Form of Bridge Loan Documents Dated April 11, 2006

CONVERTED ORGANICS INC.
7A COMMERCIAL WHARF WEST
BOSTON, MA 02210
TEL: 617 624-0111 FAX 617 624-0333
EMAIL: EGILDEA@ECAPGLOBAL.COM


APRIL 11, 2006


FINANCING TERMS AGREEMENT
FOR SALE OF BRIDGE NOTES AND SHARES


ISSUER: CONVERTED ORGANICS INC. ("CONVERTED ORGANICS"
or the "COMPANY").


AMOUNT: $1,500,000 in one hundred (100) UNITS of
$15,000 in exchange for bridge notes ("BRIDGE
NOTE(S)") and securities of the COMPANY
("BRIDGE EQUITY UNITS").


PURCHASERS: "Accredited" investors, including High Capital
Funding, LLC ("HCF"), as defined in Regulation
D of the Securities Act of 1933. See signature
pages hereto for names, addresses, and the
number of UNITS being purchased. PURCHASERS
have read and agree to the terms contained in
Exhibit D hereto.


TERM OF NOTES: INTEREST AND PRE-PAYMENT: Interest will accrue
on the principal amount of the BRIDGE NOTE(S)
at the rate of eight (8%) percent per annum,
based on a 360-day year. The Company will have
the right to prepay without penalty any amount
owed under the BRIDGE NOTE(S) in whole or in
part at any time. Accrued interest shall be
paid quarterly, beginning three months after
the FIRST CLOSING and every three months
thereafter.


MATURITY DATE: The Company plans to raise
approximately $8-10 million in an initial public
offering (the "PUBLIC OFFERING"). The principal
amount and accrued and unpaid interest on the
BRIDGE NOTE(S) will be due and payable at the
earlier of: October 16, 2006 or the closing of a
PUBLIC OFFERING ("MATURITY DATE"). After the
MATURITY DATE, unpaid principal on the BRIDGE
NOTES shall bear interest at eighteen (18%) per
annum.


- 1 - BRIDGE SECURITIES: Upon the closing of the PUBLIC OFFERING,
the COMPANY shall deliver to each PURCHASER,
BRIDGE EQUITY UNITS consisting of securities
identical in form to the securities offered for
sale in the PUBLIC OFFERING ("PRIMARY BRIDGE
EQUITY UNITS"), except that the certificates
for the PRIMARY BRIDGE EQUITY UNITS may bear
restrictive legends. Each PURCHASER shall
receive the number of PRIMARY BRIDGE EQUITY
UNITS equal to the principal of such
PURCHASER'S BRIDGE NOTE(S) divided by the
public offering price of the securities
comprising the PRIMARY BRIDGE EQUITY UNIT. The
securities issued to PURCHASERS shall have the
same CUSIP numbers as the corresponding
securities in the PUBLIC OFFERING.


If a PUBLIC OFFERING shall not have occurred prior
to October 16, 2006, then on October 17, 2006 the
COMPANY shall issue to the PURCHASER alternate
BRIDGE EQUITY UNITS ("ALTERNATE BRIDGE EQUITY
UNITS") consisting of that number of shares of
common stock of the COMPANY as shall equal the
principal amount of the BRIDGE NOTE(S) divided by
$3.00 plus an equal number of non-callable
warrants exercisable at $3.00 per share for a
period of five years from such issuance, and which
shall have a cashless exercise feature at any time
after October 16, 2007 that the underlying shares
of common stock are not covered by an effective
registration statement with a current prospectus
available. The number of ALTERNATE BRIDGE EQUITY
UNITS shall be adjusted, pro rata, on account of
any stock splits, reverse stock splits, stock
dividends paid on common stock, etc. which occur
after the date of issuance of the BRIDGE NOTE(S)
and prior to the issuance of the ALTERNATE BRIDGE
EQUITY UNITS. PRIMARY BRIDGE EQUITY UNITS and
Alternate BRIDGE EQUITY UNITS are sometimes
referred to herein as "BRIDGE EQUITY UNITS."


The PURCHASERS shall have the right for a period
of one year and one month from the issuance of the
ALTERNATE BRIDGE EQUITY UNITS to exchange them for
PRIMARY BRIDGE EQUITY Units of an equivalent worth
issued in a public offering of the COMPANY such
that the PURCHASERS will own the same securities
as if the public offering had closed on or prior
to the six month anniversary of the FIRST CLOSING.


