        granting of such right of subscription or purchase, as the case may
        be.

      

      
        
          
            
            

          

          
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      (b)     Adjustment
        of Conversion
        Price upon Subdivision or Combination of Common Stock.  If the
        Company at any time on or after the Subscription Date subdivides (by any
        stock
        split, stock dividend, recapitalization or otherwise) one or more classes
        of its
        outstanding shares of Common Stock into a greater number of shares, the
        Conversion Price in effect immediately prior to such subdivision will be
        proportionately reduced.  If the Company at any time on or after the
        Subscription Date combines (by combination, reverse stock split or otherwise)
        one or more classes of its outstanding shares of Common Stock into a smaller
        number of shares, the Conversion Price in effect immediately prior to such
        combination will be proportionately increased.

      

      (c)     Other
        Events.  If any event occurs of the type contemplated by the
        provisions of this Section 7 but not expressly provided for by such provisions
        (including, without limitation, the granting of stock appreciation rights,
        phantom stock rights or other rights with equity features), then the Company's
        Board of Directors will make an appropriate adjustment in the Conversion
        Price
        so as to protect the rights of the Holder under this Note; provided that
        no such
        adjustment will increase the Conversion Price as otherwise determined pursuant
        to this Section 7.

      

      (d)     Voluntary
        Decrease.  The Company may at any time during the term of this
        Note reduce the then current Conversion Price to any amount and for any period
        of time deemed appropriate by the Board of Directors.

      

      (8)     HOLDER'S
        RIGHT OF OPTIONAL
        REDEMPTION.  At any time prior to the Optional Redemption Date,
        the Holder shall have the right, in its sole discretion, to require that
        the
        Company redeem (the "Optional
        Redemption") all or any portion of the Conversion Amount of this Note by
        delivering written notice thereof (the "Optional Redemption Notice")
        to the Company no later than one (1) Business Day prior to the Optional
        Redemption Date.  The Optional Redemption Notice shall indicate the
        Conversion Amount of this Note the Holder is electing to have redeemed (the
        "Optional Redemption
        Amount"). The portion of this Note subject to redemption pursuant to this
        Section 8 shall be redeemed by the Company in cash at a price equal to 100%
        of
        the Optional Redemption Amount  (the "Optional Redemption
        Price").  Redemptions required by this Section 8 shall be made
        in accordance with the provisions of Section 11.  Notwithstanding
        anything to the contrary in this Section 8, but subject to Section 3(d),
        until
        the Holder receives the Optional Redemption Price, the Optional Redemption
        Amount may be converted, in whole or in part, by the Holder into Common Stock
        pursuant to Section 3, and any such conversion shall reduce the Optional
        Redemption Amount in the manner set forth by the Holder in the applicable
        Conversion Notice.

      

      (9)     NONCIRCUMVENTION.  The
        Company hereby covenants and agrees that the Company will not, by amendment
        of
        its Certificate of Incorporation, Bylaws or through any reorganization, transfer
        of assets, consolidation, merger, scheme of arrangement, 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 of this Note, and will at all
        times in good faith carry out all of the provisions of this Note and take
        all
        action as may be required to protect the rights of the Holder of this
        Note.

      

      
        
          
            
            

          

          
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      (10)     RESERVATION
        OF AUTHORIZED
        SHARES.

      

      (a)     Reservation.  The
        Company initially shall reserve out of its authorized and unissued Common
        Stock
        a number of shares of Common Stock for each of the Notes equal to 130% of
        the
        Conversion Rate with respect to the Conversion Amount of each such Note as
        of
        the Issuance Date.  So long
        as any of the Notes are outstanding, the Company shall take all action necessary
        to reserve and keep available out of its authorized and unissued Common Stock,
        solely for the purpose of effecting the conversion of the Notes, 130% of
        the
        number of shares of Common Stock as shall from time to time be necessary
        to
        effect the conversion of all of the Notes then outstanding; provided that
        at no
        time shall the number of shares of Common Stock so reserved be less than
        the
        number of shares required to be reserved by the previous sentence (without
        regard to any limitations on conversions) (the "Required Reserve
        Amount").  The initial number of shares of Common Stock
        reserved for conversions of the Notes and each increase in the number of
        shares
        so reserved shall be allocated pro rata among the holders of the Notes based
        on
        the principal amount of the Notes held by each holder at the Closing (as
        defined
        in the Securities Purchase Agreement) or increase in the number of reserved
        shares, as the case may be (the "Authorized Share
        Allocation").  In the event that a holder shall sell or
        otherwise transfer any of such holder's Notes, each transferee shall be
        allocated a pro rata portion of such holder's Authorized Share
        Allocation.  Any shares of Common Stock reserved and allocated to any
        Person which ceases to hold any Notes shall be allocated to the remaining
        holders of Notes, pro rata based on the principal amount of the Notes then
        held
        by such holders.

      

      (b)     Insufficient
        Authorized
        Shares.  If at any time while any of the Notes remain
        outstanding the Company does not have a sufficient number of authorized and
        unreserved shares of Common Stock to satisfy its obligation to reserve for
        issuance upon conversion of the Notes at least a number of shares of Common
        Stock equal to the Required Reserve Amount (an "Authorized Share Failure"),
        then the Company shall immediately take all action necessary to increase
        the
        Company's authorized shares of Common Stock to an amount sufficient to allow
        the
        Company to reserve the Required Reserve Amount for the Notes then
        outstanding.  Without limiting the generality of the foregoing
        sentence, as soon as practicable after the date of the occurrence of an
        Authorized Share Failure, but in no event later than sixty (60) days after
        the
        occurrence of such Authorized Share Failure, the Company shall hold a meeting
        of
        its stockholders for the approval of an increase in the number of authorized
        shares of Common Stock.  In connection with such meeting, the Company
        shall provide each stockholder with a proxy statement and shall use its best
        efforts to solicit its stockholders' approval of such increase in authorized
        shares of Common Stock and to cause its board of directors to recommend to
        the
        stockholders that they approve such proposal.

      

      
        
          
            
            

          

          
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      (11)     HOLDER'S
        REDEMPTIONS.

      

      (a)     Mechanics.  The
        Company shall deliver the applicable Event of Default Redemption Price to
        the
        Holder within five (5) Business Days after the Company's receipt of the Holder's
        Event of Default Redemption Notice.  If the Holder has submitted a
        Change of Control Redemption Notice in accordance with Section 5(b), the
        Company
        shall deliver the applicable Change of Control Redemption Price to the Holder
        concurrently with the consummation of such Change of Control if such notice
        is
        received prior to the consummation of such Change of Control and within five
        (5)
        Business Days after the Company's receipt of such notice
        otherwise.  The Company shall deliver the Optional Redemption Price to
        the Holder on the Optional Redemption Date.  In the event of a
        redemption of less than all of the Conversion Amount of this Note, the Company
        shall promptly cause to be issued and delivered to the Holder a new Note
        (in
        accordance with Section 18(d)) representing the outstanding Principal which
        has
        not been redeemed.  In the event that the Company does not pay the
        applicable Redemption Price to the Holder within the time period required,
        at
        any time thereafter and until the Company pays such unpaid Redemption Price
        in
        full, the Holder shall have the option, in lieu of redemption, to require
        the
        Company to promptly return to the Holder all or any portion of this Note
        representing such Conversion Amount that was submitted for redemption and
        for
        which the applicable Redemption Price (together with any Late Charges thereon)
        has not been paid.  Upon the Company's receipt of such notice, (x) the
        Redemption Notice shall be null and void with respect to such Conversion
        Amount,
        (y) the Company shall immediately return this Note, or issue a new Note (in
        accordance with Section 18(d)) to the Holder representing such Conversion
        Amount
        and (z) the Conversion Price of this Note or such new Notes shall be adjusted
        to
        the lesser of (A) the Conversion Price as in effect on the date on which
        the
        applicable Redemption Notice is voided and (B) the lowest Closing Bid Price
        of
        the Common Stock during the period beginning on and including the date on
        which
        the Redemption Notice is delivered to the Company and ending on and including
        the date on which the applicable Redemption Notice is voided.  The
        Holder's delivery of a notice voiding a Redemption Notice and exercise of
        its
        rights following such notice shall not affect the Company's obligations to
        make
        any payments of Late Charges which have accrued prior to the date of such
        notice
        with respect to the Conversion Amount subject to such notice.

      

      (b)     Redemption
        by Other
        Holders.  Upon the Company's receipt of notice from any of the
        holders of the Other Notes for redemption or repayment as a result of an
        event
        or occurrence substantially similar to the events or occurrences described
        in
        Section 4(b), Section 5(b) or Section 8 (each, an "Other Redemption Notice"), the
        Company shall immediately, but no later than one (1) Business Day of its
        receipt
        thereof), forward to the Holder by facsimile a copy of such
        notice.  If the Company receives a Redemption Notice and one or more
        Other Redemption Notices, during the seven (7) Business Day period beginning
        on
        and including the date which is three (3) Business Days prior to the Company's
        receipt of the Holder's Redemption Notice and ending on and including the
        date
        which is three (3) Business Days after the Company's receipt of the Holder's
        Redemption Notice and the Company is unable to redeem all principal, interest
        and other amounts designated in such Redemption Notice and such Other Redemption
        Notices received during such seven (7) Business Day period, then the Company
        shall redeem a pro rata amount from each holder of the Notes (including the
        Holder) based on the principal amount of the Notes submitted for redemption
        pursuant to such Redemption Notice and such Other Redemption Notices received
        by
        the Company during such seven (7) Business Day period.

      

      (12)     SECURITY.  This
        Note and the Other Notes are secured to the extent and in the manner set
        forth
        in the Security Documents (as defined in the Securities Purchase
        Agreement).

      

      (13)     VOTING
        RIGHTS.  The Holder shall have no voting rights as the holder
        of this Note, except as required by law, including but not limited to the
        General Corporation Law of the State of Nevada, and as expressly provided
        in
        this Note.

      

      
        
          
            
            

          

          
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      (14)     COVENANTS.

      

      (a)    
Rank.  All
        payments due under this Note (a) shall rank pari passu with all Other
        Notes and (b) shall be senior to all other Indebtedness of the Company and
        its
        Subsidiaries.

      

      (b)     Indebtedness.  So
        long as this Note is outstanding, the Company shall not, and the Company
        shall
        not permit any of its Subsidiaries to, directly or indirectly, incur or
        guarantee, assume or suffer to exist any Indebtedness, other than (i) the
        Indebtedness evidenced by this Note and the Other Notes and (ii) Permitted
        Indebtedness.

