Document:

EXHIBIT 4.1

                       LIVESTAR ENTERTAINMENT GROUP, INC.
              EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004 NO. 2

     1.     General  Provisions.
            -------------------

     1.1     Purpose.  This  Stock  Incentive  Plan  (the "Plan") is intended to
             -------
allow  designated officers and employees (all of whom are sometimes collectively
referred  to  herein  as  the "Employees," or individually as the "Employee") of
Livestar Entertainment Group, Inc., a Nevada corporation (the "Company") and its
Subsidiaries  (as  that  term is defined below) which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company, par value $0.0001 per share (the "Common Stock"), and to receive grants
of  the Common Stock subject to certain restrictions (the "Awards").  As used in
this  Plan,  the  term  "Subsidiary"  shall  mean  each  corporation  which is a
"subsidiary  corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code").  The purpose of this
Plan  is  to  provide  the  Employees,  who  make  significant and extraordinary
contributions  to  the  long-term  growth  and  performance of the Company, with
equity-based  compensation  incentives, and to attract and retain the Employees.

     1.2     Administration.
             --------------

     1.2.1     The Plan shall be administered by the Compensation Committee (the
"Committee")  of,  or  appointed  by, the Board of Directors of the Company (the
"Board").  The  Committee  shall select one of its members as Chairman and shall
act  by  vote  of  a  majority  of a quorum, or by unanimous written consent.  A
majority  of  its  members  shall  constitute  a quorum.  The Committee shall be
governed  by the provisions of the Company's Bylaws and of Nevada law applicable
to  the  Board,  except as otherwise provided herein or determined by the Board.

     1.2.2     The  Committee  shall  have  full  and complete authority, in its
discretion,  but  subject  to the express provisions of this Plan (a) to approve
the Employees nominated by the management of the Company to be granted Awards or
Stock  Options;  (b)  to  determine  the number of Awards or Stock Options to be
granted  to  an  Employee; (c) to determine the time or times at which Awards or
Stock Options shall be granted; to establish the terms and conditions upon which
Awards  or  Stock  Options  may  be  exercised;  (d)  to  remove  or  adjust any
restrictions and conditions upon Awards or Stock Options; (e) to specify, at the
time  of  grant,  provisions  relating to exercisability of Stock Options and to
accelerate  or otherwise modify the exercisability of any Stock Options; and (f)
to  adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of this Plan.  All interpretations
and  constructions  of  this  Plan  by  the  Committee,  and  all of its actions
hereunder,  shall  be  binding  and  conclusive on all persons for all purposes.

     1.2.3     The  Company  hereby  agrees  to indemnify and hold harmless each
Committee  member  and each Employee, and the estate and heirs of such Committee
member  or  Employee,  against  all  claims,  liabilities,  expenses, penalties,
damages  or  other  pecuniary losses, including legal fees, which such Committee
member  or  Employee,  his  estate  or  heirs  may  suffer  as  a  result of his
responsibilities,  obligations  or  duties  in connection with this Plan, to the
extent  that  insurance,  if  any, does not cover the payment of such items.  No
member  of  the  Committee  or  the  Board  shall  be  liable  for any action or
determination made in good faith with respect to this Plan or any Award or Stock
Option  granted  pursuant  to  this  Plan.

     1.3     Eligibility  and  Participation.  The Employees eligible under this
             -------------------------------
Plan shall be approved by the Committee from those Employees who, in the opinion
of  the  management  of  the Company, are in positions which enable them to make
significant  contributions  to  the  long-term  performance  and  growth  of the
Company.  In  selecting  the  Employees  to  whom  Award or Stock Options may be
granted,  consideration  shall  be given to factors such as employment position,
duties  and  responsibilities, ability, productivity, length of service, morale,
interest  in  the  Company  and  recommendations  of  supervisors.

     1.4     Shares  Subject  to this Plan.  The maximum number of shares of the
             -----------------------------
Common  Stock  that  may  be  issued  pursuant to this Plan shall be 160,000,000
subject to adjustment pursuant to the provisions of Paragraph 4.1.  If shares of
the Common Stock awarded or issued under this Plan are reacquired by the Company
due  to a forfeiture or for any other reason, such shares shall be cancelled and

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thereafter  shall  again  be  available  for  purposes of this Plan.  If a Stock
Option  expires,  terminates  or is cancelled for any reason without having been
exercised in full, the shares of the Common Stock not purchased thereunder shall
again  be  available  for  purposes  of  this  Plan.

     2.     Provisions  Relating  to  Stock  Options.
            ----------------------------------------

     2.1     Grants  of Stock Options.  The Committee may grant Stock Options in
             ------------------------
such amounts, at such times, and to the Employees nominated by the management of
the  Company  as the Committee, in its discretion, may determine.  Stock Options
granted  under  this  Plan shall constitute "incentive stock options" within the
meaning  of  Section  422  of the Code, if so designated by the Committee on the
date  of  grant.  The  Committee  shall  also have the discretion to grant Stock
Options  which  do  not  constitute  incentive stock options, and any such Stock
Options  shall be designated non-statutory stock options by the Committee on the
date  of  grant.  The  aggregate Fair Market Value (determined as of the time an
incentive  stock  option  is  granted) of the Common Stock with respect to which
incentive  stock  options  are  exercisable  for  the first time by any Employee
during  any  one calendar year (under all plans of the Company and any parent or
subsidiary  of  the  Company)  may not exceed the maximum amount permitted under
Section  422  of the Code (currently, $100,000.00).  Non-statutory stock options
shall  not  be  subject  to  the limitations relating to incentive stock options
contained  in the preceding sentence.  Each Stock Option shall be evidenced by a
written  agreement (the "Option Agreement") in a form approved by the Committee,
which shall be executed on behalf of the Company and by the Employee to whom the
Stock  Option is granted, and which shall be subject to the terms and conditions
of  this  Plan.  In  the  discretion of the Committee, Stock Options may include
provisions  (which  need  not  be  uniform),  authorized by the Committee in its
discretion,  that  accelerate  an  Employee's  rights  to exercise Stock Options
following  a  "Change in Control," upon termination of the Employee's employment
by  the  Company  without  "Cause" or by the Employee for "Good Reason," as such
terms  are  defined in Paragraph 3.1 hereof.  The holder of a Stock Option shall
not  be  entitled  to  the privileges of stock ownership as to any shares of the
Common  Stock  not  actually  issued  to  such  holder.

