Document:

Exhibit 10.24

                             CIRILIUM HOLDINGS, INC.
                            2004 STOCK INCENTIVE PLAN

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                             CIRILIUM HOLDINGS, INC.
                            2004 STOCK INCENTIVE PLAN

                                    ARTICLE I

                                     GENERAL

1.1      Purpose

         The purpose of Cirilium Holdings, Inc. 2004 Stock Incentive Plan is to
attract, retain and motivate officers, directors, employees (including
prospective employees), consultants and others who may perform services for the
Company, to compensate them for their contributions to the long-term growth and
profits of the Company, and to encourage them to acquire a proprietary interest
in the success of the Company.

1.2      Definitions of Certain Terms

         1.2.1 "Award" means an award made pursuant to the Plan.

         1.2.2 "Award Agreement" means the written document by which each Award
         is evidenced.

         1.2.3 "Board" means the Board of Directors of Cirilium Holdings
Inc.

         1.2.4 "Certificate" means a stock certificate (or other appropriate
         document or evidence of ownership) representing shares of Common Stock
         of Cirilium Holdings Inc.

         1.2.5 "Cirilium Holdings Inc." means Cirilium Holdings, Inc. and any
         successor thereto.

         1.2.6 "Code" means the Internal Revenue Code of 1986, as amended from
         time to time, and the applicable rulings and regulations thereunder.

         1.2.7 "Company" means Cirilium Holdings Inc. and its subsidiaries.

         1.2.8 "Committee" means the committee appointed by the Board to
         administer the Plan pursuant to Section 1.3.

         1.2.9 "Common Stock" means common stock of Cirilium Holdings Inc., par
         value $0.001 per share.

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         1.2.10 "Employment" means a Participant's performance of services for
         the Company, as determined by the Committee. The terms "employ" and
         "employed" shall have their correlative meaning.

         1.2.11 "Exchange Act" means the Securities Exchange Act of 1934, as
         amended from time to time, and the applicable rules and regulations
         thereunder.

         1.2.12 "Fair Market Value" means, with respect to a share of Common
         Stock on any day, the fair market value as determined in accordance
         with a valuation methodology approved by the Committee.

         1.2.13 "Incentive Stock Option" means an Option that is intended to
         qualify for special federal income tax treatment pursuant to Sections
         421 and 422 of the Code, as now constituted or subsequently amended, or
         pursuant to a successor provision of the Code, and which is so
         designated in the applicable Award Agreement.

         1.2.14 "Nonqualified Stock Option" means an Option that is not an
         Incentive Stock Option.

         1.2.15 "Option" means an Incentive Stock Option or a Nonqualified Stock
         Option or both, as the context requires.

         1.2.16 "Plan" means Cirilium Holdings, Inc. 2004 Stock Incentive Plan,
         as described herein and as hereafter amended from time to time.

         1.2.17 "Participant" means each person who has been granted an Award
         under the Plan, irrespective of the type of Award.

1.3      Administration

                  1.3.1 Subject to Section 1.3.4, the Plan shall be administered
by a committee appointed by the Board whose members shall serve at the pleasure
of the Board. To the extent required for transactions under the Plan to qualify
for the exemptions available under Rule 16b-3 promulgated under the Exchange
Act, all actions relating to Awards to persons subject to Section 16 of the
Exchange Act may be taken by the Board or a committee or subcommittee of the
Board composed of two or more members, each of whom is a "non-employee director"
within the meaning of Exchange Act Rule 16b-3. To the extent required for
compensation realized from Awards under the Plan to be deductible by Cirilium
Holdings Inc. pursuant to Section 162(m) of the Code, such Awards may be granted
by a committee or subcommittee of the Board composed of two or more members,
each of whom is an "outside director" within the meaning of Code Section 162(m).

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                  1.3.2 The Committee shall have complete control over the
administration of the Plan and shall have the authority in its discretion to (a)
exercise all of the powers granted to it under the Plan, (b) construe, interpret
and implement the Plan and any Award Agreements, (c) prescribe, amend and
rescind rules and regulations relating to the Plan, including rules governing
its own operations, (d) make all determinations necessary or advisable in
administering the Plan, (e) correct any defect, supply any omission and
reconcile any inconsistency in the Plan, (f) amend the Plan to reflect changes
in applicable law (whether or not the rights of the Participant of any Award are
adversely affected, unless otherwise provided in such Participant's Award
Agreement), (g) unless otherwise provided in an Award Agreement, amend any
outstanding Award Agreement in any respect, whether or not the rights of the
Participant of such Award are adversely affected, including, without limitation,
to accelerate the time or times at which the Award becomes vested, unrestricted
or may be exercised, waive or amend any goals, restrictions or conditions set
forth in such Award Agreement, or impose new goals, restrictions and conditions,
or reflect a change in the Participant's circumstances (e.g., a change to
part-time employment status), or to permit Cirilium Holdings Inc. to utilize the
pooling-of-interests accounting method and (h) determine whether, to what extent
and under what circumstances and method or methods (1) Awards may be (A) settled
in cash, shares of Common Stock, other securities, other Awards or other
property, (B) exercised or (C) canceled, forfeited or suspended, (2) shares of
Common Stock, other securities, other Awards or other property, and other
amounts payable with respect to an Award may be deferred either automatically or
at the election of the Participant thereof or of the Committee, (3) loans
(whether or not secured by Common Stock) may be extended by the Company with
respect to any Awards and (4) Awards may be settled by Cirilium Holdings Inc.,
any of its subsidiaries or affiliates or any of its or their designees.

                  1.3.3 Actions of the Committee may be taken by the vote of a
majority of its members. Any action may be taken by a written instrument signed
by a majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting. The determination of
the Committee on all matters relating to the Plan or any Award Agreement shall
be final, binding and conclusive. The Committee may allocate among its members
and delegate to any person who is not a member of the Committee any of its
administrative responsibilities.

                  1.3.4 Notwithstanding anything to the contrary contained
herein: (a) until the Board shall appoint the members of the Committee, the Plan
shall be administered by the Board and (b) the Board may, in its sole
discretion, at any time and from time to time, grant Awards or administer the
Plan, including but not limited to the right to reject Award(s) granted by the
Committee. In either of the foregoing events, the Board shall have all of the
authority and responsibility granted to the Committee herein.

                  1.3.5 No member of the Board or the Committee or any employee
of the Company shall be liable for any action or determination made in good
faith with respect to the Plan or any Award thereunder. Each such person shall
be indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or incurred by such person in

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connection with or resulting from any action, suit or proceeding to which such
person may be a party or in which such person may be involved by reason of any
action taken or failure to act under the Plan or any Award Agreement and against
and from any and all amounts paid by such person, with the Company's approval,
in settlement thereof, or paid by such person in satisfaction of any judgment in
any such action, suit or proceeding against such person, provided that the
Company shall have the right, at its own expense, to assume and defend the same.
The foregoing right of indemnification shall not be available to a person to the
extent that a final judgment or other final adjudication binding upon such
person establishes that the acts or omissions of such person giving rise to the
indemnification claim resulted from such person's bad faith, fraud or willful
criminal act or omission. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under Cirilium Holdings Inc.'s Certificate of Incorporation or Bylaws,
as a matter of law, or otherwise, or any other power that Cirilium Holdings Inc.
may have to indemnify such persons or hold them harmless.

1.4      Persons Eligible for Awards

                  Awards under the Plan may be made to such officers, directors,
employees (including prospective employees), consultants and other individuals
who may perform services for the Company, as the Committee may select.

1.5      Types of Awards Under Plan

                  Awards may be made under the Plan in the form of (a) Options,
(b) stock appreciation rights, (c) dividend equivalent rights, (d) restricted
stock, (e) restricted stock units and (f) other equity-based or equity-related
Awards which the Committee determines to be consistent with the purpose of the
Plan and the interests of the Company. No Incentive Stock Option (other than an
Incentive Stock Option that may be assumed or issued by Cirilium Holdings Inc.
in connection with a transaction to which Section 424(a) of the Code applies)
may be granted to a person who is not eligible to receive an Incentive Stock
Option under the Code.

