Document:

Exhibit 10.5

 

 

[FORM]

 

CENTRAL ENERGY PARTNERS LP

2014 LONG-TERM INCENTIVE PLAN

 

COMMON UNIT GRANT AGREEMENT

FOR

DIRECTORS

 

This Common Unit Grant
Agreement (this “Agreement”) is made and entered into by and between Central Energy Partners LP, a Texas
limited partnership (the “Company”), and _______________ (the “Grantee”). This
Agreement is entered into as of the __ day of ________, 2014 (the “Grant Date”). Capitalized terms used
in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in the Plan (as defined below),
unless the context requires otherwise.

 

WHEREAS, the
Company has adopted the CENTRAL ENERGY PARTNERS LP 2014 LONG-TERM INCENTIVE PLAN (the “Plan”) pursuant
to which awards of Common Units may be granted; and

 

WHEREAS, the
Board of Directors of the Company (the “Board”) has approved the recommendation of its Compensation Committee
(the “Committee”) to grant to its directors restricted Common Units of Central Energy Partners LP, a
Delaware limited partnership (the “Partnership”);

 

NOW, THEREFORE,
in consideration for the Grantee’s agreement to provide continuing services to the Company as a member of the Board, the
Company and the Grantee, intending to be legally bound, agree as follows:

 

1.Grant of Units. Pursuant
to Section 6.4 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Unit Option Award consisting of _______
Common Units of the Company (the “Unit Grant”) on the terms and conditions and subject to the restrictions
set forth in this Agreement and the Plan.

 

2.Consideration. The
grant of the Common Units is made in consideration of the services to be rendered by the Grantee to the Company as a director of
Central Energy GP LLC, the general partner of the Company (the “General Partner”).

 

3.Vesting. The Common
Units will vest in full effective on the Grant Date.

 

4.Valuation. The Value
of the Common Units which are the subject of the Unit Grant shall have the value per Common Unit as established by the final trade
price of a Common Unit on the Grant Date or, if no trade occurred on the Grant Date, the average bid and asked price on that date
as quoted by OTC Pink.

 

5.Rights as Unitholder.

 

5.1The Grantee
shall be the record owner of the Grant Units effective on the Grant Date until such Common Units are sold or otherwise disposed
of, and shall be entitled to all of the rights of a unitholder of the Company including, without limitation, the right to vote
such Common Units and receive all distributions paid with respect to such Common Units in accordance with the terms of the Third
Amended and Restated Agreement of Limited Partnership of the Company (the “Company Agreement”).

 

5.2The Company
shall issue certificates or other evidence of the Grantee’s ownership of the Common Units granted pursuant to this Agreement
as soon as practicable after the execution of this Agreement.

 

6.No Right to Continued Service.
Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained as a Director of the General Partner.
Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s
service to the General Partner at any time, with or without cause.

 

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7.Tax Liability and Withholding.

 

7.1The Grantee
shall be required to pay to the Company the amount of any required withholding taxes in respect of the Common Units issued as part
of the Unit Grant and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment
of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation
by tendering a cash payment to the Company.

 

7.2Notwithstanding
any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding
(“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s
responsibility, and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in
connection with the grant of the Common Units or the subsequent sale of any Common Units; and (b) does not commit to structure
the Common Units to reduce or eliminate the Grantee’s liability for Tax-Related Items.

 

8.Adjustment of Common Units.

 

8.1In order
to prevent dilution of the Common Units granted under this Agreement, the Exercise Price and the number of Common Units issued
pursuant to this Agreement shall be subject to adjustment from time to time as provided in this subsection 8.1. If the Company
shall, at any time or from time to time after the Grant Date, (i) make a distribution or dividend upon the Common Units or any
other securities of the Company, which distribution or dividend is payable in the form of Common Units or in Options or Convertible
Securities, or (ii) subdivide (by any split, recapitalization or otherwise) its outstanding Common Units into a greater number
of units, the Exercise Price in effect immediately prior to any such distribution, dividend or subdivision shall be proportionately
reduced and the number of Common Units issued pursuant to this Agreement shall be proportionately increased. If the Company at
any time combines (by combination, reverse stock split or otherwise) its outstanding Common Units into a smaller number of units,
the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Common
Units issued pursuant to the terms of this Agreement shall be proportionately decreased. Any adjustment under this subsection 8.1
shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

8.2In the
event of any (i) capital reorganization of the Company, (ii) reclassification of the units of the Company (other than as a result
of a unit dividend or subdivision, split-up or combination of units), (iii) consolidation or merger of the Company with or
into another Person, (iv) sale of all or substantially all of the Company's assets to another Person, or (v) similar transaction
(other than any such transaction covered by subsection 8.1 above, in each case which entitles the holders of Common Units to receive
(either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Units, this
Agreement shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain
outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the Common Units issued pursuant to this Agreement,
be exercisable for the kind and number of units or other securities or assets of the Company or of the successor Person resulting
from such transaction to which the Grantee would have been entitled upon such reorganization, reclassification, consolidation,
merger, sale or similar transaction. The provisions of this subsection shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales or similar transactions. The Company shall not effect any such reorganization, reclassification,
consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor Person (if other than
the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, shall assume,
by written instrument substantially similar in form and substance to this Agreement and satisfactory to the Grantee, the obligation
to deliver to the Grantee such shares of stock, securities or assets which, in accordance with the foregoing provisions.

 

9.Section 83(b) Election.
The Grantee may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to
the Common Units. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a
Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the
filing of the executed Section 83(b) Election with the U.S. Internal Revenue Service. The Grantee agrees to assume full responsibility
for ensuring that the Section 83(b) Election is actually and timely filed with the U.S. Internal Revenue Service and for all tax
consequences resulting from the Section 83(b) Election.

 

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10.Registration of Common Units.
The Company shall register the Common Units with the U.S. Securities and Exchange Commission (the “SEC”)
pursuant to a Form S-8 registration statement to be filed by the Company or an amendment to the current Form S-8 registration
statement of the Company filed with the SEC if still deemed effective by the SEC. Until such time as (1) the Company determines
whether its current Form S-8 is effective or (2) the Company files a Form S-8 registration statement with the SEC
that has been declared effective, a legend may be placed on any certificate(s) or other document(s) delivered to the Grantee
indicating restrictions on transferability of the Common Units pursuant to this Agreement or any other restrictions that the Committee
may deem advisable under the rules, regulations and other requirements of the SEC, any applicable federal or state securities laws
or any stock exchange on which the Common Units are listed or quoted.

 

11.Copy of Plan. By the execution
of this Agreement, the Grantee acknowledges receipt of a copy of the Plan. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any applicable law, then such provision will be deemed to be modified to the minimum extent necessary
to render it legal, valid and enforceable; and if such provision cannot be so modified, then this Agreement will be construed as
if not containing the provision held to be invalid, and the rights and obligations of the parties will be construed and enforced
accordingly.

 

12.Compliance with Law. The
issuance and transfer of the Common Units shall be subject to compliance by the Company and the Grantee with all applicable requirements
of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Common
Units may be listed. No Common Units shall be issued or transferred unless and until any then applicable requirements of state
and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.

 

13.Notices. Any notice required
to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company
at the Company’s principal offices located at 4809 Cole Avenue, Suite 108, Dallas, Texas 75205. Any notice required to be
delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as
shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by
the Company) from time to time.

 

14.Governing Law. This Agreement
will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.

 

15.Interpretation. Any dispute
regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The
resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company. Neither the Company nor
the members of the Committee or the Board shall be liable for any act, omission or determination taken or made in good faith
with respect to this Agreement or the Restricted Units granted hereunder.

 

16.Common Units Subject to Plan.
This Agreement is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated
herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan,
the applicable terms and provisions of the Plan will govern and prevail.

 

17.Successors and Assigns. The
Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding
upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Common Units may
be transferred by will or the laws of descent or distribution.

 

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18.Severability. The invalidity
or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other
provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to
the extent permitted by law.

 

19.Discretionary Nature of Plan.
The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The Unit Grant
does not create any contractual right or other right to receive any Common Units or other Awards in the future. Future awards,
if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute
a change or impairment of the terms and conditions of the Grantee’s employment with the Company.

 

20.Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the
same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable
document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of
a document, will have the same effect as physical delivery of the paper document bearing an original signature.

 

21.Section 409A. This Agreement
is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner
that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding
the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section
409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other
expenses that may be incurred by the Director on account of non-compliance with Section 409A of the Code.

 

22.Amendments. This Agreement
may be amended only by a written agreement executed by the Company and the Grantee, except that the Committee may unilaterally
waive any conditions or rights under, amend any terms of, or alter this Agreement provided no such change materially reduces the
rights or benefits of the Officer with respect to the Restricted Units without his consent.

 

23.Acceptance. The Grantee hereby
acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof,
and accepts the Common Units subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges
that there may be adverse tax consequences upon the grant of the Common Units, and that the Grantee has been advised to consult
a tax advisor prior to such grant, vesting or disposition.

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above written.