PURCHASE PRICE: The aggregate purchase price for each BRIDGE
NOTE and BRIDGE EQUITY UNIT shall be the
original principal amount of the BRIDGE NOTE(S)
included in such UNIT. The purchase price
allocable to the BRIDGE NOTE(S) included in
such UNIT shall be not less than 75% of such
aggregate purchase price and the purchase price


- 2 -
allocable to the BRIDGE EQUITY UNITS included
in such UNIT shall be not more than 25% of such
aggregate purchase price. The tax value of the
BRIDGE EQUITY UNITS shall be equal to the
portion of the purchase price allocated to the
BRIDGE EQUITY UNITS.


SECURITY: Repayment of the BRIDGE NOTE(S) shall be
secured by a lien on all tangible and
intangible assets of the COMPANY to be
evidenced by a SECURITY AGREEMENT in form and
substance satisfactory to HCF, the lead
INVESTOR.


DOCUMENT PREPARATION SECURITIES: In lieu of reimbursing HCF, for the cost of
preparing the legal documents for this
transaction, CONVERTED ORGANICS shall issue to
HCF, BRIDGE EQUITY UNITS with a tax value of
$25,000 ("DOCUMENT PREPARATION SECURITIES").
The DOCUMENT PREPARATION SECURITIES shall be in
all respects identical to the BRIDGE EQUITY
UNITS with identical attendant rights. If a
PUBLIC OFFERING shall not have occurred prior
to six months from the FIRST CLOSING, then the
BRIDGE EQUITY UNITS comprising the DOCUMENT
PREPARATION SECURITIES shall automatically
convert to 33,333 ALTERNATE BRIDGE EQUITY
UNITS.


PLACEMENT AGENT FEE: CONVERTED ORGANICS and PURCHASERS agree that
CONVERTED ORGANICS shall be solely responsible
for the payment of placement agent fees to
Investors Capital Corporation ("Placement
Agent").


EXPENSES: PURCHASERS and CONVERTED ORGANICS shall each be
responsible for their own expenses in
connection with this transaction.


TRANSFER AND ASSIGNMENT: PURCHASERS shall have the right, subject to
applicable securities laws, to transfer and/or
assign the BRIDGE NOTES and/or the BRIDGE
EQUITY UNITS, and HCF shall have the right to
transfer and/or assign the DOCUMENT PREPARATION
SECURITIES. Any PURCHASER, transferee or
assignee of a BRIDGE NOTE, BRIDGE EQUITY UNITS,
or DOCUMENT PREPARATION SECURITIES is a
"HOLDER" or collectively "HOLDERS."


CLOSING DATE/ESCROW: The first closing of this transaction ("FIRST
CLOSING") was on March 2, 2006 for $500,000
principal amount of Bridge Note(s) which
followed the receipt by David A. Rapaport
(Executive V.P. and General Counsel of HCF), as
ESCROW AGENT, of (a) $500,000 ("FIRST CLOSING
PROCEEDS") from HCF, (b) executed BRIDGE NOTES
for an aggregate of the FIRST CLOSING PROCEEDS,
(c) a fully executed SECURITY AGREEMENT with
evidence of


- 3 -
the filing of UCC-1's, and (d) a LEGAL OPINION (as
defined in "Jurisdiction/Choice of Law" below). At
the FIRST CLOSING the ESCROW AGENT transferred the
FIRST CLOSING PROCEEDS - minus Placement Agent
fees - to CONVERTED ORGANICS and delivered the
BRIDGE NOTE(S) to HCF. ADDITIONAL CLOSINGS shall
be held at the mutual agreement of the parties,
including HCF, provided that no ADDITIONAL
CLOSINGS shall be held after April 30, 2006
without the written consent of HCF.


FINANCIAL INFORMATION: The Company has delivered to HCF the unaudited
financial statements of Mining Organics Management
LLC for the years ended December 31, 2004 and
December 31, 2003, or the federal tax returns of
Mining Organics Management LLC for the years 2004
and 2003. The Company shall deliver unaudited
financial statements of Mining Organics Management
LLC for the year ended December 31, 2005 or the
federal tax return of Mining Organics Management
LLC for the year 2005 by March 31, 2006. The
Company also has delivered to HCF the form of
Asset Purchase Agreements between the Company and
Mining Organics Management LLC, and between the
Company and Mining Organics HRRY LLC, identifying
the assets to be transferred from the LLC's to
the Company.