      

      (c)     Existence
        of
        Liens.  So long as this Note is outstanding, the Company shall
        not, and the Company shall not permit any of its Subsidiaries to, directly
        or
        indirectly, allow or suffer to exist any mortgage, lien, pledge, charge,
        security interest or other encumbrance upon or in any property or assets
        (including accounts and contract rights) owned by the Company or any of its
        Subsidiaries (collectively, "Liens") other than Permitted
        Liens.

      

      (d)     Restricted
        Payments.  The Company shall not, and the Company shall not
        permit any of its Subsidiaries to, directly or indirectly, redeem, defease,
        repurchase, repay or make any payments in respect of, by the payment of cash
        or
        cash equivalents (in whole or in part, whether by way of open market purchases,
        tender offers, private transactions or otherwise), all or any portion of
        any
        Permitted Indebtedness, whether by way of payment in respect of principal
        of (or
        premium, if any) or interest on, such Indebtedness if at the time such payment
        is due or is otherwise made or, after giving effect to such payment, an event
        constituting, or that with the passage of time and without being cured would
        constitute, an Event of Default has occurred and is continuing.

      

      (e)     Restriction
        on Redemption
        and Cash Dividends.  Until all of the Notes have been
        converted, redeemed or otherwise satisfied in accordance with their terms,
        the
        Company shall not, directly or indirectly, redeem, repurchase or declare
        or pay
        any cash dividend or distribution on its capital stock without the prior
        express
        written consent of the Required Holders.

      

      (f)    
Creation
        of New
        Subsidiaries.  So long as the obligations of the Company under
        this Note are outstanding, if the Company shall create or acquire any
        Subsidiary, simultaneous with the creation or acquisition of such
        Subsidiary, the
        Company shall (i) promptly cause such Subsidiary to become a guarantor by
        executing a guaranty in favor of the Holder in form and substance reasonably
        acceptable to the Company, the Subsidiary and the Holder, (ii) promptly cause
        such Subsidiary to become a grantor under the Security Agreement by executing
        a
        joinder to the Security Agreement in form and substance reasonably acceptable
        to
        the Company, the Subsidiary and the Holder, (iii) promptly cause such Subsidiary
        to become a pledgor by the Company and such Subsidiary executing a pledge
        agreement in form and substance reasonably acceptable to the Company, the
        Subsidiary and the Holder, and (iv) promptly cause such Subsidiary to duly
        execute and/or deliver such opinions of counsel and other documents, in form
        and
        substance reasonable acceptable to the Holder, as the Holder shall reasonably
        request with respect thereto.

      

      
        
          
            
            

          

          
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      (g)     Change
        in Collateral;
        Collateral Records.  The Company shall (i)  give the
        Collateral Agent not less than 30 days' prior written notice of any change
        in the location of any Collateral (as defined in the Security Documents),
        (ii) advise the Collateral Agent promptly, in sufficient detail, of any
        material adverse change relating to the type, quantity or quality of the
        Collateral or the Lien granted thereon and (iii) execute and deliver, and
        cause each of its Subsidiaries to execute and deliver, to the Collateral
        Agent
        for the benefit of the holders of the Notes from time to time, solely for
        the
        Collateral Agent's convenience in maintaining a record of Collateral, such
        written statements and schedules as the Collateral Agent may reasonably require,
        designating, identifying or describing the Collateral.

      

      (15)     PARTICIPATION.  The
        Holder, as the holder of this Note, shall be entitled to such dividends paid
        and
        distributions made to the holders of Common Stock to the same extent as if
        the
        Holder had converted this Note into Common Stock (without regard to any
        limitations on conversion herein or elsewhere) and had held such shares of
        Common Stock on the record date for such dividends and
        distributions.  Payments under the preceding sentence shall be made
        concurrently with the dividend or distribution to the holders of Common
        Stock.

      

      (16)     VOTE
        TO ISSUE, OR CHANGE THE
        TERMS OF, NOTES.  The affirmative vote at a meeting duly called
        for such purpose or the written consent without a meeting of the Required
        Holders shall be required for any change or amendment to this Note or the
        Other
        Notes.  No consideration
        shall be offered or paid to any holder of Notes to amend or consent to a
        waiver
        or modification of the Notes unless the same consideration also is offered
        to
        all of the holders of Notes.

      

      (17)     TRANSFER.  This
        Note and any shares of Common Stock issued upon conversion of this Note may
        be
        offered, sold, assigned or transferred by the Holder without the consent
        of the
        Company, subject only to the provisions of Section 2(f) of the Securities
        Purchase Agreement.

      

      (18)     REISSUANCE
        OF THIS
        NOTE.

      

      (a)     Transfer.  If
        this Note is to be transferred, the Holder shall surrender this Note to the
        Company, whereupon the Company will forthwith issue and deliver upon the
        order
        of the Holder a new Note (in accordance with Section 18(d)), registered as
        the
        Holder may request, representing the outstanding Principal being transferred
        by
        the Holder and, if less then the entire outstanding Principal is being
        transferred, a new Note (in accordance with Section 18(d)) to the Holder
        representing the outstanding Principal not being transferred.  The
        Holder and any assignee, by acceptance of this Note, acknowledge and agree
        that,
        by reason of the provisions of Section 3(c)(iii) and this Section 18(a),
        following conversion or redemption of any portion of this Note, the outstanding
        Principal represented by this Note may be less than the Principal stated
        on the
        face of this Note.

      

      (b)     Lost,
        Stolen or Mutilated
        Note.  Upon receipt by the Company of evidence reasonably
        satisfactory to the Company of the loss, theft, destruction or mutilation
        of
        this Note, and, in the case of loss, theft or destruction, of any
        indemnification undertaking by the Holder to the Company in customary form
        and,
        in the case of mutilation, upon surrender and cancellation of this Note,
        the
        Company shall execute and deliver to the Holder a new Note (in accordance
        with
        Section 18(d)) representing the outstanding Principal.

      

      
        
          
            
            

          

          
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      (c)     Note
        Exchangeable for
        Different Denominations.  This Note is exchangeable, upon the
        surrender hereof by the Holder at the principal office of the Company, for
        a new
        Note or Notes (in accordance with Section 18(d) and in principal amounts
        of at
        least $100,000) representing in the aggregate the outstanding Principal of
        this
        Note, and each such new Note will represent such portion of such outstanding
        Principal as is designated by the Holder at the time of such
        surrender.

      

      (d)     Issuance
        of New
        Notes.  Whenever the Company is required to issue a new Note
        pursuant to the terms of this Note, such new Note (i) shall be of like tenor
        with this Note, (ii) shall represent, as indicated on the face of such new
        Note,
        the Principal remaining outstanding (or in the case of a new Note being issued
        pursuant to Section 18(a) or Section 18(c), the Principal designated by the
        Holder which, when added to the principal represented by the other new Notes
        issued in connection with such issuance, does not exceed the Principal remaining
        outstanding under this Note immediately prior to such issuance of new Notes),
        (iii) shall have an issuance date, as indicated on the face of such new Note,
        which is the same as the Issuance Date of this Note, (iv) shall have the
        same
        rights and conditions as this Note, and (v) shall represent accrued and unpaid
        Interest and Late Charges on the Principal and Interest of this Note, if
        any,
        from the Issuance Date.

      

      (19)     REMEDIES,
        CHARACTERIZATIONS,
        OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The
        remedies provided in this Note shall be cumulative and in addition to all
        other
        remedies available under this Note and any of the other Transaction Documents
        at
        law or in equity (including a decree of specific performance and/or other
        injunctive relief), and nothing herein shall limit the Holder's right to
        pursue
        actual and consequential damages for any failure by the Company to comply
        with
        the terms of this Note.  Amounts set forth or provided for herein with
        respect to payments, conversion and the like (and the computation thereof)
        shall
        be the amounts to be received by the Holder and shall not, except as expressly
        provided herein, be subject to any other obligation of the Company (or the
        performance thereof).  The Company acknowledges that a breach by it of
        its obligations hereunder will cause irreparable harm to the Holder and that
        the
        remedy at law for any such breach may be inadequate.  The Company
        therefore agrees that, in the event of any such breach or threatened breach,
        the
        Holder shall be entitled to seek, in addition to all other available remedies,
        an injunction restraining any breach, without the necessity of showing economic
        loss and without any bond or other security being required.

      

      (20)     PAYMENT
        OF COLLECTION,
        ENFORCEMENT AND OTHER COSTS.  If (a) this Note is placed in the
        hands of an attorney for collection or enforcement or is collected or enforced
        through any legal proceeding or the Holder otherwise takes action to collect
        amounts due under this Note or to enforce the provisions of this Note or
        (b)
        there occurs any bankruptcy, reorganization, receivership of the Company
        or
        other proceedings affecting Company creditors' rights and involving a claim
        under this Note, then the Company shall pay the costs incurred by the Holder
        for
        such collection, enforcement or action or in connection with such bankruptcy,
        reorganization, receivership or other proceeding, including, but not limited
        to,
        attorneys' fees and disbursements.

      

      
        
          
            
            

          

          
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      (21)     CONSTRUCTION;
        HEADINGS.  This Note shall be deemed to be jointly drafted by
        the Company and all the Holders and shall not be construed against any person
        as
        the drafter hereof.  The headings of this Note are for convenience of
        reference and shall not form part of, or affect the interpretation of, this
        Note.

      

      (22)     FAILURE
        OR INDULGENCE NOT
        WAIVER.  No failure or delay on the part of the Holder in the
        exercise of any power, right or privilege hereunder shall operate as a waiver
        thereof, nor shall any single or partial exercise of any such power, right
        or
        privilege preclude other or further exercise thereof or of any other right,
        power or privilege.

      

      (23)     DISPUTE
        RESOLUTION.  In the case of a dispute as to the determination
        of the Closing Bid Price, the Closing Sale Price or the Weighted Average
        Price
        or the arithmetic calculation of the Conversion Rate, the Conversion Price
        or
        any Redemption Price, the Company shall submit the disputed determinations
        or
        arithmetic calculations via facsimile within one (1) Business Day of receipt,
        or
        deemed receipt, of the Conversion Notice or Redemption Notice or other event
        giving rise to such dispute, as the case may be, to the Holder.  If
        the Holder and the Company are unable to agree upon such determination or
        calculation within one (1) Business Day of such disputed determination or
        arithmetic calculation being submitted to the Holder, then the Company shall,
        within one (1) Business Day submit via facsimile (a) the disputed determination
        of the Closing Bid Price, the Closing Sale Price or the Weighted Average
        Price
        to an independent, reputable investment bank selected by the Company and
        approved by the Holder or (b) the disputed arithmetic calculation of the
        Conversion Rate, Conversion Price or any Redemption Price to the Company's
        independent, outside accountant.  The Company, at the Company's
        expense, shall cause the investment bank or the accountant, as the case may
        be,
        to perform the determinations or calculations and notify the Company and
        the
        Holder of the results no later than five (5) Business Days from the time
        it
        receives the disputed determinations or calculations.  Such investment
        bank's or accountant's determination or calculation, as the case may be,
        shall
        be binding upon all parties absent demonstrable error.

