FORM OF SECOND AMENDED AND RESTATED ADDITIONAL SENIOR CONVERTIBLE NOTE

                                                                    Exhibit 99.3

     FORM OF SECOND AMENDED AND RESTATED ADDITIONAL SENIOR CONVERTIBLE NOTE

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE
SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE   (TOGETHER "THE SECURITIES") 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,   REASONABLY   SATISFACTORY TO BRAVO! BRANDS INC., 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
18(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.

                               BRAVO! BRANDS INC.

               SECOND AMENDED AND RESTATED SENIOR CONVERTIBLE NOTE

Issuance Date: July 27, 2006             Original Principal Amount: U.S. $_______



      FOR VALUE   RECEIVED,   Bravo!   Brands Inc., a Delaware   corporation   (f/k/a
Bravo! Foods International Corp. ) (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 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). This Second 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 Amended and Restated Senior   Convertible   Note,   dated as of July
26, 2006 (the "Existing Note"), issued pursuant to certain Amendment Agreements,
dated as of August 31,   2006,   by and between   each of the Buyers (as defined in
the Securities   Purchase Agreement) and the Company which Existing Note amended,
supplemented,   modified   and   completely   restated   and   superseded   the   Senior
Convertible   Note, dated as of July 26, 2006 (the "Original 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   Exchange
Agreements (as defined below), constitute a release, satisfaction or novation of
any of the   obligations   under the Existing Note, the Original Note or any other
Transaction   Document (as defined in the Securities Purchase Agreement,   defined
below) or a waiver of any Event of Default under the Existing Note, the Original
Note or the   Transaction   Documents.   This   Note is one of an   issue   of   Second
Amended and Restated Senior   Convertible   Notes issued pursuant to the Amendment
and Exchange Agreements dated as of December 29, 2006 by and between each of the
Buyers and the Company (the "Exchange   Agreements" and the date the transactions
contemplated by such Exchange   Agreements are consummated,   the "Exchange Date")
(collectively,    the   "Notes"   and   such   other   Amended   and   Restated    Senior
Convertible Notes issued thereunder,   the "Other Notes" and the holders of Other
Notes, the "Other Holders").   Certain   capitalized terms used herein are defined
in Section 28. For the avoidance of doubt,   the term "Issuance   Date" as used in
this Note shall mean July 26, 2006 and shall not be the Exchange Date.


<PAGE>

      Notwithstanding   anything   set   forth in this Note to the   contrary,   only
after the Company Escrow Release Date shall the Holder have any rights hereunder
to any   payments   of   Principal   amounts,   in excess of the funds in the   Escrow
Account,   including   without   limitation,   the right of   conversion as set forth
herein   and the   Company   shall   have no   obligation   to make   any   payments   of
Installment   Amounts   hereunder.   Without   limitation and solely for purposes of
clarification,   the foregoing   shall not effect the obligation of the Company to
pay Interest as of the Accrual   Date and the Company   shall make all payments of
Interest hereunder as and when due,   including,   to the extent required pursuant
to Section 2, prior to the Company Escrow Release Date.

      (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 on such   Principal   and
Interest.   The "Maturity   Date" shall be January 27, 2010, 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 and (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.   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 -
<PAGE>

       (2) INTEREST; INTEREST RATE. Interest on this Note shall commence accruing
on the earlier of (a) the 90th day after the   Issuance   Date and (b) the Company
Escrow Release Date (such date, the "Accrual 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 the first (1st) day of the Calendar   Quarter
succeeding   the Accrual Date   (regardless   of whether or not the Company   Escrow
Release Date has occurred).   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   with   respect to such
Principal and Interest shall be paid on the   Conversion   Date (as defined below)
to the record holder of this Note on the   applicable   Conversion   Date, in cash.
From and after the occurrence and during the continuance of an Event of Default,
the Interest Rate shall be increased to fourteen percent   (14.0%).   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), at
any time or times on or after the Company Escrow Release Date (as defined in the
Securities   Purchase   Agreement),   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
are payable   with   respect to the   issuance   and   delivery of Common   Stock upon
conversion of any Conversion Amount.

             (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.

                  (ii)   "Conversion   Price" means, as of any Conversion Date (as
defined below) or other date of determination,   $0.32,   subject to adjustment as
provided herein.

