-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 PWQUA9NUXvVDj4uT9mLSSx92aJgvDxhIBzQf15OjBOkuJZBGjQfxd5Y55cj90l0n
 yLId0YvWyQQwuYz2G/qVWg==

<SEC-DOCUMENT>0001019687-05-002995.txt : 20051107
<SEC-HEADER>0001019687-05-002995.hdr.sgml : 20051107
<ACCEPTANCE-DATETIME>20051107143432
ACCESSION NUMBER:		0001019687-05-002995
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20051102
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20051107
DATE AS OF CHANGE:		20051107

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AETHLON MEDICAL INC
		CENTRAL INDEX KEY:			0000882291
		STANDARD INDUSTRIAL CLASSIFICATION:	LABORATORY ANALYTICAL INSTRUMENTS [3826]
		IRS NUMBER:				133632859
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21846
		FILM NUMBER:		051182983

	BUSINESS ADDRESS:	
		STREET 1:		7825 FAY AVENUE SUITE 200
		CITY:			LAJOLLA
		STATE:			CA
		ZIP:			92037
		BUSINESS PHONE:		2129120930

	MAIL ADDRESS:	
		STREET 1:		7825 FAY AVENUE SUITE 200
		CITY:			LAJOLLA
		STATE:			CA
		ZIP:			92037

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BISHOP EQUITIES INC
		DATE OF NAME CHANGE:	19930602
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>aethlon_8k-110405.txt
<TEXT>

<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 2, 2005

                              AETHLON MEDICAL, INC.
               (Exact name of Registrant as specified in charter)


Nevada                                000-21846            13-3632859
(State or other jurisdiction   (Commission File Number)   (IRS Employer
of incorporation)                                         Identification Number)

                       3030 Bunker Hill Street, Suite 4000
                           San Diego, California 92109
                    (Address of principal executive offices)


Registrant's telephone number, including area code:  (858) 459-7800

                                 NOT APPLICABLE
          (Former name or former address, if changed since last report)
<PAGE>

FORWARD LOOKING STATEMENTS

         This Form 8-K and other reports filed by Registrant from time to time
with the Securities and Exchange Commission (collectively the "Filings") contain
or may contain forward looking statements and information that are based upon
beliefs of, and information currently available to, Registrant's management as
well as estimates and assumptions made by Registrant's management. When used in
the Filings the words "anticipate, "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to Registrant or Registrant's management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results
of operations and any businesses that may be acquired by Registrant. Should one
or more of these risks or uncertainties materialize, or should the underlying
assumptions prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.

         Although Registrant believes that the expectations reflected in the
forward looking statements are reasonable, Registrant cannot guarantee future
results, levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, Registrant
does not intend to update any of the forward-looking statements to conform these
statements to actual results.

ITEM 1.01 Entry into a Material Definitive Agreement

         On November 2, 2005 (the "Closing Date"), Aethlon Medical, Inc. (the
"Company") entered into two 10% Series A Convertible Promissory Notes for an
aggregate $705,000 (individually, a "Promissory Note" and collectively, the
"Promissory Notes") with Allan S. Bird and Ellen R. Weiner Family Revocable
Trust (individually, a "Holder" and collectively the "Holders"), each qualified
as an "accredited investor" as that term is defined in the Securities Act of
1933, as amended (the "Act"). The Promissory Notes formalized a series of prior
cash investments by the Holders which, at the time such investments were made,
the conversion prices represented an average discount of 13.15% to the market
price of the Company's common stock. An associated Registration Rights Agreement
between the Company and the Holders, dated November 2, 2005 (the "Registration
Rights Agreement") provides for the issuance of up to $1,000,000 under this
financing. There are no material relationships between the Company, the
investors or their respective affiliates.

         The Promissory Notes bear an interest rate of 10 percent (10%) per
annum on the unpaid principal balance and mature on January 2, 2007 (the
"Maturity Date"). The Notes are convertible into shares of restricted common
stock at any time at the election of the Holders at a conversion price equal to
an individually negotiated amount per share for any conversion occurring on or
prior to the Maturity Date (the "Conversion Price"). At any time prior to the
Maturity Date, the Company has the right to prepay the Promissory Notes, in
whole or in part, on ten (10) days' advance note to the Holders. Additionally,
upon conversion the Promissory Notes, the Company will issue to the Holders
three-year warrants to purchase the same number of shares of common stock into
which each Promissory Note is converted at an exercise price equal to the
Conversion Price per share (each a "Warrant" and collectively, the "Warrants").
A Holder shall not be entitled to convert the Promissory Note or exercise the
Warrant if upon giving effect to such conversion or exercise, would cause the
Holder's ownership to exceed 9.9% of the outstanding shares of common stock.

                                       1
<PAGE>

         The securities issued in the private placement have not been registered
under the Act, as amended, and until so registered the securities may not be
offered or sold in the United States absent registration or availability of an
applicable exemption from registration. Pursuant to the Registration Rights
Agreement, in the form attached hereto as Exhibit 10.1, the Company is required
to file a registration statement on Form SB-2 the later of November 30, 2005 or
30 days after the date the Company completes an additional financing of at least
$1.0 million but in no event later than December 31, 2005 for the purposes of
registering the resale of the shares of common stock issuable upon conversion of
the Promissory Notes and exercise of the Warrants. The Copies of the Agreement,
the Promissory Notes, the Registration Right Agreements and the form of Warrant
are filed as exhibits to this current report on Form 8-K.

         These transactions were in reliance upon the exemption from
registration set forth in Section 4(2) of the Act. The shares were issued to
accredited investors. The following conditions were all met with respect to
these transactions: (1) the Company did not advertise these issuance in any
public medium or forum, (2) the Company did not solicit any investors with
respect to these issuances, (3) the Company did not publicize any portion of the
purchase or sale of the securities issued, (4) none of the shares issued were
offered in conjunction with any public offering, (5) neither the Company nor the
investor paid any fees to any finder or broker-dealer in conjunction with this
issuance.

         This announcement is not an offer to sell securities of Aethlon
Medical, Inc. and any opportunity to participate in the private placement was
available to a very limited group of accredited investors.

ITEM 2.03 Creation of a Direct Financial Obligation of a Registrant

         The information called for by this item is contained in Item 1.01,
which is incorporated herein by reference.

ITEM 3.02 Unregistered Sales of Equity Securities

         The information called for by this item is contained in Item 1.01,
which is incorporated herein by reference.

                                       2
<PAGE>

ITEM 9.01         Financial Statements and Exhibits

         (a)      Financial Statements of Businesses Acquired. Not applicable.

         (b)      Pro Forma Financial Information Not applicable.

         (c)      Exhibits

                  Exh. No. Description
                  -------- ------------

                  4.1      10% Convertible Promissory Note by and between
                           Aethlon Medical, Inc. and Allan S. Bird dated
                           November 2, 2005

                  4.2      Convertible Promissory Note by and between Aethlon
                           Medical, Inc. and Ellen R. Weiner Family Revocable
                           Trust dated November 2, 2005

                  4.3      Form of Warrant

                  10.1     Form of Registration Rights Agreement



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:  November 4, 2005                              AETHLON MEDICAL, INC.

                                                     By: /s/ James A. Joyce
                                                         ----------------------
                                                     James A. Joyce
                                                     Chief Executive Officer

                                       3
<PAGE>


                         EXHIBITS FILED WITH THIS REPORT

         Exh. No. Description
         -------- ------------

         4.1      10% Convertible Promissory Note by and between Aethlon
                  Medical, Inc. and Allan S. Bird dated November 2, 2005

         4.2      Convertible Promissory Note by and between Aethlon Medical,
                  Inc. and Ellen R. Weiner Family Revocable Trust dated November
                  2, 2005

         4.3      Form of Warrant

         10.1     Form of Registration Rights Agreement


                                       4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>aethlon_8kex4-1.txt
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.1

  THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTE
  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
  APPLICABLE STATE SECURITIES LAWS. NEITHER THE NOTE NOR SUCH SHARES OF COMMON
    STOCK MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
 WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND UNDER
  ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, SATISFACTORY
     TO THE COMPANY, THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.


                              AETHLON MEDICAL, INC.

                          10% SERIES A CONVERTIBLE NOTE



No. 2                                                                   $125,000


         FOR VALUE RECEIVED, Aethlon Medical, Inc., a Nevada corporation (the
"Company"), promises to pay to Allan S. Bird, whose address
________________________________________________________________, or registered
assigns (the "Holder"), the sum of One Hundred Twenty Five Thousand Dollars
($125,000) in lawful money of the United States of America on or before the
Maturity Date as defined herein, with all Interest thereon as defined and
specified herein. This Note includes various advances (the "Advances") that the
Holder has made to the Company since July 2005. This Note replaces promissory
notes previously issued by the Company to the Holder prior to the Issue Date
respecting certain of those Advances and provides documentation for other
Advances for which no notes have yet been issued.

         1. INTEREST. This Note shall bear interest ("Interest") equal to ten
percent (10%) per annum on the unpaid principal balance, computed on a three
hundred sixty (360)-day year, during the term of the Note. Interest will accrue
on each Advance commencing on the date of the Advance, as set forth on Exhibit A
to this Note. The Company shall pay all Interest on or before the Maturity Date.
In no event shall the rate of Interest payable on this Note exceed the maximum
rate of Interest permitted to be charged under applicable law.

         2. PAYMENTS. All payments under this Note shall first be credited
against costs and expenses provided for in this Note, second to the payment of
any penalties, third to the payment of accrued and unpaid Interest, if any, and
the remainder shall be credited against principal. All payments due hereunder
shall be payable in legal tender of the United States of America, and in same
day funds delivered to Holder by cashier's check, certified check, bank wire
transfer or any other means of guaranteed funds to the mailing address provided
below, or at such other place as the Holder shall designate in writing for such
purpose from time to time. If a payment under this Note otherwise would become
due and payable on a Saturday, Sunday or legal holiday (any other day being a
"Business Day"), the due date of the payment shall be extended to the next
succeeding Business Day, and Interest, if any, shall be payable thereon during
such extension.

                                       1
<PAGE>

         3. PRE-PAYMENTS AND MATURITY DATE. This Note shall be due and payable
in full, including all accrued Interest thereon, on January 2, 2007 (the
"Maturity Date"). At any time on or prior to the Maturity Date, the Company
shall have the right to prepay this Note, in whole or in part, on ten (10) days'
advance notice to the Holder and subject to the right of the Holder to convert
in advance of such prepayment date and provided that on such prepayment date,
the Company will pay in respect of the redeemed Note cash equal to the face
amount plus accrued Interest on the Note (or portion thereof) redeemed. At any
time after the Maturity Date, the Company shall have the right to repay this
Note, in whole or in part, on ten (10) days' advance notice to the Holder and
subject to the right of the Holder to convert in advance of such repayment date.
The Company may prepay this Note at any time after issuance without penalty.

         4. EQUAL RANK. This Note represents one of a series of up to One
Million Dollars ($1,000,000) principal amount of 10% Series A Convertible Notes
(the "Notes") issued or to be issued by the Company. All Notes rank equally and
ratably without priority over one another.

         5. Conversion of Note and Issuance of Warrants.

                  5.1 CONVERSION OF NOTE/CONVERSION PRICE. This Note is
convertible, at the option of the Holder, into shares of the Company's Common
Stock (the "Common Stock") at any time after the Issue Date prior to the close
of business on the Business Day prior to the Maturity Date at the rate of $.20
per share (the "Conversion Price"), subject to adjustment as hereinafter
provided. No fractional shares will be issued. In lieu thereof, the Company will
pay cash for fractional share amounts equal to the fair market value of the
Common Stock as quoted as the closing bid price of the Common Stock on the date
of conversion.

                  5.2 ISSUANCE OF WARRANTS. Upon the conversion of this Note,
the Company will issue to the Holder a Common Stock Purchase Warrant (the
"Warrant") exercisable to purchase the same number of shares of Common Stock
into which this Note would be convertible on the Issue Date. The Warrant is
exercisable to purchase shares of Common Stock at the price of $.20 per share
and as otherwise specified in the Warrant.

                  5.3 LIMITATION ON CONVERSION RIGHTS. Notwithstanding any other
provision of Paragraph 5 to the contrary, the Holder shall not be entitled to
convert this Note, and any other outstanding Notes of this Series A issued to
the Holder that is convertible into Common Stock (the "Related Notes") in excess
of that number of shares of Common Stock which, upon giving effect to such
conversion, would cause the aggregate number of shares of Common Stock
beneficially owned by the Holder and its Affiliates to exceed 9.9% of the
outstanding shares of the Common Stock following such conversion. For purposes
of the foregoing provision, the aggregate number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock beneficially owned and those shares issuable upon
conversion of this Note and all Related Notes with respect to which the
determination of such proviso is being made, but shall exclude the number of
shares of Common Stock that would be issuable upon (i) conversion of the
remaining principal amount of this Note and the Related Notes beneficially owned
by the Holder and its Affiliates and (ii) exercise or conversion of the


                                       2
<PAGE>

unexercised or unconverted portion of any other securities of the Company into
Common Stock beneficially owned by the Holder and its Affiliates that are
subject to a limitation on conversion or exercise analogous to the limitation
contained in this Note. For purposes of this Paragraph, 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 (a) the Company's most
recent Form 10-Q or Form 10-K, as the case may be, or (b) more recent public
announcement by the Company or (c) any other written communication by the
Company or its Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the reasonable written or oral request of the Holder, the
Company shall promptly 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 any
conversions, exercises or purchases by the Holder since the date as of which
such number of outstanding shares of Common Stock was reported. Except as
otherwise set forth herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. If the foregoing 9.9% limitation is ever reached and the Holder desires
to convert this Note or part thereof into equity, the Company will acknowledge
the conversion in writing, but not issue the Holder any additional shares of
Common Stock at that point. Under such circumstances the Holder will have the
right to receive additional shares of Common Stock as a result of the conversion
only at such point and to the extent that its beneficial ownership subsequently
becomes less than 9.9% and such issuance will not cause the Holder's beneficial
ownership to exceed 9.9%. Upon written notice to this effect given by the
Holder, the Company will issue such additional shares in accordance with
Paragraph 5.8, "Issuance of Certificate."

                  5.4 ADJUSTMENT BASED UPON STOCK DIVIDENDS, COMBINATION OF
SHARES OR RECAPITALIZATION. The Conversion Price shall be adjusted in the event
that the Company shall at any time (i) pay a stock dividend on the Common Stock;
(ii) subdivide its outstanding Common Stock into a greater number of shares;
(iii) combine its outstanding Common Stock into a smaller number of shares; (iv)
issue by reclassification of its Common Stock any other special capital stock of
the Company; or (v) distribute to all holders of Common Stock evidences of
indebtedness or assets (excluding cash dividends) or rights or warrants to
subscribe for Common Stock (other than those mentioned above). No adjustment of
the Conversion Price will be required until cumulative adjustments amount to One
Dollar ($1.00) per Note or more. Upon the occurrence of an event requiring
adjustment of the Conversion Price, and thereafter, the Holder, upon surrender
of this Note for conversion, shall be entitled to receive the number of shares
of Common Stock or other capital stock of the Company that the Holder would have
owned or have been entitled to receive after the happening of any of the events
described above had this Note been converted immediately prior to the happening
of such event.

                  5.5 ADJUSTMENT BASED UPON MERGER OR CONSOLIDATION. In case of
any consolidation or merger to which the Company is a party (other than a merger
in which the Company is the surviving entity and which does not result in any
reclassification of or change in the outstanding Common Stock of the Company),
or in case of any sale or conveyance to another person, firm, or corporation of
the property of the Company as an entirety or substantially as an entirety, the
Holder shall have the right to convert this Note into the kind and amount of
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by the Holder of the number of shares of Common Stock
into which such Note might have been converted immediately prior thereto.


                                       3
<PAGE>

                  5.6 EXERCISE OF CONVERSION PRIVILEGE.

                           5.6.1 The Conversion Privilege provided for in this
Note shall be exercisable by the Holder by written notice to the Company or its
successor and the surrender of this Note in exchange for the number of shares
(or other securities and property, including cash, in the event of an adjustment
of the Conversion Price) into which this Note is convertible based upon the
Conversion Price.

