Series B Subordinated Secured Convertible Promissory Note due December 4, 2009

THIS NOTE AND THE SHARES OF COMMON STOCK   ISSUABLE UPON   CONVERSION   HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED   OF IN THE ABSENCE OF SUCH   REGISTRATION   OR RECEIPT BY THE MAKER OF AN
OPINION OF COUNSEL IN THE FORM,   SUBSTANCE AND SCOPE REASONABLY   SATISFACTORY TO
THE MAKER THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
HEREOF MAY BE SOLD,   TRANSFERRED,   OR OTHERWISE   DISPOSED OF, UNDER AN EXEMPTION
FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.


                              REMOTE DYNAMICS, INC.

            Series B Subordinated Secured Convertible Promissory Note
                               due December 4, 2009

No. CN-A-06-__                                                        $660,000.00
Dated: December 4, 2006


         For value received,   Remote Dynamics, Inc., a Delaware corporation (the
"Maker"),   hereby   promises to pay to the order of Bounce Mobile   Systems,   Inc.
(together   with its   successors,   representatives,   and permitted   assigns,   the
"Holder"),   in accordance   with the terms   hereinafter   provided,   the principal
amount of Six Hundred, Sixty Thousand Dollars   ($660,000.00).   Concurrently with
the issuance of this Note, the Maker is issuing   separate   series B subordinated
secured convertible   promissory notes (the "Other Notes") to separate purchasers
pursuant   to a Note and Warrant   Purchase   Agreement,   dated as of November   30,
2006,   among   the   Maker   and   the   Purchasers   listed   therein   (the   "Purchase
Agreement").

         All   payments   under or   pursuant   to this Note shall be made in United
States   Dollars in immediately   available   funds to the Holder at the address of
the   Holder   first set forth   above or at such   other   place as the   Holder   may
designate from time to time in writing to the Maker or by wire transfer of funds
to the Holder's   account,   instructions for which are attached hereto as Exhibit
A. The   outstanding   principal   balance of this Note shall be due and payable on
December   4, 2009 (the   "Maturity   Date") or at such   earlier   time as   provided
herein.


                                    ARTICLE I

                  Section   1.1   Share   Exchange   Agreement.   This   Note has been
executed and   delivered   pursuant to the Share   Exchange   Agreement   dated as of
November 30, 2006 (the "Share Exchange   Agreement") by and between the Maker and
Bounce Mobile Systems,   Inc.   Capitalized   terms used and not otherwise   defined
herein shall have the   meanings   set forth for such terms in the Share   Exchange
Agreement.


<PAGE>


                  Section 1.2        Payment of Principal.

                  (a) Commencing on August 1, 2007, and continuing thereafter on
the   first   business   day of   each   three-month   period   or on such   other   date
specified by the Holder as provided in the penultimate   sentence of this Section
1.2(a) (a "Principal Payment Date"), the Maker shall pay an amount to the Holder
equal to one-ninth   (1/9th) of the original   principal   amount of this Note (the
"Principal Installment Amount");   provided, however, if on any Principal Payment
Date, the outstanding   principal   amount of this Note is less than the Principal
Installment   Amount,   then the Maker shall pay to the Holder such lesser amount.
The Maker may pay such Principal Installment Amount in cash or registered shares
of the Maker's common stock, par value $.01 per share (the "Common   Stock").   If
the Maker   elects to pay the   Principal   Installment   Amount in cash such amount
shall be wired in   immediately   available   funds on the Principal   Payment Date;
provided,   however,   that if the Holder has delivered a Conversion Notice to the
Maker or delivers a Conversion   Notice prior to the Principal   Payment Date, the
Holder shall indicate in such Conversion   Notice whether the principal amount of
this Note to be so   converted   shall be   applied   against   the   final   Principal
Installment Amount or some other Principal   Installment   Amount. The Maker shall
provide   irrevocable   written notice to the Holder of the form of payment of the
Principal   Installment Amount at least ten (10) days prior to the first business
day of each quarter for which a Principal   Installment   Amount is required to be
made by the   Maker.   Notwithstanding   the   terms of this   Section   1.2(a) to the
contrary, if the Maker provides notice to the Holder pursuant to the immediately
preceding sentence that the Maker elects to pay the Principal Installment Amount
in registered shares of Common Stock, the Holder shall respond to such notice in
writing (the "Holder   Notice") at least three (3) Trading Days prior to the date
in which the   Holder   elects to   receive   its   Principal   Installment   Amount in
registered   shares of Common   Stock,   as   specified   by the Holder in the Holder
Notice.   In addition,   the Holder may elect to defer any   Principal   Installment
Amount to a later Principal Payment Date.