 

	 	CENTRAL ENERGY PARTNERS LP
	 	 	 
	 	By:	Central Energy GP LLC
	 	 	 
	 	 	 
	 	 	 

 

	 	 	By:	 
	 	 	 	John L. Denman, Jr.,
	 	 	 	Chief Executive Officer
	 	 	 	 

 

	 	 	 
	 	[Name of Director]
	 	 	 

 

    	4Exhibit 4.1

                                                               EXECUTION VERSION

                             SENIOR CONVERTIBLE NOTE

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  CONVERTIBLE  HAVE BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR
THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF  REQUESTED BY THE  COMPANY),  IN A FORM  REASONABLY
ACCEPTABLE TO THE COMPANY,  THAT  REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD  PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT.  NOTWITHSTANDING  THE  FOREGOING,  THE  SECURITIES  MAY BE  PLEDGED IN
CONNECTION  WITH  A  BONA  FIDE  MARGIN  ACCOUNT  OR  OTHER  LOAN  OR  FINANCING
ARRANGEMENT  SECURED  BY THE  SECURITIES.  ANY  TRANSFEREE  OF THIS NOTE  SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE,  INCLUDING SECTIONS 3(C)(III) AND 17(A)
HEREOF.  THE PRINCIPAL  AMOUNT  REPRESENTED BY THIS NOTE AND,  ACCORDINGLY,  THE
SECURITIES  ISSUABLE  UPON  CONVERSION  HEREOF MAY BE LESS THAN THE  AMOUNTS SET
FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(C)(III) OF THIS NOTE.

                                  STEVIA CORP.

                             SENIOR CONVERTIBLE NOTE

Issuance Date: May 16, 2014             Original Principal Amount: U.S. $600,000

     FOR VALUE RECEIVED,  Stevia Corp., a Nevada  corporation  (the  "COMPANY"),
hereby promises to pay to the order of NOMIS BAY LTD. or its registered  assigns
("HOLDER") the amount set out above as the Original Principal Amount (as reduced
pursuant to the terms hereof  pursuant to  redemption,  conversion or otherwise,
the  "PRINCIPAL")  when due,  whether upon the Maturity Date (as defined below),
acceleration, redemption or otherwise (in each case in accordance with the terms
hereof)  and to pay  interest  ("INTEREST")  on any  outstanding  Principal  (as
defined  below) (as such  interest on any  outstanding  Principal may be reduced
pursuant to the terms hereof pursuant to redemption, conversion or otherwise) at
the  applicable  Interest Rate (as defined below) from the date set out above as
the Issuance Date (the "ISSUANCE  DATE") until the same becomes due and payable,
whether  upon the  Maturity  Date or  acceleration,  conversion,  redemption  or
otherwise  (in each case in  accordance  with the  terms  hereof).  This  Senior
Convertible Note (this "NOTE",  including all Senior Convertible Notes issued in
exchange, transfer or replacement hereof, collectively, the "NOTES") is one of a
series of Senior  Convertible  Notes  issued  pursuant  to the  pursuant  to the
Securities  Purchase  Agreement (as defined below) either on the Initial Closing
Date (as defined below) or, if applicable, on the Additional Closing
<PAGE>
Date (as  defined  below)  (collectively,  the  "NOTES"  and such  other  Senior
Convertible Notes, the "OTHER NOTES"). Certain capitalized terms used herein are
defined in Section 28.

     1. PAYMENTS OF PRINCIPAL.  On the Maturity  Date,  the Company shall pay to
the Holder an amount in cash representing all outstanding Principal, accrued and
unpaid  Interest  and  accrued  and unpaid  Late  Charges (as defined in Section
23(c)) on such  Principal  and Interest  (as  adjusted  with respect to any Note
Reduction (as defined in Section 12)).  Other than as specifically  permitted by
this Note, the Company may not prepay any portion of the outstanding  Principal,
accrued and unpaid  Interest or accrued and unpaid Late Charges on Principal and
Interest, if any.

     2. INTEREST; INTEREST RATE.

     (a) Interest on this Note shall commence  accruing on the Issuance Date and
shall be computed on the basis of a 360-day  year and twelve  30-day  months and
shall be payable in cash on the Maturity Date or any applicable Redemption Date,
subject to adjustment with respect to any Note Reduction.

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

     3. CONVERSION OF NOTES. This Note shall be convertible into validly issued,
fully paid and non-assessable  shares of Common Stock (as defined below), on the
terms and conditions set forth in this Section 3.

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

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

          (i)  "CONVERSION  AMOUNT"  means the  portion of the  Principal  to be
     converted,  redeemed or otherwise with respect to which this  determination
     is being made,  plus all accrued and unpaid  Interest  with respect to such
     portion of the  Principal  amount and accrued and unpaid Late  Charges with
     respect to such portion of such Principal and such Interest.

          (ii)  "CONVERSION  PRICE"" means, for any date of  determination,  the
     lesser of (A) the product of (x) the  arithmetic  average of the lowest two
     (2) VWAPs of the Common Stock during the ten (10) consecutive  Trading Days
     ending and including the Trading Day  immediately  preceding the applicable
     Conversion  Date (the " VARIABLE  CONVERSION  BASE  PRICE"")  and (y) sixty
     percent  (60%),  and  (B)  $0.30  (as  adjusted  for  stock  splits,  stock
     dividends,  stock  combinations  or other similar  transactions).  All such
     determinations  to be  appropriately  adjusted for any stock  split,  stock
     dividend,  stock combination or other similar  transaction  during any such
     measuring period.

     (c) Mechanics of Conversion.

          (i) Optional Conversion.  To convert any Conversion Amount into shares
     of  Common  Stock on any date (a  "CONVERSION  DATE""),  the  Holder  shall
     deliver  (whether via facsimile or  otherwise),  for receipt on or prior to
     11:59 p.m.,  New York time,  on such date, a copy of an executed  notice of
     conversion  in the form  attached  hereto  as  Exhibit  I (the  "CONVERSION
     NOTICE"")  to the  Company.  If required by Section  3(c)(iii),  the Holder
     shall  surrender this Note to a nationally  recognized  overnight  delivery
     service for delivery to the Company (or an indemnification undertaking with
     respect  to this  Note in the case of its  loss,  theft or  destruction  as
     contemplated  by Section  17(b)).  On or before the first (1st) Trading Day
     following  the date of receipt of a Conversion  Notice,  the Company  shall
     transmit  by  facsimile  an  acknowledgment  of  confirmation,  in the form
     attached hereto as Exhibit II, of receipt of such Conversion  Notice to the
     Holder and the  Company's  transfer  agent (the  "TRANSFER  AGENT") . On or
     before the second  (2nd)  Trading  Day  following  the date of receipt of a
     Conversion  Notice,  the Company shall (1) provided that the Transfer Agent
     is participating  in The Depository Trust Company's  ("DTC") Fast Automated
     Securities  Transfer  Program,  credit such  aggregate  number of shares of
     Common  Stock to which the Holder  shall be entitled to the Holder's or its
     designee's  balance  account  with DTC  through its  Deposit/Withdrawal  at
     Custodian  system or (2) if the Transfer Agent is not  participating in the
     DTC Fast  Automated  Securities  Transfer  Program,  issue and deliver (via
     reputable  overnight courier) to the address as specified in the Conversion
     Notice,  a  certificate,  registered  in  the  name  of the  Holder  or its
     designee,  for the  number of shares  of Common  Stock to which the  Holder
     shall be entitled. If this Note is physically surrendered for conversion as
     required by Section 3(c)(iii) and the outstanding Principal of this Note is
     greater  than  the  Principal   portion  of  the  Conversion  Amount  being
     converted, then the Company shall as soon as practicable

                                       3
<PAGE>
     and in no event later than four (4) Trading Days after receipt of this Note
     and at its own expense, issue and deliver to the Holder (or its designee) a
     new Note (in accordance  with Section 17(d))  representing  the outstanding
     Principal  not  converted.  The Person or Persons  entitled  to receive the
     shares of Common Stock  issuable  upon a  conversion  of this Note shall be
     treated for all purposes as the record  holder or holders of such shares of
     Common Stock on the Conversion Date.

          (ii) Company's  Failure to Timely Convert.  If the Company shall fail,
     for any reason or for no reason,  to issue to the  Holder  within  four (4)
     Trading Days after the Company's  receipt of a Conversion  Notice  (whether
     via facsimile or otherwise) (the "SHARE DELIVERY DEADLINE"),  a certificate
     for the number of shares of Common  Stock to which the  Holder is  entitled
     and register such shares of Common Stock on the Company's share register or
     to credit the Holder's or its designee's  balance account with DTC for such
     number of shares of Common  Stock to which the Holder is entitled  upon the
     Holder's  conversion  of any  Conversion  Amount  (as the  case  may be) (a
     "CONVERSION  FAILURE") then, in addition to all other remedies available to
     the  Holder,  (1) the  Company  shall pay in cash to the Holder on each day
     after such Share  Delivery  Deadline  that the  issuance  of such shares of
     Common Stock is not timely effected an amount equal to 2% of the product of
     (A) the sum of the  number  of shares  of  Common  Stock not  issued to the
     Holder on a timely basis and to which the Holder is entitled  multiplied by
     (B)  the  Closing  Sale  Price  of the  Common  Stock  on the  Trading  Day
     immediately  preceding  the last possible date which the Company could have
     issued such shares of Common Stock to the Holder without  violating Section
     3(c)(i) and (2) the Holder,  upon written  notice to the Company,  may void
     its Conversion  Notice with respect to, and retain or have returned (as the
     case may be) any portion of this Note that has not been converted  pursuant
     to such Conversion Notice, provided that the voiding of a Conversion Notice
     shall not affect the Company's  obligations to make any payments which have
     accrued prior to the date of such notice pursuant to this Section  3(c)(ii)
     or  otherwise.  In addition to the  foregoing,  if on or prior to the Share
     Delivery  Deadline,   the  Company  shall  fail  to  issue  and  deliver  a
     certificate  to the Holder and register  such shares of Common Stock on the
     Company's  share register or credit the Holder's or its designee's  balance
     account  with DTC for the  number of  shares  of Common  Stock to which the
     Holder is entitled upon the Holder's conversion  hereunder (as the case may
     be), and if on or after such Share Delivery  Deadline the Holder  purchases
     (in an open market  transaction  or  otherwise)  shares of Common  Stock to
     deliver in  satisfaction  of a sale by the Holder of all or any  portion of
     the  number of shares of Common  Stock,  or a sale of a number of shares of
     Common  Stock equal to all or any portion of the number of shares of Common
     Stock,  issuable  upon  such  conversion  that the  Holder  so  anticipated
     receiving  from the  Company,  then,  in  addition  to all  other  remedies
     available to the Holder, the Company shall,  within three (3) Business Days
     after  receipt of the  Holder's  request  and in the  Holder's  discretion,
     either: (I) pay cash to the Holder in an amount equal to the Holder's total
     purchase price  (including  brokerage  commissions and other  out-of-pocket
     expenses,  if any) for the shares of Common Stock so purchased  (including,
     without  limitation,  by any other Person in respect,  or on behalf, of the
     Holder) (the "BUY-IN PRICE"), at which point the Company's obligation to so
     issue and deliver such certificate or credit the Holder's

