AMENDED AND RESTATED SENIOR CONVERTIBLE NOTE

<PAGE>

EXHIBIT 10.3

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, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS 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 20(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.

                        RAPTOR NETWORKS TECHNOLOGY, INC.


                  AMENDED AND RESTATED SENIOR CONVERTIBLE NOTE


Issuance Date:   July 31, 2006          Original Principal Amount: U.S. $_________

                  FOR VALUE RECEIVED, Raptor Networks Technology, Inc., a
Colorado corporation (the "COMPANY"), hereby promises to pay to
_____________________ or 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), on any Installment Date with
respect to the Installment Amount due on such Installment Date (each, as defined
herein), acceleration, redemption or otherwise (in each case in accordance with
the terms hereof) and to pay interest ("INTEREST") on any outstanding Principal
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 an Interest Date (as defined below), any Installment Date
or, the Maturity Date, acceleration, conversion, redemption or otherwise (in
each case in accordance with the terms hereof); provided, however, that (a) in
the event that the Initial Effective Date has occurred by February 12, 2007, the
Principal amount of this Note shall be reduced by [approximately 8.6% of the
Original Principal Amount] or (b) in the event that the Initial Effective Date
has not occurred by February 12, 2007, but has occurred by April 1, 2007, the
Principal amount of this Note shall be reduced by [approximately 4.0% of the
Original Principal Amount]. This Amended and Restated Senior Convertible Note
(including all Senior Convertible Notes issued in exchange, transfer or
replacement hereof, this "NOTE") amends, supplements, modifies and completely
restates and supersedes the Senior Convertible Note, dated July 31, 2006





<PAGE>

(the "EXISTING NOTE"), issued by the Company to the Holder in the Original
Principal Amount of $_________, but shall not, except as specifically amended
hereby or as set forth in the Amendment Agreements (as defined below),
constitute a release, satisfaction or novation of any of the obligations under
any other Transaction Document (as defined in the Securities Purchase
Agreement). This Note is one of an issue of Amended and Restated Senior
Convertible Notes issued pursuant to the Amendment and Exchange Agreements dated
as of January 18, 2007 by and between each of the Buyers (as defined in the
Securities Purchase Agreement) and the Company (the "AMENDMENT AGREEMENTS" and
the date the transactions contemplated by the Amendment Agreements are
consummated, the "AMENDMENT DATE") (together with the new senior convertible
notes issued pursuant to the Amendment Agreements, the "NOTES" and such other
Amended and Restated Senior Convertible Notes and new senior convertible notes,
the "OTHER NOTES"). Certain capitalized terms used herein are defined in Section
30.

         (1) PAYMENTS OF PRINCIPAL. On each Installment Date, the Company shall
pay to the Holder an amount equal to the Installment Amount due on such
Installment Date in accordance with Section 8. 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 26), if any, on such Principal and Interest. The "MATURITY
DATE" shall be July 31, 2008, as may be extended at the option of the Holder (i)
in the event that, and for so long as, an Event of Default (as defined in
Section 4(a)) shall have occurred and be continuing on the Maturity Date (as may
be extended pursuant to this Section 1) or any event shall have occurred and be
continuing on the Maturity Date (as may be extended pursuant to this Section 1)
that with the passage of time and the failure to cure would result in an Event
of Default, (ii) through the date that is ten (10) Business Days after the
consummation of a Change of Control in the event that a Change of Control is
publicly announced or a Change of Control Notice (as defined in Section 5(b)) is
delivered prior to the Maturity Date, and (iii) to the latest designated date
for repayment upon the deferral of payment of any Installment Amount in
accordance with Section 8(d). 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. Interest on this Note shall commence
accruing on the Amendment Date and shall be computed on the basis of a 360-day
year comprised of twelve (12) thirty (30) day months and shall be payable in
arrears for each Calendar Quarter on the first (1st) day of the succeeding
Calendar Quarter during the period beginning on the Issuance Date and ending on,
and including, the Maturity Date (each, an "INTEREST DATE") with the first (1st)
Interest Date being April 1, 2007. Interest shall be payable on each Interest
Date, to the record holder of this Note on the applicable Interest Date, and to
the extent that any Principal amount of this Note is converted prior to such
Interest Date, accrued and unpaid Interest with respect to such converted
Principal amount and accrued and unpaid Late Charges, if any, with respect to
such Principal and Interest shall be payable by way of inclusion of such
Interest and Late Charges in the Conversion Amount, in accordance with Section
3(b)(i). From and after the occurrence and during the continuance of an Event of