                  (b) If the   Maker   elects   to pay   the   Principal   Installment
Amount in registered   shares of Common Stock, the number of registered shares of
Common   Stock to be issued to the Holder shall be an amount equal to the greater
of (i) $0.02,   subject to adjustment as provided in Section 3.6 hereof, and (ii)
an amount equal to the Principal   Installment   Amount   divided by ninety percent
(90%) of the average of the VWAP (as defined in Section   1.2(c)   hereof) for the
ten   (10)   Trading   Days   immediately   preceding   the   Principal   Payment   Date;
provided,   however,   that if the Holder has delivered a Conversion Notice to the
Maker or delivers a Conversion   Notice prior to the Principal   Payment Date, the
Holder shall indicate in such Conversion   Notice whether the principal amount of
this Note to be so   converted   shall be   applied   against   the   final   Principal
Installment Amount or some other Principal   Installment Amount.   Notwithstanding
the   foregoing   to the   contrary,   the   Maker   may   elect   to pay the   Principal
Installment Amount in registered shares of Common Stock on any Principal Payment
Date only if (A) the   registration   statement   providing   for the   resale of the
shares of Common Stock issuable upon conversion of this Note (the   "Registration
Statement") is effective and has been effective,   without lapse or suspension of
any kind, for a period of twenty (20) consecutive   calendar days, (B) trading in
the Common Stock shall not have been   suspended by the   Securities   and Exchange
Commission or the OTC Bulletin   Board (or other   exchange or market on which the
Common Stock is trading),


                                      -2-
<PAGE>


                  (C) the   Maker is in   material   compliance   with the terms and
conditions   of this Note and the   other   Transaction   Documents   and no Event of
Default exists and is continuing, and (D) the issuance of shares of Common Stock
on the   Principal   Payment Date does not violate the   provisions   of Section 3.4
hereof.

                  (c) The term "VWAP" means,   for any date, (i) the daily volume
weighted   average   price of the Common   Stock for such date on the OTC   Bulletin
Board as reported by Bloomberg   Financial L.P. (based on a Trading Day from 9:30
a.m.   Eastern Time to 4:02 p.m.   Eastern Time);   (ii) if the Common Stock is not
then   listed or quoted on the OTC   Bulletin   Board and if prices   for the Common
Stock are then reported in the "Pink Sheets"   published by the Pink Sheets,   LLC
(or a similar   organization   or agency   succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported; or
(iii) in all other   cases,   the fair market   value of a share of Common Stock as
determined by an independent   appraiser selected in good faith by the Holder and
reasonably acceptable to the Maker.

                  Section 1.3 Security   Agreement.   The obligations of the Maker
hereunder are secured by a continuing security interest in certain assets of the
Maker pursuant to the terms of a security agreement dated as of December 4, 2006
by and between the Maker, on the one hand, and the Holder, on the other hand.

                  Section 1.4   Subordination.   All   payments due under this Note
shall be subordinated and made junior, in all respects to the payment in full of
all   principal,   all interest   accrued   thereon and all other amounts due on any
indebtedness   outstanding   under that   certain   Purchase   Agreement   dated as of
February   23,   2006 among the Maker and the   purchasers   named   therein   and the
Security Agreement dated as of February 23, 2006 among the Maker and the secured
parties named therein.