                                     - 3 -
<PAGE>

            (c) Mechanics of Conversion.

                  (i) Optional Conversion. To convert any Conversion Amount into
shares of Common Stock on any date (the date of such conversion, the "Conversion
Date"), the Holder shall (A) transmit by facsimile (or otherwise   deliver),   for
receipt on or prior to 5:00   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 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).   On or
before   the   first   (1st)   Business   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,
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 Agent Commission   system or (y) if the Transfer Agent is
not participating in the DTC Fast Automated   Securities Transfer Program,   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) pay to the Holder
in cash an amount   equal to the   accrued and unpaid   Interest on the   Conversion
Amount up to and   including   the   Conversion   Date.   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 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 18(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
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 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 (subject to conversion   limitations
as per Section   3(c)(iv),   Section 3(d) and any others   herein (the   "Conversion
Limitations"))   upon   such   holder's   conversion   of any   Conversion   Amount   (a
"Conversion Failure"),   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   Common   Stock   issuable   upon   such
conversion that the Holder anticipated   receiving from the Company (a "Buy-In"),
then the   Company   shall,   within   three (3)   Business   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 the 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.

                                     - 4 -
<PAGE>

                  (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 written   request   to assign   or sell all or part of any   Registered   Note by a
Holder,   together   with the Note to be   assigned,   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 18.   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 full   Conversion   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
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.

                  (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
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 23.

                                     - 5 -
<PAGE>

            (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   _______   (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 the most recent of (x) the
Company's   most recent Form 10-K,   Form 10-KSB,   Form 10-Q,   Form 10-QSB or Form
8-K, as the case may be, or (y) a more recent public announcement by the Company
or other more recent   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 one (1)
Business Day 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.

                                      - 6 -
<PAGE>

                  (ii)   Principal   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
that the Company (A) obtains the approval of its stockholders in accordance with
the   applicable   rules of the relevant   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 the   Purchasers   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));

                  (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, subject to the Conversion Limitations set forth in Section 3(d),
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 of the Company 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);

                                     - 7 -
<PAGE>

                  (iv)   after   the   Company   Escrow   Release   Date   at any   time
following the tenth (10th) consecutive Business Day that the Holder's Authorized
Share   Allocation   (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),   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) the   occurrence   of 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   $500,000,   other than with
respect to any Other Notes;

                  (vii)   the   Company   or   any   of   its   Material   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   Material   Subsidiaries   in an   involuntary   case,   (B)   appoints   a
Custodian of the Company or any of its Material   Subsidiaries   or (C) orders the
liquidation of the Company or any of its Material Subsidiaries;

                  (ix) a final   judgment or   judgments   for the payment of money
aggregating in excess of $500,000 are rendered against the Company or any of its
Subsidiaries   and any such judgment is, or such 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
$500,000   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 14 of this Note; or

                                     - 8 -
<PAGE>

                  (xii) 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 or any Other Note,   the Company   shall within one (1)
Business Day 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 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   together   with
accrued   and   unpaid   Interest   with   respect   to such   Conversion   Amount to be
redeemed   and accrued   and unpaid Late   Charges,   if any,   with   respect to such
Conversion   Amount and   Interest   and (B) the   Redemption   Premium   and (ii) the
product   of (A) the   Conversion   Rate with   respect   to such   Conversion   Amount
together with accrued and unpaid Interest with respect to such Conversion Amount
to be redeemed and accrued and unpaid Late Charges, if any, with respect to such
Conversion   Amount and Interest in effect at such time as the Holder delivers an
Event of Default   Redemption   Notice 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 12. 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   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,

                                     - 9 -
<PAGE>

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
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 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) the sum of (x) the product of the Change
of Control   Redemption   Premium and the Conversion Amount being redeemed and (y)
the amount of any accrued but unpaid   Interest on such   Conversion   Amount being
redeemed   and accrued   and unpaid Late   Charges,   if any,   with   respect to such
Conversion   Amount and Interest through the date of such redemption   payment and
(ii) the sum of (x) the   product of (A) the   Conversion   Amount   being   redeemed
multiplied by (B) the quotient   determined   by dividing (1) the   aggregate   cash
consideration   and the aggregate   cash value of any non-cash   consideration   per
share of   Common   Stock   to be paid to the   holders   of the   Common   Stock   upon
consummation   of   the   Change   of   Control   (any   such   non-cash    consideration
consisting   of   marketable   securities to be valued at the higher of the Closing