                           5.6.2 The Holder's conversion right set forth in this
Paragraph 5.5 may be exercised at any time and from time to time but prior to
payment in full of the principal amount of the accrued interest on this Note.
Conversion rights will expire at the close of business on the Business Day prior
to the Maturity Date or redemption date of this Note.

                           5.6.3 The Holder may exercise the right to convert
all or any portion of the principal amount and accrued Interest on this Note by
delivery of (i) this Note and (ii) a completed Conversion Notice in the form
attached as Exhibit B on a Business Day to the Company's principal executive
offices. Such conversion shall be deemed to have been made immediately prior to
the close of business on the Business Day of such delivery a conversion notice
(the "Conversion Date"), and the Holder shall be treated for all purposes as the
record holder of the shares of Common Stock into which this Note is converted as
of such date.

                           5.6.4 Upon conversion of the entire principal amount
and accrued Interest of this Note and the delivery of shares of Common Stock
upon conversion of this Note, except as otherwise provided in Paragraph 22,
"Representations and Warranties to Survive Closing," the Company shall be
forever released from all of its obligations and liabilities under this Note.

                  5.7 CORPORATE STATUS OF COMMON STOCK TO BE ISSUED. All Common
Stock (or other securities in the event of an adjustment of the Conversion
Price) which may be issued upon the conversion of this Note shall, upon
issuance, be fully paid and nonassessable.

                  5.8 ISSUANCE OF CERTIFICATE. Upon the conversion of this Note,
the Company shall, within five (5) Business Days of such conversion, issue to
the Holder a certificate or certificates representing the number of shares of
the Common Stock (or other securities in the event of an adjustment of the
Conversion Price) to which the conversion relates.

         6. STATUS OF HOLDER OF NOTE. This Note shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company or to any
rights whatsoever except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Note or the securities issuable upon the
conversion hereof unless and until this Note shall be converted. Upon the
conversion of this Note, the Holder shall, to the extent permitted by law, be
deemed to be the holder of record of the shares of Common Stock and Warrants
issuable upon such conversion, notwithstanding that the stock transfer books of
the Company shall then be closed or that the certificates representing such
shares of Common Stock and Warrants shall not then be actually delivered.

         7. RESERVE OF SHARES OF COMMON STOCK. The Company shall reserve out of
its authorized shares of Common Stock, and other securities in the event of an
adjustment of the Conversion Price, a number of shares sufficient to enable it
to comply with its obligation to issue shares of Common Stock, and other
securities in the event of an adjustment of the Conversion Price, upon the
conversion of this Note.

                                       4
<PAGE>

         8. TRANSFER RESTRICTIONS; EXEMPTION FROM REGISTRATION.

                  8.1 The Holder agrees that (i) this Note and the shares of
Common Stock issuable upon conversion have not been registered under the Act and
may not be sold or transferred without registration under the Act or unless an
exemption from such registration is available; (ii) the Holder has acquired this
Note and will acquire the Common Stock for its own account for investment
purposes only and not with a view toward resale or distribution; and (iii) if a
registration statement that includes the Common Stock is not effective at the
time Common Stock is issued to Holder upon conversion under this Note, and the
Common Stock is not exempt from registration under Rule 144, then the Common
Stock shall be inscribed with the following legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF HOLDER'S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

                  8.2 If an opinion of counsel of Holder provides that
registration is not required for the proposed conversion or transfer of this
Note or the proposed transfer of the shares of Common Stock issuable upon
conversion and that the proposed conversion or transfer in the absence of
registration would require the Company to take any action including executing
and filing forms or other documents with the Securities and Exchange Commission
(the "SEC") or any state securities agency, or delivering to the Holder any form
or document in order to establish the right of the Holder to effectuate the
proposed conversion or transfer, the Company agrees promptly, at its expense, to
take any such action; and provided, further, that the Company will reimburse the
Holder in full for any expenses (including but not limited to the fees and
disbursements of such counsel, but excluding brokers' commissions) incurred by
the Holder or owner of shares of Common Stock on his, her or its behalf in
connection with such conversion or transfer of the Note or transfer of the
shares of Common Stock.

         9. REGISTRATION RIGHTS.

                  The Holders of the Notes and Warrants or Common Stock issued
to the Holder without an effective Registration Statement under the Act (the
"Restricted Shares") shall have the right, under the terms of a Registration
Rights Agreement between the Holder and the Company, to cause the Company
register the Common Stock underlying the Notes and Warrants (the "Underlying
Common Stock") or Restricted Shares in a Registration Statement under the
Securities Act 1993, as amended ("Act"), filed by the Company with the SEC.

                                       5
<PAGE>

         10. RULE 144

                  If the Company (a) has or registers a class of securities
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or (b) has or commences to file reports under Section 13 or
15(d) of the Exchange Act, then, at the request of any Holder who proposes to
sell securities in compliance with Rule 144 of the SEC, the Company will (i)
forthwith furnish to such holder a written statement of compliance with the
filing requirements of the SEC as set forth in Rule 144, as such rules may be
amended from time to time and (ii) make available to the public and such Holder
such information and take such other action as is requested by the Holder to
enable the Holder to make sales pursuant to Rule 144.

         11. DEFAULT. The Company shall perform its obligations and covenants
hereunder and in each and every other agreement between the Company and Holder
pertaining to the Indebtedness evidenced hereby. The following provisions shall
apply upon failure of the Company so to perform.

                  11.1 EVENT OF DEFAULT. Any of the following events shall
constitute an "Event of Default" hereunder:

                           11.1.1 Failure by the Company to pay principal of any
of the Notes when due and payable on the Maturity Date;

                           11.1.2 Failure of the Company to pay Interest when
due hereunder, which failure continues for a period of thirty (30) days after
the due date of the amount involved; or

                           11.1.3 Failure of the Company to perform any of the
covenants, conditions, provisions or agreements contained herein, or in any
other agreement between the Company and Holder, which failure continues for a
period of thirty (30) days after notice of default has been given to the Company
by the Holders of not less than twenty-five percent (25%) of the principal
amount of the Notes then outstanding; provided, however, that if the nature of
the Company's obligation is such that more than thirty (30) days are required
for performance, then an Event of Default shall not occur if the Company
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion; or

                           11.1.4 The entry of an order for relief under Federal
Bankruptcy Code as to the Company or entry of any order appointing a receiver or
trustee for the Company or approving a petition in reorganization or other
similar relief under bankruptcy or similar laws in the United States of America
or any other competent jurisdiction, and if such order, if involuntary, is not
satisfied or withdrawn within sixty (60) days after entry thereof; or the filing
of a petition by the Company seeking any of the foregoing, or consenting
thereto; or the filing of a petition to take advantage of any debtor's act; or
making a general assignment for the benefit of creditors; or admitting in
writing inability to pay debts as they mature.

                  11.2 ACCELERATION. Upon any Event of Default (in addition to
any other rights or remedies provided for under this Note), at the option of the
Holders of not less than twenty-five percent (25%) of the principal amount of
the Notes then outstanding, all sums evidenced hereby, including all principal,
Interest, fees and all other amounts due hereunder, shall become immediately due
and payable. If an Event of Default in the payment of principal or Interest
should occur and be continuing with respect to the Note, any one or more holders
of the Notes then outstanding may declare the principal of the Notes to be
immediately due and payable. In the Event of a Default due to a breach of any
other covenant or term, Holders representing twenty-five percent (25%) of the
principal amount of the Notes may take action to accelerate the Notes.

                                       6
<PAGE>

                  11.3 NOTICE BY COMPANY. Upon the happening of any Event of
Default specified in this paragraph that is not cured within the respective
periods prescribed above, the Company will give prompt written notice thereof to
the Holder of this Note.

                  11.4 NO WAIVER. Failure of the Holder to exercise any option
hereunder shall not constitute a waiver of the right to exercise the same in the
event of any subsequent Event of Default, or in the event of continuance of any
existing Event of Default after demand or performance thereof.

                  11.5 DEFAULT INTEREST. Default Interest will accrue on an
unpaid principal or Interest due hereunder at the rate of fifteen percent (15%)
per annum upon the occurrence of any Event of Default until the Event of Default
is cured.

                  11.6 PURSUIT OF ANY REMEDY. No Holder of a Note may pursue any
remedy under the Notes unless (i) the Company shall have received written notice
of a continuing Event of Default from the Holder and (ii) the Company shall have
received a request from Holders of at least twenty-five percent (25%) of
principal amount of the Notes to pursue such remedy. The Holders of fifty-one
percent (51%) of principal amount of the Notes then outstanding have the right
to direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Noteholders under the Notes.

         12. ASSIGNMENT, TRANSFER OR LOSS OF THE NOTE.

                  12.1 No Holder of this Note may assign, transfer, hypothecate
or sell all or any part of this Note or in any way alienate or encumber the Note
without the express written consent of the Company, the granting or denial of
which shall be within the absolute discretion of the Company. Any attempt to
effect such transfer without the consent of the Company shall be null and void.
The Company has not registered this Note under the Act or the applicable
securities laws of any state in reliance on exemptions from registration. Such
exemptions depend upon the investment intent of the Holder at the time he
acquires his Note. The Holder is acquiring this Note for his own account for
investment purposes only and not with a view toward distribution or resale of
such Note within the meaning of the Act and the applicable securities laws of
any state. The Company shall be under no duty to register the Note or to comply
with an exemption in connection with the sale, transfer or other disposition
under the applicable laws and regulations of the Act or the applicable
securities laws of any state. The Company may require the Holder to provide, at
his expense, an opinion of counsel satisfactory to the Company to the effect
that any proposed transfer or other assignment of the Note will not result in a
violation of the applicable federal or state securities laws or any other
applicable federal or state laws or regulations.

                                       7
<PAGE>

                  12.2 All expenses, including reasonable legal fees incurred by
the Company in connection with any permitted transfer, assignment or pledge of
this Note will be paid by the Holder requesting such transfer, assignment or
pledge.

                  12.3 Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Note and, in the
case of any such loss, theft or destruction of any Note, upon delivery of an
indemnity bond in such reasonable amount as the Company may determine (or, in
the case of any Note held by the original Noteholder, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Note to the Company at is principal office for
cancellation, the Company at its expense will execute and deliver, in lieu
thereof, a new Note of like tenor, dated the date to which interest hereunder
shall have been paid on such lost, stolen, destroyed or mutilated Note.

                  12.4 Subject to Subparagraph 12.1 above, the Holder may, at
his option, either in person or by duly authorized attorney, surrender this Note
for registration of transfer at the principal office of the Company and, upon
payment of any expenses associated with the transfer, receive in exchange
therefor a Note or Notes, dated as of the date to which interest has been paid
on the Note so surrendered, each in the principal amount of $1,000 or any
multiple thereof, for the same aggregate unpaid principal amount as the Note so
surrendered and registered as payable to such person or persons as may be
designated by the Holder. Every Note surrendered for registration of transfer
shall be duly endorsed or shall be accompanied by a written instrument of
transfer duly executed by the Holder or his attorney duly authorized in writing.
Every Note, so made and delivered by the Company in exchange for any Note
surrendered, shall in all other respects be in the same form and have the same
terms as the Note surrendered. No transfer of any Note shall be valid unless
made in such manner at the principal office of the Company.

                  12.5 The Company may treat the person in whose name this Note
is registered as the owner and Holder of this Note for the purpose of receiving
payment of all principal of and all Interest on this Note, and for all other
purposes whatsoever, whether or not such Note shall be overdue and, except for
transfers effected in accordance with this subparagraph, the Company shall not
be affected by notice to the contrary.

         13. MODIFICATIONS AND AMENDMENTS. After notice given by the Company to
the Holders of all Notes at the time outstanding, the Company may from time to
time and at any time enter into an agreement or agreements supplemental to the
provisions of this Note for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Notes or of modifying
in any manner the rights of the Holders of the Notes; PROVIDED, HOWEVER, that no
such supplemental agreement, modification or amendment may, without the consent
of the holder of each Note then outstanding affected thereby, (i) reduce the
percentage of principal amount of Notes whose Holders may consent to an
amendment, supplement or waiver; (ii) reduce the rate or change the time for
payment of interest, including Default Interest, on any Note; (iii) reduce the
principal amount of any Note or change the Maturity Date of the Notes; (iv) make
any Note payable in money other than that stated in the Note; (v) impair the
right to institute suit for the enforcement of any payment of principal of, or
premium, if any, or interest on, any Note; (vi) make any change in the
percentage of principal amount of Notes necessary to waive compliance with
certain provisions of the Note; or (vii) waive a continuing default or Event of


                                       8
<PAGE>

Default in the payment of principal of, premium, if any, or Interest on the
Notes. The modifications and amendments of the Notes may be made by the Company
without the consent of any Holders of Notes in certain limited circumstances,
including (a) to cure any ambiguity, omission, defect or inconsistency, (b) to
provide for the assumption of the obligations of the Company under the Notes
upon the merger, consolidation or sale or other disposition of all or
substantially all of the assets of the Company, or (c) to make any change that
does not adversely affect the rights of any holder of Notes. The Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
any past default under the Notes, except a default in the payment of principal,
premium, if any, or Interest. Promptly after execution by the Company and
Holders of the Notes of a supplemental agreement pursuant to the provisions of
this paragraph, the Company shall deliver a copy of such supplemental agreement
to all Holders of the Notes at the time outstanding.

         14. NOTICES. All notices provided for herein shall be validly given if
in writing and delivered personally or sent by certified mail, postage prepaid,
to the office of the Company or such other address as the Company may from time
to time designate in writing sent by certified mail, postage prepaid, to the
Holder at his address set forth below or such other address as the Holder may
from time to time designate in writing to the Company by certified mail, postage
prepaid.

         15. USURY. All Interest, Default Interest, fees, charges, goods, things
in action or any other sums or things of value, or other contractual obligations
(collectively, the "Additional Sums") paid by the Company hereunder, whether
pursuant to this Note or otherwise, with respect to the Indebtedness evidenced
hereby, or any other document or instrument in any way pertaining to the
Indebtedness, which, under the laws of the State of California may be deemed to
be Interest with respect to such loan or Indebtedness, shall, for the purpose of
any laws of the State of California, which may limit the maximum amount of
Interest to be charged with respect to such loan or Indebtedness, be payable by
the Company as, and shall be deemed to be, Interest and for such purposes only,
the agreed upon and contracted rate of Interest shall be deemed to be increased
by the Additional Sums. Notwithstanding any provision of this Note to the
contrary, the total liability for payments in the nature of Interest under this
Note shall not exceed the limits imposed by applicable law. The Company shall
not assert a claim, and shall actively resist any attempts to compel it to
assert a claim, respecting a benefit under any present or future usury laws
against any Holder of this Note.

         16. BINDING EFFECT. This Note shall be binding upon the parties hereto
and their respective heirs, executors, administrators, representatives,
successors and permitted assigns.

         17. COLLECTION FEES. Except as otherwise provided herein, the Company
shall pay all costs of collection, including reasonable attorneys' fees and all
costs of suit and preparation for such suit (and whether at trial or appellate
level), in the event the unpaid principal amount of this Note, or any payment of
Interest is not paid when due, or in the event Holder is made party to any
litigation because of the existence of the Indebtedness evidenced by this Note,
or if at any time Holder should incur any attorneys' fees in any proceeding
under the Federal Bankruptcy Code (or other similar laws for the protection of
debtors generally) in order to collect any Indebtedness hereunder or to
preserve, protect or realize upon any security for, or guarantee or surety of,
such Indebtedness whether suit be brought or not, and whether through courts of
original jurisdiction, as well as in courts of appellate jurisdiction, or
through a bankruptcy court or other legal proceedings.

                                       9
<PAGE>

         18. CONSTRUCTION. This Note shall be governed as to its validity,
interpretation, construction, effect and in all other respects by and in
accordance with the laws and interpretations thereof of the State of California.
Unless the context otherwise requires, the use of terms in singular and
masculine form shall include in all instances singular and plural number and
masculine, feminine and neuter gender.

         19. SEVERABILITY. In the event any one or more of the provisions
contained in this Note or any future amendment hereto shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this Note
or such other agreement, and in lieu of each such invalid, illegal or
unenforceable provision there shall be added automatically as a part of this
Note a provision as similar in terms to such invalid, illegal or unenforceable
provision as may be possible and be valid, legal and enforceable.

         20. ENTIRE AGREEMENT. This Note Agreement represents the entire
agreement and understanding between the parties concerning the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.