                  Section 1.5 Payment on Non-Business Days. Whenever any payment
to be made shall be due on a Saturday, Sunday or a public holiday under the laws
of the   State   of New   York,   such   payment   may be due on the   next   succeeding
business day.

                  Section 1.6 Transfer.   This Note may be   transferred   or sold,
subject to the provisions of Section 4.8 of this Note, or pledged,   hypothecated
or otherwise granted as security by the Holder.

                  Section   1.7   Replacement.   Upon   receipt of a duly   executed,
notarized and unsecured   written   statement   from the Holder with respect to the
loss,   theft or   destruction   of this   Note (or any   replacement   hereof)   and a
standard indemnity, or, in the case of a mutilation of this Note, upon surrender
and   cancellation   of such Note, the Maker shall issue a new Note, of like tenor
and amount, in lieu of such lost, stolen, destroyed or mutilated Note.


                                      -3-
<PAGE>

                                   ARTICLE II

                           EVENTS OF DEFAULT; REMEDIES

                  Section 2.1 Events of Default.   The   occurrence   of any of the
following events shall be an "Event of Default" under this Note:

                  (a) the Maker   shall   fail to make the   Principal   Installment
Amount on a Principal   Payment   Date and such   default is not fully cured within
one (1) business day after the occurrence thereof; or

                  (b) the failure of the   Registration   Statement to be declared
effective   by the   Securities   and Exchange   Commission   on or prior to the date
which is one hundred eighty (180) days after the date of the initial issuance of
this Note (the "Issuance Date"); or

                  (c) the suspension from listing, without subsequent listing on
any one of, or the   failure of the Common   Stock to be listed on at least one of
the OTC Bulletin Board,   the American Stock Exchange,   the Nasdaq Global Market,
the Nasdaq Capital Market or The New York Stock   Exchange,   Inc. for a period of
five (5) consecutive Trading Days; or

                  (d) the   Maker's   notice to the   Holder,   including   by way of
public announcement,   at any time, of its inability to comply (including for any
of the reasons   described   in Section   3.8(a)   hereof) or its   intention   not to
comply with proper   requests for   conversion   of this Note into shares of Common
Stock; or

                  (e) the Maker   shall fail to (i) timely   deliver the shares of
Common Stock upon conversion of the Note, (ii) file the   Registration   Statement
in accordance with the terms of the Registration   Rights Agreement or (iii) make
the payment of any fees and/or   liquidated   damages   under this Note,   the Share
Exchange   Agreement or the Registration   Rights Agreement,   which failure in the
case of items (i) and (iii) of this Section   2.1(e) is not remedied   within five
(5) business days after the incurrence thereof; or

                   (f)   while   the   Registration   Statement   is   required   to   be
maintained effective pursuant to the terms of the Registration Rights Agreement,
the    effectiveness   of   the   Registration    Statement   lapses   for   any   reason
(including,   without limitation, the issuance of a stop order) or is unavailable
to the   Holder   for   sale   of the   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   Trading   Days,   provided that the Maker has not exercised its
rights   pursuant to Section 3(n) of the   Registration   Rights   Agreement   (which
exercise is not an Event of Default hereunder); or

                  (g) default shall be made in the   performance or observance of
(i) any material covenant,   condition or agreement contained in this Note (other
than as set forth in clause   (f) of this   Section   2.1) and such   default is not
fully cured within five (5) business days after the Maker   receives   notice from
the Holder of the occurrence thereof or (ii) any material covenant, condition or
agreement   contained   in the Share   Exchange   Agreement,   the Other   Notes,   the
Registration


                                       -4-
<PAGE>

Rights Agreement or any other   Transaction   Document which is not covered by any
other   provisions of this Section 2.1 and such default is not fully cured within
five (5) business   days after the Maker   receives   notice from the Holder of the
occurrence thereof; or

                  (h) any material   representation or warranty made by the Maker
herein or in the Share Exchange   Agreement,   the Registration Rights Agreement ,
the Other Notes or any other Transaction Document shall prove to have been false
or incorrect or breached in a material respect on the date as of which made; or

