Document:

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                                                                     Exhibit 4.1

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

                              12% CONVERTIBLE NOTE

$ ______________                                               November __, 2006

     FOR VALUE RECEIVED, Zila, Inc., a Delaware corporation (the "Company"),
hereby unconditionally promises to pay to the order of ________________ (the
"Holder"), having an address at __________________________, at such address or
at such other place as may be designated in writing by the Holder, or its
assigns, the aggregate principal sum of _____________ United States Dollars
($______________), together with interest from the date set forth above on the
unpaid principal balance of this Note outstanding at a rate equal to twelve
percent (12%) (computed on the basis of the actual number of days elapsed in a
360-day year) per annum and continuing on the outstanding principal until this
12% Convertible Note (the "Note") is automatically converted into Common Stock
as provided herein or indefeasibly and irrevocably paid in full by the Company.
Interest on this Note shall accrue and shall be payable on the Stated Maturity
Date (as defined below); provided, however, that if this Note is automatically
converted in accordance with Section 4 hereof on or before December 31, 2006, no
interest on this Note shall be deemed to have accrued or be payable. Subject to
the other provisions of this Note, the principal of this Note and all accrued
and unpaid interest hereon shall mature and become due and payable on May __,
2007 (the "Stated Maturity Date"). Except as provided herein, all payments of
principal and interest by the Company under this Note shall be made in United
States dollars in immediately available funds to an account specified by the
Holder. In no event shall any interest charged, collected or reserved under this
Note exceed the maximum rate then permitted by applicable law and if any such
payment is paid by the Company, then such excess sum shall be credited by the
Holder as a payment of principal.

     This Note is one of a series of Notes (the "Company Notes") of like tenor
in an aggregate principal amount of Twelve Million Seventy Five Thousand United
States Dollars ($12,075,000) issued by the Company pursuant to the terms of the
Purchase Agreement (as defined below).

     1. Definitions. Capitalized terms used herein shall have the respective
meanings ascribed thereto in the Purchase Agreement unless otherwise defined
herein. Unless the context otherwise requires, when used herein the following
terms shall have the meaning indicated:

          "Additional Rights" has the meaning set forth in Section 4 hereof.

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          "Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.

          "Board" shall mean the Board of Directors of Company.

          "Business Day" other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.

          "Common Stock" shall mean the Common Stock, par value $0.001 per
share, of the Company or any securities into which shares of Common Stock may be
reclassified after the date hereof.

          "Company" has the meaning set forth in the first paragraph hereof.

          "Company Notes" has the meaning set forth in the second paragraph
hereof.

          "Control" (including the terms "controlling", "controlled by" or
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

          "Conversion Price" shall mean initially $1.75 per share, subject to
adjustment as provided in Section 4.

          "Conversion Shares" has the meaning set forth in Section 4 hereof.

          "Convertible Securities" has the meaning set forth in Section 4
hereof.

          "Event of Default" has the meaning set forth in Section 6 hereof.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          "Excluded Issuances" has the meaning set forth in Section 4(j) hereof.

          "Forced Conversion Event" shall mean the effectiveness of the filing
of the Amendment to the Company's Certificate of Incorporation as contemplated
by Section 7.9 of the Purchase Agreement.

          "Fiscal Year" means the period commencing on August 1 of any year and
ending on July 31 of the following year.

          "Future Working Capital Line" means Indebtedness of the Company (i) in
the form of one or more working capital line of credit facilities and (ii) that
is secured by the Company's accounts and inventory; provided, that the aggregate
of all such working capital line of credit facilities shall not exceed
$7,000,000.

          "Hedging Agreement" means any interest rate swap, collar, cap, floor
or forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed

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in connection with hedging the interest rate exposure of any Person and any
confirming letter executed pursuant to such agreement, all as amended,
supplemented, restated or otherwise modified from time to time.

          "Holder" has the meaning set forth in the first paragraph hereof.

          "Indebtedness" means any liability or obligation (i) for borrowed
money, other than trade payables incurred in the ordinary course of business,
(ii) evidenced by bonds, debentures, notes, or other similar instruments, (iii)
in respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), except letters of credit or other similar
instruments issued to secure payment of trade payables or obligations in respect
of workers' compensation, unemployment insurance and other social security laws
or regulation, all arising in the ordinary course of business consistent with
past practices, (iv) to pay the deferred purchase price of property or services,
except trade payables arising in the ordinary course of business consistent with
past practices, (v) as lessee under capitalized leases, (vi) secured by a Lien
on any asset of the Company or a Subsidiary, whether or not such obligation is
assumed by the Company or such Subsidiary.

          "Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days arising in connection with the
sale of inventory or supplies by such Person in the ordinary course of business;
(c) the entering into of any guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Hedging Agreement.

          "Investors" has the meaning set forth in the Purchase Agreement.

          "Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any of the foregoing).

          "Majority Holders" has the meaning set forth in Section 8 hereof.

          "Market Price", as of a particular date (the "Valuation Date"), shall
mean the following: (a) if the Common Stock is then listed on a national stock
exchange, the closing sale price of one share of Common Stock on such exchange
on the last Trading Day prior to the Valuation Date; (b) if the Common Stock is
then quoted on the National Association of Securities Dealers, Inc. OTC Bulletin
Board (the "Bulletin Board") or such similar quotation system or association,
the closing sale price of one share of Common Stock on the Bulletin

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Board or such other quotation system or association on the last Trading Day
prior to the Valuation Date or, if no such closing sale price is available, the
average of the high bid and the low asked price quoted thereon on the last
trading day prior to the Valuation Date; (c) if such security is then included
in the "pink sheets," the closing sale price of one share of Common Stock on the
"pink sheets" on the last Trading Day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low ask
price quoted on the "pink sheets" as of the end of the last Trading Day prior to
the Valuation Date; or (d) if the Common Stock is not then listed on a national
stock exchange or quoted on the Bulletin Board, the "pink sheets" or such other
quotation system or association, the fair market value of one share of Common
Stock as of the Valuation Date, as determined in good faith by the Board of
Directors of the Company and the Holder. If the Common Stock is not then listed
on a national securities exchange or quoted on the Bulletin Board, the "pink
sheets" or other quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder as to
the fair market value of a share of Common Stock as determined by the Board of
Directors of the Company. In the event that the Board of Directors of the
Company and the Holder are unable to agree upon the fair market value in respect
of subpart (d) of this paragraph, the Company and the Holder shall jointly
select an appraiser, who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne equally by the Company and the Holder.

          "Note" has the meaning set forth in the first paragraph hereof.

          "Options" has the meaning set forth in Section 4 hereof.

          "Permitted Indebtedness" means:

          (a) Unsecured Indebtedness existing on the Closing Date and
refinancings, renewals and extensions of any such Indebtedness if (i) the
average life to maturity thereof is greater than or equal to that of the
Indebtedness being refinanced or extended (ii) the principal amount thereof or
interest payable thereon is not increased, and (iii) the terms thereof are not
less favorable to the Company or the Subsidiary incurring such Indebtedness than
the Indebtedness being refinanced, renewed or extended;

          (b) the Future Working Capital Line;

          (c) the Secured Notes;

          (d) Guaranties by any Subsidiary of any "Permitted Indebtedness" of
the Company or another Subsidiary;

          (e) Indebtedness representing the deferred purchase price of property
and capital lease obligations which collectively does not exceed $1,000,000 in
aggregate principal amount; and

          (f) Indebtedness of the Company to any wholly owned Subsidiary and
Indebtedness of any wholly owned Subsidiary to the Company or another wholly
owned Subsidiary which constitutes "Permitted Indebtedness."

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          "Permitted Investments" means:

          (a) direct obligations of the United States of America, or of any
agency thereof, or obligations guaranteed as to principal and interest by the
United States of America, or of any agency thereof, in either case maturing not
more than 90 days from the date of acquisition thereof;

          (b) certificates of deposit issued by any bank or trust company
organized under the laws of the United States of America or any State thereof
and having capital, surplus and undivided profits of at least $500,000,000,
maturing not more than 90 days from the date of acquisition thereof;

          (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Ratings Services or Moody's Investors Services, Inc., respectively, maturing not
more than 90 days from the date of acquisition thereof; in each case so long as
the same (x) provide for the payment of principal and interest (and not
principal alone or interest alone) and (y) are not subject to any contingency
regarding the payment of principal or interest; and

          (d) the acquisition contemplated by the non-binding letter of intent
described in the Company's definitive proxy statement, dated September 6, 2006
(the "September Proxy Statement"), of all of the equity interests of an entity
in the dental products industry; provided, that the acquisition is consummated
on substantially the terms described in the September Proxy Statement (the
"Permitted Acquisition").

          "Permitted Liens" means:

          (a) Liens imposed by law for taxes that are not yet due or are being
contested in good faith and for which adequate reserves have been established on
the Company's books and records in accordance with U.S. generally accepted
accounting principles, consistently applied;

          (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or that are
being contested in good faith and by appropriate proceedings;

          (c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;

          (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

          (e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any of its Subsidiaries;

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          (f) Liens granted to secure the obligations of the Company or any
Subsidiary under any Indebtedness permitted under clauses (b), (c) and (e) of
the definition of "Permitted Indebtedness;" provided, however, that any Liens
securing Indebtedness permitted under (i) clause (b) of such definition shall be
limited to the Company's accounts and inventory and (ii) clause (e) of such
definition shall be limited to the property acquired through such Indebtedness.

          "Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

          "Purchase Agreement" shall mean the Purchase Agreement, dated as of
November __, 2006, and as that agreement may be amended from time to time, by
and among the Company and the Investors.

          "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of November __, 2006, and as that agreement may be amended
from time to time, by and among the Company and the Investors.

          "Restricted Payment" has the meaning set forth in Section 5(b)(iv)
hereof.

          "Secured Notes" means up to $12,000,000 in aggregate principal amount
of the Company's 6% Senior Secured Convertible Notes due November 2009.

          "Stated Maturity Date" has the meaning set forth in the first
paragraph hereof.

          "Subsidiary" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.

          "Trading Day" means (i) if the relevant stock or security is listed or
admitted for trading on The New York Stock Exchange, Inc., the Nasdaq Global
Market, the Nasdaq Capital Market or any other national securities exchange, a
day on which such exchange is open for business; (ii) if the relevant stock or
security is quoted on a system of automated dissemination of quotations of
securities prices, a day on which trades may be effected through such system; or
(iii) if the relevant stock or security is not listed or admitted for trading on
any national securities exchange or quoted on any system of automated
dissemination of quotation of securities prices, a day on which the relevant
stock or security is traded in a regular way in the over-the-counter market and
for which a closing bid and a closing asked price for such stock or security are
available, shall mean a day, other than a Saturday or Sunday, on which The New
York Stock Exchange, Inc. is open for trading.

          "Trigger Issuance" has the meaning set forth in Section 4(i) hereof.

     2. Purchase Agreement. This Note is one of the several 12% Convertible
Notes of the Company issued pursuant to the Purchase Agreement. This Note is
subject to the terms and

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conditions of, and entitled to the benefit of, the provisions of the Purchase
Agreement. This Note is transferable and assignable to any Person to whom such
transfer is permissible under the Purchase Agreement and applicable law. The
Company agrees to issue from time to time a replacement Note in the form hereof
to facilitate such transfers and assignments. In addition, after delivery of an
indemnity in form and substance reasonably satisfactory to the Company, the
Company also agrees to promptly issue a replacement Note if this Note is lost,
stolen, mutilated or destroyed.

     3. No Right of Prepayment or Redemption. This Note shall not be prepayable
or redeemable by the Company prior to the Stated Maturity Date.

     4. Automatic Conversion.

          (a) Neither this Note nor any portion of this Note shall be converted
into shares of Common Stock at any time unless and until a Forced Conversion
Event shall have occurred. All of the principal amount of this Note and any
accrued and unpaid interest due hereon shall automatically and without any
action on the part of the Holder convert into fully paid and nonassessable
shares of Common Stock on the Trading Day immediately following the occurrence
of a Forced Conversion Event (the "Automatic Conversion Date"). On the Automatic
Conversion Date, this Note and all interest accrued thereon shall automatically
and with no action on the part of the Holder convert into such number of fully
paid and nonassessable shares of Common Stock as is obtained by: (i) adding (A)
the principal amount of this Note and (B) the amount of any accrued but unpaid
interest on this Note and (ii) dividing the result obtained pursuant to clause
(i) above by the Conversion Price then in effect (such shares, the "Conversion
Shares"). The Company shall provide prompt written notice of the Automatic
Conversion Date to the Holder.