         21. GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of the
State of Nevada shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by the
internal laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of California. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of San Diego for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, or in any manner arising in connection with or related to the
transactions contemplated hereby or involving the parties hereto whether at law
or equity and under any contract, tort or any other claim whatsoever and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing or faxing a copy
thereof to such party at the address for such notices as listed in this Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

                                       10
<PAGE>

         22. REPRESENTATIONS AND WARRANTIES TO SURVIVE CLOSING. All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Note and the issuance of any Conversion Shares
upon the conversion hereof.

         23. HEADINGS. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.

         24. DEFINITIONS.

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

         "BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.

         "CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, equity participations or other equivalents (however designated) of
corporate stock or partnership interests and any and all warrants, options and
rights with respect thereto (whether or not currently exercisable), including
each class of common stock and preferred stock of such Person.

         "GAAP" means generally accepted accounting principles as in effect in
the United States of America as of the Issue Date.

         "HOLDER" means a Person in whose name a Note is registered on the
Company's books.

         "INDEBTEDNESS" means, without duplication, with respect to any Person,
(a) all obligations of such Person (i) in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof); (ii) evidenced by bonds, notes, debentures or
similar instruments; (iii) representing the balance deferred and unpaid of the
purchase price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business); (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a capitalized lease obligation under GAAP; or
(vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of such
Person under interest rate swap obligations and foreign currency hedges; (c) all
liabilities of others of the kind described in the preceding clauses (a) or (b)
that such Person has guaranteed or that are otherwise its legal liability; (d)
Indebtedness (as otherwise defined in this definition) of another Person secured
by lien on any asset of such Person, whether or not such Indebtedness is assumed
by such Person, the amount of such obligations being deemed to be the lesser of
(1) the full amount of such obligations so secured, and (2) the fair market
value of such asset, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a board resolution; and
(e) any and all deferrals, renewals, extensions, refinancings and refundings
(whether direct or indirect) of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (a), (b),
(c), (d) or this clause (e), whether or not between or among the same parties.

                                       11
<PAGE>

         "ISSUE DATE" means the date on which the Note is originally issued.

         "MATURITY DATE" means January 2, 2007.

         "PERSON" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.

         A "SUBSIDIARY" of any Person means (i) a corporation a majority of
whose Voting Stock is at the time, directly or indirectly, owned by such Person,
by one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person, (ii) a partnership in which such Person or a
subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if such Person or its subsidiary is
entitled to receive more than fifty percent (50%) of the assets of such
partnership upon its dissolution, or (iii) any other Person (other than a
corporation or partnership) in which such Person, directly or indirectly, at the
date of determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of directors or
other governing body of such Person.

         "SUBSIDIARY" means any subsidiary of the Company.

         "VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof,
whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency to vote in the election of members of the
Board of Directors or other governing body of such Person.

         25. MISCELLANEOUS. Except as otherwise provided herein, the Company
waives demand, diligence, presentment for payment and protest, notice of
extension, dishonor, maturity and protest. Time is of the essence with respect
to the performance of each and every covenant, condition, term and provision
hereof.

         IN WITNESS WHEREOF, this Note has been issued on the 2nd day of
November, 2005.

                                          AETHLON MEDICAL, INC.


                                          By ___________________________________
                                             James A. Joyce
                                             Its Chairman and CEO


                                       12
<PAGE>

Mailing Address of Holder:
ALLAN S. BIRD
- -------------
____________________________________
____________________________________
____________________________________

Mailing Address of Company:
3030 Bunker Hill Street
Suite 4000
San Diego, CA 92109


                                       13
<PAGE>


                                    EXHIBIT A

                              SCHEDULE OF ADVANCES


                        DATE                                  AMOUNT
                        ----                                  ------
                      08/02/05                              $  25,000
                      09/14/05                              $  25,000
                      10/07/05                              $  50,000
                      10/14/05                              $  25,000



                                       14
<PAGE>

                                    EXHIBIT B

                                CONVERSION NOTICE


                (To be signed only upon conversion of this Note)


TO:   AETHLON MEDICAL, INC.

The undersigned, the registered holder of the 10 % Series A Convertible Note
(the "Note") of AETHLON MEDICAL, INC. (the "Company"), hereby surrenders the
Note for conversion into shares of Common Stock of the Company (the "Common
Stock") to the extent of $_______ unpaid principal amount of the Note and
$_______ unpaid accrued Interest due under the Note, all in accordance with the
provisions of such Note. The undersigned requests (i) that a certificate
representing shares of Common Stock, bearing the appropriate legends, be issued
to the undersigned, and (ii) if the unpaid principal amount so converted is less
than the entire unpaid principal amount of the Note, that a new substitute note
representing the portion of said unpaid principal amount that is not so
converted be issued in accordance with the provisions of the Note.



________________________________________
(Signature and name of the registered holder)

________________________________________
Print Name

Dated:___________________________________


                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>aethlon_8kex4-2.txt
<TEXT>

<PAGE>

EXHIBIT 4.2

  THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTE
  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
  APPLICABLE STATE SECURITIES LAWS. NEITHER THE NOTE NOR SUCH SHARES OF COMMON
   STOCK MAY BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
    WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
      UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
     SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM SUCH REGISTRATION
                                 IS AVAILABLE.


                              AETHLON MEDICAL, INC.

                          10% SERIES A CONVERTIBLE NOTE



No. 1                                                                   $580,000


         FOR VALUE RECEIVED, Aethlon Medical, Inc., a Nevada corporation (the
"Company"), promises to pay to Ellen R. Weiner Family Revocable Trust, whose
address is 4004 East Lupine Avenue, Phoenix, Arizona 85028, or registered
assigns (the "Holder"), the sum of Five Hundred and Eighty Thousand Dollars
($580,000) in lawful money of the United States of America on or before the
Maturity Date as defined herein, with all Interest thereon as defined and
specified herein. This Note includes various advances (the "Advances") that the
Holder has made to the Company since July 2005. This Note replaces promissory
notes previously issued by the Company to the Holder prior to the Issue Date
respecting certain of those Advances and provides documentation for other
Advances for which no notes have yet been issued.

         1. INTEREST. This Note shall bear interest ("Interest") equal to ten
percent (10%) per annum on the unpaid principal balance, computed on a three
hundred sixty (360)-day year, during the term of the Note. Interest will accrue
on each Advance commencing on the date of the Advance, as set forth on Exhibit A
to this Note. The Company shall pay all Interest on or before the Maturity Date.
In no event shall the rate of Interest payable on this Note exceed the maximum
rate of Interest permitted to be charged under applicable law.

         2. PAYMENTS. All payments under this Note shall first be credited
against costs and expenses provided for in this Note, second to the payment of
any penalties, third to the payment of accrued and unpaid Interest, if any, and
the remainder shall be credited against principal. All payments due hereunder
shall be payable in legal tender of the United States of America, and in same
day funds delivered to Holder by cashier's check, certified check, bank wire
transfer or any other means of guaranteed funds to the mailing address provided
below, or at such other place as the Holder shall designate in writing for such
purpose from time to time. If a payment under this Note otherwise would become
due and payable on a Saturday, Sunday or legal holiday (any other day being a
"Business Day"), the due date of the payment shall be extended to the next
succeeding Business Day, and Interest, if any, shall be payable thereon during
such extension.

                                       1
<PAGE>

         3. PRE-PAYMENTS AND MATURITY DATE. This Note shall be due and payable
in full, including all accrued Interest thereon, on January 2, 2007 (the
"Maturity Date"). At any time on or prior to the Maturity Date, the Company
shall have the right to prepay this Note, in whole or in part, on ten (10) days'
advance notice to the Holder and subject to the right of the Holder to convert
in advance of such prepayment date and provided that on such prepayment date,
the Company will pay in respect of the redeemed Note cash equal to the face
amount plus accrued Interest on the Note (or portion thereof) redeemed. At any
time after the Maturity Date, the Company shall have the right to repay this
Note, in whole or in part, on ten (10) days' advance notice to the Holder and
subject to the right of the Holder to convert in advance of such repayment date.
The Company may prepay this Note at any time after issuance without penalty.

         4. EQUAL RANK. This Note represents one of a series of up to One
Million Dollars ($1,000,000) principal amount of 10% Series A Convertible Notes
(the "Notes") issued or to be issued by the Company. All Notes rank equally and
ratably without priority over one another.

         5. CONVERSION OF NOTE AND ISSUANCE OF WARRANTS.

                  5.1 CONVERSION OF NOTE/CONVERSION PRICE. This Note is
convertible, at the option of the Holder, into shares of the Company's Common
Stock (the "Common Stock") at any time after the Issue Date prior to the close
of business on the Business Day prior to the Maturity Date at the rate of $.20
per share (the "Conversion Price"), subject to adjustment as hereinafter
provided. No fractional shares will be issued. In lieu thereof, the Company will
pay cash for fractional share amounts equal to the fair market value of the
Common Stock as quoted as the closing bid price of the Common Stock on the date
of conversion.

                  5.2 ISSUANCE OF WARRANTS. Upon the conversion of this Note,
the Company will issue to the Holder a Common Stock Purchase Warrant (the
"Warrant") exercisable to purchase the same number of shares of Common Stock
into which this Note would be convertible on the Issue Date. The Warrant is
exercisable to purchase shares of Common Stock at the price of $.20 per share
and as otherwise specified in the Warrant.

                  5.3 LIMITATION ON CONVERSION RIGHTS. Notwithstanding any other
provision of Paragraph 5 to the contrary, the Holder shall not be entitled to
convert this Note, and any other outstanding Notes of this Series A issued to
the Holder that is convertible into Common Stock (the "Related Notes") in excess
of that number of shares of Common Stock which, upon giving effect to such
conversion, would cause the aggregate number of shares of Common Stock
beneficially owned by the Holder and its Affiliates to exceed 9.9% of the
outstanding shares of the Common Stock following such conversion. For purposes
of the foregoing provision, the aggregate number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock beneficially owned and those shares issuable upon
conversion of this Note and all Related Notes with respect to which the
determination of such proviso is being made, but shall exclude the number of
shares of Common Stock that would be issuable upon (i) conversion of the
remaining principal amount of this Note and the Related Notes beneficially owned
by the Holder and its Affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company into
Common Stock beneficially owned by the Holder and its Affiliates that are
subject to a limitation on conversion or exercise analogous to the limitation
contained in this Note. For purposes of this Paragraph, 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 (a) the Company's most


                                       2
<PAGE>

recent Form 10-Q or Form 10-K, as the case may be, or (b) more recent public
announcement by the Company or (c) any other written communication by the
Company or its Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the reasonable written or oral request of the Holder, the
Company shall promptly 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 any
conversions, exercises or purchases by the Holder since the date as of which
such number of outstanding shares of Common Stock was reported. Except as
otherwise set forth herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. If the foregoing 9.9% limitation is ever reached and the Holder desires
to convert this Note or part thereof into equity, the Company will acknowledge
the conversion in writing, but not issue the Holder any additional shares of
Common Stock at that point. Under such circumstances the Holder will have the
right to receive additional shares of Common Stock as a result of the conversion
only at such point and to the extent that its beneficial ownership subsequently
becomes less than 9.9% and such issuance will not cause the Holder's beneficial
ownership to exceed 9.9%. Upon written notice to this effect given by the
Holder, the Company will issue such additional shares in accordance with
Paragraph 5.8, "Issuance of Certificate."

                  5.4 ADJUSTMENT BASED UPON STOCK DIVIDENDS, COMBINATION OF
SHARES OR RECAPITALIZATION. The Conversion Price shall be adjusted in the event
that the Company shall at any time (i) pay a stock dividend on the Common Stock;
(ii) subdivide its outstanding Common Stock into a greater number of shares;
(iii) combine its outstanding Common Stock into a smaller number of shares; (iv)
issue by reclassification of its Common Stock any other special capital stock of
the Company; or (v) distribute to all holders of Common Stock evidences of
indebtedness or assets (excluding cash dividends) or rights or warrants to
subscribe for Common Stock (other than those mentioned above). No adjustment of
the Conversion Price will be required until cumulative adjustments amount to One
Dollar ($1.00) per Note or more. Upon the occurrence of an event requiring
adjustment of the Conversion Price, and thereafter, the Holder, upon surrender
of this Note for conversion, shall be entitled to receive the number of shares
of Common Stock or other capital stock of the Company that the Holder would have
owned or have been entitled to receive after the happening of any of the events
described above had this Note been converted immediately prior to the happening
of such event.

                  5.5 ADJUSTMENT BASED UPON MERGER OR CONSOLIDATION. In case of
any consolidation or merger to which the Company is a party (other than a merger
in which the Company is the surviving entity and which does not result in any
reclassification of or change in the outstanding Common Stock of the Company),
or in case of any sale or conveyance to another person, firm, or corporation of
the property of the Company as an entirety or substantially as an entirety, the
Holder shall have the right to convert this Note into the kind and amount of
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by the Holder of the number of shares of Common Stock
into which such Note might have been converted immediately prior thereto.


                                       3
<PAGE>

                  5.6 EXERCISE OF CONVERSION PRIVILEGE.

                           5.6.1 The Conversion Privilege provided for in this
Note shall be exercisable by the Holder by written notice to the Company or its
successor and the surrender of this Note in exchange for the number of shares
(or other securities and property, including cash, in the event of an adjustment
of the Conversion Price) into which this Note is convertible based upon the
Conversion Price.

                           5.6.2 The Holder's conversion right set forth in this
Paragraph 5.5 may be exercised at any time and from time to time but prior to
payment in full of the principal amount of the accrued interest on this Note.
Conversion rights will expire at the close of business on the Business Day prior
to the Maturity Date or redemption date of this Note.

                           5.6.3 The Holder may exercise the right to convert
all or any portion of the principal amount and accrued Interest on this Note by
delivery of (i) this Note and (ii) a completed Conversion Notice in the form
attached as Exhibit B on a Business Day to the Company's principal executive
offices. Such conversion shall be deemed to have been made immediately prior to
the close of business on the Business Day of such delivery a conversion notice
(the "Conversion Date"), and the Holder shall be treated for all purposes as the
record holder of the shares of Common Stock into which this Note is converted as
of such date.

                           5.6.4 Upon conversion of the entire principal amount
and accrued Interest of this Note and the delivery of shares of Common Stock
upon conversion of this Note, except as otherwise provided in Paragraph 22,
"Representations and Warranties to Survive Closing," the Company shall be
forever released from all of its obligations and liabilities under this Note.

                  5.7 CORPORATE STATUS OF COMMON STOCK TO BE ISSUED. All Common
Stock (or other securities in the event of an adjustment of the Conversion
Price) which may be issued upon the conversion of this Note shall, upon
issuance, be fully paid and nonassessable.

                  5.8 ISSUANCE OF CERTIFICATE. Upon the conversion of this Note,
the Company shall, within five (5) Business Days of such conversion, issue to
the Holder a certificate or certificates representing the number of shares of
the Common Stock (or other securities in the event of an adjustment of the
Conversion Price) to which the conversion relates.

         6. STATUS OF HOLDER OF NOTE. This Note shall not entitle the Holder to
any voting rights or other rights as a shareholder of the Company or to any
rights whatsoever except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Note or the securities issuable upon the
conversion hereof unless and until this Note shall be converted. Upon the
conversion of this Note, the Holder shall, to the extent permitted by law, be
deemed to be the holder of record of the shares of Common Stock and Warrants
issuable upon such conversion, notwithstanding that the stock transfer books of
the Company shall then be closed or that the certificates representing such
shares of Common Stock and Warrants shall not then be actually delivered.

         7. RESERVE OF SHARES OF COMMON STOCK. The Company shall reserve out of
its authorized shares of Common Stock, and other securities in the event of an
adjustment of the Conversion Price, a number of shares sufficient to enable it
to comply with its obligation to issue shares of Common Stock, and other
securities in the event of an adjustment of the Conversion Price, upon the
conversion of this Note.

