REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of June 17,
2008, by and among INTREPID TECHNOLOGY AND RESOURCES, INC., an Idaho
corporation (the “Company”), and the undersigned Buyers listed on Schedule I
attached hereto (each, a “Buyer” and collectively, the “Buyers”).

WHEREAS:

A.

In connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the “Securities Purchase Agreement”), the Company
has agreed, upon the terms and subject to the conditions of the Securities
Purchase Agreement, to issue and sell to the Buyers (i) secured convertible
debentures (the “Convertible Debentures”) which shall be convertible into shares
of the Company’s common stock, par value $0.005 per share (the “Common Stock”
and as converted, the “Conversion Shares”) in accordance with the terms of the
Convertible Debentures, and (ii) warrants (the “Warrants”), which will be
exercisable to purchase shares of Common Stock (as exercised, collectively, the
“Warrant Shares”).  Capitalized terms not defined herein shall have the meaning
ascribed to them in the Securities Purchase Agreement.

B.

To induce the Buyers 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”), and
applicable state securities laws and other rights as provided for herein.

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 Buyers hereby
agree as follows:

1.

DEFINITIONS.

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

(a)

“Effectiveness Deadline” means, with respect to a Registration Statement filed
hereunder, the 120th calendar day following the date filed, provided, however,
in the event the Company is notified by the U.S. Securities and Exchange
Commission (“SEC”) 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 fifth Trading
Day following the date on which the Company is so notified if such date precedes
the dates required above.

(b)

“Filing Deadline” means, with respect to a Registration Statement required
hereunder, the 30th calendar day following the date the Company receives a
Filing Notice.

(c)

“Filing Notice” means a written notice from the Buyer to the Company to file a
Registration Statement and stating the number of Registrable Securities to be
included on such Registration Statement.

(d)

“Person” means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.

(e)

“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.

(f)

“Registrable Securities” means all of (i) the Conversion Shares issuable upon
conversion of the Convertible Debentures, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants, (iii) any additional shares issuable in
connection with any anti-dilution provisions in the Warrants or the Convertible
Debentures (without giving effect to any limitations on exercise set forth in
the Warrants or Convertible Debentures) and (iv) any shares of Common Stock
issued or issuable with respect to the Conversion Shares, the Convertible
Debentures, the Warrant Shares, or the Warrants as a result of any stock split,
dividend or other distribution, recapitalization or similar event or otherwise,
without regard to any limitations on the conversion of the Convertible
Debentures or exercise of the Warrants.

(g)

“Registration Statement” means the registration statements required to be filed
hereunder (including any additional registration statements contemplated by
Section 3(c)), 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.

(h)

 “Rule 415” means Rule 415 promulgated by the SEC 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 SEC  having substantially the same purpose
and effect as such Rule.

2.

REGISTRATION.

(a)

The Company’s registration obligations set forth in this Section 2 including its
obligations to file Registration Statements upon receipt of Filing Notices,
obtain effectiveness of Registration Statements, and maintain the continuous
effectiveness of Registration Statement that have been declared effective shall
begin on the date hereof and continue until all the Registrable Securities have
been sold or may permanently be sold without any restrictions pursuant to Rule
144, as determined by the counsel to the Company pursuant to a

2

written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders (the “Registration Period”).

(b)

Anytime during the Registration Period, the Buyer shall have the right to
deliver to the Company a Filing Notice which shall trigger the Company’s
obligations to file a Registration Statement as set forth below.  

(c)

After receipt of a Filing Notice, the Company shall, on or prior to the Filing
Deadline, prepare and file with the SEC a Registration Statement on Form S-1
(or, if the Company is then eligible, on Form S-3) covering the resale by the
Buyer of all of the Registrable Securities set forth in such Filing Notice.
 Each Registration Statement shall contain the “Selling Stockholders” and “Plan
of Distribution” sections in substantially the form attached hereto as Exhibit A
and contain all the required disclosures set forth on Exhibit B.  The Company
shall use its best efforts to have each Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline.  By 9:30 am on the date following the date of
effectiveness, the Company shall file with the SEC in accordance with Rule 424
under the Securities Act the final Prospectus to be used in connection with
sales pursuant to such Registration Statement.  Prior to the filing of the
Registration Statement with the SEC, the Company shall furnish a draft of the
Registration Statement to the Buyer for their review and comment.  The Buyer
shall furnish comments on the Registration Statement to the Company within
twenty-four (24) hours of the receipt thereof from the Company.