          (b) Promptly after the Automatic Conversion Date, the Holder of this
Note shall deliver this Note to the Company (or, in lieu thereof, an appropriate
lost security affidavit in the event this Note shall have been lost or
destroyed, together with a customary indemnity agreement) to the Company at its
principal office (or such other office or agency of the Company as the Company
may designate by notice in writing to the Holder), together with a statement of
the name or names (with address) in which the certificate or certificates for
the Conversion Shares issuable upon such conversion shall be issued. Promptly
following the surrender of this Note (or, in lieu thereof, delivery of an
appropriate lost security affidavit in the event this Note shall have been lost
or destroyed, together with a customary indemnity agreement) as aforesaid, but
in no event more than three (3) Business Days thereafter, the Company shall
issue and deliver, or cause to be issued and delivered, to the Holder,
registered in such name or names as the Holder may direct in writing, a
certificate or certificates for the number of whole Conversion Shares issuable
upon the conversion of this Note. To the extent permitted by law, such
conversion shall be deemed to have been effected, and the Conversion Price shall
be determined, as of the close of business on the Automatic Conversion Date, and
at such time, the rights of the Holder shall cease with respect to the Note
being converted, and the Person or Persons in whose name or names any
certificate or certificates for Conversion Shares shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
Conversion Shares represented thereby.

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          (c) No fractional shares shall be issued upon any conversion of this
Note into Common Stock. If any fractional share of Common Stock would, except
for the provisions of the first sentence of this Section 4(c), be delivered upon
such conversion, the Company, in lieu of delivering such fractional share, shall
pay to the Holder an amount in cash equal to the Market Price of such fractional
share of Common Stock.

          (d) If the Company shall, at any time or from time to time while this
Note is outstanding, pay a dividend or make a distribution on its Common Stock
in shares of Common Stock, subdivide its outstanding shares of Common Stock into
a greater number of shares or combine its outstanding shares of Common Stock
into a smaller number of shares or issue by reclassification of its outstanding
shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then (i) the Conversion Price in effect
immediately prior to the date on which such change shall become effective shall
be adjusted by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such change and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after giving effect to such change and
(ii) the number of Conversion Shares issuable upon conversion of this Note shall
be adjusted by multiplying the number of Conversion Shares issuable upon
conversion of this Note immediately prior to the date on which such change shall
become effective by a fraction, the numerator of which is shall be the
Conversion Price in effect immediately prior to the date on which such change
shall become effective and the denominator of which shall be the Conversion
Price in effect immediately after giving effect to such change, calculated in
accordance with clause (i) above. Such adjustments shall be made successively
whenever any event listed above shall occur.

          (e) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or other
disposition of all or substantially all of the Company's assets to another
Person shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby the Holder shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the Conversion Shares immediately
theretofore issuable upon conversion of this Note such shares of stock,
securities or assets as would have been issuable or payable with respect to or
in exchange for a number of Conversion Shares equal to the number of Conversion
Shares immediately theretofore issuable upon conversion of this Note, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of the Holder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Conversion Price) shall thereafter be applicable, as nearly equivalent as
may be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the conversion hereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the Holder, at
the last address of the Holder

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appearing on the books of the Company, such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, without regard to any conversion limitation specified in
Section 4, and the other obligations under this Note. The provisions of this
paragraph (e) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

          (f) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 4(d)), or
subscription rights or warrants, the Conversion Price to be in effect after such
payment date shall be determined by multiplying the Conversion Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Board in good faith) of said assets
or evidences of indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such Market Price immediately prior to
such payment date. Such adjustment shall be made successively whenever such a
payment date is fixed.

          (g) An adjustment to the Conversion Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.

          (h) In the event that, as a result of an adjustment made pursuant to
this Section 4, the Holder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon conversion of this Note shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained in this Note.

          (i) Except as provided in Section 4(j) hereof, if and whenever the
Company shall issue or sell, or is, in accordance with any of Sections 4(i)(i)
through 4(i)(vii) hereof, deemed to have issued or sold, any Additional Shares
of Common Stock (as defined below) for no consideration or for a consideration
per share less than the Conversion Price in effect immediately prior to the time
of such issuance or sale, then and in each such case (a "Trigger Issuance") the
then-existing Conversion Price, shall be reduced, as of the close of business on
the effective date of the Trigger Issuance, to a price determined as follows:

          Adjusted Conversion Price = (A x B) + D
                                      -----------
                                          A+C

                    where

                    "A" equals the number of shares of Common Stock outstanding,
including Additional Shares of Common Stock (as defined below) deemed to be
issued hereunder, immediately preceding such Trigger Issuance;

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                    "B" equals the Conversion Price in effect immediately
preceding such Trigger Issuance;

                    "C" equals the number of Additional Shares of Common Stock
issued or deemed issued hereunder as a result of the Trigger Issuance; and

                    "D" equals the aggregate consideration, if any, received or
deemed to be received by the Company upon such Trigger Issuance;

provided, however, that in no event shall the Conversion Price after giving
effect to such Trigger Issuance be greater than the Conversion Price in effect
prior to such Trigger Issuance.

     For purposes of this subsection (i), "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued or sold by the Company or deemed to
be issued or sold pursuant to this subsection (i), other than Excluded Issuances
(as defined in subsection (j) hereof).

     For purposes of this Section 4(i), the following subsections (i)(i) to
(i)(viii) shall also be applicable (subject, in each such case, to the
provisions of Section 4(j) hereof):

          (i) In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or security convertible into or exchangeable for
Common Stock (such warrants, rights or options being called "Options" and such
convertible or exchangeable stock or securities being called "Convertible
Securities") whether or not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x) the
total amount, if any, received or receivable by the Company as consideration for
the granting of such Options, plus (y) the aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options, plus
(z), in the case of such Options which relate to Convertible Securities, the
aggregate amount of additional consideration, if any, payable upon the issuance
or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Conversion Price immediately prior to the time of the granting of such
Options, then the total number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total amount of
such Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Conversion
Price. Except as otherwise provided in subsection 4(i)(iii), no adjustment of
the Conversion Price shall be made upon the actual issuance of such Common Stock
or of such Convertible Securities upon exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.

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          (ii) In case the Company shall in any manner issue (directly and not
by assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible Securities
are immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (i) the sum
(which sum shall constitute the applicable consideration) of (x) the total
amount received or receivable by the Company as consideration for the issuance
or sale of such Convertible Securities, plus (y) the aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (ii) the total number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Conversion Price immediately prior to the time of such issuance or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issuance or sale
of such Convertible Securities and thereafter shall be deemed to be outstanding
for purposes of adjusting the Conversion Price, provided that (a) except as
otherwise provided in subsection 4(i)(iii), no adjustment of the Conversion
Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Conversion Price shall be made by reason of the issuance or
sale of Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Conversion Price have been
made pursuant to the other provisions of Section 4(i).

          (iii) Upon the happening of any of the following events, namely, if
the purchase price provided for in any Option referred to in subsection 4(i)(i)
hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 4(i)(i) or
4(i)(ii), or the rate at which Convertible Securities referred to in subsections
4(i)(i) or 4(i)(ii) are convertible into or exchangeable for Common Stock shall
change at any time (including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Conversion Price in effect
at the time of such event shall forthwith be readjusted to the Conversion Price
which would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold. On the termination of any Option for which
any adjustment was made pursuant to this subsection 4(i) or any right to convert
or exchange Convertible Securities for which any adjustment was made pursuant to
this subsection 4(i) (including without limitation upon the redemption or
purchase for consideration of such Convertible Securities by the Company), the
Conversion Price then in effect hereunder shall forthwith be changed to the
Conversion Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

          (iv) Subject to the provisions of this Section 4(i), in case the
Company shall declare a dividend or make any other distribution upon any stock
of the Company (other than the Common Stock) payable in Common Stock, Options or
Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration;
provided, that if any adjustment is made to the Conversion Price as a result of
a declaration of a

                                       11

<PAGE>

dividend and such dividend is rescinded, the Conversion Price shall be
appropriately readjusted to the Conversion Price in effect had such dividend not
been declared.

          (v) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor
shall be deemed to be the net amount received by the Company therefor, after
deduction therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith. In case any
shares of Common Stock, Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board, after deduction of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any Options shall be issued in
connection with the issuance and sale of other securities of the Company,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith by
the Board of Directors of the Company. If Common Stock, Options or Convertible
Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the "Additional Rights") are issued,
then the consideration received or deemed to be received by the Company shall be
reduced by the fair market value of the Additional Rights (as determined using
the Black-Scholes option pricing model or another method mutually agreed to by
the Company and the Holder). The Board shall respond promptly, in writing, to an
inquiry by the Holder as to the fair market value of the Additional Rights. In
the event that the Board and the Holder are unable to agree upon the fair market
value of the Additional Rights, the Company and the Holder shall jointly select
an appraiser, who is experienced in such matters. The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
evenly by the Company and the Holder.

          (vi) In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Stock, Options or Convertible Securities or
(ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issuance
or sale of the shares of 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.

          (vii) The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company
or any of its wholly-owned subsidiaries, and the disposition of any such shares
(other than the cancellation or retirement thereof) shall be considered an
issuance or sale of Common Stock for the purpose of this subsection (i).

          (viii) Notwithstanding any other provision in this subsection (i) to
the contrary, if a reduction in the Conversion Price pursuant to this subsection
(i) (other than as set forth in this clause (viii)) would require the Company to
obtain stockholder approval of the transactions contemplated by the Purchase
Agreement to be consummated on the Closing Date pursuant to Nasdaq Marketplace
Rule 4350(i) and such stockholder approval has not been obtained, (i) the

                                       12

<PAGE>

Conversion Price shall be reduced to the maximum extent that would not require
stockholder approval under such Rule, and (ii) the Company shall use its
commercially reasonable efforts to obtain such stockholder approval as soon as
reasonably practicable, including by calling a special meeting of stockholders
to vote on such Conversion Price adjustment. This provision shall not restrict
the number of shares of Common Stock which a Holder may receive or beneficially
own in order to determine the amount of securities or other consideration that
such Holder may receive in the event of a transaction contemplated by Section 4
of this Note.

          (j) Anything herein to the contrary notwithstanding, the Company shall
not be required to make any adjustment of the Conversion Price in the case of
the issuance of (A) capital stock, Options or Convertible Securities issued to
directors, officers, employees or consultants of the Company in connection with
their service as directors of the Company, their employment by the Company or
their retention as consultants by the Company pursuant to an equity compensation
program approved by the Board of Directors of the Company or the compensation
committee of the Board of Directors of the Company, (B) shares of Common Stock
issued upon the conversion or exercise of Options or Convertible Securities
issued prior to the date hereof, provided such securities are not amended after
the date hereof to increase the number of shares of Common Stock issuable
thereunder or to lower the exercise or conversion price thereof, (C) securities
issued pursuant to the Purchase Agreement and securities issued upon the
exercise or conversion of those securities, (D) shares of Common Stock issued or
issuable by reason of a dividend, stock split or other distribution on shares of
Common Stock (but only to the extent that such a dividend, split or distribution
results in an adjustment in the Conversion Price pursuant to the other
provisions of this Note) and (E) securities issued in connection with the
Secured Notes (collectively, "Excluded Issuances").