     2.2     Purchase  Price.  The  purchase  price  (the  "Exercise  Price") of
             ---------------
shares  of  the  Common Stock subject to each Stock Option (the "Option Shares")
shall  not  be less than 85 percent of the Fair Market Value of the Common Stock
on the date of exercise.  For an Employee holding greater than 10 percent of the
total  voting power of all stock of the Company, either Common or Preferred, the
Exercise Price of an incentive stock option shall be at least 110 percent of the
Fair  Market  Value  of the Common Stock on the date of the grant of the option.
As  used  herein,  "Fair  Market  Value"  means the mean between the highest and
lowest  reported sales prices of the Common Stock on the New York Stock Exchange
Composite  Tape  or,  if  not  listed  on  such  exchange, on any other national
securities  exchange  on which the Common Stock is listed or on The Nasdaq Stock
Market,  or,  if  not so listed on any other national securities exchange or The
Nasdaq  Stock  Market,  then  the  average  of the bid price of the Common Stock
during  the  last  five  trading  days  on  the  OTC  Bulletin Board immediately
preceding  the last trading day prior to the date with respect to which the Fair
Market  Value  is  to  be  determined.  If the Common Stock is not then publicly
traded,  then  the Fair Market Value of the Common Stock shall be the book value
of  the  Company  per  share  as  determined  on  the  last  day of March, June,
September, or December in any year closest to the date when the determination is
to  be  made.  For  the  purpose of determining book value hereunder, book value
shall  be  determined  by adding as of the applicable date called for herein the
capital,  surplus,  and  undivided  profits  of  the  Company,  and after having
deducted  any  reserves theretofore established; the sum of these items shall be
divided by the number of shares of the Common Stock outstanding as of said date,
and  the  quotient thus obtained shall represent the book value of each share of
the  Common  Stock  of  the  Company.

     2.3     Option Period.  The Stock Option period (the "Term") shall commence
             -------------
on  the  date of grant of the Stock Option and shall be 10 years or such shorter
period  as is determined by the Committee.  Each Stock Option shall provide that
it  is  exercisable over its term in such periodic installments as the Committee
may  determine,  subject to the provisions of Paragraph 2.4.1.  Section 16(b) of
the  Securities  Exchange  Act  of 1934, as amended (the "Exchange Act") exempts
persons  normally  subject to the reporting requirements of Section 16(a) of the
Exchange  Act  (the  "Section  16  Reporting  Persons")  pursuant to a qualified
employee  stock  option plan from the normal requirement of not selling until at
least six months and one day from the date the Stock Option is granted.

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     2.4     Exercise  of  Options.
             ---------------------

     2.4.1     Each  Stock  Option may be exercised in whole or in part (but not
as  to  fractional  shares) by delivering it for surrender or endorsement to the
Company,  attention  of  the Corporate Secretary, at the principal office of the
Company,  together with payment of the Exercise Price and an executed Notice and
Agreement of Exercise in the form prescribed by Paragraph 2.4.2.  Payment may be
made  (a)  in  cash,  (b)  by  cashier's or certified check, (c) by surrender of
previously owned shares of the Common Stock valued pursuant to Paragraph 2.2 (if
the Committee authorizes payment in stock in its discretion), (d) by withholding
from  the  Option  Shares which would otherwise be issuable upon the exercise of
the Stock Option that number of Option Shares equal to the exercise price of the
Stock  Option,  if  such  withholding  is  authorized  by  the  Committee in its
discretion,  or  (e)  in the discretion of the Committee, by the delivery to the
Company  of the optionee's promissory note secured by the Option Shares, bearing
interest  at  a  rate  sufficient  to  prevent  the imputation of interest under
Sections  483 or 1274 of the Code, and having such other terms and conditions as
may  be  satisfactory  to  the  Committee.  Subject  to  the  provisions of this
Paragraph  2.4  and Paragraph 2.5, the Employee has the right to exercise his or
her  Stock  Options  at the rate of at least 20 percent per year over five years
from  the  date  the  Stock  Option  is  granted.

     2.4.2     Exercise  of  each Stock Option is conditioned upon the agreement
of  the  Employee  to  the  terms  and conditions of this Plan and of such Stock
Option  as  evidenced  by  the Employee's execution and delivery of a Notice and
Agreement  of  Exercise  in  a  form  to  be  determined by the Committee in its
discretion.  Such Notice and Agreement of Exercise shall set forth the agreement
of  the Employee that (a) no Option Shares will be sold or otherwise distributed
in violation of the Securities Act of 1933, as amended (the "Securities Act") or
any  other  applicable  federal  or state securities laws, (b) each Option Share
certificate  may be imprinted with legends reflecting any applicable federal and
state  securities  law  restrictions  and conditions, (c) the Company may comply
with  said securities law restrictions and issue "stop transfer" instructions to
its  Transfer  Agent  and  Registrar without liability, (d) if the Employee is a
Section  16 Reporting Person, the Employee will furnish to the Company a copy of
each  Form  4  or Form 5 filed by said Employee and will timely file all reports
required  under  federal  securities  laws, and (e) the Employee will report all
sales  of  Option  Shares  to the Company in writing on a form prescribed by the
Company.

     2.4.3     No  Stock  Option  shall  be  exercisable  unless  and  until any
applicable  registration  or  qualification  requirements  of  federal and state
securities  laws,  and  all  other  legal requirements, have been fully complied
with.  The  Company will use reasonable efforts to maintain the effectiveness of
a  Registration  Statement  under  the  Securities Act for the issuance of Stock
Options  and  shares  acquired  thereunder,  but there may be times when no such
Registration  Statement  will  be  currently  effective.  The  exercise of Stock
Options  may  be  temporarily  suspended without liability to the Company during
times  when  no  such  Registration  Statement is currently effective, or during
times  when,  in  the  reasonable  opinion  of the Committee, such suspension is
necessary  to  preclude  violation  of  any  requirements  of  applicable law or
regulatory  bodies  having  jurisdiction  over the Company.  If any Stock Option
would expire for any reason except the end of its term during such a suspension,
then  if  exercise  of such Stock Option is duly tendered before its expiration,
such  Stock  Option  shall  be  exercisable  and exercised (unless the attempted
exercise  is  withdrawn)  as  of the first day after the end of such suspension.
The Company shall have no obligation to file any Registration Statement covering
resales  of  Option  Shares.

     2.5     Continuous  Employment.  Except as provided in Paragraph 2.7 below,
             ----------------------
an Employee may not exercise a Stock Option unless from the date of grant to the
date of exercise the Employee remains continuously in the employ of the Company.
For  purposes  of  this Paragraph 2.5, the period of continuous employment of an
Employee with the Company shall be deemed to include (without extending the term
of the Stock Option) any period during which the Employee is on leave of absence
with  the  consent of the Company, provided that such leave of absence shall not
exceed  three  months and that the Employee returns to the employ of the Company
at  the expiration of such leave of absence.  If the Employee fails to return to
the  employ  of  the  Company  at  the  expiration of such leave of absence, the
Employee's employment with the Company shall be deemed terminated as of the date
such  leave of absence commenced.  The continuous employment of an Employee with
the Company shall also be deemed to include any period during which the Employee
is a member of the Armed Forces of the United States, provided that the Employee
returns  to  the  employ of the Company within 90 days (or such longer period as
may be prescribed by law) from the date the Employee first becomes entitled to a
discharge  from  military service.  If an Employee does not return to the employ
of  the  Company  within  90 days (or such longer period as may be prescribed by
law)  from  the  date  the  Employee  first becomes entitled to a discharge from
military  service, the Employee's employment with the Company shall be deemed to
have  terminated  as  of  the  date  the  Employee's  military  service  ended.

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     2.6     Restrictions  on  Transfer.  Each  Stock  Option granted under this
             --------------------------
Plan shall be transferable only by will or the laws of descent and distribution.
No  interest  of  any  Employee  under this Plan shall be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or  equitable  process.  Each  Stock  Option  granted  under  this Plan shall be
exercisable  during  an  Employee's  lifetime  only  by  the  Employee or by the
Employee's  legal  representative.