                                       4
<PAGE>

         8. TRANSFER RESTRICTIONS; EXEMPTION FROM REGISTRATION.

                  8.1 The Holder agrees that (i) this Note and the shares of
Common Stock issuable upon conversion have not been registered under the Act and
may not be sold or transferred without registration under the Act or unless an
exemption from such registration is available; (ii) the Holder has acquired this
Note and will acquire the Common Stock for its own account for investment
purposes only and not with a view toward resale or distribution; and (iii) if a
registration statement that includes the Common Stock is not effective at the
time Common Stock is issued to Holder upon conversion under this Note, and the
Common Stock is not exempt from registration under Rule 144, then the Common
Stock shall be inscribed with the following legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF HOLDER'S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

                  8.2 If an opinion of counsel of Holder provides that
registration is not required for the proposed conversion or transfer of this
Note or the proposed transfer of the shares of Common Stock issuable upon
conversion and that the proposed conversion or transfer in the absence of
registration would require the Company to take any action including executing
and filing forms or other documents with the Securities and Exchange Commission
(the "SEC") or any state securities agency, or delivering to the Holder any form
or document in order to establish the right of the Holder to effectuate the
proposed conversion or transfer, the Company agrees promptly, at its expense, to
take any such action; and provided, further, that the Company will reimburse the
Holder in full for any expenses (including but not limited to the fees and
disbursements of such counsel, but excluding brokers' commissions) incurred by
the Holder or owner of shares of Common Stock on his, her or its behalf in
connection with such conversion or transfer of the Note or transfer of the
shares of Common Stock.

         9. REGISTRATION RIGHTS.

                  The Holders of the Notes and Warrants or Common Stock issued
to the Holder without an effective Registration Statement under the Act (the
"Restricted Shares") shall have the right, under the terms of a Registration
Rights Agreement between the Holder and the Company, to cause the Company
register the Common Stock underlying the Notes and Warrants (the "Underlying
Common Stock") or Restricted Shares in a Registration Statement under the
Securities Act 1993, as amended ("Act"), filed by the Company with the SEC.

                                       5
<PAGE>

         10. RULE 144

                  If the Company (a) has or registers a class of securities
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or (b) has or commences to file reports under Section 13 or
15(d) of the Exchange Act, then, at the request of any Holder who proposes to
sell securities in compliance with Rule 144 of the SEC, the Company will (i)
forthwith furnish to such holder a written statement of compliance with the
filing requirements of the SEC as set forth in Rule 144, as such rules may be
amended from time to time and (ii) make available to the public and such Holder
such information and take such other action as is requested by the Holder to
enable the Holder to make sales pursuant to Rule 144.

         11. DEFAULT. The Company shall perform its obligations and covenants
hereunder and in each and every other agreement between the Company and Holder
pertaining to the Indebtedness evidenced hereby. The following provisions shall
apply upon failure of the Company so to perform.

                  11.1 EVENT OF DEFAULT. Any of the following events shall
constitute an "Event of Default" hereunder:

                           11.1.1 Failure by the Company to pay principal of any
of the Notes when due and payable on the Maturity Date;

                           11.1.2 Failure of the Company to pay Interest when
due hereunder, which failure continues for a period of thirty (30) days after
the due date of the amount involved; or

                           11.1.3 Failure of the Company to perform any of the
covenants, conditions, provisions or agreements contained herein, or in any
other agreement between the Company and Holder, which failure continues for a
period of thirty (30) days after notice of default has been given to the Company
by the Holders of not less than twenty-five percent (25%) of the principal
amount of the Notes then outstanding; provided, however, that if the nature of
the Company's obligation is such that more than thirty (30) days are required
for performance, then an Event of Default shall not occur if the Company
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion; or

                           11.1.4 The entry of an order for relief under Federal
Bankruptcy Code as to the Company or entry of any order appointing a receiver or
trustee for the Company or approving a petition in reorganization or other
similar relief under bankruptcy or similar laws in the United States of America
or any other competent jurisdiction, and if such order, if involuntary, is not
satisfied or withdrawn within sixty (60) days after entry thereof; or the filing
of a petition by the Company seeking any of the foregoing, or consenting
thereto; or the filing of a petition to take advantage of any debtor's act; or
making a general assignment for the benefit of creditors; or admitting in
writing inability to pay debts as they mature.

                  11.2 ACCELERATION. Upon any Event of Default (in addition to
any other rights or remedies provided for under this Note), at the option of the
Holders of not less than twenty-five percent (25%) of the principal amount of
the Notes then outstanding, all sums evidenced hereby, including all principal,
Interest, fees and all other amounts due hereunder, shall become immediately due
and payable. If an Event of Default in the payment of principal or Interest
should occur and be continuing with respect to the Note, any one or more holders
of the Notes then outstanding may declare the principal of the Notes to be
immediately due and payable. In the Event of a Default due to a breach of any
other covenant or term, Holders representing twenty-five percent (25%) of the
principal amount of the Notes may take action to accelerate the Notes.

                                       6
<PAGE>

                  11.3 NOTICE BY COMPANY. Upon the happening of any Event of
Default specified in this paragraph that is not cured within the respective
periods prescribed above, the Company will give prompt written notice thereof to
the Holder of this Note.

                  11.4 NO WAIVER. Failure of the Holder to exercise any option
hereunder shall not constitute a waiver of the right to exercise the same in the
event of any subsequent Event of Default, or in the event of continuance of any
existing Event of Default after demand or performance thereof.

                  11.5 DEFAULT INTEREST. Default Interest will accrue on an
unpaid principal or Interest due hereunder at the rate of fifteen percent (15%)
per annum upon the occurrence of any Event of Default until the Event of Default
is cured.

                  11.6 PURSUIT OF ANY REMEDY. No Holder of a Note may pursue any
remedy under the Notes unless (i) the Company shall have received written notice
of a continuing Event of Default from the Holder and (ii) the Company shall have
received a request from Holders of at least twenty-five percent (25%) of
principal amount of the Notes to pursue such remedy. The Holders of fifty-one
percent (51%) of principal amount of the Notes then outstanding have the right
to direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Noteholders under the Notes.

         12. ASSIGNMENT, TRANSFER OR LOSS OF THE NOTE.

                  12.1 No Holder of this Note may assign, transfer, hypothecate
or sell all or any part of this Note or in any way alienate or encumber the Note
without the express written consent of the Company, the granting or denial of
which shall be within the absolute discretion of the Company. Any attempt to
effect such transfer without the consent of the Company shall be null and void.
The Company has not registered this Note under the Act or the applicable
securities laws of any state in reliance on exemptions from registration. Such
exemptions depend upon the investment intent of the Holder at the time he
acquires his Note. The Holder is acquiring this Note for his own account for
investment purposes only and not with a view toward distribution or resale of
such Note within the meaning of the Act and the applicable securities laws of
any state. The Company shall be under no duty to register the Note or to comply
with an exemption in connection with the sale, transfer or other disposition
under the applicable laws and regulations of the Act or the applicable
securities laws of any state. The Company may require the Holder to provide, at
his expense, an opinion of counsel satisfactory to the Company to the effect
that any proposed transfer or other assignment of the Note will not result in a
violation of the applicable federal or state securities laws or any other
applicable federal or state laws or regulations.

                                       7
<PAGE>

                  12.2 All expenses, including reasonable legal fees incurred by
the Company in connection with any permitted transfer, assignment or pledge of
this Note will be paid by the Holder requesting such transfer, assignment or
pledge.

                  12.3 Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Note and, in the
case of any such loss, theft or destruction of any Note, upon delivery of an
indemnity bond in such reasonable amount as the Company may determine (or, in
the case of any Note held by the original Noteholder, of an indemnity agreement
reasonably satisfactory to the Company), or, in the case of any such mutilation,
upon the surrender of such Note to the Company at is principal office for
cancellation, the Company at its expense will execute and deliver, in lieu
thereof, a new Note of like tenor, dated the date to which interest hereunder
shall have been paid on such lost, stolen, destroyed or mutilated Note.

                  12.4 Subject to Subparagraph 12.1 above, the Holder may, at
his option, either in person or by duly authorized attorney, surrender this Note
for registration of transfer at the principal office of the Company and, upon
payment of any expenses associated with the transfer, receive in exchange
therefor a Note or Notes, dated as of the date to which interest has been paid
on the Note so surrendered, each in the principal amount of $1,000 or any
multiple thereof, for the same aggregate unpaid principal amount as the Note so
surrendered and registered as payable to such person or persons as may be
designated by the Holder. Every Note surrendered for registration of transfer
shall be duly endorsed or shall be accompanied by a written instrument of
transfer duly executed by the Holder or his attorney duly authorized in writing.
Every Note, so made and delivered by the Company in exchange for any Note
surrendered, shall in all other respects be in the same form and have the same
terms as the Note surrendered. No transfer of any Note shall be valid unless
made in such manner at the principal office of the Company.

                  12.5 The Company may treat the person in whose name this Note
is registered as the owner and Holder of this Note for the purpose of receiving
payment of all principal of and all Interest on this Note, and for all other
purposes whatsoever, whether or not such Note shall be overdue and, except for
transfers effected in accordance with this subparagraph, the Company shall not
be affected by notice to the contrary.

         13. MODIFICATIONS AND AMENDMENTS. After notice given by the Company to
the Holders of all Notes at the time outstanding, the Company may from time to
time and at any time enter into an agreement or agreements supplemental to the
provisions of this Note for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Notes or of modifying
in any manner the rights of the Holders of the Notes; PROVIDED, HOWEVER, that no
such supplemental agreement, modification or amendment may, without the consent
of the holder of each Note then outstanding affected thereby, (i) reduce the
percentage of principal amount of Notes whose Holders may consent to an
amendment, supplement or waiver; (ii) reduce the rate or change the time for
payment of interest, including Default Interest, on any Note; (iii) reduce the
principal amount of any Note or change the Maturity Date of the Notes; (iv) make


                                       8
<PAGE>

any Note payable in money other than that stated in the Note; (v) impair the
right to institute suit for the enforcement of any payment of principal of, or
premium, if any, or interest on, any Note; (vi) make any change in the
percentage of principal amount of Notes necessary to waive compliance with
certain provisions of the Note; or (vii) waive a continuing default or Event of
Default in the payment of principal of, premium, if any, or Interest on the
Notes. The modifications and amendments of the Notes may be made by the Company
without the consent of any Holders of Notes in certain limited circumstances,
including (a) to cure any ambiguity, omission, defect or inconsistency, (b) to
provide for the assumption of the obligations of the Company under the Notes
upon the merger, consolidation or sale or other disposition of all or
substantially all of the assets of the Company, or (c) to make any change that
does not adversely affect the rights of any holder of Notes. The Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
any past default under the Notes, except a default in the payment of principal,
premium, if any, or Interest. Promptly after execution by the Company and
Holders of the Notes of a supplemental agreement pursuant to the provisions of
this paragraph, the Company shall deliver a copy of such supplemental agreement
to all Holders of the Notes at the time outstanding.

         14. NOTICES. All notices provided for herein shall be validly given if
in writing and delivered personally or sent by certified mail, postage prepaid,
to the office of the Company or such other address as the Company may from time
to time designate in writing sent by certified mail, postage prepaid, to the
Holder at his address set forth below or such other address as the Holder may
from time to time designate in writing to the Company by certified mail, postage
prepaid.

         15. USURY. All Interest, Default Interest, fees, charges, goods, things
in action or any other sums or things of value, or other contractual obligations
(collectively, the "Additional Sums") paid by the Company hereunder, whether
pursuant to this Note or otherwise, with respect to the Indebtedness evidenced
hereby, or any other document or instrument in any way pertaining to the
Indebtedness, which, under the laws of the State of California may be deemed to
be Interest with respect to such loan or Indebtedness, shall, for the purpose of
any laws of the State of California, which may limit the maximum amount of
Interest to be charged with respect to such loan or Indebtedness, be payable by
the Company as, and shall be deemed to be, Interest and for such purposes only,
the agreed upon and contracted rate of Interest shall be deemed to be increased
by the Additional Sums. Notwithstanding any provision of this Note to the
contrary, the total liability for payments in the nature of Interest under this
Note shall not exceed the limits imposed by applicable law. The Company shall
not assert a claim, and shall actively resist any attempts to compel it to
assert a claim, respecting a benefit under any present or future usury laws
against any Holder of this Note.

         16. BINDING EFFECT. This Note shall be binding upon the parties hereto
and their respective heirs, executors, administrators, representatives,
successors and permitted assigns.

         17. COLLECTION FEES. Except as otherwise provided herein, the Company
shall pay all costs of collection, including reasonable attorneys' fees and all
costs of suit and preparation for such suit (and whether at trial or appellate
level), in the event the unpaid principal amount of this Note, or any payment of
Interest is not paid when due, or in the event Holder is made party to any
litigation because of the existence of the Indebtedness evidenced by this Note,
or if at any time Holder should incur any attorneys' fees in any proceeding
under the Federal Bankruptcy Code (or other similar laws for the protection of
debtors generally) in order to collect any Indebtedness hereunder or to
preserve, protect or realize upon any security for, or guarantee or surety of,
such Indebtedness whether suit be brought or not, and whether through courts of
original jurisdiction, as well as in courts of appellate jurisdiction, or
through a bankruptcy court or other legal proceedings.

                                       9
<PAGE>

         18. CONSTRUCTION. This Note shall be governed as to its validity,
interpretation, construction, effect and in all other respects by and in
accordance with the laws and interpretations thereof of the State of California.
Unless the context otherwise requires, the use of terms in singular and
masculine form shall include in all instances singular and plural number and
masculine, feminine and neuter gender.

         19. SEVERABILITY. In the event any one or more of the provisions
contained in this Note or any future amendment hereto shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this Note
or such other agreement, and in lieu of each such invalid, illegal or
unenforceable provision there shall be added automatically as a part of this
Note a provision as similar in terms to such invalid, illegal or unenforceable
provision as may be possible and be valid, legal and enforceable.

         20. ENTIRE AGREEMENT. This Note Agreement represents the entire
agreement and understanding between the parties concerning the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
representations and warranties with respect thereto.

         21. GOVERNING LAW; JURISDICTION; JURY TRIAL. The corporate laws of the
State of Nevada shall govern all issues concerning the relative rights of the
Company and its shareholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by the
internal laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of California. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of San Diego for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, or in any manner arising in connection with or related to the
transactions contemplated hereby or involving the parties hereto whether at law
or equity and under any contract, tort or any other claim whatsoever and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing or faxing a copy
thereof to such party at the address for such notices as listed in this Note and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.

                                       10
<PAGE>

         22. REPRESENTATIONS AND WARRANTIES TO SURVIVE CLOSING. All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Note and the issuance of any Conversion Shares
upon the conversion hereof.

         23. HEADINGS. The headings used in this Note are used for convenience
only and are not to be considered in construing or interpreting this Note.

         24. Definitions.

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

         "BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.

         "CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, equity participations or other equivalents (however designated) of
corporate stock or partnership interests and any and all warrants, options and
rights with respect thereto (whether or not currently exercisable), including
each class of common stock and preferred stock of such Person.

         "GAAP" means generally accepted accounting principles as in effect in
the United States of America as of the Issue Date.

         "HOLDER" means a Person in whose name a Note is registered on the
Company's books.

         "INDEBTEDNESS" means, without duplication, with respect to any Person,
(a) all obligations of such Person (i) in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof); (ii) evidenced by bonds, notes, debentures or
similar instruments; (iii) representing the balance deferred and unpaid of the
purchase price of any property or services (other than accounts payable or other
obligations arising in the ordinary course of business); (iv) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks, (v) for
the payment of money relating to a capitalized lease obligation under GAAP; or
(vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit; (b) all net obligations of such
Person under interest rate swap obligations and foreign currency hedges; (c) all
liabilities of others of the kind described in the preceding clauses (a) or (b)
that such Person has guaranteed or that are otherwise its legal liability; (d)
Indebtedness (as otherwise defined in this definition) of another Person secured
by lien on any asset of such Person, whether or not such Indebtedness is assumed
by such Person, the amount of such obligations being deemed to be the lesser of


                                       11
<PAGE>

(1) the full amount of such obligations so secured, and (2) the fair market
value of such asset, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a board resolution; and
(e) any and all deferrals, renewals, extensions, refinancings and refundings
(whether direct or indirect) of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (a), (b),
(c), (d) or this clause (e), whether or not between or among the same parties.

         "ISSUE DATE" means the date on which the Note is originally issued.

         "MATURITY DATE" means January 2, 2007.

         "PERSON" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.