          (k) In case at any time:

          (i) the Company shall declare any dividend upon its Common Stock or
any other class or series of capital stock of the Company payable in cash or
stock or make any other distribution to the holders of its Common Stock or any
such other class or series of capital stock;

          (ii) the Company shall offer for subscription pro rata to the holders
of its Common Stock or any other class or series of capital stock of the Company
any additional shares of stock of any class or other rights; or

          (iii) there shall be any capital reorganization or reclassification of
the capital stock of the Company, any acquisition or a liquidation, dissolution
or winding up of the Company;

then, in any one or more of said cases, the Company shall give, by delivery in
person or by certified or registered mail, return receipt requested, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, (a) at least 20 Business Days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any event set forth in clause (iii) of this Section 4(k) and (b)
in the case of any event set forth in clause (iii) of this Section 4(k), at
least 20 Business Days' prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (a) shall also

                                       13

<PAGE>

specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock or such other class or series of
capital stock shall be entitled thereto and such notice in accordance with the
foregoing clause (b) shall also specify the date on which the holders of Common
Stock and such other series or class of capital stock shall be entitled to
exchange their Common Stock and other stock for securities or other property
deliverable upon consummation of the applicable event set forth in clause (iii)
of this Section 4(k).

          (l) Upon any adjustment of the Conversion Price, then and in each such
case the Company shall give prompt written notice thereof, by delivery in person
or by certified or registered mail, return receipt requested, addressed to the
Holder at the address of such Holder as shown on the books of the Company, which
notice shall state the Conversion Price resulting from such adjustment and
setting forth in reasonable detail the method upon which such calculation is
based.

          (m) From and after the effectiveness of the Amendment (as defined in
the Purchase Agreement), the Company shall at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon conversion of this Note as herein provided, such number of shares of Common
Stock as shall then be issuable upon the conversion of this Note. The Company
covenants that all shares of Common Stock which shall be so issued shall be duly
and validly issued and fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, and that the Company will from time to time take
all such action as may be requisite to assure that the par value per share of
the Common Stock is at all times equal to or less than the Conversion Price in
effect at the time. The Company shall take all such action as may be necessary
to assure that all such shares of Common Stock may be so issued without
violation of any applicable law or regulation, or of any requirement of any
national securities exchange or trading market upon which the Common Stock may
be listed. The Company shall not take any action which results in any adjustment
of the Conversion Price if the total number of shares of Common Stock issued and
issuable after such action upon conversion of this Note would exceed the total
number of shares of Common Stock then authorized by the Company's Certificate of
Incorporation.

          (n) The issuance of certificates for shares of Common Stock upon
conversion of this Note shall be made without charge to the holders thereof for
any issuance tax in respect thereof, provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
Holder.

          (o) The Company will not at any time close its transfer books against
the transfer, as applicable, of this Note or of any shares of Common Stock
issued or issuable upon the conversion of this Note in any manner which
interferes with the timely conversion of this Note, except as may otherwise be
required to comply with applicable securities laws.

                                       14

<PAGE>

     5. Covenants.

          (a) So long as any amount due under this Note is outstanding and until
the earlier of (i) the indefeasible payment in full of all amounts payable by
the Company hereunder and (ii) the conversion of this Note:

          (i) The Company shall and shall cause each of its Subsidiaries to (A)
carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducting, (B)
do all things necessary to remain duly organized, validly existing, and in good
standing as a domestic corporation under the laws of its state of incorporation
and (C) maintain all requisite authority to conduct its business in those
jurisdictions in which its business is conducted.

          (ii) The Company shall promptly notify the Holder in writing of (A)
any change in the business or the operations the Company or any Subsidiary which
could reasonably be expected to have a Material Adverse Effect, and (B) any
information which indicates that any financial statements which are the subject
of any representation contained in the Transaction Documents, or which are
furnished to the Holder pursuant to the Transaction Documents, fail, in any
material respect, to present fairly, as of the date thereof and for the period
covered thereby, the financial condition and results of operations purported to
be presented therein, disclosing the nature thereof.

          (iii) The Company shall promptly notify the Holder of the occurrence
of any Event of Default or any event which, with the giving of notice, the lapse
of time or both would constitute an Event of Default, which notice shall include
a written statement as to such occurrence, specifying the nature thereof and the
action (if any) which is proposed to be taken with respect thereto.

          (iv) The Company shall promptly notify the Holder of any action, suit
or proceeding at law or in equity or by or before any governmental
instrumentality or other agency against the Company or any Subsidiary or to
which the Company or any Subsidiary may be subject which alleges damages in
excess of Two Hundred Fifty Thousand United States Dollars ($250,000).

          (v) The Company shall promptly notify the Holder of any default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which the Company or any
Subsidiary is a party which default could reasonably be expected to have a
Material Adverse Effect.

          (vi) The Company shall and shall cause each Subsidiary to pay when due
all taxes, assessments and governmental charges and levies upon it or its
income, profits or property, except those that are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves have been
set aside.

          (vii) The Company shall and shall cause each Subsidiary to all times
maintain with financially sound and reputable insurance companies insurance
covering its assets and its businesses in such amounts and covering such risks
(including, without limitation, hazard,

                                       15

<PAGE>

business interruption and public liability) as is consistent with sound business
practice and as may be obtained at commercially reasonable rates.

          (viii) The Company shall and shall cause each Subsidiary to comply
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which they may be subject except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.

          (ix) The Company shall and shall cause each Subsidiary to use
commercially reasonable efforts to do all things necessary to maintain,
preserve, protect and keep its properties in good repair, working order and
condition and use commercially reasonable efforts to make all necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted.

          (x) At its own expense, the Company shall and shall cause each
Subsidiary to make, execute, endorse, acknowledge, file and/or deliver any
documents and take all commercially reasonable actions necessary or required to
maintain its ownership rights in its Intellectual Property, including, without
limitation, (i) any action reasonably required to protect the Intellectual
Property in connection with any infringement, suspected infringement, passing
off, act of unfair competition or other unlawful interference with the rights of
the Company or any Subsidiary in and to such Intellectual Property, and (ii) any
registrations with the United States Patent & Trademark Office and any
corresponding foreign patent and/or trademark office required for the Company or
any Subsidiary to carry on its business as presently conducted and as presently
proposed to be conducted. Except for non-exclusive licenses granted in the
ordinary course of business, the Company shall not and shall cause each
Subsidiary not to transfer, assign or otherwise convey the Intellectual
Property, any registrations or applications thereof and all goodwill associated
therewith, to any person or entity.

          (xi) Promptly after the occurrence thereof, the Company shall and
shall cause each Subsidiary to inform the Holder of the following material
developments: (i) entering into material agreements outside the ordinary course
of business consistent with past practice, (ii) any issuance of debt securities
by the Company or any Subsidiary, (iii) the incurrence of any Indebtedness,
other than Permitted Indebtedness, by the Company or any Subsidiary, (iv) a
change in the number of the Board of Directors of the Company, (v) a sale, lease
or transfer of any material portion of the assets of the Company or any
Subsidiary and (vi) any change in ownership of any Subsidiary (specifying the
details of any such change, including the identity and ownership amount of any
new owner).

          (b) So long as any amount due under this Note is outstanding and until
the earlier of (i) the indefeasible payment in full of all amounts payable by
the Company hereunder and (ii) the conversion of this Note, without the prior
written consent of the Majority Holders (for purposes of this Section 5(b), any
Company Notes held by any employee, director or officer of the Company or any
Subsidiary shall not be deemed to be outstanding):

          (i) The Company shall not and shall cause each Subsidiary not to
create, incur, guarantee, issue, assume or in any manner become liable in
respect of any Indebtedness, other than Permitted Indebtedness.

                                       16

<PAGE>

          (ii) The Company shall not and shall cause each Subsidiary not to
create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired other than Permitted Liens. The Company
shall not, and shall cause each Subsidiary not to, be bound by any agreement
which limits the ability of the Company or any Subsidiary to grant Liens.

          (iii) The Company shall not and shall cause each Subsidiary not to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service (other than
service as an employee)) with, or for the benefit of, any of its Affiliates
other than a wholly owned Subsidiary, except for consulting arrangements with
directors approved by the Board.

          (iv) The Company shall not, and shall cause each of its Subsidiaries
not to, directly or indirectly, declare or pay any dividends on account of any
shares of any class or series of its capital stock now or hereafter outstanding,
or set aside or otherwise deposit or invest any sums for such purpose, or
redeem, retire, defease, purchase or otherwise acquire any shares of any class
of its capital stock (or set aside or otherwise deposit or invest any sums for
such purpose) for any consideration or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or pay any interest, premium if any, or principal of any Indebtedness or
redeem, retire, defease, repurchase or otherwise acquire any Indebtedness (or
set aside or otherwise deposit or invest any sums for such purpose) for any
consideration or apply or set apart any sum, or make any other payment in
respect thereof or agree to do any of the foregoing (each of the foregoing is
herein called a "Restricted Payment"); provided, that (i) the Company may make
payments of interest, premium if any, and principal of the Notes in accordance
with the terms hereof, (ii) provided that no Event of Default or event which,
with the giving of notice, the lapse of time or both would constitute an Event
of Default has occurred and is continuing, the Company may declare and pay
regular, recurring dividends on the shares of its Series B Preferred Stock
outstanding on the date hereof in accordance with the terms of the Series B
Preferred Stock as in effect on the date hereof, (iii) provided that no Event of
Default or event which, with the giving of notice, the lapse of time or both
would constitute an Event of Default has occurred and is continuing, the Company
and its Subsidiaries may make regularly scheduled payments of interest and
principal of any Permitted Indebtedness, (iv) any Subsidiary directly or
indirectly wholly owned by the Company may pay dividends on its capital stock
and (v) the Company may repurchase capital stock from a former employee in
connection with the termination or other departure of such employee, strictly in
accordance with the terms of any agreement entered into with such employee and
in effect on the Closing Date (as defined in the Purchase Agreement), provided
that (A) such repurchase is approved by a majority of the Board, (B) payments
permitted under this clause (v) shall not exceed $1,000,000 in the aggregate,
and (C) no such payment may be made if an Event of Default or an event which,
with the giving of notice, the lapse of time or both would constitute an Event
of Default has occurred and is continuing or would result from such payment.

          (v) Except as contemplated by the Permitted Acquisition, the Company
shall not and shall cause each Subsidiary not to, directly or indirectly, engage
in any business other than the business of developing, manufacturing and
marketing preventive healthcare

                                       17

<PAGE>

technologies and products, focused on enhanced body defense and the detection of
pre-disease states.

          (vi) The Company shall not and shall cause each Subsidiary not to make
or own any Investment in any Person, including without limitation any joint
venture, other than (A) Permitted Investments, (B) operating deposit accounts
with banks, (C) Hedging Agreements entered into in the ordinary course of the
Company's financial planning and not for speculative purposes and (D)
investments by the Company in the capital stock of any wholly owned Subsidiary.

          (vii) The Company shall not and shall cause each Subsidiary not to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal
or mixed), whether now owned or hereafter acquired, which the Company or any
Subsidiary (a) has sold or transferred or is to sell or to transfer to any other
Person, or (b) intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by the Company or any
Subsidiary to any Person in connection with such lease.

          (viii) The Company shall not and shall cause each Subsidiary not to
settle, or agree to indemnify or defend third parties against, any material
lawsuit, except as may be required by judicial or regulatory order or by
agreements entered into prior to the date hereof on a basis consistent with past
practice. A material lawsuit shall be any lawsuit in which the amount in
controversy exceeds One Million United States Dollars ($1,000,000).

          (ix) Other than the Amendment to Certificate of Incorporation as
contemplated by Section 7.9 of the Purchase Agreement, the Company shall not and
shall cause each Subsidiary not to amend its bylaws, certificate of
incorporation or other charter document in a manner adverse to the Holder.

          (x) The Company shall not change its Fiscal Year.