     2.7     Termination  of  Employment.
             ---------------------------

     2.7.1     Upon  an  Employee's  Retirement,  Disability  (both  terms being
defined  below)  or  death,  (a)  all Stock Options to the extent then presently
exercisable  shall remain in full force and effect and may be exercised pursuant
to  the  provisions thereof, and (b) unless otherwise provided by the Committee,
all  Stock  Options to the extent not then presently exercisable by the Employee
shall  terminate  as of the date of such termination of employment and shall not
be  exercisable  thereafter.  Unless  employment  is  terminated  for  cause, as
defined  by applicable law, the right to exercise in the event of termination of
employment,  to the extent that the optionee is entitled to exercise on the date
the  employment  terminates  as  follows:

          (i)     At  least  six  months  from  the  date  of  termination  if
termination  was  caused  by  death  or  disability.

          (ii)     At  least 30 days from the date of termination if termination
was  caused  by  other  than  death  or  disability.

     2.7.2     Upon  the  termination  of  the employment of an Employee for any
reason other than those specifically set forth in Paragraph 2.7.1, (a) all Stock
Options  to  the  extent then presently exercisable by the Employee shall remain
exercisable  only  for a period of 90 days after the date of such termination of
employment  (except that the 90 day period shall be extended to 12 months if the
Employee  shall die during such 90 day period), and may be exercised pursuant to
the  provisions  thereof,  including  expiration  at  the  end of the fixed term
thereof,  and  (b) unless otherwise provided by the Committee, all Stock Options
to  the extent not then presently exercisable by the Employee shall terminate as
of  the  date  of  such  termination  of employment and shall not be exercisable
thereafter.

     2.7.3     For  purposes  of  this  Plan:

          (a)     "Retirement"  shall  mean  an  Employee's  retirement from the
employ of the Company on or after the date on which the Employee attains the age
of  65  years;  and

          (b)     "Disability" shall mean total and  permanent  incapacity of an
Employee, due to physical impairment or legally established mental incompetence,
to perform the usual duties of the Employee's employment with the Company, which
disability  shall  be determined (i) on medical evidence by a licensed physician
designated  by  the  Committee, or (ii) on evidence that the Employee has become
entitled  to  receive  primary  benefits as a disabled employee under the Social
Security  Act  in  effect  on  the  date  of  such  disability.

     3.     Provisions  Relating  to  Awards.
            --------------------------------

     3.1     Grant  of  Awards.  Subject  to  the  provisions  of this Plan, the
             -----------------
Committee shall have full and complete authority, in its discretion, but subject
to  the  express  provisions  of this Plan, to (1) grant Awards pursuant to this
Plan,  (2)  determine  the  number of shares of the Common Stock subject to each
Award  (the  "Award Shares"), (3) determine the terms and conditions (which need
not be identical) of each Award, including the consideration (if any) to be paid
by the Employee for such Common Stock, which may, in the Committee's discretion,
consist  of  the  delivery  of  the  Employee's  promissory  note  meeting  the
requirements  of  Paragraph 2.4.1, (4) establish and modify performance criteria
for  Awards,  and (5) make all of the determinations necessary or advisable with
respect  to Awards under this Plan.  Each Award under this Plan shall consist of
a  grant  of  shares  of the Common Stock subject to a restriction period (after

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which  the  restrictions shall lapse), which shall be a period commencing on the
date  the  Award  is  granted  and  ending  on  such date as the Committee shall
determine  (the  "Restriction Period").  The Committee may provide for the lapse
of  restrictions  in installments, for acceleration of the lapse of restrictions
upon  the  satisfaction  of  such  performance  or  other  criteria  or upon the
occurrence  of  such  events as the Committee shall determine, and for the early
expiration  of  the  Restriction  Period upon an Employee's death, Disability or
Retirement  as  defined  in  Paragraph 2.7.3, or, following a Change of Control,
upon  termination  of an Employee's employment by the Company without "Cause" or
by  the  Employee  for  "Good  Reason,"  as those terms are defined herein.  For
purposes  of  this  Plan:

     "Change  of  Control"  shall be deemed to occur (a) on the date the Company
first  has  actual  knowledge  that any person (as such term is used in Sections
13(d)  and  14(d)(2)  of  the  Exchange Act) has become the beneficial owner (as
defined  in  Rule  13(d)-3  under  the Exchange Act), directly or indirectly, of
securities of the Company representing 40 percent or more of the combined voting
power  of  the  Company's  then  outstanding  securities, or (b) on the date the
stockholders of the Company approve (i) a merger of the Company with or into any
other  corporation  in  which the Company is not the surviving corporation or in
which  the  Company  survives  as  a  subsidiary  of another corporation, (ii) a
consolidation  of  the  Company with any other corporation, or (iii) the sale or
disposition  of  all  or  substantially all of the Company's assets or a plan of
complete  liquidation.

     "Cause,"  when  used  with reference to termination of the employment of an
Employee  by  the  Company  for  "Cause,"  shall  mean:

               (a)     The  Employee's continuing willful and material breach of
his duties to the Company after he receives a demand from the Chief Executive of
the  Company  specifying  the  manner  in  which he has willfully and materially
breached  such  duties, other than any such failure resulting from Disability of
the  Employee  or  his  resignation  for  "Good  Reason,"  as defined herein; or

               (b)     The  conviction  of  the  Employee  of  a  felony;  or

               (c)     The  Employee's  commission of fraud in the course of his
employment  with  the  Company,  such  as  embezzlement  or  other  material and
intentional  violation  of  law  against  the  Company;  or

               (d)     The  Employee's gross misconduct causing material harm to
the  Company.

     "Good  Reason"  shall  mean  any  one  or  more of the following, occurring
following  or in connection with a Change of Control and within 90 days prior to
the  Employee's resignation, unless the Employee shall have consented thereto in
writing:

               (a)     The  assignment  to  the  Employee of duties inconsistent
with his executive status prior to the Change of Control or a substantive change
in  the  officer  or officers to whom he reports from the officer or officers to
whom  he  reported  immediately  prior  to  the  Change  of  Control;  or

               (b)     The  elimination  or  reassignment  of  a majority of the
duties and responsibilities that were assigned to the Employee immediately prior
to  the  Change  of  Control;  or

               (c)     A  reduction by the Company in the Employee's annual base
salary  as  in  effect  immediately  prior  to  the  Change  of  Control;  or

               (d)     The  Company  requiring the Employee to be based anywhere
outside  a  35-mile radius from his place of employment immediately prior to the
Change  of  Control,  except for required travel on the Company's business to an
extent  substantially consistent with the Employee's business travel obligations
immediately  prior  to  the  Change  of  Control;  or

               (e)     The  failure  of  the  Company  to  grant  the Employee a
performance  bonus  reasonably  equivalent  to the same percentage of salary the
Employee  normally  received  prior  to  the Change of Control, given comparable
performance  by  the  Company  and  the  Employee;  or

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               (f)     The  failure  of  the  Company  to  obtain a satisfactory
Assumption  Agreement  (as  defined  in  Paragraph  4.13  of  this  Plan) from a
successor,  or  the  failure  of  such  successor  to  perform  such  Assumption
Agreement.

     3.2     Incentive  Agreements.  Each Award granted under this Plan shall be
             ---------------------
evidenced  by  a written agreement (an "Incentive Agreement") in a form approved
by  the Committee and executed by the Company and the Employee to whom the Award
is  granted.  Each  Incentive  Agreement  shall  be  subject  to  the  terms and
conditions of this Plan and other such terms and conditions as the Committee may
specify.