1.6      Shares Available for Awards

                  1.6.1 Total shares available. Subject to adjustment pursuant
to Section 1.6.2, the total number of shares of Common Stock which may be
delivered pursuant to Awards granted under the Plan through Cirilium Holdings
Inc.'s fiscal year ending in 2004 shall not exceed three million three hundred
thousand (3,300,000) shares and pursuant to Awards granted in each fiscal year
thereafter shall not exceed ten percent (10%) of the issued and outstanding
shares of Common Stock, determined as of the last day of the immediately
preceding fiscal year, increased by the number of shares available for Awards in
previous fiscal years but not covered by Awards granted in such years. If, after

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the effective date of the Plan, any Award is forfeited or otherwise terminates
or is canceled without the delivery of shares of Common Stock, shares of Common
Stock are surrendered or withheld from any Award to satisfy a Participant's
income tax or other withholding obligations, or shares of Common Stock owned by
a Participant are tendered to pay the exercise price of any Award granted under
the Plan, then the shares covered by such forfeited, terminated or canceled
Award or which are equal to the number of shares surrendered, withheld or
tendered shall again become available for transfer pursuant to Awards granted or
to be granted under this Plan, subject, however, in the case of Incentive Stock
Options, to any limitation required under the Code. Notwithstanding the
foregoing, but subject to adjustment as provided in Section 1.6.2., no more than
two hundred million shares of Common Stock shall be delivered pursuant to the
exercise of Incentive Stock Options. The maximum number of shares of Common
Stock with respect to which Options or stock appreciation rights may be granted
(i) in Cirilium Holdings Inc.'s fiscal year ending in 2004 shall equal 3,300,000
shares of Common Stock and (ii) in each subsequent fiscal year shall equal 110%
of the maximum number for the preceding fiscal year. Any shares of Common Stock
(a) delivered by Cirilium Holdings, Inc., (b) with respect to which Awards are
made by Cirilium Holdings, Inc. and (c) with respect to which Cirilium Holdings,
Inc. becomes obligated to make Awards, in each case through the assumption of,
or in substitution for, outstanding awards previously granted by an acquired
entity, shall not be counted against the shares of Common Stock available for
Awards under this Plan. Shares of Common Stock which may be delivered pursuant
to Awards may be authorized but unissued Common Stock or authorized and issued
Common Stock held in Cirilium Holdings, Inc.'s treasury or otherwise acquired
for the purposes of the Plan.

                  1.6.2 Adjustments. The Committee shall have the authority (but
shall not be required) to adjust the number of shares of Common Stock authorized
pursuant to Section 1.6.1 and to adjust equitably (including, without
limitation, by payment of cash) the terms of any outstanding Awards (including,
without limitation, the number of shares of Common Stock covered by each
outstanding Award, the type of property to which the Award is subject and the
exercise or strike price of any Award), in such manner as it deems appropriate
to preserve the benefits or potential benefits intended to be made available to
Participants of Awards, for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, spin-off, split-up, combination or reclassification of the Common
Stock, or any other event the Committee determines in its sole discretion
affects the capitalization of Cirilium Holdings, Inc., including any
extraordinary dividend or distribution. After any adjustment made pursuant to
this Section 1.6.2, the number of shares of Common Stock subject to each
outstanding Award shall be rounded to the nearest whole number.

                  1.6.3 Except as provided in this Section 1.6 and Section 2.9.2
or under the terms of any applicable Award Agreement, there shall be no limit on
the number or the value of shares of Common Stock that may be subject to Awards
to any individual under the Plan.

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                  1.6.4 There shall be no limit on the amount of cash,
securities (other than shares of Common Stock as provided in this Section 1.6)
or other property that may be delivered pursuant to any Award.

                                   ARTICLE II

                              AWARDS UNDER THE PLAN

2.1      Agreements Evidencing Awards

                  Each Award granted under the Plan shall be evidenced by a
written document (which need not be identical) which shall contain such
provisions and conditions as the Committee deems appropriate and consistent with
the Plan. The Committee may grant Awards in tandem with or in substitution for
any other Award or Awards granted under this Plan or any award granted under any
other plan of the Company. By accepting an Award pursuant to the Plan, a
Participant thereby agrees that the Award shall be subject to all of the terms
and provisions of the Plan and the applicable Award Agreement.

2.2      No Rights as a Shareholder

                  No Participant shall have any of the rights of a shareholder
of Cirilium Holdings, Inc. with respect to shares subject to such Award until
the delivery of such shares. Except as otherwise provided in Section 1.6.2, no
adjustments shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, Common Stock, other securities
or other property) for which the record date is prior to the date such shares
are delivered.

2.3      Grant of Options and Stock Appreciation Rights

                  The Committee may grant (a) Options to purchase shares of
Common Stock of Cirilium Holdings, Inc. and (b) stock appreciation rights, in
such amounts and subject to such terms and conditions as the Committee may
determine.

2.4      Exercise of Options and Stock Appreciation Rights

                  2.4.1 Any acceptance by the Committee of a Participant's
written notice of exercise of an Option shall be conditioned upon payment for
the shares being purchased. Such payment may be made in cash or by such other
method as the Committee may from time to time prescribe.

                  2.4.2 After receiving payment from the Participant of the full
Option exercise price, or after receiving notice from the Participant of the
exercise of a stock appreciation right for which payment will be made by
Cirilium Holdings, Inc. partly or entirely in shares of Common Stock, Cirilium
Holdings, Inc. shall, subject to the provisions of the Plan or any Award
Agreement, deliver the shares of Common Stock.

2.5      Grant of Restricted Stock

                  The Committee may grant or offer for sale restricted shares of
Common Stock in such amounts and subject to such terms and conditions as the
Committee shall determine. Upon the delivery of such shares, the Participant
shall have the rights of a shareholder with respect to the restricted stock,
subject to any restrictions and conditions as the Committee may include in the
applicable Award Agreement, including those set forth in Sections 2.9 and 3.3
herein. In the event that a Certificate is issued in respect of restricted
shares of Common Stock, such Certificate may be registered in the name of the
Participant but may be held by Cirilium Holdings, Inc. or its designated agent
until the time the restrictions lapse.

2.6      Grant of Restricted Stock Units

                  The Committee may grant Awards of restricted stock units in
such amounts and subject to such terms and conditions as the Committee shall
determine. A Participant of a restricted stock unit will have only the rights of
a general unsecured creditor of Cirilium Holdings, Inc. until delivery of shares
of Common Stock, cash or other securities or property is made as specified in
the applicable Award Agreement. On the delivery date, the Participant of each
restricted stock unit not previously forfeited shall receive one share of Common
Stock, or cash, securities or other property equal in value to a share of Common
Stock or a combination thereof, as specified by the Committee.

2.7      Other Stock-Based Awards

                  The Committee may grant other types of equity-based or
equity-related Awards (including the grant or offer for sale of unrestricted
shares of Common Stock) in such amounts and subject to such terms and
conditions, as the Committee shall determine. Such Awards may entail the
transfer of actual shares of Common Stock to Plan participants, or payment in
cash or otherwise of amounts based on the value of shares of Common Stock, and
may include, without limitation, Awards designed to comply with or take
advantage of the applicable local laws of jurisdictions other than the United
States.

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2.8      Grant of Dividend Equivalent Rights

                  The Committee may include in the Award Agreement with respect
to any Award a dividend equivalent right entitling the Participant to receive
amounts equal to all or any portion of the dividends that would be paid on the
shares of Common Stock covered by such Award if such shares had been delivered
pursuant to such Award. The Participant of a dividend equivalent right will have
only the rights of a general unsecured creditor of Cirilium Holdings, Inc. until
payment of such amounts is made as specified in the applicable Award Agreement.
In the event such a provision is included in an Award Agreement, the Committee
shall determine whether such payments shall be made in cash, in shares of Common
Stock or in another form, whether they shall be conditioned upon the exercise of
the Award to which they relate, the time or times at which they shall be made,
and such other terms and conditions as the Committee shall deem appropriate.

2.9   Incentive Stock Options

      An Option that the Committee intends to be an "incentive stock option" as
defined in Section 422 of the Code (an "Incentive Stock Option") shall only be
granted to employees of the Company and shall be subject to and shall be
construed consistently with the requirements of Section 422 of the Code. The
Company shall have no liability whatsoever to a Participant, or any other party,
if an Option (or any part thereof) which is intended to be an Incentive Stock
Option is not an Incentive Stock Option.

      2.9.1 Option Price. The purchase price for the shares subject to any
Option shall be determined by the Committee at the time of grant. Anything to
the contrary notwithstanding, the purchase price for the shares subject to any
Incentive Stock Option shall not be less than 100% of the Fair Market Value of
the shares of Common Stock of the Company on the date the Incentive Stock Option
is granted. In the case of an Incentive Stock Option granted to an employee who
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
the Option price shall not be less than 110% of the fair market value per share
of the Common Stock of the Company on the date the Option is granted.

      2.9.2 Limit on Incentive Stock Options. The aggregate fair market value
(determined at the time the Option is granted) of the stock with respect to
which Incentive Stock Options granted after 1986 are exercisable for the first
time by a Participant during any calendar year (under all Incentive Stock
Options plans of the Company and its subsidiaries) shall not exceed $100,000. To
the extent that the aggregate Fair Market Value (determined at the time of the
Stock Option is granted) of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a Participant during any
calendar year (under all Incentive Stock Option plans of the Company and any
parent or subsidiary corporations) exceeds $100,000, such Stock Options shall be
treated as Nonqualified Stock Options. The determination of which Stock Options
shall be treated as Nonqualified Stock Options shall be made by taking Stock
Options into account in the order in which they were granted.