                                       -2-



<PAGE>

Default, the Interest Rate shall be increased to fifteen percent (15.0%). 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 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 cure of such Event of Default.

         (3) CONVERSION OF NOTES. This Note shall be convertible into shares of
the Company's common stock, par value $0.001 per share (the "COMMON STOCK"), on
the terms and conditions set forth in this Section 3.

                 (a) CONVERSION RIGHT. Subject to the provisions of Section 3(d)
and subject to the Company's right to elect to pay accrued and unpaid Interest
and Late Charges, if any, in cash as set forth in Section 3(c)(i), 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 fully paid and nonassessable 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 and
similar taxes that may be payable with respect to the issuance and delivery of
Common Stock upon conversion of any Conversion Amount.

                 (b) CONVERSION RATE. Subject to the Company's right to elect to
pay accrued and unpaid Interest and Late Charges, if any, in cash as set forth
in Section 3(c)(i), 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 sum of (A) the
portion of the Principal to be converted, redeemed or otherwise with respect to
which this determination is being made, (B) accrued and unpaid Interest with
respect to such Principal and (C) accrued and unpaid Late Charges with respect
to such Principal and Interest.

                          (ii) "CONVERSION PRICE" means, as of any Conversion
Date (as defined below) or other date of determination, $0.43948, subject to
adjustment as provided herein.

                 (c) MECHANICS OF CONVERSION.

                          (i) OPTIONAL CONVERSION. To convert any Conversion
Amount into shares of Common Stock on any Trading Day (a "CONVERSION DATE"), the
Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or
prior to 11:59 p.m., New York Time, on a Business Day, a copy of an executed
notice of conversion in the form attached hereto as EXHIBIT I (the "CONVERSION
NOTICE") to the Company and (B) if required by Section 3(c)(iii), surrender this
Note to a common carrier for delivery to the Company as soon as practicable on
or following such date (or an indemnification undertaking with respect to this
Note in the case of its loss, theft or destruction). Accrued and unpaid Interest
and Late Charges, if any, on any Principal portion of the Conversion Amount
being converted shall be payable to the record holder of this Note on the


                                      -3-



<PAGE>

applicable Share Delivery Date (as defined below) in shares of Common Stock so
long as there has been no Equity Conditions Failure; provided however, that the
Company may, at its option following notice to the Holder, pay accrued and
unpaid Interest and/or Late Charges, if any, on any Principal portion of the
Conversion Amount being converted on the applicable Share Delivery Date in cash
("CASH INTEREST/CHARGES"). On or before the second (2nd) Trading Day following
the date of receipt of a Conversion Notice, the Company shall transmit by
facsimile a confirmation of receipt of such Conversion Notice to the Holder and
the Company's transfer agent (the "TRANSFER AGENT"). On or before the third
(3rd) Business Day following the date of receipt of a Conversion Notice (the
"SHARE DELIVERY DATE"), the Company shall (1) (x) provided that the Transfer
Agent is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program and that securities are to be issued without legends
pursuant to Section 2(g) of the Securities Purchase Agreement, credit such
aggregate number of shares of Common Stock (including any shares of Common Stock
delivered in respect of Interest and/or Late Charges) to which the Holder shall
be entitled to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system or (y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program or if
securities are to be issued with legends pursuant to Section 2(g) of the
Securities Purchase Agreement, issue and deliver 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 and (2) if the Company has elected to pay Cash Interest/Charges, pay
to the Holder in cash an amount equal to the accrued and unpaid Interest and/or
Late Charges, if any, on the Principal portion of the Conversion Amount up to
and including the Conversion Date. If this Note is physically surrendered for
conversion pursuant to 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 and in no event later
than five (5) Business Days after receipt of this Note and at its own expense,
issue and deliver to the holder a new Note (in accordance with Section 20(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. In the event of a partial
conversion of this Note pursuant hereto, the Principal amount and Interest
converted shall be deducted from the Installment Amounts relating to the
Installment Dates as set forth in the Conversion Notice.