     3.3     Amendment,  Modification and Waiver of Restrictions.  The Committee
             ---------------------------------------------------
may  modify  or  amend  any  Award  under this Plan or waive any restrictions or
conditions  applicable  to  the Award; provided, however, that the Committee may
not  undertake  any  such  modifications,  amendments  or  waivers if the effect
thereof  materially increases the benefits to any Employee, or adversely affects
the  rights  of  any  Employee  without  his  consent.

     3.4     Terms and Conditions of Awards.  Upon receipt of an Award of shares
             ------------------------------
of  the  Common  Stock  under  this Plan, even during the Restriction Period, an
Employee  shall  be  the  holder  of record of the shares and shall have all the
rights  of  a  stockholder with respect to such shares, subject to the terms and
conditions  of  this  Plan  and  the  Award.

     3.4.1     Except  as otherwise provided in this Paragraph 3.4, no shares of
the  Common  Stock  received  pursuant  to  this  Plan shall be sold, exchanged,
transferred,  pledged,  hypothecated  or  otherwise  disposed  of  during  the
Restriction Period applicable to such shares.  Any purported disposition of such
the  Common  Stock  in  violation  of this Paragraph 3.4 shall be null and void.

     3.4.2     If  an Employee's employment with the Company terminates prior to
the expiration of the Restriction Period for an Award, subject to any provisions
of  the Award with respect to the Employee's death, Disability or Retirement, or
Change  of Control, all shares of the Common Stock subject to the Award shall be
immediately  forfeited  by  the  Employee and reacquired by the Company, and the
Employee  shall  have  no  further  rights  with  respect  to the Award.  In the
discretion  of  the Committee, an Incentive Agreement may provide that, upon the
forfeiture  by  an  Employee  of  Award  Shares,  the Company shall repay to the
Employee the consideration (if any) which the Employee paid for the Award Shares
on  the  grant  of  the Award.  In the discretion of the Committee, an Incentive
Agreement  may also provide that such repayment shall include an interest factor
on  such  consideration  from  the date of the grant of the Award to the date of
such  repayment.

     3.4.3     The  Committee  may require under such terms and conditions as it
deems  appropriate  or  desirable that (a) the certificates for the Common Stock
delivered  under  this Plan are to be held in custody by the Company or a person
or  institution  designated by the Company until the Restriction Period expires,
(b)  such  certificates shall bear a legend referring to the restrictions on the
Common Stock pursuant to this Plan, and (c) the Employee shall have delivered to
the  Company  a  stock  power  endorsed  in  blank relating to the Common Stock.

     4.     Miscellaneous  Provisions.
            -------------------------

     4.1     Adjustments  Upon  Change  in  Capitalization.
             ---------------------------------------------

     4.1.1     The  number and class of shares subject to each outstanding Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of  Stock  Options  that  may  be granted under this Plan, the minimum number of
shares  as  to  which  a  Stock Option may be exercised at any one time, and the
number  and  class  of  shares  subject  to  each  outstanding  Award,  shall be
proportionately  adjusted in the event of any increase or decrease in the number
of  the  issued  shares  of  the  Common  Stock which results from a split-up or
consolidation  of  shares,  payment of a stock dividend or dividends exceeding a
total of five percent for which the record dates occur in any one fiscal year, a
recapitalization  (other than the conversion of convertible securities according
to  their  terms),  a combination of shares or other like capital adjustment, so
that  (a)  upon  exercise  of  the  Stock Option, the Employee shall receive the
number  and  class  of  shares the Employee would have received had the Employee
been  the holder of the number of shares of the Common Stock for which the Stock
Option  is  being exercised upon the date of such change or increase or decrease
in  the  number  of  issued  shares  of  the  Company, and (b) upon the lapse of

                                        6
<PAGE>
restrictions  of  the  Award  Shares,  the Employee shall receive the number and
class  of  shares  the  Employee  would have received if the restrictions on the
Award  Shares  had  lapsed on the date of such change or increase or decrease in
the  number  of  issued  shares  of  the  Company.

     4.1.2     Upon  a  reorganization,  merger  or consolidation of the Company
with  one  or  more  corporations  as  a  result of which the Company is not the
surviving  corporation  or  in  which  the  Company  survives  as a wholly-owned
subsidiary of another corporation, or upon a sale of all or substantially all of
the  property  of  the  Company  to  another  corporation,  or  any  dividend or
distribution  to  stockholders  of more than 10 percent of the Company's assets,
adequate  adjustment  or  other provisions shall be made by the Company or other
party  to  such transaction so that there shall remain and/or be substituted for
the  Option  Shares and Award Shares provided for herein, the shares, securities
or assets which would have been issuable or payable in respect of or in exchange
for  such  Option Shares and Award Shares then remaining, as if the Employee had
been  the  owner  of  such  shares as of the applicable date.  Any securities so
substituted  shall  be  subject  to  similar  successive  adjustments.

     4.2     Withholding Taxes.  The Company shall have the right at the time of
             -----------------
exercise  of  any  Stock  Option,  the  grant  of  an  Award,  or  the  lapse of
restrictions on Award Shares, to make adequate provision for any federal, state,
local  or  foreign  taxes  which it believes are or may be required by law to be
withheld  with  respect  to  such  exercise (the "Tax Liability"), to ensure the
payment  of  any such Tax Liability.  The Company may provide for the payment of
any  Tax Liability by any of the following means or a combination of such means,
as  determined  by  the  Committee  in  its  sole and absolute discretion in the
particular  case  (1)  by requiring the Employee to tender a cash payment to the
Company,  (2) by withholding from the Employee's salary, (3) by withholding from
the  Option  Shares which would otherwise be issuable upon exercise of the Stock
Option,  or  from  the  Award  Shares  on  their  grant  or  date  of  lapse  of
restrictions,  that  number of Option Shares or Award Shares having an aggregate
Fair  Market  Value (determined in the manner prescribed by Paragraph 2.2) as of
the  date  the  withholding tax obligation arises in an amount which is equal to
the  Employee's  Tax  Liability or (4) by any other method deemed appropriate by
the  Committee.  Satisfaction  of  the  Tax  Liability of a Section 16 Reporting
Person  may  be made by the method of payment specified in clause (3) above only
if  the  following  two  conditions  are  satisfied:

               (a)     The  withholding of Option Shares or Award Shares and the
exercise  of  the  related  Stock  Option  occur at least six months and one day
following  the  date  of  grant  of  such  Stock  Option  or  Award;  and

               (b)     The  withholding of Option Shares or Award Shares is made
either (i) pursuant to an irrevocable election (the "Withholding Election") made
by  the  Employee  at  least six months in advance of the withholding of Options
Shares  or  Award  Shares,  or  (ii)  on  a  day within a 10-day "window period"
beginning  on  the  third  business  day  following  the  date of release of the
Company's  quarterly  or  annual  summary  statement  of  sales  and  earnings.

     Anything herein to the contrary notwithstanding, a Withholding Election may
be  disapproved  by  the  Committee  at  any  time.