      

      (24)    
NOTICES;
        PAYMENTS.

      

      (a)    
Notices.  Whenever
        notice is required to be given under this Note, unless otherwise provided
        herein, such notice shall be given in accordance with Section 9(f) of the
        Securities Purchase Agreement.  The Company shall provide the Holder
        with prompt written notice of all actions taken pursuant to this Note, including
        in reasonable detail a description of such action and the reason
        therefore.  Without limiting the generality of the foregoing, the
        Company will give written notice to the Holder (i) immediately upon any
        adjustment of the Conversion Price, setting forth in reasonable detail, and
        certifying, the calculation of such adjustment and (ii) at least twenty (20)
        days prior to the date on which the Company closes its books or takes a record
        (A) with respect to any dividend or distribution upon the Common Stock, (B)
        with
        respect to any pro rata subscription offer to holders of Common Stock or
        (C) for
        determining rights to vote with respect to any Fundamental Transaction,
        dissolution or liquidation, provided in each case that such information shall
        be
        made known to the public prior to or in conjunction with such notice being
        provided to the Holder.

      

      
        
          
            
            

          

          
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      (b)     Payments.  Whenever
        any payment of cash is to be made by the Company to any Person pursuant to
        this
        Note, such payment shall be made in lawful money of the United States of
        America
        by a check drawn on the account of the Company and sent via overnight courier
        service to such Person at such address as previously provided to the Company
        in
        writing (which address, in the case of each of the Purchasers, shall initially
        be as set forth on the Schedule of Buyers attached to the Securities Purchase
        Agreement); provided that the Holder may elect to receive a payment of cash
        via
        wire transfer of immediately available funds by providing the Company with
        prior
        written notice setting out such request and the Holder's wire transfer
        instructions.  Whenever any amount expressed to be due by the terms of
        this Note is due on any day which is not a Business Day, the same shall instead
        be due on the next succeeding day which is a Business Day and, in the case
        of
        any Interest Date which is not the date on which this Note is paid in full,
        the
        extension of the due date thereof shall not be taken into account for purposes
        of determining the amount of Interest due on such date.  Any amount of
        Principal, Interest or other amounts due under the Transaction Documents
        which
        is not paid when due shall result in a late charge being incurred and payable
        by
        the Company in an amount equal to interest on such amount at the rate of
        eighteen percent (18.0%) per annum from the date such amount was due until
        the
        same is paid in full ("Late
        Charge").

      

      (25)     CANCELLATION.  After
        all Principal, accrued Interest and other amounts at any time owed on this
        Note
        has been paid in full, this Note shall automatically be deemed canceled,
        shall
        be surrendered to the Company for cancellation and shall not be
        reissued.

      

      (26)     WAIVER
        OF
        NOTICE.  To the extent permitted by law, the Company hereby
        waives demand, notice, protest and all other demands and notices in connection
        with the delivery, acceptance, performance, default or enforcement of this
        Note
        and the Securities Purchase Agreement.

      

      (27)     GOVERNING
        LAW; JURISDICTION;
        JURY TRIAL.  This Note shall be construed and enforced in
        accor­dance with, and all questions concerning the construction, validity,
        interpretation and performance of this Note shall be governed by, the internal
        laws of the State of New York, without giving effect to any choice of law
        or
        conflict of law provision or rule (whether of the State of New York or any
        other
        jurisdictions) that would cause the application of the laws of any jurisdictions
        other than the State of New York.  The Company hereby irrevocably
        submits to the exclusive jurisdiction of the state and federal courts sitting
        in
        The City of New York, Borough of Manhattan, for the adjudication of any dispute
        hereunder or in connection herewith or with any transaction contemplated
        hereby
        or discussed herein, and hereby irrevocably waives, and agrees not to assert
        in
        any suit, action or proceeding, any claim that it is not personally subject
        to
        the jurisdiction of any such court, that such suit, action or proceeding
        is
        brought in an inconvenient forum or that the venue of such suit, action or
        proceeding is improper.  Nothing contained herein shall be deemed to
        limit in any way any right to serve process in any manner permitted by
        law.  The Company hereby irrevocably waives personal service of
        process and consents to process being served in any such suit, action or
        proceeding by mailing a copy thereof to such party at the address as provided
        in
        Section 24 hereof and agrees that such service shall constitute good and
        sufficient service of process and notice thereof.  Nothing contained
        herein shall be deemed or operate to preclude the Holder from bringing suit
        or
        taking other legal action against the Company in any other jurisdiction to
        collect on the Company's obligations to the Holder, to realize on any collateral
        or any other security for such obligations, or to enforce a judgment or other
        court ruling in favor of the Holder.  THE COMPANY HEREBY IRREVOCABLY
        WAIVES
        ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
        ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT
        OF
        THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

      

      
        
          
            
            

          

          
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      (28)     SEVERABILITY.
        If any
        provision of this Note is prohibited by law or otherwise determined to be
        invalid or unenforceable by a court of competent jurisdiction, the provision
        that would otherwise be prohibited, invalid or unenforceable shall be deemed
        amended to apply to the broadest extent that it would be valid and enforceable,
        and the invalidity or unenforceability of such provision shall not affect
        the
        validity of the remaining provisions of this Note so long as this Note as
        so
        modified continues to express, without material change, the original intentions
        of the parties as to the subject matter hereof and the prohibited nature,
        invalidity or unenforceability of the provision(s) in question does not
        substantially impair the respective expectations or reciprocal obligations
        of
        the parties or the practical realization of the benefits that would otherwise
        be
        conferred upon the parties.  The parties will endeavor in good faith
        negotiations to replace the prohibited, invalid or unenforceable provision(s)
        with a valid provision(s), the effect of which comes as close as possible
        to
        that of the prohibited, invalid or unenforceable provision(s).

      

      (29)     CERTAIN
        DEFINITIONS.  For purposes of this Note, the following terms
        shall have the following meanings:

      

      (a)     "Approved
        Stock Plan" means any
        employee benefit plan which has been approved by the Board of Directors of
        the
        Company, pursuant to which the Company's securities may be issued to any
        employee, consultant, officer or director for services provided to the
        Company.

      

      (b)     "Bloomberg"
        means Bloomberg
        Financial Markets.

      

      (c)     "Business
        Day" means any day
        other than Saturday, Sunday or other day on which commercial banks in The
        City
        of New York are authorized or required by law to remain closed.

      

      (d)     "Calendar
        Quarter" means each
        of: the period beginning on and including January 1 and ending on and including
        March 31; the period beginning on and including April 1 and ending on and
        including June 30; the period beginning on and including July 1 and ending
        on
        and including September 30; and the period beginning on and including October
        1
        and ending on and including December 31.

      

      (e)     "Change
        of Control" means any
        Fundamental Transaction other than (i) any reorganization, recapitalization
        or
        reclassification of the Common Stock in which holders of the Company's voting
        power immediately prior to such reorganization, recapitalization or
        reclassification continue after such reorganization, recapitalization or
        reclassification to hold publicly traded securities and, directly or indirectly,
        the voting power of the surviving entity or entities necessary to elect a
        majority of the members of the board of directors (or their equivalent if
        other
        than a corporation) of such entity or entities, or (ii) pursuant to a migratory
        merger effected solely for the purpose of changing the jurisdiction of
        incorporation of the Company.

      

      
        
          
            
            

          

          
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      (f)     "Closing
        Bid Price" and "Closing Sale Price" means,
        for
        any security as of any date, the last closing bid price and last closing
        trade
        price, respectively, for such security on the Principal Market, as reported
        by
        Bloomberg, or, if the Principal Market begins to operate on an extended hours
        basis and does not designate the closing bid price or the closing trade price,
        as the case may be, then the last bid price or last trade price, respectively,
        of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
        or, if the Principal Market is not the principal securities exchange or trading
        market for such security, the last closing bid price or last trade price,
        respectively, of such security on the principal securities exchange or trading
        market where such security is listed or traded as reported by Bloomberg,
        or if
        the foregoing do not apply, the last closing bid price or last trade price,
        respectively, of such security in the over-the-counter market on the electronic
        bulletin board for such security as reported by Bloomberg, or, if no closing
        bid
        price or last trade price, respectively, is reported for such security by
        Bloomberg, the average of the bid prices, or the ask prices, respectively,
        of
        any market makers for such security as reported in the "pink sheets" by Pink
        Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the
        Closing Bid Price or the Closing Sale Price cannot be calculated for a security
        on a particular date on any of the foregoing bases, the Closing Bid Price
        or the
        Closing Sale Price, as the case may be, of such security on such date shall
        be
        the fair market value as mutually determined by the Company and the
        Holder.  If the Company and the Holder are unable to agree upon the
        fair market value of such security, then such dispute shall be resolved pursuant
        to Section 23.  All such determinations to be appropriately adjusted
        for any stock dividend, stock split, stock combination or other similar
        transaction during the applicable calculation period.

      

      (g)     "Closing
        Date" shall have the
        meaning set forth in the Securities Purchase Agreement, which corresponds
        to the
        date this Note and the Other Notes were initially issued by the Company pursuant
        to the terms of the Securities Purchase Agreement.

      

      (h)    
"Collateral
        Agent" has the
        meaning ascribed to such term in the Securities Purchase Agreement, and shall
        include all successors thereto.

      

      (i)     "Contingent
        Obligation" means,
        as to any Person, any direct or indirect liability, contingent or otherwise,
        of
        that Person with respect to any Indebtedness, lease, dividend or other
        obligation of another Person if the primary purpose or intent of the Person
        incurring such liability, or the primary effect thereof, is to provide assurance
        to the obligee of such liability that such liability will be paid or discharged,
        or that any agreements relating thereto will be complied with, or that the
        holders of such liability will be protected (in whole or in part) against
        loss
        with respect thereto.

      

      (j)     "Convertible
        Securities" means
        any stock or securities (other than Options) directly or indirectly convertible
        into or exercisable or exchangeable for Common Stock.

      

      
        
          
            
            

          

          
            -
              24
              -

            
              

            

          

          
            
            

          

        

      

      

      (k)    
"Eligible
        Market" means the
        Principal Market, The New York Stock Exchange, Inc., the American Stock
        Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market or The
        NASDAQ Capital Market.