                          (ii) COMPANY'S FAILURE TO TIMELY CONVERT. If the
Company shall fail to issue a certificate to the Holder or credit the Holder's
balance account with DTC, as applicable, for the number of shares of Common
Stock to which the Holder is entitled upon conversion of any Conversion Amount
on or prior to the date which is five (5) Trading Days after the Conversion Date
(a "CONVERSION FAILURE"), then (A) the Company shall pay damages to the Holder
for each Trading Day of such Conversion Failure in an amount equal to 1.5% of
the product of (I) the sum of the number of shares of Common Stock not issued to
the Holder on or prior to the Share Delivery Date and to which the Holder is
entitled, and (II) the Closing Sale Price of the Common Stock on the Share
Delivery Date and (B) 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


                                      -4-



<PAGE>

to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In
addition to the foregoing, if within three (3) Trading Days after the Company's
receipt of the facsimile copy of a Conversion Notice the Company shall fail to
issue and deliver a certificate to the Holder or credit the Holder's balance
account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon such holder's conversion of any Conversion Amount, and if on or
after such Trading Day the Holder purchases (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of
the number of shares of Common Stock issuable upon such conversion that the
Holder anticipated receiving from the Company (a "BUY-IN"), then the Company
shall, within five (5) Trading Days after the Holder's request and in the
Holder's discretion, either (A) 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 such number of shares of Common Stock so purchased
(the "BUY-IN PRICE"), at which point the Company's obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (B) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (1) such number of
shares of Common Stock, times (2) the Closing Bid Price on the Conversion Date.

                          (iii) REGISTRATION; BOOK-ENTRY. The Company shall
maintain a register (the "REGISTER") for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Notes held
by such holders (the "REGISTERED NOTES"). The entries in the Register shall be
conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the
Register as the owner of a Note for all purposes, including, without limitation,
the right to receive payments of Principal and Interest hereunder,
notwithstanding notice to the contrary. A Registered Note may be assigned or
sold in whole or in part only by registration of such assignment or sale on the
Register. Upon its receipt of a request to assign or sell all or part of any
Registered Note by a Holder, the Company shall record the information contained
therein in the Register and issue one or more new Registered Notes in the same
aggregate principal amount as the principal amount of the surrendered Registered
Note to the designated assignee or transferee pursuant to Section 20.
Notwithstanding anything to the contrary set forth herein, upon 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
entire outstanding Principal amount represented by this Note is being converted
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, if any,
converted and the dates of such conversions 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 (except as required above).

                           (iv) PRO RATA CONVERSION; DISPUTES. In the event that
the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such
portions of the Notes submitted for conversion, the Company, subject to Section
3(d), shall convert from each holder of Notes electing to have Notes converted
on such date a pro rata amount of such holder's portion of its Notes submitted
for conversion based on the principal amount of Notes submitted for conversion


                                      -5-



<PAGE>

on such date by such holder relative to the aggregate principal amount of all
Notes submitted for conversion on such date. 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 25.

                 (d) LIMITATIONS ON CONVERSIONS.

                          (i) BENEFICIAL OWNERSHIP. The Company shall not effect
any conversion of this Note, and the Holder of this Note shall not have the
right to convert any portion of this Note pursuant to Section 3(a), to the
extent that after giving effect to such conversion, the Holder (together with
the Holder's affiliates) would beneficially own in excess of 4.99% (the "MAXIMUM
PERCENTAGE") of the number of shares of Common Stock outstanding immediately
after giving effect to such conversion. For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) conversion of the remaining, nonconverted portion of
this Note beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any Other Notes or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this
Section 3(d)(i), beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934
ACT"). For purposes of this Section 3(d)(i), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Form 8-K or other public filing
with the Securities Exchange Commission, as the case may be (y) a more recent
public announcement by the Company or (z) any other notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock outstanding.
For any reason at any time, upon the written or oral request of the Holder, the
Company shall within two (2) Business Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to
the Company, the Holder may increase or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% specified in such notice; provided that
(i) any such increase will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of Notes.