                                       4
<PAGE>
     balance  account with DTC for the number of shares of Common Stock to which
     the Holder is entitled upon the Holder's conversion  hereunder (as the case
     may be) (and to issue such shares of Common Stock) shall terminate, or (II)
     promptly  honor its  obligation  to so issue and  deliver  to the  Holder a
     certificate  or  certificates  representing  such shares of Common Stock or
     credit the  Holder's  balance  account with DTC for the number of shares of
     Common Stock to which the Holder is entitled  upon the Holder's  conversion
     hereunder  (as the  case may be) and pay cash to the  Holder  in an  amount
     equal to the excess (if any) of the  Buy-In  Price over the  product of (x)
     such number of shares of Common Stock  multiplied by (y) the lowest Closing
     Sale  Price of the  Common  Stock on any  Trading  Day  during  the  period
     commencing on the date of the  applicable  Conversion  Notice and ending on
     the date of such issuance and payment under this clause (II).

          (iii) Book-Entry.  Notwithstanding  anything to the contrary set forth
     in this  Section 3,  following  conversion  of any  portion of this Note in
     accordance  with the terms  hereof,  the Holder  shall not be  required  to
     physically  surrender  this  Note  to  the  Company  unless  (A)  the  full
     Conversion  Amount  represented  by this Note is being  converted (in which
     event this Note shall be  delivered  to the  Company  following  conversion
     thereof as contemplated by Section  3(c)(i)) or (B) the Holder has provided
     the Company with prior  written  notice  (which notice may be included in a
     Conversion  Notice)  requesting  reissuance  of  this  Note  upon  physical
     surrender of this Note. The Holder and the Company shall  maintain  records
     showing the  Principal,  Interest  and Late Charges  converted  and/or paid
     and/or  adjusted  (as the  case may be) and the  dates of such  conversions
     and/or payments  and/or  adjustments (as the case may be) or shall use such
     other method,  reasonably satisfactory to the Holder and the Company, so as
     not to require physical surrender of this Note upon conversion.

          (iv) Pro Rata  Conversion;  Disputes.  In the event of a dispute as to
     the number of shares of Common Stock  issuable to the Holder in  connection
     with a conversion  of this Note,  the Company shall issue to the Holder the
     number of shares of Common Stock not in dispute and resolve such dispute in
     accordance with Section 22.

     (d)  Limitations on Conversions.  Notwithstanding  anything to the contrary
contained in this Note, this Note shall not be convertible by the Holder hereof,
and the Company shall not effect any conversion of this Note or otherwise  issue
any shares of Common  Stock  pursuant  hereto,  to the  extent  (but only to the
extent)  that after giving  effect to such  conversion  or other share  issuance
hereunder the Holder  (together with its affiliates)  would  beneficially own in
excess of 4.99% (the "MAXIMUM  PERCENTAGE")  of the Common Stock.  To the extent
the above limitation  applies,  the  determination of whether this Note shall be
convertible (vis-a-vis other convertible, exercisable or exchangeable securities
owned by the Holder or any of its affiliates) and of which such securities shall
be convertible,  exercisable or exchangeable (as among all such securities owned
by the Holder and its  affiliates)  shall,  subject to such  Maximum  Percentage
limitation,  be determined  on the basis of the first  submission to the Company
for conversion, exercise or exchange (as the case may be). No prior inability to
convert  this  Note,  or to issue  shares  of  Common  Stock,  pursuant  to this
paragraph shall have any effect on the  applicability  of the provisions of this
paragraph with respect to any subsequent determination of

                                       5
<PAGE>
convertibility.  For purposes of this  paragraph,  beneficial  ownership and all
determinations and calculations (including,  without limitation, with respect to
calculations  of percentage  ownership)  shall be determined in accordance  with
Section 13(d) of the 1934 Act (as defined in the Securities  Purchase Agreement)
and the rules and  regulations  promulgated  thereunder.  The provisions of this
paragraph shall be implemented in a manner  otherwise than in strict  conformity
with the terms of this  paragraph  to correct  this  paragraph  (or any  portion
hereof)  which  may be  defective  or  inconsistent  with the  intended  Maximum
Percentage  beneficial  ownership limitation herein contained or to make changes
or  supplements  necessary or desirable to properly  give effect to such Maximum
Percentage  limitation.  The limitations contained in this paragraph shall apply
to a successor  Holder of this Note.  The holders of Common Stock shall be third
party  beneficiaries  of this  paragraph  and the  Company  may not  waive  this
paragraph  without the consent of holders of a majority of its Common Stock. For
any reason at any time,  upon the  written or oral  request of the  Holder,  the
Company  shall within one (1) Business Day confirm  orally and in writing to the
Holder  the  number of shares of Common  Stock then  outstanding,  including  by
virtue of any  prior  conversion  or  exercise  of  convertible  or  exercisable
securities into Common Stock,  including,  without limitation,  pursuant to this
Note or securities  issued pursuant to the Securities  Purchase  Agreement.  The
Company or its  transfer  agent shall  advise the Holder  within 24 hours to the
extent that any issuance of Common Stock hereunder, after giving effect thereto,
would result in the Holder (together with its affiliates) beneficially owning in
excess of 4.99% of the Common Stock.

     4. RIGHTS UPON EVENT OF DEFAULT.

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

          (i) the suspension  from trading or the failure of the Common Stock to
     be trading or listed (as  applicable) on an Eligible Market for a period of
     ten (10) consecutive days or for more than an aggregate of thirty (30) days
     in any 365-day period;

          (ii) the Company's or any  Subsidiary's  (as defined in the Securities
     Purchase  Agreement)  failure to pay to the Holder any amount of Principal,
     Interest,  Late  Charges or other  amounts  when and as due under this Note
     (including,  without limitation,  the Company's or any Subsidiary's failure
     to  pay  any  redemption  payments  or  amounts  hereunder)  or  any  other
     Transaction  Document (as defined in the Securities  Purchase Agreement) or
     any other agreement, document, certificate or other instrument delivered in
     connection with the transactions  contemplated hereby and thereby,  except,
     in the case of a failure to pay  Interest and Late Charges when and as due,
     in which case only if such failure remains uncured for a period of at least
     five (5) days;

          (iii)  the  occurrence  of  any  default   under,   redemption  of  or
     acceleration  prior to maturity of an  aggregate  of any  Indebtedness  (as
     defined in the Securities  Purchase Agreement) of the Company or any of its
     Subsidiaries;

          (iv) bankruptcy, insolvency, reorganization or liquidation proceedings

                                       6
<PAGE>
     or other  proceedings  for the relief of debtors  shall be instituted by or
     against  the  Company or any  Subsidiary  and,  if  instituted  against the
     Company or any Subsidiary by a third party,  shall not be dismissed  within
     sixty (60) days of their initiation;

          (v) the  commencement  by the Company or any Subsidiary of a voluntary
     case  or  proceeding  under  any  applicable  federal,   state  or  foreign
     bankruptcy, insolvency, reorganization or other similar law or of any other
     case or  proceeding  to be  adjudicated  a bankrupt  or  insolvent,  or the
     consent by it to the entry of a decree,  order,  judgment or other  similar
     document in respect of the Company or any Subsidiary in an involuntary case
     or proceeding under any applicable  federal,  state or foreign  bankruptcy,
     insolvency,  reorganization  or other similar law or to the commencement of
     any bankruptcy or insolvency  case or proceeding  against it, or the filing
     by it of a petition or answer or consent seeking  reorganization  or relief
     under any applicable federal, state or foreign law, or the consent by it to
     the filing of such petition or to the  appointment of or taking  possession
     by a custodian,  receiver,  liquidator,  assignee, trustee, sequestrator or
     other  similar  official  of  the  Company  or  any  Subsidiary  or of  any
     substantial part of its property,  or the making by it of an assignment for
     the benefit of creditors,  or the execution of a composition  of debts,  or
     the occurrence of any other similar federal,  state or foreign  proceeding,
     or the  admission  by it in  writing  of its  inability  to pay  its  debts
     generally as they become due, the taking of corporate action by the Company
     or any  Subsidiary in  furtherance  of any such action or the taking of any
     action by any Person to commence a Uniform Commercial Code foreclosure sale
     or any other similar action under federal, state or foreign law;