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                                   ARTICLE III

                                  MISCELLANEOUS

3.1      Amendment of the Plan

                  3.1.1 Unless otherwise provided in an Award Agreement, the
Board may from time to time suspend, discontinue, revise or amend the Plan in
any respect whatsoever, including in any manner that adversely affects the
rights, duties or obligations of any Participant.

                  3.1.2 Unless otherwise determined by the Board, shareholder
approval of any suspension, discontinuance, revision or amendment shall be
obtained only to the extent necessary to comply with any applicable law, rule or
regulation.

3.2      Tax Withholding

                  3.2.1 As a condition to the delivery of any shares of Common
Stock pursuant to any Award or the lifting or lapse of restrictions on any
Award, or in connection with any other event that gives rise to a federal or
other governmental tax withholding obligation on the part of Cirilium Holdings,
Inc. or any of its subsidiaries or affiliates relating to an Award (including,
without limitation, FICA tax), (a) the Company may deduct or withhold (or cause
to be deducted or withheld) from any payment or distribution to a Participant
whether or not pursuant to the Plan or (b) the Committee shall be entitled to
require that the Participant remit cash to Cirilium Holdings, Inc. or any of its
subsidiaries or affiliates (through payroll deduction or otherwise), in each
case in an amount sufficient in the opinion of Cirilium Holdings, Inc. to
satisfy such withholding obligation.

                  3.2.2 If the event giving rise to the withholding obligation
involves a transfer of shares of Common Stock, then, unless the applicable Award
Agreement provides otherwise, at the discretion of the Committee, the
Participant may satisfy the withholding obligation described under Section 3.2.1
by electing to have Cirilium Holdings, Inc. withhold shares of Common Stock
(which withholding, unless otherwise provided in the applicable Award Agreement,
will be at a rate not in excess of the statutory minimum rate) or by tendering
previously owned shares of Common Stock, in each case having a Fair Market Value
equal to the amount of tax to be withheld (or by any other mechanism as may be
required or appropriate to conform with local tax and other rules). For this
purpose, Fair Market Value shall be determined as of the date on which the
amount of tax to be withheld is determined (and Cirilium Holdings, Inc. may
cause any fractional share amount to be settled in cash).

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3.3      Legal Requirements: Consents, Legends and Restrictions

      3.3.1 Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

                  3.3.1 Consent. If the Committee shall at any time determine
that any consent (as hereinafter defined) is necessary or desirable as a
condition of, or in connection with, the granting of any Award, the delivery of
shares of Common Stock or the delivery of any cash, securities or other property
under the Plan, or the taking of any other action thereunder (each such action
being hereinafter referred to as a "plan action"), then such plan action shall
not be taken, in whole or in part, unless and until such consent shall have been
effected or obtained to the full satisfaction of the Committee.

                  3.3.2 The term "consent" as used herein with respect to any
plan action includes (a) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any federal, state, or
local law, or law, rule or regulation of a jurisdiction outside the United
States, (b) any and all written agreements and representations by the
Participant with respect to the disposition of shares, or with respect to any
other matter, which the Committee may deem necessary or desirable to comply with
the terms of any such listing, registration or qualification or to obtain an
exemption from the requirement that any such listing, qualification or
registration be made, (c) any and all other consents, clearances and approvals
in respect of a plan action by any governmental or other regulatory body or any
stock exchange or self-regulatory agency and (d) any and all consents or
authorizations required to comply with, or required to be obtained under,
applicable local law or otherwise required by the Committee. Nothing herein
shall require Cirilium Holdings, Inc. to list, register or qualify the shares of
Common Stock for public sale.

                  3.3.3 Private Offering. The Options to be granted under the
Plan are available only to a limited number of present and future key executives
and employees of the Company and its subsidiaries who have knowledge of the
Company's financial condition, management, and affairs. Such options are not
intended to provide additional capital for the Company but are to encourage
stock ownership by the Company's employees. By the act of accepting an Option,
in the absence of an effective registration statement under the Securities Act
of 1933, as amended, Participants shall agree that upon exercise of such
Option(s), they will acquire the shares of Common Stock that are the subject
thereof for investment and not with any intention at such time to resell or
redistribute the same, and they shall confirm such agreement at the time of
exercise, but the neglect or failure to confirm the same in writing shall not be
a limitation of such agreement.

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      3.3.4 Restriction on Issuances of Shares, Legend. The issuance of Options
and shares shall be subject to compliance with all of the applicable
requirements of law with respect to the issuance and sale of securities,
including, without limitation, any required qualification under applicable state
securities laws. If a Participant acquires shares of Common Stock pursuant to
the exercise of an Option, the Committee, in its sole discretion, may require as
a condition of issuance of shares covered by the Option that the shares of
Common Stock shall be subject to certain restrictions on transfer so as not to
violate any state or Federal securities or other law. The Committee may direct
that any Certificate evidencing shares delivered pursuant to the Plan shall bear
a legend setting forth such restrictions on transferability as the Committee may
determine to be necessary or desirable, and may advise the transfer agent to
place a stop order against any legended shares. Such Certificate(s) (unless
registered under the Securities Act of 1933, as amended) shall be stamped or
imprinted with a legend in substantially the following form and may not be
immediately transferable:

      THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
      INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
      ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF
      COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
      EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
      ACT.

In addition, the Participant may be required to execute a buy-sell agreement in
favor of the Company or its designee with respect to all or any of the shares so
acquired. In such event, the terms of such agreement shall apply to such shares.

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3.4      Nonassignability

                  Except to the extent otherwise expressly provided in the
applicable Award Agreement, no Award (or any rights and obligations thereunder)
granted to any person under the Plan may be sold, exchanged, transferred,
assigned, pledged, hypothecated or otherwise disposed of (including through the
use of any cash-settled instrument) (each such action being hereinafter referred
to as an "assignment"), whether voluntarily or involuntarily, other than by will
or by the laws of descent and distribution, and all such Awards (and any rights
thereunder) shall be exercisable during the life of the Participant only by the
Participant or the Participant's legal representative. Notwithstanding the
immediately preceding sentence, the Committee may permit, under such terms and
conditions that it deems appropriate in its sole discretion, a Participant to
transfer any Award to any person or entity that the Committee so determines. Any
assignment in violation of the provisions of this Section 3.4 shall be void. All
of the terms and conditions of this Plan and the Award Agreements shall be
binding upon any such permitted successors and assigns.

3.5      Requirement of Consent and Notification of Election Under Section 83(b)
         of the Code or Similar Provision

                  No election under Section 83(b) of the Code (to include in
gross income in the year of transfer the amounts specified in Code Section
83(b)) or under a similar provision of the law of a jurisdiction outside the
United States may be made unless expressly permitted by the terms of the Award
Agreement or by action of the Committee in writing prior to the making of such
election. If a Participant, in connection with the acquisition of shares of
Common Stock under the Plan or otherwise, is expressly permitted under the terms
of the Award Agreement or by such Committee action to make any such election and
the Participant makes the election, the Participant shall notify the Committee
of such election within ten (10) days of filing notice of the election with the
Internal Revenue Service or other governmental authority, in addition to any
filing and notification required pursuant to regulations issued under Code
Section 83(b) or other applicable provision.

3.6      Requirement of Notification Upon Disqualifying Disposition Under
         Section 421(b) of the Code

                  If any Participant shall make any disposition of shares of
Common Stock delivered pursuant to the exercise of an Incentive Stock Option
under the circumstances described in Section 421(b) of the Code (relating to
certain disqualifying dispositions), such Participant shall notify Cirilium
Holdings, Inc. of such disposition within 10 days thereof.

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3.7      Change in Control

                  3.7.1 The Committee may provide in any Award Agreement for
provisions relating to a "change in control" of the Company (as such term is
defined by the Committee in any such Award Agreement), including, without
limitation, the acceleration of the exercisability of, or the lapse of
restrictions or deemed satisfaction of goals with respect to, any outstanding
Awards.

                  3.7.2 Unless otherwise provided in the applicable Award
Agreement, in the event of a merger, consolidation, mandatory share exchange or
other similar business combination of Cirilium Holdings, Inc. with or into any
other entity ("successor entity") or any transaction in which another person or
entity acquires all of the issued and outstanding Common Stock of Cirilium
Holdings, Inc., or all or substantially all of the assets of Cirilium Holdings,
Inc., outstanding Awards may be assumed or an equivalent Award may be
substituted by such successor entity or a parent or subsidiary of such successor
entity.