     6. Event of Default. The occurrence of any of following events shall
constitute an "Event of Default" hereunder:

          (a) the failure of the Company to make any payment of principal on
this Note when due, whether at maturity, upon acceleration or otherwise;

          (b) the failure of the Company to make any payment of interest on this
Note, or any other amounts due under the other Transaction Documents (as defined
under the Purchase Agreement) when due, whether at maturity, upon acceleration
or otherwise, and such failure continues for more than five (5) days;

          (c) the Company and/or its Subsidiaries fail to make a required
payment or payments on Indebtedness of $250,000 or more in aggregate principal
amount and such failure continues for more than ten (10) days;

          (d) there shall have occurred an acceleration of the stated maturity
of any Indebtedness of the Company or its Subsidiaries of $250,000 or more in
aggregate principal

                                       18

<PAGE>

amount (which acceleration is not rescinded, annulled or otherwise cured within
ten (10) days of receipt by the Company or a Subsidiary of notice of such
acceleration);

          (e) the Company makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
or an order, judgment or decree is entered adjudicating the Company as bankrupt
or insolvent; or any order for relief with respect to the Company is entered
under title 11 of the United States Code or any other bankruptcy or insolvency
law; or the Company petitions or applies to any tribunal for the appointment of
a custodian, trustee, receiver or liquidator of the Company or of any
substantial part of the assets of the Company, or commences any proceeding
relating to it under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction; or any
such petition or application is filed, or any such proceeding is commenced,
against the Company and either (i) the Company by any act indicates its approval
thereof, consents thereto or acquiescence therein or (ii) such petition
application or proceeding is not dismissed within sixty (60) days;

          (f) a final, non-appealable judgment which, in the aggregate with
other outstanding final judgments against the Company and its Subsidiaries,
exceeds $250,000 shall be rendered against the Company or a Subsidiary and
within sixty (60) days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within sixty (60) days after the
expiration of such stay, such judgment is not discharged; provided, however,
that a judgment that provides for the payment of royalties subsequent to the
date of the judgment shall be deemed to be discharged so long as the Company or
the Subsidiary affected thereby is in compliance with the terms of such
judgment;

          (g) the Company is in breach of the requirements of Section 5(b)
hereof;

          (h) if any representation or statement of fact made in any Transaction
Document or furnished to the Holder at any time by or on behalf of the Company
proves to have been false in any material respect when made or furnished; or

          (i) if the Company fails to observe or perform in any material respect
any of its covenants contained in the Transaction Documents (other than any
failure which is covered by Section 5(a), (b) or (g)), and such failure
continues for thirty (30) days after receipt by the Company of notice thereof.

     Upon the occurrence of any such Event of Default all unpaid principal and
accrued interest under this Note shall become immediately due and payable (A)
upon election of the Holder, with respect to (a) through (d) and (f) through
(i), and (B) automatically, with respect to (e). Upon the occurrence of any
Event of Default, the Holder may, in addition to declaring all amounts due
hereunder to be immediately due and payable, pursue any available remedy,
whether at law or in equity, including, without limitation, exercising its
rights under the other Transaction Documents. If an Event of Default occurs, the
Company shall pay to the Holder the reasonable attorneys' fees and disbursements
and all other reasonable out-of-pocket costs incurred by the Holder in order to
collect amounts due and owing under this Note or otherwise to enforce the
Holder's rights and remedies hereunder and under the other Transaction
Documents.

                                       19

<PAGE>

     7. No Waiver. To the extent permitted by applicable law, no delay or
omission on the part of the Holder in exercising any right under this Note shall
operate as a waiver of such right or of any other right of the Holder, nor shall
any delay, omission or waiver on any one occasion be deemed a bar to or waiver
of the same or any other right on any future occasion.

     8. Amendments in Writing. Any term of this Note may be amended or waived
upon the written consent of the Company and the holders of Company Notes
representing at least 50% of the principal amount of Company Notes then
outstanding (the "Majority Holders"); provided, that (x) any such amendment or
waiver must apply to all outstanding Company Notes; and (y) without the consent
of the Holder hereof, no amendment or waiver shall (i) change the Stated
Maturity Date of this Note, (ii) reduce the principal amount of this Note or the
interest rate due hereon, (iii) change the Conversion Price or (iv) change the
place of payment of this Note. No such waiver or consent on any one instance
shall be construed to be a continuing waiver or a waiver in any other instance
unless it expressly so provides.

     9. Waivers. The Company hereby forever waives presentment, demand,
presentment for payment, protest, notice of protest, notice of dishonor of this
Note and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.

     10. Waiver of Jury Trial. THE COMPANY HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS NOTE OR
ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THE COMPANY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

     11. Governing Law; Consent to Jurisdiction. This Note shall be governed by
and construed under the law of the State of New York, without giving effect to
the conflicts of law principles thereof. The Company and, by accepting this
Note, the Holder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Note and
the transactions contemplated hereby. Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Note. The Company and, by accepting this Note, the Holder, each irrevocably
consents to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court. The Company and, by
accepting this Note, the Holder, each irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.

     12. Costs. If action is instituted to collect on this Note, the Company
promises to pay all reasonable costs and expenses, including reasonable
attorney's fees, incurred in connection with such action.

     13. Notices. All notices hereunder shall be given in writing and shall be
deemed delivered when received by the other party hereto at the address set
forth in the Purchase

                                       20

<PAGE>

Agreement or at such other address as may be specified by such party from time
to time in accordance with the Purchase Agreement.

     14. Successors and Assigns. This Note shall be binding upon the successors
or assigns of the Company and shall inure to the benefit of the successors and
assigns of the Holder.

                  [Remainder of Page Intentionally Left Blank]

                                       21

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this 12% Convertible Note to be
signed in its name, effective as of the date first above written.

                                        ZILA, INC.

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

                                        22<PAGE>

                                                                     Exhibit 4.2

THE SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

                       6% SENIOR SECURED CONVERTIBLE NOTE

$_______________                                               November __, 2006

          FOR VALUE RECEIVED, Zila, Inc., a Delaware corporation (the
"Company"), hereby unconditionally promises to pay to the order of
________________ (the "Holder"), having an address at
__________________________, at such address or at such other place as may be
designated in writing by the Holder, or its assigns, the aggregate principal sum
of _______ Million United States Dollars ($__________), together with interest
from the date set forth above on the unpaid principal balance of this Note
outstanding at a rate equal to six percent (6%) (computed on the basis of the
actual number of days elapsed in a 360-day year) per annum and continuing on the
outstanding principal until this 6% Senior Secured Convertible Note (the "Note")
is converted into Common Stock as provided herein or indefeasibly and
irrevocably paid in full by the Company. Interest on this Note shall accrue and
shall be payable quarterly on each subsequent January [__], April [__], July
[__], and anniversary hereof until the Stated Maturity Date (as defined below).
Subject to the other provisions of this Note, the principal of this Note and all
accrued and unpaid interest hereon shall mature and become due and payable on
November __, 2009 (the "Stated Maturity Date"). Except as provided herein, all
payments of principal and interest by the Company under this Note shall be made
in United States dollars in immediately available funds to an account specified
by the Holder. In no event shall any interest charged, collected or reserved
under this Note exceed the maximum rate then permitted by applicable law and if
any such payment is paid by the Company, then such excess sum shall be credited
by the Holder as a payment of principal.

          Upon the occurrence and during the continuation of any Event of
Default hereunder, all amounts outstanding hereunder shall bear interest at an
annual rate of fifteen percent (15%). For purposes of any of the covenants set
forth in Sections 5(a)(xiii) through 5(a)(xvi) only, any Event of Default caused
by a breach of any such covenant shall be cured and shall no longer continue
upon the satisfaction by the Company of such covenant for the next succeeding
quarter, to the extent applicable. In no event shall any interest charged,
collected or reserved under this Note exceed the maximum rate then permitted by
applicable law and if any such payment is paid by the Company, then such excess
sum shall be credited by the Holder as a payment of principal.

          This Note is one of a series of Notes (the "Company Notes") of like
tenor in an

<PAGE>

aggregate principal amount of Twelve Million United States Dollars ($12,000,000)
issued by the Company pursuant to the terms of the Purchase Agreement (as
defined below).

     1. Definitions. Capitalized terms used herein shall have the respective
meanings ascribed thereto in the Purchase Agreement unless otherwise defined
herein. Unless the context otherwise requires, when used herein the following
terms shall have the meaning indicated:

          "Additional Rights" has the meaning set forth in Section 4 hereof.

          "Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.

          "Automatic Conversion Event" has the meaning set forth in Section 4(b)
hereof.

          "Board" shall mean the Board of Directors of Company.

          "Business Day" other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.

          "Cash Equivalents" means (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus of not less than
$500,000,000; (c) commercial paper of an issuer rated at least A-1 by Standard &
Poor's Ratings Services ("S&P") or P-1 by Moody's Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within six months from the date
of acquisition; (d) repurchase obligations of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30
days, with respect to securities issued or fully guaranteed or insured by the
United States government; (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition or money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody's
and (iii) have portfolio assets of at least $5,000,000,000.

                                         2

<PAGE>

          "Closing Date" has the meaning set forth in the Purchase Agreement.

          "Common Stock" shall mean the Common Stock, par value $0.001 per
share, of the Company or any securities into which shares of Common Stock may be
reclassified after the date hereof.

          "Company" has the meaning set forth in the first paragraph hereof.

          "Company Notes" has the meaning set forth in the third paragraph
hereof.

          "Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Subsidiaries for such period on a
consolidated basis, determined in accordance with GAAP, consistently applied for
all relevant periods, less (i) gains and losses from any sale, lease,
conveyance, transfer or other disposition of any assets or property of the
Company and its Subsidiaries, other than in the ordinary course of business,
including the tax effects thereof and (ii) items classified under GAAP,
consistently applied for all relevant periods, as extraordinary or non-recurring
gains and losses, and the related tax effects thereof.

          "Control" (including the terms "controlling", "controlled by" or
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

          "Conversion Price" shall mean initially $2.20 per share, subject to
adjustment as provided in Section 4.

          "Conversion Shares" means the shares of Common Stock issuable upon
conversion of this Note.

          "Convertible Securities" has the meaning set forth in Section 4
hereof.

          "EBITDA" means, for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense (other than income taxes attributable to extraordinary, unusual or
non-recurring gains or losses), (b) interest expense, amortization or writeoff
of debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness, (c) depreciation and amortization
expense, and (d) amortization of intangibles (including, but not limited to,
goodwill) and organization costs and minus, to the extent included in the
statement of such Consolidated Net Income for such period, interest income, all
as determined on a consolidated basis.

          "Event of Default" has the meaning set forth in Section 6 hereof.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

          "Excluded Issuances" has the meaning set forth in Section 4(j) hereof.

          "Fiscal Year" means the period commencing on August 1 of any year and
ending

                                       3

<PAGE>

on July 31 of the following year.

          "Free Cash" as of any date means the sum of the Company's unrestricted
cash and Cash Equivalents, determined on a consolidated basis, less the amount
of all Indebtedness outstanding under the Future Working Capital Line.

          "Future Working Capital Line" means Indebtedness of the Company (i) in
the form of one or more working capital line of credit facilities and (ii) that
is secured by the Company's accounts and inventory; provided, that the aggregate
of all such working capital line of credit facilities shall not exceed
$7,000,000.

          "GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis as in effect on the date hereof.

          "Hedging Agreement" means any interest rate swap, collar, cap, floor
or forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, supplemented, restated or otherwise modified from
time to time.

          "Holder" has the meaning set forth in the first paragraph hereof.

          "Indebtedness" means any liability or obligation (i) for borrowed
money, other than trade payables incurred in the ordinary course of business,
(ii) evidenced by bonds, debentures, notes, or other similar instruments, (iii)
in respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), except letters of credit or other similar
instruments issued to secure payment of trade payables or obligations in respect
of workers' compensation, unemployment insurance and other social security laws
or regulation, all arising in the ordinary course of business consistent with
past practices, (iv) to pay the deferred purchase price of property or services,
except trade payables arising in the ordinary course of business consistent with
past practices, (v) as lessee under capitalized leases, (vi) secured by a Lien
on any asset of the Company or a Subsidiary, whether or not such obligation is
assumed by the Company or such Subsidiary.

          "Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding 90 days arising in connection with the
sale of inventory or supplies by such Person in the ordinary course of business;
(c) the entering into of any guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any

                                       4

<PAGE>

Hedging Agreement.

          "Investors" has the meaning set forth in the Purchase Agreement.

          "Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any of the foregoing).

          "Majority Holders" has the meaning set forth in Section 8 hereof.