      

      (l)     "Excluded
        Securities" means any
        Common Stock issued or issuable: (i) in connection with any Approved Stock
        Plan;
        (ii) upon conversion of the Notes or upon the exercise of the Warrants; (iii)
        upon conversion, exercise or exchange of any Options or Convertible Securities
        which are outstanding on the day immediately preceding the Subscription Date,
        provided that the terms of such Options or Convertible Securities are not
        amended, modified or changed on or after the Subscription Date; or (iv) pursuant
        to a bona fide firm commitment underwritten public offering with a nationally
        recognized underwriter which generates gross proceeds to the Company in excess
        of $10,000,000 (other than an "at-the-market offering" as defined in Rule
        415(a)(4) under the 1933 Act and "equity lines").

      

      (m)    
"Fundamental
        Transaction" means
        (i) that the Company shall, directly or indirectly, in one or more related
        transactions, (A) consolidate or merge with or into (whether or not the Company
        is the surviving corporation) another Person or Persons, or (B) sell, assign,
        transfer, convey or otherwise dispose of all or substantially all of the
        properties or assets of the Company to another Person, or (C) allow another
        Person to make a purchase, tender or exchange offer that is accepted by the
        holders of more than 50% of the outstanding shares of Voting Stock (not
        including any shares of Voting Stock held by the Person or Persons making
        or
        party to, or associated or affiliated with the Persons making or party to,
        such
        purchase, tender or exchange offer), or (D) consummate a stock purchase
        agreement or other business combination (including, without limitation, a
        reorganization, recapitalization, spin-off or scheme of arrangement) with
        another Person whereby such other Person acquires more than 50% of the
        outstanding shares of Voting Stock (not including any shares of Voting Stock
        held by the other Person or other Persons making or party to, or associated
        or
        affiliated with the other Persons making or party to, such stock purchase
        agreement or other business combination), or (E) reorganize, recapitalize
        or
        reclassify its Common Stock or (ii) any "person" or "group" (as these terms
        are
        used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or
        shall
        become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
        Act),
        directly or indirectly, of 50% of the aggregate Voting Stock of the
        Company.

      

      (n)     "GAAP"
        means United States
        generally accepted accounting principles, consistently applied.

      

      (o)     "Indebtedness"
        of any Person
        means, without duplication (i) all indebtedness for borrowed money, (ii)
        all
        obligations issued, undertaken or assumed as the deferred purchase price
        of
        property or services, including (without limitation) "capital leases" in
        accordance with GAAP (other than trade payables entered into in the ordinary
        course of business), (iii) all reimbursement or payment obligations with
        respect
        to letters of credit, surety bonds and other similar instruments, (iv) all
        obligations evidenced by notes, bonds, debentures or similar instruments,
        including obligations so evidenced incurred in connection with the acquisition
        of property, assets or businesses, (v) all indebtedness created or arising
        under
        any conditional sale or other title retention agreement, or incurred as
        financing, in either case with respect to any property or assets acquired
        with
        the proceeds of such indebtedness (even though the rights and remedies of
        the
        seller or bank under such agreement in the event of default are limited to
        repossession or sale of such property), (vi) all monetary obligations under
        any
        leasing or similar arrangement which, in connection with GAAP, consistently
        applied for the periods covered thereby, is classified as a capital lease,
        (vii)
        all indebtedness referred to in clauses (i) through (vi) above secured by
        (or
        for which the holder of such Indebtedness has an existing right, contingent
        or
        otherwise, to be secured by) any mortgage, lien, pledge, charge, security
        interest or other encumbrance upon or in any property or assets (including
        accounts and contract rights) owned by any Person, even though the Person
        which
        owns such assets or property has not assumed or become liable for the payment
        of
        such indebtedness, and (viii) all Contingent Obligations in respect of
        indebtedness or obligations of others of the kinds referred to in clauses
        (i)
        through (vii) above.

      

      
        
          
            
            

          

          
            -
              25
              -

            
              

            

          

          
            
            

          

        

      

      

      (p)    
"Interest
        Rate" means ten percent
        (10.0%) per annum, subject to adjustment as set forth in Section
        2.

      

      (q)    
"Make-Whole
        Amount" means, as to any
        Conversion Amount being converted pursuant to Section 3 hereof, an amount
        equal
        to the difference between (A) an amount of Interest that, but for the applicable
        conversion, would have been paid to the Holder on such Conversion Amount
        from
        the Issuance Date through the Optional Redemption Date and (B) the amount of
        Interest already paid to the Holder through the applicable Conversion
        Date.

      

      (r)     "Optional
        Redemption Date"
        means December 20, 2008

      

      (s)    
"Options"
        means any rights,
        warrants or options to subscribe for or purchase Common Stock or Convertible
        Securities.

      

      (t)     "Parent
        Entity" of a Person
        means an entity that, directly or indirectly, controls the applicable Person
        and
        whose common stock or equivalent equity security is quoted or listed on an
        Eligible Market, or, if there is more than one such Person or Parent Entity,
        the
        Person or Parent Entity with the largest public market capitalization as
        of the
        date of consummation of the Fundamental Transaction.

      

      (u)     "Permitted
        Indebtedness" means
        (i) Indebtedness evidenced by this Note and the Other Notes, (ii) other
        unsecured Indebtedness incurred by the Company and/or any of its Subsidiaries
        that is made expressly subordinate in right of payment to the Indebtedness
        evidenced by this Note, as reflected in a written agreement acceptable to
        the
        Holder and approved by the Holder in writing, and which Indebtedness does
        not
        provide at any time for (A) the payment, prepayment, repayment, repurchase
        or
        defeasance, directly or indirectly, of any principal or premium, if any,
        thereon
        until ninety-one (91) days after the Maturity Date or later and (B) total
        interest and fees at a rate in excess of the maximum applicable Interest
        Rate
        hereunder, (iii) Indebtedness secured by Permitted Liens, (iv) Indebtedness
        to
        trade creditors incurred in the ordinary course of business and not outstanding
        for more than 120 days after the date such payable was created, and (v)
        extensions, refinancings and renewals of any items of Permitted Indebtedness,
        provided that the principal amount is not increased or the terms modified
        to
        impose more burdensome terms upon the Company or its Subsidiary, as the case
        may
        be.

      

      
        
          
            
            

          

          
            -
              26
              -

            
              

            

          

          
            
            

          

        

      

      

      (v)     "Permitted
        Liens" means (i) any
        Lien for taxes not yet due or delinquent or being contested in good faith
        by
        appropriate proceedings for which adequate reserves have been established
        in
        accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
        of
        business by operation of law with respect to a liability that is not yet
        due or
        delinquent, (iii) any Lien created by operation of law, such as materialmen's
        liens, mechanics' liens and other similar liens, arising in the ordinary
        course
        of business with respect to a liability that is not yet due or delinquent
        or
        that are being contested in good faith by appropriate proceedings, (iv) Liens
        (A) upon or in any equipment (as defined in the Security Agreement) acquired
        or
        held by the Company or any of its Subsidiaries to secure the purchase price
        of
        such equipment or Indebtedness incurred solely for the purpose of financing
        the
        acquisition or lease of such equipment, or (B) existing on such equipment
        at the
        time of its acquisition, provided that the Lien is confined solely to the
        property so acquired and improvements thereon, and the proceeds of such
        equipment, (v) Liens incurred in connection with the extension, renewal or
        refinancing of the Indebtedness secured by Liens of the type described in
        clauses (i) and (iv) above, provided that any extension, renewal or replacement
        Lien shall be limited to the property encumbered by the existing Lien and
        the
        principal amount of the Indebtedness being extended, renewed or refinanced
        does
        not increase, (vi) Liens securing the obligations under the Notes; (vii)
        leases
        or subleases and licenses and sublicenses granted to others in the ordinary
        course of the Company's business, not interfering in any material respect
        with
        the business of the Company and its Subsidiaries taken as a whole, (ix) Liens
        in
        favor of customs and revenue authorities arising as a matter of law to secure
        payments of custom duties in connection with the importation of goods and
        (viii)
        Liens arising from judgments, decrees or attachments in circumstances not
        constituting an Event of Default under Section 4(a)(ix).

      

      (w)    
"Person"
        means an individual, a
        limited liability company, a partnership, a joint venture, a corporation,
        a
        trust, an unincorporated organization, any other entity  and a
        government or any department or agency thereof.

      

      (x)    
"Principal
        Market" means the
        OTC Bulletin Board.

      

      (y)    
"Redemption
        Notices" means,
        collectively, the Event of Default Redemption Notices, Change of Control
        Redemption Notices, the Optional Redemption Notices, each of the foregoing,
        individually, a Redemption Notice.

      

      (z)    
"Redemption
        Premium" means (i)
        in the case of the Events of Default described in Section 4(a)(i) - (vi)
        and
        (ix) - (xvii), 125% or (ii) in the case of the Events of Default described
        in
        Section 4(a)(vii) - (viii), 100%.

      

      (aa)  
           "Redemption
        Prices" means,
        collectively, the Event of Default Redemption Price, Change of Control
        Redemption Price, the Optional Redemption Price and, each of the foregoing,
        individually, a Redemption Price.

      

      (bb) 
           "Registration
        Rights Agreement"
        means that certain Registration Rights Agreement dated as of the Subscription
        Date by and among the Company and the initial holders of the Notes relating
        to,
        among other things, the registration of the resale of the Common Stock issuable
        upon conversion of the Notes and exercise of the Warrants.

      

      
        
          
            
            

          

          
            -
              27
              -

            
              

            

          

          
            
            

          

        

      

      

      (cc)   
           "Required
        Holders" means the
        holders of Notes representing at least a majority of the aggregate principal
        amount of the Notes then outstanding.

      

      (dd) 
            "SEC"
        means the United States
        Securities and Exchange Commission.

      

      (ee)   
           "Securities
        Purchase
        Agreement" means that
        certain securities purchase agreement dated as of the Subscription Date by
        and
        among the Company and the initial holders of the Notes pursuant to which
        the
        Company issued the Notes and Warrants.

      

      (ff)    
           "Security
        Documents" has the
        meaning ascribed to such term in the Securities Purchase Agreement, and shall
        include all successors thereto.

      

      (gg)  
           "Subscription
        Date" means
        December 20, 2007.

      

      (hh)  
           "Subsidiary"
        means any entity
        in which the Company, directly or indirectly, owns any of the capital stock
        or
        holds an equity or similar interest.

      

      (ii)     "Successor
        Entity" means the
        Person, which may be the Company, formed by, resulting from or surviving
        any
        Fundamental Transaction or the Person with which such Fundamental Transaction
        shall have been made, provided that if such Person is not a publicly traded
        entity whose common stock or equivalent equity security is quoted or listed
        for
        trading on an Eligible Market, Successor Entity shall mean such Person's
        Parent
        Entity.

