Exhibit 10.16

REGISTRATION RIGHTS AGREEMENT
(CONVERTIBLE DEBENTURES)

THIS REGISTRATION RIGHTS AGREEMENT, dated as of December 7, 2005 (this
"Agreement"), is made by and between EL GRANDE INTERNATIONAL, INC., a Nevada
corporation, with headquarters located at 1450 Kootenay Street, Vancouver,
British Columbia, Canada V5K 4R1 (the “Company”), and each entity named on the
signature page hereto as “Investors” (each, an “Investor”).

W I T N E S S E T H:

WHEREAS, upon the terms and subject to the conditions of the Securities Purchase
Agreement, dated as of December 7, 2005, between the Buyers listed therein and
the Company (the "Securities Purchase Agreement"; terms not otherwise defined
herein shall have the meanings ascribed to them in the Securities Purchase
Agreement), the Company has agreed to issue and sell to the Investors one or
more debentures of the Company, in a minimum aggregate principal amount of
$250,000 and a maximum aggregate amount of $600,000 (the "Debentures"); and

WHEREAS, the Debentures are convertible into shares of Common Stock (the
"Conversion Shares"; which term, for purposes of this Agreement, shall be 300%
of that number of shares of Common Stock into which the Debentures, including
without limitation all shares of Common Stock issuable by the Company in lieu of
accrued interest on conversion as contemplated by the Debentures) upon the terms
and subject to the conditions contained in the Debentures.

WHEREAS, to induce the Investors to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Securities
Act"), with respect to the Conversion Shares;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:

1.

Definitions.

As used in this Agreement, the following terms shall have the following
meanings:

a.

“Holders’ Representative” means the person appointed as the Holders’
Representative by the Investors pursuant to Section 11 hereof.

b.

"Investor" means an Investor and any permitted transferee or assignee who agrees
to become bound by the provisions of this Agreement in accordance with Section 9
hereof and who holds Debentures or Registrable Securities.

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c.

"Potential Material Event" means any of the following: (i) the possession by the
Company of material information not ripe for disclosure in a registration
statement, which shall be evidenced by determinations in good faith by the Board
of Directors of the Company that disclosure of such information in the
registration statement would be detrimental to the business and affairs of the
Company; or (ii) any material engagement or activity by the Company which would,
in the good faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time, which
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.

d.

"Register," "Registered," and "Registration" refer to a registration effected by
preparing and filing a Registration Statement or Statements in compliance with
the Securities Act and pursuant to Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such Registration
Statement by the SEC.

e.

"Registrable Securities" means the Conversion Shares and, to the extent
applicable, any other shares of capital stock or other securities of the Company
or any successor to the Company that are issued upon exchange of the Conversion
Shares.

f.

"Registration Statement" means a registration statement of the Company under the
Securities Act.

g.

“SEC” means the United States Securities and Exchange Commission.

2.

Piggy-back Registration.  From and after the date that is ninety (90) days after
the date of this Agreement and until the fifth anniversary of the Closing Date,
for so long as any of the Registrable Securities are outstanding and are not the
subject of an effective registration statement, if the Company contemplates
making an offering of Common Stock (or other equity securities convertible into
or exchangeable for Common Stock) registered for sale under the Securities Act
or proposes to file a Registration Statement covering any of its securities
other than (i) a registration on Form S-8 or S-4, or any successor or similar
forms; and (ii) a shelf registration under Rule 415 for the sole purpose of
registering shares to be issued in connection with the acquisition of assets,
the Company will at each such time give prompt written notice to the Holders’
Representative and the Investors of its intention to do so and of the Investor’s
rights under this Agreement.  Upon the written request of any Investor made
within thirty (30) days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
Holder and the intended method of disposition thereof), the Company will use its
best efforts to effect the registration of all Registrable Securities which the
Company has been so requested to register by the Investors, to the extent
requisite to permit the disposition (in accordance with the intended methods of
disposition) of the Registrable Securities by the Investors requesting
registration, by inclusion of such Registrable Securities in the Registration
Statement which covers the securities which the Company proposes to register;
provided, that if the Company is unable to register the full amount of
Registrable Securities in an “at the market offering” under Commission rules and
regulations due to the high percentage of the Company’s Common Stock the
Registrable Securities represents (giving effect to all other