REGISTRATION RIGHTS: The Company will (1) file a resale registration
statement within 180 days of the PUBLIC
OFFERING closing: (2) cause it to be effective
within 240 days of the PUBLIC OFFERING closing
if the registration statement is not reviewed
by the Securities and Exchange Commission
("SEC") and 270 days of the PUBLIC OFFERING
closing if the registration statement is
reviewed by the SEC covering the resale of the
BRIDGE EQUITY UNITS and the DOCUMENT
PREPARATION SECURITIES (including the resale of
any shares of common stock issuable upon the
exercise or conversion of any BRIDGE EQUITY
UNITS); and (3) cause it to remain effective
with a current prospectus available for a
period of the longer of two years, or until the
expiration or exercise in full of any warrants
contained in the BRIDGE EQUITY UNITS.


If the Company fails to satisfy requirements (1)
or (2) above it will be subject to a 2% cash late
registration fee (i.e. 2% of the outstanding
BRIDGE NOTE(S) principal) per month or part
thereof that such failure continues ("LATE FEE");
provided such LATE FEE shall not be accrued for
any month after one year from the FIRST CLOSING
that the Company is current in its reporting
obligations under the Exchange Act and has been
subject to such reporting requirements for at
least 90 days, unless any Holder is


- 4 -
the beneficial owner of more than 1% of CONVERTED
ORGANICS's issued and outstanding common stock, in
which case the LATE FEE shall continue to accrue
for no more than two years from the FIRST CLOSING.


If the COMPANY fails to satisfy requirement (3)
above, the LATE FEE shall continue until the
longer of the period set forth in the preceding
paragraph, or the expiration or exercise in full
of any warrants included in the BRIDGE EQUITY
UNITS.


JURISDICTION/CHOICE OF LAW: All transaction documents shall be governed by and
construed under the laws of the state of Delaware
as applied to agreements entered into and to be
performed entirely within the state of Delaware,
without giving effect to principles of conflicts
of law. The parties irrevocably consent to the
jurisdiction and venue of the state and federal
courts located in Wilmington, DE in connection
with any action relating to this transaction. At
or prior to each ADDITIONAL CLOSING, PURCHASERS
shall receive a legal opinion from Company counsel
in form and substance satisfactory to HCF it as to
(a) the due formation and existence of the COMPANY
(under Delaware law), (b) the validity and
enforceability of this Financing Terms Agreement
(under Delaware law), the BRIDGE NOTE(S) (under
Delaware law), and the SECURITY AGREEMENT (under
Delaware law), including specifically that neither
this Financing Terms Agreement nor the BRIDGE
NOTE(S) violate any laws of the state of Delaware
relating directly or indirectly to the maximum
rate of interest that may be charged in this
transaction, subject to standard carve-outs for
equitable remedies and insolvency laws, and (c)
the valid authorization to issue the BRIDGE EQUITY
UNITS and the DOCUMENT PREPARATION SECURITIES
(under Delaware law) ("LEGAL OPINION"). The LEGAL
OPINION shall be updated and reissued at each
ADDITIONAL CLOSING.


BINDING AGREEMENT: All parties executing this Financing Terms
Agreement, including Exhibit D, shall be
legally bound by the above terms and shall
execute such further documents ("FURTHER
DOCUMENTS"), including without limitation
BRIDGE NOTE(S), a SECURITY AGREEMENT, AND AN
ESCROW AGREEMENT substantially in the forms of
Exhibit A, Exhibit B, and Exhibit C attached
hereto, respectively. If there are any
inconsistencies between this Financing Terms
Agreement (Exclusive of Exhibits A, B & C) and
any such FURTHER DOCUMENTS executed in
connection with this transaction, the terms of
this Financing Terms Agreement shall govern.
This Financing Terms Agreement may be signed in
two or more counterparts,


- 5 -
all of which taken together shall constitute an
original. Facsimile signatures shall be deemed to
be original signatures.


CONVERTED ORGANICS INC.


By: Date: April 11, 2006
--------------------------
(signature)


Edward J. Gildea, President - ------------------------------------
(name and title)


DAVID A. RAPAPORT, ESCROW AGENT


Date: April 11, 2006 - --------------------------------


333 Sandy Springs Circle, Suite 230


Atlanta, GA 30328


Tel: 404 257-9150


Fax: 404 257-9125


Email: drapaport@highcapus.com


- 6 -
EXHIBIT A - FORM OF BRIDGE NOTE


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED, OFFERED FOR SALE, ASSIGNED OR TRANSFERRED UNLESS (A) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT, AND ANY APPLICABLE STATE SECURITIES LAW REQUIREMENTS HAVE BEEN MET OR (B) EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS ARE AVAILABLE.