      

      (jj)     "Trading
        Day" means any day on
        which the shares of Common Stock are traded on the Principal Market, or,
        if the
        Principal Market is not the principal trading market for the shares of Common
        Stock, then on the principal securities exchange or securities market on
        which
        the shares of Common Stock are then traded; provided that "Trading Day" shall
        not include any day on which the shares of Common Stock are scheduled to
        trade
        on any such exchange or market for less than 4.5 hours or any day that the
        shares of Common Stock are suspended from trading during the final hour of
        trading on such exchange or market (or if such exchange or market does not
        designate in advance the closing time of trading on any such exchange or
        market,
        then during the hour ending at 4:00:00 p.m., New York Time).

      

      (kk)  
           "Voting
        Stock" of a Person
        means capital stock of such Person of the class or classes pursuant to which
        the
        holders thereof have the general voting power to elect, or the general power
        to
        appoint, at least a majority of the board of directors, managers or trustees
        of
        such Person (irrespective of whether or not at the time capital stock of
        any
        other class or classes shall have or might have voting power by reason of
        the
        happening of any contingency).

      

      (ll)     "Warrants"
        has the meaning
        ascribed to such term in the Securities Purchase Agreement, and shall include
        all warrants issued in exchange therefor or replacement thereof.

      

      
        
          
            
            

          

          
            -
              28
              -

            
              

            

          

          
            
            

          

        

      

      

      (mm)
           "Weighted
        Average Price" means,
        for any security as of any date, the dollar volume-weighted average price
        for
        such security on the Principal Market during the period beginning at 9:30:01
        a.m., New York Time (or such other time as the Principal Market publicly
        announces is the official open of trading), and ending at 4:00:00 p.m., New
        York
        Time (or such other time as the Principal Market publicly announces is the
        official close of trading) as reported by Bloomberg through its "Volume at
        Price" functions, or, if the foregoing does not apply, the dollar
        volume-weighted average price of such security in the over-the-counter market
        on
        the electronic bulletin board for such security during the period beginning
        at
        9:30:01 a.m., New York Time (or such other time as such market publicly
        announces is the official open of trading), and ending at 4:00:00 p.m., New
        York
        Time (or such other time as such market publicly announces is the official
        close
        of trading) as reported by Bloomberg, or, if no dollar volume-weighted average
        price is reported for such security by Bloomberg for such hours, the average
        of
        the highest closing bid price and the lowest closing ask price of any of
        the
        market makers for such security as reported in the "pink sheets" by Pink
        Sheets
        LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted
        Average Price cannot be calculated for such security on such particular date
        on
        any of the foregoing bases, the Weighted Average Price of such security on
        such
        date shall be the fair market value as mutually determined by the Company
        and
        the Holder.  If the Company and the Holder are unable to agree upon
        the fair market value of such security, then such dispute shall be resolved
        pursuant to Section 23.  All such determinations to be appropriately
        adjusted for any stock dividend, stock split, stock combination,
        reclassification or other similar transaction during the applicable calculation
        period.

      

      (30)     DISCLOSURE.
        Upon
        receipt or delivery by the Company of any notice in accordance with the terms
        of
        this Note, unless the Company has in good faith determined that the matters
        relating to such notice do not constitute material, nonpublic information
        relating to the Company or its Subsidiaries, the Company shall within one
        (1)
        Business Day after any such receipt or delivery publicly disclose such material,
        nonpublic information on a Current Report on Form 8-K or otherwise. In the
        event
        that the Company believes that a notice contains material, nonpublic
        information, relating to the Company or its Subsidiaries, the Company shall
        indicate to the Holder contemporaneously with delivery of such notice, and
        in
        the absence of any such indication, the Holder shall be allowed to presume
        that
        all matters relating to such notice do not constitute material, nonpublic
        information relating to the Company or its Subsidiaries.

      

      [Signature
        Page Follows]

      

      
        
          
            
            

          

          
            -
              29
              -

            
              

            

          

          
            
            

          

        

      

       

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

      

      

      
        	 	
                ENTERCONNECT
                  INC.

              
	 	
                By: 

              	 
	 	 	
                Name:
                  Sam Jankovich

              
	 	 	
                Title:
                  Chairman & Chief
                  Executive Officer

              

      

      

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      EXHIBIT
        I

      

      ENTERCONNECT
        INC.

      

      CONVERSION
        NOTICE

      

      Reference
        is made to the Senior Secured Convertible Note (the "Note") issued to the
        undersigned by EnterConnect Inc. (the "Company").  In
        accordance with and pursuant to the Note, the undersigned hereby elects to
        convert the Conversion Amount (as defined in the Note) of the Note indicated
        below into shares of Common Stock par value $0.001 per share (the "Common Stock"), as of the date
        specified below.

      

      
        	
                Date
                  of Conversion:

              	 
	
                Aggregate
                  Conversion Amount to be converted:

              	 
	
                Please
                  confirm the following information:

              
	
                Conversion
                  Price:

              	 
	
                Number
                  of shares of Common Stock to be issued:

              	 

      

      

      
        	
                Please
                  issue the Common Stock into which the Conversion Amount of this
                  Note is
                  being converted in the following name and to the following
                  address:

              

      

      

      
        	
                Issue
                  to:

              	 
	 	 
	 	 

      

      
        	
                Facsimile
                  Number:

              	 

      

      
        	
                Authorization:

              	 

      

      
        	
                By:

              	 
	
                Title:

              	 
	 	 

      

      
        	
                Dated:

              	 

        	
                Account
                  Number:

              	 
	
                 
                   (if electronic book entry transfer)

              
	
                Transaction
                  Code Number:

              	 
	
                 
                   (if electronic book entry
                  transfer)

              

      

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      ACKNOWLEDGMENT

      

      The
        Company hereby acknowledges this Conversion Notice and hereby directs Interwest
        Transfer Co., Inc. to issue the above indicated number of shares of Common
        Stock
        in accordance with the Transfer Agent Instructions dated December __, 2007 from the
        Company and
        acknowledged and agreed to by Interwest Transfer Co., Inc.

      

      

      
        	 	
                ENTERCONNECT
                  INC.

              
	 	
                By: 

              	 
	 	 	
                Name:

              
	 	 	
                Title:ex10_5.htm

    
      

    

    Exhibit
      10.5

     

    
      EXECUTION
        VERSION

      

      COLLATERAL
        AGENCY
        AGREEMENT

      

      This
        COLLATERAL AGENCY AGREEMENT
        (this “Agreement”),
        dated as
        of December __, 2007, is
        entered into among each of the persons identified as a “Buyer” on the signature
        pages hereof (individually, “Buyer”; collectively,
        the “Buyers”),
        and THEBANK
        OF NEW YORK, as collateral
        agent for
        the Buyers (in such capacity, together with its successors and assigns in
        such
        capacity, “Collateral
        Agent”), and is acknowledged by the Company (as defined
        below).  For good and valuable consideration, the receipt and adequacy
        of which hereby is acknowledged by each party hereto, the parties hereto
        hereby
        agree as follows:

      

      1.           Definitions;
        Construction.

      

      a.           Any
        capitalized terms used but not defined herein shall have the meanings ascribed
        to them in the “Senior Convertible Notes” or the “Securities Purchase Agreement”
(as defined below), as applicable.  As used herein, the following
        terms shall have the meanings respectively set forth after
        each:

      

      “Agreement”
has
        the
        meaning ascribed thereto in the introductory paragraph hereto.

      

      “Affiliate”
means,
        as
        applied to any Person, any other Person who, directly or indirectly, controls,
        is controlled by, or is under common control with, such Person.  For
        purposes of this definition, “control” means the possession, directly or
        indirectly, of the power to direct the management and policies of a Person,
        whether through the ownership of Stock, by contract, or otherwise.

      

      “Buyers”
has
        the
        meaning ascribed thereto in the introductory paragraph to this
        Agreement.

      

      “Buyer
        Claims” means
        any and all “claims” (used in its broadest sense, as contemplated by and defined
        in Section 101(5) of the Bankruptcy Code, but without regard to whether such
        claim would be disallowed under the Bankruptcy Code) now or hereafter arising
        or
        existing under or relating to the Transaction Documents in favor of any
        Buyer.

      

      “Buyer
        Expenses” means all
        (a)  costs or expenses (including taxes, and insurance premiums)
        required to be paid by the Company or any of its Affiliates under any of
        the
        Transaction Documents that are paid or incurred by the Collateral Agent or
        the
        Buyers, (b) actual fees or charges paid or incurred by the Collateral Agent
        in
        connection with transactions between the Collateral Agent or any Buyer, on
        the
        one hand, and the Company or any of its Affiliates, on the other hand,
        including, fees or charges for photocopying, notarization, couriers and
        messengers, telecommunication, public record searches (including tax lien,
        litigation, and UCC searches and including searches with the patent and
        trademark office, the copyright office), filing, recording, publication,
        appraisal (including periodic Collateral appraisals), real estate surveys,
        real
        estate title policies and endorsements, and environmental audits, (c) actual
        costs and expenses incurred by the Collateral Agent in the disbursement of
        funds
        to the Company (by wire
        transfer or otherwise), (d) actual charges paid or incurred by the Collateral
        Agent resulting from the dishonor of checks, (e) reasonable costs and expenses
        paid or incurred by the Collateral Agent or any Buyer to correct any default
        or
        enforce any provision of the Transaction Documents, or in gaining possession
        of,
        maintaining, handling, preserving, storing, shipping, selling, preparing
        for
        sale, or advertising to sell the Collateral, or any portion thereof,
        irrespective of whether a sale is consummated, (f) reasonable costs and expenses
        paid or incurred by the Collateral Agent or any Buyer in examining the
Company’ Books, (g)
        reasonable costs and expenses of third party claims or any other suit paid
        or
        incurred by the Collateral Agent or any Buyer in enforcing or defending the
        Transaction Documents or in connection with the transactions contemplated
        by the
        Transaction Documents or the Collateral Agent’s or any Buyer’s relationship with
        the Company or any guarantor, and (h) the Collateral Agent’s and each of the
        Buyers’ reasonable fees and expenses (including attorneys fees) incurred in
        advising, structuring, drafting, reviewing, administering, amending,
        terminating, enforcing (including attorneys fees and expenses incurred in
        connection with a “workout,” a “restructuring,” or an insolvency proceeding
        concerning the Company or any guarantor of any of the obligations of the
        Company under the
        Transaction Documents), defending, or concerning the Transaction Documents,
        irrespective of whether suit is brought.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Buyer
        Obligations”
means any and all obligations of the Company to any one or more of
        the Buyers
        with respect to all or any part of the Buyer Claims, including obligations
        of
        payment and performance, whether fixed or indeterminate, due or not yet due,
        contingent or non-contingent, matured or unmatured, liquidated or unliquidated,
        or disputed or undisputed, and whether arising under contract, in tort, by
        law,
        or otherwise.