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securities being registered in the Registration Statement), then the Company may
reduce, on a pro rata basis, the amount of Registrable Securities subject to the
Registration Statement to a lesser amount which equals the maximum number of
Registrable Securities that the Company is permitted to register in an “at the
market offering”; and provided, further, that if, at any time after giving
written notice of its intention to register any Registrable Securities and prior
to the effective date of the Registration Statement filed in connection with
such registration, the Company shall determine for any reason either not to
register or to delay registration of such Registrable Securities, the Company
may, at its election, give written notice of such determination to the Holders’
Representative and the Investors requesting registration and, thereupon, (i) in
the case of a determination not to register, the Company shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the expenses of registration in
connection therewith), and (ii) in the case of a determination to delay
registering such Registrable Securities, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities.

3.

Obligations of the Company.  In connection with the registration of the
Registrable Securities, the Company shall do each of the following:

(a)

Prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement as set forth in
Section 2 and the prospectus used in connection with the Registration Statement
as may be necessary to keep the Registration Statement effective at all times
during the period through the earliest of (i) the date that is five (5) years
after the last day of the calendar month following the month in which the
Registration Statement so filed is declared effective by the SEC, (ii) the date
when the Investors may sell all Registrable Securities under Rule 144, or (iii)
the date the Investors no longer own any of the Registrable Securities (The
“Registration Period”), Registration Period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in the
Registration Statement;

(b)

The Company shall permit a single firm of legal counsel designated by the
Holders’ Representative (the “Investors’ Counsel”) to review drafts of the
Registration Statement and all amendments and supplements thereto a reasonable
period of time (but not less than three (3) business days) prior to their filing
with the SEC, and not file any document in a form to which such Investors’
Counsel reasonably objects.  If the Investors’ Counsel objects, the Company
shall take under advisement such objections and shall endeavor to promptly make
such revisions to the Registration Statement (or ancillary documents and/or SEC
filings in connection therewith) as are necessary to satisfy the objections of
the Investors’ Counsel;

(c)

Notify the Holders’ Representative and the Investors’ Counsel, and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than five
(5) days prior to the contemplated date of such filing) and (if requested by any
the Holders' Representative) confirm such notice in writing no later than one
(1) business day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) whenever the SEC notifies the Company

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whether there will be a “review” of  Registration Statement; (C) whenever the
Company receives (or a representative of the Company receives on its behalf) any
oral or written comments from the SEC relating to a Registration Statement
(copies or, in the case of oral comments, summaries of such comments shall be
promptly furnished by the Company to the Holders’ Representative and the
Investor’s Counsel); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) if at any time the Company has actual knowledge that any of the
representations or warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true and
correct in all material respects; (v) 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 (vi) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the 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 the
Registration Statement, Prospectus or other documents so that, in the case of
the 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.  In
addition, the Company shall respond to the SEC in writing to comments on the
Registration Statement by the SEC within fifteen (15) business days of the
Company’s receipt thereof, plus any additional time reasonably required by the
Company’s independent auditors to respond to accounting comments and, if
requested by the Holders' Representative and the Investors’ counsel, the Company
shall furnish the Holders' Representative with copies of all intended written
responses to the comments contemplated in clause (C) of this Section 3(c) not
later than one (1) business day in advance of the filing of such responses with
the SEC so that the Holders’ Representative and the Investors’ Counsel shall
have the opportunity to comment thereon;  

(d)

Furnish to the Holders’ Representative and the Investors’ Counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement, each
preliminary Prospectus and Prospectus, and each amendment or supplement thereto,
and (ii) if so requested by any Investor, such number of copies of a Prospectus,
and all amendments and supplements thereto and such other documents, as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;  

(e)

As promptly as practicable after becoming aware thereof, notify the Holders’
Representative of the happening of any event of which the Company has actual
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits 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, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct

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such untrue statement or omission, and deliver a number of copies of such
supplement or amendment to the Holders' Representative and each Investor as such
Investor may reasonably request;

(f)

As promptly as practicable (and in any event not later than one (1) business
day) after becoming aware thereof, notify the Holders’ Representative of the
issuance by the SEC of a Notice of Effectiveness or any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;  

(g)

Notwithstanding the foregoing, if at any time or from time to time after the
date of effectiveness of a Registration Statement, the Company notifies the
Holders’ Representative in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives 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 the
Company may not so suspend the right to such Holders of Registrable Securities
for more than two twenty (20) business day periods in the aggregate during any
12-month period ("Suspension Period") with at least a ten (10) business day
interval between such periods, during the periods the Registration Statement is
required to be in effect;