                           (ii) ELIGIBLE MARKET REGULATION. The Company shall not
be obligated to issue any shares of Common Stock upon conversion of this Note if
the issuance of such shares of Common Stock would exceed the aggregate number of
shares of Common Stock which the Company may issue upon conversion or exercise,
as applicable, of the Notes and Warrants without breaching the Company's
obligations under the rules or regulations of any applicable Eligible Market
(the "EXCHANGE CAP"), except that such limitation shall not apply in the event


                                      -6-



<PAGE>

that the Company (A) obtains the approval of its stockholders as required by the
applicable rules of such Eligible Market for issuances of Common Stock in excess
of such amount or (B) obtains a written opinion from outside counsel to the
Company that such approval is not required, which opinion shall be reasonably
satisfactory to the Required Holders. Until such approval or written opinion is
obtained, no purchaser of the Notes pursuant to the Securities Purchase
Agreement (the "PURCHASERS") shall be issued in the aggregate, upon conversion
or exercise or otherwise, as applicable, of Notes or Warrants, shares of Common
Stock in an amount greater than the product of the Exchange Cap multiplied by a
fraction, the numerator of which is the principal amount of Notes issued to a
Purchaser pursuant to the Securities Purchase Agreement on the Closing Date and
the denominator of which is the aggregate principal amount of all Notes issued
to the Purchasers pursuant to the Securities Purchase Agreement on the Closing
Date (with respect to each Purchaser, the "EXCHANGE CAP ALLOCATION"). In the
event that any Purchaser shall sell or otherwise transfer any of such
Purchaser's Notes, the transferee shall be allocated a pro rata portion of such
Purchaser's Exchange Cap Allocation, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange Cap
Allocation allocated to such transferee. In the event that any holder of Notes
shall convert all of such holder's Notes into a number of shares of Common Stock
which, in the aggregate, is less than such holder's Exchange Cap Allocation,
then the difference between such holder's Exchange Cap Allocation and the number
of shares of Common Stock actually issued to such holder shall be allocated to
the respective Exchange Cap Allocations of the remaining holders of Notes on a
pro rata basis in proportion to the aggregate principal amount of the Notes then
held by each such holder.

         (4) RIGHTS UPON EVENT OF DEFAULT.

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

                          (i) the failure of the applicable Registration
Statement required to be filed pursuant to the Registration Rights Agreement to
be declared effective by the SEC on or prior to the date that is sixty (60) days
after the applicable Effectiveness Deadline (as defined in the Registration
Rights Agreement), or, while the applicable Registration Statement is required
to be maintained effective pursuant to the terms of the Registration Rights
Agreement, the effectiveness of the applicable Registration Statement lapses for
any reason (including, without limitation, the issuance of a stop order) or is
unavailable to any holder of the Notes for sale of all of such holder's
Registrable Securities (as defined in the Registration Rights Agreement) in
accordance with the terms of the Registration Rights Agreement, and such lapse
or unavailability continues for a period of ten (10) consecutive days or for
more than an aggregate of thirty (30) days in any 365-day period (other than
days during an Allowable Grace Period (as defined in the Registration Rights
Agreement)); provided, however, that notwithstanding anything to the contrary
contained herein, the Company's failure to meet one or more of the requirements
of this Section 4(a) shall not constitute an Event of Default where such failure
is solely the result of a comment received by the SEC requiring a limit on the
number of Registrable Securities included in the applicable Registration
Statement in order for such Registration Statement to be able to avail itself of
Rule 415 under the 1933 Act;

                                       -7-



<PAGE>

                          (ii) the suspension from trading or failure of the
Common Stock to be listed on an Eligible Market for a period of five (5)
consecutive Trading Days or for more than an aggregate of ten (10) Trading Days
in any 365-day period;