          "Market Price", as of a particular date (the "Valuation Date"), shall
mean the following: (a) if the Common Stock is then listed on a national stock
exchange, the closing sale price of one share of Common Stock on such exchange
on the last Trading Day prior to the Valuation Date; (b) if the Common Stock is
then quoted on the National Association of Securities Dealers, Inc. OTC Bulletin
Board (the "Bulletin Board") or such similar quotation system or association,
the closing sale price of one share of Common Stock on the Bulletin Board or
such other quotation system or association on the last Trading Day prior to the
Valuation Date or, if no such closing sale price is available, the average of
the high bid and the low asked price quoted thereon on the last trading day
prior to the Valuation Date; (c) if such security is then included in the "pink
sheets," the closing sale price of one share of Common Stock on the "pink
sheets" on the last Trading Day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low ask
price quoted on the "pink sheets" as of the end of the last Trading Day prior to
the Valuation Date; or (d) if the Common Stock is not then listed on a national
stock exchange or quoted on the Bulletin Board, the "pink sheets" or such other
quotation system or association, the fair market value of one share of Common
Stock as of the Valuation Date, as determined in good faith by the Board of
Directors of the Company and the Holder. If the Common Stock is not then listed
on a national securities exchange or quoted on the Bulletin Board, the "pink
sheets" or other quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder as to
the fair market value of a share of Common Stock as determined by the Board of
Directors of the Company. In the event that the Board of Directors of the
Company and the Holder are unable to agree upon the fair market value in respect
of subpart (d) of this paragraph, the Company and the Holder shall jointly
select an appraiser, who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne equally by the Company and the Holder.

          "Note" has the meaning set forth in the first paragraph hereof.

          "Optional Conversion Date" has the meaning set forth in Section 4(a)
hereof.

          "Options" has the meaning set forth in Section 4 hereof.

          "OraTest Expenses" means, for any period, the sum of (i) personnel,
general and administrative expense and research and development expenses of the
Company's Biotech Business Unit for such period and (ii) product launch and
commercialization expenses of the Company's Biotech Business Unit for such
period that are specifically and directly related to the Company's OraTest
product. All of such expenses shall be determined and allocated pursuant to GAAP
and, to the extent consistent with GAAP, the Company's existing accounting
principles,

                                       5

<PAGE>

applied on a basis consistent with the Company's historical financial
statements.

          "Permitted Indebtedness" means:

          (a) Unsecured Indebtedness existing on the Closing Date and
refinancings, renewals and extensions of any such Indebtedness if (i) the
average life to maturity thereof is greater than or equal to that of the
Indebtedness being refinanced or extended (ii) the principal amount thereof or
interest payable thereon is not increased, and (iii) the terms thereof are not
less favorable to the Company or the Subsidiary incurring such Indebtedness than
the Indebtedness being refinanced, renewed or extended;

          (b) the Future Working Capital Line;

          (c) the PIPE Notes;

          (d) Guaranties by any Subsidiary of any "Permitted Indebtedness" of
the Company or another Subsidiary;

          (e) Indebtedness representing the deferred purchase price of property
and capital lease obligations which collectively does not exceed $1,000,000 in
aggregate principal amount; and

          (f) Indebtedness of the Company to any wholly owned Subsidiary and
Indebtedness of any wholly owned Subsidiary to the Company or another wholly
owned Subsidiary which constitutes "Permitted Indebtedness."

          "Permitted Investments" means:

          (a) direct obligations of the United States of America, or of any
agency thereof, or obligations guaranteed as to principal and interest by the
United States of America, or of any agency thereof, in either case maturing not
more than 90 days from the date of acquisition thereof;

          (b) certificates of deposit issued by any bank or trust company
organized under the laws of the United States of America or any State thereof
and having capital, surplus and undivided profits of at least $500,000,000,
maturing not more than 90 days from the date of acquisition thereof;

          (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Ratings Services or Moody's Investors Services, Inc., respectively, maturing not
more than 90 days from the date of acquisition thereof; in each case so long as
the same (x) provide for the payment of principal and interest (and not
principal alone or interest alone) and (y) are not subject to any contingency
regarding the payment of principal or interest; and

          (d) the acquisition contemplated by the non-binding letter of intent
described in the Company's definitive proxy statement, dated September 6, 2006
(the "September Proxy Statement"), of all of the equity interests of an entity
in the dental products industry; provided,

                                       6

<PAGE>

that the acquisition is consummated on substantially the terms described in the
September Proxy Statement (the "Permitted Acquisition").

          "Permitted Liens" means:

          (a) Liens imposed by law for taxes that are not yet due or are being
contested in good faith and for which adequate reserves have been established on
the Company's books and records in accordance with U.S. generally accepted
accounting principles, consistently applied;

          (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or that are
being contested in good faith and by appropriate proceedings;

          (c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;

          (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

          (e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any of its Subsidiaries; and

          (f) Liens granted to secure the obligations of the Company or any
Subsidiary under any Indebtedness permitted under clauses (b) and (e) of the
definition of "Permitted Indebtedness"; provided, however, that any Liens
securing Indebtedness permitted under (i) clause (b) of such definition shall be
limited to the Company's accounts and inventory and (ii) clause (e) of such
definition shall be limited to the property acquired through such Indebtedness.

          "Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

          "PIPE Notes" means up to $12,075,000 in aggregate principal amount of
the Company's 12% Convertible Notes due May __, 2007.

          "PIPE Purchase Agreement" shall mean the Purchase Agreement, dated as
of November __, 2006, and as that agreement may be amended from time to time, by
and among the Company and the certain investors thereto, relating to the sale
and issuance of 9,100,000 shares of Company's Common Stock, warrants to purchase
8,508,000 shares of the Company's Common Stock and the issuance of the PIPE
Notes.

                                       7

<PAGE>

          "Pro Forma Consolidated Net Income" means, for any period,
Consolidated Net Income for such period minus the OraTest Expenses for such
period.

          "Pro Forma EBITDA" means, for any period, EBITDA for such period minus
the OraTest Expenses for such period.

          "Proposal Date" has the meaning set forth in the Purchase Agreement.

          "Purchase Agreement" shall mean the Purchase Agreement, dated as of
November __, 2006, and as that agreement may be amended from time to time, by
and among the Company and the Investors.

          "Qualifying Event of Default" means an Event of Default of the type
specified in Sections 6(b), 6(g) and 6(j).

          "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of November __, 2006, and as that agreement may be amended
from time to time, by and among the Company and the Investors.

          "Restricted Payment" has the meaning set forth in Section 5(b)(iv)
hereof.

          "Security Agreement" has the meaning set forth in the Purchase
Agreement.

          "Security Documents" means the collective reference to the Security
Agreement and each other agreement or writing pursuant to which the Company
purports to pledge or grant a security interest in any property or assets
securing the Company's obligations or any such Person purports to guaranty the
payment and/or performance of the Company's obligations, in each case, as
amended, restated, supplemented or otherwise modified from time to time.

          "Stated Maturity Date" has the meaning set forth in the first
paragraph hereof.

          "Subsidiary" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person.

          "Trading Day" means (i) if the relevant stock or security is listed or
admitted for trading on The New York Stock Exchange, Inc., the Nasdaq Global
Market, the Nasdaq Capital Market or any other national securities exchange, a
day on which such exchange is open for business; (ii) if the relevant stock or
security is quoted on a system of automated dissemination of quotations of
securities prices, a day on which trades may be effected through such system; or
(iii) if the relevant stock or security is not listed or admitted for trading on
any national securities exchange or quoted on any system of automated
dissemination of quotation of securities prices, a day on which the relevant
stock or security is traded in a regular way in the over-the-counter market and
for which a closing bid and a closing asked price for such stock or security are
available, shall mean a day, other than a Saturday or Sunday, on which The New
York Stock Exchange, Inc. is open for trading.

                                       8

<PAGE>

          "Trigger Issuance" has the meaning set forth in Section 4(i) hereof.

     2. Purchase Agreement. This Note is one of the several 6% Senior Secured
Convertible Notes of the Company issued pursuant to the Purchase Agreement. This
Note is subject to the terms and conditions of, and entitled to the benefit of,
the provisions of the Purchase Agreement. This Note is transferable and
assignable to any Person to whom such transfer is permissible under the Purchase
Agreement and applicable law. The Company agrees to issue from time to time a
replacement Note in the form hereof to facilitate such transfers and
assignments. In addition, after delivery of an indemnity in form and substance
reasonably satisfactory to the Company, the Company also agrees to promptly
issue a replacement Note if this Note is lost, stolen, mutilated or destroyed.

     3. Prepayment. This Note shall not be prepayable or redeemable by the
Company prior to the Stated Maturity Date.

     4. Conversion.

          (a) The Holder shall have the right, at its option, exercisable at any
time after the Proposal Date, effective upon delivery to the Company of a
Conversion Notice, to convert all or a portion of the principal amount of this
Note and any accrued and unpaid interest due on the portion of the principal
amount of this Note being converted into fully paid and nonassessable shares of
the Common Stock at the Conversion Price then in effect. The date of any
optional conversion is hereinafter referred to as the "Optional Conversion
Date."

          (b) Subject to the provisions of this clause (b), all of the principal
amount of this Note and any accrued and unpaid interest due hereon shall
automatically and without any action on the part of the Holder convert into
fully paid and nonassessable shares of Common Stock at the Conversion Price then
in effect, in the event that the closing bid price of a share of Common Stock as
traded on the Nasdaq Global Market (or such other exchange or stock market on
which the Common Stock may then be listed or quoted) equals or exceeds $7.00
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after the
date hereof) for twenty (20) consecutive trading days commencing after the
Proposal Date and during which the Registration Statement (as defined in the
Registration Rights Agreement) has been effective (such date, the "Automatic
Conversion Date"); provided that (i) such automatic conversion applies to all of
the Company Notes then outstanding on the same terms, (ii) all of the shares of
Common Stock issuable hereunder either (A) are registered pursuant to an
effective Registration Statement (as defined in the Registration Rights
Agreement) which has not been suspended and for which no stop order is in
effect, and pursuant to which the Holder is able to sell such shares of Common
Stock immediately following the Automatic Conversion Date or (B) no longer
constitute Registrable Securities (as defined in the Registration Rights
Agreement) and (iii) this Note is then fully convertible into shares of Common
Stock. No later than one Business Day following the Automatic Conversion Date,
the Company shall give written notice to the Holder advising the Holder of the
Automatic Conversion Date.

          (c) Promptly after the Automatic Conversion Date or any Optional
Conversion Date, as applicable, the Holder of this Note shall deliver this Note
to the Company

                                       9

<PAGE>

(or, in lieu thereof, an appropriate lost security affidavit in the event this
Note shall have been lost or destroyed, together with a customary indemnity
agreement) to the Company at its principal office (or such other office or
agency of the Company as the Company may designate by notice in writing to the
Holder), together with a statement of the name or names (with address) in which
the certificate or certificates for the Conversion Shares issuable upon such
conversion shall be issued. Promptly following the surrender of this Note (or,
in lieu thereof, delivery of an appropriate lost security affidavit in the event
this Note shall have been lost or destroyed, together with a customary indemnity
agreement) as aforesaid, but in no event more than three (3) Business Days
thereafter, the Company shall issue and deliver, or cause to be issued and
delivered, to the Holder, registered in such name or names as the Holder may
direct in writing, a certificate or certificates for the number of whole
Conversion Shares issuable upon the conversion of this Note and, in the case of
an optional conversion of less than the entire amount of this Note, a new note
of like tenor in the principal amount of this Note not being converted on the
relevant Optional Conversion Date. To the extent permitted by law, such
conversion shall be deemed to have been effected, and the Conversion Price shall
be determined, as of the close of business on the Automatic Conversion Date or
the Optional Conversion Date, as applicable, and at such time, the rights of the
Holder shall cease with respect to the Note, or amount thereof, being converted,
and the Person or Persons in whose name or names any certificate or certificates
for Conversion Shares shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the Conversion Shares represented
thereby.

          (d) No fractional shares shall be issued upon any conversion of this
Note into Common Stock. If any fractional share of Common Stock would, except
for the provisions of the first sentence of this Section 4(d), be delivered upon
such conversion, the Company, in lieu of delivering such fractional share, shall
pay to the Holder an amount in cash equal to the Market Price of such fractional
share of Common Stock.