                  (i) the Maker   shall (A)   default in any payment of any amount
or amounts of   principal   of or   interest   on any   Indebtedness   (other than the
Indebtedness   hereunder) the aggregate principal amount of which Indebtedness is
in excess of $100,000 or (B) default in the   observance   or   performance   of any
other agreement or condition   relating to any Indebtedness in excess of $100,000
or contained in any   instrument   or agreement   evidencing,   securing or relating
thereto,   or any other event shall occur or condition exist, the effect of which
default   or other   event or   condition   is to cause,   or to permit the holder or
holders or beneficiary or beneficiaries   of such   Indebtedness to cause with the
giving of notice   if   required,   such   Indebtedness   to become   due prior to its
stated maturity; or

                  (j)   the   Maker    shall   (i)   apply   for   or   consent   to   the
appointment of, or the taking of possession by, a receiver,   custodian,   trustee
or   liquidator   of itself or of all or a   substantial   part of its   property   or
assets,   (ii) make a general assignment for the benefit of its creditors,   (iii)
commence a voluntary   case under the United   States   Bankruptcy   Code (as now or
hereafter in effect) or under the comparable laws of any   jurisdiction   (foreign
or domestic),   (iv) file a petition seeking to take advantage of any bankruptcy,
insolvency,   moratorium,   reorganization   or other   similar   law   affecting   the
enforcement   of creditors'   rights   generally   which is not dismissed   within 30
days,   (v)   acquiesce   in   writing   to   any   petition   filed   against   it   in an
involuntary   case under United   States   Bankruptcy   Code (as now or hereafter in
effect) or under the comparable laws of any   jurisdiction   (foreign or domestic)
which is not   dismissed   within 60 days,   (vi) issue a notice of   bankruptcy   or
winding down of its operations or issue a press release regarding same, or (vii)
take   any   action   under   the laws of any   jurisdiction   (foreign   or   domestic)
analogous to any of the foregoing; or

                  (k) a proceeding   or case shall be commenced in respect of the
Maker,    without   its   application   or   consent,    in   any   court   of   competent
jurisdiction,    seeking   (i)   the    liquidation,    reorganization,    moratorium,
dissolution,   winding up, or composition or readjustment of its debts,   (ii) the
appointment of a trustee, receiver,   custodian,   liquidator or the like of it or
of all or any substantial   part of its assets in connection with the liquidation
or   dissolution   of the Maker or (iii) similar relief in respect of it under any
law providing for the relief of debtors,   and such   proceeding or case described
in clause (i),   (ii) or (iii) shall   continue   undismissed,   or unstayed   and in
effect,   for a period of thirty   (30)   days or any   order   for   relief   shall be
entered in an involuntary   case under United States   Bankruptcy   Code (as now or
hereafter in effect) or under the comparable laws of any   jurisdiction   (foreign
or   domestic)   against   the Maker or action   under the laws of any   jurisdiction
(foreign or   domestic)   analogous   to any of the   foregoing   shall be taken with
respect to the Maker and shall continue   undismissed,   or unstayed and in effect
for a period of thirty (30) days; or


                                      -5-
<PAGE>

                  (l) the failure of the Maker to instruct its transfer agent to
remove any legends   from shares of Common   Stock   eligible to be sold under Rule
144 of the Securities Act and issue such   unlegended   certificates to the Holder
within three (3) business days of the Holder's request so long as the Holder has
complied with Section 2.02 of the Share Exchange Agreement; or

                  (m) the   failure   of the Maker to pay any   amounts   due to the
Holder   herein or in the Share   Exchange   Agreement or the   Registration   Rights
Agreement within three (3) business days of the date such payments are due; or

                  (n) the   occurrence   of an Event of   Default   under   the Other
Notes or the OID Note.