(d)

During the Registration Period, the Company shall (i) promptly prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the Prospectus used in connection
with a Registration Statement, which Prospectus is to be filed pursuant to Rule
424 promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
(ii) prepare and file with the SEC 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 (subject to the terms of this Agreement), and
as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from the SEC with
respect to a Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Buyers true and complete copies of all
correspondence from and to the SEC relating to a Registration Statement
(provided that the Company may excise any information contained therein which
would constitute material non-public information as to any Buyer which has not
executed a confidentiality agreement with the Company); and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement.  In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(d)) by
reason of the Company’s filing a report on Form 10-K, 10-KSB, 10-Q, 10-QSB or
Form 8-K or any analogous report under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Company shall incorporate such report by
reference into the Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the Exchange Act

3

report is filed which created the requirement for the Company to amend or
supplement the Registration Statement.

(e)

Reduction of Registrable Securities Included in a Registration Statement.
Notwithstanding anything contained herein, in the event that the SEC requires
the Company to reduce the number of Registrable Securities to be included in a
Registration Statement in order to allow the Company to rely on Rule 415 with
respect to a Registration Statement, then the Company shall be obligated to
include in such Registration Statement (which may be a subsequent Registration
Statement if the Company needs to withdraw a Registration Statement and refile a
new Registration Statement in order to rely on Rule 415) only such limited
portion of the Registrable Securities as the SEC shall permit.  Any Registrable
Securities that are excluded in accordance with the foregoing terms are
hereinafter referred to as “Cut Back Securities”.  To the extent Cut Back
Securities exist, as soon as may be permitted by the SEC, the Company shall be
required to file a Registration Statement covering the resale of the Cut Back
Securities (subject also to the terms of this Section) and shall use best
efforts to cause such Registration Statement to be declared effective as
promptly as practicable thereafter.

(f)

Failure to File or Obtain Effectiveness of the Registration Statement or Remain
Current.     If: (i) a Registration Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(c), the Company shall not be deemed to have satisfied this clause (i)), or
(ii) the Company fails to file with the SEC a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act, within five
Trading Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the SEC that a Registration Statement will not be
“reviewed” or not subject to further review, or (iii) a Registration Statement
filed or required to be filed hereunder is not declared effective by the SEC by
its Effectiveness Deadline, or (iv) after the effectiveness, a Registration
Statement ceases for any reason to remain continuously effective as to all
Registrable Securities for which it is required to be effective, or the Holders
are otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities for more than thirty (30) consecutive calendar days or
more than an aggregate of forty (40) calendar days during any twelve (12) month
period (which need not be consecutive calendar days), or (v) if after the six
month anniversary of the date hereof, the Company does not have available
adequate current public information as set forth in Rule 144(c) (any such
failure or breach being referred to as an “Event”), then in addition to any
other rights the holders of the Convertible Debentures may have hereunder or
under applicable law, on each such Event date and on each monthly anniversary of
each such Event date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each holder
of Convertible Debentures an amount in cash, as partial liquidated damages
(“Liquidated Damages”) and not as a penalty, equal to two percent (2%) of the
aggregate purchase price paid by such holder pursuant to the Securities Purchase
Agreement for any Convertible Debentures then held by such holder.  The parties
agree that (1) the Company shall not be liable for Liquidated Damages under this
Agreement with respect to any Warrants or Warrant Shares and (2) the maximum
aggregate Liquidated Damages payable to a holder of Convertible Debentures under
this Agreement shall be twenty-four percent (24%) of the aggregate Purchase
Price paid by such holder pursuant to the Securities Purchase Agreement.  The
partial Liquidated Damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event.

4

(g)

Liquidated Damages.  The Company and the Buyer hereto acknowledge and agree that
the sums payable under subsection 2(f) above shall constitute liquidated damages
and not penalties and are in addition to all other rights of the Buyer,
including the right to call a default.  The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred is incapable or is difficult
to precisely estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly disproportionate to,
the probable loss likely to be incurred in connection with any failure by the
Company to obtain or maintain the effectiveness of a Registration Statement,
(iii) one of the reasons for the Company and the Buyer reaching an agreement as
to such amounts was the uncertainty and cost of litigation regarding the
question of actual damages, and (iv) the Company and the Buyer are sophisticated
business parties and have been represented by sophisticated and able legal
counsel and negotiated this Agreement at arm’s length.