3.8      Right of Discharge Reserved

                  No person shall have any claim or right to be granted an Award
and nothing in the Plan or in any Award Agreement shall confer upon any
Participant the right to continued Employment by the Company or affect any right
which the Company may have to terminate such Employment. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award.

3.9      Nature of Payments

                  3.9.1 Any and all grants of Awards and deliveries of Common
Stock, cash, securities or other property under the Plan shall be in
consideration of services performed or to be performed for the Company by the
Participant. Awards under the Plan may, in the discretion of the Committee, be
made in substitution in whole or in part for cash or other compensation
otherwise payable to an Employee.

                  3.9.2 All such grants and deliveries shall constitute a
special discretionary incentive payment to the Participant and shall not be
required to be taken into account in computing the amount of salary or
compensation of the Participant for the purpose of determining any contributions
to or any benefits under any pension, retirement, profit-sharing, bonus, life
insurance, severance or other benefit plan of the Company or under any agreement
with the Participant, unless the Company specifically provides otherwise.

                                       13
<PAGE>

3.10     Non-Uniform Determinations

                  The Committee's determinations under the Plan and Award
Agreements need not be uniform and may be made by it selectively among persons
who receive, or are eligible to receive, Awards under the Plan (whether or not
such persons are similarly situated). Without limiting the generality of the
foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations under Award Agreements, and to enter
into nonuniform and selective Award Agreements, as to (a) the persons to receive
Awards, (b) the terms and provisions of Awards and (c) whether a Participant's
Employment has been terminated for purposes of the Plan.

3.11     Other Payments or Awards

                  Nothing contained in the Plan shall be deemed in any way to
limit or restrict Cirilium Holdings, Inc. from making any award or payment to
any person under any other plan, arrangement or understanding, whether now
existing or hereafter in effect.

3.12     Plan Headings

                  The headings in this Plan are for the purpose of convenience
only and are not intended to define or limit the construction of the provisions
hereof.

3.13     Date of Adoption and Term of Plan

                  The Plan was adopted by the Board of Directors of Cirilium
Holdings, Inc. on May 20, 2004, and amended by the Board of Directors on April
22, 2005. Unless sooner terminated by the Board, the provisions of the Plan
respecting the grant of Incentive Stock Options shall terminate on the day
before the tenth anniversary of the adoption of the Plan by the Board, and no
Incentive Stock Options shall thereafter be granted under the Plan. Unless
expressly provided in the Award Agreement, Awards shall terminate three months
after an employee's severance of employment with the Company other than by death
or disability. Unless the Award expires sooner, all Awards will expire one year
after the death or disability of the eligible person. The Board reserves the
right to terminate the Plan at any time; provided, however, that all Awards made
under the Plan prior to its termination shall remain in effect until such Awards
have been satisfied or terminated in accordance with the terms and provisions of
the Plan and the applicable Award Agreements.

3.14     Governing Law

                  ALL RIGHTS AND OBLIGATIONS UNDER THE PLAN AND EACH AWARD
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF FLORIDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

                                       14
<PAGE>

3.15     Severability; Entire Agreement

                  If any of the provisions of this Plan or any Award Agreement
is finally held to be invalid, illegal or unenforceable (whether in whole or in
part), such provision shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
provisions shall not be affected thereby; provided, that if any of such
provisions is finally held to be invalid, illegal, or unenforceable because it
exceeds the maximum scope determined to be acceptable to permit such provision
to be enforceable, such provision shall be deemed to be modified to the minimum
extent necessary to modify such scope in order to make such provision
enforceable hereunder. The Plan and any Award Agreements contain the entire
agreement of the parties with respect to the subject matter thereof and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter thereof.

3.16     Waiver of Claims

                  Each Participant recognizes and agrees that prior to being
selected by the Committee to receive an Award he or she has no right to any
benefits hereunder. Accordingly, in consideration of the Participant's receipt
of any Award hereunder, he or she expressly waives any right to contest the
amount of any Award, the terms of any Award Agreement, any determination, action
or omission hereunder or under any Award Agreement by the Committee, Cirilium
Holdings, Inc. or the Board, or any amendment to the Plan or any Award Agreement
(other than an amendment to this Plan or an Award Agreement to which his or her
consent is expressly required by the express terms of an Award Agreement).

3.17     No Third Party Beneficiaries

                  Except as expressly provided therein, neither the Plan nor any
Award Agreement shall confer on any person other than the Company and the
Participant of any Award any rights or remedies thereunder.

3.18     Successors and Assigns of Cirilium Holdings, Inc.

                  The terms of this Plan shall be binding upon and inure to the
benefit of Cirilium Holdings, Inc. and its successors and assigns.

                                       15THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE
         SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT,
         OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR
         OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS THAT REGISTRATION IS NOT
         REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR
         REGULATION S UNDER SAID ACT.

                        CALLABLE SECURED CONVERTIBLE NOTE

Lombard, Illinois
May 16, 2005                                                          $_________

      FOR VALUE RECEIVED, GLOBALNET CORPORATION, a Nevada corporation
(hereinafter called the "Borrower"), hereby promises to pay to the order of
_______________________________ or registered assigns (the "Holder") the sum of
$______, on May 16, 2008 (the "Maturity Date"), and to pay interest on the
unpaid principal balance hereof at the rate of twelve percent (12%) per annum
from May 16, 2005 (the "Issue Date") until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise. Any
amount of principal or interest on this Note which is not paid when due shall
bear interest at the rate of fifteen percent (15%) per annum from the due date
thereof until the same is paid ("Default Interest"). Interest shall commence
accruing on the issue date, shall be computed on the basis of a 365-day year and
the actual number of days elapsed and shall be payable, quarterly on March 31,
June 30, September 30 and December 31 of each year beginning on June 30, 2004.
All payments due hereunder (to the extent not converted into common stock, $.005
par value per share, of the Borrower (the "Common Stock") in accordance with the
terms hereof) shall be made in lawful money of the United States of America. All
payments shall be made at such address as the Holder shall hereafter give to the
Borrower by written notice made in accordance with the provisions of this Note.
Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a business day, the same shall instead be due on the next
succeeding day which is a business day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of
the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term
"business day" shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the city of New York, New York are authorized or
required by law or executive order to remain closed. Each capitalized term used
herein, and not otherwise defined, shall have the meaning ascribed thereto in
that certain Securities Purchase Agreement, dated April 29, 2005, pursuant to
which this Note was originally issued (the "Purchase Agreement").

<PAGE>

      This Note is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of shareholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Note shall be secured by that certain Security Agreement by and
between the Borrower and the Holder of even date herewith.

      The following terms shall apply to this Note:

                          ARTICLE I. CONVERSION RIGHTS

      1.1 Conversion Right. The Holder shall have the right from time to time,
and at any time on or prior to the earlier of (i) the Maturity Date and (ii) the
date of payment of the Default Amount (as defined in Article III) pursuant to
Section 1.6(a) or Article III, the Optional Prepayment Amount (as defined in
Section 5.1 or any payments pursuant to Section 1.7, each in respect of the
remaining outstanding principal amount of this Note to convert all or any part
of the outstanding and unpaid principal amount of this Note into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into
which such Common Stock shall hereafter be changed or reclassified at the
conversion price (the "Conversion Price") determined as provided herein (a
"Conversion"); provided, however, that in no event shall the Holder be entitled
to convert any portion of this Note in excess of that portion of this Note upon
conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the unexercised or unconverted portion of
any other security of the Borrower (including, without limitation, the warrants
issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Note with respect to which the determination
of this proviso is being made, would result in beneficial ownership by the
Holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such proviso. The number of shares
of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing the Conversion Amount (as defined below) by the
applicable Conversion Price then in effect on the date specified in the notice
of conversion, in the form attached hereto as Exhibit A (the "Notice of
Conversion"), delivered to the Borrower by the Holder in accordance with Section
1.4 below; provided that the Notice of Conversion is submitted by facsimile (or
by other means resulting in, or reasonably expected to result in, notice) to the
Borrower before 6:00 p.m., New York, New York time on such conversion date (the
"Conversion Date"). The term "Conversion Amount" means, with respect to any
conversion of this Note, the sum of (1) the principal amount of this Note to be
converted in such conversion plus (2) accrued and unpaid interest, if any, on
such principal amount at the interest rates provided in this Note to the
Conversion Date plus (3) Default Interest, if any, on the amounts referred to in
the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's
option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof or pursuant to Section 2(c) of that certain Registration Rights
Agreement, dated as of April 29, 2005, executed in connection with the initial
issuance of this Note and the other Notes issued on the Issue Date (the
"Registration Rights Agreement").