                  Section 2.2 Remedies Upon An Event of Default.   If an Event of
Default shall have occurred and shall be continuing, the Holder of this Note may
at any time at its option,   (a) pursuant to Section 3.7(a)   hereof,   declare the
entire unpaid principal balance of this Note due and payable, and thereupon, the
same shall be accelerated and so due and payable,   without presentment,   demand,
protest,   or   notice,   all of which are   hereby   expressly   unconditionally   and
irrevocably waived by the Maker; provided,   however, that upon the occurrence of
an Event of Default   described in (i)   Sections 2.1 (j) or (k), the   outstanding
principal   balance   hereunder   shall be   automatically   due and payable and (ii)
Sections 2.1 (b)-(i) and (l)-(n),   the Holder may demand the   prepayment of this
Note   pursuant to Section 3.7 hereof,   (b) demand that the   principal   amount of
this Note then   outstanding   shall be converted into shares of Common Stock at a
Conversion   Price per share   calculated   pursuant to Sections 3.1 and 3.4 hereof
assuming that the date that the Event of Default occurs is the   Conversion   Date
(as defined in Section 3.1 hereof), or (c) exercise or otherwise enforce any one
or more of the Holder's rights, powers, privileges, remedies and interests under
this Note, the Share Exchange   Agreement,   the Registration   Rights Agreement or
applicable   law. Upon the occurrence of an Event of Default,   the Maker will pay
interest to the Holder,   payable on demand, on the outstanding principal balance
of the Note   from   the date of the   Event of the   Default   until   such   Event of
Default is cured at the rate equal to the   lesser of ten   percent   (10%) and the
maximum   applicable   legal rate per annum. No course of delay on the part of the
Holder shall operate as a waiver thereof or otherwise prejudice the right of the
Holder.   No remedy   conferred   hereby   shall be   exclusive   of any other   remedy
referred to herein or now or hereafter   available at law, in equity,   by statute
or otherwise.

                                   ARTICLE III

                      CONVERSION; ANTIDILUTION; PREPAYMENT

                   Section 3.1       Conversion Option.

                  (a) At any time on or   after   the date   that is   fifteen   (15)
months   following the Issuance Date, this Note shall be convertible (in whole or
in part),   at the   option of the Holder   (the   "Conversion   Option"),   into such
number of fully paid and non-assessable   shares of Common Stock (the "Conversion
Rate")   as is   determined   by   dividing   (x)   that   portion   of the   outstanding
principal   balance   under   this Note as of such date that the   Holder   elects to
convert by (y) the   Conversion   Price (as defined in Section 3.2(a) hereof) then
in effect on the date on which the


                                      -6-
<PAGE>

Holder faxes a notice of conversion (the "Conversion Notice"), duly executed, to
the Maker (facsimile number (972) 301-2263, Attn.: Chief Executive Officer) (the
"Voluntary Conversion Date"), provided, however, that the Conversion Price shall
be subject to   adjustment   as described   in Section 3.6 below.   The Holder shall
deliver this Note to the Maker at the address   designated in the Share   Exchange
Agreement   at such   time   that this Note is fully   converted.   With   respect   to
partial   conversions of this Note,   the Maker shall keep written   records of the
amount of this Note converted as of each Conversion Date.

                  (b) On the Mandatory   Conversion Date (as defined below),   the
Maker may cause the   principal   amount of this Note to convert   into a number of
fully paid and nonassessable shares of Common Stock equal to the quotient of (i)
the principal amount of this Note   outstanding on the Mandatory   Conversion Date
divided by (ii) the Conversion Price in effect on the Mandatory   Conversion Date
by   providing   five (5) business   days prior   written   notice of such   Mandatory
Conversion Date. As used herein,   a "Mandatory   Conversion Date" shall be a date
following the effective date of the Registration   Statement in which the Closing
Bid Price (as defined in Section 3.1(c) below) exceeds two hundred fifty percent
(250%) of the Conversion Price for a period of twelve (12)   consecutive   Trading
Days   and the   average   daily   trading   volume   for   each of   such   twelve   (12)
consecutive Trading Days exceeds 750,000 shares of Common Stock; provided,   that
(A) the   Registration   Statement is effective   and has been   effective,   without
lapse or   suspension   of any   kind,   for a period   of   thirty   (30)   consecutive
calendar days immediately   preceding the Mandatory   Conversion Date, (B) trading
in the Common Stock shall not have been suspended by the Securities and Exchange
Commission or the OTC Bulletin   Board (or other   exchange or market on which the
Common Stock is trading), (C) the Maker is in material compliance with the terms
and conditions of this Note and the other Transaction   Documents and no Event of
Default exists and is continuing,   (D) the issuance of shares of Common Stock on
the Mandatory   Conversion   Date pursuant to such mandatory   conversion   does not
violate   the   provisions   of   Section   3.4   hereof,   and (E) the Maker is not in
possession of any material non-public information. Notwithstanding the foregoing
to the contrary,   the Mandatory Conversion Date shall be extended for as long as
a Triggering Event (as defined in Section 3.7(f) hereof) shall have occurred and
be continuing.   The Mandatory   Conversion Date and the Voluntary Conversion Date
collectively are referred to in this Note as the "Conversion Date."