3.

RELATED OBLIGATIONS.

(a)

The Company shall, not less than three (3) Trading Days prior to the filing of
each Registration Statement and not less than one (1) Trading Day prior to the
filing of any related amendments and supplements to all Registration Statements
(except for annual reports on Form 10-K or Form 10-KSB), furnish to each Buyer
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 reasonable and prompt review of such Buyers, The Company shall not file a
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Buyers shall reasonably object in good faith; provided
that, the Company is notified of such objection in writing no later than two (2)
Trading Days after the Buyers have been so furnished copies of a Registration
Statement.

(b)

The Company shall furnish to each Buyer whose Registrable Securities are
included in any Registration Statement, without charge, (i) at least one (1)
copy of such Registration Statement as declared effective by the SEC and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each preliminary
prospectus, (ii) ten (10) copies of the final prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Buyer may reasonably request) and (iii) such other
documents as such Buyer may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such Buyer.

(c)

The Company shall use its best efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such other
securities or “blue sky” laws of such jurisdictions in the United States as any
Buyer reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (w) make any
change to its articles of incorporation or by-laws, (x) qualify to do business
in any jurisdiction where it

5

would not otherwise be required to qualify but for this Section 3(d), (y)
subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction.  The Company
shall promptly notify each Buyer who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.

(d)

As promptly as practicable after becoming aware of such event or development,
the Company shall notify each Buyer in writing of the happening of any event as
a result of which the Prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission 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 (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such supplement or amendment to each Buyer.  The
Company shall also promptly notify each Buyer in writing (i) when a Prospectus
or any Prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to each Buyer
by facsimile on the same day of such effectiveness), (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.

(e)

The Company shall use its best efforts to prevent the issuance of any stop order
or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction within the United States of America and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify each Buyer who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.

(f)

If, after the execution of this Agreement, a Buyer believes, after consultation
with its legal counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of any Buyer, the Company shall
furnish to such Buyer, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as a Buyer may
reasonably request (i) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the Buyers.

(g)

If, after the execution of this Agreement, a Buyer believes, after consultation
with its legal counsel, that it could reasonably be deemed to be an underwriter
of Registrable Securities, at the request of any Buyer, the Company shall make
available for

6

inspection by (i) any Buyer and (ii) one (1) firm of accountants or other agents
retained by the Buyers (collectively, the “Inspectors”) all pertinent financial
and other records, and pertinent corporate documents and properties of the
Company (collectively, the “Records”), as shall be reasonably deemed necessary
by each Inspector, and cause the Company’s officers, directors and employees to
supply all information which any Inspector may reasonably request; provided,
however, that each Inspector shall agree, and each Buyer hereby agrees, to hold
in strict confidence and shall not make any disclosure (except to a Buyer) or
use  any Record or other information which the Company determines in good faith
to be confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the Securities Act, (b) the release of such Records is ordered pursuant to
a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector and the Buyer has knowledge.  Each
Buyer agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential.

(h)

The Company shall hold in confidence and not make any disclosure of information
concerning a Buyer provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement.  The Company agrees that it shall, upon learning that disclosure of
such information concerning a Buyer is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt written
notice to such Buyer and allow such Buyer, at the Buyer’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

(i)

The Company shall use its best efforts either to cause all the Registrable
Securities covered by a Registration Statement (i) to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities.  The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(j).

(j)

The Company shall cooperate with each Buyer who holds Registrable Securities
being offered and, to the extent applicable, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Buyers may reasonably request and registered in such
names as the Buyers may request.

7

(k)

The Company shall use its best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.

(l)

The Company shall otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC in connection with any registration hereunder.

(m)

Within two (2) business days after a Registration Statement which covers
Registrable Securities is declared effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Buyer whose
Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the SEC in the
form attached hereto as Exhibit C.

(n)

The Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by each Buyer of Registrable Securities pursuant to a
Registration Statement.

4.

OBLIGATIONS OF THE BUYERS.

(a)

Each Buyer agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(d) such Buyer will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement covering such Registrable Securities until such Buyer’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3(d) or receipt of notice that no supplement or amendment is required.
 Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended certificates for shares of Common Stock to a
transferee of a Buyer in accordance with the terms of the Securities Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which a Buyer has entered into a contract for sale prior to the Buyer’s receipt
of a notice from the Company of the happening of any event of the kind described
in Section 3(d) and for which the Buyer has not yet settled.

