Document:

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                                                                   EXHIBIT 10.1A

                             CONVERTED ORGANICS INC.
                            7A COMMERCIAL WHARF WEST
                                BOSTON, MA 02210
                       TEL: 617 624-0111 FAX 617 624-0333
                          EMAIL: EGILDEA@ECAPGLOBAL.COM

                                 APRIL 11, 2006

                            FINANCING TERMS AGREEMENT
                       FOR SALE OF BRIDGE NOTES AND SHARES

ISSUER:                       CONVERTED ORGANICS INC. ("CONVERTED ORGANICS"
                              or the "COMPANY").

AMOUNT:                       $1,500,000 in one hundred (100) UNITS of
                              $15,000 in exchange for bridge notes ("BRIDGE
                              NOTE(S)") and securities of the COMPANY
                              ("BRIDGE EQUITY UNITS").

PURCHASERS:                    "Accredited" investors, including High Capital
                              Funding, LLC ("HCF"), as defined in Regulation
                              D of the Securities Act of 1933.  See signature
                              pages hereto for names, addresses, and the
                              number of UNITS being purchased.  PURCHASERS
                              have read and agree to the terms contained in
                              Exhibit D hereto.

TERM OF NOTES:                INTEREST AND PRE-PAYMENT:  Interest will accrue
                              on the principal amount of the BRIDGE NOTE(S)
                              at the rate of eight (8%) percent per annum,
                              based on a 360-day year.  The Company will have
                              the right to prepay without penalty any amount
                              owed under the BRIDGE NOTE(S) in whole or in
                              part at any time. Accrued interest shall be
                              paid quarterly, beginning three months after
                              the FIRST CLOSING and every three months
                              thereafter.

                              MATURITY DATE: The Company plans to raise
                              approximately $8-10 million in an initial public
                              offering (the "PUBLIC OFFERING"). The principal
                              amount and accrued and unpaid interest on the
                              BRIDGE NOTE(S) will be due and payable at the
                              earlier of: October 16, 2006 or the closing of a
                              PUBLIC OFFERING ("MATURITY DATE"). After the
                              MATURITY DATE, unpaid principal on the BRIDGE
                              NOTES shall bear interest at eighteen (18%) per
                              annum.

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BRIDGE SECURITIES:            Upon the closing of the PUBLIC OFFERING,
                              the COMPANY shall deliver to each PURCHASER,
                              BRIDGE EQUITY UNITS consisting of securities
                              identical in form to the securities offered for
                              sale in the PUBLIC OFFERING ("PRIMARY BRIDGE
                              EQUITY UNITS"), except that the certificates
                              for the PRIMARY BRIDGE EQUITY UNITS may bear
                              restrictive legends. Each PURCHASER shall
                              receive the number of PRIMARY BRIDGE EQUITY
                              UNITS equal to the principal of such
                              PURCHASER'S BRIDGE NOTE(S) divided by the
                              public offering price of the securities
                              comprising the PRIMARY BRIDGE EQUITY UNIT. The
                              securities issued to PURCHASERS shall have the
                              same CUSIP numbers as the corresponding
                              securities in the PUBLIC OFFERING.

                              If a PUBLIC OFFERING shall not have occurred prior
                              to October 16, 2006, then on October 17, 2006 the
                              COMPANY shall issue to the PURCHASER alternate
                              BRIDGE EQUITY UNITS ("ALTERNATE BRIDGE EQUITY
                              UNITS") consisting of that number of shares of
                              common stock of the COMPANY as shall equal the
                              principal amount of the BRIDGE NOTE(S) divided by
                              $3.00 plus an equal number of non-callable
                              warrants exercisable at $3.00 per share for a
                              period of five years from such issuance, and which
                              shall have a cashless exercise feature at any time
                              after October 16, 2007 that the underlying shares
                              of common stock are not covered by an effective
                              registration statement with a current prospectus
                              available. The number of ALTERNATE BRIDGE EQUITY
                              UNITS shall be adjusted, pro rata, on account of
                              any stock splits, reverse stock splits, stock
                              dividends paid on common stock, etc. which occur
                              after the date of issuance of the BRIDGE NOTE(S)
                              and prior to the issuance of the ALTERNATE BRIDGE
                              EQUITY UNITS. PRIMARY BRIDGE EQUITY UNITS and
                              Alternate BRIDGE EQUITY UNITS are sometimes
                              referred to herein as "BRIDGE EQUITY UNITS."

                              The PURCHASERS shall have the right for a period
                              of one year and one month from the issuance of the
                              ALTERNATE BRIDGE EQUITY UNITS to exchange them for
                              PRIMARY BRIDGE EQUITY Units of an equivalent worth
                              issued in a public offering of the COMPANY such
                              that the PURCHASERS will own the same securities
                              as if the public offering had closed on or prior
                              to the six month anniversary of the FIRST CLOSING.

PURCHASE PRICE:               The aggregate purchase price for each BRIDGE
                              NOTE and BRIDGE EQUITY UNIT shall be the
                              original principal amount of the BRIDGE NOTE(S)
                              included in such UNIT. The purchase price
                              allocable to the BRIDGE NOTE(S) included in
                              such UNIT shall be not less than 75% of such
                              aggregate purchase price and the purchase price

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                                 allocable to the BRIDGE EQUITY UNITS included
                                 in such UNIT shall be not more than 25% of such
                                 aggregate purchase price. The tax value of the
                                 BRIDGE EQUITY UNITS shall be equal to the
                                 portion of the purchase price allocated to the
                                 BRIDGE EQUITY UNITS.

SECURITY:                        Repayment of the BRIDGE NOTE(S) shall be
                                 secured by a lien on all tangible and
                                 intangible assets of the COMPANY to be
                                 evidenced by a SECURITY AGREEMENT in form and
                                 substance satisfactory to HCF, the lead
                                 INVESTOR.

DOCUMENT PREPARATION SECURITIES: In lieu of reimbursing HCF, for the cost of
                                 preparing the legal documents for this
                                 transaction, CONVERTED ORGANICS shall issue to
                                 HCF, BRIDGE EQUITY UNITS with a tax value of
                                 $25,000 ("DOCUMENT PREPARATION SECURITIES").
                                 The DOCUMENT PREPARATION SECURITIES shall be in
                                 all respects identical to the BRIDGE EQUITY
                                 UNITS with identical attendant rights. If a
                                 PUBLIC OFFERING shall not have occurred prior
                                 to six months from the FIRST CLOSING, then the
                                 BRIDGE EQUITY UNITS comprising the DOCUMENT
                                 PREPARATION SECURITIES shall automatically
                                 convert to 33,333 ALTERNATE BRIDGE EQUITY
                                 UNITS.

PLACEMENT AGENT FEE:             CONVERTED ORGANICS and PURCHASERS agree that
                                 CONVERTED ORGANICS shall be solely responsible
                                 for the payment of placement agent fees to
                                 Investors Capital Corporation ("Placement
                                 Agent").

EXPENSES:                        PURCHASERS and CONVERTED ORGANICS shall each be
                                 responsible for their own expenses in
                                 connection with this transaction.

TRANSFER AND ASSIGNMENT:         PURCHASERS shall have the right, subject to
                                 applicable securities laws, to transfer and/or
                                 assign the BRIDGE NOTES and/or the BRIDGE
                                 EQUITY UNITS, and HCF shall have the right to
                                 transfer and/or assign the DOCUMENT PREPARATION
                                 SECURITIES.  Any PURCHASER, transferee or
                                 assignee of a BRIDGE NOTE, BRIDGE EQUITY UNITS,
                                 or DOCUMENT PREPARATION SECURITIES is a
                                 "HOLDER" or collectively "HOLDERS."

CLOSING DATE/ESCROW:             The first closing of this transaction ("FIRST
                                 CLOSING") was on March 2, 2006 for $500,000
                                 principal amount of Bridge Note(s) which
                                 followed the receipt by David A. Rapaport
                                 (Executive V.P. and General Counsel of HCF), as
                                 ESCROW AGENT, of (a) $500,000 ("FIRST CLOSING
                                 PROCEEDS") from HCF, (b) executed BRIDGE NOTES
                                 for an aggregate of the FIRST CLOSING PROCEEDS,
                                 (c) a fully executed SECURITY AGREEMENT with
                                 evidence of

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                              the filing of UCC-1's, and (d) a LEGAL OPINION (as
                              defined in "Jurisdiction/Choice of Law" below). At
                              the FIRST CLOSING the ESCROW AGENT transferred the
                              FIRST CLOSING PROCEEDS - minus Placement Agent
                              fees - to CONVERTED ORGANICS and delivered the
                              BRIDGE NOTE(S) to HCF. ADDITIONAL CLOSINGS shall
                              be held at the mutual agreement of the parties,
                              including HCF, provided that no ADDITIONAL
                              CLOSINGS shall be held after April 30, 2006
                              without the written consent of HCF.

FINANCIAL INFORMATION:        The Company has delivered to HCF the unaudited
                              financial statements of Mining Organics Management
                              LLC for the years ended December 31, 2004 and
                              December 31, 2003, or the federal tax returns of
                              Mining Organics Management LLC for the years 2004
                              and 2003. The Company shall deliver unaudited
                              financial statements of Mining Organics Management
                              LLC for the year ended December 31, 2005 or the
                              federal tax return of Mining Organics Management
                              LLC for the year 2005 by March 31, 2006. The
                              Company also has delivered to HCF the form of
                              Asset Purchase Agreements between the Company and
                              Mining Organics Management LLC, and between the
                              Company and Mining Organics HRRY LLC, identifying
                              the assets to be transferred  from the LLC's to
                              the Company.

REGISTRATION RIGHTS:          The Company will (1) file a resale registration
                              statement within 180 days of the PUBLIC
                              OFFERING closing: (2) cause it to be effective
                              within 240 days of the PUBLIC OFFERING closing
                              if the registration statement is not reviewed
                              by the Securities and Exchange Commission
                              ("SEC") and 270 days of the PUBLIC OFFERING
                              closing if the registration statement is
                              reviewed by the SEC covering the resale of the
                              BRIDGE EQUITY UNITS and the DOCUMENT
                              PREPARATION SECURITIES (including the resale of
                              any shares of common stock issuable upon the
                              exercise or conversion of any BRIDGE EQUITY
                              UNITS); and (3) cause it to remain effective
                              with a current prospectus available for a
                              period of the longer of two years, or until the
                              expiration or exercise in full of any warrants
                              contained in the BRIDGE EQUITY UNITS.