      

      “Capital
        Lease” means
        a lease that is required to be capitalized for financial reporting purposes
        under GAAP.

      

      “Claims”
means
        the
        Collateral Agent Claims and the Buyer Claims.

      

      “Collateral”
means
        all
        property (real, personal or otherwise) of the Company now or hereafter subject
        to a lien or security interest in favor of the Collateral Agent for the ratable
        benefit of the Buyers, and all Proceeds of such property.

      

      “Collateral
        Agent” has
        the meaning ascribed thereto in the introductory paragraph to this
        Agreement.

      

      “Collateral
        Agent
        Claims” means any and all “claims” (used in its broadest sense, as
        contemplated by and defined in Section 101(5) of the Bankruptcy Code, but
        without regard to whether such claim would be disallowed under the Bankruptcy
        Code) now or hereafter arising or existing under or relating to this Agreement
        or any Transaction Document in favor of the Collateral Agent.

      

      “Collateral
        Agent’s
        Liens” means the Liens granted by the Company to the Collateral Agent
        under the Security Documents.

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      “Collateral
        Agent
        Obligations” means any and all obligations of the Company to the
        Collateral Agent with respect to all or any part of the Collateral Agent
        Claims,
        including obligations of payment and performance, whether fixed or
        indeterminate, due or not yet due, contingent or non-contingent, matured
        or
        unmatured, liquidated or unliquidated, or disputed or undisputed, and whether
        arising under contract, in tort, by law, or otherwise.

      

      “Collections”
means
        any collections of, on, or with respect to Collateral, and any proceeds of
        any
        foreclosure, sale, exchange, disposition of, or other realization upon any
        Collateral, received by the Collateral Agent.

      

      “Company”
means
        EnterConnect Inc., a Nevada corporation.

      

      “Company
        Security
        Agreement” means that certain Pledge and Security Agreement dated as of
        December __, 2007, by and between the Company and the Collateral
        Agent.

      

      “Exchange
        Act” means
        the Securities Exchange Act of 1934, as in effect from time to
        time.

      

      “Event
        of Default”
means any defined event of default under any one or more of the Transaction
        Documents, in each instance, after giving effect to any notice, grace, or
        cure
        periods provided for in the applicable Transaction Documents.

      

      “GAAP”
means
        generally
        accepted accounting principles as in effect from time to time in the United
        States, consistently applied.

      

      “Indebtedness”
means
        (a) all obligations of the
Company for borrowed money,
        (b) all obligations of the Company evidenced by bonds,
        debentures, notes,
        or other similar instruments and all reimbursement or other obligations of
        the
Company in respect of
        letters of credit, bankers acceptances, interest rate swaps, or other similar
        financial products, (c) all obligations of the Company under Capital Leases,
        (d) all
        obligations or liabilities of others secured by a Lien on any property or
        asset
        of the Company,
        irrespective of whether such obligation or liability is assumed, and (e)
        any
        obligation of the Company guaranteeing or intended to guarantee (whether
        guaranteed, endorsed, co-made, discounted, or sold with recourse to the Company)
        any obligation of any other Person.

      

      “Indemnified
        Amount(s)” means any amount(s) payable by any Buyer to the Collateral
        Agent (or recoverable by the Collateral Agent from Collateral or Proceeds
        of
        Collateral or Collections) pursuant to Section 8
        hereof.

      

      “Lien”
means
        any
        interest in property securing an obligation owed to, or a claim by, any Person
        other than the owner of the property, whether such interest shall be based
        on
        the common law, statute, or contract, whether such interest shall be recorded
        or
        perfected, and whether such interest shall be contingent upon the occurrence
        of
        some future event or events or the existence of some future circumstance
        or
        circumstances, including the lien or security interest arising from a mortgage,
        deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
        arrangement, security agreement, conditional sale or trust receipt, or from
        a
        lease, consignment, or bailment for security purposes and also including
        reservations, exceptions, encroachments, easements, rights-of-way, covenants,
        conditions, restrictions, leases, and other title exceptions and encumbrances
        affecting Real Property.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      “Majority
        Buyers” has
        the meaning ascribed thereto in Section 5
        hereof.

      

      “Obligations”
means,
        collectively, the Collateral Agent Obligations and the Buyer
        Obligations.

      

      “Person”
means
        natural persons, corporations, limited liability companies, limited
        partnerships, general partnerships, limited liability partnerships, joint
        ventures, trusts, land trusts, business trusts, or other organizations,
        irrespective of whether they are legal entities, and governments and agencies
        and political subdivisions thereof.

      

      “Proceeds”
means
        all
        present and future “proceeds” (as defined in the UCC) of Collateral, whether or
        not received by the Company, including insurance proceeds arising from or
        relating to Collateral.

      

      “Real
        Property” means
        any estates or interests in real property now owned or hereafter acquired
        by the
        Company.

      

      “Record”
means
        information that is inscribed on a tangible medium or which is stored in
        an
        electronic or other medium and is retrievable in perceivable form.

      

      “Restricted
        Account
        Agreement” means the Restricted (Non-Blocked) Account Agreement, dated as
        of the date hereof, among the Collateral Agent, the Company and Sun Trust
        Bank.

      

      “SEC”
means
        the United
        States Securities Exchange Commission.

      

      “Securities
        Purchase
        Agreement” means that certain Securities Purchase Agreement, dated as of
        the date hereof, by and among the Company and the Buyers.

      

      “Security
        Documents”
means the Company Security Agreement, and any other security agreement,
        stock
        pledge agreement, mortgage, deed of trust, assignment, pledge, and other
        agreement executed and delivered by the Company in favor of Collateral Agent
        for
        the benefit of the Buyers.

      

      “Senior
        Convertible
        Notes” means those several Senior Secured Convertible Notes issued by the
        Company in favor of the Buyers, dated December __, 2007.

      

      “Stock”
means
        all
        shares, options, warrants, interests, participations, or other equivalents
        (regardless of how designated) of or in a Person, whether voting or nonvoting,
        including common stock, preferred stock, or any other “equity security” (as such
        term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
        by the SEC under the Exchange Act).

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      “Transaction
        Documents” means the Securities Purchase Agreement, the Senior
        Convertible Notes, the Security Documents, the Restricted Account Agreement,
        this Agreement and any other agreement, instrument, and other document executed
        and delivered pursuant thereto or otherwise evidencing or securing any of
        the
        Obligations or any other Indebtedness or other obligations owing by the Company
        to the Buyers or the Collateral Agent.

      

      “UCC”
means
        the
        Uniform Commercial Code of the State of New York, as in effect from time
        to
        time.

      

      b.           Construction.  Any
        term used herein that
        is defined in the UCC shall have the meaning ascribed to such term in the
        UCC,
        unless specifically otherwise defined herein.  Unless the context of
        this Agreement clearly requires otherwise, references to the plural include
        the
        singular, references to the singular include the plural, the part includes
        the
        whole, the terms “includes” and “including” are not limiting, and the term “or”
has the inclusive meaning represented by the phrase “and/or”.  The
        words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
        Agreement refer to this Agreement as a whole and not to any particular provision
        of this Agreement.  Section references are to this Agreement unless
        otherwise specified.  Any reference in this Agreement or in any of the
        other Transaction Documents to this Agreement or any of the other Transaction
        Documents shall include all alterations, amendments, restatements, changes,
        extensions, modifications, renewals, replacements, substitutions, and
        supplements, thereto and thereof, as applicable.

      

      2.           Appointment
        of Collateral Agent Each
        Buyer hereby appoints the Collateral Agent as the collateral agent for itself
        with respect to the Collateral, the Security Documents and the other Transaction
        Documents.  Each Buyer agrees that all liens and security interests in
        Collateral securing any of the Obligations shall be held in the name of the
        Collateral Agent and administered by and through the Collateral Agent in
        accordance with the provisions of this Agreement.  If, as of the date
        hereof, or at any time in the future, any Buyer at any time holds a lien
        or
        security interest on Collateral in its own name, it agrees to assign it,
        without
        warranty or recourse, to the Collateral Agent (to be held by the Collateral
        Agent as the collateral agent for each of the Buyers).

      

      3.           Security
        Interest The Collateral
        Agent shall hold its security interests in and liens on the Collateral for
        the
        benefit of the Buyers.

      

      4.           Distribution
        of Collections Any
        Collections shall be distributed pro rata among the Buyers (after recouping,
        offsetting, or deducting any Indemnified Amounts due the Collateral Agent
        that
        are entitled to be recouped, offset, or deducted, pursuant to the Transaction
        Documents).

      

      5.           Authority
        of
        Collateral Agent to Act Each Buyer hereby appoints
        and
        authorizes the Collateral Agent to take such action as agent on its behalf
        and
        to exercise such powers and discretion under this Agreement, the Security
        Documents and the other Transaction Documents as are delegated to the Collateral
        Agent by the terms hereof and thereof, together with such powers as are
        reasonably incidental thereto.  As to any matters within the scope of
        the Collateral Agent’s agency and not expressly provided for by this Agreement
        or such other Transaction Documents, the Collateral Agent shall not be required
        to exercise any discretion or take any action, but shall be required to act
        or
        to refrain from acting with respect to the Collateral or with respect to
        the
        provisions of the Transaction Documents relating to same (and shall be fully
        protected in so acting or refraining from acting) upon the instructions of
        the
        Buyers of at least 50.1% of the unpaid principal amount of the Senior
        Convertible Notes then outstanding (the “Majority Buyers”); provided, however,
        that the Collateral Agent shall not be required to take any action that exposes
        the Collateral Agent or any Buyer to personal liability or that is contrary
        to
        this Agreement, the Transaction Documents, or applicable
        law.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      6.           Collateral
        Agent’s Reliance Without
        limiting any other provision hereof that is protective of the Collateral
        Agent,
        the Collateral Agent shall not be liable for any action taken or omitted
        to be
        taken by it under or in connection with this Agreement or any Transaction
        Document, except for its own gross negligence or willful
        misconduct.  In no event shall the Collateral Agent be responsible or
        liable for special, indirect or consequential loss or damage of any kind
        whatsoever (including, but not limited to, loss of profit) irrespective of
        whether the Collateral Agent has been advised of the likelihood of such loss
        or
        damage and regardless of the form of action.