                                       2
<PAGE>

      1.2 Conversion Price.

            (a) Calculation of Conversion Price. The Conversion Price shall be
the lesser of (i) the Variable Conversion Price (as defined herein) and (ii) the
Fixed Conversion Price (as defined herein) (subject, in each case, to equitable
adjustments for stock splits, stock dividends or rights offerings by the
Borrower relating to the Borrower's securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean the Applicable Percentage (as defined herein) multiplied by the
Market Price (as defined herein). "Market Price" means the average of the lowest
three (3) Trading Prices (as defined below) for the Common Stock during the
twenty (20) Trading Day period ending one Trading Day prior to the date the
Conversion Notice is sent by the Holder to the Borrower via facsimile (the
"Conversion Date"). "Trading Price" means, for any security as of any date, the
intraday trading price on the Over-the-Counter Bulletin Board (the "OTCBB") as
reported by a reliable reporting service mutually acceptable to and hereafter
designated by Holders of a majority in interest of the Notes and the Borrower
or, if the OTCBB is not the principal trading market for such security, the
intraday trading price of such security on the principal securities exchange or
trading market where such security is listed or traded or, if no intraday
trading price of such security is available in any of the foregoing manners, the
average of the intraday trading prices of any market makers for such security
that are listed in the "pink sheets" by the National Quotation Bureau, Inc. If
the Trading Price cannot be calculated for such security on such date in the
manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of
the Notes being converted for which the calculation of the Trading Price is
required in order to determine the Conversion Price of such Notes. "Trading Day"
shall mean any day on which the Common Stock is traded for any period on the
OTCBB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded. "Applicable Percentage" shall mean
25.0%. The "Fixed Conversion Price" shall mean $.0036.

            (b) Conversion Price During Major Announcements. Notwithstanding
anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to consolidate or merge with any
other corporation (other than a merger in which the Borrower is the surviving or
continuing corporation and its capital stock is unchanged) or sell or transfer
all or substantially all of the assets of the Borrower or (ii) any person, group
or entity (including the Borrower) publicly announces a tender offer to purchase
50% or more of the Borrower's Common Stock (or any other takeover scheme) (the
date of the announcement referred to in clause (i) or (ii) is hereinafter
referred to as the "Announcement Date"), then the Conversion Price shall,
effective upon the Announcement Date and continuing through the Adjusted
Conversion Price Termination Date (as defined below), be equal to the lower of
(x) the Conversion Price which would have been applicable for a Conversion
occurring on the Announcement Date and (y) the Conversion Price that would
otherwise be in effect. From and after the Adjusted Conversion Price Termination
Date, the Conversion Price shall be determined as set forth in this Section
1.2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall
mean, with respect to any proposed transaction or tender offer (or takeover
scheme) for which a public announcement as contemplated by this Section 1.2(b)
has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

                                       3
<PAGE>

      1.3 Authorized Shares. The Borrower covenants that during the period the
conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Note and the other Notes issued pursuant to the Purchase Agreement. The
Borrower is required at all times to have authorized and reserved two times the
number of shares that is actually issuable upon full conversion of the Notes
(based on the Conversion Price of the Notes or the Exercise Price of the
Warrants in effect from time to time) (the "Reserved Amount"). The Reserved
Amount shall be increased from time to time in accordance with the Borrower's
obligations pursuant to Section 4(h) of the Purchase Agreement. The Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. In addition, if the Borrower shall issue any
securities or make any change to its capital structure which would change the
number of shares of Common Stock into which the Notes shall be convertible at
the then current Conversion Price, the Borrower shall at the same time make
proper provision so that thereafter there shall be a sufficient number of shares
of Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Notes. The Borrower (i) acknowledges that it has
irrevocably instructed its transfer agent to issue certificates for the Common
Stock issuable upon conversion of this Note, and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock in accordance with the terms
and conditions of this Note.

      If, at any time a Holder of this Note submits a Notice of Conversion, and
the Borrower does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Article I (a "Conversion Default"), subject to Section 4.8, the Borrower
shall issue to the Holder all of the shares of Common Stock which are then
available to effect such conversion. The portion of this Note which the Holder
included in its Conversion Notice and which exceeds the amount which is then
convertible into available shares of Common Stock (the "Excess Amount") shall,
notwithstanding anything to the contrary contained herein, not be convertible
into Common Stock in accordance with the terms hereof until (and at the Holder's
option at any time after) the date additional shares of Common Stock are
authorized by the Borrower to permit such conversion, at which time the
Conversion Price in respect thereof shall be the lesser of (i) the Conversion
Price on the Conversion Default Date (as defined below) and (ii) the Conversion
Price on the Conversion Date thereafter elected by the Holder in respect
thereof. In addition, the Borrower shall pay to the Holder payments ("Conversion
Default Payments") for a Conversion Default in the amount of (x) the sum of (1)

                                       4
<PAGE>

the then outstanding principal amount of this Note plus (2) accrued and unpaid
interest on the unpaid principal amount of this Note through the Authorization
Date (as defined below) plus (3) Default Interest, if any, on the amounts
referred to in clauses (1) and/or (2), multiplied by (y) .24, multiplied by (z)
(N/365), where N = the number of days from the day the holder submits a Notice
of Conversion giving rise to a Conversion Default (the "Conversion Default
Date") to the date (the "Authorization Date") that the Borrower authorizes a
sufficient number of shares of Common Stock to effect conversion of the full
outstanding principal balance of this Note. The Borrower shall use its best
efforts to authorize a sufficient number of shares of Common Stock as soon as
practicable following the earlier of (i) such time that the Holder notifies the
Borrower or that the Borrower otherwise becomes aware that there are or likely
will be insufficient authorized and unissued shares to allow full conversion
thereof and (ii) a Conversion Default. The Borrower shall send notice to the
Holder of the authorization of additional shares of Common Stock, the
Authorization Date and the amount of Holder's accrued Conversion Default
Payments. The accrued Conversion Default Payments for each calendar month shall
be paid in cash or shall be convertible into Common Stock (at such time as there
are sufficient authorized shares of Common Stock) at the applicable Conversion
Price, at the Borrower's option, as follows:

            (a) In the event Holder elects to take such payment in cash, cash
payment shall be made to Holder by the fifth (5th) day of the month following
the month in which it has accrued; and

            (b) In the event Holder elects to take such payment in Common Stock,
the Holder may convert such payment amount into Common Stock at the Conversion
Price (as in effect at the time of conversion) at any time after the fifth day
of the month following the month in which it has accrued in accordance with the
terms of this Article I (so long as there is then a sufficient number of
authorized shares of Common Stock).

      The Holder's election shall be made in writing to the Borrower at any time
prior to 6:00 p.m., New York, New York time, on the third day of the month
following the month in which Conversion Default payments have accrued. If no
election is made, the Holder shall be deemed to have elected to receive cash.
Nothing herein shall limit the Holder's right to pursue actual damages (to the
extent in excess of the Conversion Default Payments) for the Borrower's failure
to maintain a sufficient number of authorized shares of Common Stock, and each
holder shall have the right to pursue all remedies available at law or in equity
(including degree of specific performance and/or injunctive relief).

      1.4 Method of Conversion.

            (a) Mechanics of Conversion. Subject to Section 1.1, this Note may
be converted by the Holder in whole or in part at any time from time to time
after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion
(by facsimile or other reasonable means of communication dispatched on the
Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to
Section 1.4(b), surrendering this Note at the principal office of the Borrower.

                                       5
<PAGE>

            (b) Surrender of Note Upon Conversion. Notwithstanding anything to
the contrary set forth herein, upon conversion of this Note in accordance with
the terms hereof, the Holder shall not be required to physically surrender this
Note to the Borrower unless the entire unpaid principal amount of this Note is
so converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Note upon each such conversion. In the
event of any dispute or discrepancy, such records of the Borrower shall be
controlling and determinative in the absence of manifest error. Notwithstanding
the foregoing, if any portion of this Note is converted as aforesaid, the Holder
may not transfer this Note unless the Holder first physically surrenders this
Note to the Borrower, whereupon the Borrower will forthwith issue and deliver
upon the order of the Holder a new Note of like tenor, registered as the Holder
(upon payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this
Note. The Holder and any assignee, by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of this paragraph, following conversion
of a portion of this Note, the unpaid and unconverted principal amount of this
Note represented by this Note may be less than the amount stated on the face
hereof.

            (c) Payment of Taxes. The Borrower shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock or other securities or property on conversion
of this Note in a name other than that of the Holder (or in street name), and
the Borrower shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons (other than the
Holder or the custodian in whose street name such shares are to be held for the
Holder's account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that such tax has been paid.