          (vi) the entry by a court of (i) a decree,  order,  judgment  or other
     similar document in respect of the Company or any Subsidiary of a voluntary
     or involuntary  case or proceeding under any applicable  federal,  state or
     foreign bankruptcy, insolvency, reorganization or other similar law or (ii)
     a decree,  order,  judgment or other similar document adjudging the Company
     or any Subsidiary as bankrupt or insolvent,  or approving as properly filed
     a petition seeking liquidation, reorganization,  arrangement, adjustment or
     composition  of or in respect of the  Company or any  Subsidiary  under any
     applicable federal, state or foreign law or (iii) a decree, order, judgment
     or other similar  document  appointing a custodian,  receiver,  liquidator,
     assignee, trustee, sequestrator or other similar official of the Company or
     any Subsidiary or of any substantial part of its property,  or ordering the
     winding up or liquidation of its affairs,  and the  continuance of any such
     decree, order, judgment or other similar document or any such other decree,
     order,  judgment or other  similar  document  unstayed  and in effect for a
     period of thirty (30) consecutive days;

          (vii)  a  final  judgment  or  judgments  for  the  payment  of  money
     aggregating  in excess of $100,000 are rendered  against the Company and/or
     any of its  Subsidiaries  and which  judgments are not,  within thirty (30)
     days after the entry thereof, bonded,  discharged or stayed pending appeal,
     or are not  discharged  within sixty (60) days after the expiration of such
     stay;  provided,  however, any judgment which is covered by insurance or an
     indemnity  from a credit worthy party shall not be included in  calculating
     the $100,000 amount set forth above so long as the Company

                                       7
<PAGE>
     provides  the Holder a written  statement  from such  insurer or  indemnity
     provider (which written  statement shall be reasonably  satisfactory to the
     Holder) to the effect  that such  judgment  is covered by  insurance  or an
     indemnity  and the  Company  or such  Subsidiary  (as the case may be) will
     receive the proceeds of such insurance or indemnity within thirty (30) days
     of the issuance of such judgment;

          (viii) the  Company  and/or  any  Subsidiary,  individually  or in the
     aggregate,  either (i) fails to pay,  when due,  or within  any  applicable
     grace  period,  any payment with respect to any  Indebtedness  in excess of
     $100,000  due to any third party  (other  than,  with  respect to unsecured
     Indebtedness only, payments contested by the Company and/or such Subsidiary
     (as the case may be) in good faith by proper  proceedings  and with respect
     to which adequate  reserves have been set aside for the payment  thereof in
     accordance  with  GAAP) or is  otherwise  in  breach  or  violation  of any
     agreement  for  monies  owed or owing in an amount  in excess of  $100,000,
     which  breach or  violation  permits the other  party  thereto to declare a
     default or otherwise  accelerate amounts due thereunder,  or (ii) suffer to
     exist any other  circumstance  or event that  would,  with or  without  the
     passage of time or the  giving of  notice,  result in a default or event of
     default under any agreement  binding the Company or any  Subsidiary,  which
     default or event of default  would or is likely to have a material  adverse
     effect on the business,  assets,  operations  (including  results thereof),
     liabilities,  properties,  condition  (including  financial  condition)  or
     prospects of the Company or any of its Subsidiaries, individually or in the
     aggregate;

          (ix) other than as  specifically  set forth in another  clause of this
     Section 4(a),  the Company or any Subsidiary  breaches any  representation,
     warranty,  covenant or other term or condition of any Transaction Document,
     except,  in the case of a breach of a covenant  or other term or  condition
     that is curable,  only if such breach remains uncured for a period of three
     (3) consecutive Trading Days;

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

          (xi)  any  Material  Adverse  Effect  (as  defined  in the  Securities
     Purchase Agreement) occurs; or

          (xii) any Change of Control occurs.

     (b) Notice of an Event of Default; Redemption Right. Upon the occurrence of
an Event of Default with respect to this Note,  the Company shall within one (1)
Business Day deliver written notice thereof via facsimile and overnight  courier
(with next day delivery specified) (an "EVENT OF DEFAULT NOTICE") to the Holder.
At any time  after the  earlier of the  Holder's  receipt of an Event of Default
Notice  and the Holder  becoming  aware of an Event of  Default,  the Holder may
require the Company to redeem,  at any time during the period  commencing on the
date the  Holder  first  becomes  aware of such  Event of  Default  through  and
including the  twentieth  Trading Day after the later of (x) the date the Holder
receives the applicable Event of Default Notice with respect thereto and (y) the
date such Event of Default  has been  cured,  all or any portion of this Note by
delivering written notice thereof (the "EVENT OF

                                       8
<PAGE>
DEFAULT  REDEMPTION  NOTICE") to the Company,  which Event of Default Redemption
Notice shall indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company  pursuant to this
Section 4(b) shall be redeemed by the Company at a price equal to the greater of
(i) the product of (A) the  Conversion  Amount to be redeemed  multiplied by (B)
the  Redemption  Premium  and (ii) the product of (X) the  Conversion  Rate with
respect to the Conversion  Amount in effect at such time as the Holder  delivers
an Event of Default  Redemption  Notice multiplied by (Y) the product of (1) the
Redemption  Premium  multiplied  by (2) the  greatest  Closing Sale Price of the
Common  Stock on any  Trading  Day  during  the  period  commencing  on the date
immediately  preceding  such Event of Default and ending on the date the Company
makes the entire payment required to be made under this Section 4(b) (the "EVENT
OF DEFAULT REDEMPTION PRICE").  Redemptions  required by this Section 4(b) shall
be made  in  accordance  with  the  provisions  of  Section  10.  To the  extent
redemptions required by this Section 4(b) are deemed or determined by a court of
competent  jurisdiction  to be  prepayments  of this Note by the  Company,  such
redemptions  shall  be  deemed  to  be  voluntary  prepayments.  Notwithstanding
anything to the contrary in this Section 4, but subject to Section  3(d),  until
the Event of Default  Redemption  Price (together with any Late Charges thereon)
is paid in full,  the  Conversion  Amount  submitted for  redemption  under this
Section 4(b) (together with any Late Charges thereon) may be converted, in whole
or in part, by the Holder into Common Stock  pursuant to the terms of this Note.
In the event of the Company's  redemption of any portion of this Note under this
Section 4(b), the Holder's  damages would be uncertain and difficult to estimate
because of the  parties'  inability  to predict  future  interest  rates and the
uncertainty of the availability of a suitable substitute investment  opportunity
for the Holder. Accordingly,  any redemption premium due under this Section 4(b)
is intended by the parties to be, and shall be deemed, a reasonable  estimate of
the Holder's actual loss of its investment opportunity and not as a penalty.

     5. RIGHTS UPON FUNDAMENTAL TRANSACTION; OTHER CORPORATE EVENTS.

     (a)  Assumption.  The  Company  shall  not  enter  into  or be  party  to a
Fundamental  Transaction  unless (i) the Successor Entity assumes in writing all
of the  obligations  of the  Company  under this Note and the other  Transaction
Documents in  accordance  with the  provisions  of this Section 5(a) pursuant to
written agreements in form and substance satisfactory to the Holder and approved
by the Holder prior to such  Fundamental  Transaction,  including  agreements to
deliver to each  holder of Notes in  exchange  for such Notes a security  of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to the Notes,  including,  without limitation,  having a principal
amount and interest rate equal to the principal amounts then outstanding and the
interest  rates of the Notes  held by such  holder,  having  similar  conversion
rights as the Notes and having similar ranking to the Notes, and satisfactory to
the Holder and (ii) the  Successor  Entity  (including  its Parent  Entity) is a
publicly  traded  corporation  whose  common  stock is quoted  on or listed  for
trading  on  an  Eligible  Market.   Upon  the  occurrence  of  any  Fundamental
Transaction,  the Successor  Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction,  the provisions of
this Note and the other Transaction  Documents  referring to the "Company" shall
refer instead to the Successor  Entity),  and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Note  and the  other  Transaction  Documents  with the  same  effect  as if such
Successor Entity had been named as the Company

                                       9
<PAGE>
herein.  Upon  consummation of a Fundamental  Transaction,  the Successor Entity
shall  deliver  to the  Holder  confirmation  that  there  shall be issued  upon
conversion or redemption of this Note at any time after the consummation of such
Fundamental Transaction, in lieu of the shares of the Company's Common Stock (or
other  securities,  cash,  assets or other  property  (except  such items  still
issuable  under Section 14, which shall  continue to be  receivable  thereafter)
issuable  upon  the  conversion  or  redemption  of  the  Notes  prior  to  such
Fundamental  Transaction,  such shares of the publicly  traded  common stock (or
their  equivalent) of the Successor  Entity  (including its Parent Entity) which
the  Holder  would have been  entitled  to receive  upon the  happening  of such
Fundamental  Transaction had this Note been converted  immediately prior to such
Fundamental  Transaction (without regard to any limitations on the conversion of
this  Note),  as  adjusted  in  accordance  with the  provisions  of this  Note.
Notwithstanding  the  foregoing,  the Holder may elect,  at its sole option,  by
delivery of written  notice to the Company to waive this  Section 5(a) to permit
the Fundamental Transaction without the assumption of this Note.

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

     (c) The  provisions of this Section 5 shall apply  similarly and equally to
successive  Fundamental  Transactions  and Corporate Events and shall be applied
without regard to any limitations on the conversion of this Note.

     6. [Intentionally Omitted!

     7.  NONCIRCUMVENTION.  The  Company  hereby  covenants  and agrees that the
Company will not, by amendment of its Certificate of  Incorporation  (as defined
in the  Securities  Purchase  Agreement),  Bylaws (as defined in the  Securities
Purchase  Agreement)  or  through  any   reorganization,   transfer  of  assets,
consolidation,  merger,  scheme of  arrangement,  dissolution,  issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or  performance  of any of the terms of this Note, and will at all times in good
faith carry out all of the provisions of this Note and take all action as may be
required to protect the rights of the Holder of this Note.  Without limiting the
generality of the foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon conversion of this Note

                                       10
<PAGE>
above the Conversion  Price then in effect,  (ii) shall take all such actions as
may be  necessary  or  appropriate  in order that the  Company  may  validly and
legally  issue  fully  paid and  nonassessable  shares of Common  Stock upon the
conversion  of this  Note,  and  (iii)  shall,  so long as any of the  Notes are
outstanding,  take all action necessary to reserve and keep available out of its
authorized  and  unissued  shares of Common  Stock,  solely  for the  purpose of
effecting the  conversion of the Notes,  the maximum  number of shares of Common
Stock as shall from time to time be  necessary to effect the  conversion  of the
Notes then outstanding (without regard to any limitations on conversion).

     8. RESERVATION OF AUTHORIZED SHARES.

     (a) Reservation.  So long as any of the Notes are outstanding,  the Company
shall  take all  action  necessary  to  reserve  and keep  available  out of its
authorized  and unissued  Common Stock,  solely for the purpose of effecting the
conversion of the Notes,  a number of shares of Common Stock,  as of any date of
determination, for each of the Notes in accordance with the following formula:

                       P
               ---------------x 3 = Share Reserve
                   (T x B)

               P = The  aggregate  Purchase  Price (as  defined  the  Securities
               Purchase  Agreement) of the Notes issued on or prior to such date
               of determination;

               T = The applicable Variable Conversion Base Price as of such date
               of determination;

               B = 0.85;

provided,  that,  the Share  Reserve  shall in no event be less than 150% of the
number  of shares of Common  Stock as shall  from time to time be  necessary  to
effect the conversion of all of the Notes then  outstanding  (without  regard to
any limitations on conversions) (the "REQUIRED RESERVE AMOUNT").

     (b) Insufficient  Authorized Shares. If, notwithstanding  Section 8(a), and
not in limitation thereof, at any time while any of the Notes remain outstanding
the Company  does not have a  sufficient  number of  authorized  and  unreserved
shares of Common Stock to satisfy its  obligation  to reserve for issuance  upon
conversion of the Notes at least a number of shares of Common Stock equal to the
Required Reserve Amount (an "AUTHORIZED SHARE Failure"),  then the Company shall
immediately  take all action  necessary  to increase  the  Company's  authorized
shares of Common Stock to an amount  sufficient  to allow the Company to reserve
the Required Reserve Amount for the Notes then outstanding. Without limiting the
generality of the foregoing  sentence,  as soon as practicable after the date of
the occurrence of an Authorized Share Failure,  but in no event later than sixty
(60) days after the occurrence of such  Authorized  Share  Failure,  the Company
shall hold a meeting of its  stockholders for the approval of an increase in the
number of authorized  shares of Common Stock.  In connection  with such meeting,
the Company shall provide each  stockholder with a proxy statement and shall use
its best efforts to solicit its

                                       11
<PAGE>
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of  directors  to  recommend  to the  stockholders  that they
approve such proposal.  In the event that the Company is prohibited from issuing
shares of Common Stock upon any  conversion due to the failure by the Company to
have  sufficient  shares of Common Stock  available  out of the  authorized  but
unissued  shares of Common  Stock (such  unavailable  number of shares of Common
Stock,  the  "AUTHORIZATION  FAILURE  SHARES'"),  in  lieu  of  delivering  such
Authorization  Failure  Shares  to the  Holder,  the  Company  shall pay cash in
exchange for the redemption of such portion of the Conversion Amount convertible
into  such  Authorized  Failure  Shares  at a price  equal to the sum of (i) the
product of (x) such number of Authorization  Failure Shares and (y) the greatest
Closing  Sale Price of the  Common  Stock on any  Trading  Day during the period
commencing on the date the Holder delivers the applicable Conversion Notice with
respect to such  Authorization  Failure  Shares to the Company and ending on the
date of such issuance and payment under this Section 8(b) and (ii) to the extent
the Holder  purchases (in an open market  transaction  or  otherwise)  shares of
Common Stock to deliver in satisfaction of a sale by the Holder of Authorization
Failure Shares, any brokerage  commissions and other out-of-pocket  expenses, if
any, of the Holder  incurred  in  connection  therewith.  Nothing  contained  in
Section  8(a) or this Section  8(b) shall limit any  obligations  of the Company
under any provision of the Securities Purchase Agreement.

     9. COMPANY  OPTIONAL  REDEMPTION.  At any time after the Issuance Date, the
Company  shall  have the right to  redeem  all,  but not less  than all,  of the
Conversion  Amount  then  remaining  under  this  Note  (the  "COMPANY  OPTIONAL
REDEMPTION  AMOUNT') on the Company Optional  Redemption Date (as defined below)
(a  "COMPANY  OPTIONAL  REDEMPTION").  The  portion  of  this  Note  subject  to
redemption  pursuant to this  Section 9 shall be redeemed by the Company in cash
at a price  (the  "COMPANY  OPTIONAL  REDEMPTION  PRICE")  equal  to 140% of the
Conversion  Amount of this Note then  outstanding.  The Company may exercise its
right to require  redemption  under this Section 9 by delivering an  irrevocable
written  notice  thereof by facsimile and  overnight  courier to the Holder (the
"COMPANY  OPTIONAL  REDEMPTION  NOTICE"  and the date the Holder  receives  such
notice is referred to as the "COMPANY  OPTIONAL  REDEMPTION  NOTICE DATE").  The
Company may deliver only one Company  Optional  Redemption  Notice in any ninety
(90) day period. The Company Optional Redemption Notice shall (x) state the date
on which the Company  Optional  Redemption  shall occur (the  "COMPANY  OPTIONAL
REDEMPTION DATE") which date shall not be less than sixty (60) calendar days nor
more than ninety (90) calendar days  following the Company  Optional  Redemption
Notice Date, and (y) state the aggregate Conversion Amount of the Notes which is
being redeemed in such Company  Optional  Redemption from the Holder pursuant to
this Section 9 on the Company Optional Redemption Date. Notwithstanding anything
herein  to the  contrary,  at any time  prior to the date the  Company  Optional
Redemption Price is paid, in full, the Company Optional Redemption Amount may be
converted,  in whole or in part,  by the  Holder  into  shares of  Common  Stock
pursuant to Section 3. All Conversion  Amounts converted by the Holder after the
Company  Optional  Redemption  Notice  Date shall  reduce the  Company  Optional
Redemption  Amount of this Note required to be redeemed on the Company  Optional
Redemption  Date.  Redemptions  made pursuant to this Section 9 shall be made in
accordance with Section 10.

                                       12
<PAGE>
     10. REDEMPTIONS.

     (a) Mechanics.  The Company shall deliver the  applicable  Event of Default
Redemption  Price to the Holder in cash within five (5) Business  Days after the
Company's  receipt of the  Holder's  Event of  Default  Redemption  Notice.  The
Company shall deliver the applicable  Company  Optional  Redemption Price to the
Holder in cash on the applicable Company Optional  Redemption Date. In the event
of a  redemption  of less than all of the  Conversion  Amount of this Note,  the
Company shall promptly cause to be issued and delivered to the Holder a new Note
(in accordance with Section 17(d)) representing the outstanding  Principal which
has not been  redeemed.  The Holder's  delivery of a notice voiding a Redemption
Notice and  exercise of its rights  following  such notice  shall not affect the
Company's  obligations  to make any payments of Late Charges  which have accrued
prior to the date of such notice with respect to the  Conversion  Amount subject
to such notice.

     11. VOTING RIGHTS.  The Holder shall have no voting rights as the holder of
this Note, except as required by law (including,  without limitation, Chapter 78
of the Nevada Revised Statutes) and as expressly provided in this Note.

     12. [Reserved]

     13.  COVENANTS.  Until all of the Notes have been  converted,  redeemed  or
otherwise satisfied in accordance with their terms:

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

     (b)  Incurrence  of  Indebtedness.  The Company  shall not, and the Company
shall cause each of its  Subsidiaries to not,  directly or indirectly,  incur or
guarantee,  assume  or  suffer to exist  any  Indebtedness  (other  than (i) the
Indebtedness evidenced by this Note and the Other Notes and (ii) other Permitted
Indebtedness.

     (c) Existence of Liens.  The Company shall not, and the Company shall cause
each of its  Subsidiaries  to not,  directly or  indirectly,  allow or suffer to
exist any mortgage, lien, pledge, charge, security interest or other encumbrance
upon or in any property or assets (including accounts and contract rights) owned
by the Company or any of its  Subsidiaries  (collectively,  "LIENS")  other than
Permitted Liens.

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

                                       13
<PAGE>
     (e) Restricted  Issuances.  The Company shall not,  directly or indirectly,
without the prior  written  consent of the  holders of a majority  in  aggregate
principal amount of the Notes then outstanding,  (i) issue any Notes (other than
as  contemplated  by the  Securities  Purchase  Agreement and the Notes) or (ii)
issue any other securities that would cause a breach or default under the Notes.

     (f)  Restriction on Redemption and Cash  Dividends.  The Company shall not,
and the  Company  shall  cause  each of its  Subsidiaries  to not,  directly  or
indirectly,   redeem,  repurchase  or  declare  or  pay  any  cash  dividend  or
distribution on any of its capital stock.

     (g)  Restriction  on Transfer of Assets.  The  Company  shall not,  and the
Company shall cause each of its  Subsidiaries  to not,  directly or  indirectly,
sell, lease, license, assign, transfer,  spin-off,  split-off,  close, convey or
otherwise dispose of any assets or rights of the Company or any Subsidiary owned
or hereafter  acquired  whether in a single  transaction  or a series of related
transactions,  other than (i) sales, leases, licenses,  assignments,  transfers,
conveyances  and other  dispositions of such assets or rights by the Company and
its  Subsidiaries in the ordinary course of business and (ii) sales of inventory
in the ordinary course of business.