      

      7.           Rights
        as a
        Buyer With respect to any
        Claims due it, if any, the Person defined herein to be the Collateral Agent
        (and
        any successor Person acting as the Collateral Agent), in its capacity as
        a Buyer
        under the Transaction Documents, shall have the same rights and powers hereunder
        as any other Buyer and may exercise the same as though it were not the
        Collateral Agent, and the term “Buyer” or “Buyers” shall, unless otherwise
        expressly indicated, include such Person (and any successor Person acting
        as the
        Collateral Agent) in its individual capacity.

      

      8.           Indemnification
        of Collateral Agent by Buyers Each Buyer hereby agrees
        to indemnify
        and hold the Collateral Agent harmless (to the extent not reimbursed on demand
        by the Company, except that no such prior demand on the Company need be made
        before enforcing the indemnity contained in this section if the Collateral
        Agent
        is barred from making such prior demand, such as by the operation of the
        automatic stay of any Bankruptcy Law), in accordance with the sharing
        arrangement described below in this section, from and against any and all
        losses, liabilities (including liabilities for penalties), actions, suits,
        judgments, demands, damages, costs, disbursements, or expenses (including
        attorneys fees and expenses) of any kind or nature whatsoever which are imposed
        on, incurred by, or asserted against the Collateral Agent in its capacity
        as
        such in any way relating to or arising out of this Agreement, the Security
        Documents or the other Transaction Documents, or as a result of any action
        taken
        or omitted to be taken by the Collateral Agent pursuant to the provisions
        of
        this Agreement or the Transaction Documents, including (without limitation)
        any
        indemnification by, or interpleader action commenced against, the Collateral
        Agent under the Restricted Account Agreement; provided, however, that no
        Buyer
        shall be liable for any portion of any such losses, liabilities (including
        liabilities for penalties), actions, suits, judgments, demands, damages,
        costs,
        disbursements, or expenses resulting from the gross negligence or willful
        misconduct of the Collateral Agent.  Each Buyer’s obligations under
        this paragraph shall survive the resignation or removal of the Collateral
        Agent
        and the termination of this Agreement and the discharge of the Obligations
        with
        respect to any indemnity claims then existing or thereafter arising that
        are
        based on transactions, events, or occurrences that transpired prior to such
        termination or discharge.  Any Indemnified Amount due to the
        Collateral Agent shall be shared pro rata by the Buyers (to the extent not
        paid
        by the Company).  Any Indemnified Amount paid by any Buyer that the
        Company is obligated to reimburse but that has not yet been reimbursed by
        the
        Company or recouped from Collections shall be added to and shall become a
        part
        of the Claim of such Buyer.  Any other provision of this Agreement
        notwithstanding, and without limiting the generality of the foregoing, if
        such
        Indemnified Amount has not been fully satisfied by the Buyers, then the
        Collateral Agent shall be entitled to recover same (except to the extent
        that
        the Company is not responsible therefor under the Transaction Documents)
        from
        the Collateral or proceeds thereof, or Collections with respect thereto,
        by way
        of recoupment, offset, or deduction, in such order and manner as the Collateral
        Agent deems appropriate or expedient, prior to the application of such
        Collateral, proceeds, or Collections for any other
        purpose.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      9.           Non-Reliance
        by BuyersEach Buyer hereby
        acknowledges that it has, independently of and without reliance upon the
        Collateral Agent or any other Buyer, and based upon such documents and
        information as it has deemed appropriate, made its own credit analysis and
        decision to enter into the transactions evidenced by the Transaction Documents
        and this Agreement.  Each Buyer also acknowledges that it will,
        independently of and without reliance upon the Collateral Agent or any other
        Buyer, and based on such documents and information as it shall deem appropriate
        at the time, continue to make its own independent credit decisions in taking
        or
        omitting to take action under or in connection with the Claims.  The
        Collateral Agent shall not be required to keep itself informed as to the
        performance or observance by the Company or any other Persons of their
        obligations to any Buyer, or to inspect the Collateral or books and records
        of
        the Company, of any of its Affiliates, or of any other Person.  The
        Collateral Agent shall not have any duty or responsibility to provide any
        Buyer
        with any credit or other information concerning the affairs, financial
        condition, or business of the Company or its Affiliates that may come into
        the
        possession of the Collateral Agent or any of its Affiliates.  Except
        as provided in the following sentence, the Collateral Agent shall not be
        a
        trustee for, and shall not have any fiduciary or quasi-fiduciary duty to,
        the
        Buyers and shall not be liable to any Buyer except for gross negligence or
        willful misconduct in the performance of its undertakings
        hereunder.  The preceding sentence notwithstanding, for the limited
        purpose of holding and distributing or applying Collections, the Collateral
        Agent shall hold such Collections in trust for the benefit of all Buyers,
        and
        shall act as a fiduciary of the Buyers with respect to such
        Collections.

      

      10.           Failure
        to
        Act Except for action
        expressly required of the Collateral Agent hereunder, the Collateral Agent
        shall
        in all cases be fully justified in failing or refusing to act hereunder unless
        it shall be indemnified to its reasonable satisfaction by the Buyers against
        any
        and all liability and expense which may be incurred by it by reason of taking
        or
        continuing to take any such action.

      

      11.           No
        Joint
        Venture Nothing contained
        in this Agreement, and no action taken by any Buyer or the Collateral Agent
        pursuant hereto or in connection herewith or pursuant to or in connection
        with
        the Security Documents or the other Transaction Documents shall be deemed
        to
        constitute the Buyers, together or with or without the Collateral Agent,
        a
        partnership, association, joint venture, or other entity.

      

      12.           Resignation
        by or Removal of Collateral Agent The Collateral Agent
        may resign at any
        time as the Collateral Agent under this Agreement, the Security Documents
        and
        the other Transaction Documents by giving written notice thereof to the Buyers
        and the Company, and may be removed at any time by vote of the Majority
        Buyers.  Upon any such resignation or removal, the Majority Buyers
        shall have the right to appoint a successor Collateral Agent.  If no
        successor Collateral Agent shall have been so appointed by the Majority Buyers,
        acting in unison, or a successor Collateral Agent appointed by the Majority
        Buyers, acting in unison, shall not have accepted such appointment, in either
        case within thirty (30) days after the retiring Collateral Agent’s giving of
        notice of resignation or the Majority Buyers’ removal of the retiring Collateral
        Agent, then the retiring Collateral Agent may at the expense of the Company,
        on
        behalf of the Buyers, appoint (or petition a court of competent jurisdiction
        to
        appoint) a successor Collateral Agent, which shall be a Buyer, an Affiliate
        of a
        Buyer or a commercial bank organized under the laws of the United States
        of
        America or of any state thereof having a combined capital and surplus of
        at
        least Two Hundred Fifty Million Dollars ($250,000,000).  Upon
        acceptance of any appointment as the Collateral Agent hereunder by a successor
        Collateral Agent, such successor Collateral Agent shall thereupon succeed
        to and
        become vested with all of the obligations, rights, powers, privileges, and
        duties of the retiring Collateral Agent, and the retiring Collateral Agent
        shall
        assign to the successor Collateral Agent, without warranty or recourse, all
        its
        rights hereunder and under the Transaction Documents, including all rights
        with
        respect to liens on or security interests in Collateral, and including all
        documentation necessary or appropriate to reflect such assignment of record
        in
        all appropriate filing offices and jurisdictions, and thereupon shall be
        discharged from its duties and obligations under this Agreement and the
        Transaction Documents.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      13.           Notices.
Unless
        otherwise specifically provided
        herein, any notice or communication herein required or permitted to be given
        shall be in writing and shall be delivered to the Collateral Agent and the
        applicable Buyer in the manner set forth in the applicable Senior Convertible
        Notes.

      

      14.           Bailee
        for
        Perfection of Liens and Security Interests by Possession or Control For the limited purpose
        of perfecting
        liens or security interests in those types or items of Collateral in which
        a
        lien or security interest may be perfected by possession or control, each
        Buyer
        hereby appoints the Collateral Agent, and the Collateral Agent and each Buyer
        hereby appoints each other Buyer, as its respective bailee and agent for
        the
        limited purpose of possessing on its behalf, or controlling on its behalf,
        any
        such Collateral that may come into the possession or control (as applicable)
        of
        the Collateral Agent or such other Buyer from time to time, and the Collateral
        Agent and each Buyer agrees to act as each other Buyer’s bailee and agent, and
        each Buyer agrees to act as the Collateral Agent’s bailee and agent, for such
        limited purpose of perfecting the other’s lien or security interest in any
        Collateral by possession or control (as applicable) through a bailee or agent,
        provided, that, each party hereto hereby waives and releases each of the
        other
        parties hereto from any and all claims and liabilities arising from such
        other
        party’s actions or omissions in its role as bailee and agent with respect to
        possession or control of any Collateral, except for any claims arising from
        such
        other party’s gross negligence or willful misconduct.  Unless there is
        an express written agreement to the contrary in effect between the Collateral
        Agent and the affected Buyer, no Buyer shall relinquish such possession or
        control (as applicable) of any Collateral without the prior written consent
        of
        the Collateral Agent.  Not withstanding anything to the contrary
        contained herein, the Collateral Agent shall have no responsibility for
        preparing, recording, filing, re-recording, or re-filing of any financing
        statement, continuation statement, mortgage or other instrument in any public
        office with respect to any Collateral or otherwise.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      15.           Termination
        This Agreement is a
        continuing agreement, and, unless the Collateral Agent and each Buyer have
        specifically consented in writing to its earlier termination, this Agreement
        shall remain in full force and effect in all respects until such time as
        (a) all
        Claims (other than contingent indemnification obligations that survive the
        termination of the Transaction Documents) are fully and finally paid in cash
        or
        otherwise satisfied in full in accordance with the terms of the Transaction
        Documents, (b) none of the Buyers has any further commitment to extend further
        financial accommodations to the Company under the Transaction Documents,
        and (c)
        each Buyer has instructed the Collateral Agent to release or terminate the
        security interests and liens in favor of the Collateral Agent to the extent
        that
        they secure Claims of such Buyer (and each Buyer hereby agrees promptly to
        do so
        after the conditions in clauses (a) and (b) are satisfied).

      

      16.           Modifications
        in Writing No amendment,
        modification, supplement, termination, consent, or waiver of or to any provision
        of this Agreement nor any consent to any departure therefrom shall in any
        event
        be effective unless the same shall be in writing and signed by or on behalf
        of
        the parties to be bound thereby.  Any waiver of any provision of this
        Agreement, or any consent to any departure from the terms of any provisions
        of
        this Agreement, shall be effective only in the specific instance and for
        the
        specific purpose for which given.  Anything herein to the contrary
        notwithstanding, any amendment, modification, supplement, termination, consent,
        or waiver of or to any provision of this Agreement, or any consent to any
        departure therefrom, that relates only to the relationship between or among
        any
        one or more of the Collateral Agent and the Buyers, and that does not adversely
        affect the obligations of the Company hereunder, shall not require consent
        by or
        the agreement of the Company.