                  (c) The term "Closing Bid Price" shall mean, on any particular
date (i) the last   trading   price per share of the Common   Stock on such date on
the OTC Bulletin   Board or another   registered   national stock exchange on which
the Common Stock is then listed, or if there is no such price on such date, then
the last trading price on such exchange or quotation   system on the date nearest
preceding   such date,   or (ii) if the Common Stock is not listed then on the OTC
Bulletin Board or any registered national stock exchange, the last trading price
for a share of Common Stock in the   over-the-counter   market, as reported by the
OTC Bulletin Board or in the National   Quotation Bureau   Incorporated or similar
organization or agency   succeeding to its functions of reporting   prices) at the
close   of   business   on such   date,   or (iii)   if the   Common   Stock is not then
reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated
(or similar   organization   or agency   succeeding   to its   functions of reporting
prices), then the average of the "Pink Sheet" quotes for the relevant conversion
period,   as determined in good faith by the Holder,   or (iv) if the Common Stock
is not then publicly traded the fair market value


                                      -7-
<PAGE>


of a share of Common Stock as determined by the Holder and reasonably acceptable
to the Maker.

                  Section 3.2        Conversion Price.

                  (a) The term "Conversion Price" shall mean $0.016,   subject to
adjustment under Sections 3.2(b) and 3.6 hereof.

                   (b) In the event   that the Maker   does not (i)   achieve   gross
revenues equal to at least   $1,750,000 as determined in accordance with GAAP for
the calendar   quarter ended June 30, 2007, or (ii) increase its subscriber units
by a minimum of 5,000 net additional REDIview subscriber units by June 30, 2007,
or (iii) achieve   positive cash flow based on the Maker's EBITDA   (determined in
accordance with GAAP) by June 30, 2007, or (iv) execute binding agreements for a
minimum of two (2) new accounts   (with each such   account   ordering in excess of
1,000 REDIview units) by June 30, 2007 or a minimum of one (1) new account (with
such account   ordering in excess of 2,500 REDIview units) by June 30, 2007 (each
of the   foregoing   events   described   in   subclauses   (i) through   (iv) shall be
defined   herein as a   "Milestone"),   then in each such case in which the Company
fails to achieve any Milestone, the Conversion Price shall be reduced by fifteen
percent   (15%),   up to a maximum   reduction of sixty   percent (60%) in the event
none of the Milestones is achieved.

                  (c) Notwithstanding   any of the foregoing to the contrary,   if
during any period (a "Black-out Period"), a Holder is unable to trade any Common
Stock issued or issuable   upon   conversion of this Note   immediately   due to the
postponement   of   filing   or   delay   or   suspension   of    effectiveness   of   the
Registration   Statement or because the Maker has otherwise   informed such Holder
that an existing   prospectus cannot be used at that time in the sale or transfer
of such Common Stock (provided that such postponement, delay, suspension or fact
that the   prospectus   cannot be used is not due to   factors   solely   within   the
control   of the   Holder of this Note or due to the Maker   exercising   its rights
under Section 3(n) of the Registration Rights Agreement), such Holder shall have
the option but not the obligation on any Conversion Date within ten (10) Trading
Days   following the   expiration of the Black-out   Period of using the Conversion
Price   applicable on such   Conversion   Date or any Conversion   Price selected by
such Holder that would have been applicable had such Conversion Date been at any
earlier   time during the   Black-out   Period or within the ten (10)   Trading Days
thereafter.   In no event   shall   the   Black-out   Period   have any   effect on the
Maturity Date of this Note.