          (e) If the Company shall, at any time or from time to time while this
Note is outstanding, pay a dividend or make a distribution on its Common Stock
in shares of Common Stock, subdivide its outstanding shares of Common Stock into
a greater number of shares or combine its outstanding shares of Common Stock
into a smaller number of shares or issue by reclassification of its outstanding
shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then (i) the Conversion Price in effect
immediately prior to the date on which such change shall become effective shall
be adjusted by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such change and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after giving effect to such change and
(ii) the number of Conversion Shares issuable upon conversion of this Note shall
be adjusted by multiplying the number of Conversion Shares issuable upon
conversion of this Note immediately prior to the date on which such change shall
become effective by a fraction, the numerator of which is shall be the
Conversion Price in effect immediately prior to the date on which such change
shall become effective and the denominator of which shall be the Conversion
Price in effect immediately after giving effect to such change, calculated in
accordance with clause (i) above. Such adjustments shall be made successively
whenever any event listed above shall occur.

                                       10

<PAGE>

          (f) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or other
disposition of all or substantially all of the Company's assets to another
Person shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby the Holder shall thereafter
have the right, at its option, either (i) to purchase and receive upon the basis
and upon the terms and conditions herein specified and in lieu of the Conversion
Shares immediately theretofore issuable upon conversion of this Note such shares
of stock, securities or assets as would have been issuable or payable with
respect to or in exchange for a number of Conversion Shares equal to the number
of Conversion Shares immediately theretofore issuable upon conversion of this
Note, had such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the Holder
to the end that the provisions hereof (including, without limitation, provision
for adjustment of the Conversion Price) shall thereafter be applicable, as
nearly equivalent as may be practicable in relation to any shares of stock,
securities or assets thereafter deliverable upon the conversion hereof or (ii)
in the event or any such consolidation or merger of the Company or such sale,
transfer or other disposition of all or substantially all of the Company's
assets only, to cause the Company to redeem this Note at a redemption price
equal to 110% of the outstanding principal amount of this Note, together with
all accrued and unpaid interest hereon to the date of redemption, which right
must be exercised by the Holder within ten (10) Business Days after receipt by
it from the Company of written notice of the occurrence of any transaction
giving rise to such right. The Company shall not effect any such consolidation,
merger, sale, transfer or other disposition unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation
purchasing or otherwise acquiring such assets or other appropriate corporation
or entity shall assume the obligation to deliver to the Holder, at the last
address of the Holder appearing on the books of the Company, such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase, without regard to any conversion limitation
specified in Section 4, and the other obligations under this Note. The
provisions of this paragraph (f) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or
other dispositions.

          (g) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 4(e)), or
subscription rights or warrants, the Conversion Price to be in effect after such
payment date shall be determined by multiplying the Conversion Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price of Common Stock immediately prior to such payment date, less
the fair market value (as determined by the Board in good faith) of said assets
or evidences of indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such Market Price immediately prior to
such payment date. Such adjustment shall be made successively whenever such a
payment date is fixed.

                                       11

<PAGE>

          (h) An adjustment to the Conversion Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.

          (i) In the event that, as a result of an adjustment made pursuant to
this Section 4, the Holder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon conversion of this Note shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained in this Note.

          (j) Except as provided in Section 4(j) hereof, if and whenever the
Company shall issue or sell, or is, in accordance with any of Sections 4(j)(i)
through 4(j)(vii) hereof, deemed to have issued or sold, any Additional Shares
of Common Stock (as defined below) for no consideration or for a consideration
per share less than the Conversion Price in effect immediately prior to the time
of such issuance or sale, then and in each such case (a "Trigger Issuance") the
then-existing Conversion Price, shall be reduced, as of the close of business on
the effective date of the Trigger Issuance, to a price determined as follows:

          Adjusted Conversion Price = (A x B) + D
                                      -----------
                                        A+C

                    where

                    "A" equals the number of shares of Common Stock outstanding,
including Additional Shares of Common Stock (as defined below) deemed to be
issued hereunder, immediately preceding such Trigger Issuance;

                    "B" equals the Conversion Price in effect immediately
preceding such Trigger Issuance;

                    "C" equals the number of Additional Shares of Common Stock
issued or deemed issued hereunder as a result of the Trigger Issuance; and

                    "D" equals the aggregate consideration, if any, received or
deemed to be received by the Company upon such Trigger Issuance;

provided, however, that in no event shall the Conversion Price after giving
effect to such Trigger Issuance be greater than the Conversion Price in effect
prior to such Trigger Issuance.

          For purposes of this subsection (j), "Additional Shares of Common
Stock" shall mean all shares of Common Stock issued or sold by the Company or
deemed to be issued or sold pursuant to this subsection (j), other than Excluded
Issuances (as defined in subsection (k) hereof).

          For purposes of this Section 4(j), the following subsections (j)(i) to
(j)(viii) shall also be applicable (subject, in each such case, to the
provisions of Section 4(k) hereof):

                                       12

<PAGE>

          (i) In case at any time the Company shall in any manner grant
(directly and not by assumption in a merger or otherwise) any warrants or other
rights to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or security convertible into or exchangeable for
Common Stock (such warrants, rights or options being called "Options" and such
convertible or exchangeable stock or securities being called "Convertible
Securities") whether or not such Options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the sum (which sum shall constitute the applicable consideration) of (x) the
total amount, if any, received or receivable by the Company as consideration for
the granting of such Options, plus (y) the aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options, plus
(z), in the case of such Options which relate to Convertible Securities, the
aggregate amount of additional consideration, if any, payable upon the issuance
or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Conversion Price immediately prior to the time of the granting of such
Options, then the total number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total amount of
such Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Conversion
Price. Except as otherwise provided in subsection 4(i)(iii), no adjustment of
the Conversion Price shall be made upon the actual issuance of such Common Stock
or of such Convertible Securities upon exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.

          (ii) In case the Company shall in any manner issue (directly and not
by assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert any such Convertible Securities
are immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (i) the sum
(which sum shall constitute the applicable consideration) of (x) the total
amount received or receivable by the Company as consideration for the issuance
or sale of such Convertible Securities, plus (y) the aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (ii) the total number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Conversion Price immediately prior to the time of such issuance or
sale, then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the issuance or sale
of such Convertible Securities and thereafter shall be deemed to be outstanding
for purposes of adjusting the Conversion Price, provided that (a) except as
otherwise provided in subsection 4(j)(iii), no adjustment of the Conversion
Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Conversion Price shall be made by reason of the issuance or
sale of Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Conversion Price have been
made pursuant to the other provisions of Section 4(j).

                                       13

<PAGE>

          (iii) Upon the happening of any of the following events, namely, if
the purchase price provided for in any Option referred to in subsection 4(j)(i)
hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 4(j)(i) or
4(j)(ii), or the rate at which Convertible Securities referred to in subsections
4(j)(i) or 4(j)(ii) are convertible into or exchangeable for Common Stock shall
change at any time (including, but not limited to, changes under or by reason of
provisions designed to protect against dilution), the Conversion Price in effect
at the time of such event shall forthwith be readjusted to the Conversion Price
which would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold. On the termination of any Option for which
any adjustment was made pursuant to this subsection 4(j) or any right to convert
or exchange Convertible Securities for which any adjustment was made pursuant to
this subsection 4(j) (including without limitation upon the redemption or
purchase for consideration of such Convertible Securities by the Company), the
Conversion Price then in effect hereunder shall forthwith be changed to the
Conversion Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

          (iv) Subject to the provisions of this Section 4(j), in case the
Company shall declare a dividend or make any other distribution upon any stock
of the Company (other than the Common Stock) payable in Common Stock, Options or
Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration;
provided, that if any adjustment is made to the Conversion Price as a result of
a declaration of a dividend and such dividend is rescinded, the Conversion Price
shall be appropriately readjusted to the Conversion Price in effect had such
dividend not been declared.

          (v) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for cash, the consideration received therefor
shall be deemed to be the net amount received by the Company therefor, after
deduction therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith. In case any
shares of Common Stock, Options or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board, after deduction of any
expenses incurred or any underwriting commissions or concessions paid or allowed
by the Company in connection therewith. In case any Options shall be issued in
connection with the issuance and sale of other securities of the Company,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith by
the Board of Directors of the Company. If Common Stock, Options or Convertible
Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the "Additional Rights") are issued,
then the consideration received or deemed to be received by the Company shall be
reduced by the fair market value of the Additional Rights (as determined using
the Black-Scholes option pricing model or another method mutually agreed to by
the Company and the Holder). The Board shall respond promptly, in writing, to an
inquiry by the Holder as to the

                                       14

<PAGE>

fair market value of the Additional Rights. In the event that the Board and the
Holder are unable to agree upon the fair market value of the Additional Rights,
the Company and the Holder shall jointly select an appraiser, who is experienced
in such matters. The decision of such appraiser shall be final and conclusive,
and the cost of such appraiser shall be borne evenly by the Company and the
Holder.

          (vi) In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Stock, Options or Convertible Securities or
(ii) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issuance
or sale of the shares of 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.

          (vii) The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the Company
or any of its wholly-owned subsidiaries, and the disposition of any such shares
(other than the cancellation or retirement thereof) shall be considered an
issuance or sale of Common Stock for the purpose of this subsection (j).

          (viii) Notwithstanding any other provision in this subsection (j) to
the contrary, if a reduction in the Conversion Price pursuant to this subsection
(j) (other than as set forth in this clause (viii)) would require the Company to
obtain stockholder approval of the transactions contemplated by the Purchase
Agreement to be consummated on the Closing Date pursuant to Nasdaq Marketplace
Rule 4350(i) and such stockholder approval has not been obtained, (i) the
Conversion Price shall be reduced to the maximum extent that would not require
stockholder approval under such Rule, and (ii) the Company shall use its
commercially reasonable efforts to obtain such stockholder approval as soon as
reasonably practicable, including by calling a special meeting of stockholders
to vote on such Conversion Price adjustment. This provision shall not restrict
the number of shares of Common Stock which a Holder may receive or beneficially
own in order to determine the amount of securities or other consideration that
such Holder may receive in the event of a transaction contemplated by Section 4
of this Note.

          (k) Anything herein to the contrary notwithstanding, the Company shall
not be required to make any adjustment of the Conversion Price in the case of
the issuance of (A) capital stock, Options or Convertible Securities issued to
directors, officers, employees or consultants of the Company in connection with
their service as directors of the Company, their employment by the Company or
their retention as consultants by the Company pursuant to an equity compensation
program approved by the Board of Directors of the Company or the compensation
committee of the Board of Directors of the Company, (B) shares of Common Stock
issued upon the conversion or exercise of Options or Convertible Securities
issued prior to the date hereof, provided such securities are not amended after
the date hereof to increase the number of shares of Common Stock issuable
thereunder or to lower the exercise or conversion price thereof, (C) securities
issued pursuant to the Purchase Agreement and securities issued upon the
exercise or conversion of those securities, (D) shares of Common Stock issued or
issuable by reason of a dividend, stock split or other distribution on shares of
Common Stock (but only to the extent that such a dividend, split or distribution
results in an adjustment in the

                                       15

<PAGE>

Conversion Price pursuant to the other provisions of this Note) and (E)
securities issued pursuant to the PIPE Purchase Agreement (collectively,
"Excluded Issuances").

          (l) In case at any time:

          (i) the Company shall declare any dividend upon its Common Stock or
any other class or series of capital stock of the Company payable in cash or
stock or make any other distribution to the holders of its Common Stock or any
such other class or series of capital stock;

          (ii) the Company shall offer for subscription pro rata to the holders
of its Common Stock or any other class or series of capital stock of the Company
any additional shares of stock of any class or other rights; or

          (iii) there shall be any capital reorganization or reclassification of
the capital stock of the Company, any acquisition or a liquidation, dissolution
or winding up of the Company;

then, in any one or more of said cases, the Company shall give, by delivery in
person or by certified or registered mail, return receipt requested, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, (a) at least 20 Business Days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any event set forth in clause (iii) of this Section 4(l) and (b)
in the case of any event set forth in clause (iii) of this Section 4(l), at
least 20 Business Days' prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (a) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock or such other class or series of
capital stock shall be entitled thereto and such notice in accordance with the
foregoing clause (b) shall also specify the date on which the holders of Common
Stock and such other series or class of capital stock shall be entitled to
exchange their Common Stock and other stock for securities or other property
deliverable upon consummation of the applicable event set forth in clause (iii)
of this Section 4(l).