(h)

Use its  reasonable efforts to secure and maintain the designation of all the
Registrable Securities covered by the Registration Statement on the
NASDAQ/National Market System or the "OTC Bulletin Board Market" or any
successor thereto of the National Association of Securities Dealers Automated
Quotations System ("NASDAQ") within the meaning of Rule 11Aa2-1 of the SEC under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on The NASDAQ National Market System;
and further use its efforts to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities;  

(i)

Provide a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than one (1) business day after the effective
date of the Registration Statement;

(j)

Cooperate with the Investors to facilitate the timely preparation and delivery
of certificates for the Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investors may reasonably request, and, within five (5) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) an appropriate instruction and opinion
of such counsel;

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(k)

Take all other reasonable actions necessary to expedite and facilitate
disposition by the Investor of the Registrable Securities pursuant to the
Registration Statement;

(l)

Not take, or omit to take, any actions that would preclude the filing or
effectiveness of the Registration Statement or require the withdrawal of the
Registration Statement;  

(m)

If the Registration Statement has been filed but has not been declared effective
by the SEC, not complete any acquisitions or business combinations until the SEC
has declared effective the Registration Statement that registers the Registrable
Securities.

4.

Payments by the Company.  Unless the Company's performance is waived in writing
by the Holders' Representative:

(i)

If the Company fails to satisfy its obligations under Sections 2 or 3, then the
Company shall immediately pay to the Investors without demand therefor a cash
amount equal to 2% per month of the outstanding principal amount of the
Debentures and, until such time as all such obligations shall have been
satisfied, the same amount shall accrue and become payable to the Investors
within three days on each subsequent month until such obligations shall have
been satisfied.  In light of the difficulty of ascertaining the amount of damage
that the Investors will suffer as a result of the Company’s failure to comply
with its obligations under Sections 2 or 3, all amounts payable under this
Section 4 shall be payable as liquidated damages, and not as a penalty.  The
Company shall keep the Registration Statement effective throughout the
Registration Period.

(ii)

The parties acknowledge that the damages which may be incurred by the Investors
if the Company fails to satisfy any of its obligations under Sections 2 or 3 may
be difficult to ascertain.  The parties agree that the payments to be paid to
the Investors under this Section 4 represent a reasonable estimate on the part
of the parties, as of the date of this Agreement, of the amount of such damages.

5.

Obligations of the Investors.  In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:

(a)

It shall be a condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of the Registrable Securities held by
it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.  At least ten (10) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of such Investor's Registrable Securities included in the Registration
Statement.  If at least two (2) business days prior to the filing date the
Company has

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not received the Requested Information from an Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement without
including Registrable Securities of such Non-Responsive Investor;

(b)

Each Investor, by such Investor's acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable Securities
from the Registration Statement; and

(c)

Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(d) or 3(e), above,
such Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(d) or 3(e) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

(d)

Each holder of Registrable Securities that sells Registrable Securities pursuant
to a registration under this Agreement agrees that in connection with
registration as follows:

(i)

Such seller shall cooperate as reasonably requested by the Company with the
Company in connection with the preparation of the registration statement, and
for as long as the Company is obligated to file and keep effective the
registration statement, shall provide to the Company, in writing, for use in the
registration statement, all such information regarding such seller and its plan
of distribution of the Registrable Securities as may reasonably be necessary to
enable the Company to prepare the registration statement and prospectus covering
the Registrable Securities, to maintain the currency and effectiveness thereof
and otherwise to comply with all applicable requirements of law in connection
therewith; and  

(ii)

During such time as such seller may be engaged in a distribution of the
Registrable Securities, such seller shall comply with Rules 10b-6 and 10b-7
promulgated under the Securities Exchange Act and pursuant thereto it shall,
among other things; (x) not engage in any stabilization activity in connection
with the securities of the Company in contravention of such rules; (y)
distribute the Registrable Securities under the registration statement solely in
the manner described in the registration statement; and (z) cease distribution
of such Registrable Securities pursuant to such registration statement upon
written notice from the Company that the prospectus covering the Registrable
Securities contains any untrue statement of a material fact required to be
stated therein or necessary to make the statements therein not misleading.