                  Section 3.3        Mechanics of Conversion.

                  (a) Not later than three (3) Trading Days after any Conversion
Date, the Maker or its designated transfer agent, as applicable, shall issue and
deliver to the Depository   Trust Company   ("DTC") account on the Holder's behalf
via the Deposit   Withdrawal Agent Commission System ("DWAC") as specified in the
Conversion Notice, 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.   In the
alternative,   not later than three (3) Trading Days after any   Conversion   Date,
the   Maker   shall   deliver   to   the   applicable   Holder   by   express   courier   a
certificate   or   certificates   which   shall be free of   restrictive   legends and
trading restrictions (other than those required by


                                      -8-
<PAGE>

Section 2.02 of the Share Exchange Agreement)   representing the number of shares
of Common Stock being   acquired upon the   conversion of this Note (the "Delivery
Date"). Notwithstanding the foregoing to the contrary, the Maker or its transfer
agent shall only be   obligated to issue and deliver the shares to the DTC on the
Holder's behalf via DWAC (or certificates   free of restrictive   legends) if such
conversion   is in   connection   with a sale and the Holder has complied   with the
applicable   prospectus   delivery   requirements   (as   evidenced by   documentation
furnished to and reasonably   satisfactory   to the Maker).   If in the case of any
Conversion   Notice such   certificate or certificates   are not delivered to or as
directed by the   applicable   Holder by the   Delivery   Date,   the Holder shall be
entitled by written   notice to the Maker at any time on or before its receipt of
such   certificate or certificates   thereafter,   to rescind such   conversion,   in
which   event   the   Maker   shall   immediately    return   this   Note   tendered   for
conversion,   whereupon   the Maker and the Holder shall each be restored to their
respective   positions   immediately   prior   to the   delivery   of such   notice   of
revocation,   except that any amounts   described in Sections 3.3(b) and (c) shall
be payable through the date notice of rescission is given to the Maker.

                  (b) The Maker   understands that a delay in the delivery of the
shares of Common Stock upon   conversion   of this Note beyond the   Delivery   Date
could   result in economic   loss to the Holder.   If the Maker fails to deliver to
the Holder such shares via DWAC or a   certificate   or   certificates   pursuant to
this Section hereunder by the Delivery Date, the Maker shall pay to such Holder,
in cash,   an amount per Trading   Day for each   Trading Day until such shares are
delivered via DWAC or certificates are delivered, together with interest on such
amount at a rate of 10% per annum,   accruing   until such   amount and any accrued
interest   thereon   is paid in full,   equal to the   greater   of (A) (i) 1% of the
aggregate   principal amount of the Notes requested to be converted for the first
five (5)   Trading   Days   after the   Delivery   Date and (ii) 2% of the   aggregate
principal   amount of the Notes   requested to be   converted   for each Trading Day
thereafter   and (B)   $2,000 per day (which   amount   shall be paid as   liquidated
damages and not as a penalty).   Nothing   herein shall limit a Holder's   right to
pursue   actual   damages   for   the   Maker's    failure   to   deliver    certificates
representing   shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies   available to
it at law or in equity   (including,   without   limitation,   a decree of   specific
performance and/or injunctive relief).   Notwithstanding anything to the contrary
contained herein,   the Holder shall be entitled to withdraw a Conversion Notice,
and upon such withdrawal the Maker shall only be obligated to pay the liquidated
damages   accrued in   accordance   with this Section   3.3(b)   through the date the
Conversion Notice is withdrawn.

                  (c) In addition to any other   rights   available to the Holder,
if the Maker   fails to cause its   transfer   agent to   transmit   to the   Holder a
certificate   or   certificates   representing   the shares of Common Stock issuable
upon   conversion of this Note on or before the Delivery   Date, and if after such
date the   Holder is   required   by its   broker   to   purchase   (in an open   market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the shares of Common Stock   issuable   upon   conversion   of
this   Note   which   the   Holder   anticipated   receiving   upon   such   exercise   (a
"Buy-In"),   then the Maker   shall (1) pay in cash to the   Holder   the   amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of shares of Common Stock issuable upon conversion
of


                                      -9-
<PAGE>


this Note that the Maker was   required   to deliver   to the Holder in   connection
with the   conversion at issue times (B) the price at which the sell order giving
rise to such   purchase   obligation   was   executed,   and (2) at the option of the
Holder, either reinstate the portion of the Note and equivalent number of shares
of Common   Stock for which   such   conversion   was not   honored or deliver to the
Holder the number of shares of Common   Stock that would have been issued had the
Maker timely   complied with its conversion and delivery   obligations   hereunder.
For example,   if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted   conversion   of shares
of Common   Stock with an   aggregate   sale   price   giving   rise to such   purchase
obligation of $10,000,   under clause (1) of the immediately   preceding   sentence
the Maker shall be required to pay the Holder   $1,000.   The Holder shall provide
the Maker written notice indicating the amounts payable to the Holder in respect
of the   Buy-In,   together   with   applicable   confirmations   and   other   evidence
reasonably   requested by the Maker.   Nothing herein shall limit a Holder's right
to pursue any other   remedies   available   to it   hereunder,   at law or in equity
including,    without   limitation,    a   decree   of   specific   performance   and/or
injunctive   relief   with   respect   to the   Maker's   failure   to   timely   deliver
certificates representing shares of Common Stock upon conversion of this Note as
required pursuant to the terms hereof.

                  Section 3.4 Ownership Cap and Certain Conversion Restrictions.

                  (a)   Notwithstanding   anything   to the   contrary   set forth in
Section 3 of this Note,   at no time may the Holder   convert   all or a portion of
this Note if the number of shares of Common Stock to be issued   pursuant to such
conversion   would exceed,   when aggregated with all other shares of Common Stock
owned by the   Holder at such time   (including   pursuant   to the   Warrants),   the
number of shares of Common Stock which would   result in the Holder   beneficially
owning (as   determined in accordance   with Section 13(d) of the Exchange Act and
the rules   thereunder) more than 4.9% of all of the Common Stock   outstanding at
such time;   provided,   however,   that upon the Holder   providing   the Maker with
sixty-one   (61) days   notice   (pursuant   to Section   4.1   hereof)   (the   "Waiver
Notice") that the Holder would like to waive this Section   3.4(a) with regard to
any or all shares of Common Stock   issuable upon   conversion of this Note,   this
Section   3.4(a) will be of no force or effect with regard to all or a portion of
the Note referenced in the Waiver Notice.

                  (b)   Notwithstanding   anything   to the   contrary   set forth in
Section 3 of this Note,   at no time may the Holder   convert   all or a portion of
this Note if the number of shares of Common Stock to be issued   pursuant to such
conversion,   when   aggregated with all other shares of Common Stock owned by the
Holder   at such   time,   would   result   in the   Holder   beneficially   owning   (as
determined   in   accordance   with Section 13(d) of the Exchange Act and the rules
thereunder)   in   excess of 9.9% of the then   issued   and   outstanding   shares of
Common Stock   outstanding   at such time   (including   pursuant to the   Warrants);
provided, however, that upon the Holder providing the Maker with a Waiver Notice
that the Holder would like to waive   Section   3.4(b) of this Note with regard to
any or all shares of Common Stock   issuable upon   conversion of this Note,   this
Section 3.4(b) shall be of no force or effect with regard to all or a portion of
the Note referenced in the Waiver Notice.

                  Section 3.5        Intentionally Omitted.


                                      -10-
<PAGE>

                  Section 3.6        Adjustment of Conversion Price.

                  (a) The Conve