(b)

Each Buyer covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it or an exemption therefrom
in connection with sales of Registrable Securities pursuant to the Registration
Statement.

5.

EXPENSES OF REGISTRATION.

All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Company.

6.

INDEMNIFICATION.

With respect to Registrable Securities which are included in a Registration
Statement under this Agreement:

8

(a)

To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Buyer, the directors, officers,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Buyer within the meaning of the Securities Act or the Exchange Act
(each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified Damages”), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which Registrable Securities are
offered (“Blue Sky Filing”), or the omission or alleged omission to state 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 any final prospectus (as 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
other law, including, without limitation, any state securities law, or any rule
or regulation there under relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”).  The Company shall
reimburse the Buyers and each such controlling person promptly as such expenses
are incurred and are due and payable, for any legal fees or disbursements 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 6(a): (x) shall
not apply to a Claim by an Indemnified Person 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 such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (y) shall not be available to the
extent such Claim is based on a failure of the Buyer to deliver or to cause to
be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c); and (z) shall
not 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. 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
Buyers pursuant to Section 9 hereof.

(b)

In connection with a Registration Statement, each Buyer agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6(a), the Company, each of its directors,
each of its officers, employees, representatives, or agents and each Person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (each an “Indemnified

9

Party”), against any Claim or Indemnified Damages to which any of them may
become subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such Claim or Indemnified Damages arise out of or is based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Buyer expressly for use in connection with such
Registration Statement; and, subject to Section 6(d), such Buyer will reimburse
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Buyer, which consent shall not be unreasonably withheld;
provided, further, however, that the Buyer shall be liable under this Section
6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to such Buyer as a result of the sale of Registrable Securities
pursuant to such Registration Statement.  Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Buyers pursuant to Section 9.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(b)
with respect to any prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the
prospectus was corrected and such new prospectus was delivered to each Buyer
prior to such Buyer’s use of the prospectus to which the Claim relates.

(c)

Promptly after receipt by an Indemnified Person or Indemnified Party under this
Section 6 of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, 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; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
of not more than one (1) counsel for such Indemnified Person or Indemnified
Party to be paid by the indemnifying party, if, in the reasonable opinion of
counsel retained by the indemnifying party, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing  interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding.  The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or claim.
 The indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto.  No indemnifying party shall be liable for
any settlement of any action, claim or proceeding effected without its prior
written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent.  No indemnifying party
shall, without the prior written consent of the Indemnified Party or

10

Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such claim or
litigation.  Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made.  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 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

(d)

The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

(e)

The indemnity agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

7.

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
6 to the fullest extent permitted by law; provided, however, that:  (i) 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
fraudulent misrepresentation; and (ii) 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.

8.

REPORTS UNDER THE EXCHANGE ACT.

With a view to making available to the Buyers the benefits of Rule 144
promulgated under the Securities Act or any similar rule or regulation of the
SEC that may at any time permit the Buyers to sell securities of the Company to
the public without registration (“Rule 144”), and as a material inducement to
the Buyer’s purchase of the Convertible Debentures, the Company represents,
warrants, and covenants to the following:

(a)

The Company is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act and has filed all required reports under section 13 or 15(d) of
the Exchange Act during the 12 months prior to the date hereof (or for such
shorter period that the issuer was required to file such reports), other than
Current Report on Form 8-K;

(b)

During the Registration Period, the Company shall file with the SEC in a timely
manner all required reports under section 13 or 15(d) of the Exchange Act (it
being

11

understood that nothing herein shall limit the Company’s obligations under the
Securities Purchase Agreement) and such reports shall conform to the requirement
of the Exchange Act and the SEC for filing thereunder; and

(c)

The Company shall furnish to each Buyer so long as such Buyer owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, (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 Buyers to sell such securities pursuant to
Rule 144 without registration.

9.

AMENDMENT OF REGISTRATION RIGHTS.

Provisions 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 Buyers who then
hold at least two-thirds (2/3) of the Registrable Securities.  Any amendment or
waiver effected in accordance with this Section 9 shall be binding upon each
Buyer and the Company.  No such amendment shall be effective to the extent that
it applies to fewer than all of the holders of the Registrable Securities.  No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

10.

MISCELLANEOUS.