            (d) Delivery of Common Stock Upon Conversion. Upon receipt by the
Borrower from the Holder of a facsimile transmission (or other reasonable means
of communication) of a Notice of Conversion meeting the requirements for
conversion as provided in this Section 1.4, the Borrower shall issue and deliver
or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within two (2)
business days after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this Note) (such second
business day being hereinafter referred to as the "Deadline") in accordance with
the terms hereof and the Purchase Agreement (including, without limitation, in
accordance with the requirements of Section 2(g) of the Purchase Agreement that
certificates for shares of Common Stock issued on or after the effective date of
the Registration Statement upon conversion of this Note shall not bear any
restrictive legend).

                                       6
<PAGE>

            (e) Obligation of Borrower to Deliver Common Stock. Upon receipt by
the Borrower of a Notice of Conversion, the Holder shall be deemed to be the
holder of record of the Common Stock issuable upon such conversion, the
outstanding principal amount and the amount of accrued and unpaid interest on
this Note shall be reduced to reflect such conversion, and, unless the Borrower
defaults on its obligations under this Article I, all rights with respect to the
portion of this Note being so converted shall forthwith terminate except the
right to receive the Common Stock or other securities, cash or other assets, as
herein provided, on such conversion. If the Holder shall have given a Notice of
Conversion as provided herein, the Borrower's obligation to issue and deliver
the certificates for Common Stock shall be absolute and unconditional,
irrespective of the absence of any action by the Holder to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against any person or any action to enforce the same, any failure or
delay in the enforcement of any other obligation of the Borrower to the holder
of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date.

            (f) Delivery of Common Stock by Electronic Transfer. In lieu of
delivering physical certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system.

            (g) Failure to Deliver Common Stock Prior to Deadline. Without in
any way limiting the Holder's right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the
Common Stock issuable upon conversion of this Note is more than two (2) days
after the Deadline (other than a failure due to the circumstances described in
Section 1.3 above, which failure shall be governed by such Section) the Borrower
shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline
that the Borrower fails to deliver such Common Stock. Such cash amount shall be
paid to Holder by the fifth day of the month following the month in which it has
accrued or, at the option of the Holder (by written notice to the Borrower by
the first day of the month following the month in which it has accrued), shall
be added to the principal amount of this Note, in which event interest shall
accrue thereon in accordance with the terms of this Note and such additional
principal amount shall be convertible into Common Stock in accordance with the
terms of this Note.

      1.5 Concerning the Shares. The shares of Common Stock issuable upon
conversion of this Note may not be sold or transferred unless (i) such shares
are sold pursuant to an effective registration statement under the Act or (ii)
the Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from
such registration or (iii) such shares are sold or transferred pursuant to Rule
144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are
transferred to an "affiliate" (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the shares of
Common Stock issuable upon conversion of this Note have been registered under
the Act as contemplated by the Registration Rights Agreement or otherwise may be
sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for
shares of Common Stock issuable upon conversion of this Note that has not been
so included in an effective registration statement or that has not been sold
pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form,
as appropriate:

                                       7
<PAGE>

      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE
      SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN
      FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
      TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD
      PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT."

      The legend set forth above shall be removed and the Borrower shall issue
to the Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Note (to the extent such securities are deemed to have been acquired on the same
date) can be sold pursuant to Rule 144 or (iii) in the case of the Common Stock
issuable upon conversion of this Note, such security is registered for sale by
the Holder under an effective registration statement filed under the Act or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold.
Nothing in this Note shall (i) limit the Borrower's obligation under the
Registration Rights Agreement or (ii) affect in any way the Holder's obligations
to comply with applicable prospectus delivery requirements upon the resale of
the securities referred to herein.

      1.6 Effect of Certain Events.

            (a) Effect of Merger, Consolidation, Etc. At the option of the
Holder, the sale, conveyance or disposition of all or substantially all of the
assets of the Borrower, the effectuation by the Borrower of a transaction or
series of related transactions in which more than 50% of the voting power of the
Borrower is disposed of, or the consolidation, merger or other business
combination of the Borrower with or into any other Person (as defined below) or
Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (as defined
in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person"
shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

                                       8
<PAGE>

            (b) Adjustment Due to Merger, Consolidation, Etc. If, at any time
when this Note is issued and outstanding and prior to conversion of all of the
Notes, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Note shall
thereafter have the right to receive upon conversion of this Note, upon the
basis and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore issuable upon conversion, such
stock, securities or assets which the Holder would have been entitled to receive
in such transaction had this Note been converted in full immediately prior to
such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of
the Conversion Price and of the number of shares issuable upon conversion of the
Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon the conversion
hereof. The Borrower shall not effect any transaction described in this Section
1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days
prior written notice (but in any event at least fifteen (15) days prior written
notice) of the record date of the special meeting of shareholders to approve, or
if there is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled
to convert this Note) and (b) the resulting successor or acquiring entity (if
not the Borrower) assumes by written instrument the obligations of this Section
1.6(b). The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

            (c) Adjustment Due to Distribution. If the Borrower shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a "Distribution"), then the Holder of this Note shall be
entitled, upon any conversion of this Note after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.

            (d) Adjustment Due to Dilutive Issuance. If, at any time when any
Notes are issued and outstanding, the Borrower issues or sells, or in accordance
with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of
Common Stock for no consideration or for a consideration per share (before
deduction of reasonable expenses or commissions or underwriting discounts or
allowances in connection therewith) less than the Fixed Conversion Price in
effect on the date of such issuance (or deemed issuance) of such shares of
Common Stock (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Fixed Conversion Price will be reduced to the amount of the
consideration per share received by the Borrower in such Dilutive Issuance;
provided that only one adjustment will be made for each Dilutive Issuance.

                                       9
<PAGE>

            The Borrower shall be deemed to have issued or sold shares of Common
Stock if the Borrower in any manner issues or grants any warrants, rights or
options, whether or not immediately exercisable, to subscribe for or to purchase
Common Stock or other securities convertible into or exchangeable for Common
Stock ("Convertible Securities") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as "Options")
and the price per share for which Common Stock is issuable upon the exercise of
such Options is less than the Fixed Conversion Price then in effect, then the
Fixed Conversion Price shall be equal to such price per share. For purposes of
the preceding sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Borrower as consideration for the
issuance or granting of all such Options, plus the minimum aggregate amount of
additional consideration, if any, payable to the Borrower upon the exercise of
all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of all
such Options (assuming full conversion of Convertible Securities, if
applicable). No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of
such Options.

            Additionally, the Borrower shall be deemed to have issued or sold
shares of Common Stock if the Borrower in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the
Fixed Conversion Price then in effect, then the Fixed Conversion Price shall be
equal to such price per share. For the purposes of the preceding sentence, the
"price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or
receivable by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

            (e) Purchase Rights. If, at any time when any Notes are issued and
outstanding, the Borrower issues any convertible securities or rights to
purchase stock, warrants, securities or other property (the "Purchase Rights")
pro rata to the record holders of any class of Common Stock, then the Holder of
this Note will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on
conversion contained herein) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

                                       10
<PAGE>

            (f) Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events described in this
Section 1.6, the Borrower, at its expense, shall promptly compute such
adjustment or readjustment and prepare and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Borrower
shall, upon the written request at any time of the Holder, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other securities or property which at
the time would be received upon conversion of the Note.

      1.7 Trading Market Limitations. Unless permitted by the applicable rules
and regulations of the principal securities market on which the Common Stock is
then listed or traded, in no event shall the Borrower issue upon conversion of
or otherwise pursuant to this Note and the other Notes issued pursuant to the
Purchase Agreement more than the maximum number of shares of Common Stock that
the Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common Stock is then traded (the "Maximum Share
Amount"), which shall be 19.99% of the total shares outstanding on the Closing
Date (as defined in the Purchase Agreement), subject to equitable adjustment
from time to time for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring after
the date hereof. Once the Maximum Share Amount has been issued (the date of
which is hereinafter referred to as the "Maximum Conversion Date"), if the
Borrower fails to eliminate any prohibitions under applicable law or the rules
or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Borrower or any of its
securities on the Borrower's ability to issue shares of Common Stock in excess
of the Maximum Share Amount (a "Trading Market Prepayment Event"), in lieu of
any further right to convert this Note, and in full satisfaction of the
Borrower's obligations under this Note, the Borrower shall pay to the Holder,
within fifteen (15) business days of the Maximum Conversion Date (the "Trading
Market Prepayment Date"), an amount equal to 130% times the sum of (a) the then
outstanding principal amount of this Note immediately following the Maximum
Conversion Date, plus (b) accrued and unpaid interest on the unpaid principal
amount of this Note to the Trading Market Prepayment Date, plus (c) Default
Interest, if any, on the amounts referred to in clause (a) and/or (b) above,
plus (d) any optional amounts that may be added thereto at the Maximum
Conversion Date by the Holder in accordance with the terms hereof (the then
outstanding principal amount of this Note immediately following the Maximum
Conversion Date, plus the amounts referred to in clauses (b), (c) and (d) above
shall collectively be referred to as the "Remaining Convertible Amount"). With
respect to each Holder of Notes, the Maximum Share Amount shall refer to such
Holder's pro rata share thereof determined in accordance with Section 4.8 below.
In the event that the sum of (x) the aggregate number of shares of Common Stock
issued upon conversion of this Note and the other Notes issued pursuant to the
Purchase Agreement plus (y) the aggregate number of shares of Common Stock that
remain issuable upon conversion of this Note and the other Notes issued pursuant
to the Purchase Agreement, represents at least one hundred percent (100%) of the
Maximum Share Amount (the "Triggering Event"), the Borrower will use its best
efforts to seek and obtain Shareholder Approval (or obtain such other relief as
will allow conversions hereunder in excess of the Maximum Share Amount) as soon
as practicable following the Triggering Event and before the Maximum Conversion
Date. As used herein, "Shareholder Approval" means approval by the shareholders
of the Borrower to authorize the issuance of the full number of shares of Common
Stock which would be issuable upon full conversion of the then outstanding Notes
but for the Maximum Share Amount.