         A "SUBSIDIARY" of any Person means (i) a corporation a majority of
whose Voting Stock is at the time, directly or indirectly, owned by such Person,
by one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person, (ii) a partnership in which such Person or a
subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if such Person or its subsidiary is
entitled to receive more than fifty percent (50%) of the assets of such
partnership upon its dissolution, or (iii) any other Person (other than a
corporation or partnership) in which such Person, directly or indirectly, at the
date of determination thereof, has (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of directors or
other governing body of such Person.

         "SUBSIDIARY" means any subsidiary of the Company.

         "VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof,
whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency to vote in the election of members of the
Board of Directors or other governing body of such Person.

         25. MISCELLANEOUS. Except as otherwise provided herein, the Company
waives demand, diligence, presentment for payment and protest, notice of
extension, dishonor, maturity and protest. Time is of the essence with respect
to the performance of each and every covenant, condition, term and provision
hereof.

         IN WITNESS WHEREOF, this Note has been issued on the 2nd day of
November, 2005.

                                       AETHLON MEDICAL, INC.


                                       By ______________________________________
                                          James A. Joyce
                                          Its Chairman and CEO


                                       12
<PAGE>


Mailing Address of Holder:
ELLEN R WEINER FAMILY REVOCABLE TRUST
- -------------------------------------
4004 EAST LUPINE AVENUE
- ------------------------------------
PHOENIX, ARIZONA  85028
- ------------------------------------


Mailing Address of Company:
3030 Bunker Hill Street
Suite 4000
San Diego, CA 92109


                                       13
<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF ADVANCES


                        DATE                                 AMOUNT
                        ----                                 ------
                      07/11/05                              $105,000
                      08/02/05                              $ 25,000
                      08/19/05                              $ 50,000
                      08/31/05                              $100,000
                      09/14/05                              $ 75,000
                      09/30/05                              $100,000
                      10/07/05                              $ 50,000
                      10/14/05                              $ 50,000
                      10/19/05                              $ 25,000


                                       14
<PAGE>

                                    EXHIBIT B

                                CONVERSION NOTICE


                (To be signed only upon conversion of this Note)


TO:   AETHLON MEDICAL, INC.

The undersigned, the registered holder of the 10 % Series A Convertible Note
(the "Note") of AETHLON MEDICAL, INC. (the "Company"), hereby surrenders the
Note for conversion into shares of Common Stock of the Company (the "Common
Stock") to the extent of $_______ unpaid principal amount of the Note and
$_______ unpaid accrued Interest due under the Note, all in accordance with the
provisions of such Note. The undersigned requests (i) that a certificate
representing shares of Common Stock, bearing the appropriate legends, be issued
to the undersigned, and (ii) if the unpaid principal amount so converted is less
than the entire unpaid principal amount of the Note, that a new substitute note
representing the portion of said unpaid principal amount that is not so
converted be issued in accordance with the provisions of the Note.



________________________________________
(Signature and name of the registered holder)

________________________________________
Print Name

Dated:___________________________________


                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>4
<FILENAME>aethlon_8kex4-3.txt
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.3

  THESE SECURITIES MAY NOT BE OFFERED OR SOLD UNLESS AT THE TIME OF SUCH OFFER
  OR SALE, THE PERSON MAKING SUCH OFFER OR SALE DELIVERS A PROSPECTUS MEETING
    THE REQUIREMENTS OF SECTION 10 OF THE SECURITIES ACT OF 1933, AS AMENDED
     ("ACT"), FORMING A PART OF A REGISTRATION STATEMENT, OR POST-EFFECTIVE
   AMENDMENT THERETO, WHICH IS EFFECTIVE UNDER SAID ACT, UNLESS IN THE OPINION
      OF COUNSEL TO THE CORPORATION, SUCH OFFER AND SALE IS EXEMPT FROM THE
                      PROVISIONS OF SECTION 5 OF SAID ACT.

                              AETHLON MEDICAL, INC.

                          COMMON STOCK PURCHASE WARRANT

         Aethlon Medical, Inc. (the "Company"), a Nevada corporation, hereby
certifies that, for value received of $.001 per Warrant,
_____________________________________________ (the "Holder"), whose address is
______________________________________________, is entitled, subject to the
terms set forth below at any time or from time to time after the date hereof and
before the Expiration Date (as defined below), to purchase from the Company
_________ shares (the "Shares") of Common Stock, $ .001 par value, at a price of
$.20 per Share (the purchase price per Share, as adjusted from time to time
pursuant to the provisions hereunder set forth, is referred to in this Warrant
as the "Purchase Price").

         This Warrant was issued to the Holder in connection with the Holder's
conversion of all or part of a 10% Series A Convertible Note issued by the
Company into its Common Stock.

1. TERMS OF THE WARRANT.

         1.1 TIME OF EXERCISE. Subject to the provisions of Sections 1.5,
"Transfer and Assignment," and 3.1, "Registration and Legends," this Warrant may
be exercised at any time and from time to time after 9:00 a.m., P.S.T., on
_____________, 2005 (the "Exercise Commencement Date"), but no later than 5:00
p.m., P.S.T., ___________, 2008 (the "Expiration Date"), at which point it shall
become void and all rights under this Warrant shall cease.

         1.2 MANNER OF EXERCISE.

                  1.2.1 Upon compliance with and subject to the conditions set
forth in this Warrant, the Holder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant with the form of subscription attached
hereto duly executed to the Company at its corporate office at the address
indicated in this Warrant, together with the full Purchase Price for each Share
to be purchased (i) in lawful money of the United States, or by certified check,
bank draft or postal or express money order payable in United States dollars to
the order of the Company or (ii) a manner acceptable to the Company.

                  1.2.2 Upon receipt of this Warrant with the form of
subscription duly executed and accompanied by payment of the aggregate Purchase
Price for the Shares for which this Warrant is then being exercised, the Company
shall cause to be issued certificates or other evidence of ownership, for the
total number of whole Shares for which this Warrant is being exercised in such
denominations as are required for delivery to the Holder, and the Company shall
thereupon deliver such documents to the Holder or its nominee.

                                       1
<PAGE>

                  1.2.3 If the Holder exercises this Warrant with respect to
fewer than all of the Shares that may be purchased under this Warrant, the
Company shall execute a new Warrant for the balance of the Shares that may be
purchased upon exercise of this Warrant and deliver such new Warrant to the
Holder.

                  1.2.4 The Company covenants and agrees that it will pay when
due and payable any and all taxes which may be payable in respect of the issue
of this Warrant, or the issue of any Shares upon the exercise of this Warrant.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issuance or delivery of this Warrant
or of the Shares in a name other than that of the Holder at the time of
surrender, and until the payment of such tax, the Company shall not be required
to issue such Shares.

                  1.2.5 The Company shall, at the time of any exercise of all or
part of this Warrant, upon the request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holders shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant, provided that if the Holder of this Warrant
shall fail to make any such request, such failure shall not affect the
continuing obligations of the Company to afford to such Holder any such rights.

         1.3 EXCHANGE OF WARRANT. This Warrant may be split-up, combined or
exchanged for another Warrant or Warrants of like tenor to purchase a like
aggregate number of Shares. If the Holder desires to split-up, combine or
exchange this Warrant, it shall make such request in writing delivered to the
Company at its corporate office and shall surrender this Warrant and any other
Warrants to be so split-up, combined or exchanged, the Company shall execute and
deliver to the person entitled thereto a Warrant or Warrants, as the case may
be, as so requested. The Company shall not be required to effect any split-up,
combination or exchange which will result in the issuance of a Warrant entitling
the Holder to purchase upon exercise a fraction of a Share. The Company may
require the Holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split-up, combination or
exchange of Warrants. The term "Warrant" as used herein includes any Warrants
issued in substitution for or replacement of this Warrant, or into which this
Warrant may be divided or exchanged.

         1.4 HOLDER AS OWNER. Prior to due presentment for registration of
transfer of this Warrant, the Company may deem and treat the Holder as the
absolute owner of this Warrant (notwithstanding any notation of ownership or
other writing hereon) for the purpose of any exercise hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Irrespective of the date of issue and delivery of certificates for any Shares
issuable upon the exercise of the Warrant, each person in whose name any such
certificate is issued shall be deemed to have become the holder of record of the
Shares represented thereby on the date on which all or a portion of the Warrant
surrendered in connection with the subscription therefor was surrendered and
payment of the purchase price was tendered. No surrender of all or a portion of
the Warrant on any date when the stock transfer books of the Company are closed,
however, shall be effective to constitute the person or persons entitled to
receive Shares upon such surrender as the record holder of such Shares on such
date, but such person or persons shall be constituted the record holder or
holders of such Shares at the close of business on the next succeeding date on
which the stock transfer books are opened. Each person holding any Shares
received upon exercise of Warrant shall be entitled to receive only dividends or
distributions payable to holders of record on or after the date on which such
person shall be deemed to have become the holder of record of such Shares.

                                       2
<PAGE>

         1.5 TRANSFER AND ASSIGNMENT. This Warrant may not be sold,
hypothecated, exercised, assigned or transferred except in accordance with and
subject to the provisions of the Securities Act of 1933, as amended (the "Act").

         1.6 METHOD FOR ASSIGNMENT. Any assignment permitted under this Warrant
shall be made by surrender of this Warrant to the Company at its principal
office with the form of assignment attached hereto duly executed and funds
sufficient to pay any transfer tax. In such event, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee designated
in such instrument of assignment and this Warrant shall promptly be canceled.
This Warrant may be divided or combined with other Warrants which carry the same
rights upon presentation thereof at the corporate office of the Company together
with a written notice signed by the Holder, specifying the names and
denominations in which such new Warrants are to be issued.

         1.7 RIGHTS OF HOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Holder the right to vote or consent or receive
notice as a stockholder in respect of any meetings of stockholders for the
election of directors or any other matter, or as having any rights whatsoever as
a stockholder of the Company. If, however, at any time prior to the expiration
of this Warrant and prior to its exercise, any of the following shall occur:

                  1.7.1 The Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or

                  1.7.2 The Company shall offer to the holders of its Common
Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or

                  1.7.3 There shall be proposed any capital reorganization or
reclassification of the Common Stock, or a sale of all or substantially all of
the assets of the Company, or a consolidation or merger of the Company with
another entity; or

                  1.7.4 There shall be proposed a voluntary or involuntary
dissolution, liquidation or winding up of the Company; then, in any one or more
of said cases, the Company shall cause to be mailed to the Holder, at the
earliest practicable time (and, in any event, not less than thirty (30) days
before any record date or other date set for definitive action), written notice
of the date on which the books of the Company shall close or a record shall be
taken to determine the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such reorganization, reclassification, sale, consolidation, merger,
dissolution, liquidation or winding up, as the case may be. Such notice shall
also set forth such facts as shall indicate the effect of such action (to the


                                       3
<PAGE>

extent such effect may be known at the date of such notice) on the Purchase
Price and the kind and amount of the Common Stock and other securities and
property deliverable upon exercise of this Warrant. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in said distribution or subscription rights or shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, sale, consolidation, merger, dissolution,
liquidation or winding up, as the case may be (on which date, in the event of
voluntary or involuntary dissolution, liquidation or winding up of the Company,
the right to exercise this Warrant shall terminate). Without limiting the
obligation of the Company to provide notice to the holder of actions hereunder,
it is agreed that failure of the Company to give notice shall not invalidate
such action of the Company.

         1.8 LOST WARRANT CERTIFICATE(S). Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction of reasonably
satisfactory indemnification, including a surety bond if required by the
Company, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will cause to be executed and delivered a new Warrant of like tenor and
date. Any such new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or not this Warrant
so lost, stolen, destroyed, or mutilated shall be at any time enforceable by
anyone.

         1.9 COVENANTS OF THE COMPANY. The Company covenants and agrees as
follows:

                  1.9.1 At all times it shall reserve and keep available for the
exercise of this Warrant into Common Stock such number of authorized shares of
Common Stock as are sufficient to permit the exercise in full of this Warrant
into Common Stock; and

                  1.9.2 All Shares issued upon exercise of the Warrant shall be
duly authorized, validly issued and outstanding, fully-paid and non-assessable.

         1.10 LIMITATION ON EXERCISE RIGHTS. Notwithstanding any other provision
of Section 1 to the contrary, the Holder shall not be entitled to exercise this
Warrant and any other Warrant (the "Related Warrants") issued by the Company to
the Holder or convert any of the 10% Series A Convertible Notes (the "Notes")
issued by the Company to the Holder into Common Stock in excess of that number
of shares of Common Stock which, upon giving effect to such conversion, would
cause the aggregate number of shares of Common Stock beneficially owned by the
Holder and its Affiliates to exceed 9.9% of the outstanding shares of the Common
Stock following such conversion. For purposes of the foregoing provision, the
aggregate number of shares of Common Stock beneficially owned by the Holder and
its Affiliates shall include the number of shares of Common Stock beneficially
owned and those shares issuable upon conversion of all Notes and Related
Warrants with respect to which the determination of such provision is being
made, but shall exclude the number of shares of Common Stock that would be
issuable upon (i) conversion of the remaining principal amount(s) of all Notes
and the Related Warrants beneficially owned by the Holder and its Affiliates and
(ii) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company into Common Stock beneficially owned by the
Holder and its Affiliates that are subject to a limitation on conversion or
exercise analogous to the limitation contained in this Note. For purposes of
this Section, in determining the number of outstanding shares of Common Stock


                                       4
<PAGE>

the Holder may rely on the number of outstanding shares of Common Stock as
reflected in (a) the Company's most recent Form 10-Q or Form 10-K, as the case
may be, or (b) more recent public announcement by the Company or (c) any other
written communication by the Company or its Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the reasonable written or
oral request of the Holder, the Company shall promptly 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 any conversions, exercises or purchases by the Holder
since the date as of which such number of outstanding shares of Common Stock was
reported. Except as otherwise set forth herein, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). For purposes of this Warrant, an
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under common control with such
specified Person. A "Person" means any individual, corporation, partnership,
joint venture, trust, estate or unincorporated organization.

2. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES PURCHASABLE UPON EXERCISE.

         2.1 RECAPITALIZATION. The number of Shares purchasable on exercise of
this Warrant and the Purchase Price therefor shall be subject to adjustment from
time to time in the event that the Company shall: (i) pay a dividend in, or make
a distribution of, shares of Common Stock; (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares; (iii) combine its outstanding
shares of Common Stock into a smaller number of shares; or (iv) spin-off a
subsidiary by distributing, as a dividend or otherwise, shares of the subsidiary
to its stockholders. In any such case, the total number of shares purchasable on
exercise of this Warrant immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive, at the same aggregate purchase price, the
number of shares of Common Stock that the Holder would have owned or would have
been entitled to receive immediately following the occurrence of any of the
events described above had this Warrant been exercised in full immediately prior
to the occurrence (or applicable record date) of such event. An adjustment made
pursuant to this Paragraph 2 shall, in the case of a stock dividend or
distribution, be made as of the record date and, in the case of a subdivision or
combination, be made as of the effective date thereof. If, as a result of any
adjustment pursuant to this Paragraph 2, the Holder shall become entitled to
receive shares of two or more classes of series of securities of the Company,
the Board of Directors of the Company shall equitably determine the allocation
of the adjusted purchase price between or among shares or other units of such
classes or series and shall notify the Holder of such allocation.

         2.2 MERGER OR CONSOLIDATION. In the event of any reorganization or
recapitalization of the Company or in the event the Company consolidates with or
merges into another entity or transfers all or substantially all of its assets
to another entity, then and in each such event, the Holder, on exercise of this
Warrant as provided herein, at any time after the consummation of such
reorganization, recapitalization, consolidation, merger or transfer, shall be
entitled, and the documents executed to effectuate such event shall so provide,
to receive the stock or other securities or property to which the Holder would
have been entitled upon such consummation if the Holder had exercised this
Warrant immediately prior thereto. In such case, the terms of this Warrant shall
survive the consummation of any such reorganization, recapitalization,
consolidation, merger or transfer and shall be applicable to the shares of stock
or other securities or property receivable on the exercise of this Warrant after
such consummation. and as an exchange for a larger or smaller number of shares,
as the case may be.