     4.3     Relationship  to  Other  Employee Benefit Plans.  Stock Options and
             -----------------------------------------------
Awards  granted hereunder shall not be deemed to be salary or other compensation
to  any  Employee  for  purposes  of  any pension, thrift, profit-sharing, stock
purchase  or any other employee benefit plan now maintained or hereafter adopted
by  the  Company.

     4.4     Amendments and Termination.  The Board of Directors may at any time
             --------------------------
suspend,  amend  or  terminate  this  Plan.  No amendment, except as provided in
Paragraph  3.3,  or  modification of this Plan may be adopted, except subject to
stockholder  approval, which would (1) materially increase the benefits accruing
to  the  Employees  under  this  Plan,  (2)  materially  increase  the number of
securities  which may be issued under this Plan (except for adjustments pursuant
to  Paragraph  4.1  hereof),  or  (3)  materially  modify the requirements as to
eligibility  for  participation  in  this  Plan.

     4.5     Successors  in  Interest.  The  provisions  of  this  Plan  and the
             ------------------------
actions of the Committee shall be binding upon all heirs, successors and assigns
of  the  Company  and  of  the  Employees.

                                        7
<PAGE>
     4.6     Other  Documents.  All documents prepared, executed or delivered in
             ----------------
connection  with this Plan (including, without limitation, Option Agreements and
Incentive  Agreements)  shall  be,  in  substance  and  form, as established and
modified  by  the Committee; provided, however, that all such documents shall be
subject in every respect to the provisions of this Plan, and in the event of any
conflict between the terms of any such document and this Plan, the provisions of
this  Plan  shall  prevail.

     4.7     Fairness  of  the  Repurchase Price.  In the event that the Company
             -----------------------------------
repurchases  securities  upon  termination  of employment pursuant to this Plan,
either:  (a)  the  price  will  not  be  less  than the fair market value of the
securities  to  be repurchased on the date of termination of employment, and the
right to repurchase will be exercised for cash or cancellation of purchase money
indebtedness  for the securities within 90 days of termination of the employment
(or  in the case of securities issued upon exercise of options after the date of
termination,  within  90  days  after  the  date of the exercise), and the right
terminates  when the Company's securities become publicly traded, or (b) Company
will  repurchase  securities  at  the original purchase price, provided that the
right  to  repurchase  at  the  original purchase price lapses at the rate of at
least  20  percent  of the securities per year over five years from the date the
option  is  granted  (without  respect  to  the date the option was exercised or
became  exercisable)  and  the right to repurchase must be exercised for cash or
cancellation of purchase money indebtedness for the securities within 90 days of
termination  of  employment  (or  in  case of securities issued upon exercise of
options  after  the  date  of  termination, within 90 days after the date of the
exercise).

     4.8     No  Obligation  to  Continue  Employment.  This Plan and the grants
             ----------------------------------------
which  might be made hereunder shall not impose any obligation on the Company to
continue  to  employ  any  Employee.  Moreover, no provision of this Plan or any
document executed or delivered pursuant to this Plan shall be deemed modified in
any  way  by any employment contract between an Employee (or other employee) and
the  Company.

     4.9     Misconduct  of an Employee.  Notwithstanding any other provision of
             --------------------------
this  Plan,  if  an  Employee  commits fraud or dishonesty toward the Company or
wrongfully  uses  or  discloses  any  trade  secret,  confidential data or other
information  proprietary to the Company, or intentionally takes any other action
which  results  in material harm to the Company, as determined by the Committee,
in  its  sole and absolute discretion, the Employee shall forfeit all rights and
benefits  under  this  Plan.

     4.10     Term  of  Plan.  No  Stock  Option  shall be exercisable, or Award
              --------------
granted,  unless  and until the Directors of the Company have approved this Plan
and  all  other  legal requirements have been met.  This Plan was adopted by the
Board  effective March 5, 2004.  No Stock Options or Awards may be granted under
this  Plan  after  March  5,  2014.

     4.11     Governing  Law.  This  Plan and all actions taken thereunder shall
              --------------
be  governed  by,  and  construed  in  accordance with, the laws of the State of
Nevada.

     4.12     Assumption  Agreements.  The  Company will require each successor,
              ----------------------
(direct  or  indirect, whether by purchase, merger, consolidation or otherwise),
to  all  or substantially all of the business or assets of the Company, prior to
the  consummation  of  each such transaction, to assume and agree to perform the
terms  and  provisions  remaining  to  be  performed  by  the Company under each
Incentive  Agreement  and  Stock  Option  and  to  preserve  the benefits to the
Employees  thereunder.  Such  assumption  and  agreement shall be set forth in a
written  agreement  in  form  and  substance  satisfactory  to the Committee (an
"Assumption  Agreement"),  and  shall  include  such adjustments, if any, in the
application  of the provisions of the Incentive Agreements and Stock Options and
such  additional provisions, if any, as the Committee shall require and approve,
in  order  to  preserve  such  benefits  to the Employees.  Without limiting the
generality  of  the foregoing, the Committee may require an Assumption Agreement
to  include  satisfactory  undertakings  by  a  successor:

               (a)     To  provide  liquidity to the Employees at the end of the
Restriction  Period  applicable  to  the Common Stock awarded to them under this
Plan,  or  on  the  exercise  of  Stock  Options;

               (b)     If  the  succession  occurs  before the expiration of any
period  specified  in  the  Incentive Agreements for satisfaction of performance
criteria  applicable  to  the  Common  Stock awarded thereunder, to refrain from
interfering  with  the Company's ability to satisfy such performance criteria or
to  agree  to  modify  such  performance criteria and/or waive any criteria that
cannot  be  satisfied  as  a  result  of  the  succession;

                                        8
<PAGE>
               (c)     To  require  any  future  successor  to  enter  into  an
Assumption  Agreement;  and

               (d)     To  take or refrain from taking such other actions as the
Committee  may  require  and  approve,  in  its  discretion.

     4.13     Compliance  with  Rule  16b-3.  Transactions  under  this Plan are
              -----------------------------
intended  to  comply  with  all  applicable conditions of Rule 16b-3 promulgated
under the Exchange Act.  To the extent that any provision of this Plan or action
by  the  Committee  fails to so comply, it shall be deemed null and void, to the
extent  permitted  by  law  and  deemed  advisable  by  the  Committee.

     4.14     Information to Shareholders.  The Company shall furnish to each of
              ---------------------------
its stockholders financial statements of the Company at least annually.

     IN  WITNESS  WHEREOF,  this Plan has been executed effective as of March 5,
2004.

                                        LIVESTAR ENTERTAINMENT GROUP, INC.