(a)

A Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities or owns the right
to receive the Registrable Securities.  If the Company receives conflicting
instructions, notices or elections from two (2) or more Persons 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)

No Piggyback on Registrations.  Except as set forth on Schedule 10(b) attached
hereto, neither the Company nor any of its security holders (other than the
Buyers in such capacity pursuant hereto) may include securities of the Company
in the initial Registration Statement other than the Registrable Securities.
 The Company shall not file any other registration statements until the initial
Registration Statement required hereunder is declared effective by the SEC,
provided that this Section 10(b) shall not prohibit the Company from filing
amendments to registration statements already filed.

(c)

Piggy-Back Registrations.  If at any time there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the SEC 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 the stock
option or other

12

employee benefit plans, then the Company shall send to each Buyer a written
notice of such determination and, if within fifteen (15) days after the date of
such notice, any such Buyer shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Buyer requests to be registered; provided, however, that, the
Company shall not be required to register any Registrable Securities pursuant to
this Section 10(c) that are eligible for resale under Rule 144 promulgated under
the Securities Act or that are the subject of a then effective Registration
Statement.

(d)

Any notices, consents, waivers or other communications required or permitted to
be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) business day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such communications
shall be:

If to the Company, to:

Intrepid Technology & Resources, Inc.

 

501 West Broadway

 

Suite 200

 

Idaho Falls, ID 83402

 

Attention: Jacob D. Dustin

 

Telephone: (208) 529-5337

 

Facsimile: (208) 529-1014

 

 

With Copy to:

Kirkpatrick & Lockhart Preston Gates Ellis LLP

 

200 South Biscayne Boulevard, Suite 2000

 

Miami, Florida 33131

 

Attention:

Clayton E. Parker, Esq.

 

Telephone:

(305) 539-3306

 

Facsimile:

(305) 358-7095

 

 

If to an Buyer, to its address and facsimile number on the Schedule of Buyers
attached hereto, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers or to such other address and/or facsimile number and/or to
the attention of such other person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

(e)

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.

13

(f)

The laws of the State of New Jersey shall govern all issues concerning the
relative rights of the Company and the Buyers as its stockholders.  All other
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
Jersey, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New Jersey or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New Jersey.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the Superior Courts of the State of New Jersey, sitting in
Hudson County, New Jersey and federal courts for the District of New Jersey
sitting Newark, New Jersey, 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 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 a copy thereof to such party at the address for such 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.
 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 in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.  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 AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

(g)

This Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.

(h)

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

(i)

This Agreement may be executed in identical 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 facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

(j)

Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

14

(k)

The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent and no rules of strict construction
will be applied against any party.

(l)

This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

15

IN WITNESS WHEREOF, each Buyer and the Company have caused their signature page
to this Registration Rights Agreement to be duly executed as of the date first
above written.

 

COMPANY:

 

INTREPID TECHNOLOGY & RESOURCES, INC.

 

 

 

By:

/s/ John D. Haffey

 

Name:

John D. Haffey

 

Title:

CEO

 

 

16

IN WITNESS WHEREOF, each Buyer and the Company have caused their signature page
to this Registration Rights Agreement to be duly executed as of the date first
above written.

 

BUYER:

 

YA GLOBAL INVESTMENTS, L.P.

 

 

 

By:

Yorkville Advisors, LLC

 

Its:

Investment Manager

 

 

 

 

 

By:

/s/ Mark Angelo

 

Name:

Mark Angelo

 

Title:

Portfolio Manager

17

SCHEDULE I

SCHEDULE OF BUYERS

Buyer

Address/Facsimile
Number of Buyer

Address/Facsimile
Number of Buyer’s Representative

 

 

 

 

 

 

YA Global Investments, L.P.

101 Hudson Street – Suite 3700

101 Hudson Street – Suite 3700

 

Jersey City, NJ  07302

Jersey City, NJ  07302

 

Facsimile:

(201) 985-8266

Facsimile:

(201) 985-8266

 

 

Attention:  David Gonzalez, Esq.

 

 

 

 

 

 

 

 

 

EXHIBIT A

SELLING STOCKHOLDERS

AND PLAN OF DISTRIBUTION

Selling Stockholders

The shares of Common Stock being offered by the selling stockholders are
issuable upon conversion of the convertible debentures and upon exercise of the
warrants.  For additional information regarding the issuance of those
convertible notes and warrants, see “Private Placement of Convertible Debentures
and Warrants” above.  We are registering the shares of Common Stock in order to
permit the selling stockholders to offer the shares for resale from time to
time.  Except as otherwise notes and except for the ownership of the convertible
Debentures and the warrants issued pursuant to the Securities Purchase
Agreement, the selling stockholders have not had any material relationship with
us within the past three years.