      

      17.           Headings
        Section headings used
        in
        this Agreement are for convenience of reference only and shall not constitute
        a
        part of this Agreement for any purpose or affect the construction of this
        Agreement.

      

      18.           GOVERNING
        LAW, CONSENT TO JURISDICTION, ANDWAIVER
        OF
        RIGHT TO JURY TRIAL THIS
        AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK ANDTHE
        VALIDITY OF THIS AGREEMENT,
ANDTHE
        CONSTRUCTION, INTERPRETATION,
ANDENFORCEMENT
        HEREOF, ANDTHE
        RIGHTS OF THE PARTIES HERETO, SHALL
        BE DETERMINED UNDER, GOVERNED BY, ANDCONSTRUED
        IN ACCORDANCE WITH THE
LAWSOF
        THE STATE OF NEW YORK.  THE
        PARTIES HERETO CONSENT
        TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED IN
        THE
        COUNTY OF NEW YORK ANDTHE
        STATE OF NEW YORK,
        TO ADJUDICATE ANY LEGAL PROCEEDING
        THAT RELATES TO THIS AGREEMENT, THE INTERPRETATION HEREOF, ANY DISPUTE ARISING
        HEREUNDER, OR ANY CONTENTION THAT ANY PARTY HERETO HASBREACHED
        ANY PROVISION HEREOF
ANDWAIVES
        ANY DEFENSE BASED ON DOCTRINES OF
        VENUE OR FORUM NON CONVENIENS, OR SIMILAR RULES OR DOCTRINES.  THE
        PARTIES HERETO EXPRESSLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY LEGAL
        PROCEEDING THAT RELATES TO THIS AGREEMENT, THE INTERPRETATION HEREOF, ANY
        DISPUTE ARISING HEREUNDER, OR ANY CONTENTION THAT ANY PARTY HERETO HASBREACHED
        ANY PROVISION HEREOF, EVEN IF
        SUCH LEGAL PROCEEDING INCLUDES OTHER CLAIMS THAT DO NOT RELATE TO THIS
        AGREEMENT.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      19.           Severability
        of Provisions Any provision
        of this Agreement which is illegal, invalid, prohibited, or unenforceable
        in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such illegality, invalidity, prohibition, or unenforceability without
        invalidating or impairing the remaining provisions hereof or affecting the
        validity or enforceability of such provision in any other
        jurisdiction.

      

      20.           Complete
        Agreement This Agreement is
        intended by the parties as a final expression of their agreement regarding
        the
        subject matter hereof and is intended as a complete statement of the terms
        and
        conditions of their agreement regarding the subject matter
        hereof.

      

      21.           Successors
        and Assigns This Agreement
        is binding upon and inures to the benefit of the successors and assigns of
        the
        parties hereto.  Any corporation or association into which the
        Collateral Agent may be merged or converted or with which it may be
        consolidated, or any corporation or association resulting from any merger,
        conversion or consolidation to which the Collateral Agent shall be a party,
        or
        any corporation or association to which all or substantially all of the
        corporate trust business of the Collateral Agent may be sold or otherwise
        transferred, shall be the successor collateral agent hereunder without any
        further act.

      

      22.           Attorneys
        Fees and Disbursements In
        the event of any dispute concerning the meaning or interpretation of this
        Agreement that results in litigation, or in the event of any litigation by
        a
        party to enforce the provisions hereof, the prevailing party shall be entitled
        to recover from the non-prevailing party or parties its reasonable attorneys
        fees and disbursements, and any actual court costs incurred.

      

      23.           Counterparts;
        Telefacsimile Execution This Agreement may
        be executed and
        delivered in counterparts and shall be effective when each party has delivered
        its counterpart signature, but all counterparts taken together shall be deemed
        a
        single original agreement.  Delivery of an executed counterpart of the
        signature pages to this Agreement by telefacsimile shall be equally as effective
        as delivery of a manually executed counterpart of the signature pages to
        this
        Agreement.  Any party delivering an executed counterpart of the
        signature pages to this Agreement by telefacsimile shall thereafter also
        promptly deliver a manually executed counterpart of this Agreement but the
        failure to deliver such manually executed counterpart shall not affect the
        validity, enforceability, and binding effect of this
        Agreement.

      

      24.           Expenses
        of
        Collateral Agent The
        Company hereby agrees to reimburse the Collateral Agent on demand for any
        reasonable out-of-pocket costs and expenses incurred by the Collateral Agent
        in
        connection with the execution, delivery, performance, amendment, or enforcement
        of this Agreement or any of the Transaction Documents, or in connection with
        the
        creation, attachment, perfection, release, termination, enforcement, or
        foreclosure of any lien or security interest on any of the Collateral, including
        any costs and expenses incurred in connection with any aspect of any bankruptcy
        or insolvency proceeding affecting the Company, and including reasonable
        fees
        and disbursements of attorneys, accountants, consultants, and outside advisors
        and experts, and other out-of-pocket expenditures made pursuant to or permitted
        by this Agreement or the Transaction Documents.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      25.           Indemnification
        of Collateral Agent by the Company In addition to the
        payment of expenses
        pursuant to the preceding section of this Agreement, the Company agrees to
        indemnify, defend, and hold harmless the Collateral Agent and the officers,
        directors, employees and agents of the Collateral Agent (collectively the
        “Indemnitees” and individually an “Indemnitee”) from and against any and all
        actions, causes of action, suits, losses, liabilities, and damages, and expenses
        (including reasonable attorneys fees and disbursements) in connection therewith
        which may be imposed on, incurred by, or asserted against such Indemnitee,
        in
        any manner relating to or arising out of the actions or inactions of the
        Collateral Agent with respect to this Agreement or the Transaction Documents,
        or
        the consummation of the transactions contemplated hereby and thereby (the
        “Indemnified Liabilities”); provided, however, that the Company shall not have
        any obligation hereunder with respect to Indemnified Liabilities of any
        Indemnitee arising from the gross negligence or willful misconduct of such
        Indemnitee.  In connection with any matter as to which any Indemnitee
        is entitled to be indemnified hereunder, such Indemnitee will endeavor to
        give
        written notice thereof in reasonable detail to the Company as soon as
        practicable, provided that any failure to give such notice shall not vitiate
        or
        void the indemnities provided for herein.  If any investigative,
        judicial, or administrative proceeding arising from any of the foregoing
        is
        brought against any Indemnitee indemnified pursuant to this section, the
        Company, to the extent and in the manner directed by the Indemnitee or intended
        Indemnitee, will resist and defend such action, suit, or proceeding or cause
        the
        same to be resisted and defended by counsel designated by the Company (which
        counsel shall be reasonably satisfactory to the
        Indemnitee).  Alternatively, the Collateral Agent may at its option
        have separate counsel of its own choosing and the Company shall pay the
        reasonable fees and expenses of such counsel; provided
        that the Company shall
        not
        be required to pay such fees and expenses if it assumes the Collateral Agent’s
        defense and there is no conflict of interest between or alternative defenses
        between the Company and the Collateral Agent in connection with such defense
        as
        reasonably determined by the Collateral Agent.  Each Indemnitee will
        use its best efforts to cooperate in the defense of any such action, writ,
        or
        proceeding.  To the extent that the undertaking to indemnify, pay, and
        hold harmless set forth in this section may be unenforceable because it is
        violative of any law or public policy, the Company shall make the maximum
        contribution to the payment and satisfaction of each of the Indemnified
        Liabilities that is permissible under the applicable law.  The
        obligations of the Company under this section shall survive the resignation
        and
        removal of the Collateral Agent and the termination of this Agreement and
        the
        Transaction Documents and the discharge of the Company’s other obligations
        hereunder and thereunder.  The indemnities set forth herein are
        intended to include indemnification against the stated matters notwithstanding
        the fact that such matters resulted from the negligence (other than gross
        negligence) of an Indemnitee.

      

      Collateral
        may be released from the Lien and security interest created by the Security
        Documents at any time or from time to time in accordance with the provisions
        of
        the Transaction Documents and as provided hereby.

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Collateral
        may be released from the Lien and security interest created by the Security
        Documents at any time or from time to time upon the request of the Company
        in
        accordance with, and subject to the terms of, the Security Documents (including,
        without limitation, any required consent of the Buyers). Any such Company
        request to release Collateral will be accompanied by a certificate by an
        officer
        of the Company, upon which the Collateral Agent may conclusively rely,
        certifying that all conditions under the Security Documents have been met
        and
        such release of Collateral does not violate any provisions of the Security
        Documents.

      

      

      

      [Remainder
        of page intentionally left blank]

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the
        parties hereto have entered into this Agreement as of the date first set
        forth
        above, intending to be legally bound hereby.

      

      
        	 	
                COLLATERAL
                  AGENT

              	 
	 	 	 	 
	 	
                THE
                  BANK OF NEW YORK, as Collateral Agent

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	
                Title:

              	 	 
	 	 	 	 
	 	 	 	 
	 	
                BUYER

              	 
	 	 	 	 
	 	
                HIGHBRIDGE
                  INTERNATIONAL LLC,

              	 
	 	
                as
                  a Buyer

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	
                Title:

              	 	 

      

      
        
          
          

        

        
          S-1

          
            

          

        

        
          
          

        

      

      ACKNOWLEDGMENT,
        CONSENT, AND
        AGREEMENT TO BE BOUND

      

      By
        executing this Acknowledgement, Consent, and Agreement to be Bound, the
        undersigned acknowledges and consents to the foregoing Collateral Agency
        Agreement (the “Agreement”) and
        agrees to be bound by the provisions thereof.  All initially
        capitalized terms used herein but not defined herein shall have the respective
        meanings ascribed thereto in the Agreement.  The undersigned hereby
        agrees that the terms of the Agreement shall not give it any substantive
        rights
        vis-a-vis the Collateral Agent or any Buyer.  If any one or more of
        the Collateral Agent or any Buyer shall enforce its rights or remedies in
        violation of the terms of the Agreement, the undersigned shall not have the
        right to assert such violation as a defense against the Collateral Agent
        or any
        Buyer, as the case may be, or assert such violation as a counterclaim or
        basis
        for set-off or recoupment.

      

      

      
        	 	
                ENTERCONNECT
                  INC.,

              	 
	 	
                a
                  Nevada corporation

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 	 
	 	 	 	 
	 	
                Title:

              	 	 

      

       

       

      A-1

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