                                        By  /s/  Raymond Hawkins
                                          --------------------------------------
                                        Raymond Hawkins, Chief Executive Officer

                                        9
<PAGE>THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES
LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THESE SECURITIES UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

                      EQUITY LINE OF CREDIT

               SECURED CONVERTIBLE PROMISSORY NOTE
                             between
                  FLEXPOINT SENSOR SYSTEMS, INC.
                               and
                    BROAD INVESTMENT PARTNERS

==============================================================================

$1,500,000
2% loan origination fee $30,000
10% annual interest (applied to all outstanding balance)

      Flexpoint Sensor Systems, Inc., a Nevada corporation (the "Company"),
for value received, hereby promises to pay to Broad Investment Partners, a
Nevada company (the "Noteholder"), at 365 Denver Street Salt Lake City, Utah,
or its assigns, the sum of One Million Five Hundred Thousand and no/100
dollars ($1,500,000), plus a 2% origination fee, totaling Thirty Thousand
dollars ($30,000), or such other amounts as may be outstanding, plus interest
accrued on unpaid principal, including unpaid origination fee, compounded
annually, at a rate per annum of ten percent (10%), from the date of this
Equity Line until the principal amount hereof and all fees and interest
accrued thereon is paid (or converted, as provided in Section 2 hereof).
Accrued fees and interest due on this Equity Line of  Credit shall be payable
in full on the Equity Line within three years of the signing of this document,
at the principal address of Noteholder or by mail to the registered address of
the holder of this Note. The principal amount of this Note, with fees and
interest accrued thereon, shall be payable at the principal address of
Noteholder or by mail to the registered address of the holder of this Note on
the earliest to occur of (i) within three years of the signing of this
document, (ii) a default under this Note in accordance with Paragraph 8 below,
(iii) upon the closing of the sale of securities pursuant to a registration
statement filed by the Company under the securities Act of 1933, as amended,
in connection with the offering of its securities to the public ("Public
Offering"), or (iv) the date five (5) days after the date of any breach by the
Company of any agreement with Noteholder and/or any affiliate of Noteholder,
unless this Note shall have been previously converted pursuant to Section 2
hereof or as provided otherwise in this Note.

      This Equity Line and/or Note may be prepaid in full at any time without
penalty upon ten (10) days written notice to Noteholder; provided, however,
Noteholder shall have no obligation to accept any payment less than the entire
principal balance, plus accrued interest.

      If any payment is not made when due hereunder, time being of the
essence, a late fee equal to five percent (5%) of such late payment shall be
immediately due hereunder (in addition to all other amounts due hereunder),
and all amounts outstanding hereunder shall bear interest until all payments
hereunder are brought current at the lesser of (i) the rate of 15% per annum
or (ii) the highest rate for which Borrower may legally contract under
applicable law.

      All payments hereunder shall be payable in lawful money of the United
States of America which shall be legal tender for public and private debts at
the time of payments. Any and all payments by Borrower under this Note shall
be applied as follows: first, to the repayment of any amounts advanced by
Noteholder hereunder or related hereto; second, to the payment of any late
charges; third, to the payment of accrued interest; and fourth, to the payment
of principal.

      The following additional terms and conditions shall apply hereto:

      1.    Definitions. The following definitions shall apply for all
purposes of this Note:

            1.1   "Company" shall mean the Company as defined above and
includes any corporation which shall succeed to or assume the obligations of
the Company under this Note.

            1.2   "Change of Control Transaction" shall mean a merger,
acquisition, or other business combination in which fifty percent (50%) or
more of the Company's outstanding voting stock is transferred to different
holders in a single transaction or a series of related transactions.

            1.3   "Conversion Date" shall mean the date on which, pursuant to
Sections 2 and 3 hereof, Noteholder exercises its right to convert this Note
into the Conversion Stock at the Note Conversion Price.

            1.4   "Conversion Stock" shall mean the shares of Common Stock,
$0.001 par value, of the Company, with the rights and terms as set forth in
the Company's Certificate of Incorporation ("Articles"). The number and
character of shares of Conversion Stock are subject to adjustment as provided
herein and the term "Conversion Stock" shall include shares and other
securities and property at any time receivable or issuable upon conversion of
this Note in accordance with its terms.

            1.5   "Note Conversion Price" shall be $0.50 per share.

            1.6   "Noteholder," "holder", or similar terms, when the context
refers to a holder of this Note, shall mean any person who shall at the time
be the registered holder of the Note.

      2.    Conversion.

            2.1   "Conversion of Note" At any time prior to payment in full of
the entire principal balance, plus accrued interest, and upon five (5) days
written notice, Noteholder shall have the right, at the holder's option, to
convert the principal and accrued interest on this Note, in whole or in part,
into Conversion Stock at the Note Conversion Price. Conversion under this
Section 2 shall occur only upon surrender of this Note for conversion at the
principal offices of the Company, accompanied by written notice of election to
convert.

            2.2   "Certain Transactions" The Company shall give written notice
to Noteholder of any Change of Control Transaction at least ten (10) business
days prior to the date on which Such Change of Control Transaction shall take
place. Prior to the closing of such Change of Control Transaction, the Company
shall, at Noteholder's election, either (i) repay all unpaid principal and
interest under this Note, or (ii) convert this Note into Conversion Stock at
the Note Conversion Price.

      3.    Issuance of Conversion Stock. As soon as practicable after
conversion of this Note, the Company, at its expense, will cause to be issued
in the name of and delivered to the holder of this Note, a certificate or
certificates for the number of shares of Conversion Stock to which the holder
shall be entitled upon such conversion  together with any other securities and
property to which the holder is entitled upon such conversion under the terms
of this Note.  Such conversion shall be deemed to have been made (i) under
Section 2 above and (ii) immediately prior to the close of business on the
date that the Note shall have been surrendered for conversion, accompanied by
written notice of election to convert. No fractional shares will be issued
upon conversion of this Note. If upon an conversion of this Note a fraction of
a share would otherwise result, then, in lieu of such fractional share, the
Company will pay the cash value of that fractional share, calculated on the
basis of the applicable Note Conversion Price.

      4.    Adjustment of Number of Shares. The number and character of shares
of Conversion Stock issuable upon conversion of this Note (or any shares of
stock or other securities or property at the time receivable or issuable upon
conversion of this Note) are subject to adjustment upon the occurrence of any
of the following events:

            4.1   "Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc."  In the event that the Company shall fix a record
date for the determination of holders of securities affected by any stock
split, stock dividend, reclassification, recapitalization or other similar
event that will, in the future, affect the number of outstanding shares of the
Company's capital stock, then, and in each such case, Noteholder, upon
conversion of this Note at any time after the Company shall fix the record
date for such event, shall receive, in addition to the shares of Conversion
Stock issuable upon conversion of the Conversion Date, the right to receive
the securities of the Company to which such holder would have been entitled if
such holder had converted this Note immediately prior to such record date (all
subject to further adjustment as provided in this Note.)

            4.2   "Adjustment for Dividends and Distributions." In the event
that the Company shall make or issue, or shall fix a record date for the
determination of eligible holders of securities entitled to receive, a
dividend or other distribution payable with respect to the Conversion Stock
(or any shares of stock or other securities at the time issuable upon
conversion of this Note) that is payable in (a) securities of the Company
other than capital stock or (b) any other assets, then, and in each such case,
Noteholder, upon conversion of this Note at any time after the consummation,
effective date or record date of such event, shall receive, in addition to the
shares of Conversion Stock (or such other stock or securities) issuable upon
such conversion prior to such date, the securities or such other assets of the
Company to which such holder would have been entitled upon such date if such
holder had converted this Note immediately prior thereto (all subject to
further adjustment as provided in this Note).