                                       11
<PAGE>

      1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a
Holder, (i) the shares covered thereby (other than the shares, if any, which
cannot be issued because their issuance would exceed such Holder's allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed
converted into shares of Common Stock and (ii) the Holder's rights as a Holder
of such converted portion of this Note shall cease and terminate, excepting only
the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Note. Notwithstanding the foregoing, if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th) business day after the
expiration of the Deadline with respect to a conversion of any portion of this
Note for any reason, then (unless the Holder otherwise elects to retain its
status as a holder of Common Stock by so notifying the Borrower) the Holder
shall regain the rights of a Holder of this Note with respect to such
unconverted portions of this Note and the Borrower shall, as soon as
practicable, return such unconverted Note to the Holder or, if the Note has not
been surrendered, adjust its records to reflect that such portion of this Note
has not been converted. In all cases, the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such
Conversion Default and any subsequent Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent conversions determined in
accordance with Section 1.3) for the Borrower's failure to convert this Note.

                         ARTICLE II. CERTAIN COVENANTS

      2.1 Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the Holder's written
consent (a) pay, declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

                                       12
<PAGE>

      2.2 Restriction on Stock Repurchases. So long as the Borrower shall have
any obligation under this Note, the Borrower shall not without the Holder's
written consent redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

      2.3 Borrowings. So long as the Borrower shall have any obligation under
this Note, the Borrower shall not, without the Holder's written consent, create,
incur, assume or suffer to exist any liability for borrowed money, except (a)
borrowings in existence or committed on the date hereof and of which the
Borrower has informed Holder in writing prior to the date hereof, (b)
indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business or (c) borrowings, the proceeds of which shall be
used to repay this Note.

      2.4 Sale of Assets. So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder's written consent,
sell, lease or otherwise dispose of any significant portion of its assets
outside the ordinary course of business. Any consent to the disposition of any
assets may be conditioned on a specified use of the proceeds of disposition.

      2.5 Advances and Loans. So long as the Borrower shall have any obligation
under this Note, the Borrower shall not, without the Holder's written consent,
lend money, give credit or make advances to any person, firm, joint venture or
corporation, including, without limitation, officers, directors, employees,
subsidiaries and affiliates of the Borrower, except loans, credits or advances
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, (b) made in the ordinary
course of business or (c) not in excess of $50,000.

      2.6 Contingent Liabilities. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not, without the Holder's written
consent, assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any person, firm, partnership, joint
venture or corporation, except by the endorsement of negotiable instruments for
deposit or collection and except assumptions, guarantees, endorsements and
contingencies (a) in existence or committed on the date hereof and which the
Borrower has informed Holder in writing prior to the date hereof, and (b)
similar transactions in the ordinary course of business.

                         ARTICLE III. EVENTS OF DEFAULT

      If any of the following events of default (each, an "Event of Default")
shall occur:

      3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether at maturity,
upon a Trading Market Prepayment Event pursuant to Section 1.7, upon
acceleration or otherwise;

      3.2 Conversion and the Shares. The Borrower fails to issue shares of
Common Stock to the Holder (or announces or threatens that it will not honor its
obligation to do so) upon exercise by the Holder of the conversion rights of the
Holder in accordance with the terms of this Note (for a period of at least sixty
(60) days, if such failure is solely as a result of the circumstances governed
by Section 1.3 and the Borrower is using its best efforts to authorize a
sufficient number of shares of Common Stock as soon as practicable), fails to
transfer or cause its transfer agent to transfer (electronically or in
certificated form) any certificate for shares of Common Stock issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note or the Registration Rights Agreement, or fails to remove
any restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by
this Note or the Registration Rights Agreement (or makes any announcement,
statement or threat that it does not intend to honor the obligations described
in this paragraph) and any such failure shall continue uncured (or any
announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for ten (10) days after the Borrower shall have been
notified thereof in writing by the Holder;

                                       13
<PAGE>

      3.3 Failure to Timely File Registration or Effect Registration. The
Borrower fails to file the Registration Statement within thirty (30) days
following an Investor Demand (as set forth in the Registration Rights Agreement)
or obtain effectiveness with the Securities and Exchange Commission of the
Registration Statement within one hundred twenty (120) days following the
Investor Demand (as defined in the Registration Rights Agreement) or such
Registration Statement lapses in effect (or sales cannot otherwise be made
thereunder effective, whether by reason of the Borrower's failure to amend or
supplement the prospectus included therein in accordance with the Registration
Rights Agreement or otherwise) for more than twenty (20) consecutive days or
forty (40) days in any twelve month period after the Registration Statement
becomes effective;;

      3.4 Breach of Covenants. The Borrower breaches any material covenant or
other material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Note, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase Agreement
and such breach continues for a period of ten (10) days after written notice
thereof to the Borrower from the Holder;

      3.5 Breach of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith
(including, without limitation, the Purchase Agreement and the Registration
Rights Agreement), shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will have) a
material adverse effect on the rights of the Holder with respect to this Note,
the Purchase Agreement or the Registration Rights Agreement;

      3.6 Receiver or Trustee. The Borrower or any subsidiary of the Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business, or such a receiver or trustee shall otherwise be
appointed;

      3.7 Judgments. Any money judgment, writ or similar process shall be
entered or filed against the Borrower or any subsidiary of the Borrower or any
of its property or other assets for more than $50,000, and shall remain
unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder, which consent will not be unreasonably
withheld;

                                       14
<PAGE>

      3.8 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower;

      3.9 Delisting of Common Stock. The Borrower shall fail to maintain the
listing of the Common Stock on at least one of the OTCBB or an equivalent
replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market,
the New York Stock Exchange, or the American Stock Exchange; or

      3.10 Default Under Other Notes. An Event of Default has occurred and is
continuing under any of the other Notes issued pursuant to the Purchase
Agreement,

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Notes issued pursuant to the Purchase Agreement exercisable through
the delivery of written notice to the Borrower by such Holders (the "Default
Notice"), and upon the occurrence of an Event of Default specified in Section
3.6 or 3.8, the Notes shall become immediately due and payable and the Borrower
shall pay to the Holder, in full satisfaction of its obligations hereunder, an
amount equal to the greater of (i) 130% times the sum of (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid interest
on the unpaid principal amount of this Note to the date of payment (the
"Mandatory Prepayment Date") plus (y) Default Interest, if any, on the amounts
referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the
Registration Rights Agreement (the then outstanding principal amount of this
Note to the date of payment plus the amounts referred to in clauses (x), (y) and
(z) shall collectively be known as the "Default Sum") or (ii) the "parity value"
of the Default Sum to be prepaid, where parity value means (a) the highest
number of shares of Common Stock issuable upon conversion of or otherwise
pursuant to such Default Sum in accordance with Article I, treating the Trading
Day immediately preceding the Mandatory Prepayment Date as the "Conversion Date"
for purposes of determining the lowest applicable Conversion Price, unless the
Default Event arises as a result of a breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date),
multiplied by (b) the highest Closing Price for the Common Stock during the
period beginning on the date of first occurrence of the Event of Default and
ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and
all other amounts payable hereunder shall immediately become due and payable,
all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and
expenses, of collection, and the Holder shall be entitled to exercise all other
rights and remedies available at law or in equity. If the Borrower fails to pay
the Default Amount within five (5) business days of written notice that such
amount is due and payable, then the Holder shall have the right at any time, so
long as the Borrower remains in default (and so long and to the extent that
there are sufficient authorized shares), to require the Borrower, upon written
notice, to immediately issue, in lieu of the Default Amount, the number of
shares of Common Stock of the Borrower equal to the Default Amount divided by
the Conversion Price then in effect.