          (m) Upon any adjustment of the Conversion Price, then and in each such
case the Company shall give prompt written notice thereof, by delivery in person
or by certified or registered mail, return receipt requested, addressed to the
Holder at the address of such Holder as shown on the books of the Company, which
notice shall state the Conversion Price resulting from such adjustment and
setting forth in reasonable detail the method upon which such calculation is
based.

          (n) From and after the effectiveness of the Amendment (as defined in
the Purchase Agreement), the Company shall at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon conversion of this Note as herein provided, such number of shares of Common
Stock as shall then be issuable upon the conversion of this Note. The Company
covenants that all shares of Common Stock which shall be so issued shall be duly
and validly issued and fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, and that the Company will from time to time take
all such action as may be

                                       16

<PAGE>

requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the Conversion Price in effect at the time. The
Company shall take all such action as may be necessary to assure that all such
shares of Common Stock may be so issued without violation of any applicable law
or regulation, or of any requirement of any national securities exchange or
trading market upon which the Common Stock may be listed. The Company shall not
take any action which results in any adjustment of the Conversion Price if the
total number of shares of Common Stock issued and issuable after such action
upon conversion of this Note would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation.

          (o) The issuance of certificates for shares of Common Stock upon
conversion of this Note shall be made without charge to the holders thereof for
any issuance tax in respect thereof, provided that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
Holder. When the Company is required to issue Conversion Shares hereunder, if:
(1) certificates representing such Conversion Shares are not delivered to the
Holder within three (3) Business Days of the Automatic Conversion Date or the
Optional Conversion Date, as applicable, and (2) prior to the time such
certificates are received, the Holder, or any third party on behalf of such
Holder or for the Holder's account, purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of such certificates (a "Buy-In"), then the Company shall pay in cash to
the Holder (for costs incurred either directly by such Holder or on behalf of a
third party) the amount by which the total purchase price paid for Common Stock
as a result of the Buy-In (including brokerage commissions, if any) exceeds the
proceeds received by the Holder as a result of the sale to which such Buy-In
relates. The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In.

          (p) The Company will not at any time close its transfer books against
the transfer, as applicable, of this Note or of any shares of Common Stock
issued or issuable upon the conversion of this Note in any manner which
interferes with the timely conversion of this Note, except as may otherwise be
required to comply with applicable securities laws.

          (q) Notwithstanding anything to the contrary contained herein, the
number of Conversion Shares that may be acquired by the Holder upon any
conversion of this Note (or otherwise in respect hereof) shall be limited to the
extent necessary to insure that, following such conversion (or other issuance),
the total number of shares of Common Stock then beneficially owned by such
Holder and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with the Holder's for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), does
not exceed 9.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
conversion). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. This provision shall not restrict the number of shares
of Common Stock which a Holder may receive or beneficially own in order to
determine the amount of securities or other consideration that such Holder may
receive in the event of a transaction contemplated by Section 4(f) of this Note.
This restriction may not be waived.

                                       17
<PAGE>

     5. Covenants.

          (a) So long as any amount due under this Note is outstanding and until
the earlier of (i) the indefeasible payment in full of all amounts payable by
the Company hereunder and (ii) the conversion of this Note:

          (i) The Company shall and shall cause each of its Subsidiaries to (A)
carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducting, (B)
do all things necessary to remain duly organized, validly existing, and in good
standing as a domestic corporation under the laws of its state of incorporation
and (C) maintain all requisite authority to conduct its business in those
jurisdictions in which its business is conducted.

          (ii) The Company shall promptly notify the Holder in writing of (A)
any change in the business or the operations the Company or any Subsidiary which
could reasonably be expected to have a Material Adverse Effect, and (B) any
information which indicates that any financial statements which are the subject
of any representation contained in the Transaction Documents, or which are
furnished to the Holder pursuant to the Transaction Documents, fail, in any
material respect, to present fairly, as of the date thereof and for the period
covered thereby, the financial condition and results of operations purported to
be presented therein, disclosing the nature thereof.

          (iii) The Company shall promptly notify the Holder of the occurrence
of any Event of Default or any event which, with the giving of notice, the lapse
of time or both would constitute an Event of Default, which notice shall include
a written statement as to such occurrence, specifying the nature thereof and the
action (if any) which is proposed to be taken with respect thereto.

          (iv) The Company shall promptly notify the Holder of any action, suit
or proceeding at law or in equity or by or before any governmental
instrumentality or other agency against the Company or any Subsidiary or to
which the Company or any Subsidiary may be subject which alleges damages in
excess of Two Hundred Fifty Thousand United States Dollars ($250,000).

          (v) The Company shall promptly notify the Holder of any default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which the Company or any
Subsidiary is a party which default could reasonably be expected to have a
Material Adverse Effect.

          (vi) The Company shall and shall cause each Subsidiary to promptly
take any and all actions necessary to execute any definitive documentation
(which documentation shall include customary representations, warranties,
covenants, conditions and agreements, and any UCC financing statements)
reasonably requested by the Holder, for obtaining the benefits of the Security
Agreement, subject to the terms and conditions stated therein.

          (vii) The Company shall and shall cause each Subsidiary to pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or

                                       18

<PAGE>

property, except those that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside.

          (viii) The Company shall and shall cause each Subsidiary to all times
maintain with financially sound and reputable insurance companies insurance
covering its assets and its businesses in such amounts and covering such risks
(including, without limitation, hazard, business interruption and public
liability) as is consistent with sound business practice and as may be obtained
at commercially reasonable rates. The insurance policies will comply with the
provisions of Section 11 of the Security Agreement.

          (ix) The Company shall and shall cause each Subsidiary to comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which they may be subject except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.

          (x) The Company shall and shall cause each Subsidiary to use
commercially reasonable efforts to do all things necessary to maintain,
preserve, protect and keep its properties in good repair, working order and
condition and use commercially reasonable efforts to make all necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted.

          (xi) At its own expense, the Company shall and shall cause each
Subsidiary to make, execute, endorse, acknowledge, file and/or deliver any
documents and take all commercially reasonable actions necessary or required to
maintain its ownership rights in its Intellectual Property, including, without
limitation, (i) any action reasonably required to protect the Intellectual
Property in connection with any infringement, suspected infringement, passing
off, act of unfair competition or other unlawful interference with the rights of
the Company or any Subsidiary in and to such Intellectual Property, and (ii) any
registrations with the United States Patent & Trademark Office and any
corresponding foreign patent and/or trademark office required for the Company or
any Subsidiary to carry on its business as presently conducted and as presently
proposed to be conducted. Except for non-exclusive licenses granted in the
ordinary course of business, the Company shall not and shall cause each
Subsidiary not to transfer, assign or otherwise convey the Intellectual
Property, any registrations or applications thereof and all goodwill associated
therewith, to any person or entity.

          (xii) Promptly after the occurrence thereof, the Company shall and
shall cause each Subsidiary to inform the Holder of the following material
developments: (i) entering into material agreements outside the ordinary course
of business consistent with past practice, (ii) any issuance of debt securities
by the Company or any Subsidiary, (iii) the incurrence of any Indebtedness,
other than Permitted Indebtedness, by the Company or any Subsidiary, (iv) a
change in the number of the Board of Directors of the Company, (v) a sale, lease
or transfer of any material portion of the assets of the Company or any
Subsidiary and (vi) any change in ownership of any Subsidiary (specifying the
details of any such change, including the identity and ownership amount of any
new owner).

          (xiii) The Company shall maintain, as at the end of each fiscal
quarter commencing with the fiscal quarter ending January 31, 2007, Free Cash in
an amount not less

                                       19

<PAGE>

than $4,500,000 (the "Cash Target"); provided, however, that if the Company's
Peridex(R) product line is divested, the Cash Target shall be increased to
$10,500,000 effective as of the closing date of such divestiture.

          (xiv) The Company shall maintain Pro Forma EBITDA of at least $1 (the
"EBITDA Target") for each of the fiscal quarters ending January 31, 2008 and
April 30, 2008; provided, however, that if the Company's Peridex(R) product line
is divested, the EBITDA Target shall be decreased by $1,500,000 on an annualized
basis, commencing on the closing date of such divestiture. For the avoidance of
doubt, if the Peridex(R) divestiture is consummated on December 31, 2007, the
EBITDA Target for the fiscal quarter ending January 31, 2008 would be -$125,000
and the EBITDA Target for the fiscal quarter ending April 30, 2008 would be
-$375,000.

          (xv) The Company shall have Pro Forma Consolidated Net Income of at
least $1 (the "Net Income Target") for the fiscal quarter ended July 31, 2008;
provided, however, that if the Company's Peridex(R) product line is divested,
the Net Income Target shall be decreased by $1,500,000 on an annualized basis,
commencing on the closing date of such divestiture. For the avoidance of doubt,
if the Peridex(R) divestiture is consummated on June 30, 2008, the Net Income
Target for the fiscal quarter ending July 31, 2008 would be -$125,000 and if the
Peridex(R) divestiture is consummated on April 15, 2008, the Net Income Target
for the fiscal quarter ending July 31, 2008 would be -$375,000.

          (xvi) The Company shall have Consolidated Net Income of at least $1
for each fiscal quarter commencing with the fiscal quarter ending October 31,
2008.

          (xvii) Within 45 days after the end of each of the first three fiscal
quarters and within 60 days after the end of each Fiscal Year, the Company shall
deliver to the Holder an officer's certificate, in a form reasonably
satisfactory to the Holder and signed by the Company's Chief Financial Officer,
certifying as to the Company's compliance with all of the terms, conditions and
covenants set forth in this Note (without regard to any period of grace or
requirement of notice provided hereunder) and, in the event any default or Event
of Default exists, specifying the nature of such default or Event of Default and
the Company's plans to cure such default or Event of Default and demonstrating
the Company's compliance with each of the financial covenants set forth in
Sections 5(a)(xiii) through 5(a)(xvi), as applicable. Each such officer's
certificate shall include a perfection certificate update in a form reasonably
satisfactory to the Holder.

          (b) So long as any amount due under this Note is outstanding and until
the earlier of (i) the indefeasible payment in full of all amounts payable by
the Company hereunder and (ii) the conversion of this Note, without the prior
written consent of the Majority Holders (for purposes of this Section 5(b), any
Company Notes held by any employee, director or officer of the Company or any
Subsidiary shall not be deemed to be outstanding):

          (i) The Company shall not and shall cause each Subsidiary not to
create, incur, guarantee, issue, assume or in any manner become liable in
respect of any Indebtedness, other than Permitted Indebtedness.

                                       20

<PAGE>

          (ii) The Company shall not and shall cause each Subsidiary not to
create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired other than (i) Liens created pursuant to
the Security Agreement and (ii) Permitted Liens. The Company shall not, and
shall cause each Subsidiary not to, be bound by any agreement which limits the
ability of the Company or any Subsidiary to grant Liens.

          (iii) The Company shall not and shall cause each Subsidiary not to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service (other than
service as an employee)) with, or for the benefit of, any of its Affiliates
other than a wholly owned Subsidiary, except for consulting arrangements with
directors approved by the Board.