     (h) Maturity of Indebtedness.  The Company shall not, and the Company shall
cause  each of its  Subsidiaries  to not,  directly  or  indirectly,  permit any
Indebtedness  of the Company or any of the  Subsidiaries to mature or accelerate
prior to the Maturity Date.

     (i) Change in Nature of  Business.  The Company  shall not, and the Company
shall cause each of its Subsidiaries to not,  directly or indirectly,  engage in
any  material  line of  business  substantially  different  from those  lines of
business  conducted by the Company and each of its  Subsidiaries on the Issuance
Date or any business  substantially  related or incidental thereto.  The Company
shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, modify its or their corporate structure or purpose.

     (j)  Preservation  of  Existence,  Etc.  The  Company  shall  maintain  and
preserve,  and cause each of its  Subsidiaries  to maintain  and  preserve,  its
existence,  rights and privileges,  and become or remain,  and cause each of its
Subsidiaries  to become or remain,  duly  qualified and in good standing in each
jurisdiction  in which the character of the properties  owned or leased by it or
in which the transaction of its business makes such qualification necessary.

     (k)  Maintenance  of  Properties,  Etc.  The  Company  shall  maintain  and
preserve,  and cause each of its  Subsidiaries to maintain and preserve,  all of
its  properties  which are  necessary  or useful in the  proper  conduct  of its
business in good working order and  condition,  ordinary wear and tear excepted,
and comply,  and cause each of its Subsidiaries to comply, at all times with the
provisions  of all  leases to which it is a party as  lessee  or under  which it
occupies  property,  so  as  to  prevent  any  loss  or  forfeiture  thereof  or
thereunder.

     (l) Maintenance of Intellectual  Property. The Company will, and will cause
each of its  Subsidiaries to, take all action necessary or advisable to maintain
all  of the  Intellectual  Property  Rights  of the  Company  and/or  any of its
Subsidiaries  that are  necessary  or material to the conduct of its business in
full force and effect.

                                       14
<PAGE>
     (m) Maintenance of Insurance. The Company shall maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation,  comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties  (including all real properties  leased or owned by it) and business,
in such  amounts and  covering  such risks as is  required  by any  governmental
authority having jurisdiction with respect thereto or as is carried generally in
accordance  with sound  business  practice by  companies  in similar  businesses
similarly situated.

     (n)  Transactions  with  Affiliates.  The Company  shall not,  nor shall it
permit any of its Subsidiaries to, enter into,  renew,  extend or be a party to,
any  transaction  or  series  of  related   transactions   (including,   without
limitation,  the  purchase,  sale,  lease,  transfer  or exchange of property or
assets of any kind or the rendering of services of any kind) with any affiliate,
except  in the  ordinary  course  of  business  in a  manner  and  to an  extent
consistent  with past  practice  and  necessary  or  desirable  for the  prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries  than would be obtainable in a comparable arm's length
transaction with a Person that is not an affiliate thereof.

     14.  PARTICIPATION.  Upon any  conversion of this Note, the Holder shall be
entitled to receive such dividends paid and distributions made to the holders of
Common Stock from and after the initial  Issuance  Date to the same extent as if
the Holder had effected such conversion and had held such shares of Common Stock
(issued  or to be  issued  in such  conversion)  on the  record  date  for  such
dividends and distributions. Payments under the preceding sentence shall be made
on or prior to the  applicable  Share  Delivery  Deadline  with  respect to such
conversion.

     15.  AMENDING  THE TERMS OF THIS  NOTE.  The prior  written  consent of the
Holder shall be required for any change or amendment to this Note.

     16.  TRANSFER.  This  Note and any  shares  of  Common  Stock  issued  upon
conversion of this Note may be offered,  sold,  assigned or  transferred  by the
Holder  without the consent of the Company,  subject only to the  provisions  of
Section 4.4 of the Securities Purchase Agreement.

     17. REISSUANCE OF THIS NOTE.

     (a) Transfer. If this Note is to be transferred, the Holder shall surrender
this Note to the Company, whereupon the Company will forthwith issue and deliver
upon the order of the  Holder a new Note (in  accordance  with  Section  17(d)),
registered as the Holder may request,  representing  the  outstanding  Principal
being  transferred  by the  Holder  and,  if less  than the  entire  outstanding
Principal is being transferred, a new Note (in accordance with Section 17(d)) to
the Holder  representing the outstanding  Principal not being  transferred.  The
Holder and any assignee, by acceptance of this Note, acknowledge and agree that,
by reason  of the  provisions  of  Section  3(c)(iii)  following  conversion  or
redemption of any portion of this Note, the outstanding Principal represented by
this Note may be less than the Principal stated on the face of this Note.

                                       15
<PAGE>
     (b) Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably  satisfactory  to the  Company  of the loss,  theft,  destruction  or
mutilation  of  this  Note  (as  to  which  a  written   certification  and  the
indemnification  contemplated below shall suffice as such evidence), and, in the
case of loss, theft or destruction,  of any  indemnification  undertaking by the
Holder to the  Company in  customary  and  reasonable  form and,  in the case of
mutilation,  upon  surrender and  cancellation  of this Note,  the Company shall
execute and deliver to the Holder a new Note (in accordance  with Section 17(d))
representing the outstanding Principal.

     (c)  Note   Exchangeable   for  Different   Denominations.   This  Note  is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company,  for a new Note or Notes (in  accordance  with Section 17(d) and in
principal  amounts  of at  least  $1,000)  representing  in  the  aggregate  the
outstanding  Principal of this Note,  and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the time
of such surrender.

     (d) Issuance of New Notes.  Whenever the Company is required to issue a new
Note  pursuant  to the  terms of this  Note,  such new Note (i) shall be of like
tenor with this Note, (ii) shall represent, as indicated on the face of such new
Note, the Principal  remaining  outstanding  (or in the case of a new Note being
issued pursuant to Section 17(a) or Section 17(c),  the Principal  designated by
the Holder which, when added to the principal represented by the other new Notes
issued in connection with such issuance, does not exceed the Principal remaining
outstanding  under this Note  immediately  prior to such issuance of new Notes),
(iii) shall have an issuance  date,  as  indicated on the face of such new Note,
which is the same as the  Issuance  Date of this Note,  (iv) shall have the same
rights and conditions as this Note, and (v) shall  represent  accrued and unpaid
Interest and Late Charges on the Principal  and Interest of this Note,  from the
Issuance Date.

     18. REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF.  The remedies  provided in this Note shall be cumulative and in addition
to all other remedies available under this Note and any of the other Transaction
Documents at law or in equity (including a decree of specific performance and/or
other injunctive  relief),  and nothing herein shall limit the Holder's right to
pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Note.  The  Company  covenants  to the Holder  that there
shall be no characterization  concerning this instrument other than as expressly
provided  herein.  Amounts  set forth or  provided  for herein  with  respect to
payments,  conversion  and the like (and the  computation  thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided
herein,  be subject to any other  obligation of the Company (or the  performance
thereof).  The  Company  acknowledges  that a  breach  by it of its  obligations
hereunder will cause  irreparable  harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled,  in
addition to all other available remedies, to an injunction  restraining any such
breach or any such threatened breach,  without the necessity of showing economic
loss and without any bond or other  security being  required.  The Company shall
provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company's  compliance  with the terms
and conditions of this Note.

                                       16
<PAGE>
     19. PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is
placed in the hands of an attorney for collection or enforcement or is collected
or enforced through any legal proceeding or the Holder otherwise takes action to
collect amounts due under this Note or to enforce the provisions of this Note or
(b) there occurs any bankruptcy, reorganization,  receivership of the Company or
other  proceedings  affecting  Company  creditors'  rights and involving a claim
under this Note, then the Company shall pay the costs incurred by the Holder for
such  collection,  enforcement or action or in connection with such  bankruptcy,
reorganization, receivership or other proceeding, including, without limitation,
attorneys' fees and disbursements. The Company expressly acknowledges and agrees
that no amounts due under this Note shall be affected,  or limited,  by the fact
that the purchase price paid for this Note was less than the original  Principal
amount hereof.

     20. CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted
by the Company and the Holder and shall not be  construed  against any Person as
the drafter  hereof.  The headings of this Note are for convenience of reference
and shall not form part of, or affect the  interpretation  of, this Note.  Terms
used in this Note but defined in the other Transaction  Documents shall have the
meanings  ascribed  to such  terms on the  Initial  Closing  Date in such  other
Transaction Documents unless otherwise consented to in writing by the Holder.

     21.  FAILURE OR INDULGENCE  NOT WAIVER.  No failure or delay on the part of
the Holder in the  exercise of any power,  right or  privilege  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power,  right or privilege preclude other or further exercise thereof or of
any other right,  power or privilege.  No waiver shall be effective unless it is
in writing and signed by an authorized representative of the waiving party.

