6% CONVERTIBLE SUBORDINATED NOTE DUE MAY 31, 2007

(a)    File Restated Certificate of Incorporation . Not later than one hundred (150) days from the issuance of this Note, the Company shall obtain stockholder approval of the Restated Certificate, as defined in the Agreement, and shall file the Restated Certificate with the Secretary of State of the State of Delaware. The Restated Certificate, as filed with the Secretary of State, shall include the Statement of Designations of the Series A Convertible Preferred Stock as an exhibit.

(b)    Fundamental Transaction . The Company shall not enter into any agreement with respect to any Fundamental Transaction, or consummate any Fundamental Transaction prior to the conversion of this Note.

(a)    Events of Default Defined . The entire unpaid principal amount of this Note, together with interest thereon shall, on written notice to the Company given by the holders of this Note, forthwith become and be due and payable if any one or more the following events (“Events of Default”) shall have occurred (for any reason whatsoever and whether such happening shall be voluntary or involuntary or be affected or come about by operation of law pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule or regulation of any administrative or governmental body) and be continuing. An Event of Default shall occur:

(i)    if failure shall be made in the payment of the principal or interest on the Note when and as the same shall become due and such failure shall continue for a period of five (5) business days after such payment is due; or

(ii)    if the Company shall violate or breach any of the representations, warranties and covenants contained in this Note or the Agreement and such violation or breach shall continue for thirty (30) days after written notice of such breach shall been received by the Company from the Holder; or

(iii)    if the Company or any Significant Subsidiary (which term shall mean any subsidiary of the Company which would be considered a significant subsidiary, as defined in Rule 1-02 of Regulation S-X of the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”)) shall consent to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its property, or shall admit in writing its inability to pay its debts generally as they become due, or shall make a general assignment for the benefit of creditors, or shall file a voluntary petition in bankruptcy, or an answer seeking reorganization in a proceeding under any bankruptcy law (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against the Company or any Significant Subsidiary, in any such proceeding, or shall by voluntary petition, answer or consent, seek relief under the provisions of any other now existing or future bankruptcy or other similar law providing for the reorganization or winding up of corporations, or an arrangement, composition, extension or adjustment with its or their creditors, or shall, in a petition in bankruptcy filed against it or them be adjudicated a bankrupt, or the Company or any Significant Subsidiary or their directors or a majority of its stockholders shall vote to dissolve or liquidate the Company or any Significant Subsidiary other than a liquidation involving a transfer of assets from a Subsidiary to the Company or another Subsidiary; or

(iv)    if an involuntary petition shall be filed against the Company or any Significant Subsidiary seeking relief against the Company or any Significant Subsidiary under any now existing or future bankruptcy, insolvency or other similar law providing for the reorganization or winding up of corporations, or an arrangement, composition, extension or adjustment with its or their creditors, and such petition shall not be vacated or set aside within ninety (90) days from the filing thereof; or

(v)    if a court of competent jurisdiction shall enter an order, judgment or decree appointing, without consent of the Company or any Significant Subsidiary, a receiver, trustee or liquidator of the Company or any Significant Subsidiary, or of all or any substantial part of the property of the Company or any Significant Subsidiary, or approving a petition filed against the Company or any Significant Subsidiary seeking a reorganization or arrangement of the Company or any Significant Subsidiary under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof, or any substantial part of the property of the Company or any Significant Subsidiary shall be sequestered; and such order, judgment or decree shall not be vacated or set aside within ninety (90) days from the date of the entry thereof; or

(vi)    if, under the provisions of any law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Company or any Significant Subsidiary or of all or any substantial part of the property of the Company or any Significant Subsidiary and such custody or control shall not be terminated within ninety (90) days from the date of assumption of such custody or control.

(b)    Rights of Note Holder . Nothing in this Note shall be construed to modify, amend or limit in any way the right of the holder of this Note to bring an action against the Company.

Article 3.

(a)    Automatic Conversion . Principal and interest due on this Note shall be automatically converted into such number of shares of the Company’s Series A Preferred Stock (the “Series A Preferred Stock”) as is determined by dividing the principal amount of the Note by the Preferred Stock Conversion Price. Upon such conversion, this Note and the Company’s obligations under this Note (including the obligation to pay interest) shall terminate.

(b)    Definitions . Unless otherwise defined in this Note, all terms defined in the Certificate of Designation for the Series A Preferred Stock and used in this Note shall have the same meanings in this Note as in the Restated Certificate; provided, however, that the term “Conversion Shares” shall mean the shares of Series A Preferred Stock issuable upon conversion of the Note.