                          (iii) the Company's (A) failure to cure a Conversion
Failure by delivery of the required number of shares of Common Stock within ten
(10) Business Days after the applicable Conversion Date or (B) notice, written
or oral, to any holder of the Notes, including by way of public announcement or
through any of its agents, at any time, of its intention not to comply with a
request for conversion of any Notes into shares of Common Stock that is tendered
in accordance with the provisions of the Notes, other than pursuant to Section
3(d);

                          (iv) at any time following the tenth (10th)
consecutive Business Day subsequent to the earlier of the Stockholder Approval
Date (as defined in the Securities Purchase Agreement) and the Stockholder
Meeting Deadline (as defined in the Securities Purchase Agreement) that the
Holder's Authorized Share Allocation (as defined below) is less than the number
of shares of Common Stock that the Holder would be entitled to receive upon a
conversion of the full Conversion Amount of this Note (without regard to any
limitations on conversion set forth in Section 3(d) or otherwise);

                          (v) the Company's 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 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 to which the Holder is a party, except, in the
case of a failure to pay Interest and Late Charges when and as due, in which
case only if such failure continues for a period of at least five (5) Business
Days;

                          (vi) any default under, redemption of or acceleration
prior to maturity of any Indebtedness of the Company or any of its Subsidiaries
(as defined in Section 3(a) of the Securities Purchase Agreement) which,
individually or in the aggregate, exceeds $50,000, other than with respect to
any Other Notes;

                          (vii) the Company or any of its Subsidiaries, pursuant
to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign
or state law for the relief of debtors (collectively, "BANKRUPTCY LAW"), (A)
commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
receiver, trustee, assignee, liquidator or similar official (a "CUSTODIAN"), (D)
makes a general assignment for the benefit of its creditors or (E) admits in
writing that it is generally unable to pay its debts as they become due;

                          (viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that (A) is for relief against the
Company or any of its Subsidiaries in an involuntary case, (B) appoints a
Custodian of the Company or any of its Subsidiaries or (C) orders the
liquidation of the Company or any of its Subsidiaries;

                                      -8-



<PAGE>

                          (ix) a final judgment or judgments for the payment of
money aggregating in excess of $350,000 are rendered against the Company or any
of its Subsidiaries and which judgments are not, within sixty (60) 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, that any judgment which is covered by insurance or an indemnity from a
credit worthy party shall not be included in calculating the $350,000 amount set
forth above so long as the Company 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 will receive the proceeds of such
insurance or indemnity within thirty (30) days of the issuance of such judgment;

                          (x) the Company 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 of any Transaction
Document which is curable, only if such breach continues for a period of at
least ten (10) consecutive Business Days;

                          (xi) any breach or failure in any respect to comply
with either of Sections 8 or 16 of this Note or Section 4(q) of the Securities
Purchase Agreement;

                          (xii) the failure of the Company to obtain the
Stockholder Approval by the Stockholder Approval Date; or

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

                 (b) REDEMPTION RIGHT. Upon the occurrence of an Event of
Default with respect to this Note, the Company shall within two (2) Business
Days deliver written notice thereof via facsimile and overnight courier (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 all or any
portion of this Note by delivering written notice thereof (the "EVENT OF DEFAULT
REDEMPTION NOTICE") to the Company, which Event of Default Redemption Notice
shall indicate the Conversion Amount of this Note the Holder is electing to
require the Company 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 and (B) the Redemption Premium and (ii) the product of (A) the
product of (1) the Conversion Rate with respect to such Conversion
Amount in effect at such time as the Holder delivers an Event of Default
Redemption Notice and (2) the Equity Value Redemption Premium and (B) the
greater of (1) the Closing Sale Price of the Common Stock on the date
immediately preceding such Event of Default, (2) the Closing Sale Price of the
Common Stock on the date immediately after such Event of Default and (3) the
Closing Sale Price of the Common Stock on the date the Holder delivers the Event
of Default Redemption Notice (the "EVENT OF DEFAULT REDEMPTION PRICE").
Redemptions required by this Section 4(b) shall be made in accordance with the
provisions of Section 14. To the extent redemptions required by this Section
4(b) are deemed or determined by a court of competent jurisdiction to be
prepayments of the Note by the Company, such redemptions shall be deemed to be