                              If the Company fails to satisfy requirements (1)
                              or (2) above it will be subject to a 2% cash late
                              registration fee (i.e. 2% of the outstanding
                              BRIDGE NOTE(S) principal) per month or part
                              thereof that such failure continues ("LATE FEE");
                              provided such LATE FEE shall not be accrued for
                              any month after one year from the FIRST CLOSING
                              that the Company is current in its reporting
                              obligations under the Exchange Act and has been
                              subject to such reporting requirements for at
                              least 90 days, unless any Holder is

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                              the beneficial owner of more than 1% of CONVERTED
                              ORGANICS's issued and outstanding common stock, in
                              which case the LATE FEE shall continue to accrue
                              for no more than two years from the FIRST CLOSING.

                              If the COMPANY fails to satisfy requirement (3)
                              above, the LATE FEE shall continue until the
                              longer of the period set forth in the preceding
                              paragraph, or the expiration or exercise in full
                              of any warrants included in the BRIDGE EQUITY
                              UNITS.

JURISDICTION/CHOICE OF LAW:   All transaction documents shall be governed by and
                              construed under the laws of the state of Delaware
                              as applied to agreements entered into and to be
                              performed entirely within the state of Delaware,
                              without giving effect to principles of conflicts
                              of law. The parties irrevocably consent to the
                              jurisdiction and venue of the state and federal
                              courts located in Wilmington, DE in connection
                              with any action relating to this transaction. At
                              or prior to each ADDITIONAL CLOSING, PURCHASERS
                              shall receive a legal opinion from Company counsel
                              in form and substance satisfactory to HCF it as to
                              (a) the due formation and existence of the COMPANY
                              (under Delaware law), (b) the validity and
                              enforceability of this Financing Terms Agreement
                              (under Delaware law), the BRIDGE NOTE(S) (under
                              Delaware law), and the SECURITY AGREEMENT (under
                              Delaware law), including specifically that neither
                              this Financing Terms Agreement  nor the BRIDGE
                              NOTE(S) violate any laws of the state of Delaware
                              relating directly or indirectly to the maximum
                              rate of interest that may be charged in this
                              transaction, subject to standard carve-outs for
                              equitable remedies and insolvency laws, and (c)
                              the valid authorization to issue the BRIDGE EQUITY
                              UNITS and the DOCUMENT PREPARATION SECURITIES
                              (under Delaware law) ("LEGAL OPINION"). The LEGAL
                              OPINION shall be updated and reissued at each
                              ADDITIONAL CLOSING.

BINDING AGREEMENT:            All parties executing this Financing Terms
                              Agreement, including Exhibit D, shall be
                              legally bound by the above terms and shall
                              execute such further documents ("FURTHER
                              DOCUMENTS"), including without limitation
                              BRIDGE NOTE(S), a SECURITY AGREEMENT, AND AN
                              ESCROW AGREEMENT substantially in the forms of
                              Exhibit A, Exhibit B, and Exhibit C attached
                              hereto, respectively. If there are any
                              inconsistencies between this Financing Terms
                              Agreement (Exclusive of Exhibits A, B & C) and
                              any such FURTHER DOCUMENTS executed in
                              connection with this transaction, the terms of
                              this Financing Terms Agreement shall govern.
                              This Financing Terms Agreement may be signed in
                              two or more counterparts,

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                              all of which taken together shall constitute an
                              original. Facsimile signatures shall be deemed to
                              be original signatures.

CONVERTED ORGANICS INC.

By:                                       Date:       April 11, 2006
    --------------------------
            (signature)

   Edward J. Gildea, President
------------------------------------
          (name and title)

DAVID A. RAPAPORT, ESCROW AGENT

                                          Date:       April 11, 2006
--------------------------------

333 Sandy Springs Circle, Suite 230

Atlanta, GA 30328

Tel: 404 257-9150

Fax: 404 257-9125

Email: drapaport@highcapus.com

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                         EXHIBIT A - FORM OF BRIDGE NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD,
PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (A) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY
APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION
OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.

Certificate No.                                                $
                ----------                                      ----------------
                                                                Principal Amount

                             CONVERTED ORGANICS INC.
                             SECURED PROMISSORY NOTE

                                                                          , 2006
                                                                 ---------

FOR VALUE RECEIVED, CONVERTED ORGANICS INC., a Delaware corporation,
("Borrower") promises to pay to the order of ___________________________
("Lender") the principal amount of ___________________________ Dollars
($______________), together with interest on the unpaid principal amount at the
rate of 8 percent (8%) per annum based on a 360-day year, all upon the terms set
forth below. This Secured Promissory Note (the "Note") is issued pursuant to
that certain Financing Terms Agreement for Sale of Bridge Notes and Shares,
dated as of April 11, 2006, by and between Lender and Borrower (the "Financing
Agreement"). This Note is subject to the terms and conditions of the Financing
Agreement. To the extent that any of the terms specifically set forth in the
Financing Agreement is inconsistent with the provisions of this Note
specifically relating to such matters, the Financing Agreement shall govern with
respect to such inconsistencies. Capitalized terms used herein and not otherwise
defined have the meanings ascribed to them in the Financing Agreement.

1. MATURITY. Accrued interest shall be paid in arrears on a quarterly basis,
beginning three months after July 1, 2006 and every three months thereafter.
Except as otherwise provided herein, the principal hereunder shall become due
and payable in full on October 16, 2006, except that in the event of the closing
of a Public Offering, the principal amount and accrued and unpaid interest will
become immediately due and payable. After the Maturity Date, the Note shall bear
interest at 18 percent per annum.

2. PREPAYMENT. Borrower may prepay any or all amounts due under this Bridge Note
at any time without penalty.

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3. METHOD OF PAYMENT. Any payment of principal or interest hereunder shall be
made by certified or bank cashier's check unless Holder has provided Borrower
with appropriate wire instructions, in which event, the payment shall be made by
wire transfer of "same day" funds. For the purpose of any interest calculation,
payment shall be deemed made when the check is sent by overnight delivery or
when the wire is sent. Any partial payment shall be applied first to accrued and
unpaid interest and thereafter to a reduction of principal.

4. Security. REPAYMENT OF THE NOTE SHALL BE SECURED BY A LIEN ON ALL TANGIBLE
AND INTANGIBLE ASSETS OF THE BORROWER AS DESCRIBED IN THAT CERTAIN SECURITY
AGREEMENT EXECUTED CONTEMPORANEOUSLY HEREWITH.

5. ANTI DILUTION ADJUSTMENTS. The number and kind of securities or other
property into which this Note may become convertible shall be subject to
adjustment as follows:

      (a)   If a split or a reverse split shall have occurred with respect to
            the Common Stock, the conversion rate shall be appropriately
            adjusted to cause the Holder to receive, upon conversion, a number
            of shares of Common Stock representing the same percentage of the
            equity of the Company to which the Holder would have been entitled
            on such conversion if the split had not occurred.

      (b)   If a dividend or other distribution shall be made in favor of the
            Common Stock, appropriate adjustment shall be made so that, upon
            conversion of the Note, the Holder shall receive, in addition to the
            Common Stock otherwise obtainable on such conversion, the cash,
            securities or other property that it would have received had the
            Note been so converted immediately prior to the split, dividend or
            distribution.

      (c)   If the Common Stock shall, as the result of a merger or otherwise,
            be converted into the right to receive other securities or property,
            appropriate adjustment shall be made so that, upon conversion of the
            Note, the Holder shall receive, in lieu of Common Stock, the
            securities and/or property that it would have received as a result
            of the merger or other such transaction had the Note been so
            converted immediately prior to the record date therefor.

6. DEFAULT. In the event of an occurrence of any event of default specified
below, the principal of, and all accrued and unpaid interest on, the Note shall
become immediately due and payable without notice, except as specified below:

      (a)   Borrower fails to make any payment hereunder when due, which failure
            has not been cured within 10 days following such due date.

      (b)   Any defined event of default occurs under any contract or instrument
            pursuant to which Borrower has incurred any liability for borrowed
            money in excess of $50,000, which event of default has not been
            waived within five business days following such occurrence, and
            which event of default is reasonably likely to materially affect the
            Company's business.

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      (c)   Borrower files a petition to take advantage of any insolvency act;
            makes an assignment for the benefit of its creditors; commences a
            proceeding for the appointment of a receiver, trustee, liquidator or
            conservator of itself of a whole or any substantial part of its
            property; files a petition or answer seeking reorganization or
            arrangement or similar relief under the federal bankruptcy laws or
            any other applicable law or statute of the United States of America
            or any state.

      (d)   A court of competent jurisdiction enters an order, judgment or
            decree appointing a custodian, receiver, trustee, liquidator or
            conservator of Borrower or of the whole or any substantial part of
            its properties, or approves a petition filed against Borrower
            seeking reorganization or arrangement or similar relief under the
            federal bankruptcy laws or any other applicable law or statute of
            the Untied States of America or any state; or if, under the
            provisions of any other law for the relief or aid of debtors, a
            court of competent jurisdiction assumes custody or control of
            Borrower or of the whole or any substantial part of its properties;
            or there is commenced against Borrower any proceeding for any of the
            foregoing relief and such proceeding or petition remains undismissed
            for a period of 30 days; or if Borrower by any act indicates its
            consent to or approval of any such proceeding or petition.

      (e)   If (i) any judgment remaining unpaid, unstayed or undismissed for a
            period of 60 days is rendered against Borrower which by itself or
            together with all other such judgments rendered against Borrower
            remaining unpaid, unstayed or undismissed for a period of 60 days,
            is in excess of $50,000, or (ii) there is any attachment or
            execution against Borrower's properties remaining unstayed or
            undismissed for a period of 60 days which by itself or together with
            all other attachments and executions against Borrower's properties
            remaining unstayed or undismissed for a period of 60 days is for an
            amount in excess of $50,000.

7. SUCCESSORS AND ASSIGNS. The Note is transferable and assignable by Lender or
any subsequent permitted assignee subject to the requirement that any such
assignment or transfer be, in the opinion of Borrower's counsel, in compliance
with applicable federal and state securities laws. The assignee shall be
referred to herein as a "Holder." All covenants, agreements and undertakings in
the Note by or on behalf of any of the parties shall bind and inure to the
benefit of the respective successors and assigns of the parties whether so
expressed or not.

8. NOTICES. Any and all notices, requests, consents and demands required or
permitted to be given hereunder shall be in writing and shall be deemed given
and received (i) upon personal delivery, (ii) upon the first business day
following the receipt of confirmation of facsimile transmission to the telefax
number as indicated below, or (iii) upon the third business day after deposit in
the United States mail, by certified or registered mail, postage prepaid and
addressed as follows:

      To Lender:        [to the address and facsimile provided in
                         Subscription Agreement between the Lender

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                        and the Borrower executed in connection with
                        the purchase and sale of this Note]

      To Borrower:      Converted Organics Inc.
                        7A Commercial Wharf West
                        Boston, MA  02210
                        Tel:  (617) 624-0111
                        Fax:  (617) 624-0333
                        Email:      egildea@ecapgolbal.com

Either party may change by notice the address to which notices to that party are
to be addressed.

9. WAIVER/AMENDMENT. Borrower hereby waives presentment for payment, demand,
protest and notice of protest for nonpayment of the Note and consents to any
extension or postponement of the time of payment or any other indulgence. The
Note may only be amended or modified by written agreement signed by Borrower and
Holder.

10. EXPENSES. In the event that Holder brings legal action against Borrower, or
Borrower brings legal action against Holder, to enforce or otherwise determine
the meaning or enforceability of the Note or any provision hereof, each party
shall bear its own expenses, including attorney fees, directly attributable to
such action. However, in any action for breach of the Note, including
nonpayment, the prevailing party in any such dispute shall be entitled to
recover all reasonable costs and attorney fees incurred in connection with such
action. In addition, Borrower shall be entitled to recover from Lender all
reasonable costs of collection, including without limitation, legal fees and
expenses incurred in any bankruptcy and/or state insolvency proceeding.

11. CHOICE OF LAW. The Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of
Delaware. The parties agree that venue for any suit, action, proceeding or
litigation arising out of or in relation to this Note will be in any federal or
state court in Wilmington, Delaware having subject matter jurisdiction, and the
parties hereby submit to the jurisdiction of that Court.

      WITH RESPECT TO ANY CLAIM OR ACTION ARISING UNDER THIS NOTE, EACH PARTY
HEREBY (A) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF DELAWARE AND THE UNITED STATES DISTRICT COURT LOCATED IN THE CITY
OF WILMINGTON, STATE OF DELAWARE, AND (B) IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE BROUGHT IN ANY SUCH COURT, IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES
THE RIGHT TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH

                                     - 10 -
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PARTY. NOTHING IN THIS NOTE WILL BE DEEMED TO PRECLUDE THE LENDER FROM BRINGING
AN ACTION OR PROCEEDING IN RESPECT HEREOF IN ANY OTHER JURISDICTION.

      IN WITNESS WHEREOF, the Note has been executed and delivered on the date
specified on the first page hereof by the duly authorized representative of
Borrower.

                                    CONVERTED ORGANICS INC.

                                    By:
                                          ------------------------------
                                          Edward J. Gildea, President

                                     - 11 -
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                                   EXHIBIT "B"

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT, ("Agreement") is made as of this 2nd day of
March, 2006, by and between CONVERTED ORGANICS INC., a Delaware Corporation, 7A
Commercial Wharf West, Boston, MA 02210 (hereinafter "Borrower"), and Lender(s)
as listed on Schedule "1" of this Agreement.

      WHEREAS, this Agreement is given to secure performance of the obligations
("Obligations") under the Secured Promissory Note(s) ("Secured Notes") ,
executed by Borrower, to Lenders as lenders and in the amounts listed on
Schedule "1" attached hereto and incorporated herein by reference, together with
interest thereon as provided for in the Secured Notes. Schedule I shall be
amended and supplemented from time to time to reflect the issuance and delivery
of additional Secured Notes.

      NOW, THEREFORE, in consideration of the loans made by the Lenders to
Borrower, and further consideration of the covenants and promises contained in
this Agreement, and for other good and valuable consideration, the parties agree
as follows:

1. Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

      (a) "Collateral" has the meaning set forth in paragraph 2 hereof.

      (b) "PTO" means the United States Patent and Trademark Office.

      (c) "UCC" means the Uniform Commercial Code as in effect in the State of
Delaware.

      (d) Terms Defined in UCC. Where applicable in the context of this
Agreement and except as otherwise defined herein, terms used in this Agreement
shall have the meanings assigned to them in the UCC.

      (e)   Construction. In this Agreement, the following rules of construction
            and interpretation shall be applicable: (i) no reference to
            "proceeds" in this Agreement authorizes any sale, transfer, or other
            disposition of any Collateral by Borrower; (ii) "includes" and
            "including" are not limiting; (iii) "or" is not exclusive; and (iv)
            "all" includes "any" and "any" includes "all."

2. Security Interest.

      (a) Grant of Security Interest. As security for the payment and
performance of the Obligations, Borrower hereby assigns, transfers and conveys
to Lenders, and grants to

                                     - 12 -
<PAGE>
Lenders a security interest in and to all of Borrower's right, title and
interest in, to and under the following property, in each case whether now or
hereafter existing or arising or in which Borrower now has or hereafter owns,
acquires or develops an interest and wherever located (collectively, the
"Collateral"):

            (i) Accounts;

            (ii) Chattel Paper and Electronic Chattel Paper;

            (iii) Fixtures;

            (iv) Goods;

            (v) Inventory;

            (vi) Software;

            (vii) all patents, trademark, patent applications and trademark
      applications, domestic or foreign, all licenses relating to any of the
      foregoing and all income and royalties with respect to any licenses
      (including such patents, trademark, patent applications and trademark
      applications as described in Schedule "2"), all rights to sue for past,
      present or future infringement thereof, all rights arising therefrom and
      pertaining thereto and all reissues, divisions, continuations, renewals,
      extensions and continuations-in-part thereof. Borrower represents and
      warrants to Lenders that a true and correct list of all of the existing
      Collateral consisting of U.S. patents, trademark, patent applications and
      trademark applications or registrations owned by Borrower, in whole or in
      part, is set forth in Schedule "2";

            (viii) all General Intangibles and all intangible intellectual or
      other similar property of Borrower of any kind or nature, associated with
      or arising out of any of the aforementioned properties and assets and not
      otherwise described above; and

            (ix) all Proceeds of any and all of the foregoing Collateral
      (including license royalties, rights to payment, accounts and proceeds of
      infringement suits) and, to the extent not otherwise included, all
      payments under insurance (whether or not Lenders is the loss payee
      thereof) or any indemnity, warranty or guaranty payable by reason of loss
      or damage to or otherwise with respect to the foregoing Collateral.

      (b) Continuing Security Interest. Borrower agrees that this Agreement
shall create a continuing security interest in the Collateral which shall remain
in effect until terminated in accordance herewith.

                                     - 13 -
<PAGE>
3. Collateral Free of Other Security Interests. Borrower warrants that no
financing statement covering any of the Collateral or its proceeds is on file in
any public office at this date or will be on file with respect to the Collateral
at the time the Collateral becomes subject to this Agreement (except any
purchase money security interests). No other security interest of any kind
affects the Collateral at this date, and no arrangement exists whereby the
Collateral will in the future become subject to a security interest senior to
the Agreement.

      Borrower will not sell, assign or otherwise alienate the ownership of the
Collateral or its use or operation except any sale or replacement in the
ordinary course of Borrower's business; and Borrower will not use the Collateral
in violation of any ordinance or state or federal statute or any administrative
rule or regulation of law.

      Borrower authorizes Lenders at their option and their sole discretion to
discharge any taxes, charges, assessments, liens or other security interests or
other encumbrances to which the Collateral may become subject. Lenders may pay
amounts to preserve and maintain the Collateral, if Borrower fails to do so.
Borrower agrees to reimburse Lenders within ten (10) days after demand for any
payment made or any expense incurred by Lenders pursuant to the foregoing
authorization, together with interest on the amount expended at the rate of
eighteen percent (18%) per annum from the date of the payment. Any such amounts
shall be secured by and under this Agreement.

4. Fees and Taxes. Borrower will timely pay any and all license fees, taxes,
assessments and public charges, general and special, that may at any time be
levied or assessed upon or against Collateral.

5. Maintenance of Collateral. Borrower will, at Borrower's expense, maintain and
keep the Collateral at its present location in good order and repair, ordinary
wear and tear excepted, and shall not remove, demolish or substantially alter
the Collateral, except any sale or replacement in the ordinary course of
Borrower's business, without the prior written consent of the Lenders. Borrower
will not attempt to or actually dispose of, lend, transfer, lease or assign the
Collateral, except any sale or replacement in the ordinary course of Borrower's
business, without the prior written consent of Lenders.

      Borrower may remove the Collateral in its ordinary course of business,
provided, that such Collateral shall be replaced with property of a similar
nature of equal or greater value. The security interest created by this
Agreement will immediately attach to the substitute property when it is
acquired, and the substitute property will become part or the Collateral defined
in this Agreement.

      Borrower will not permit the Collateral to be attached or seized by any
legal process. Borrower will defend and indemnify Lenders from all expense and
liability of every kind to any person or to the property of any person by reason
of or in connection with the delivery, possession or use of the Collateral.

6. [Reserved].