(c)    Conversion Price . The Conversion Price shall initially be fifty seven and one-half cents ($.575). In the event that the Restated Certificate (as defined in the Agreement) is not filed with the Secretary of State of the State of Delaware within one hundred fifty days (150) from the Closing Date (as defined in the Purchase Agreement), then for each whole or partial month that elapses between the 150 ^th day from the Closing Date and the date of such filing, the Conversion Price then in effect shall automatically be reduced by 6%.

(d)    Conversions at Option of Holder . This Note shall be initially convertible, in whole at any time or in part from time to time into such number of shares of the Company’s Series A Preferred Stock determined by dividing the principal amount of this Note being converted by the Conversion Price in effect on the date of conversion. Holders shall effect conversions by providing the Company with the form of conversion notice attached hereto as Annex A (a “ Notice of Conversion ”) as fully and originally executed by the Holder, together with the delivery by the Holder to the Company of this Note, with this Note being duly endorsed in full for transfer to the Company or with an applicable stock power duly executed by the Holder in the manner and form as deemed reasonable by the transfer agent of the Common Stock. Each Notice of Conversion shall specify the principal amount of this Note to be converted, the principal amount of this Note outstanding prior to the conversion at issue, the principal amount of this Note owned subsequent to the conversion at issue, and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such Notice of Conversion and the Note to the Company by overnight delivery service (the “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the Trading Day immediately following the date that such Notice of Conversion and applicable stock certificates are received by the Company. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. The principal amount of this Note being converted into Preferred stock in accordance with the terms hereof shall be canceled and may not be reissued.

(e)    Automatic Conversion upon the filing of the Restated Certificate of Incorporation . Upon the filing of the Restated Certificate of Incorporation, this Note shall automatically be converted into shares of Series A Preferred Stock at the Conversion Price.

(f)    Automatic Conversion Upon Change of Control . This Note shall be automatically converted into Series A Preferred Stock at the Conversion Price upon the close of business on the business day immediately preceding the date fixed for consummation of any transaction resulting in a Change of Control of the Company (an “Automatic Conversion Event”). A “Change in Control” means a consolidation or merger of the Company with or into another company or entity in which the Company is not the surviving entity or the sale of all or substantially all of the assets of the Company to another company or entity not controlled by the then existing stockholders of the Company in a transaction or series of transactions. The Company shall not be obligated to issue certificates evidencing the Series A Preferred Stock or other consideration issuable upon such conversion unless this Note is either delivered to the Company or its transfer agent or the Holder notifies the Company or its transfer agent in writing that such certificates have been lost, stolen, or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith. Upon the conversion of this Note pursuant to this Section 3(f), the Company shall promptly send written notice thereof, by hand delivery or by overnight delivery, to the Holder at its address then shown on the records of the Company, which notice shall state that this Note must be surrendered at the office of the Company (or of its transfer agent for the Common Stock, if applicable). Further, since a Change of Control also results in the automatic conversion of the Series A Preferred Stock into shares of Common Stock, the Change of Control shall also result in the conversion of the Series A Preferred Stock into shares of Common Stock simultaneously with the conversion of this Note into share of Series A Preferred Stock.

(g)    Mechanics of Conversion

(i)    Delivery of Certificate Upon Conversion . Except as otherwise set forth herein, not later than three Trading Days after each Conversion Date (the “ Share Delivery Date ”), the Company shall deliver to the Holder (A) a certificate or certificates which, after the Effective Date, shall be free of restrictive legends and trading restrictions (other than those required by the Agreement) representing the number of shares of Series A Preferred Stock being acquired upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid dividends (if the Company has elected or is required to pay accrued dividends in cash). After the Effective Date, the Company shall, upon request of the Holder, deliver any certificate or certificates required to be delivered by the Company under this Section electronically through the Depository Trust Company or another established clearing Company performing similar functions if the Company’s transfer agent has the ability to deliver shares of Series A Preferred Stock in such manner. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return the this Note to the Holder.

(ii)    Obligation Absolute; Partial Liquidated Damages . The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares. In the event a Holder shall elect to convert any or all of this Note, the Company may not refuse conversion based on any claim that such Holder or any one associated or affiliated with the Holder of has been engaged in any violation of law, agreement or for any other reason (other than the inability of the Company to issue shares of Common Stock as a result of the 4.9% Limitation) unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part of this Note shall have been sought and obtained and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the Conversion Value of the principal amount of the Note outstanding ( i.e. , the value of the shares of Preferred Stock issued upon conversion of such principal amount of this Note)