1.2            Minimum Quarterly Principal Payments . Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the “Principal Amount”) shall begin on September 1, 2006 and shall recur on the first business day of each succeeding quarter thereafter until the Maturity Date (each, an “Amortization Date”).  Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make quarterly payments to the Holder on each Repayment Date, each in the amount of                      together with any accrued and unpaid interest to date on such portion of the Principal Amount plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (collectively, the “Quarterly Amount”). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date.

ARTICLE 2

CONVERSION REPAYMENT

2.1            Payment of Quarterly Amount .

(a)            Payment of Quarterly Amount in Cash or Common Stock .  Each quarter by the fifth (5th) business day prior to each Repayment Date (the “Notice Date”), the Holder shall deliver to Borrower a written notice in the form of Exhibit B attached hereto (each, an “Allocation Notice”) stating whether, subject to Section 2.1(b), the Quarterly Amount payable on the next Repayment Date shall be (i) paid in cash, (ii) paid in Common Stock, (iii) applied to the exercise price of any warrants or stock options held by the Purchaser that the Purchaser has elected to exercise (provided that if the Purchaser has elected to exercise warrants and/or stock options having an aggregate exercise price that exceeds the Quarterly Amount due on such Repayment Date, the Principal Amount shall be reduced by an amount equal to such excess amount, with such reduction to be applied first to the final payment of Principal Amount due prior to the Maturity Date and then, if applicable, to each preceding payment of Principal Amount in reverse chronological order), or (iv)  paid and/or applied in a combination of some or all of the foregoing alternatives.  Subject to Section 2.1(b), if an Allocation Notice is not delivered by the Holder on or before the applicable Notice Date for such Repayment Date, then the Borrower shall pay the Quarterly Amount due on such Repayment Date in cash.  The number of such shares to be issued by the Borrower to the Holder on such Repayment Date, shall be the number determined by dividing (x) the portion of the Quarterly Amount converted into shares of Common Stock, by (y) the then applicable Fixed Conversion Price.  For purposes hereof, the initial “Fixed Conversion Price” means $1.35.

(b)            Quarterly Amount Conversion Guidelines .  Subject to Sections 2.2 and 3.2 hereof, the Holder shall convert into shares of Common Stock all of the Quarterly Amount due on each Repayment Date if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date shall be greater than $1.70.

2.2            No Effective Registration .  Notwithstanding anything to the contrary herein, none of the Borrower’s obligations to the Holder may be converted into Common Stock nor may the Borrower exercise its rights under Section 2.3 in each case without the consent of the Holder unless (i) either (x) an effective current Registration Statement (as defined in the Registration

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Rights Agreement) covering the shares of Common Stock to be issued in connection with satisfaction of such obligations exists or (y) an exemption from registration of the Common Stock is available pursuant to Rule 144(k) of the Securities Act and (ii) no Event of Default hereunder exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder’s option.

2.3            Optional Redemption in Cash .  The Borrower will have the option of prepaying this Note (“Optional Redemption”) by paying to the Holder a sum of money equal to one hundred twenty percent (120%) of the principal amount of this Note together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement, or any Related Agreement (the “Redemption Amount”) outstanding on the Redemption Payment Date (defined below); provided , however, that in no event may the Borrower pay the Holder any amount in respect of the exercise of any such Optional Redemption (of all or any portion of this Note) unless the Borrower shall have first until the Discharge of the Senior Claims, (i) prepaid the Laurus Note by an amount equal to the aggregate amount to be paid to the Holder and all other Purchasers in connection with such Optional Redemption (the “Prepayment Amount”) as provided in the Laurus Note and (ii) deposited additional cash collateral in an amount equal to the Prepayment Amount with Aether as provided in the Aether Note.  The Borrower shall deliver to the Holder a written notice of redemption (the “Notice of Redemption”) specifying the date for such Optional Redemption (the “Redemption Payment Date”) which date shall be ten (10) business days after the date of the Notice of Redemption (the “Redemption Period”). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period.  The Redemption Amount shall be determined as if such Holder’s conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder.  In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then (i) such Redemption Notice will be null and void and (ii) the Borrower shall no longer have the Optional Redemption rights set forth herein.  Each of the terms “Aether”, “Aether Note”, “Discharge of Senior Claims”, “Laurus Note” has the meaning given to such term in the Subordination Agreement.

ARTICLE 3

CONVERSION RIGHTS

3.1            Holder’s Conversion Rights .  The Holder shall have the right, but not the obligation, to convert all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III.  The Holder may exercise such right by delivery to the Borrower of a written notice of conversion by facsimile or otherwise not less than one (1) business day prior to the date upon which such conversion shall occur.

3.2            Conversion Limitation .  Notwithstanding anything contained herein to the contrary, in no event shall the Holder be entitled to convert any portion of this Note, or shall the Company have the obligation to convert such Note (and the Company shall not have the

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obligation to pay interest hereon in shares of Common Stock) to the extent that, after such conversion or issuance of stock in payment of interest, the Holder would be deemed to be the beneficial owner of more than 4.99% of the outstanding shares of Common Stock.   For purposes of this section , beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.  Notwithstanding the foregoing, the restriction described in this paragraph may be revoked upon 61 days prior notice from the Holder to the Company.

3.3            Mechanics of Holder’s Conversion .

(a)            In the event that the Holder elects to convert all or a portion of the outstanding balance of this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion (“Notice of Conversion”) by facsimile or otherwise to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted.  Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A.  In addition to the provisions set forth herein with respect to any such conversion, the parties shall comply with the requirements of Section 9 of the Purchase Agreement.

(b)            Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel, if required under applicable securities laws, within one (1) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder’s designated broker with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the “Delivery Date”).  In the case of the exercise of the co