                                     - 10 -
<PAGE>

Sale Price of such   securities as of the Trading Day   immediately   prior to, the
Closing   Sale   Price as of the   Trading   Day   immediately   following   the public
announcement   of such   proposed   Change of Control and the Closing Sale Price of
the Common Stock immediately   prior to the public   announcement of such proposed
Change   of   Control)   by (2) the   Conversion   Price   plus (y) the   amount of any
accrued but unpaid Interest on such Conversion Amount being redeemed and accrued
and unpaid Late   Charges,   if any,   with respect to such   Conversion   Amount and
Interest   through the date of such redemption   payment,   (the "Change of Control
Redemption   Price").   Redemptions   required   by this   Section 5 shall be made in
accordance with the provisions of Section 12 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 (excluding, however, any grants, issuances or sales
of any Options,   Convertible   Securities or rights to purchase stock,   warrants,
securities or other property in connection with any Excluded   Security) 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.

            (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 all or substantially all of the 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.

                                     - 11 -
<PAGE>

      (7) RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

            (a) Adjustment of Conversion Price upon Issuance of Common Stock. If
and whenever during the Full Adjustment   Period, 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. If
and whenever after the Full Adjustment   Period,   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) in a Dilutive Issuance,   then immediately after such
Dilutive   Issuance,   the Conversion   Price then in effect shall be reduced to an
amount equal the product of (A) the Conversion Price in effect immediately prior
to such   Dilutive   Issuance and (B) the quotient   determined by dividing (1) the
sum of (I) the product   derived by multiplying   the   Conversion   Price in effect
immediately   prior to such Dilutive   Issuance and the number of shares of Common
Stock Deemed   Outstanding   immediately prior to such Dilutive Issuance plus (II)
the consideration,   if any, received by the Company upon such Dilutive Issuance,
by (2) the product   derived by multiplying   (I) the   Conversion   Price in effect
immediately   prior to such   Dilutive   Issuance   by (II) the   number of shares of
Common Stock Deemed Outstanding   immediately after such Dilutive   Issuance.   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   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.

                                     - 12 -
<PAGE>

                  (ii) Issuance of Convertible Securities. If the Company in any
            manner   issues or sells any   Convertible   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.

                  (iv) Calculation of Consideration Received. In case any Option
            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 Options by the
            parties thereto,   the Options 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.

                                     - 13 -
<PAGE>

                  (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, provided there has
been no Equity Conditions   Failure,   the Company shall pay to the Holder of this
Note the   Installment   Amount due on such date by   converting   such   Installment
Amount,   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   (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 the
Company   shall not be entitled to pay any portion of the   Installment   Amount in
shares of Common Stock pursuant to a Company Conversion and shall be required to
pay such   Installment   Amount in cash   pursuant to a Company   Redemption   if the
Weighted   Average Price of the Common Stock on any Trading Day during either the
Initial Company   Conversion   Measuring Period or the five (5) Trading Days prior
to the date the Company   delivers   the Company   Installment   Notice is less than
$0.40.   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 Installment Volume Limitation.   On or prior to
the date which is the twelfth (12th) 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 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 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,   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 a number of
shares of Common   Stock   equal to the   quotient of (A) such   Company   Conversion
Amount divided by (B) the Initial Company Conversion Price (the "Pre-Installment
Conversion Shares"). On the Trading Day immediately after the end of the Company
Conversion   Measuring Period (the "Installment   Settlement   Date"),   the Company
shall,   or shall direct the Transfer Agent to,   deliver to the Holder's   account
with DTC a number of   additional   shares of Common Stock,   if any,   equal to the
Installment   Balance Conversion Shares. If an Event of Default occurs during any
applicable Company Conversion Measuring Period and the Holder elects an Event of
Default   Redemption   in   accordance   with Section   4(b),   then,   at the Holder's
option,   either (1) the Holder,   upon receipt of the Event of Default Redemption
Price (which   Redemption   Price includes   redemption o