                                      -9-



<PAGE>

voluntary prepayments. In the event of a partial redemption of this Note
pursuant hereto, the principal amount redeemed shall be deducted from the
Installment Amounts relating to the applicable Installment Dates as set forth in
the Event of Default Redemption Notice. The parties hereto agree that in the
event of the Company's redemption of any portion of the 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 AND CHANGE OF CONTROL.

                 (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 reasonably satisfactory to the Required
Holders and approved by the Required Holders 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 and the interest rates of the Notes then outstanding held by
such holder, having similar conversion rights and having similar ranking to the
Notes, and satisfactory to the Required Holders 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 (a "PUBLIC
SUCCESSOR ENTITY"). 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
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 with the same effect as if such
Successor Entity had been named as the Company herein. Upon consummation of the
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 the Fundamental Transaction, in lieu
of the shares of the Company's Common Stock (or other securities, cash, assets
or other property) 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), as
adjusted in accordance with the provisions of this Note. The provisions of this
Section shall apply similarly and equally to successive Fundamental Transactions
and shall be applied without regard to any limitations on the conversion or
redemption of this Note.

                 (b) REDEMPTION RIGHT. No sooner than fifteen (15) days nor
later than ten (10) days prior to the consummation of a Change of Control, but
not prior to the public announcement of such Change of Control, the Company
shall deliver written notice thereof via facsimile and overnight courier to the
Holder (a "CHANGE OF CONTROL NOTICE"). At any time during the period beginning
after the Holder's receipt of a Change of Control Notice and ending twenty (20)
Trading Days after the date of the consummation of such Change of Control, the


                                       -10-



<PAGE>

Holder may require the Company to redeem all or any portion of this Note by
delivering written notice thereof ("CHANGE OF CONTROL REDEMPTION NOTICE") to the
Company, which Change of Control Redemption Notice shall indicate the Conversion
Amount the Holder is electing to require the Company to redeem. The portion of
this Note subject to redemption pursuant to this Section 5 shall be redeemed by
the Company in cash at a price equal to the greater of (i) 150% of the
Conversion Amount being redeemed and (ii) the product of (A) the product of (1)
the Equity Value Redemption Premium and (2) the Conversion Amount being redeemed
multiplied by (B) the quotient determined by dividing (x) the aggregate cash
consideration and the aggregate cash value of any non-cash consideration per
Common Share to be paid to the holders of the Common Shares upon consummation of
the Change of Control (any such non-cash consideration consisting of marketable
securities to be valued at the higher of (x) the Closing Sale Price of such
securities as of the Trading Day immediately prior to the consummation of such
Change of Control, (y) the Closing Sale Price as of the Trading Day immediately
following the public announcement of such proposed Change of Control and (z) the
Closing Sale Price as of the Trading Day immediately prior to the public
announcement of such proposed Change of Control) by (y) the Conversion Price
(the "CHANGE OF CONTROL REDEMPTION PRICE"). Redemptions required by this Section
5 shall be made in accordance with the provisions of Section 14 and shall have
priority to payments to stockholders in connection with a Change of Control. To
the extent redemptions required by this Section 5(b) are deemed or determined by
a court of competent jurisdiction to be prepayments of the Note by the Company,
such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 5, but subject to Section 3(d), until
the Change of Control Redemption Price (together with any interest thereon) is
paid in full, the Conversion Amount submitted for redemption under this Section
5(c) (together with any interest thereon) may be converted, in whole or in part,
by the Holder into Common Stock pursuant to Section 3. In the event of a partial
redemption of this Note pursuant hereto, the principal amount redeemed shall be
deducted from the Installment Amounts relating to the applicable Installment
Dates as set forth in the Change of Control Redemption Notice. The parties
hereto agree that in the event of the Company's redemption of any portion of the
Note under this Section 5(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 Change of Control
redemption premium due under this Section 5(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.