                                     - 14 -
<PAGE>
7. Further Acts. On a continuing basis, Borrower shall make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places, all such instruments and documents, and take all such action as may be
necessary or advisable or may be requested by Lenders to carry out the intent
and purposes of this Agreement, or for assuring, confirming or protecting the
grant or perfection of the security interest granted or purported to be granted
hereby, to ensure Borrower's compliance with this Agreement or to enable Lenders
to exercise and enforce its rights and remedies hereunder with respect to the
Collateral, including any documents for filing with the PTO or any applicable
state office. Lenders may record this Agreement, an abstract thereof, or any
other document describing Lenders' interest in the Collateral with the PTO, at
the expense of Borrower. In addition, Borrower authorizes Lenders to file
financing statements describing the Collateral in any UCC filing office deemed
appropriate by Lenders. If the Borrower shall at any time hold or acquire a
commercial tort claim arising with respect to the Collateral, the Borrower shall
immediately notify Lenders in a writing signed by the Borrower of the brief
details thereof and grant to the Lenders in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance satisfactory to the Lenders.

8. Authorization to Supplement. If Borrower shall obtain rights to any new
patentable inventions or become entitled to the benefit of any patent
application or patent for any reissue, division, or continuation, of any patent
or trademark, the provisions of this Agreement shall automatically apply
thereto. Borrower shall give prompt notice in writing to Lenders with respect to
any such new patent or trademark rights. Without limiting Borrower's obligations
hereunder, Borrower authorizes Lenders unilaterally to modify this Agreement by
amending Schedule "2" to include any such new patent or trademark rights.
Notwithstanding the foregoing, no failure to so modify this Agreement or amend
Schedule "2" shall in any way affect, invalidate or detract from Lenders'
continuing security interest in all Collateral, whether or not listed on
Schedule "2."

9. Default. The breach or failure of any term, agreement, covenant or term of
this Agreement or the occurrence of an event or default upon any term contained
in the Secured Note(s) shall constitute a default hereunder.

10. Remedies. Upon the occurrence of any default as defined above, Lenders will
have the right at their option to enforce and to exercise any or all of their
rights under this Agreement or otherwise. In addition to all other rights and
remedies, Lenders shall have the remedies of a secured party under the UCC. In
exercising these remedies, Lenders and Borrower agree as follows:

      (a) Lenders may, at their option, required Borrower to assemble the
Collateral and make it available to Lenders at a place to be designated by
Lenders which is reasonably convenient to both parties. In the event Borrower
fails or refuses to assemble the Collateral, Lenders shall have the right, and
Borrower hereby authorizes and empowers Lenders, to enter the premises upon
which the Collateral is located in order to remove the same.

                                     - 15 -
<PAGE>
      (b) Lenders will give Borrower reasonable notice of the time and place of
any public sale of the Collateral, or of the time after which any private sale
or other intended disposition of the collateral is to be made, unless the
Collateral is perishable, threatens to decline speedily in value, or is of a
type customarily sold on a recognized market. The requirement of reasonable
notice shall be met if a written notice is mail to Borrower, postage prepaid, to
the address of Borrower last known to Lenders, at least ten (10) days prior to
the date of the sale or disposition.

      (c) Borrower agrees to surrender possession of the Collateral to Lenders
in event Lenders elects to foreclose this security interest. Borrower waives any
notice of the exercise of any and all options reserved to Lenders by this
Agreement.

      (d) Borrower will, upon Lenders' request, deliver to Lenders all original
invoices, bills, charge or credit card receipts, books and records and other
documents evidencing or describing any of the account receivable constituting a
part of the Collateral. Borrower will also execute and deliver to Lenders an
assignment of the right to receive payments under all such Accounts. The parties
recognize, however, that in the event of default such Accounts shall be deemed
assigned to Lenders, whether or not the assignments described above are actually
delivered.

      (e) Lenders shall have the right and are hereby authorized to collect all
amounts due under the Accounts; sue or take other actions to collect the same in
their own name or as assignee of or in the name of Borrower; compromise or give
acquittance for amounts due; and use such other measures as Lenders may in its
sole discretion deem appropriate for collection of the Accounts. All such
actions shall be taken at the sole expense of Borrower, who agrees to reimburse
Lenders for all reasonable amounts expended (including a reasonable attorney's
fee), together with interest thereon from the date of expenditure at the rate
then applicable under the Secured Notes.

      (f) This Agreement constitutes a direction to and full authority to any
Account debtor to pay directly to Lenders any such accounts. No proof of default
shall be required. Any such debtor is herby irrevocably and unconditionally
authorized to rely upon and comply with any notice from Lenders. The debtor
shall not be liable to Borrower or any person claiming under Borrower for making
any payment or rendering any performance to Lenders. The debtor shall have no
obligation or right to inquire whether any default has occurred or is then
existing. By its execution of this Agreement, Borrower irrevocably and
unconditionally joins in, authorizes and consents to the above instructions.

      (g) The proceeds of any sale of the Collateral shall be applied to the
following items in the following order: (a) the reasonable expenses of
repossessing the Collateral and preparing for the holding the sale, including
without limitation all reasonable attorney's fees incurred by Lenders; (b)
interest an principal then due (by acceleration or otherwise) under the Secured
Notes and any other debts specifically secured by the Agreement; (c) interest
and principal then due (by acceleration or otherwise) under any

                                     - 16 -
<PAGE>
other debts of Borrower to Lenders (to be applied in whatever order Lenders may
in their sole discretion determine); (d) indebtedness of Borrower to other
secured parties, provided written notice of demand therefore is received by
Lenders before the sale (to bee applied in the order Lenders receives the
requires); and (e) the balance, if any, to Borrower.

11. Set-off. Upon default by Borrower under this Agreement, Lenders (or the
holder or owner of any debt secured by this Agreement) shall immediately have
the right without further notice to Borrower to set off against the Secured
Notes and any other debts secured by this Agreement all debts of Lenders (or
such holder or owner) to Borrower, whether or not then due.

12. Notice. Any and all notices, requests, consents and demands required or
permitted to be given hereunder shall be in writing and shall be deemed given
and received (i) upon personal delivery, (ii) upon the first business day
following the receipt of confirmation of facsimile transmission to the telefax
number as indicated below, or (iii) upon the third business day after deposit in
the United States mail, by certified or registered mail, postage prepaid and
addressed to the appropriate party at the address provided for herein. Any party
may change by notice the address to which notices to that party are to be
addressed.

13. Miscellaneous. The following provisions are additional terms of this
Agreement:

      (a) Lenders have no duty to maintain, repair or protect the Collateral.

      (b) No waiver by Lenders of any default shall operate as a waiver of any
other default or of the same default on a future occasion.

      (c) All rights and remedies of Lenders are cumulative and may be exercised
successively or concurrently, and shall inure to the benefit of Lenders'
assigns.

      (d) All obligations of Borrower shall bind his trustees, custodians,
general partners, successors and assigns.

      (e) The captions of the sections of this Agreement are inserted for
convenience only and shall not be used in the interpretation or construction of
any provisions hereof.

      (f) If any provisions of this Agreement is held invalid or unenforceable,
the holding shall affect only the provision in question and all other provisions
on this Agreement shall remain in full force and effect.

      (g) This Agreement supersedes all prior oral and/or written agreements
concerning the subject matter hereof, including without limitation the Security
Agreement by and among the parties hereto dated February 28, 2006.

                                     - 17 -
<PAGE>
      IN WITNESS WHEREOF, Borrower has executed this Agreement the day and year
first above written.

                                    CONVERTED ORGANICS INC.
                                    a Delaware corporation

                                    --------------------------------------
                                    By:  Edward J. Gildea, President

                                     - 18 -
<PAGE>
                                  SCHEDULE "1"

                                     LENDERS

NAME AND ADDRESS                                              AMOUNT

<PAGE>

                                  SCHEDULE "2"

                      PATENTS, TRADEMARKS AND APPLICATIONS

         None.

                                     - 20 -
<PAGE>

                                   EXHIBIT "C"

                                ESCROW AGREEMENT

David A. Rapaport, Esq.
333 Sandy Springs Circle, Suite 230
Atlanta, GA  30328

Dear Mr. Rapaport:

      The undersigned hereby appoints you as my (our) agent, and you hereby
accept such appointment, to act on my (our) behalf in connection with my (our)
purchase of Secured Promissory Note(s) ("Note") and Bridge Equity Units from
Converted Organics Inc. ("Organics" or "Company") pursuant to a Financing Terms
Agreement For Sale of Bridge Notes and Shares dated April 11, 2006 ("Financing
Terms Agreement"). You are hereby authorized and directed to hold for my (our)
benefit the Bridge Notes and Primary Bridge Equity Units, Alternate Bridge
Equity Units, if any, being issued, or to be issued in the future, to me (us) as
partial consideration for my (our) purchase of the Note. You are also authorized
to act on my behalf in the enforcement of my (our) rights under the Note, the
Security Agreement dated March 2, the Primary Bridge Equity Units and the
Alternate Bridge Equity Units.

      1. The Agent's duties hereunder may be altered, amended, modified or
revoked only by a writing signed by Investor and the Agent.

      2. The Agent shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in relying
or refraining from acting on any instrument reasonably believed by the Agent to
be genuine and to have been signed or presented by the property party or
parties. The Agent shall not be personally liable for any act the Agent may do
or omit to do hereunder as Agent while acting in good faith, except for fraud,
willful misconduct, or gross negligence, and any act done or omitted by the
Agent pursuant to the advice of the Agent's attorneys-at-law shall be evidence
of such good faith.

      3. The fees, if any, and disbursements of the Agent chargeable in respect
of services provided in the capacity as Agent pursuant to this Escrow Agreement
will be responsibility of Investor, except to the extent recoverable from the
Company.

      4. The Agent is hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Agent obeys or complies with any such order, judgment or
decree, the Agent shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.

      5. The Agent shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Note, Security Agreement, or any documents
or papers deposited or called for hereunder.

      6. The Agent shall be entitled to employ such legal counsel and other
experts as the Agent may deem necessary properly to advise the Agent in
connection with the Agent's duties

                                     - 21 -
<PAGE>

hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor. The Agent is the Executive Vice President and
General Counsel of High Capital Funding, LLC ("HCF") and has acted as legal
counsel for HCF in connection with the Financing Terms Agreement and may
continue to act as legal counsel for HCF and/or its affiliates from time to
time, notwithstanding its duties as Agent hereunder. Investor waives any and all
claims and allegations of conflict in relation to the Agent's continued
representation of HCF and/or its affiliates as its attorney.

      7. The Agent's responsibilities as Agent hereunder shall terminate if the
Agent shall resign by three (3) business days prior written notice to Investor
and Organics. In the event of any such resignation, Investor may, but shall not
be required to, appoint a successor Agent.

      8. If the Agent reasonably requires other or further instruments in
connection with Escrow Agreement or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

      9. It is understood and agreed that should any dispute arise with respect
to the delivery and/or ownership or right of possession of the property held by
the Agent hereunder, the Agent is authorized and directed in the Agent's sole
discretion (1) to retain in the Agent's possession without liability to anyone
all or any part of such property until such disputes shall have been settled
either by mutual written agreement of the parties concerned or by a final order,
decree or judgment of a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but the Agent shall be
under no duty whatsoever to institute or defend any such proceedings or (2) to
deliver the property held by the Agent hereunder to a state or federal court
having competent subject matter jurisdiction in accordance with the applicable
procedure therefore.

      10. The Investor agrees to indemnify and hold harmless the Agent from any
and all claims, liabilities, costs or expenses in any way arising from or
relating to the duties or performance of the Agent hereunder other than any such
claim, liability, cost or expense to the extent the same shall have been
determined by final, unappealable judgment of a court of competent jurisdiction
to have resulted from fraud, gross negligence or willful misconduct of the
Agent.

      11. In the event of any action or proceeding brought by any party against
another under Escrow Agreement the prevailing party or parties shall be entitled
to recover all expenses incurred through the date of final collection, including
without limitation, all attorneys' fees.

      12. Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given upon
personal delivery, overnight courier, facsimile, email or other form of
electronic transmission, or three business days after deposit in the United
States Postal Service, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
addresses listed below their signature, or at such other addresses as a party
may designate by ten days advance written notice to each of the other parties
hereto.

      13. This instrument shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns and shall
be governed by the laws of the State of Georgia without giving effect to
principles governing the conflicts of laws. Facsimile transmissions of the
signatures to these instructions shall be legal and binding on all parties
hereto.

                                     - 22 -
<PAGE>

      14. Organics shall be entitled to rely upon the authority of Agent under
this Escrow Agreement unless and until Organics is notified in writing by Agent
and/or Investor that such authority has been terminated and/or revoked in
conformity with the terms herein.

      15. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings provided in the Financing Terms Agreement.

         .

                            (Signature page follows)

                                     - 23 -
<PAGE>

AGENT

                                                             Date:
David A. Rapaport
333 Sandy Springs Circle
Suite 230
Atlanta, GA  30328
Tel: (404) 257-9150
Fax: (404) 257-9125
Email: drapaport@highcapus.com

INVESTOR

                                                             Date:

                                     - 24 -
<PAGE>

                                    EXHIBIT D

                          REPRESENTATIONS OF PURCHASER

      (1) ACCREDITED INVESTOR STATUS. The PURCHASER is an "accredited investor"
within the meaning of Securities and Exchange Commission Rule 501 of Regulation
D.

      (2) PURCHASE ENTIRELY FOR OWN ACCOUNT. The BRIDGE EQUITY UNITS to be
received by the PURCHASER will be acquired for investment for the PURCHASER'S
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the PURCHASER has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The PURCHASER further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the BRIDGE
EQUITY UNITS.

      (3) DISCLOSURE OF INFORMATION. The PURCHASER represents that it has
received the disclosure it believes relevant and necessary to its investment
decision and has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of this transaction and the
business, properties, prospects and financial condition of the Company and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense) and/or
conduct its own independent investigation necessary to verify the accuracy of
any information furnished to the PURCHASER or to which the PURCHASER had access.

      (4) INVESTMENT EXPERIENCE. The PURCHASER (i) is experienced in evaluating
and investing in private placement transactions in securities of companies
similar to the Company and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the UNITS and (ii) acknowledges that it can bear the economic risk
of its investment, including the loss of the entire investment.

      (5) RESTRICTED SECURITIES. The PURCHASER understands that the BRIDGE
EQUITY UNITS are being sold pursuant to an exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").
The PURCHASER also understands that the BRIDGE EQUITY UNITS and, with certain
limited exceptions, any securities issuable on exercise or conversion thereof
may not be resold by the PURCHASER without registration under the Securities Act
or an exemption therefrom, and that in the absence of an effective registration
statement covering the BRIDGE EQUITY UNITS or an available exemption from
registration under the Securities Act, the BRIDGE EQUITY UNITS may be restricted
from resale in a transaction to which United States securities laws apply for an
indefinite period of time.

      (6) ILLIQUID INVESTMENT. The PURCHASER understands that no market for the
BRIDGE EQUITY UNITS exists and no such market may ever exist.

      (7) RESIDENCE. The PURCHASER resides, or its office primarily responsible
for the purchase of the BRIDGE EQUITY UNITS is located, at the address listed on
the signature page.

      (8) BROKERS OR FINDERS. All negotiations on the part of the PURCHASER
relative to the transactions contemplated hereby have been carried on by the
PURCHASER without the intervention of any person or as the result of any act of
the PURCHASER in such manner as to give rise to any valid

                                     - 25 -
<PAGE>

claim for a brokerage commission, finder's fee, or other like payment, except
for Investors Capital Corporation.

      (9) RELIANCE. The PURCHASER understands that this agreement is made with
the PURCHASER in reliance upon the PURCHASER'S representations to the Company,
as set forth above.

                                     - 26 -
<PAGE>

                                                                NAME:

                                                                AMOUNT: $

                             SUBSCRIPTION AGREEMENT
                             CONVERTED ORGANICS INC.
                               A DELAWARE COMPANY

The undersigned hereby applies to become an investor in CONVERTED ORGANICS INC.,
a Delaware company (the "Company"), and subscribes to purchase the number of
units consisting of Bridge Notes and Bridge Equity Units (the "Units") specified
herein.

1.    REPRESENTATIONS AND WARRANTIES. The undersigned represents and warrants to
      the Company as follows:

      (a)   I have received, read and understand the Confidential Memorandum
            dated April 11, 2006 (the "Memorandum"), and in making this
            investment I am relying only on the information provided therein. I
            have not relied on any statements or representations inconsistent
            with those contained in the Memorandum. I understand that by signing
            this subscription agreement, I am agreeing to be bound by all of the
            terms and conditions of the Financing Terms Agreement For Sale of
            Bridge Notes And Shares dated April 11, 2006 (the "Financing Terms
            Agreement"), including the Security Agreement and Escrow Agreement
            attached to the Financing Terms Agreement as Exhibits B and C,
            respectively, which are included in the Memorandum, and my signature
            on this agreement is deemed to be a signature on the Financing Terms
            Agreement, Security Agreement, and Escrow Agreement.

      (b)   I, or the fiduciary account for which I am purchasing, meet the
            suitability standards set forth in EXHIBIT D, "Representations of
            Purchaser," to the Financing Terms Agreement.

      (c)   I am aware that this subscription may be rejected in whole or in
            part by the Company or its designees in its sole and absolute
            discretion; that my investment, if accepted, is subject to certain
            risks described in part in "RISK FACTORS" set forth in the
            Memorandum; and that, among other restrictions on sale or transfer
            of the Units, there will be no public market for the Units, and
            accordingly, it may not be possible for me to readily liquidate my
            investment in the Company.

      (d)   I have been informed of all pertinent facts relating to the lack of
            liquidity or marketability of this investment. I am aware that any
            transfer of the Units or the Bridge Notes and/or Bridge Equity Units
            is subject to numerous restrictions described in the Memorandum. I
            have liquid assets sufficient to assure myself that such purchase
            will cause me no undue financial difficulties and that I can provide
            for my current needs and possible personal contingencies, or if I am
            the trustee of a retirement trust, that the limited liquidity of the
            Units will not cause difficulty in

                                     - 27 -
<PAGE>

            meeting the trust's obligations to make distributions to plan
            participants in a timely manner.

      (e)   I am of the age of majority (as established in the state in which I
            am domiciled) if I am an individual, and in any event, I have full
            power, capacity, and authority to enter into a contractual
            relationship with the Company. If acting in a representative or
            fiduciary capacity for a corporation, fund or trust, or as a
            custodian or agent for any person or entity, I have full power or
            authority to enter into this subscription agreement in such capacity
            and on behalf of such corporation, fund, trust, person or entity.

      (f)   I am buying the Units solely for my own account, or for the account
            of a member or members of my immediate family or in a fiduciary
            capacity for the account of another person or entity and not as an
            agent for another. I understand that the sale, transfer and
            assignment of the Units are subject to restrictions and may not be
            sold, transferred or assigned except in accordance with the terms of
            the Financing Terms Agreement, and I am aware that the certificates
            evidencing the Bridge Notes and the Bridge Equity Unit securities
            will bear a legend in substantially the following form:

            THIS [NAME OF SECURITY] HAS NOT BEEN REGISTERED UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR UNDER ANY STATE
            SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED, OFFERED FOR SALE,
            ASSIGNED OR TRANSFERRED UNLESS (A) A REGISTRATION STATEMENT WITH
            RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY
            APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B)
            EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
            ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE
            STATE SECURITIES LAWS ARE AVAILABLE.

            As appropriate, other legends required by applicable state
            securities laws also will be affixed to certificates evidencing the
            Bridge Notes and/or Bridge Equity Unit securities.

      (g)   I acknowledge and agree that counsel representing the Company and
            its affiliates do not represent me and shall not be deemed under the
            applicable codes of professional responsibility to have represented
            or to be representing me or any of the Company's members in any
            respect.

      (h)   If I am buying the Units in a fiduciary capacity or as a custodian
            for the account of another person or entity, I have been directed by
            that person or entity to purchase the Unit(s), and such person or
            entity is aware of my purchase of Units on their behalf, and
            consents thereto and is aware of the merits and risks involved in
            the investment in the Company.

                                     - 28 -
<PAGE>

      (i)   I (or the entity on whose behalf I am signing) do not have a direct
            or indirect ownership interest in Investors Capital Corp., Paulson
            Investment Company, Inc. or any other NASD member firm (through the
            ownership of securities in the NASD member firm, its parent,
            affiliates or otherwise).

      (j)   I (or the entity on whose behalf I am signing) do not have an
            "immediate family relationship" with Investors Capital Corp.,
            Paulson Investment Company, Inc. or any other NASD member firm. For
            purposes of this statement, I understand that the NASD defines
            "immediate family relationship" as parents, mother-in-law,
            father-in-law, husband or wife, brother or sister, brother-in-law or
            sister-in-law, son-in-law or daughter-in-law, and children, or any
            other person who is supported, directly or indirectly, to a material
            extent by an employee of, or person associated, with an NASD member.

      (k)   I (or the entity on whose behalf I am signing) have not provided any
            consulting or other services to the Company.

      (l)   I (or the entity on whose behalf I am signing) am not an
            "underwriter or a related person." For purposes of this statement, I
            understand that the NASD defines an "underwriter or a related
            person" with respect to a proposed offering as being an underwriter,
            underwriter's counsel, financial consultant or advisor, finder,
            member of the selling or distribution group, any member
            participating in a public offering, and any and all other person
            associated with or related to any of the aforementioned persons.

      (m)   I (or the entity on whose behalf I am signing) do not have any oral
            or written agreements with any NASD member or any associated persons
            of such member concerning the dispositions of my securities of the
            Company. For purposes of this statement, I understand that the NASD
            defines a "person associated with an NASD member" as being every
            sole proprietor, partner, officer, director or branch manager of any
            NASD member, or any natural person occupying a similar status or
            performing similar functions, or any natural person engaged in the
            investment banking or securities business who is directly or
            indirectly controlling or controlled by an NASD member (for example,
            any employee), whether or not any such person is registered or
            exempt from registration with the NASD pursuant to its Bylaws.

      By making these representations, the subscriber has not waived any right
      of action available under applicable federal or state securities laws.

2.    ACCEPTANCE. This subscription agreement will be accepted or rejected by
      the Company within five (5) days of its receipt by the Company. Upon
      acceptance, this subscription will become irrevocable, and will obligate
      the undersigned to purchase the number of Units and in the dollar amount
      specified herein. The Company will return a countersigned copy of this
      subscription agreement to accepted subscribers, which copy of the
      agreement will be evidence of the purchase of the Units.

                                     - 29 -
<PAGE>

3.    PAYMENT OF SUBSCRIPTION PRICE. The full purchase price for the Units,
      equal to the number of purchased Units shall be payable by check or wire
      concurrently with delivery of this subscription agreement. Checks shall be
      made payable to "David A. Rapaport, Escrow Agent. Wires shall be sent as
      follows:

                  BANK:               Wachovia Bank, N.A.
                  ABA # :             061-000-227
                  FOR CREDIT TO:      David A. Rapaport, Attorney Escrow Account
                  ACCT #   :          101 008 605 4713

4.    INDEMNIFICATION. THE UNDERSIGNED AGREES TO INDEMNIFY AND HOLD CONVERTED
      ORGANICS INC., A DELAWARE COMPANY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
      ADVISOR AND OTHER AGENTS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
      DEMANDS, LIABILITIES, AND DAMAGES, INCLUDING, WITHOUT LIMITATION, ALL
      ATTORNEYS' FEES WHICH ANY OF THEM MAY INCUR, IN ANY MANNER OR TO ANY
      PERSON, BY REASON OF THE FALSITY, INCOMPLETENESS OR MISREPRESENTATION OF
      ANY INFORMATION FURNISHED BY THE UNDERSIGNED HEREIN OR IN ANY DOCUMENT
      SUBMITTED HEREWITH.

5.    SUBSCRIPTION-RELATED UNDERTAKINGS, REPRESENTATIONS AND WARRANTIES.

      (a)   General. Each of the undersigned represents that: (i) I have read
            this agreement and the Memorandum included herein in its entirety
            and that all the information provided by me is accurate and
            complete; and (ii) I will notify the Company immediately of any
            material adverse change in any of the information set forth herein
            which occurs prior to the acceptance of my subscription.

      (b)   Type Of Ownership: (check one)

            [ ] SINGLE PERSON

            [ ] MARRIED PERSON - JTWROS

            [ ] MARRIED PERSONS-- TENANTS-IN-COMMON

            [ ] CORPORATION OR LLC (C):
                (Authorized party must sign)

            [ ] TRUST (TR)
                (Trustee signature required)

            [ ] PARTNERSHIP (P)
                (Authorized Party must sign)

                                     - 30 -
<PAGE>

            [ ] CUSTODIAN (CU)
                (Custodian signature required)

            [ ] OTHER (Explain)

      (c)   If Investor is One or More Individuals. Type or print your name(s)
            exactly as it should appear in the account records of the Company.
            Complete this section for individual investors and all trusts. All
            checks and correspondence will go to this address unless another
            address is listed in Sections 2 or 5 below.

--------------------------------------------------------------------------------
Individual Name

--------------------------------------------------------------------------------
Additional Name(s) if held in joint tenancy, community property or
tenants-in-common

--------------------------------------------------------------------------------
Street Address

--------------------------------------------------------------------------------
City                               State                      Zip Code

--------------------------------------------------------------------------------
Daytime Phone Number                               Evening Phone Number

--------------------------------------------------------------------------------
Mobile Phone Number

--------------------------------------------------------------------------------
Email

--------------------------------------------------------------------------------
Taxpayer ID# or Social Security #
(A social security number or taxpayer identification number is required
for individual investors. For most individual taxpayers, it is your
social security number. NOTE: If the Units are to be held in more than
one name, only one number will be used and will be that of the first
person listed.)

--------------------------------------------------------------------------------
Date of Birth

--------------------------------------------------------------------------------
Citizenship: [ ] U.S.      [ ] Other

--------------------------------------------------------------------------------
Occupation                                  Employer Name

--------------------------------------------------------------------------------
Employer Address

--------------------------------------------------------------------------------
City                               State                      Zip Code

Investment Objective (check one):

                                     - 31 -
<PAGE>

[ ] Capital appreciation

[ ] Other (please explain)

Do you have a net worth, either individually or jointly with spouse, in
excess of $1,000,000 [ ] YES [ ] NO

Did you have an individual income in excess of $200,000 (or joint income with
your spouse in excess of $300,000) during the last two years, and do you have a
reasonable expectation of reaching the same or higher income level in the
current year? [ ] YES [ ] NO

Are you subject to any regulatory or other constraints that may
preclude or limit your participation in any potential investment?
[ ] YES   [ ] NO

If yes, please explain:

      (d)   If Investor is an Entity:

--------------------------------------------------------------------------------
Name of Investor

--------------------------------------------------------------------------------
Type of Legal Entity (e.g., corporation, trust, etc.):

--------------------------------------------------------------------------------
Address

--------------------------------------------------------------------------------
City              State             Zip Code

--------------------------------------------------------------------------------
Daytime Tel

--------------------------------------------------------------------------------
Evening Tel

--------------------------------------------------------------------------------
Mobile

--------------------------------------------------------------------------------
Email

--------------------------------------------------------------------------------
Taxpayer ID#               Tax Year End

--------------------------------------------------------------------------------
Please print here the exact name of Custodian, Administrator or other signatory
for the entity

Investment Objective: (check one)

                                     - 32 -
<PAGE>

[ ]      Capital appreciation
[ ]      Other (please explain)

If the Investor is an entity is the Investor any of the following? (check
applicable box, if any)

[ ] A corporation, Massachusetts or similar business trust, limited
liability company, or partnership with total assets in excess of
$5,000,000 that was not formed for the specific purposed of acquiring
the Units

[ ] A trust with total assets in excess of $5,000,000 not formed for
the specific purposed of acquiring the Units and whose purchase of the
Units is directed by a person who has such knowledge and experience in
financial and business matters that he/she is capable of evaluating the
merits and risks of investment in the Units

[ ] A trust in which all of the beneficiaries are accredited investors
as defined in Rule 501 (c)(3) of the Securities Act of 1933.

ARE THE FOREGOING REPRESENTATIONS AND WARRANTIES TRUE?
[ ] YES  [ ] NO

--------------------------------------------------------------------------------
Please provide your initials here
--------------------------------------------------------------------------------

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

6.    DISTRIBUTIONS INFORMATION. ALTERNATIVE ADDRESS FOR DELIVERY OF DOCUMENTS,
      SECURITIES, AND FUNDS (I.E., OTHER THAN THE ADDRESS GIVEN IN SECTION 5(C)
      OR 5(D) ABOVE).

      David A. Rapaport, Esq.
      333 Sandy Springs Circle, Suite 230
      Atlanta, GA 30328
      Tel:  404 257-9150
      Fax:  404 257-9125
      Email:  drapap@gmail.com

                                     - 33 -
<PAGE>

7.    INVESTMENT.

      Amount of payment enclosed:    $
                                     [Minimum subscription is $5,000 with
                                     additional investments in increments
                                     of $1,000.]

      Payment by Check:              [ ]    Check #

      Payment by Wire Transfer:      [ ]    Wire Reference #

8.    SIGNATURES.
      (a)   Individuals:

         Investor's primary residence is in:

         -----------------------------------------------------------------------
         Signature of Subscriber                              Date

         -----------------------------------------------------------------------
         Print Name of Subscriber

         -----------------------------------------------------------------------
         Signature of Co-Subscriber                                    Date

         -----------------------------------------------------------------------
         Print Name of Co-Subscriber

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

      (b)   Entities:

         -----------------------------------------------------------------------
         Print Name of Subscriber

         -----------------------------------------------------------------------
         By                                           Date

         -----------------------------------------------------------------------
         Signature of Authorized Signatory

         -----------------------------------------------------------------------
         Print Name and Title of Signatory

         -----------------------------------------------------------------------
         By:                                         Date

         -----------------------------------------------------------------------
         Signature of Required Authorized Co-Signatory

         -----------------------------------------------------------------------
         Print Name and Title of Co-Signatory

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

9.    ACCEPTANCE. THE SUBSCRIPTION AGREEMENT WILL NOT BE AN EFFECTIVE AGREEMENT
      UNTIL IT OR A FACSIMILE IS SIGNED BY AN OFFICER OF CONVERTED ORGANICS
      INC., A DELAWARE COMPANY. (Office Use Only)

                                     - 34 -
<PAGE>

     ---------------------------------------------------------------------------
     Account Number

     ---------------------------------------------------------------------------
     Investor Check/Wire Date

     ---------------------------------------------------------------------------
     Check/Wire Amount

     ---------------------------------------------------------------------------
     Check/Wire  #

     ---------------------------------------------------------------------------
     Entered by                           Date

     Subscription has been:     Accepted     Rejected

     ---------------------------------------------------------------------------
     By:                                 Dated

     ---------------------------------------------------------------------------
     Print Name and Title

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

                                     - 35 -<PAGE>

                                                                    Exhibit 10.2

                             CONVERTED ORGANICS INC.
                             2006 STOCK OPTION PLAN

1. Purposes of the Plan. The purposes of this 2006 Stock Option Plan are:

     -    to attract and retain the best available personnel;

     -    to provide additional incentive to Employees, Directors and
          Consultants; and

     -    to promote the success of the Company's business.

     Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.

2. Definitions. As used herein, the following definitions shall apply:

     (a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.

     (b) "Applicable Laws" means the requirements relating to the administration
of stock option plans under U. S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Options are, or will be, granted under the Plan.

     (c) "Board" means the Board of Directors of the Company.

     (d) "Code" means the Internal Revenue Code of 1986, as amended.

     (e) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.

     (f) "Common Stock" means the common stock of the Company.

     (g) "Company" means Converted Organics Inc., a Delaware corporation.

     (h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

     (i) "Director" means a member of the Board.

     (j) "Disability" means total and permanent disability as defined in Section
22(e)(3) of the Code.

     (k) "Employee" means any person, including Officers and Directors, employed
by the Company or any Parent or Subsidiary of the Company. A Service Provider
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed one hundred eighty (180)
days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by
the Company is not so guaranteed, on the one hundred eighty-first (181st) day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax

                                        1

<PAGE>

purposes as a Nonstatutory Stock Option. Neither service as a Director nor
payment of a director's fee by the Company shall be sufficient to constitute
"employment" by the Company.

     (l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (m) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

          (i) If the Common Stock is listed on any established stock exchange or
     a national market system, including without limitation the Nasdaq National
     Market or The Nasdaq Capital Market, its Fair Market Value shall be the
     closing sales price for such stock (or the closing bid, if no sales were
     reported) as quoted on such exchange or system for the last market trading
     day prior to the time of determination, as reported in The Wall Street
     Journal or such other source as the Administrator deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized
     securities dealer but selling prices are not reported, the Fair Market
     Value of a Share of Common Stock shall be the mean between the high bid and
     low asked prices for the Common Stock on the last market trading day prior
     to the day of determination, as reported in The Wall Street Journal or such
     other source as the Administrator deems reliable; or

          (iii) In the absence of an established market for the Common Stock,
     the Fair Market Value shall be determined in good faith by the
     Administrator.

     (n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

     (o) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.

     (p) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.

     (q) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

     (r) "Option" means a stock option granted pursuant to the Plan.

     (s) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

     (t) "Option Exchange Program" means a program whereby outstanding Options
are surrendered in exchange for Options with a lower exercise price.

     (u) "Optioned Stock" means the Common Stock subject to an Option.

     (v) "Optionee" means the holder of an outstanding Option granted under the
Plan.

     (w) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

                                        2

<PAGE>

     (x) "Plan" means this 2006 Stock Option Plan.

     (y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.

     (z) "Section 16(b)" means Section 16(b) of the Exchange Act.

     (aa) "Service Provider" means an Employee, Director or Consultant.

     (bb) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.

     (cc) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is six hundred sixty-six thousand, six hundred sixty-seven
(666,667) Shares. The Shares may be authorized, but unissued, or reacquired
Common Stock.

     If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.

4. Administration of the Plan.

     (a) Procedure.

          (i) Multiple Administrative Bodies. The Plan may be administered by
     different Committees with respect to different groups of Service Providers.

          (ii) Section 162(m). To the extent that the Administrator determines
     it to be desirable to qualify Options granted hereunder as
     "performance-based compensation" within the meaning of Section 162(m) of
     the Code, the Plan shall be administered by a Committee of two or more
     "outside directors" within the meaning of Section 162(m) of the Code.

          (iii) Rule 16b-3. To the extent desirable to qualify transactions
     hereunder as exempt under Rule 16b-3, the transactions contemplated
     hereunder shall be structured to satisfy the requirements for exemption
     under Rule 16b-3.

          (iv) Other Administration. Other than as provided above, the Plan
     shall be administered by (A) the Board or (B) a Committee, which committee
     shall be constituted to satisfy Applicable Laws.

     (b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

          (i) to determine the Fair Market Value;

                                        3

<PAGE>

          (ii) to select the Service Providers to whom Options may be granted
     hereunder;

          (iii) to determine the number of shares of Common Stock to be covered
     by each Option granted hereunder;

          (iv) to approve forms of agreement for use under the Plan;

          (v) to determine the terms and conditions, not inconsistent with the
     terms of the Plan, of any Option granted hereunder. Such terms and
     conditions include, but are not limited to, the exercise price, the time or
     times when Options may be exercised (which may be based on performance
     criteria), any vesting acceleration or waiver of forfeiture restrictions,
     and any restriction or limitation regarding any Option or the shares of
     Common Stock relating thereto, based in each case on such factors as the
     Administrator, in its sole discretion, shall determine;

          (vi) to reduce the exercise price of any Option to the then current
     Fair Market Value if the Fair Market Value of the Common Stock covered by
     such Option shall have declined since the date the Option was granted;

          (vii) to institute an Option Exchange Program;

          (viii) to construe and interpret the terms of the Plan and awards
     granted pursuant to the Plan;

          (ix) to prescribe, amend and rescind rules and regulations relating to
     the Plan, including rules and regulations relating to sub-plans established
     for the purpose of qualifying for preferred tax treatment under foreign tax
     laws;

          (x) to modify or amend each Option (subject to Section 14(c) of the
     Plan), including the discretionary authority to extend the post-termination
     exercisability period of Options longer than is otherwise provided for in
     the Plan;

          (xi) to authorize any person to execute on behalf of the Company any
     instrument required to effect the grant of an Option previously granted by
     the Administrator;

          (xii) to make all other determinations deemed necessary or advisable
     for administering the Plan.

     (c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.

5. Eligibility. Nonstatutory Stock Options may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.

6. Limitations.

     (a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The

                                        4

<PAGE>

Fair Market Value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted.

     (b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee's relationship as a Service Provider
with the Company, nor shall they interfere in any way with the Optionee's right
or the Company's right to terminate such relationship at any time, with or
without cause.

7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 14 of the Plan.

8. Term of Option. The term of each Option shall be stated in the Option
Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof. In the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Option Agreement. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Option
Agreement.

9. Option Exercise Price and Consideration.

     (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

          (i)  In the case of an Incentive Stock Option

               (A) granted to an Employee who, at the time the Incentive Stock
          Option is granted, owns stock representing more than ten percent (10%)
          of the voting power of all classes of stock of the Company or any
          Parent or Subsidiary, the per Share exercise price shall be no less
          than 110% of the Fair Market Value per Share on the date of grant.

               (B) granted to any Employee other than an Employee described in
          paragraph (A) immediately above, the per Share exercise price shall be
          no less than 100% of the Fair Market Value per Share on the date of
          grant.

          (ii) In the case of a Nonstatutory Stock Option

               (A) granted to a Service Provider who, at the time the
          Nonstatutory Stock Option is granted, owns stock representing more
          than ten percent (10%) of the voting power of all classes of stock of
          the Company or any Parent or Subsidiary, the per Share exercise price
          shall be no less than one hundred ten percent (110%) of the Fair
          Market Value per Share on the date of grant.

               (B) intended to qualify as "performance-based compensation"
          within the meaning of Section 162(m) of the Code, the per Share
          exercise price shall be no less than 100% of the Fair Market Value per
          Share on the date of grant.

               (C) Granted to any other Service Provider, the per Share exercise
          price shall be no less than eighty-five percent (85%) of the Fair
          Market Value per Share on the date of grant.

                                        5

<PAGE>

          (iii) Notwithstanding the foregoing, Options may be granted with a per
     Share exercise price of less than one hundred percent (100%) of the Fair
     Market Value per Share on the date of grant pursuant to a merger or other
     corporate transaction.

     (b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised.

     (c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:

          (i) cash;

          (ii) check;

          (iii) other Shares which (A) in the case of Shares acquired upon
     exercise of an option, have been owned by the Optionee for more than six
     months on the date of surrender, and (B) have a Fair Market Value on the
     date of surrender equal to the aggregate exercise price of the Shares as to
     which said Option shall be exercised;

          (iv) consideration received by the Company under a cashless exercise
     program, if implemented by the Company in connection with the Plan;

          (v) a reduction in the amount of any Company liability to the
     Optionee, including any liability attributable to the Optionee's
     participation in any Company-sponsored deferred compensation program or
     arrangement;

          (vi) any combination of the foregoing methods of payment; or

          (vii) such other consideration and method of payment for the issuance
     of Shares to the extent permitted by Applicable Laws.