                                       5
<PAGE>

         2.3 NOTICE OF DISSOLUTION OR LIQUIDATION. Except as otherwise provided
in Section 2.2, "Merger or Consolidation," in the case of any sale or conveyance
of all or substantially all of the assets of the Company in connection with a
plan of complete liquidation of the Company, or in the case of the dissolution,
liquidation or winding-up of the Company, all rights under this Warrant shall
terminate on a date fixed by the Company, such date so fixed to be not earlier
than the date of the commencement of the proceedings for such dissolution,
liquidation or winding-up and not later than thirty (30) days after such
commencement date. Notice of such termination of purchase rights shall be given
to the Holder at least thirty (30) days prior to such termination date.

         2.4 STATEMENT OF ADJUSTMENT. Any adjustment pursuant to the provisions
of this Section 2 shall be made on the basis of the number of Shares which the
Holder would have been entitled to acquire by exercise of this Warrant
immediately prior to the event giving rise to such adjustment and, as to the
Purchase Price in effect immediately prior to the rise to such adjustment.
Whenever any such adjustment is required to be made, the Company shall forthwith
determine the new number of Shares which the Holder hereof shall be entitled to
purchase hereunder and/or such new Purchase Price and shall prepare, retain on
file and transmit to the Holder within ten (10) days after such preparation a
statement describing in reasonable detail the method used in calculating such
adjustment.

         2.5 NO FRACTIONAL SHARES. The Company shall not issue any fraction of a
Share in connection with the exercise of this Warrant, and in any case where the
Holder would, except for the provisions of this Section 2.5, be entitled under
the terms of this Warrant to receive a fraction of a Share upon such exercise,
the Company shall upon the exercise and receipt of the Purchase Price, issue the
largest number of whole Shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a Share to which the Holder would otherwise be entitled. The
Holder, by the acceptance of this Warrant, expressly waives his right to receive
a certificate for any fraction of a Share upon exercise hereof.

         2.6 NO CHANGE IN FORM REQUIRED. The form of Warrant need not be changed
because of any change pursuant to this Section 2 in the Purchase Price or in the
number of Shares purchasable upon the exercise of a Warrant, may state the same
Purchase Price and the same number of shares of Common Stock as are stated in
the Warrants initially issued pursuant to the Agreement.

3. REGISTRATION UNDER THE SECURITIES ACT OF 1933.

         3.1 REGISTRATION AND LEGENDS. The Holder understands that (i) the
Company has not registered the Warrant or the Shares under the Act, or the
applicable securities laws of any state in reliance on exemptions from
registration and (ii) such exemptions depend upon the Holder's investment intent
at the time the Holder acquires the Warrant or the Shares. The Holder therefore
represents and warrants that it is acquiring the Warrant, and will acquire the
Shares, for the Holder's own account for investment and not with a view to
distribution, assignment, resale or other transfer of the Warrant or the Shares.
Because the Warrant and the Shares are not registered, the Holder is aware that
the Holder must hold them indefinitely unless they are registered under the Act
and any applicable securities laws or the Holder must obtain exemptions from
such registration. Upon exercise, in part or in whole, of this Warrant, the
Shares shall bear the following legend:

                                       6
<PAGE>

                  The shares of Common Stock represented by this certificate
         have not been registered under the Securities Act of 1933, as amended
         ("Act") or any applicable state securities laws, and they may not be
         offered for sale, sold, transferred, pledged or hypothecated without an
         effective registration statement under the Securities Act and under any
         applicable state securities laws, or an opinion of counsel,
         satisfactory to the company, that an exemption from such registration
         is available.

         3.2 NO-ACTION LETTER. The Company agrees that it will be satisfied that
no post-effective amendment or new registration is required for the public sale
of the Shares if it shall be presented with a letter from the Staff of the
Securities and Exchange Commission (the "Commission"), stating in effect that,
based upon stated facts which the Company shall have no reason to believe are
not true in any material respect, the Staff will not recommend any action to the
Commission if such Shares are offered and sold without delivery of a prospectus,
and that, therefore, no Registration Statement under which such shares are to be
registered is required to be filed.

         3.3 REGISTRATION RIGHTS. The Holders of the Notes and Warrants or
Common Stock issued to the Holder without an effective Registration Statement
under the Act (the "Restricted Shares") shall have the right, under the terms of
a Registration Rights Agreement between the Holder and the Company, to cause the
Company register the Common Stock underlying the Notes and Warrants (the
"Underlying Common Stock") or Restricted Shares in a Registration Statement
under the Act filed by the Company with the Commission.

         3.4 RULE 144. If the Company (a) has or registers a class of securities
under Section 12 of the Exchange Act or (b) has or commences to file reports
under Section 13 or 15(d) of the Exchange Act, then, at the request of any
Holder who proposes to sell securities in compliance with Rule 144 of the SEC,
the Company will (i) forthwith furnish to such holder a written statement of
compliance with the filing requirements of the SEC as set forth in Rule 144, as
such rules may be amended from time to time and (ii) make available to the
public and such Holder such information and take such other action as it
requested by the Holder as will enable the Holder to make sales pursuant to Rule
144.

         3.5 AGREEMENTS. The agreements in this Section shall continue in effect
regardless of the exercise and surrender of this Warrant.

4. RESERVATION OF SHARES. The Company shall at all times reserve, for the
purpose of issuance on exercise of this Warrant such number of shares of Common
Stock or such class or classes of capital stock or other securities as shall
from time to time be sufficient to comply with this Warrant and the Company
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized and unissued Common Stock or such other
class or classes of capital stock or other securities to such number as shall be
sufficient for that purpose.

                                       7
<PAGE>

5. SURVIVAL. All agreements, covenants, representations and warranties herein
shall survive the execution and delivery of this Warrant and any investigation
at any time made by or on behalf of any parties hereto and the exercise, sale
and purchase of this Warrant (and any other securities or property) issuable on
exercise hereof.

6. REMEDIES. The Company agrees that the remedies at law of the Holder, in the
event of any default or threatened default by the Company in the performance or
compliance with any of the terms of this Warrant, may not be adequate and such
terms may, in addition to and not in lieu of any other remedy, be specifically
enforced by a decree of specific performance of any agreement contained herein
or by an injunction against a violation of any of the terms hereof or otherwise.

7. OTHER MATTERS.

7.1 BINDING EFFECT. All the covenants and provisions of this Warrant by or for
the benefit of the Company shall bind and inure to the benefit of its successors
and assigns hereunder.

7.2 NOTICES. Notices or demands pursuant to this Warrant to be given or made by
the Holder to or on the Company shall be sufficiently given or made if sent by
certified or registered mail, return receipt requested, postage prepaid, and
addressed, until another address is designated in writing by the Company, as
follows:

                               Aethlon Medical, Inc.
                               3030 Bunker Hill Street
                               Suite 4000
                               San Diego, CA 92109
                               Attn: President

Notices to the Holder provided for in this Warrant shall be deemed given or made
by the Company if sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed to the Holder at the Holder's last
known address as it shall appear on the books of the Company.

         7.3 GOVERNING LAW. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of California.

         7.4 PARTIES BOUND AND BENEFITTED. Nothing in this Warrant expressed and
nothing that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or corporation other
than the Company and the Holder any right, remedy or claim under promise or
agreement hereof, and all covenants, conditions, stipulations, promises and
agreements contained in this Warrant shall be for the sole and exclusive benefit
of the Company and its successors and of the Holder, its successors and, if
permitted, its assignees.

                                       8
<PAGE>

         7.5 HEADINGS. The Article headings herein are for convenience only and
are not part of this Warrant and shall not affect the interpretation thereof.

         IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the ____ day of ____________, 2005.



                                       AETHLON MEDICAL, INC.



                                       By: ____________________________________
                                          James A. Joyce
                                          Chairman and Chief Executive Officer

                                       9
<PAGE>


                              AETHLON MEDICAL, INC.

                                   ASSIGNMENT


         FOR VALUE RECEIVED, _____________________________________ hereby sells,
assigns and transfers unto
_______________________________________________________________________________
________________________________________________________ the within Warrant and
the rights represented thereby, and does hereby irrevocably constitute and
appoint ______________________________________ Attorney, to transfer said
Warrant on the books of the Company, with full power of substitution.

Dated:

                                                Signed: ________________________

                                                Print Name:_____________________



                                       10
<PAGE>


                                SUBSCRIPTION FORM

                              AETHLON MEDICAL, INC.
                             3030 BUNKER HILL STREET
                            SUITE 4000, SAN DIEGO, CA

         The undersigned hereby irrevocably subscribes for the purchase of _____
shares of Common Stock (the "Shares"), pursuant to and in accordance with the
terms and conditions of this Warrant, and herewith makes payment, covering the
purchase of the Shares, which should be delivered to the undersigned at the
address stated below, and, if such number of Shares shall not be all of the
Shares purchasable hereunder, then a new Warrant of like tenor for the balance
of the remaining Shares purchasable under this Warrant be delivered to the
undersigned at the address stated below.

         The undersigned agrees that: (1) the undersigned will not offer, sell,
transfer or otherwise dispose of any such Shares, unless either (a) a
registration statement, or post-effective amendment thereto, covering such
Shares have been filed with the Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Act"), and such sale, transfer or
other disposition is accompanied by a prospectus meeting the requirements of
Section 10 of the Act forming a part of such registration statement, or
post-effective amendment thereto, which is in effect under the Act covering the
Shares to be so sold, transferred or otherwise disposed of, or (b) counsel to
Aethlon Medical, Inc. (the "Company") satisfactory to the undersigned has
rendered an opinion in writing and addressed to the Company that such proposed
offer, sale, transfer or other disposition of the Shares is exempt from the
provisions of Section 5 of the Act in view of the circumstances of such proposed
offer, sale, transfer or other disposition; (2) the Company may notify the
transfer agent for its Common Stock that the certificates for the Common Stock
acquired by the undersigned are not to be transferred unless the transfer agent
receives advice from the Company that one or both of the conditions referred to
in (1)(a) and (1)(b) above have been satisfied; and (3) the Company may affix
the legend set forth in Section 3.1 of this Warrant to the certificates for
Shares hereby subscribed for, if such legend is applicable.

Dated:                                     Signed:_____________________________

                                           Address:____________________________

                                           ____________________________________


                                       11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>aethlon_8kex10-1.txt
<TEXT>

<PAGE>
                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT


         This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of November 2, 2005, by and among AETHLON MEDICAL, INC., a Nevada corporation
(the "Company"), and the parties who are signatories to this Agreement
(collectively referred to as the "Holders").

         WHEREAS, the Company sold to the Holders up to $1,000,000 principal
amount of 10% Series A Convertible Notes (the "Notes"), which are convertible
into units (the "Units") comprised of one share of the Company's Common Stock
(the "Common Stock") and one Common Stock purchase warrant (the "Warrant")
exercisable to purchase Common Stock at a price of $.20 per share in a private
placement (the "Offering");

         WHEREAS, in order to induce the Holders to purchase the Notes, the
Company has entered into this Agreement to register the Common Stock issuable
upon conversion of the Notes (the "Conversion Shares") and upon exercise of the
Warrants (the "Warrant Shares") under the Securities Act of 1933, as amended
(the "Act") in accordance with the provisions of this Agreement.

         WHEREAS, the Conversion Shares and Warrant Shares are collectively
referred to in this Agreement as "Registrable Securities."

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:

         1.       DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
meanings. Other capitalized terms in this Agreement will have the meanings set
forth in the Notes and the Warrants, as the case may be.

                  1.1 "BUSINESS DAY" means any day except Saturday, Sunday and
         any day which shall be a legal holiday or a day on which banking
         institutions in the State of New York or the State of California are
         authorized or required by law or other government actions to close.

                  1.2 "EFFECTIVENESS DATE" means, with respect to the initial
         Registration Statement required to be filed hereunder as to shares of
         Common Stock underlying the shares of Notes and Warrants, the ninetieth
         (90th) calendar day following the Filing Date and, with respect to any
         additional Registration Statements which may be required pursuant to
         Section 3.3, the ninetieth (90th) calendar day following the date on
         which the Company first knows, or reasonably should have known, that
         such additional Registration Statement is required hereunder; PROVIDED,
         HOWEVER, if the Company is notified by the Commission that one of the
         above Registration Statements will not be reviewed or is no longer
         subject to further review and comments, the Effectiveness Date as to
         such Registration Statement shall be the tenth (10th) Trading Day
         following the date on which the Company is so notified if such date
         precedes the dates required above.

                                       1
<PAGE>

                  1.3 "EFFECTIVENESS PERIOD" shall have the meaning set forth in
         Section 2.1.

                  1.4 "FILING DATE" means, with respect to the initial
         Registration Statement required to be filed hereunder as to shares of
         Common Stock underlying the Notes and Warrants, the later of November
         30, 2005 or 30 days after the date the Company completes an additional
         financing of at least $1.0 million but in no event later than December
         31, 2005 and, with respect to any additional Registration Statements
         which may be required pursuant to Section 3.3, the thirtieth (30th) day
         following the date on which the Company first knows, or reasonably
         should have known that such additional Registration Statement is
         required hereunder.

                  1.5 "HOLDER" or "HOLDERS" means the holder or holders, as the
         case may be, from time to time of Registrable Securities.

                  1.6 "INDEMNIFIED PARTY" shall have the meaning set forth in
         Section 5.3.

                  1.7 "INDEMNIFYING PARTY" shall have the meaning set forth in
         Section 5.3.

                  1.8 "PROSPECTUS" means the prospectus included in a
         Registration Statement (including, without limitation, a prospectus
         that includes any information previously omitted from a prospectus
         filed as part of an effective registration statement in reliance upon
         Rule 430A promulgated under the Securities Act), as amended or
         supplemented by any prospectus supplement, with respect to the terms of
         the offering of any portion of the Registrable Securities covered by a
         Registration Statement, and all other amendments and supplements to the
         Prospectus, including post-effective amendments, and all material
         incorporated by reference or deemed to be incorporated by reference in
         such Prospectus.

                  1.9 "REGISTRABLE SECURITIES" means all of the shares of Common
         Stock issuable upon conversion in full of the Notes and exercise in
         full of the Warrants, and the shares of Common Stock issuable in lieu
         of the payment of liquidated damages, together with any securities
         issued or issuable upon any stock split, dividend or other distribution
         recapitalization or similar event with respect to the foregoing.

                  1.10 "REGISTRATION STATEMENT" means the registration
         statements required to be filed hereunder and any additional
         registration statements contemplated by Section 3.3, including (in each
         case) the Prospectus, amendments and supplements to such registration
         statement or Prospectus, including pre- and post-effective amendments,
         all exhibits thereto, and all material incorporated by reference or
         deemed to be incorporated by reference in such registration statement.

                                       2
<PAGE>

                  1.11 "RULE 415" means Rule 415 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  1.12 "RULE 424" means Rule 424 promulgated by the Commission
         pursuant to the Securities Act, as such Rule may be amended from time
         to time, or any similar rule or regulation hereafter adopted by the
         Commission having substantially the same effect as such Rule.

                  1.13 "SPECIAL COUNSEL" means one special counsel for the
         Holders, the cost of whose services will be reimbursed by the Company
         pursuant to Section 4.

                  1.14 "WARRANTS" shall mean the Common Stock purchase warrants
         issued to the Holders upon conversion of the Notes.

         2.       SHELF REGISTRATION.

                  2.1 On or prior to each Filing Date, the Company shall prepare
         and file with the Commission a "Shelf" Registration Statement covering
         the resale of all Registrable Securities applicable to such Filing Date
         for an offering to be made on a continuous basis pursuant to Rule 415.
         The Registration Statement shall be on Form S-3 (except if the Company
         is not then eligible to register for resale the Registrable Securities
         on Form S-3, in which case such registration shall be on Form SB-2 or
         another appropriate form in accordance herewith) and shall contain
         (except if otherwise directed by the Holders) the "Plan of
         Distribution" in substantially the form attached hereto as EXHIBIT A.
         The Company shall use its best efforts to cause the Registration
         Statement to be declared effective under the Securities Act as promptly
         as possible after the filing thereof, but in any event prior to the
         applicable Effectiveness Date, and shall use its best efforts to keep
         such Registration Statement continuously effective under the Securities
         Act until the date which is two years after the expiration date of the
         Warrants or such earlier date when all Registrable Securities covered
         by such Registration Statement have been sold or may be sold without
         volume restrictions pursuant to Rule 144(k), as determined by the
         counsel to the Company pursuant to a written opinion letter to such
         effect, addressed and acceptable to the Company's transfer agent and
         the affected Holders (the "EFFECTIVENESS PERIOD").