         (6) RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

                 (a) PURCHASE RIGHTS. If at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete conversion of this
Note (without taking into account any limitations or restrictions on the
convertibility of this Note) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

                                      -11-



<PAGE>

                 (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, at the Holder's option, (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
Required Holders. The provisions of this Section shall apply similarly and
equally to successive Corporate Events and shall be applied without regard to
any limitations on the conversion or redemption of this Note.

         (7) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

                 (a) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF COMMON
STOCK. If and whenever on or after the Subscription Date, the Company issues or
sells, or in accordance with this Section 7(a) is deemed to have issued or sold,
any shares of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account of the Company, but excluding shares
of Common Stock deemed to have been issued or sold by the Company in connection
with any Excluded Security) for a consideration per share (the "NEW ISSUANCE
PRICE") less than a price (the "APPLICABLE PRICE") equal to the Conversion Price
in effect immediately prior to such issue or sale (the foregoing a "DILUTIVE
ISSUANCE"), then immediately after such Dilutive Issuance the Conversion Price
then in effect shall be reduced to an amount equal to the New Issuance Price.
For purposes of determining the adjusted Conversion Price under this Section
7(a), the following shall be applicable:

                          (i) ISSUANCE OF OPTIONS. If the Company in any manner
grants or sells any Options and the lowest price per share for which one share
of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon
exercise of such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 7(a)(i), the "lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such Option
or upon conversion or exchange or exercise of any Convertible Securities
issuable upon exercise of such Option" shall be equal to the sum of the lowest


                                      -12-



<PAGE>

amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon granting or sale of the Option,
upon exercise of the Option and upon conversion or exchange or exercise of any
Convertible Security issuable upon exercise of such Option. No further
adjustment of the Conversion Price shall be made upon the actual issuance of
such share of Common Stock or of such Convertible Securities upon the exercise
of such Options or upon the actual issuance of such Common Stock upon conversion
or exchange or exercise of such Convertible Securities.

                          (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is issuable upon such
conversion or exchange or exercise thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of this
Section 7(a)(ii), the "lowest price per share for which one share of Common
Stock is issuable upon such conversion or exchange or exercise" shall be equal
to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon the
issuance or sale of the Convertible Security and upon the conversion or exchange
or exercise of such Convertible Security. No further adjustment of the
Conversion Price shall be made upon the actual issuance of such share of Common
Stock upon conversion or exchange or exercise of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Conversion Price had been or
are to be made pursuant to other provisions of this Section 7(a), no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.

                           (iii) CHANGE IN OPTION PRICE OR RATE OF CONVERSION. If
the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable or exercisable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this Section 7(a)(iii), if
the terms of any Option or Convertible Security that was outstanding as of the
Subscription Date are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change. No adjustment shall be
made if such adjustment would result in an increase of the Conversion Price then
in effect.

                                       -13-



<PAGE>

                          (iv) CALCULATION OF CONSIDERATION RECEIVED. In case
any Option or Convertible Security is issued in connection with the issue or
sale of other securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such Option or
Convertible Security by the parties thereto, the Option or Convertible Security
will be deemed to have been issued for a consideration of $.01. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed
to be the net amount received by the Company therefor. If any Common Stock,
Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Closing Sale Price of such securities on the
date of receipt. If any Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger
in which the Company is the surviving entity, the amount of consideration
therefor will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such Common
Stock, Options or Convertible Securities, as the case may be. The fair value of
any consideration other than cash or securities will be determined jointly by
the Company and the Required Holders. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring
valuation (the "VALUATION EVENT"), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day following
the Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the Required Holders. The determination of such appraiser shall
be deemed binding upon all parties absent manifest error and the fees and
expenses of such appraiser shall be borne by the Company.

                          (v) RECORD DATE. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

                 (b) ADJUSTMENT OF CONVERSION PRICE UPON SUBDIVISION OR
COMBINATION OF COMMON STOCK. If the Company at any time on or after the
Subscription Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced. If the
Company at any time on or after the Subscription Date combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately increased.