The table below lists the selling stockholders and other information regarding
the beneficial ownership of the shares of Common Stock by each of the selling
stockholders.  The second column lists the number of shares of Common Stock
beneficially owned by each selling stockholder, based on its ownership of the
convertible debentures and warrants, as of ________, 200_, assuming conversion
of all convertible debentures and exercise of the warrants held by the selling
stockholders on that date, without regard to any limitations on conversions or
exercise.

The third column lists the shares of Common Stock being offered by this
prospectus by the selling stockholders.

In accordance with the terms of a registration rights agreement with the selling
stockholders, this prospectus generally covers the resale of at least
___________ shares of common stock issued or issuable to the selling
stockholders pursuant to the Securities Purchase Agreement.  Because the
conversion price of the convertible debentures and the exercise price of the
warrants may be adjusted, the number of shares that will actually be issued may
be more or less than the number of shares being offered by this prospectus.  The
fourth column assumes the sale of all of the shares offered by the selling
stockholders pursuant to this prospectus.

Under the terms of the convertible debentures and the warrants, a selling
stockholder may not convert the convertible debentures or exercise the warrants
to the extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 4.99% of our then outstanding shares of Common Stock
following such conversion or exercise, excluding for purposes of such
determination shares of Common Stock issuable upon conversion of the convertible
debentures which have not been converted and upon exercise of the warrants which
have not been exercised.  The number of shares in the second column does not
reflect this limitation.  The selling stockholders may sell all, some or none of
their shares in this offering.  See "Plan of Distribution."

 

 

 

Name of Selling Stockholder

Number of Shares Owned Prior to Offering

Maximum Number of Shares to be Sold Pursuant to this Prospectus

Number of Shares Owned After Offering

YA Global Investments, L.P. (1)

 

 

(1)

YA Global Investments, L.P. is a Cayman Island exempt limited partnership.  YA
Global is managed by Yorkville Advisors, LLC.  Investment decisions for
Yorkville Advisors are made by Mark Angelo, its portfolio manager.  

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the common stock 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 the __________ or any
other 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.
 A Selling Stockholder may use any one or more of the following methods when
selling shares:

·

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

·

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;

·

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

·

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

·

privately negotiated transactions;

·

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

·

through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

·

a combination of any such methods of sale; or

·

any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), 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, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.  

In connection with the sale of the common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
Common Stock in the course of hedging the positions they assume.  The Selling
Stockholders may also enter into option or other

3

transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).

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.  Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).

The Company is required to pay certain fees and expenses incurred by the Company
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.  

Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder.  In addition,
any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under
this prospectus.  There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the Selling
Stockholders.

We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities Act
or any other rule of similar effect.  The resale shares will be sold only
through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale shares may not
be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to the common stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution.  In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the Selling Stockholders or any other
person.  We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a

4

copy of this prospectus to each purchaser at or prior to the time of the sale
(including by compliance with Rule 172 under the Securities Act).

5

EXHIBIT B

OTHER DISCLOSURES

See attachment provided separately.  

6

EXHIBIT C

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

Attention:

Re:

INTREPID TECHNOLOGY & RESOURCES, INC.

Ladies and Gentlemen:

We are counsel to Intrepid Technology and Resources, Inc., an Idaho corporation
(the “Company”), and have represented the Company in connection with that
certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
entered into by and among the Company and the Buyers named therein
(collectively, the “Buyers”) pursuant to which the Company issued to the Buyers
shares of its Common Stock, par value $0.005 per share (the “Common Stock”).
 Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Buyers (the “Registration Rights
Agreement”) pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the “Securities Act”).
 In connection with the Company’s obligations under the Registration Rights
Agreement, on ____________ ____, the Company filed a Registration Statement on
Form ________ (File No. 333-_____________) (the “Registration Statement”) with
the Securities and Exchange Commission (the “SEC”) relating to the Registrable
Securities which names each of the Buyers as a selling stockholder there under.

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the Securities Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the Securities Act pursuant to the
Registration Statement.

Very truly yours,

[Law Firm]

By:

cc:

[LIST NAMES OF BUYERS]

7