                  2.2 The Registration Statements to be filed hereunder shall
         include a number of shares of Common Stock equal to no less than the
         sum of (i) 150% of the number of shares of Common Stock issuable upon
         conversion in full of the Notes subject to such Registration Statement,
         assuming for such purposes that Notes are outstanding for their full
         term and the lowest possible Conversion Price, as defined in the Notes,
         applies and (ii) 150% of the number of shares of Common Stock issuable
         upon exercise in full of the Warrants subject to such Registration
         Statement.

                  2.3 The Company shall be subject to the provisions of Sections
         2.4 if

                                       3
<PAGE>

                           2.3.1 a Registration Statement is not filed on or
                  prior to its respective Filing Date (if the Company files such
                  Registration Statement without affording the Holder the
                  opportunity to review and comment on the same as required by
                  Section 3.1 hereof, the Company shall not be deemed to have
                  satisfied this Subsection 2.3.1); or

                           2.3.2 a Registration Statement filed hereunder is not
                  declared effective by the Commission on or prior to its
                  Effectiveness Date; or

                           2.3.3 after a Registration Statement is filed with
                  and declared effective by the Commission, such Registration
                  Statement ceases to be effective as to all Registrable
                  Securities to which it is required to relate at any time prior
                  to the expiration of the Effectiveness Period without being
                  succeeded within ten (10) Business Days by an amendment to
                  such Registration Statement or by a subsequent Registration
                  Statement filed with and declared effective by the Commission;
                  or

                           2.3.4 the Common Stock shall be delisted or suspended
                  from trading on the New York Stock Exchange, American Stock
                  Exchange, the Nasdaq Stock Market or the Nasdaq OTC Bulletin
                  Board (each, a "SUBSEQUENT MARKET") for more than twenty (20)
                  Business Days (which need not be consecutive Business Days);
                  or

                           Any failure or breach set forth in this Section 2.3
                  is referred to as an "EVENT." The following are referred to as
                  "Event Date": for purposes of Subsections 2.3.1 and 2.3.2, the
                  date on which such Event occurs, or for purposes of
                  Subsections 2.3.3 and 2.3.4, the date on which such ten (10)
                  and twenty (20) Business Day periods are exceeded.

                  2.4 On an Event Date, the Company shall pay to each Holder, as
                  liquidated damages and not as a penalty, an amount in cash
                  equal to one percent (1.0%) of the original principal amount
                  of the Notes of such Holder. On every month after the Event
                  Date until the applicable Event is cured, the Company shall
                  pay to each Holder, as liquidated damages and not as a
                  penalty, an amount in cash equal to one and one-half percent
                  (1.5%) of the original principal amount of the Notes. If the
                  Warrants have been issued and are "in the money," the
                  penalties shall be computed based on the value of any
                  outstanding Warrants on an Event Date and on each month
                  following an Event Date until the Event is cured. The value of
                  the Warrants for such purposes shall be the difference between
                  the closing price of the Common Stock on the Event Date (and
                  after the Event Date, the average of the closing sales prices
                  during the applicable month) and the exercise price multiplied
                  by the number of shares of Common Stock issuable upon exercise
                  of the Warrants. If the Company fails to pay any liquidated
                  damages pursuant to this Section in full within seven (7) days
                  after the date payable, the Company will pay interest thereon
                  at a rate of twelve (12%) per annum (or such lesser maximum
                  amount that is permitted to be paid by applicable law) to the
                  Holder, accruing daily from the date such liquidated damages
                  are due until such amounts, plus all such interest thereon,


                                       4
<PAGE>

                  are paid in full. At the option of the Company, shares of
                  Common Stock may be issued to the Holder in lieu of a cash
                  payment for such liquidated damages based upon the Conversion
                  Price then in effect, provided that such shares have been
                  registered for resale by such Holder and the Company provides
                  the Holder with at least five (5) Business Days' irrevocable
                  notice prior to the date such payment is due. The liquidated
                  damages pursuant to the terms hereof shall apply on a pro-rata
                  basis for any portion of a month prior to the cure of an
                  Event.

         3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations hereunder, the Company shall:

                  3.1 Not less than five (5) Business Days prior to the filing
         of each Registration Statement or any related Prospectus or any
         amendment or supplement thereto (including any document that would be
         incorporated or deemed to be incorporated therein by reference), the
         Company shall (i) furnish to the Holders and their Special Counsel
         copies of all such documents proposed to be filed, which documents
         (other than those incorporated or deemed to be incorporated by
         reference) will be subject to the review of such Holders and their
         Special Counsel, and (ii) cause its officers and directors, counsel and
         independent certified public accountants to respond to such inquiries
         as shall be necessary, in the reasonable opinion of respective counsel
         to conduct a reasonable investigation within the meaning of the
         Securities Act. The Company shall not file the Registration Statement
         or any such Prospectus or any amendments or supplements thereto to
         which the Holders of a majority of the Registrable Securities and their
         Special Counsel shall reasonably object, provided the Company is
         notified of such objection no later than five (5) Business Days after
         the Holders have been so furnished copies of such documents and
         provided, further, that such objections relate to the selling
         shareholder information, the plan of distribution, any information
         relating to the Holders, either directly or indirectly, or the
         compliance under the Securities Act of such Registration Statement or
         Prospectus as to form.

                  3.2 (i) Prepare and file with the Commission such amendments,
         including post-effective amendments, to a Registration Statement and
         the Prospectus used in connection therewith as may be necessary to keep
         a Registration Statement continuously effective as to the applicable
         Registrable Securities for the Effectiveness Period and prepare and
         file with the Commission such additional Registration Statements in
         order to register for resale under the Securities Act all of the
         Registrable Securities; (ii) cause the related Prospectus to be amended
         or supplemented by any required Prospectus supplement, and as so
         supplemented or amended to be filed pursuant to Rule 424; (iii) respond
         as promptly as reasonably possible, and in any event within ten (10)
         days, to any comments received from the Commission with respect to a
         Registration Statement or any amendment thereto and as promptly as
         reasonably possible provide the Holders true and complete copies of all
         correspondence from and to the Commission relating to a Registration
         Statement; and (iv) comply in all material respects with the provisions
         of the Securities Act and the Exchange Act with respect to the
         disposition of all Registrable Securities covered by a Registration
         Statement during the applicable period in accordance with the intended
         methods of disposition by the Holders thereof set forth in such
         Registration Statement as so amended or in such Prospectus as so
         supplemented.

                                       5
<PAGE>

                  3.3 File additional Registration Statements if the number of
         Registrable Securities at any time exceeds seventy-five percent (75%)
         of the number of shares of Common Stock then registered for the account
         of the Holders in all existing Registration Statements hereunder.

                  3.4 Notify the Holders of Registrable Securities to be sold
         and their Special Counsel as promptly as reasonably possible (and, in
         the case of (i)(A) below, not less than five (5) Business Days prior to
         such filing) and (if requested by any such Person) confirm such notice
         in writing no later than one Business Day following the day (i)(A) when
         a Prospectus or any Prospectus supplement or post-effective amendment
         to a Registration Statement is proposed to be filed; and (B) with
         respect to a Registration Statement or any post-effective amendment,
         when the same has become effective; (ii) of the issuance by the
         Commission of any stop order suspending the effectiveness of a
         Registration Statement covering any or all of the Registrable
         Securities or the initiation of any Proceedings for that purpose; (iii)
         of the receipt by the Company of any notification with respect to the
         suspension of the qualification or exemption from qualification of any
         of the Registrable Securities for sale in any jurisdiction, or the
         initiation or threatening of any Proceeding for such purpose; and (iv)
         of the occurrence of any event or passage of time that makes the
         financial statements included in a Registration Statement ineligible
         for inclusion therein or any statement made in a Registration Statement
         or Prospectus or any document incorporated or deemed to be incorporated
         therein by reference untrue in any material respect or that requires
         any revisions to a Registration Statement, Prospectus or other
         documents so that, in the case of a Registration Statement or the
         Prospectus, as the case may be, it will not contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                  3.5 Promptly deliver to each Holder and their Special Counsel,
         without charge, as many copies of the Prospectus or Prospectuses,
         including each form of Prospectus, and each amendment or supplement
         thereto as such Persons may reasonably request. The Company hereby
         consents to the use of such Prospectus and each amendment or supplement
         thereto by each of the selling Holders in connection with the offering
         and sale of the Registrable Securities covered by such Prospectus and
         any amendment or supplement thereto.

                  3.6 Prior to any public offering of Registrable Securities,
         use its best efforts to register or qualify or cooperate with the
         selling Holders and their Special Counsel in connection with the
         registration or qualification (or exemption from such registration or
         qualification) of such Registrable Securities for offer and sale under
         the securities or Blue Sky laws of such jurisdictions within the United
         States as any Holder requests in writing, to keep each such
         registration or qualification (or exemption therefrom) effective during
         the Effectiveness Period and to do any and all other acts or things
         necessary or advisable to enable the disposition in such jurisdictions
         of the Registrable Securities covered by a Registration Statement;
         provided, that the Company shall not be required to qualify generally
         to do business in any jurisdiction where it is not then so qualified or
         subject the Company to any material tax in any such jurisdiction where
         it is not then so subject.

                                       6
<PAGE>

                  3.7 Cooperate with the Holders to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities to be delivered to a transferee pursuant to a Registration
         Statement, which certificates shall be free, to the extent permitted by
         law, of all restrictive legends, and to enable such Registrable
         Securities to be in such denominations and registered in such names as
         any such Holders may request.

                  3.8 Upon the occurrence of any event contemplated this Section
         3, as promptly as reasonably possible, prepare a supplement or
         amendment, including a post-effective amendment, to a Registration
         Statement or a supplement to the related Prospectus or any document
         incorporated or deemed to be incorporated therein by reference, and
         file any other required document so that, as thereafter delivered,
         neither a Registration Statement nor such Prospectus will contain an
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading.

                  3.9 Comply with all applicable rules and regulations of the
         Commission.

                  3.10 Use its best efforts to avoid the issuance of, or, if
         issued, obtain the withdrawal of (i) any order suspending the
         effectiveness of a Registration Statement, or (ii) any suspension of
         the qualification (or exemption from qualification) of any of the
         Registrable Securities for sale in any jurisdiction, at the earliest
         practicable moment.

                  3.11 Furnish to each Holder and their Special Counsel, without
         charge, at least one conformed copy of each Registration Statement and
         each amendment thereto, including financial statements and schedules,
         all documents incorporated or deemed to be incorporated therein by
         reference, and all exhibits to the extent requested by such Person
         (including those previously furnished or incorporated by reference)
         promptly after the filing of such documents with the Commission.

                  3.12 Notwithstanding anything herein to the contrary, if at
         any time or from time to time during the Effectiveness Period, the
         Company notifies the Holders in writing of the existence of a Potential
         Material Event (as defined below), the Holders shall not offer or sell
         any Securities from the time of the giving of notice with respect to a
         Potential Material Event until the Holders receive written notice from
         the Company that such Potential Material Event either has been
         disclosed to the public or no longer constitutes a Potential Material
         Event; PROVIDED, HOWEVER, that, subject to Subsections 3.12.1 and
         3.12.2, the Company may not so suspend the right to such holders of
         Securities for more than sixty (60) calendar days in the aggregate
         during any twelve-month period, and if such period is exceeded, such
         period shall be deemed an "Event" and the Company shall be liable to
         the Holder for liquidated damages pursuant to Section 2(c); PROVIDED,


                                       7
<PAGE>

         FURTHER, subject to Subsections 3.12.1 and 3.12.2, the failure to
         maintain a Registration Statement for not more than sixty (60) calendar
         days in the aggregate during any twelve (12) month period as a result
         of a Potential Material Event shall not be deemed a breach of this
         Agreement, provided the Company timely pays the Holder such liquidated
         damages. The Company must give the Holders at least thirty (30)
         calendar days' prior written notice that such a blackout period
         (without indicating the nature of such blackout period) will occur and
         such notice must be acknowledged in writing by the Holders. Failure to
         provide the Holders with such notice shall constitute an Event during
         the entire applicable period that the Registration Statement is
         suspended. "Potential Material Event" means any of the following:

                           3.12.1 The Board of Directors of the Company
                  determines, in its good faith judgment, that the use of any
                  Prospectus would require the disclosure of important
                  information which the Company has a bona fide business purpose
                  for preserving as confidential or the disclosure of which
                  would impede the Company's ability to consummate a significant
                  transaction, in which event such period may be extended for up
                  to thirty (30) additional days in any twelve (12) month
                  period;

                           3.12.2 Company consummates any business combination
                  for purposes of Rule 3-05 or Article 11 of Regulation S-X
                  under the Securities Act, in which event such restricted
                  period may be extended until the date on which the Company has
                  filed such reports or obtained the financial information
                  required by Rule 3-05 or Article 11 of Regulation S-X to be
                  included in the Registration Statement, but in no event more
                  sixty (60) additional days in any twelve (12) month period;

                           3.12.3 After one year from the Closing Date, the
                  Company files or proposes to file a registration statement in
                  an underwritten primary equity offering initiated by the
                  Company (other than any registration by the Company on Form
                  S-8), which underwriters are reasonably acceptable to a
                  majority in interest of the Holders, or a successor or
                  substantially similar form, of (i) an employee stock option,
                  stock purchase or compensation plan or of securities issued or
                  issuable pursuant to any such plan, or (ii) a dividend
                  reinvestment plan), in which event such restricted period may
                  be extended for thirty (30) days prior to the effective date
                  of the registration statement covering such underwritten
                  primary equity offering and ending on the date specified by
                  such managing underwriter in such written request to each
                  Holder, which date shall be no more than thirty (30) days
                  after such effective date, during which the Holder agrees, if
                  requested in writing by the managing underwriter or
                  underwriters administering such offering, not to effect any
                  offer, sale or distribution of Company securities (or any
                  option or right to acquire Company securities;

         4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings


                                       8
<PAGE>

required to be made with the Nasdaq OTC Bulletin Board and any Subsequent Market
on which the Common Stock is then listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment under the laws of
such jurisdictions as requested by the Holders)); (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the Holders);
(iii) messenger, telephone and delivery expenses; (iv) fees and disbursements of
counsel for the Company; and (v) fees and expenses of all other Persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement; and (vi) and fees and expenses of the Special
Counsel up to $20,000. In addition, the Company shall be responsible for all of
its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

         5.       INDEMNIFICATION.

                  5.1 INDEMNIFICATION BY THE COMPANY. The Company shall,
         notwithstanding any termination of this Agreement, indemnify and hold
         harmless each Holder, the officers, directors, agents, brokers
         (including brokers who offer and sell Registrable Securities as
         principal as a result of a pledge or any failure to perform under a
         margin call of Common Stock), investment advisors and employees of each
         of them, each Person who controls any such Holder (within the meaning
         of Section 15 of the Securities Act or Section 20 of the Exchange Act)
         and the officers, directors, agents and employees of each such
         controlling Person, to the fullest extent permitted by applicable law,
         from and against any and all losses, claims, damages, liabilities,
         costs (including, without limitation, costs of preparation and
         attorneys' fees) and expenses (collectively, "Losses"), as incurred,
         arising out of or relating to any untrue or alleged untrue statement of
         a material fact contained in a Registration Statement, any Prospectus
         or any form of prospectus or in any amendment or supplement thereto or
         in any preliminary prospectus, or arising out of or relating to any
         omission or alleged omission of a material fact required to be stated
         therein or necessary to make the statements therein (in the case of any
         Prospectus or form of prospectus or supplement thereto, in light of the
         circumstances under which they were made) not misleading, except to the
         extent, but only to the extent, that (i) such untrue statements or
         omissions are based solely upon information regarding such Holder


                                       9
<PAGE>

         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in a Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto or
         (ii) in the case of an occurrence of an event of the type specified in
         Section 3.4(ii)-(vi), the use by such Holder of an outdated or
         defective Prospectus after the Company has notified such Holder in
         writing that the Prospectus is outdated or defective and prior to the
         receipt by such Holder of the Advice contemplated in Section 6.5. The
         Company shall notify the Holders promptly of the institution, threat or
         assertion of any Proceeding of which the Company is aware in connection
         with the transactions contemplated by this Agreement.