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6.

Expenses of Registration.  

(a)

All reasonable expenses (other than underwriting discounts and commissions of
the Investors) incurred for the Registration Statement covering the Registrable
Securities applicable to the Debentures shall be borne by the Company, up to an
aggregate amount of $50,000 in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, a fee for the Investors’ Counsel of
not more than $5,000 and including, without limitation, all registration,
listing, and qualifications fees, printers, legal and accounting fees and the
fees and disbursements of counsel for the Company.  

(b)

Neither the Company nor any of its subsidiaries has, as of the date hereof, nor
shall the Company nor any of its subsidiaries, on or after the date of this
Agreement, entered into any agreement with respect to its securities that is
inconsistent with the rights granted to the Investors in this Agreement or
otherwise conflicts with the provisions hereof.  Except as disclosed in the
Securities Purchase Agreement or the other documents entered into simultaneously
therewith, 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 except for the secured convertible promissory
note issued to Thomas A. Simons dated December 23, 2004 with piggyback
registration rights expiring one year from the date of the note and as provided
in the subscription agreement dated October 11, 2004 between the Company and
Walther-Glass Gmbh & Co KG.  Without limiting the generality of the foregoing,
without the written consent of the Investors holding a majority of the
Registrable Securities, the Company shall not grant to any person the right to
request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights in full of the Investors set forth herein, and are not otherwise in
conflict or inconsistent with the provisions of this Agreement and the other
Transaction Documents.

7.

Indemnification.  In the event any Registrable Securities are included in a
Registration Statement under this Agreement:

(a)

To the extent permitted by law, the Company will indemnify and hold harmless the
Holders’ Representative, the Investor’s Counsel and each Investor who holds such
Registrable Securities, the directors, managers, partners, stockholders and
members, if any, of the Holders’ Representative, the Investor’s Counsel or such
Investor, the officers and employees, if any, of the Holders’ Representative,
the Investor’s Counsel or such Investor, and each person, if any, who controls
the Holders’ Representative, the Investors Counsel or any Investor within the
meaning of the Securities Act or the Exchange Act (each, an "Indemnified Person"
or "Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as

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amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations").  Subject to clause (b) of this Section 7, the Company shall
reimburse the Investors, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.  Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 7(a) shall not (I) apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(b) hereof;  (II) be available to the extent such Claim is based on a failure
of the Investor to deliver or cause to be delivered the prospectus made
available by the Company;  (III) apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; or (IV) apply to any
violation or alleged violation by an Indemnified Person of the Securities Act,
the Exchange Act, any state securities laws or any rule or regulation under the
Securities Act, the Exchange Act, or any state securities laws.   Each Investor
will indemnify the Company and its officers, directors and agents (each, an
"Indemnified Person" or "Indemnified Party") against any claims arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf of such
Investor, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company to this Section 7.
 Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors.

(b)

Promptly after receipt by an Indemnified Person or Indemnified Party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 7, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be.  In case
any such action is brought against any Indemnified Person or Indemnified Party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such Indemnified Person or Indemnified
Party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such Indemnified Person or Indemnified Party under this
Section 7 for any legal or other reasonable out-of-pocket expenses subsequently
incurred by such Indemnified Person or

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Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion.  The Indemnified Person or Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and reasonable out-of-pocket
expenses of such counsel shall not be at the expense of the indemnifying party
if the indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the Indemnified Person or Indemnified Party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
Section 7, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.  The indemnification required by this Section 7
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.

8.

Contribution.  To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 7 to the fullest extent permitted by law; provided, however, that
(a) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 7; (b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any seller of Registrable Securities who
was not guilty of such fraudulent misrepresentation; and (c) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

9.

Reports under Exchange Act.  With a view to making available to the Investors
the benefits of Rule 144 promulgated under the Securities Act or any other
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration ("Rule
144"), the Company agrees to:

a.

make and keep public information available, as those terms are understood and
defined in Rule 144;

b.

file with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act;  

c.

furnish to each Investor so long as such Investor owns Registrable Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration; and  

d.   cause its counsel to deliver to its transfer agent such opinions of law as
shall be required to remove restrictive legends on the shares to be sold in the
standard form then employed for such purpose by such counsel or in such other
form as is reasonably acceptable to

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such transfer agent.

10.