                                       15
<PAGE>

                           ARTICLE IV. MISCELLANEOUS

      4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

      4.2 Notices. Any notice herein required or permitted to be given shall be
in writing and may be personally served or delivered by courier or sent by
United States mail and shall be deemed to have been given upon receipt if
personally served (which shall include telephone line facsimile transmission) or
sent by courier or three (3) days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Borrower; and the address of the Borrower shall be 1919 S
Highland Avenue, Suite 125D, Lombard, IL 60148, facsimile number: (303)
942-5574. Both the Holder and the Borrower may change the address for service by
service of written notice to the other as herein provided.

      4.3 Amendments. This Note and any provision hereof may only be amended by
an instrument in writing signed by the Borrower and the Holder. The term "Note"
and all reference thereto, as used throughout this instrument, shall mean this
instrument (and the other Notes issued pursuant to the Purchase Agreement) as
originally executed, or if later amended or supplemented, then as so amended or
supplemented.

      4.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an "accredited
investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Note to the contrary, this Note may be pledged as collateral in
connection with a bona fide margin account or other lending arrangement.

      4.5 Cost of Collection. If default is made in the payment of this Note,
the Borrower shall pay the Holder hereof costs of collection, including
reasonable attorneys' fees.

      4.6 Governing Law. THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS NOTE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS'
FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

                                       16
<PAGE>

      4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is
required to pay an amount in excess of the outstanding principal amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such interest, the Borrower and the Holder
agree that the actual damages to the Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the
Borrower represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to convert this Note
and to earn a return from the sale of shares of Common Stock acquired upon
conversion of this Note at a price in excess of the price paid for such shares
pursuant to this Note. The Borrower and the Holder hereby agree that such amount
of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.

      4.8 Allocations of Maximum Share Amount and Reserved Amount. The Maximum
Share Amount and Reserved Amount shall be allocated pro rata among the Holders
of Notes based on the principal amount of such Notes issued to each Holder. Each
increase to the Maximum Share Amount and Reserved Amount shall be allocated pro
rata among the Holders of Notes based on the principal amount of such Notes held
by each Holder at the time of the increase in the Maximum Share Amount or
Reserved Amount. In the event a Holder shall sell or otherwise transfer any of
such Holder's Notes, each transferee shall be allocated a pro rata portion of
such transferor's Maximum Share Amount and Reserved Amount. Any portion of the
Maximum Share Amount or Reserved Amount which remains allocated to any person or
entity which does not hold any Notes shall be allocated to the remaining Holders
of Notes, pro rata based on the principal amount of such Notes then held by such
Holders.

      4.9 Damages Shares. The shares of Common Stock that may be issuable to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section 2(c)
of the Registration Rights Agreement ("Damages Shares") shall be treated as
Common Stock issuable upon conversion of this Note for all purposes hereof and
shall be subject to all of the limitations and afforded all of the rights of the
other shares of Common Stock issuable hereunder, including without limitation,
the right to be included in the Registration Statement filed pursuant to the
Registration Rights Agreement. For purposes of calculating interest payable on
the outstanding principal amount hereof, except as otherwise provided herein,
amounts convertible into Damages Shares ("Damages Amounts") shall not bear
interest but must be converted prior to the conversion of any outstanding
principal amount hereof, until the outstanding Damages Amounts is zero.

                                       17
<PAGE>

      4.10 Denominations. At the request of the Holder, upon surrender of this
Note, the Borrower shall promptly issue new Notes in the aggregate outstanding
principal amount hereof, in the form hereof, in such denominations of at least
$50,000 as the Holder shall request.

      4.11 Purchase Agreement. By its acceptance of this Note, each Holder
agrees to be bound by the applicable terms of the Purchase Agreement.

      4.12 Notice of Corporate Events. Except as otherwise provided below, the
Holder of this Note shall have no rights as a Holder of Common Stock unless and
only to the extent that it converts this Note into Common Stock. The Borrower
shall provide the Holder with prior notification of any meeting of the
Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

      4.13 Remedies. The Borrower acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its obligations
under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Note, that the
Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Note and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.

                                       18
<PAGE>

                             ARTICLE V. CALL OPTION

      5.1 Call Option. Notwithstanding anything to the contrary contained in
this Article V, so long as (i) no Event of Default or Trading Market Prepayment
Event shall have occurred and be continuing, (ii) the Borrower has a sufficient
number of authorized shares of Common Stock reserved for issuance upon full
conversion of the Notes, then at any time after the Issue Date, and (iii) the
Common Stock is trading at or below $.0036 per share, the Borrower shall have
the right, exercisable on not less than ten (10) Trading Days prior written
notice to the Holders of the Notes (which notice may not be sent to the Holders
of the Notes until the Borrower is permitted to prepay the Notes pursuant to
this Section 5.1), to prepay all of the outstanding Notes in accordance with
this Section 5.1. Any notice of prepayment hereunder (an "Optional Prepayment")
shall be delivered to the Holders of the Notes at their registered addresses
appearing on the books and records of the Borrower and shall state (1) that the
Borrower is exercising its right to prepay all of the Notes issued on the Issue
Date and (2) the date of prepayment (the "Optional Prepayment Notice"). On the
date fixed for prepayment (the "Optional Prepayment Date"), the Borrower shall
make payment of the Optional Prepayment Amount (as defined below) to or upon the
order of the Holders as specified by the Holders in writing to the Borrower at
least one (1) business day prior to the Optional Prepayment Date. If the
Borrower exercises its right to prepay the Notes, the Borrower shall make
payment to the holders of an amount in cash (the "Optional Prepayment Amount")
equal to either (i) 120% (for prepayments occurring within sixty (60) days of
the Issue Date), (ii) 130% for prepayments occurring between sixty-one (61) and
one hundred twenty (120) days of the Issue Date, or (iii) 140% (for prepayments
occurring after the one hundred twentieth (120th) day following the Issue Date),
multiplied by the sum of (w) the then outstanding principal amount of this Note
plus (x) accrued and unpaid interest on the unpaid principal amount of this Note
to the Optional Prepayment Date plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Note to the date of payment plus the amounts referred to in clauses (x), (y) and
(z) shall collectively be known as the "Optional Prepayment Sum").
Notwithstanding notice of an Optional Prepayment, the Holders shall at all times
prior to the Optional Prepayment Date maintain the right to convert all or any
portion of the Notes in accordance with Article I and any portion of Notes so
converted after receipt of an Optional Prepayment Notice and prior to the
Optional Prepayment Date set forth in such notice and payment of the aggregate
Optional Prepayment Amount shall be deducted from the principal amount of Notes
which are otherwise subject to prepayment pursuant to such notice. If the
Borrower delivers an Optional Prepayment Notice and fails to pay the Optional
Prepayment Amount due to the Holders of the Notes within two (2) business days
following the Optional Prepayment Date, the Borrower shall forever forfeit its
right to redeem the Notes pursuant to this Section 5.1.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       19
<PAGE>

      IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name
by its duly authorized officer this 16th day of May, 2005.

                                           GLOBALNET CORPORATION

                                           By: _________________________________
                                               Mark T. Wood
                                               Chief Executive Officer

                                       20
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION
                    (To be Executed by the Registered Holder
                         in order to Convert the Notes)

      The undersigned hereby irrevocably elects to convert $__________ principal
amount of the Note (defined below) into shares of common stock, par value $.005
per share ("Common Stock"), of GlobalNet Corporation, a Nevada corporation (the
"Borrower") according to the conditions of the convertible Notes of the Borrower
dated as of May 16, 2005 (the "Notes"), as of the date written below. If
securities are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates. No fee will be charged to the Holder for
any conversion, except for transfer taxes, if any. A copy of each Note is
attached hereto (or evidence of loss, theft or destruction thereof).

      The Borrower shall electronically transmit the Common Stock issuable
pursuant to this Notice of Conversion to the account of the undersigned or its
nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC
Transfer").

      Name of DTC Prime Broker: ________________________________________________
      Account Number: __________________________________________________________

      In lieu of receiving shares of Common Stock issuable pursuant to this
Notice of Conversion by way of a DWAC Transfer, the undersigned hereby requests
that the Borrower issue a certificate or certificates for the number of shares
of Common Stock set forth below (which numbers are based on the Holder's
calculation attached hereto) in the name(s) specified immediately below or, if
additional space is necessary, on an attachment hereto:

      Name: ____________________________________________________________________
      Address: _________________________________________________________________

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Notes shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.

      Date of Conversion:___________________________
      Applicable Conversion Price:____________________
      Number of Shares of Common Stock to be Issued Pursuant to
      Conversion of the Notes:______________
      Signature:___________________________________
      Name:______________________________________
      Address:____________________________________

                                       21
<PAGE>

The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Note(s) to be converted, and shall make payments pursuant to the Notes for the
number of business days such issuance and delivery is late.

                                       22

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