          (iv) The Company shall not, and shall cause each of its Subsidiaries
not to, directly or indirectly, declare or pay any dividends on account of any
shares of any class or series of its capital stock now or hereafter outstanding,
or set aside or otherwise deposit or invest any sums for such purpose, or
redeem, retire, defease, purchase or otherwise acquire any shares of any class
of its capital stock (or set aside or otherwise deposit or invest any sums for
such purpose) for any consideration or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or pay any interest, premium if any, or principal of any Indebtedness or
redeem, retire, defease, repurchase or otherwise acquire any Indebtedness (or
set aside or otherwise deposit or invest any sums for such purpose) for any
consideration or apply or set apart any sum, or make any other payment in
respect thereof or agree to do any of the foregoing (each of the foregoing is
herein called a "Restricted Payment"); provided, that (i) the Company may make
payments of interest, premium if any, and principal of the Notes in accordance
with the terms hereof, (ii) provided that no Event of Default or event which,
with the giving of notice, the lapse of time or both would constitute an Event
of Default has occurred and is continuing, the Company may declare and pay
regular, recurring dividends on the shares of its Series B Preferred Stock
outstanding on the date hereof in accordance with the terms of the Series B
Preferred Stock as in effect on the date hereof, (iii) provided that no Event of
Default or event which, with the giving of notice, the lapse of time or both
would constitute an Event of Default has occurred and is continuing, the Company
and its Subsidiaries may make regularly scheduled payments of interest and
principal of any Permitted Indebtedness, (iv) any Subsidiary directly or
indirectly wholly owned by the Company may pay dividends on its capital stock
and (v) the Company may repurchase capital stock from a former employee in
connection with the termination or other departure of such employee, strictly in
accordance with the terms of any agreement entered into with such employee and
in effect on the Closing Date (as defined in the Purchase Agreement), provided
that (A) such repurchase is approved by a majority of the Board, (B) payments
permitted under this clause (v) shall not exceed $1,000,000 in the aggregate,
and (C) no such payment may be made if an Event of Default or an event which,
with the giving of notice, the lapse of time or both would constitute an Event
of Default has occurred and is continuing or would result from such payment.

          (v) Except as contemplated by the Permitted Acquisition, the Company
shall not and shall cause each Subsidiary not to, directly or indirectly, engage
in any business other than the business of developing, manufacturing and
marketing preventive healthcare

                                       21

<PAGE>

technologies and products, focused on enhanced body defense and the detection of
pre-disease states.

          (vi) The Company shall not and shall cause each Subsidiary not to make
or own any Investment in any Person, including without limitation any joint
venture, other than (A) Permitted Investments, (B) operating deposit accounts
with banks, (C) Hedging Agreements entered into in the ordinary course of the
Company's financial planning and not for speculative purposes and (D)
investments by the Company in the capital stock of any wholly owned Subsidiary.

          (vii) The Company shall not and shall cause each Subsidiary not to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal
or mixed), whether now owned or hereafter acquired, which the Company or any
Subsidiary (a) has sold or transferred or is to sell or to transfer to any other
Person, or (b) intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by the Company or any
Subsidiary to any Person in connection with such lease.

          (viii) The Company shall not and shall cause each Subsidiary not to
settle, or agree to indemnify or defend third parties against, any material
lawsuit, except as may be required by judicial or regulatory order or by
agreements entered into prior to the date hereof on a basis consistent with past
practice. A material lawsuit shall be any lawsuit in which the amount in
controversy exceeds One Million United States Dollars ($1,000,000).

          (ix) Other than the Amendment to Certificate of Incorporation as
contemplated by Section 7.9 of the Purchase Agreement, the Company shall not and
shall cause each Subsidiary not to amend its bylaws, certificate of
incorporation or other charter document in a manner adverse to the Holder.

          (x) The Company shall not change its Fiscal Year.

     6. Event of Default. The occurrence of any of following events shall
constitute an "Event of Default" hereunder:

          (a) the failure of the Company to make any payment of principal on
this Note when due, whether at maturity, upon acceleration or otherwise;

          (b) the failure of the Company to make any payment of interest on this
Note, or any other amounts due under the other Transaction Documents (as defined
under the Purchase Agreement) when due, whether at maturity, upon acceleration
or otherwise, and such failure continues for more than five (5) days;

          (c) the Company and/or its Subsidiaries fail to make a required
payment or payments on Indebtedness of $250,000 or more in aggregate principal
amount and such failure continues for more than ten (10) days;

          (d) there shall have occurred an acceleration of the stated maturity
of any Indebtedness of the Company or its Subsidiaries of $250,000 or more in
aggregate principal

                                       22

<PAGE>

amount (which acceleration is not rescinded, annulled or otherwise cured within
ten (10) days of receipt by the Company or a Subsidiary of notice of such
acceleration);

          (e) the Company makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts generally as they become due;
or an order, judgment or decree is entered adjudicating the Company as bankrupt
or insolvent; or any order for relief with respect to the Company is entered
under title 11 of the United States Code or any other bankruptcy or insolvency
law; or the Company petitions or applies to any tribunal for the appointment of
a custodian, trustee, receiver or liquidator of the Company or of any
substantial part of the assets of the Company, or commences any proceeding
relating to it under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction; or any
such petition or application is filed, or any such proceeding is commenced,
against the Company and either (i) the Company by any act indicates its approval
thereof, consents thereto or acquiescence therein or (ii) such petition
application or proceeding is not dismissed within sixty (60) days;

          (f) a final, non-appealable judgment which, in the aggregate with
other outstanding final judgments against the Company and its Subsidiaries,
exceeds $250,000 shall be rendered against the Company or a Subsidiary and
within sixty (60) days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within sixty (60) days after the
expiration of such stay, such judgment is not discharged; provided, however,
that a judgment that provides for the payment of royalties subsequent to the
date of the judgment shall be deemed to be discharged so long as the Company or
the Subsidiary affected thereby is in compliance with the terms of such
judgment;

          (g) the Company is in breach of the requirements of Sections
5(a)(xiii) through 5(a)(xvii) or Section 5(b) hereof;

          (h) if any representation or statement of fact made in any Transaction
Document, certificate or other document furnished to the Holder at any time by
or on behalf of the Company proves to have been false in any material respect
when made or furnished;

          (i) any Liens created by the Security Documents shall at any time not
constitute a valid and perfected first priority Lien on the collateral intended
to be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Holders, free and clear of all other Liens (other than Permitted Liens), or any
of the security interests granted pursuant to the Security Documents shall be
determined to be void, voidable, invalid or unperfected, are subordinated or are
ineffective to provide the Holder with a perfected, first priority security
interest in the collateral covered by the Security Documents, free and clear of
all other Liens (other than Permitted Liens) or, except for expiration or
termination in accordance with their terms, the Security Agreement shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof or any other Transaction Documents shall be contested by
the Company;

          (j) if the Company fails to observe or perform in any material respect
any of its covenants contained in the Transaction Documents (other than any
failure covered by Section

                                       23

<PAGE>

6(a), (b) or (g)), and such failure continues for thirty (30) days after receipt
by the Company of notice thereof;

          (k) the Proposal Date does not occur on or prior to December 31, 2006;
or

          (l) The Company shall fail to comply with the corporate governance
changes as specified in the writing delivered to the Holder pursuant to the
terms of the Purchase Agreement on or prior to the respective dates set forth in
such writing.

     Upon the occurrence of any such Event of Default, except as provided in the
following paragraph, all unpaid principal and accrued interest under this Note
shall become immediately due and payable (A) upon election of the Holder, with
respect to (a) through (d) and (f) through (l), and (B) automatically, with
respect to (e). Except as provided in the following paragraph, upon the
occurrence of any Event of Default, the Holder may, in addition to declaring all
amounts due hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity, including, without limitation, exercising
its rights under the other Transaction Documents. If an Event of Default occurs,
the Company shall pay to the Holder the reasonable attorneys' fees and
disbursements and all other reasonable out-of-pocket costs incurred by the
Holder in order to collect amounts due and owing under this Note or otherwise to
enforce the Holder's rights and remedies hereunder and under the other
Transaction Documents.

     So long as the only Events of Default that have occurred and are continuing
are Qualifying Events of Default, upon the first occurrence of a Qualifying
Event of Default which is not cured by the Company or waived or rescinded by the
Holder, the Holder's right to accelerate the principal and interest due under
this Note shall be limited to one-third of the outstanding principal amount and
all accrued interest then due under this Note (the "First Default Amount"). The
date on which notice of the acceleration of the First Default Amount is given by
the Holder is hereinafter referred to as the "First Acceleration Date." Upon the
second occurrence of a Qualifying Event of Default which is not cured or waived
or rescinded by the Holder or upon the continuation of an existing Qualifying
Event of Default more than 90 days after the First Acceleration Date and
provided that the Holder shall have received the indefeasible payment in full of
the First Default Amount, the Holder's right to accelerate the principal and
interest due under this Note shall be limited to one-half of the outstanding
principal amount and all accrued interest then due under this Note (the "Second
Default Amount"); provided, however, that no such acceleration shall be
effective until 90 days after the First Acceleration Date. The date on which
notice of the acceleration of the Second Default Amount is given by the Holder
is hereinafter referred to as the "Second Acceleration Date." Upon the third
occurrence of a Qualifying Event of Default which is not cured by the Company or
waived or rescinded by the Holder or upon the continuation of an existing
Qualifying Event of Default more than 90 days after the Second Acceleration Date
and provided that the Holder shall have received the indefeasible payment in
full of the First Default Amount and the Second Default Amount, the Holder shall
not have the right to accelerate the remaining outstanding principal amount and
all accrued interest then due under this Note until 90 days after the Second
Acceleration Date. The failure of the Company to indefeasibly pay in full the
First Default Amount or the Second Default Amount within three days of the First
Acceleration Date or the Second Acceleration Date, as applicable, shall
constitute an additional Event of Default hereunder and shall entitle the
Holder, at its option, to declare the entire principal amount of this Note and
all accrued interest

                                       24

<PAGE>

hereunder immediately due and payable. In no event shall the Holder proceed
against the collateral pursuant to the terms of the Security Agreement in
respect of one or more Qualifying Events of Default subject to the provisions of
this paragraph unless and until the Company shall have failed to pay the First
Default Amount or the Second Default Amount, as applicable, within three days of
the First Acceleration Date or the Second Acceleration Date, as applicable.

     7. No Waiver. To the extent permitted by applicable law, no delay or
omission on the part of the Holder in exercising any right under this Note shall
operate as a waiver of such right or of any other right of the Holder, nor shall
any delay, omission or waiver on any one occasion be deemed a bar to or waiver
of the same or any other right on any future occasion.

     8. Amendments in Writing. Any term of this Note may be amended or waived
upon the written consent of the Company and the holders of Company Notes
representing at least 50% of the principal amount of Company Notes then
outstanding (the "Majority Holders"); provided, that (x) any such amendment or
waiver must apply to all outstanding Company Notes; and (y) without the consent
of the Holder hereof, no amendment or waiver shall (i) change the Stated
Maturity Date of this Note, (ii) reduce the principal amount of this Note or the
interest rate due hereon, (iii) change the Conversion Price or (iv) change the
place of payment of this Note. No such waiver or consent on any one instance
shall be construed to be a continuing waiver or a waiver in any other instance
unless it expressly so provides.

     9. Waivers. The Company hereby forever waives presentment, demand,
presentment for payment, protest, notice of protest, notice of dishonor of this
Note and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.

     10. Waiver of Jury Trial. THE COMPANY HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS NOTE OR
ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THE COMPANY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

     11. Secured Obligation. This Note is one of the Notes referred to in the
Security Agreement and is secured by the collateral described therein. The
Security Agreement grants the Holder certain rights with respect to such
collateral upon an Event of Default.

     12. Governing Law; Consent to Jurisdiction. This Note shall be governed by
and construed under the law of the State of New York, without giving effect to
the conflicts of law principles thereof. The Company and, by accepting this
Note, the Holder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Note and
the transactions contemplated hereby. Service of process in connection with any
such suit, action or proceeding may be served on each party hereto anywhere in
the world by the same methods as are specified for the giving of notices under
this Note. The Company and, by accepting this Note, the Holder, each irrevocably
consents to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court. The Company and, by
accepting

                                       25

<PAGE>

this Note, the Holder, each irrevocably waives any objection to the laying of
venue of any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.

     13. Costs. If action is instituted to collect on this Note, the Company
promises to pay all reasonable costs and expenses, including reasonable
attorney's fees, incurred in connection with such action.

     14. Notices. All notices hereunder shall be given in writing and shall be
deemed delivered when received by the other party hereto at the address set
forth in the Purchase Agreement or at such other address as may be specified by
such party from time to time in accordance with the Purchase Agreement.

     15. Successors and Assigns. This Note shall be binding upon the successors
or assigns of the Company and shall inure to the benefit of the successors and
assigns of the Holder.

                  [Remainder of Page Intentionally Left Blank]

                                       26

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this 6% Senior Convertible Note
to be signed in its name, effective as of the date first above written.

                                        ZILA, INC.

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

                                        27

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