10. Exercise of Option.

     (a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless otherwise stated in the Option Agreement,
Options shall become exercisable at a rate of twenty-five percent (25%) per year
over four (4) years from the date the Options are granted, with twenty-five
percent (25%) of the Shares under the Option vesting on each of the first,
second, third and fourth anniversaries of the date of grant. Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall be
suspended during any unpaid leave of absence. An Option may not be exercised for
a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued

                                        6

<PAGE>

(as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

     (b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within ninety (90) days
of termination, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). If, on the date of termination, the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

     (c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within one (1) year of termination, or such longer period of time as may
be specified in the Option Agreement, to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

     (d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within one (1) year following Optionee's death, or such
longer period of time as may be specified in the Option Agreement, to the extent
that the Option is vested on the date of death (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant), by
the Optionee's designated beneficiary, provided such beneficiary has been
designated prior to Optionee's death in a form acceptable to the Administrator.
If no such beneficiary has been designated by the Optionee, then such Option may
be exercised by the personal representative of the Optionee's estate or by the
person(s) to whom the Option is transferred pursuant to the Optionee's will or
in accordance with the laws of descent and distribution. If, at the time of
death, the Optionee is not vested as to his or her entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan. If the Option is not so exercised within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

     (e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

11. Limited Transferability of Options. Unless determined otherwise by the
Administrator, Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or the laws of
descent and distribution, and may be exercised during the lifetime of the
Optionee, only by the Optionee. If the Administrator in its sole discretion
makes an Option transferable, such Option may only be transferred (i) by will,
(ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701
of the Securities Act of 1933, as amended.

                                        7

<PAGE>

12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.

     (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option .

     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.

     (c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option may, at the discretion of the Administrator or
the successor corporation, be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, any Option or portions of Options
outstanding as of the date of such event that are not yet fully vested shall
immediately become exercisable in full. In such event, the Administrator or the
successor corporation, as the case may be, shall promptly notify the Optionee in
writing or electronically of the qualifying merger or asset sale and of the
exercisability of the Option; the Option and any portion thereof, whether vested
or unvested, shall be exercisable by the Optionee for a period of fifteen (15)
calendar days from the date of such notice, and the Option shall terminate upon
the expiration of such period. For the purposes of this paragraph, the Option
shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

                                        8

<PAGE>

13. Date of Grant. The date of grant of an Option shall be, for all purposes,
the date on which the Administrator makes the determination granting such
Option, or such other later date as is determined by the Administrator. Notice
of the determination shall be provided to each Optionee within a reasonable time
after the date of such grant.

14. Amendment and Termination of the Plan.

     (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.

     (b) Stockholder Approval. The Company shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

     (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

15. Conditions Upon Issuance of Shares.

     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option unless the exercise of such Option and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

     (b) Investment Representations. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

17. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

18. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted. Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

19. Information to Optionees. The Company shall provide, or make available, to
each Optionee and to each individual who acquires Shares pursuant to the Plan,
not less frequently than annually during the period such participant has one or
more Options outstanding, and, in the case of an individual who acquires Shares
pursuant to the Plan, during the period such individual owns such Shares, copies
of annual financial statements. The Company shall not be required to provide
such statements to key employees whose duties in connection with the Company
assure their access to equivalent information.

                                       9

<PAGE>

                             CONVERTED ORGANICS INC.
                             2006 STOCK OPTION PLAN
                             STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I. NOTICE OF STOCK OPTION GRANT

     (NAME)

     The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:

<TABLE>
<S>                                            <C>
Date of Grant:                                 _________________________________

Vesting Commencement Date:                     _________________________________
(same as Date of Grant, if left blank)

Exercise Price per Share:                      _________________________________

Total Number of Shares Granted:                _________________________________

Type of Option:                                ____ Incentive Stock Option
                                               ____ Nonstatutory Stock Option

Expiration Date:                               _________________________________
(10 years from Date of Grant, if left blank)

Vesting Schedule:                              _________________________________

[To be completed]

Termination Period:                            _________________________________
</TABLE>

     This Option shall be exercisable for ninety (90) days after Optionee ceases
to be a Service Provider. Upon Optionee's death or disability, this Option may
be exercised for such longer period as provided in the Plan. In no event may
Optionee exercise this Option after the Term/Expiration Date as provided above.

II. AGREEMENT

     1. Grant of Option. The Plan Administrator of the Company hereby grants to
the Optionee named in the Notice of Grant (the "Optionee"), an option (the
"Option") to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 14(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Option
Agreement, the terms and conditions of the Plan shall prevail.

                                        1

<PAGE>

     If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").

     2. Exercise of Option.

          (a) Right to Exercise. This Option shall be exercisable during its
     term in accordance with the Vesting Schedule set out in the Notice of Grant
     and with the applicable provisions of the Plan and this Option Agreement.

          (b) Method of Exercise. This Option shall be exercisable by delivery
     of an exercise notice in the form attached as EXHIBIT A (the "Exercise
     Notice") which shall state the election to exercise the Option, the number
     of Shares with respect to which the Option is being exercised, and such
     other representations and agreements as may be required by the Company. The
     Exercise Notice shall be accompanied by payment of the aggregate Exercise
     Price as to all Exercised Shares. This Option shall be deemed to be
     exercised upon receipt by the Company of such fully executed Exercise
     Notice accompanied by the aggregate Exercise Price.

          No Shares shall be issued pursuant to the exercise of an Option unless
     such issuance and such exercise complies with Applicable Laws. Assuming
     such compliance, for income tax purposes the Shares shall be considered
     transferred to the Optionee on the date on which the Option is exercised
     with respect to such Shares.

     3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a) cash or check;

          (b) consideration received by the Company under a formal cashless
     exercise program adopted by the Company in connection with the Plan;

          (c) surrender of other Shares which, (i) in the case of Shares
     acquired from the Company, either directly or indirectly, have been owned
     by the Optionee for more than six (6) months on the date of surrender, and
     (ii) have a Fair Market Value on the date of surrender equal to the
     aggregate Exercise Price of the Exercised Shares; or

          (d) any other form or manner endorsed in the Plan.

     4. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.

     5. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

                                        2

<PAGE>

     6. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.

     7. Tax Obligations.

          (a) Taxes. Optionee acknowledges and agrees that Optionee is solely
     responsible for the satisfaction of all federal, state, local and foreign
     income and other tax arising from or applicable to the Option exercise and
     the acquisition or sale of the Optioned Stock. Optionee agrees that
     Optionee shall indemnify the Company for any liability, including
     attorneys' fees and expenses, accrued by the Company as a result of the
     Optionee's failure to satisfy those taxes.

          (b) Notice of Disqualifying Disposition of ISO Shares. If the Option
     granted to Optionee herein is an ISO, and if Optionee sells or otherwise
     disposes of any of the Shares acquired pursuant to the ISO on or before the
     later of (1) the date two (2) years after the Date of Grant, or (2) the
     date one year after the date of exercise, the Optionee shall immediately
     notify the Company in writing of such disposition.

     8. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of Delaware.

     9. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT
THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

     Optionee acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel and other advisors prior to executing this Option
and fully understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option. Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.

                                        3

<PAGE>

OPTIONEE:                               CONVERTED ORGANICS INC.

-------------------------------------   ----------------------------------------
Signature                               By

-------------------------------------   ----------------------------------------
Print Name                              Name

                                        ----------------------------------------
                                        Title

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

-------------------------------------
Residence Address

                                       4

<PAGE>

                                    EXHIBIT A

                          EXERCISE NOTICE AND AGREEMENT

Converted Organics Inc.
7A Commercial Wharf West
Boston, MA 02110

Attention: Stock Option Plan Administrator

     Re: Exercise of Stock Option Pursuant to 2006 Stock Option Plan

<TABLE>
<S>                                                     <C>
Name of Optionee:                                       ________________________

Optionee's Address:                                     ________________________

Optionee's Social Security Number:                      ________________________

Date of Option Agreement:                               ________________________

Exercise Date:                                          ________________________

The Shares Purchased are Incentive Stock Options:              Yes / No
(circle one)

Number of Shares Purchased Pursuant to this Notice::    ________________________

Exercise Price per Share:                              $________________________

Aggregate Exercise Price:                              $________________________

Amount of Payment Enclosed:                            $________________________
</TABLE>

     1. Exercise of Option. Pursuant to the 2006 Stock Option Plan (the "Plan")
of Converted Organics Inc., a Delaware corporation (the "Company") and the Stock
Option Agreement ("Option Agreement") entered into as of the date set forth
above between the undersigned Optionee and the Company, Optionee hereby elects,
effective as of the date of this notice, to exercise Optionee's option to
purchase the number of shares of common stock (the "Shares") of the Company
indicated above.

     2. Payment. Enclosed is Optionee's payment in the amount indicated above,
which is the full exercise price for the Shares.

     3. Deemed Date of Exercise. The date of exercise shall be deemed to be the
first date after which this Notice is filed with Company upon which Shares
become eligible for issuance to Optionee under applicable state and federal laws
and regulatory requirements.

     4. Compliance with Laws. Optionee understands and acknowledges that the
purchase and sale of the Shares may be subject to approval under the state and
federal securities laws and other laws and,

                                  Exhibit A-1

<PAGE>

notwithstanding any other provision of the Option Agreement to the contrary, the
exercise of any rights to purchase Shares is expressly conditioned upon approval
(if necessary) and compliance with all such laws.

     5. Representations of Optionee. Optionee represents and warrants to the
Company, as follows:

     (a) Optionee has received, read, and understood the Plan and the Option
     Agreement and agrees to abide by and be bound by their terms and
     conditions.

     (b) The Options exercised herewith are exercisable only according to the
     schedule in the Option Agreement.

     (c) Optionee is aware of the business affairs and financial condition of
     the Company and has acquired sufficient information about the Company to
     reach an informed and knowledgeable decision to acquire the Shares.

     6. Refusal to Transfer. The Company shall not be required (a) to transfer
on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, the Option Agreement, or
the Plan or (b) to treat as owner of such Shares or to accord the right to vote
or receive dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.

     7. Tax Consultation. Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's purchase or disposition of the
Shares. Optionee represents that Optionee is not relying on the Company for any
tax advice.

     8. Entire Agreement. The Plan and the Option Agreement are incorporated
herein by reference. This Agreement, the Plan, and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof.

Submitted by:                           Accepted by:
"OPTIONEE":                             "COMPANY"

                                        Converted Organics Inc.,
                                        a Delaware corporation

-------------------------------------   ----------------------------------------
Signature                               By

-------------------------------------   ----------------------------------------
Print Name                              Name

                                        ----------------------------------------
                                        Title

                                  Exhibit A-2

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