                  5.2 INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
         and not jointly, indemnify and hold harmless the Company, its
         directors, officers, agents and employees, each Person who controls the
         Company (within the meaning of Section 15 of the Securities Act and
         Section 20 of the Exchange Act), and the directors, officers, agents or
         employees of such controlling Persons, to the fullest extent permitted
         by applicable law, from and against all Losses (as determined by a
         court of competent jurisdiction in a final judgment not subject to
         appeal or review) arising out of or based upon any untrue statement of
         a material fact contained in any Registration Statement, any
         Prospectus, or any form of prospectus, or in any amendment or
         supplement thereto, or arising solely out of or based solely upon any
         omission of a material fact required to be stated therein or necessary
         to make the statements therein not misleading to the extent, but only
         to the extent, that such untrue statement or omission is contained in
         any information so furnished in writing by such Holder to the Company
         specifically for inclusion in such Registration Statement or such
         Prospectus or to the extent that (i) such untrue statements or
         omissions are based solely upon information regarding such Holder
         furnished in writing to the Company by such Holder expressly for use
         therein, or to the extent that such information relates to such Holder
         or such Holder's proposed method of distribution of Registrable
         Securities and was reviewed and expressly approved in writing by such
         Holder expressly for use in the Registration Statement, such Prospectus
         or such form of Prospectus or in any amendment or supplement thereto or
         (ii) in the case of an occurrence of an event of the type specified in
         Section 3(d)(ii)-(vi), the use by such Holder of an outdated or
         defective Prospectus after the Company has notified such Holder in
         writing that the Prospectus is outdated or defective and prior to the
         receipt by such Holder of the Advice contemplated in Section 6(e). In
         no event shall the liability of any selling Holder hereunder be greater
         in amount than the dollar amount of the net proceeds received by such
         Holder upon the sale of the Registrable Securities giving rise to such
         indemnification obligation.

                  5.3      CONDUCT OF INDEMNIFICATION PROCEEDINGS.

                           5.3.1 If any Proceeding shall be brought or asserted
                  against any Person entitled to indemnity hereunder (an
                  "INDEMNIFIED PArty"), such Indemnified Party shall promptly
                  notify the Person from whom indemnity is sought (the
                  "Indemnifying Party") in writing, and the Indemnifying Party
                  shall assume the defense thereof, including the employment of
                  counsel reasonably satisfactory to the Indemnified Party and
                  the payment of all fees and expenses incurred in connection
                  with defense thereof; provided, that the failure of any
                  Indemnified Party to give such notice shall not relieve the
                  Indemnifying Party of its obligations or liabilities pursuant
                  to this Agreement, except (and only) to the extent that it
                  shall be finally determined by a court of competent
                  jurisdiction (which determination is not subject to appeal or
                  further review) that such failure shall have proximately and
                  materially adversely prejudiced the Indemnifying Party.

                                       10
<PAGE>

                           5.3.2 An Indemnified Party shall have the right to
                  employ separate counsel in any such Proceeding and to
                  participate in the defense thereof, but the fees and expenses
                  of such counsel shall be at the expense of such Indemnified
                  Party or Parties unless: (i) the Indemnifying Party has agreed
                  in writing to pay such fees and expenses; or (ii) the
                  Indemnifying Party shall have failed promptly to assume the
                  defense of such Proceeding and to employ counsel reasonably
                  satisfactory to such Indemnified Party in any such Proceeding;
                  or (iii) the named parties to any such Proceeding (including
                  any impleaded parties) include both such Indemnified Party and
                  the Indemnifying Party, and such Indemnified Party shall have
                  been advised by counsel that a conflict of interest is likely
                  to exist if the same counsel were to represent such
                  Indemnified Party and the Indemnifying Party (in which case,
                  if such Indemnified Party notifies the Indemnifying Party in
                  writing that it elects to employ separate counsel at the
                  expense of the Indemnifying Party, the Indemnifying Party
                  shall not have the right to assume the defense thereof and
                  such counsel shall be at the expense of the Indemnifying
                  Party). The Indemnifying Party shall not be liable for any
                  settlement of any such Proceeding effected without its written
                  consent, which consent shall not be unreasonably withheld. No
                  Indemnifying Party shall, without the prior written consent of
                  the Indemnified Party, effect any settlement of any pending
                  Proceeding in respect of which any Indemnified Party is a
                  party, unless such settlement includes an unconditional
                  release of such Indemnified Party from all liability on claims
                  that are the subject matter of such Proceeding.

                           5.3.3 All fees and expenses of the Indemnified Party
                  (including reasonable fees and expenses to the extent incurred
                  in connection with investigating or preparing to defend such
                  Proceeding in a manner not inconsistent with this Section)
                  shall be paid to the Indemnified Party, as incurred, within
                  ten (10) Business Days of written notice thereof to the
                  Indemnifying Party (regardless of whether it is ultimately
                  determined that an Indemnified Party is not entitled to
                  indemnification hereunder; provided, that the Indemnifying
                  Party may require such Indemnified Party to undertake to
                  reimburse all such fees and expenses to the extent it is
                  finally judicially determined that such Indemnified Party is
                  not entitled to indemnification hereunder).

                  5.4      CONTRIBUTION.

                           5.4.1 If a claim for indemnification under Section
                  5.1 or 5.2 is unavailable to an Indemnified Party (by reason
                  of public policy or otherwise), then each Indemnifying Party,
                  in lieu of indemnifying such Indemnified Party, shall
                  contribute to the amount paid or payable by such Indemnified
                  Party as a result of such Losses, in such proportion as is
                  appropriate to reflect the relative fault of the Indemnifying
                  Party and Indemnified Party in connection with the actions,


                                       11
<PAGE>

                  statements or omissions that resulted in such Losses as well
                  as any other relevant equitable considerations. The relative
                  fault of such Indemnifying Party and Indemnified Party shall
                  be determined by reference to, among other things, whether any
                  action in question, including any untrue or alleged untrue
                  statement of a material fact or omission or alleged omission
                  of a material fact, has been taken or made by, or relates to
                  information supplied by, such Indemnifying Party or
                  Indemnified Party, and the parties' relative intent,
                  knowledge, access to information and opportunity to correct or
                  prevent such action, statement or omission. The amount paid or
                  payable by a party as a result of any Losses shall be deemed
                  to include, subject to the limitations set forth in Section
                  5.3, any reasonable attorneys' or other reasonable fees or
                  expenses incurred by such party in connection with any
                  Proceeding to the extent such party would have been
                  indemnified for such fees or expenses if the indemnification
                  provided for in this Section was available to such party in
                  accordance with its terms.

                           5.4.2 The parties hereto agree that it would not be
                  just and equitable if contribution pursuant to this Section
                  5.4 were determined by pro rata allocation or by any other
                  method of allocation that does not take into account the
                  equitable considerations referred to in the immediately
                  preceding paragraph. Notwithstanding the provisions of this
                  Section 5.4, no Holder shall be required to contribute, in the
                  aggregate, any amount in excess of the amount by which the
                  proceeds actually received by such Holder from the sale of the
                  Registrable Securities subject to the Proceeding exceeds the
                  amount of any damages that such Holder has otherwise been
                  required to pay by reason of such untrue or alleged untrue
                  statement or omission or alleged omission.

                           5.4.3 The indemnity and contribution agreements
                  contained in this Section are in addition to any liability
                  that the Indemnifying Parties may have to the Indemnified
                  Parties.

         6.       MISCELLANEOUS.

                  6.1 AMENDMENTS AND WAIVERS. The provisions of this Agreement,
         including the provisions of this sentence, may not be amended, modified
         or supplemented, and waivers or consents to departures from the
         provisions hereof may not be given, unless the same shall be in writing
         and signed by the Company and the Holders of at least two-thirds of the
         then outstanding Registrable Securities. Notwithstanding the foregoing,
         a waiver or consent to depart from the provisions hereof with respect
         to a matter that relates exclusively to the rights of Holders and that
         does not directly or indirectly affect the rights of other Holders may
         be given by Holders of at least a majority of the Registrable
         Securities to which such waiver or consent relates; PROVIDED, HOWEVER,
         that the provisions of this sentence may not be amended, modified, or
         supplemented except in accordance with the provisions of the
         immediately preceding sentence.

                                       12
<PAGE>

                  6.2 NO INCONSISTENT AGREEMENTS. Neither the Company nor any of
         its subsidiaries has entered, as of the date hereof, nor shall the
         Company or any of its subsidiaries, on or after the date of this
         Agreement, enter into any agreement with respect to its securities,
         that would have the effect of impairing the rights granted to the
         Holders in this Agreement or otherwise conflicts with the provisions
         hereof. Except as and to the extent specified in Schedule 6.2 hereto,
         neither the Company nor any of its subsidiaries has previously entered
         into any agreement granting any registration rights with respect to any
         of its securities to any Person that have not been satisfied in full.

                  6.3 NO PIGGYBACK ON REGISTRATIONS. Except as and to the extent
         specified in Schedule 6.3 hereto, neither the Company nor any of its
         security holders (other than the Holders in such capacity pursuant
         hereto) may include securities of the Company in the Registration
         Statement other than the Registrable Securities, and the Company shall
         not after the date hereof enter into any agreement providing any such
         right to any of its security holders.

                  6.4 COMPLIANCE. Each Holder covenants and agrees that it will
         comply with the prospectus delivery requirements of the Securities Act
         as applicable to it in connection with sales of Registrable Securities
         pursuant to the Registration Statement.

                  6.5 DISCONTINUED DISPOSITION. Each Holder agrees by its
         acquisition of such Registrable Securities that, upon receipt of a
         notice from the Company of the occurrence of any event of the kind
         described in Sections 3.4, such Holder will forthwith discontinue
         disposition of such Registrable Securities under a Registration
         Statement until such Holder's receipt of the copies of the supplemented
         Prospectus and/or amended Registration Statement contemplated by
         Section 3.8, or until it is advised in writing (the "Advice") by the
         Company that the use of the applicable Prospectus may be resumed, and,
         in either case, has received copies of any additional or supplemental
         filings that are incorporated or deemed to be incorporated by reference
         in such Prospectus or Registration Statement. The Company may provide
         appropriate stop orders to enforce the provisions of this paragraph.

                  6.6 PIGGY-BACK REGISTRATIONS. If at any time during the
         Effectiveness Period there is not an effective Registration Statement
         covering all of the Registrable Securities and the Company shall
         determine to prepare and file with the Commission a registration
         statement relating to an offering for its own account or the account of
         others under the Securities Act of any of its equity securities, other
         than on Form S-4 or Form S-8 (each as promulgated under the Securities
         Act) or their then equivalents relating to equity securities to be
         issued solely in connection with any acquisition of any entity or
         business or equity securities issuable in connection with stock option
         or other employee benefit plans, then the Company shall send to each
         Holder written notice of such determination and, if within fifteen (15)
         days after receipt of such notice, any such Holder shall so request in
         writing, the Company shall include in such registration statement all
         or any part of such Registrable Securities such holder requests to be
         registered, subject to customary underwriter cutbacks applicable to all
         Holders of registration rights; provided, that, the Company shall not
         be required to register any Registrable Securities pursuant to this
         Section 6.6 that are eligible for resale pursuant to Rule 144(k)
         promulgated under the Securities Act.

                                       13
<PAGE>

                  6.7 NOTICES. Any and all notices or other communications or
         deliveries required or permitted to be provided hereunder shall be
         delivered as set forth in the Purchase Agreement.

                  6.8 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
         benefit of and be binding upon the successors and permitted assigns of
         each of the parties and shall inure to the benefit of each Holder. The
         Company may not assign its rights or obligations hereunder without the
         prior written consent of each Holder. Each Holder may assign their
         respective rights hereunder in the manner and to the Persons as
         permitted under the Purchase Agreement.

                  6.9 COUNTERPARTS. This Agreement may be executed in any number
         of counterparts, each of which when so executed shall be deemed to be
         an original and, all of which taken together shall constitute one and
         the same Agreement. In the event that any signature is delivered by
         facsimile transmission, such signature shall create a valid binding
         obligation of the party executing (or on whose behalf such signature is
         executed) the same with the same force and effect as if such facsimile
         signature were the original thereof.

                  6.10 GOVERNING LAW. All questions concerning the construction,
         validity, enforcement and interpretation of this Agreement shall be
         governed by and construed and enforced in accordance with the internal
         laws of the State of California, without regard to the principles of
         conflicts of law thereof. Each party hereby irrevocably submits to the
         exclusive jurisdiction of the state and federal courts sitting in the
         City of San Diego, for the adjudication of any dispute hereunder or in
         connection herewith or with any transaction contemplated hereby or
         discussed herein, and hereby irrevocably waives, and agrees not to
         assert in any suit, action or proceeding, any claim that it is not
         personally subject to the jurisdiction of any such court, that such
         suit, action or proceeding is improper. Each party hereby irrevocably
         waives personal service of process and consents to process being served
         in any such suit, action or proceeding by mailing a copy thereof to
         such party at the address in effect for notices to it under this
         Agreement and agrees that such service shall constitute good and
         sufficient service of process and notice thereof. Nothing contained
         herein shall be deemed to limit in any way any right to serve process
         in any manner permitted by law. Each party hereto hereby irrevocably
         waives, to the fullest extent permitted by applicable law, any and all
         right to trial by jury in any legal proceeding arising out of or
         relating to this Agreement or the transactions contemplated hereby. If
         either party shall commence a Proceeding to enforce any provisions of
         this Agreement, then the prevailing party in such Proceeding shall be
         reimbursed by the other party for its attorneys fees and other costs
         and expenses incurred with the investigation, preparation and
         prosecution of such Proceeding.

                  6.11 CUMULATIVE REMEDIES. The remedies provided herein are
         cumulative and not exclusive of any remedies provided by law.

                                       14
<PAGE>

                  6.12 SEVERABILITY. If any term, provision, covenant or
         restriction of this Agreement is held by a court of competent
         jurisdiction to be invalid, illegal, void or unenforceable, the
         remainder of the terms, provisions, covenants and restrictions set
         forth herein shall remain in full force and effect and shall in no way
         be affected, impaired or invalidated, and the parties hereto shall use
         their reasonable efforts to find and employ an alternative means to
         achieve the same or substantially the same result as that contemplated
         by such term, provision, covenant or restriction. It is hereby
         stipulated and declared to be the intention of the parties that they
         would have executed the remaining terms, provisions, covenants and
         restrictions without including any of such that may be hereafter
         declared invalid, illegal, void or unenforceable.

                  6.13 HEADINGS. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  6.14 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS.
         The obligations of each Purchaser hereunder is several and not joint
         with the obligations of any other Purchaser hereunder, and no Purchaser
         shall be responsible in any way for the performance of the obligations
         of any other Purchaser hereunder. Nothing contained herein or in any
         other agreement or document delivered at any closing, and no action
         taken by any Purchaser pursuant hereto or thereto, shall be deemed to
         constitute the Purchasers as a partnership, an association, a joint
         venture or any other kind of entity, or create a presumption that the
         Purchasers are in any way acting in concert with respect to such
         obligations or the transactions contemplated by this Agreement. Each
         Purchaser shall be entitled to protect and enforce its rights,
         including without limitation the rights arising out of this Agreement,
         and it shall not be necessary for any other Purchaser to be joined as
         an additional party in any proceeding for such purpose.

         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                   AETHLON MEDICAL, INC.



                                   By: ______________________________________
                                   Name:  James Joyce
                                   Title: President and Chief Executive Officer


                                       15
<PAGE>


             HOLDER SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT


         ______________________________
         Signature of Holder

                                           _____________________________________
                                           Outstanding Principal Amount of Notes

         ______________________________
         Name of Holder


                                       16
<PAGE>

                                    EXHIBIT A

                              PLAN OF DISTRIBUTION
                              --------------------

         The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

         o        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         o        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        short sales;

         o        broker-dealers may agree with the Selling Stockholders to sell
                  a specified number of such shares at a stipulated price per
                  share;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

         The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Shares or Common Stock or Warrant owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of Selling Stockholders to include the pledgee, transferee
or other successors in interest as Selling Stockholders under this prospectus.

                                       17
<PAGE>

         The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.

         The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Selling Stockholders have
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.

         The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

                                       18
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