            4.3   "Adjustment for Reorganization, Consolidation, Merger." In
the event of any reorganization not considered a Change of Control Transaction
of the Company (or any other corporation the stock or other securities of
which are at the time receivable upon the conversion of this Note) after the
date of this Note, or in the event, after such date, the Company (or any such
corporation) shall consolidate with or merge into another corporation or
convey all or substantially all of its assets to another corporation where
such transaction is not considered a Change of Control Transaction, then, and
in each such case, Noteholder, upon the conversion of this Note (as provided
in Section 2) at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the conversion of
this Note prior to such consummation, the stock or other securities or
property to which such Noteholder would have been entitled upon the
consummation of such reorganization, consolidation, merger or conveyance if
such holder had converted this Note immediately prior thereto, all subject to
further adjustment as provided consolidation, merger or conveyance (if other
than the Company) shall duly execute and deliver to Noteholder a supplement
hereto acknowledging such corporation's obligations under this Note. In each
such case, the terms of the Note shall be applied to the shares of stock or
other securities or property receivable upon the conversion of this Note after
the consummation of such reorganization, consolidation, merger or conveyance.

            4.4   "Conversion of Stock." In the event that all of the
authorized Conversion Stock of the Company is converted, pursuant to the
Amended Articles, into other capital stock or securities or property, or the
Conversion Stock otherwise ceases to exist, then Noteholder, upon conversion
of this Note at any time after the date on which the Conversion Stock is so
converted or ceases to exist (the "Termination Date"), shall receive, in lieu
of the number of shares of Conversion Stock that would have been issuable upon
such conversion immediately prior to the Termination Date (the "Former Number
of Shares of Conversion Stock"), the stock and other securities and property
to which such Noteholder would have been entitled to receive upon the
Termination Date if such holder had converted this Note with respect to the
Former Number of Shares of Conversion Stock immediately prior to the
Termination Date (all subject to further adjustment as provided in this Note).

            4.5   "Notice of Adjustments" This Company shall promptly give
written notice of each adjustment or readjustment of the number of shares of
Conversion Stock or other securities issuable upon conversion of this Note, by
first class mail, postage prepaid, to the registered holder of this Note at
the holder's address as shown on the Company's books. The notice shall
describe the adjustment or readjustment and show in reasonable detail the
facts on which the adjustment or readjustment is based.

            4.6   "No Change Necessary" The form of this Note need not be
changed because of any adjustment in the number of shares of Conversion stock
issuable upon its conversion.

            4.7   "Reservation of Stock" The Company has taken all necessary
corporation action and obtained all necessary government consents and
approvals to authorize the issuance of this Note and, prior to the conversion
hereof, the shares of Conversion Stock issuable upon conversion of this Note.
If at any time the number of authorized but unissued Common Stock or other
securities shall not be sufficient to effect the conversion of this Note, then
the Company will take such corporate action as may, in the opinion of its
legal counsel, be necessary to increase its authorized but unissued Stock or
other securities to such number of shares of Common Shares or other securities
as shall be sufficient for such purpose.

      5.    Fully Paid Shares. All shares of Conversion Stock issued upon the
conversion of this Note shall be validly issued, fully paid and
non-assessable.

      6.    No Rights or Liabilities as Shareholder. This Note does not by
itself entitle Noteholder to any voting rights or other rights as a
shareholder of the Company. In the absence of conversion of this Note, no
provisions of this Note, and no enumeration herein of the rights or privileges
of the holder, shall cause such holder to be a shareholder of the company for
any purpose.

      7.    Corporate Action; No Impairment.  The Company will not, by
amendment of its Certificate of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of
securities, repurchase of securities, sale of assets or any other action,
avoid or seek to avoid the observance or performance of any of the terms of
this Note, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or
appropriate, or as reasonably requested by Noteholder, in order to protect the
rights of Noteholder under this Note against wrongful impairment. The Company
shall not negotiate with or entertain discussions with any party regarding a
Change of Control Transaction without prior written notice to Noteholder. The
Company shall not amend its Certificate of Incorporation or issue any capital
stock or options to purchase any capital stock of the Company without the
prior written consent of Noteholder which shall not be unreasonably withheld;
provided, however, that  the Company may issue stock in connection with the
exercise or conversion of currently outstanding options, warrants and other
convertible securities.

      8.    Default. The Company will be in default if the Company fails to
make any payment when due hereunder. The Company will also be in default if
any of the following occurs and such default is not cured within a five (5)
day period after Noteholder has given the Company written notice of such
default;
            (a)   The Company breaches any material obligation to
                  Noteholder hereunder.

            (b)   A receiver is appointed for any part of the Company's
                  property, the Company makes an assignment for the benefit
                  of creditors, or any proceeding is commenced either by
                  the Company or against the Company under any bankruptcy
                  or insolvency laws.

            (c)   The Company suspends its normal business operations or
                  otherwise fails to continue to operate its business in
                  the ordinary course.

      In the event of a default under this Section 8, Noteholder shall, in
addition to any other remedies allowed by law, be entitled to accelerate all
unpaid principal and interest under this Note.

      9.    Conversion Rights.  Holder shall have the rights provided in this
Section 9 upon conversion of this Note into Free Trading Common Stock of the
Company pursuant to the terms of Section 2 above.

            9.1   All Expenses incurred in connection with any bankruptcy
court filing, Securities and Exchange Commission filing , any and all
necessary documents pursuant to the conversion of free trading shares,
qualification, exemption or compliance, shall be borne by the Company.

            9.2   In the case of the bankruptcy court approval, qualification,
exemption or compliance effected by the Company pursuant to this Agreement,
the Company shall, upon reasonable request, inform each Holder as to the
status of such bankruptcy court approval, qualification, exemption and
compliance. At its expense the Company shall:

                  (a)  use its best efforts to keep any such qualification,
exemption or compliance under the bankruptcy court rules which the Company
determines to obtain, continuously effective until the Holders have completed
the distribution as described in this document relating thereto. The period of
time during which the Company is required hereunder to keep the conversion
rights into Free Trading Securities available is referred to herein as "the
Conversion Period". Notwithstanding the foregoing, at the Company's election,
the Borrower may cease to keep such qualification, exemption or compliance
effective with respect to any Free Trading Securities, (or other exemption
from registration acceptable to the Company) required by the Securities and
Exchange Commission for the sale thereof; and

                  (b)  advise the Holders:

                       (i)  when approval by the bankruptcy court for the
conversion of stock into free trading securities have become effective;

                       (ii) of any request by the Commission for information;

                       (iii) of the receipt by the Company of any notification
with respect to any jurisdiction or the initiation or threatening of any
proceeding for such purpose against the Company; and

                  (c)  prior to any public offering of Registrable Securities
pursuant to any Registration Statement, register or qualify or obtain an
exemption for offer and sale under the securities or blue sky laws of such
jurisdiction as any such Holders reasonably request in writing, provided that
the Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction, and do any and all other acts or things reasonably necessary or
advisable to enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Registration Statement;

                  (d)  cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Convertible Securities
to be sold pursuant to approval of the bankruptcy court and in compliance with
the Securities and Exchange Commission free of any restrictive legends to the
extent not required at such time and in such denominations and issued in such
names as Holders may request at least three (3) business days prior to sales
of Convertible Securities pursuant to such bankruptcy court approval and
Securities and Exchange Commission compliance;

            9.3   The Holders shall have no right to take any action to
restrain, enjoin or otherwise delay any conversion hereof as a result of any
controversy that may arise with respect to the interpretation or
implementation of this Agreement.