     22. DISPUTE RESOLUTION. In the case of a dispute as to the determination of
the Conversion Price (including,  without  limitation,  any disputed  adjustment
thereto or any dispute as to whether any issuance or sale or deemed  issuance or
sale was an issuance or sale or deemed issuance or sale of Excluded Securities),
the Company  Conversion  Price, any Redemption Price, the Closing Bid Price, the
Closing Sale Price or fair market  value (as the case may be) or the  arithmetic
calculation  of the  Conversion  Rate,  any  Note  Reduction  or the  applicable
Redemption  Price (as the case may be),  the  Company or the Holder (as the case
may be) shall submit the disputed  determinations or arithmetic calculations (as
the case may be) via facsimile (i) within two (2) Business Days after receipt of
the  applicable  notice giving rise to such dispute to the Company or the Holder
(as the case may be) or (ii) if no notice gave rise to such dispute, at any time
after the Holder learned of the  circumstances  giving rise to such dispute.  If
the  Holder and the  Company  are  unable to agree  upon such  determination  or
calculation  within two (2)  Business  Days of such  disputed  determination  or
arithmetic  calculation  (as the case may be) being  submitted to the Company or
the Holder (as the case may be), then the Company shall, within two (2) Business
Days,  submit via facsimile  (a) the disputed  determination  of the  Conversion
Price,  the Company  Conversion  Price,  any Redemption  Price,  the Closing Bid
Price,  the Closing  Sale Price or fair market  value (as the case may be) to an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed  arithmetic  calculation of the Conversion  Rate,
any  Note  Reduction  or  any  Redemption  Price  (as  the  case  may  be) to an
independent,  outside  accountant  selected  by the  Holder  that is  reasonably
acceptable to the Company. The Company shall cause at its expense the investment
bank or the accountant (as the

                                       17
<PAGE>
case may be) to perform the  determinations or calculations (as the case may be)
and notify  the  Company  and the  Holder of the  results no later than ten (10)
Business  Days  from  the  time it  receives  such  disputed  determinations  or
calculations  (as the case may  be).  Such  investment  bank's  or  accountant's
determination  or  calculation  (as the case may be) shall be  binding  upon all
parties absent demonstrable error.

     23. NOTICES; CURRENCY; PAYMENTS.

     (a)  Notices.  Whenever  notice is  required  to be given  under this Note,
unless otherwise provided herein,  such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt  written  notice of all actions taken  pursuant to this Note,
including  in  reasonable  detail a  description  of such  action and the reason
therefore.  Without  limiting the generality of the foregoing,  the Company will
give written  notice to the Holder (i)  immediately  upon any  adjustment of the
Conversion  Price,  setting  forth in reasonable  detail,  and  certifying,  the
calculation of such  adjustment and (ii) at least fifteen (15) days prior to the
date on which the Company closes its books or takes a record (A) with respect to
any  dividend or  distribution  upon the Common  Stock,  (B) with respect to any
grant, issuances,  or sales of any Options,  Convertible Securities or rights to
purchase stock,  warrants,  securities or other property to holders of shares of
Common  Stock  or  (C)for  determining  rights  to  vote  with  respect  to  any
Fundamental Transaction,  dissolution or liquidation, provided in each case that
such  information  shall be made known to the public prior to or in  conjunction
with such notice being provided to the Holder.

     (b)  Currency.  All dollar  amounts  referred to in this Note are in United
States Dollars ("U.S. DOLLARS"),  and all amounts owing under this Note shall be
paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall
be converted  into the U.S.  Dollar  equivalent  amount in  accordance  with the
Exchange Rate on the date of calculation.  "EXCHANGE RATE" means, in relation to
any amount of currency to be converted into U.S.  Dollars pursuant to this Note,
the U.S.  Dollar  exchange  rate as published in the Wall Street  Journal on the
relevant  date of  calculation  (it being  understood  and agreed  that where an
amount is calculated  with  reference to, or over, a period of time, the date of
calculation shall be the final date of such period of time).

     (c) Payments.  Whenever any payment of cash is to be made by the Company to
any Person pursuant to this Note,  unless otherwise  expressly set forth herein,
such payment  shall be made in lawful money of the United States of America by a
certified  check  drawn on the  account of the  Company  and sent via  overnight
courier  service to such Person at such  address as  previously  provided to the
Company in writing  (which  address,  in the case of each of the  Buyers,  shall
initially be as set forth on the Schedule of Buyers  attached to the  Securities
Purchase Agreement),  provided that the Holder may elect to receive a payment of
cash via wire transfer of immediately  available  funds by providing the Company
with prior  written  notice  setting  out such  request  and the  Holder's  wire
transfer  instructions.  Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business  Day, the same shall instead
be due on the next  succeeding  day  which is a  Business  Day.  Any  amount  of
Principal or other amounts due under the Transaction Documents which is not paid
when due shall result in a late charge being incurred and payable by the Company
in an amount equal to interest on such

                                       18
<PAGE>
amount at the rate of eighteen percent (18%) per annum from the date such amount
was due until the same is paid in full ("LATE CHARGE").

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

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

     26.  GOVERNING LAW. This Note shall be construed and enforced in accordance
with, and all questions  concerning the construction,  validity,  interpretation
and  performance  of this Note shall be governed  by, the  internal  laws of the
State of Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of  Illinois.  The Company  hereby  irrevocably  submits to the  exclusive
jurisdiction of the state and federal courts sitting in Chicago,  Illinois,  for
the adjudication of any dispute hereunder or in connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit, action or proceeding is brought in an inconvenient  forum or that the
venue of such suit,  action or proceeding is improper.  Nothing contained herein
shall be  deemed to limit in any way any right to serve  process  in any  manner
permitted  by law.  In the event that any  provision  of this Note is invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the  validity  or  enforceability  of any other  provision  of this Note.
Nothing  contained herein shall be deemed or operate to preclude the Holder from
bringing  suit or taking  other  legal  action  against the Company in any other
jurisdiction to collect on the Company's  obligations to the Holder,  to realize
on any  collateral or any other security for such  obligations,  or to enforce a
judgment  or other  court  ruling in favor of the  Holder.  THE  COMPANY  HEREBY
IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,  A JURY
TRIAL FOR THE  ADJUDICATION  OF ANY DISPUTE  HEREUNDER OR IN CONNECTION  WITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

     27. MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to establish
or require the  payment of a rate of interest or other  charges in excess of the
maximum  permitted  by  applicable  law.  In the event that the rate of interest
required to be paid or other charges  hereunder exceed the maximum  permitted by
such law,  any  payments in excess of such  maximum  shall be  credited  against
amounts owed by the Company to the Holder and thus refunded to the Company.

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

                                       19
<PAGE>
     (a) "ADDITIONAL  CLOSING DATE" shall have the meaning ascribed to such term
in the  Securities  Purchase  Agreement,  which  date is the  date  the  Company
initially  issued  Additional  Notes  (as  defined  in the  Securities  Purchase
Agreement) pursuant to the terms of the Securities Purchase Agreement.

     (b)  "APPROVED  STOCK PLAN" means any employee  benefit plan which has been
approved by the board of directors of the Company  prior to or subsequent to the
date hereof  pursuant to which shares of Common  Stock and  standard  options to
purchase  Common  Stock may be issued to any  employee,  officer or director for
services provided to the Company in their capacity as such.

     (c) "BLOOMBERG" means Bloomberg, L.P.

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

     (e) "CHANGE OF CONTROL" means any  Fundamental  Transaction  other than (i)
any  merger  of the  Company  or any of its,  direct or  indirect,  wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization,
recapitalization  or  reclassification  of the  shares of Common  Stock in which
holders of the Company's voting power immediately prior to such  reorganization,
recapitalization  or  reclassification   continue  after  such   reorganization,
recapitalization  or  reclassification  to hold publicly traded  securities and,
directly or indirectly, are, in all material respects, the holders of the voting
power of the surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if other than a
corporation)   of  such   entity  or   entities)   after  such   reorganization,
recapitalization  or  reclassification,  (iii)  pursuant to a  migratory  merger
effected solely for the purpose of changing the jurisdiction of incorporation of
the  Company  or any of its  Subsidiaries  or (iv) any  Fundamental  Transaction
described on Schedule 28(g) attached hereto).

     (f) "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for any security as
of any  date,  the  last  closing  bid  price  and  last  closing  trade  price,
respectively,  for  such  security  on the  Principal  Market,  as  reported  by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing  trade price
(as the case may be) then the last bid price or last trade price,  respectively,
of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively, of such security in the over-the- counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported  in the "pink  sheets" by OTC
Markets Group Inc. (formerly Pink Sheets LLC).

                                       20
<PAGE>
     (g)  "CLOSING  DATE"  shall have the  meaning  set forth in the  Securities
Purchase Agreement, which date is the date the Company initially issued the Note
pursuant to the terms of the Securities Purchase Agreement.

     (h) "COMMON STOCK" means (i) the Company's  common stock,  $0.001 par value
per share,  and (ii) any capital  stock into which such common  stock shall have
been changed or any share  capital  resulting  from a  reclassification  of such
common stock.

     (i) "CONVERTIBLE SECURITIES'" means any stock or other security (other than
Options)  that  is  at  any  time  and  under  any  circumstances,  directly  or
indirectly,   convertible  into,  exercisable  or  exchangeable  for,  or  which
otherwise entitles the holder thereof to acquire, any shares of Common Stock.

     (j)  "ELIGIBLE  MARKET " means the OTC Bulletin  Board,  The NASDAQ  Global
Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York
Stock  Exchange,  NYSE Arca,  the NYSE MKT, the OTCQX  Marketplace  or the OTCQB
Marketplace  operated by OTC Markets  Group Inc. (or any successor to any of the
foregoing).