Certificate No. $
---------- ----------------
Principal Amount


CONVERTED ORGANICS INC.
SECURED PROMISSORY NOTE


, 2006
---------


FOR VALUE RECEIVED, CONVERTED ORGANICS INC., a Delaware corporation, ("Borrower") promises to pay to the order of ___________________________ ("Lender") the principal amount of ___________________________ Dollars ($______________), together with interest on the unpaid principal amount at the rate of 8 percent (8%) per annum based on a 360-day year, all upon the terms set forth below. This Secured Promissory Note (the "Note") is issued pursuant to that certain Financing Terms Agreement for Sale of Bridge Notes and Shares, dated as of April 11, 2006, by and between Lender and Borrower (the "Financing Agreement"). This Note is subject to the terms and conditions of the Financing Agreement. To the extent that any of the terms specifically set forth in the Financing Agreement is inconsistent with the provisions of this Note specifically relating to such matters, the Financing Agreement shall govern with respect to such inconsistencies. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Financing Agreement.


1. MATURITY. Accrued interest shall be paid in arrears on a quarterly basis, beginning three months after July 1, 2006 and every three months thereafter. Except as otherwise provided herein, the principal hereunder shall become due and payable in full on October 16, 2006, except that in the event of the closing of a Public Offering, the principal amount and accrued and unpaid interest will become immediately due and payable. After the Maturity Date, the Note shall bear interest at 18 percent per annum.


2. PREPAYMENT. Borrower may prepay any or all amounts due under this Bridge Note at any time without penalty.


- 7 - 3. METHOD OF PAYMENT. Any payment of principal or interest hereunder shall be made by certified or bank cashier's check unless Holder has provided Borrower with appropriate wire instructions, in which event, the payment shall be made by wire transfer of "same day" funds. For the purpose of any interest calculation, payment shall be deemed made when the check is sent by overnight delivery or when the wire is sent. Any partial payment shall be applied first to accrued and unpaid interest and thereafter to a reduction of principal.


4. Security. REPAYMENT OF THE NOTE SHALL BE SECURED BY A LIEN ON ALL TANGIBLE AND INTANGIBLE ASSETS OF THE BORROWER AS DESCRIBED IN THAT CERTAIN SECURITY AGREEMENT EXECUTED CONTEMPORANEOUSLY HEREWITH.


5. ANTI DILUTION ADJUSTMENTS. The number and kind of securities or other property into which this Note may become convertible shall be subject to adjustment as follows:


(a) If a split or a reverse split shall have occurred with respect to
the Common Stock, the conversion rate shall be appropriately
adjusted to cause the Holder to receive, upon conversion, a number
of shares of Common Stock representing the same percentage of the
equity of the Company to which the Holder would have been entitled
on such conversion if the split had not occurred.


(b) If a dividend or other distribution shall be made in favor of the
Common Stock, appropriate adjustment shall be made so that, upon
conversion of the Note, the Holder shall receive, in addition to the
Common Stock otherwise obtainable on such conversion, the cash,
securities or other property that it would have received had the
Note been so converted immediately prior to the split, dividend or
distribution.


(c) If the Common Stock shall, as the result of a merger or otherwise,
be converted into the right to receive other securities or property,
appropriate adjustment shall be made so that, upon conversion of the
Note, the Holder shall receive, in lieu of Common Stock, the
securities and/or property that it would have received as a result
of the merger or other such transaction had the Note been so
converted immediately prior to the record date therefor.


6. DEFAULT. In the event of an occurrence of any event of default specified below, the principal of, and all accrued and unpaid interest on, the Note shall become immediately due and payable without notice, except as specified below:


(a) Borrower fails to make any payment hereunder when due, which failure
has not been cured within 10 days following such due date.


(b) Any defined event of default occurs under any contract or instrument
pursuant to which Borrower has incurred any liability for borrowed
money in excess of $50,000, which event of default has not been
waived within five business days following such occurrence, and
which event of default is reasonably likely to materially affect the
Company's business.


- 8 -
(c) Borrower files a petition to take advantage of any insolvency act;
makes an assignment for the benefit of its creditors; commences a
proceeding for the appointment of a receiver, trustee, liquidator or
conservator of itself of a whole or any substantial part of its
property; files a petition or answer seeking reorganization or
arrangement or similar relief under the federal bankruptcy laws or
any other applicable law or statute of the United States of America
or any state.


(d) A court of competent jurisdiction enters an order, judgment or
decree appointing a custodian, receiver, trustee, liquidator or
conservator of Borrower or of the whole or any substantial part of
its properties, or approves a petition filed against Borrower
seeking reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of
the Untied States of America or any state; or if, under the
provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction assumes custody or control of
Borrower or of the whole or any substantial part of its properties;
or there is commenced against Borrower any proceeding for any of the
foregoing relief and such proceeding or petition ...