            9.4   (a)  To the extent permitted by law, the Company shall
indemnify each Holder and each person controlling such Holder within the
meaning of Section 15 of the Act, with respect to which any conversion,
qualification or compliance has been effected pursuant to this Agreement,
against all claims, losses, damages and liabilities (or action in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
and all documents deemed necessary by the bankruptcy court and/or Securities
and Exchange Commission, qualification or compliance, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in light
of the circumstances in which they were made, and will reimburse each Holder
and each person controlling such Holder, for reasonable legal and other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action as incurred; provided that the
Company will not be liable in any such case to the extent that any untrue
statement or omission or allegation thereof is made in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of such Holder and stated to be specifically for use in preparation of such
necessary documents, prospectus or offering circular; and, provided further,
that the Company will not be liable in any such case where the claim, loss,
damage or liability arises out of or is related to the failure of the Holder
to comply with the covenants and agreements contained in this Agreement
respecting sales of Free Trading Securities.

                  (b)   As a condition to the inclusion of its Convertible
Securities, each Holder shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may request in writing or as shall be required in connection with any
conversion, qualification or compliance referred to in this Section 9.

                  (c)   Each Holder hereby covenants with the Company (i) not
to make any sale of the Convertible Securities without effectively causing any
and all acts and/or documentation required by the Securities and Exchange
Commission under the Act to be satisfied, and (ii) if such Convertible
Securities are to be sold by any method or in any transaction other than on a
national securities exchange, Nasdaq National Market, Nasdaq SmallCap Market
or in the over-the-counter market, in privately negotiated transactions, or in
a combination of such methods, to notify the Company at least five (5)
business days prior to the date on which the Holder first offers to sell any
such Convertible Securities.

                  (d)   Each Holder acknowledges and agrees that the
Convertible Securities sold pursuant to any and all documentation required by
the bankruptcy court and/or the Securities and Exchange Commission described
in this Section are not transferable on the books of the Company unless the
stock certificate submitted to the transfer agent evidencing such Convertible
Securities is accompanied by a certificate reasonably satisfactory to the
Company to the effect that (i) the Convertible Securities have been sold in
accordance with any and all requirements set forth by the bankruptcy court
and/or the Securities and Exchange commission; and (ii) the requirement of
delivering all necessary documents has been satisfied.

                  (e)   Each Holder agrees not to take any action with respect
to any distribution deemed to be made pursuant to such conversion which would
constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.

            9.5   With a view to making available to the Holders the benefits
of certain rules and regulations of the Commission which at any time permit
the sale of these Free Trading Securities to the public without registration,
the Company shall use its reasonable best efforts to:

                  (a)   make and keep public information available, as those
terms are understood and defined in Rule 144 under the Act at all times;

                  (b)   file with the Commission in a timely manner all
reports and other documents required of the Company under the Exchange Act;
and

            9.6   Any provision of this Section 9 may be waived (either
generally or in a particular instance, either retroactively or prospectively
and either for a specified period of time or indefinitely) or amended upon the
written consent of the Company and the Holders holding at least a majority of
the Registrable Securities that are then outstanding, Upon the effectuation
each such waiver or amendment, the Company shall promptly give written notice
thereof to the Holders, if any, who have not previously received notice
thereof or consented thereto in writing.

            9.7   Except to the extent any delay is due to the failure of a
Holder to reasonably cooperate in providing to the Company such information as
shall be reasonably requested by the Company for use in the bankruptcy filing
and/or Securities and Exchange Commission filing, in the event that the stock
is not free trading, the Company shall, for no additional consideration, pay
to each Holder as liquidated damages and not as a penalty an amount in cash
equal to two percent (2%) of the amount invested by such Holder for each 15
day period in which the bankruptcy filing and/or Securities and Exchange
Commission filing remains unfiled; provided, however, that in no event shall
the amount of liquidated damages payable by the Company to any Holder pursuant
to this Section 9.7 exceed twenty four percent (24%) of the amount invested by
such Holder.

      10.   "Waiver and Amendment" ANY PROVISION OF THIS NOTE MAY BE AMENDED,
WAIVED, MODIFIED, DISCHARGED OR TERMINATED SOLELY UPON THE WRITTEN CONSENT OF
BOTH THE COMPANY AND NOTEHOLDER.

      11.   "Assignment; Binding upon Successor and Assigns." The Company may
not assign any of its obligations hereunder without the prior written notice
of Noteholder. The terms and conditions of this Note shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties.

      12.   "Waiver of Notice; Attorneys' Fees." The Company and all endorsers
of this Note hereby waive notice, demand, notice of nonpayment, presentment,
protest and notice of dishonor. If any action at law or in equity is necessary
to enforce this Note or to collect payment under this Note, Noteholder shall
be entitled to recover, as an element of the costs of suit and not as damages,
reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which it may be entitled. Noteholder will be entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment.

      13.   "Construction of Note." The terms of this Note have been
negotiated by the Company, the original holder of this Note and their
respective attorneys and the language hereof will not be construed for or
against either Company or Noteholder. Unless otherwise explicitly set forth, a
reference to a Section will mean a section in this Note. The titles and
headings herein are for reference purposes only and will not in any manner
limit the construction of this Note which will be considered as a whole.

      14.   "Notices." Any notice or other communication required or permitted
to be given under this Note shall be in writing, shall be delivered by hand or
overnight courier service, by certified mail, postage prepaid, or by
facsimile, and will be deemed given upon delivery, if delivered personally,
one business day after deposit with a national courier service for overnight
delivery, or one business day after transmission by facsimile with
confirmation of receipt, and three days after deposit in the mails, if mailed,
to the following addresses:

            (i) If to Noteholder:   Broad Investment Partners
                                    365 Denver Street
                                    Salt Lake City, Utah 84101

            (ii) If to Company:     Flexpoint Sensor Systems, Inc.
                                    47 East 7200 South, #204
                                    Midvale, Utah 84047

or to such other address as may have been furnished to the other party in
writing pursuant to this Section 14, except that notices of change of address
shall only be effective upon receipt.

      15.   "Governing Law; Consent to Jurisdiction." This Note and all
matters relating to this Note shall be governed by and construed in accordance
with the internal laws (and not the law of conflicts of the State of Utah.
Each of the parties submits to the jurisdiction of any state or federal court
sitting in Salt Lake County, Utah, in any action or proceeding arising out of
or relating to this Note or any other matter arising between the parties and
agrees that all claims in respect of the action or proceeding shall be heard
and determined in any such court. Each party also agrees not to bring any
action or proceeding arising out of or relating to this Note or any other
matter arising between the parties in any other court. Each of the parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought.

                     [Signature page follows]

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name as of the date first above written. The company hereby agrees and accepts
all of the obligations outlined in this convertible Note. Acceptance of this
note has been approved by all officers and directors of Flexpoint Sensor
Systems, Inc.

The Company:                             FLEXPOINT SENSOR SYSTEMS, INC.
                                         (a Nevada corporation)

                                              /s/ John Sindt
                                          By:_____________________________
                                               John Sindt, President

                                                   1/14/04
                                          Date: ___________________________

AGREED AND ACCEPTED:

The Noteholder:                           BROAD INVESTMENT PARTNERS
                                          (a Nevada company)

                                                  /s/ Franklin Plott
                                          By: _____________________________
                                                Title: Noteholder

                                                   1/13/04
                                          Date: ____________________________

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