     (k) "EXCLUDED SECURITIES'" means any (i) shares of Common Stock or standard
options to purchase  Common  Stock to  directors,  officers or  employees of the
Company in their capacity as such pursuant to an Approved Stock Plan (as defined
below),  provided that (A) all such issuances (taking into account the shares of
Common Stock  issuable upon  exercise of such options  granted after the date of
this Note,  but not such shares  issuable upon exercise of such options  granted
before the date of this Note) after the date hereof  pursuant to this clause (i)
do not, in the  aggregate,  exceed more than 5.0% of the Common Stock issued and
outstanding  immediately  prior to the date hereof and (B) the exercise price of
any such  options is not  lowered,  none of such options are amended to increase
the number of shares issuable  thereunder and none of the terms or conditions of
any such options are otherwise  materially  changed in any manner that adversely
affects  any of the  Buyers;  (ii)  shares  of  Common  Stock  issued  upon  the
conversion or exercise of Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by  clause  (i)  above)  issued  prior to the  date  hereof,  provided  that the
conversion price of any such Convertible Securities (other than standard options
to purchase  Common  Stock  issued  pursuant to an Approved  Stock Plan that are
covered by clause (i) above) is not lowered, none of such Convertible Securities
(other than  standard  options to purchase  Common Stock  issued  pursuant to an
Approved  Stock  Plan that are  covered  by clause  (i)  above)  are  amended to
increase the number of shares issuable thereunder or extend the maturity date or
expiration date of such Convertible  Securities  (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) and none of the terms or conditions of any such Convertible
Securities (other than standard options to purchase Common Stock issued pursuant
to an Approved  Stock Plan that are  covered by clause (i) above) are  otherwise
materially changed in any manner that adversely affects any of the Buyers; (iii)
the shares of Common Stock  issuable  upon  conversion of the Notes or otherwise
pursuant to the terms of the Notes and (iv) any shares of Common Stock issued to
the Holder or any of its affiliates.

                                       21
<PAGE>
     (l)  "FUNDAMENTAL  TRANSACTION"  means  that (i) the  Company or any of its
Subsidiaries shall, directly or indirectly, in one or more related transactions,
(1)  consolidate or merge with or into (whether or not the Company or any of its
Subsidiaries is the surviving corporation) any other Person, or (2) sell, lease,
license, assign,  transfer,  convey or otherwise dispose of all or substantially
all of its respective properties or assets to any other Person, or (3) allow any
other  Person to make a purchase,  tender or exchange  offer that is accepted by
the holders of more than 50% of the  outstanding  shares of Voting  Stock of the
Company  (not  including  any shares of Voting  Stock of the Company held by the
Person or  Persons  making or party to, or  associated  or  affiliated  with the
Persons making or party to, such  purchase,  tender or exchange  offer),  or (4)
consummate a stock or share  purchase  agreement or other  business  combination
(including, without limitation, a reorganization,  recapitalization, spin-off or
scheme of arrangement)  with any other Person whereby such other Person acquires
more than 50% of the  outstanding  shares of Voting  Stock of the  Company  (not
including  any shares of Voting Stock of the Company held by the other Person or
other Persons  making or party to, or  associated  or affiliated  with the other
Persons  making or party to,  such stock or share  purchase  agreement  or other
business combination),  or (ii) any "person" or "group" (as these terms are used
for  purposes  of  Sections  13(d)  and  14(d) of the 1934 Act and the rules and
regulations  promulgated  thereunder) is or shall become the "beneficial  owner"
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of
the aggregate ordinary voting power represented by issued and outstanding Voting
Stock of the Company.

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

     (n) "INITIAL  CLOSING DATE" shall have the meaning ascribed to such term in
the Securities Purchase Agreement,  which date is the date the Company initially
issued Initial Notes (as defined in the Securities  Purchase Agreement) pursuant
to the terms of the Securities Purchase Agreement.

     (o) "INTEREST  RATE" means eight percent (8%) per annum, as may be adjusted
from time to time in accordance with Section 2.

     (p)  "MATURITY  DATE" shall mean March 16,  2015;  provided,  however,  the
Maturity Date may be extended at the option of the Holder (i) in the event that,
and for so long as, an Event of Default shall have occurred and be continuing or
any event shall have  occurred and be  continuing  that with the passage of time
and the failure to cure would  result in an Event of Default or (ii) through the
date that is twenty (20) Business Days after the  consummation  of a Fundamental
Transaction in the event that a Fundamental Transaction is publicly announced or
a  Fundamental  Transaction  Notice is  delivered  prior to the  Maturity  Date,
provided  further  that if a Holder  elects to convert  some or all of this Note
pursuant  to  Section 3  hereof,  and the  Conversion  Amount  would be  limited
pursuant to Section 3(d)  hereunder,  the Maturity Date shall  automatically  be
extended  until such time as such  provision  shall not limit the  conversion of
this Note.

     (q) "SECURITIES  PURCHASE AGREEMENT' means that certain Securities Purchase
Agreement,  dated as of the Initial Closing Date, by and between the Company and
the Holder  pursuant  to which the Company  issued this Note,  as may be amended
from time to time.

                                       22
<PAGE>
     (r)  "OPTIONS"  means any rights,  warrants or options to subscribe  for or
purchase shares of Common Stock or Convertible Securities.

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

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

     (u) "PERMITTED  INDEBTEDNESS" means (i) Indebtedness evidenced by this Note
and the Other Notes,  (ii)  Indebtedness  described on Schedule  13(b)  attached
hereto and (iii)  Indebtedness  secured by Permitted  Liens described in clauses
(iv) and (v) of the definition of Permitted Liens, in an aggregate amount not to
exceed $100,000.

     (v)  "PERMITTED  LIENS"  means  (i)  any  Lien  for  taxes  not  yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate  reserves  have been  established  in  accordance  with GAAP,  (ii) any
statutory  Lien arising in the  ordinary  course of business by operation of law
with respect to a liability  that is not yet due or  delinquent,  (iii) any Lien
created by operation of law, such as materialmen's  liens,  mechanics' liens and
other similar liens,  arising in the ordinary course of business with respect to
a liability  that is not yet due or  delinquent  or that are being  contested in
good faith by appropriate  proceedings,  (iv) Liens (A) upon or in any equipment
acquired  or  held by the  Company  or any of its  Subsidiaries  to  secure  the
purchase price of such equipment or indebtedness incurred solely for the purpose
of financing the acquisition or lease of such equipment, or (B) existing on such
equipment  at the time of its  acquisition,  provided  that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of
such equipment, (v) Liens incurred in connection with the extension,  renewal or
refinancing of the indebtedness secured by Liens of the type described in clause
(iv) above,  provided that any extension,  renewal or replacement  Lien shall be
limited to the property encumbered by the existing Lien and the principal amount
of the Indebtedness being extended, renewed or refinanced does not increase, and
(vi) Liens securing the Company's obligations under the Notes.

     (w)  "PRINCIPAL  MARKET"  means,  as of  any  date  of  determination,  the
principal  securities exchange or securities market on which the Common Stock is
then traded.

     (x)  "REDEMPTION  NOTICES"  means,  collectively,   the  Event  of  Default
Redemption Notices and the Company Optional Redemption Notices,  and each of the
foregoing, individually, a "REDEMPTION NOTICE."

     (y)  "REDEMPTION  PREMIUM"  means (i) in the case of the  Events of Default
described in Section 4(a) (other than Sections 4(a)(iv) through 4(a)(vi)),  140%
or (ii) in the case of the  Events of Default  described  in  Sections  4(a)(iv)
through 4(a)(vi), 100%.

                                       23
<PAGE>
     (z) "REDEMPTION PRICES'" means,  collectively,  Event of Default Redemption
Prices,  and the Company Optional  Redemption  Prices and each of the foregoing,
individually, a "REDEMPTION PRICE."

     (aa) "REGISTRATION RIGHTS AGREEMENT" means that certain registration rights
agreement,  dated as of the Initial Closing Date, by and between the Company and
the Holder  relating to, among other things,  the  registration of the resale of
the Common Stock issuable upon conversion of the Notes or otherwise  pursuant to
the terms of the Notes, as may be amended from time to time.

     (bb) "SEC" means the United States  Securities  and Exchange  Commission or
the successor thereto.

     (cc) "SUBSIDIARIES'"  shall have the meaning as set forth in the Securities
Purchase Agreement.

     (dd) "SUCCESSOR ENTITY'" means the Person (or, if so elected by the Holder,
the Parent  Entity)  formed by,  resulting  from or  surviving  any  Fundamental
Transaction  or the Person (or, if so elected by the Holder,  the Parent Entity)
with which such Fundamental Transaction shall have been entered into.

     (ee)  "TRADING  DAY'" means any day on which the Common  Stock is traded on
the Principal  Market,  or, if the Principal Market is not the principal trading
market  for the Common  Stock,  then on the  principal  securities  exchange  or
securities  market on which  the  Common  Stock is then  traded,  provided  that
"TRADING  DAY'" shall not include any day on which the Common Stock is scheduled
to trade on such  exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended  from trading during the final hour of trading on such
exchange or market (or if such  exchange or market does not designate in advance
the closing  time of trading on such  exchange  or market,  then during the hour
ending at 4:00:00 p.m.,  New York time) unless such day is otherwise  designated
as a Trading Day in writing by the Holder.

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

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

                                       24
<PAGE>
in the absence of any such  indication,  the Holder  shall be allowed to presume
that all matters relating to such notice do not constitute material,  non-public
information  relating to the Company or its  Subsidiaries.  Nothing contained in
this Section 29 shall limit any obligations of the Company, or any rights of the
Holder, under Section 4.3 of the Securities Purchase Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       25
<PAGE>
     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as
of the Issuance Date set out above.

                                   STEVIA CORP.

                                   By: /s/ George Blankenbaker
                                       -----------------------------------------
                                       Name:  George Blankenbaker
                                       Title: President

                Senior Secured Convertible Note - Signature Page

                                       26

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