                 (c) OTHER EVENTS. If any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the Holder under this Note;
provided that no such adjustment will increase the Conversion Price as otherwise
determined pursuant to this Section 7.

                                      -14-



<PAGE>

(8)       COMPANY INSTALLMENT CONVERSION OR REDEMPTION.

                  (a) GENERAL. On each applicable Installment Date the Company
shall pay to the Holder of this Note the Installment Amount due on such date by
converting such Installment Amount into shares of Common Stock, in accordance
with this Section 8 (a "COMPANY CONVERSION"); provided, however, that the
Company may, at its option following notice to the Holder, pay the Installment
Amount by redeeming such Installment Amount in cash (a "COMPANY REDEMPTION") or
by any combination of a Company Conversion and a Company Redemption so long as
all of the outstanding applicable Installment Amount shall be converted and/or
redeemed by the Company on the applicable Installment Date, subject to the
provisions of this Section 8; provided, further, however that if there has been
an Equity Conditions Failure, then the applicable Installment Amount shall be
redeemed in its entirety by the Company pursuant to a Company Redemption.
Notwithstanding the foregoing, the Company may not effect a Company Conversion
of any Installment Amount under this Section in excess of the Holder Pro Rata
Amount of the applicable Volume Limitation. On or prior to the date which is the
sixth (6th) Trading Day prior to each Installment Date (each, an "INSTALLMENT
NOTICE DUE DATE"), the Company shall deliver written notice (each, a "COMPANY
INSTALLMENT NOTICE" and the date all of the holders receive such notice is
referred to as to the "COMPANY INSTALLMENT NOTICE DATE"), to each holder of
Notes which Company Installment Notice shall (i) either (A) confirm that the
applicable Installment Amount of such holder's Note shall be converted in whole
pursuant to a Company Conversion (such amount to be converted, the "COMPANY
CONVERSION AMOUNT") or (B) (1) state that the Company elects to redeem, or is
required to redeem in accordance with the provisions of the Notes, in whole or
in part, the applicable Installment Amount pursuant to a Company Redemption and
(2) specify the portion (including Interest and Late Charges, if any, on such
amount and Interest) which the Company elects or is required to redeem pursuant
to a Company Redemption (such amount to be redeemed, the "COMPANY REDEMPTION
AMOUNT") and the portion (including Interest and Late Charges, if any, on such
amount and Interest), if any, that the Company elects to convert pursuant to a
Company Conversion (such amount also, a "COMPANY CONVERSION AMOUNT") which
amounts when added together, must equal the applicable Installment Amount and
(ii) if the Installment Amount is to be paid, in whole or in part, pursuant to a
Company Conversion, certify that the Equity Conditions have been satisfied as of
the date of the Company Installment Notice. Each Company Installment Notice
shall be irrevocable. If the Company does not timely deliver a Company
Installment Notice in accordance with this Section 8, then the Company shall be
deemed to have delivered an irrevocable Company Installment Notice confirming a
Company Conversion and shall be deemed to have certified that the Equity
Conditions in connection with any such conversion have been satisfied. Except as
expressly provided in this Section 8(a), the Company shall convert and/or redeem
the applicable Installment Amount of this Note pursuant to this Section 8 and
the corresponding Installment Amounts of the Other Notes pursuant to the
corresponding provisions of the Other Notes in the same ratio of the Installment
Amount being converted and/or redeemed hereunder. The Company Conversion Amount
(whether set forth in the Company Installment Notice or by operation of this
Section 8) shall be converted in accordance with Section 8(b) and the Company
Redemption Amount shall be redeemed in accordance with Section 8(c).

                                      -15-



<PAGE>

                 (b) MECHANICS OF COMPANY CONVERSION. (i) If the Company
delivers a Company Installment Notice and confirms, or is deemed to have
confirmed, in whole or in part, a Company Conversion in accordance with Section
8(a), then on the Trading Day prior to the Installment Date the Company shall,
or shall direct the Transfer Agent to, deliver to the Holder's account with DTC,
or issue to the H