Amendment of Registration Rights.  Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a fifty (50%) percent
interest of the Registrable Securities.  Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and the
Company.

11.

Appointment and Indemnification of Holders’ Representative.  Each of the
Investors hereby appoints as the Holders’ Representative Divine Capital Markets,
LLC to so act until such time as all Registrable Securities have become
Registered and there shall be no Debentures issued and outstanding, or such time
as a successor to the then-acting Holders’ Representative is appointed in
writing signed by the Investors representing greater than 50% of the
then-outstanding Debentures and Registrable Securities.  The Holders’
Representative shall have full discretion and authority, without consultation
with the Holders, to accept and give notices on behalf of the Holders, to
communicate with the Holders at such times and in such manner as the Holders’
Representative in its discretion determines is appropriate and to grant
extensions of deadlines or waive any payment obligations set forth in Sections 2
and 3 hereof.  The Holders' Representative shall not have discretion or
authority to exercise any investment discretion over the Debentures, including
causing the conversion of any Debentures, absent a Holder's express written
authority.  Notwithstanding any provision to the contrary contained elsewhere
herein or in the Securities Purchase Agreement or the Debentures, the Holders’
Representative shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Holders’ Representative have or be
deemed to have any fiduciary relationship with any Holder, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the Securities Purchase Agreement or Debentures
or otherwise exist against the Holders’ Representative.  The Holders shall
indemnify upon demand the Holders’ Representative (to the extent not reimbursed
by or on behalf of the Company and without limiting the obligation of the
Company to do so under Section 7 hereof or under any other agreement or
applicable law), pro rata, and hold harmless the Holders’ Representative from
and against any and all against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Holders’ Representative’s
Claims") incurred by it; provided, however, that no Holder shall be liable for
the payment to the Holders’ Representative of any portion of such Holders’
Representative’s Claims to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from the Holders’
Representative’s own gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of the Holders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 11.  Without limitation of the foregoing, each Holder shall reimburse
the Holders’ Representative upon demand for its ratable share of any costs or
out-of-pocket expenses incurred by the Holders’ Representative in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, the Securities Purchase Agreement, the Debentures, or any
document contemplated by or referred to herein, to the extent that the Holders’
Representative is not reimbursed for such expenses by or on behalf of the
Company.

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12.

Miscellaneous.

a.

A person or entity is deemed to be a holder of Registrable Securities whenever
such person or entity owns of record such Registrable Securities.  If the
Company receives conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable Securities, the Company
shall act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.

b.

Notices required or permitted to be given hereunder shall be given in the manner
contemplated by the Securities Purchase Agreement, (i) if to the Company or to
the Investors, to their respective address contemplated by the Securities
Purchase Agreement, and (iii) if to any other Investor, at such address as such
Investor shall have provided in writing to the Company, or at such other address
as each such party furnishes by notice given in accordance with this Section
12(b).

c.

Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

d.

This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of laws.
 Each of the parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the City of New York or the state courts of the
State of New York sitting in the City of New York in connection with any dispute
arising under this Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non coveniens, to
the bringing of any such proceeding in such jurisdictions.  To the extent
determined by such court, the Company shall reimburse the Buyer for any
reasonable legal fees and disbursements incurred by the Buyer in enforcement of
or protection of any of its rights under this Agreement.

e.

If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

f.

Subject to the requirements of Section 9 hereof, this Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.

g.

All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require.

h.

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

i.

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement.  This Agreement, once executed by a party, may be delivered to the
other party hereto by telephone

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line facsimile transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.

j.

The Company acknowledges that any failure by the Company to perform its
obligations under Sections 2 or 3 or any delay in such performance could result
in loss to the Investors, and the Company agrees that, in addition to any other
liability the Company may have by reason of such failure or delay, the Company
shall be liable for all direct damages caused by any such failure or delay,
unless the same is the result of force majeure.  Neither party shall be liable
for consequential damages.

k.

This Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein.
 This Agreement supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof. This Agreement may be
amended only by an instrument in writing signed by the party to be charged with
enforcement thereof.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

COMPANY:

ELGRANDE INTERNATIONAL, INC.

         /s/ Michael F. Holloran

By:   _____________________________

       Name:  Michael F. Holloran

 

Title:

Chief Executive Officer

INVESTOR:

 

 

Print Name of Investor Above

By:

Investor Signature Above

Print Name of Signatory:  

Title of Signatory: