THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST
RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS
INVOLVED.

Warrant to Purchase                  shares                                     
           Warrant Number J-____        “J” Warrant to Purchase Common Stock of
Universal Energy Corp.   THIS    CERTIFIES                     that             
     _________________________.,    a 

______________________
Company or any subsequent holder hereof (“Holder”) has the right to purchase
from Universal Energy Corp. a Delaware corporation, (the “Company”), up to
__________
Million (
____________
) fully paid and nonassessable shares, of the Company's common stock, $0.0001
par value per share (“Common Stock”), subject to adjustment as provided herein,
at a price equal to the Exercise Price as defined in Section 3 below, at any
time during the Term (as defined below).

     Holder agrees with the Company that this Warrant to Purchase Common Stock
of the Company (this “Warrant” or this “Agreement”) is issued and all rights
hereunder shall be held subject to all of the conditions, limitations and
provisions set forth herein.

  1. Date of Issuance and Term.

     This Warrant shall be deemed to be issued on October ___, 2008 (“Date of
Issuance”). The term of this Warrant begins on the Date of Issuance and ends at
5:00 p.m., New York City time, on the date that is five (5) years after the Date
of Issuance (the “Term”). This Warrant was issued in conjunction with the
issuance of Debentures of the Company (“the “Debentures”) to the Holder pursuant
to the terms of the Securities Purchase Agreement (“Securities Purchase
Agreement”) by and between the Company and Holder dated on or about October
____, 2008.

     Notwithstanding anything to the contrary herein, the applicable portion of
this Warrant shall not be exercisable during any time that, and only to the
extent that, the number of shares of Common Stock to be issued to Holder upon
such Exercise (as defined in Section 2(a)), when added to the number of shares
of Common Stock, if any, that the

1

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Holder otherwise beneficially owns (outside of this Warrant, and not including
any other warrants or securities of Holder’s having a provision substantially
similar to this paragraph) at the time of such Exercise, would exceed 4.99% (the
“Maximum Percentage”) of the number of shares of Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock
issuable upon Exercise of this Warrant held by the Holder, as determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934 (the
“Beneficial Ownership Limitation”). The Beneficial Ownership Limitation shall be
conclusively satisfied if the applicable Notice of Exercise includes a signed
representation by the Holder that the issuance of the shares in such Notice of
Exercise will not violate the Limitation, and the Company shall not be entitled
to require additional documentation of such satisfaction.

     Notwithstanding the above, in the event that the Company receives any
purchase, tender or exchange offer or any offer to enter into a merger with
another entity whereby the Company shall not be the surviving entity (an
“Offer”), then the Maximum Percentage shall be increased (but not decreased) to
9.99%, and “4.99%” shall be automatically revised immediately after such offer
to read “9.99%” each place it occurs in this Section 1. The Beneficial Ownership
Limitation provisions of this Section 1 may be waived by such Holder, at the
election of such Holder, upon not less than 61 days’ prior notice to the
Company, to change the Beneficial Ownership Limitation to any amount not in
excess of 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
Exercise of this Warrant held by the Holder and the Beneficial Ownership
Limitation shall continue to apply. Upon such a change by a Holder of the
Beneficial Ownership Limitation from such 4.99% limitation to such 9.99%
limitation, the Beneficial Ownership Limitation may not be further waived by
such Holder, provided that, if an Event of Default occurs, thereafter the
Beneficial Ownership Limitation provisions of this Section 1 may be waived by
such Holder, at the election of such Holder, upon not less than 61 days’ prior
notice to the Company, to change the Maximum Percentage to any other percentage
(and not limited to 9.99%) of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock upon Exercise of the Warrants held by the Holder and the provisions of
this Section 1 shall continue to apply. The limitations on Exercise set forth in
this subsection are referred to as the “Beneficial Ownership Limitations.” The
provisions of this paragraph shall be construed and implemented in a manner
otherwise than in strict conformity with the terms of this Section 1 to correct
this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such
limitation.

     Notwithstanding the above, Holder shall retain the option to either
Exercise or not Exercise its option(s) to acquire Common Stock pursuant to the
terms hereof after an Offer, and, in the event of a cash Exercise following a
tender offer, the Exercise Price per share that would otherwise be due shall
instead be offset against the tender price per share to be received by the
Holder, provided, however, that in the event a tender offer is not completed,
Holder, at its option may either (i) complete any Exercise that was initiated
after the Offer by promptly paying to the Company the Exercise Price that would
have been due at the time the Warrant was Exercised, or (ii) cancel such
Exercise by providing written notice to the Company, in which case such Exercise
shall be deemed void ad initio.

2

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     Maximum Exercise of Rights. In the event the Holder notifies the Company
that the Exercise of the rights described herein would result in the issuance of
an amount of Common Stock of the Company that would exceed the maximum amount
that may be issued to a Holder calculated in the manner described above, then
the issuance of such additional shares of Common Stock of the Company to such
Holder will be deferred in whole or in part until such time as such Holder is
able to beneficially own such Common Stock without exceeding the maximum amount
calculated in the manner described herein. The determination of when such Common
Stock may be issued shall be made by each Holder as to only such Holder.

2.      Exercise.     (a) Manner of Exercise. During the Term this Warrant may
be Exercised as to  

all or any lesser number of full shares of Common Stock covered hereby (the
“Warrant Shares” or the “Shares”) upon surrender of this Warrant, with the
Notice of Exercise Form attached hereto as Exhibit A (the “Notice of Exercise”)
duly completed and executed, together with the full Exercise Price (as defined
below, which may be satisfied by either a Cash Exercise or a Cashless Exercise,
as each is defined below) for each share of Common Stock as to which this
Warrant is Exercised, at the office of the Company, Universal Energy Corp.; 30
Skyline Drive, Lake Mary, FL 32746; Phone: 800-975-2076, Fax: 800-805-4561, or
at such other location as the Company may then be located or such other office
or agency as the Company may designate in writing, by overnight mail, by
facsimile (such surrender and payment of the Exercise Price hereinafter called
the “Exercise” of this Warrant). In the case of a Cashless Exercise, the
Exercise Price is deemed to have been delivered upon the Holder’s deliver of a
Notice of Exercise to the Company.

     (b) Date of Exercise. The “Date of Exercise” of the Warrant shall be
defined as the date that a copy of the Notice of Exercise Form attached hereto
as Exhibit A, completed and executed, is sent by facsimile to the Company,
provided that the original Warrant and Notice of Exercise Form are received by
the Company and the Exercise Price is satisfied, each as soon as practicable
thereafter. Alternatively, the Date of Exercise shall be defined as the date the
original Notice of Exercise Form are received by the Company and the Exercise
Price is satisfied, if Holder has not sent advance notice by facsimile. Upon
delivery of the Date of Exercise, the Holder shall be deemed for all corporate
purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder's DTC account or the date of delivery of the
certificates evidencing such Warrant Shares as the case may be. The Company
shall deliver any objection to any Notice of Exercise within 1 Business Day of
receipt of such notice. In the event of any dispute or discrepancy, the records
of the Holder shall be controlling and determinative in the absence of manifest
error.

     (c) Delivery of Common Stock Upon Exercise. Within 3 Trading Days from the
delivery to the Company of the Notice of Exercise, surrender of this Warrant (if
required) and payment of the aggregate Exercise Price (which, in the case of a
Cashless Exercise, shall be deemed to have been paid upon the submission by the
Holder of a Notice of

3

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Exercise)(the “Warrant Shares Delivery Deadline”), the Company shall issue and
deliver (or cause its transfer agent so to issue and deliver) in accordance with
the terms hereof to or upon the order of the Holder that number of shares of
Common Stock (“Exercise Shares”) for the portion of this Warrant converted as
shall be determined in accordance herewith. Upon the Exercise of this Warrant or
any part thereof, the Company shall, at its own cost and expense, take all
necessary action, including obtaining and delivering, an opinion of counsel to
assure that the Company's transfer agent shall issue stock certificates in the
name of Holder (or its nominee) or such other persons as designated by Holder
and in such denominations to be specified at Exercise representing the number of
shares of Common Stock issuable upon such Exercise. The Company warrants that no
instructions other than these instructions have been or will be given to the
transfer agent of the Company's Common Stock and that, unless waived by the
Holder, the Exercise Shares will be free-trading, and freely transferable, and
will not contain a legend restricting the resale or transferability of the
Exercise Shares if the Unrestricted Conditions (as defined below) are met. If
the Company fails for any reason to deliver to the Holder certificates
evidencing the Warrant Shares subject to a Notice of Exercise by the Warrant
Shares Delivery Deadline (a

“Warrant Share Delivery Failure”).

     (d) Revocation of Exercise Upon Delivery Failure. In addition to any other
remedies which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Exercise Shares by the Warrant
Shares Delivery Deadline, the Holder will be entitled to revoke all or part of
the relevant Notice of Exercise by delivery of a notice to such effect to the
Company whereupon the Company and the Holder shall each be restored to their
respective positions immediately prior to the delivery of such notice, except
that the liquidated damages described above shall be payable through the date
notice of revocation or rescission is given to the Company.

(e)      Legends.     (i) Restrictive Legend. The Holder understands that the
Warrant and,  

until such time as Exercise Shares have been registered under the 1933 Act or
otherwise may be sold pursuant to Rule 144 or Rule 144(k) under the 1933 Act
without any restriction as to the number of securities as of a particular date
that can then be immediately sold, the Exercise Shares may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such securities):

     “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN
OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO
COUNSEL TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.”

4

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     (ii) Removal of Restrictive Legends. Certificates evidencing the Exercise
Shares shall not contain any legend restricting the transfer thereof (including
the legend set forth above in subsection 2(e)(i)): (i) while a registration
statement covering the resale of such security is effective under the Securities
Act, or (ii) following any sale of such Exercise Shares pursuant to Rule 144, or
(iii) if such Exercise Shares are eligible for sale under Rule 144(k), or (iv)
if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff
of the Commission) (collectively, the “Unrestricted Conditions”). The Company
shall cause its counsel to issue a legal opinion to the Company’s transfer agent
promptly after the effective date of a registration statement if required by the
Company’s transfer agent to effect the issuance of Exercise Shares without a
restrictive legend or removal of the legend hereunder. If the Unrestricted
Conditions are met at the time of issuance of Exercise Shares, then such
Exercise Shares shall be issued free of all legends. The Company agrees that
following the effective date or at such time as the Unrestricted Conditions are
met or such legend is otherwise no longer required under this Section 2(e), it
will, no later than three (3) Trading Days following the delivery (the
“Unlegended Shares Delivery Deadline”) by the Holder to the Company or the
Company’s transfer agent of a certificate representing Exercise Shares, as
applicable, issued with a restrictive legend (such third Trading Day, the
“Legend Removal Date”), deliver or cause to be delivered to such Holder a
certificate (or electronic transfer) representing such shares that is free from
all restrictive and other legends.

     (iii) Sale of Unlegended Shares. Holder agrees that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 2(e)(i) above is predicated upon the Company’s reliance that the
Holder will sell any Exercise Shares pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a registration statement, they will be sold in compliance with the
plan of distribution set forth therein.

     (f) Cancellation of Warrant. This Warrant shall be canceled upon the full
Exercise of this Warrant, and, as soon as practical after the Date of Exercise,
Holder shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise of this Warrant, and if this Warrant is not
Exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant) representing any unexercised portion of this
Warrant in addition to such Common Stock.

     (g) Holder of Record. Each person in whose name any Warrant for shares of
Common Stock is issued shall, for all purposes, be deemed to be the Holder of
record of such shares on the Date of Exercise of this Warrant, irrespective of
the date of delivery of the Common Stock purchased upon the Exercise of this
Warrant. Nothing in this Warrant shall be construed as conferring upon Holder
any rights as a stockholder of the Company.

     (h) Delivery of Electronic Shares. In lieu of delivering physical
certificates representing the unlegended shares of Common Stock issuable upon
Exercise (the “Unlegended Shares”), provided the Company’s transfer agent is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (“FAST”) program, upon written request of the Holder, so long as the
certificates therefor are not

5

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required to bear a legend, and the Holder is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Unlegended Shares to the Holder by
crediting the account of the Holder's prime broker with DTC identified in the
written request through its Deposit Withdrawal Agent Commission (“DWAC”) system.

     (i) Buy-In. In addition to any other rights available to the Holder, if the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Exercise Shares pursuant to an
Exercise on or before the Warrant Shares Delivery Deadline, and if after such
date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm otherwise purchases
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Exercise Shares which the Holder anticipated receiving upon such Exercise (a
“Buy-In”), then the Company shall (1) pay in cash to the Holder the amount (the
“Buy-In Amount”) by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (A) the number of Exercise Shares
that the Company was required to deliver to the Holder in connection with the
Exercise at issue times (B) the price at which the sell order giving rise to
such purchase obligation was executed, and (2) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of Exercise
Shares for which such Exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had the Company
timely complied with its Exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to an attempted Exercise of shares of
Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (1) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and other evidence
reasonably requested by the Company. Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon Exercise of the Warrant as
required pursuant to the terms hereof.

     (j) Surrender of Warrant Upon Exercise; Book-Entry. Notwithstanding
anything to the contrary set forth herein, upon Exercise of this Warrant in
accordance with the terms hereof, the Holder shall not be required to physically
surrender the original Warrant Certificate to the Company unless all of this
Warrant is Exercised, in which case such Holder shall deliver the original
Warrant being Exercised to the Company promptly following the Date of Exercise
at issue. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect
of lowering the outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased. The Holder
and the Company shall maintain records showing the amount of this Warrant that
is so Exercised and the dates of such Exercises or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this original Warrant upon each such Exercise. In the
event of any dispute or discrepancy, such

6

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records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder and any assignee, by acceptance of this Warrant,
acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given time may be less
than the amount stated on the face hereof.

3.      Payment of Warrant Exercise Price.     (a) Exercise Price. The Exercise
Price (“Exercise Price”) shall initially equal  

$0.25 per share (the “Initial Exercise Price”), subject to adjustment pursuant
to the terms hereof, including but not limited to Section 5 below.

     Payment of the Exercise Price may be made by either of the following, or a
combination thereof, at the election of Holder:

     (i) Cash Exercise: The Holder may exercise this Warrant in cash, bank or
cashiers check or wire transfer (a “Cash Exercise”); or

     (ii) Cashless Exercise: If at any time after the date that is six (6)
months from the Date of Issuance, there is no effective registration statement
covering the resale of the Warrant Shares issuable upon the exercise of this
Warrant, the Holder, at its option, may exercise this Warrant in a Cashless
Exercise transaction (as defined below).

     In order to effect a Cashless Exercise, the Holder shall surrender of this
Warrant at the principal office of the Company together with notice of cashless
election, in which event the Company shall issue Holder a number of shares of
Common Stock computed using the following formula (a “Cashless Exercise”):

X = Y (A-B)/A

where: X = the number of shares of Common Stock to be issued to Holder.

Y = the number of shares of Common Stock for which this Warrant is being
Exercised.

A = the Market Price of one (1) share of Common Stock (for purposes of this
Section 3(ii),

  B = the Exercise Price.

     As used herein, “Market Price,” as of any date, means the Volume Weighted
Average Price (as defined herein) of the Company’s Common Stock during the five
(5) consecutive trading day period immediately preceding the date of Exercise,
or other applicable date, and the “Volume Weighted Average Price” or “VWAP” for
any security as of any date means the volume weighted average sale price on the
Over the Counter Electronic Bulletin Board (the “OTC-BB”) as reported by, or
based upon data reported by, Bloomberg Financial Markets or an

7

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equivalent, reliable reporting service mutually acceptable to and hereafter
designated by holders of a majority in interest of the Warrants and the Company
(“Bloomberg”) or, if the OTC-BB is not the principal trading market for such
security, the volume weighted average sale price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or, if no volume weighted average sale price is
reported for such security, then the last closing trade price of such security
as reported by Bloomberg, or, if no last closing trade price is reported for
such security by Bloomberg, the average of the bid prices of any market makers
for such security that are listed in the “pink sheets” by the National Quotation
Bureau, Inc. If the Volume Weighted Average Price cannot be calculated for such
security on such date in the manner provided above, the volume weighted average
price shall be the fair market value as mutually determined by the Company and
the holders of a majority in interest of the Warrants being Exercised for which
the calculation of the volume weighted average price is required in order to
determine the Exercise Price of such Warrants. “Trading Day” shall mean any day
on which the Common Sock is traded for any period on the OTC-BB, or on the
principal securities exchange or other securities market on which the Common
Stock is then being traded.

     For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is
intended, understood and acknowledged that the Common Stock issuable upon
Exercise of this Warrant in a cashless Exercise transaction shall be deemed to
have been acquired at the time this Warrant was issued. Moreover, it is
intended, understood and acknowledged that the holding period for the Common
Stock issuable upon Exercise of this Warrant in a cashless Exercise transaction
shall be deemed to have commenced on the date this Warrant was issued.

     (b) Dispute Resolution. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the number of Warrant Shares
issuable upon any exercise of this Warrant, the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with this subsection. In the case of a dispute as to the
determination of the closing price or the Volume Weighted Average Price of the
Company’s Common Stock or the arithmetic calculation of the Exercise Price,
Market Price or any Redemption Price, or the determination of whether or not a
Dilutive Issuance, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within two (2) Business Days of receipt,
or deemed receipt, of the Notice of Exercise or Redemption Notice or other event
giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable to agree upon such determination or calculation
within two (2) Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via facsimile (i) the disputed determination of the
closing price or the Volume Weighted Average Price of the Company’s Common Stock
to an independent, reputable investment bank selected by the Company and
approved by the Holder, which approval shall not be unreasonably withheld, (ii)
the disputed arithmetic calculation of the Exercise Price, Market Price or any
Redemption Price to the Company’s independent, outside accountant or (iii) the
disputed facts regarding the occurrence of a Dilutive Issuance (or any other
matter referred to above that is not expressly designated to the independent
investment bank or the independent

8

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outside accountant pursuant to (i) or (ii) immediately above) to an expert
attorney from a nationally recognized outside law firm (having at least 100
attorneys and having with no prior relationship with the Company) selected by
the Company and approved by the Holder. The Company, at the Company’s expense,
shall cause the investment bank or the accountant, law firm, or other expert, as
the case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than five (5) Business Days from
the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error (collectively,
the “Dispute Resolution Procedures”).

4.      Transfer and Registration.     (a) Transfer Rights. Subject to the
provisions of Section 8 of this Warrant, this  

Warrant may be transferred on the books of the Company, in whole or in part, in
person or by attorney, upon surrender of this Warrant properly completed and
endorsed. This Warrant shall be canceled upon such surrender and, as soon as
practicable thereafter, the person to whom such transfer is made shall be
entitled to receive a new Warrant or Warrants as to the portion of this Warrant
transferred, and Holder shall be entitled to receive a new Warrant as to the
portion hereof retained.

  (b) Omitted.

5.      Anti-Dilution Adjustments; Additional Adjustments; Purchase Rights. (a)
Participation. The Holder, as the holder of this Warrant, shall be entitled to  

receive such dividends paid and distributions of any kind made to the holders of
Common Stock of the Company to the same extent as if the Holder had Exercised
this Warrant into Common Stock (without regard to any limitations on exercise
herein or elsewhere and without regard to whether or not a sufficient number of
shares are authorized and reserved to effect any such exercise and issuance) and
had held such shares of Common Stock on the record date for such dividends and
distributions. Payments under the preceding sentence shall be made concurrently
with the dividend or distribution to the holders of Common Stock.

     (b) Recapitalization or Reclassification. If the Company shall at any time
effect a recapitalization, reclassification or other similar transaction of such
character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which Holder shall be
entitled to purchase upon Exercise of this Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares, proportionally decreased and, in
the case of decrease in the number of shares, proportionally increased. The
Company shall give Holder the same notice it provides to holders of Common Stock
of any transaction described in this Section 5(b).

9

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     (c) Exercise Price Adjusted. As used in this Warrant, the term “Exercise
Price” shall mean the purchase price per share specified in Section 3 of this
Warrant, until the occurrence of an event stated in this Section 5 or otherwise
set forth in this Warrant, and thereafter shall mean said price as adjusted from
time to time in accordance with the provisions of said subsection. No such
adjustment under this Section 5 shall be made unless such adjustment would
change the Exercise Price at the time by $.01 or more; provided, however, that
all adjustments not so made shall be deferred and made when the aggregate
thereof would change the Exercise Price at the time by $.01 or more. No
adjustment made pursuant to any provision of this Section 5 shall have the net
effect of increasing the Exercise Price in relation to the split adjusted and
distribution adjusted price of the Common Stock.

     (d) Adjustments: Additional Shares, Securities or Assets. In the event that
at any time, as a result of an adjustment made pursuant to this Section 5 or
otherwise, Holder shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

     (e) Adjustments to Exercise Price Due to Subsequent Equity Sales. If at any
time after the Date of Issuance for so long as any Warrants are outstanding, the
Company or any Subsidiary, as applicable, sells or grants any option to purchase
or sells or grants any right to reprice, or otherwise disposes of or issues (or
announces any sale, grant or any option to purchase or other disposition), any
Common Stock or Common Stock Equivalents entitling any Person to acquire shares
of Common Stock at an effective price per share that is lower than the then
Exercise Price (such lower price, the “Base Exercise Price” and such issuances,
collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or
Common Stock Equivalents so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share
which are issued in connection with such issuance, be entitled to receive shares
of Common Stock at an effective price per share that is lower than the Exercise
Price, such issuance shall be deemed to have occurred for less than the Exercise
Price on such date of the Dilutive Issuance), regardless of whether or not any
such issuance or repricing of securities is conditional upon circumstances or
events that may occur in the future, then the Exercise Price shall be reduced
(each, a “Dilutive Issuance Adjustment”) to equal the Base Exercise Price. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 5(e) in respect of an Exempt Issuance (as defined in the Securities
Purchase Agreement). If the Company issues Variable Equity Securities, despite
the prohibition set forth in the Securities Purchase Agreement, the Company
shall be deemed to have issued Common Stock or Common Stock Equivalents at the
lowest possible conversion price at which such securities may be converted or
exercised. The Company shall notify the Holder in writing, no later than 1
Business Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this Section 5(e), indicating therein the applicable
issuance price, or applicable reset price, exchange price, conversion price and
other pricing terms

10

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(such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this
Section 5(e), upon the occurrence of any Dilutive Issuance, the Holder is
entitled to receive a number of Exercise Shares based upon the Base Exercise
Price on or after the date of such Dilutive Issuance, regardless of whether the
Holder accurately refers to the Base Exercise Price in the Notice of Exercise.
No adjustment shall be made hereunder if such adjustment would result in an
increase of the Exercise Price then in effect.

  For purposes hereof:

     “Common Stock Equivalents,” “Exempt Issuance” and “Variable Equity
Securities” shall each have the meanings ascribed to them in the Securities
Purchase Agreement.

     “Convertible Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
Common Stock.

     “Options” means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

     (f) Subsequent Rights Offerings. If the Company, at anytime prior to the
date that all of the Warrants have been Exercised, redeemed or otherwise
satisfied in accordance with their terms, shall issue rights, options or
warrants to all holders of Common Stock (and not to Holders) entitling them to
subscribe for or purchase shares of Common Stock at a price per share (the “Base
Rights Offering Price”) that is lower than the Exercise Price then in effect,
then the Exercise Price then in effect shall be reduced (but not increased) to
the Base Rights Offering Price (a “Subsequent Rights Offering Adjustment”). Such
adjustment shall be made whenever such rights or warrants are issued, and shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants. No adjustment
shall be made hereunder if such adjustment would result in an increase of the
Exercise Price then in effect.

     (g) Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the number of
shares represented by this Warrant shall proportionally increase. If the Company
at any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of shares
represented by this Warrant shall proportionally decrease.

     (h) Voluntary Adjustment By Company. The Company may at any time during the
term of this Warrant reduce the then current Exercise Price to any amount and
for any

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period of time deemed appropriate by the Board of Directors of the Company (a

“Voluntary Adjustment”).

     (i) Adjustment to Number of Shares. In the event of any adjustment to the
Exercise Price pursuant to the terms of this Warrant resulting in a reduction in
the Exercise Price, including but not limited to, any Dilutive Issuance
Adjustment any Subsequent Rights Offering Adjustment, Default Adjustment or any
Voluntary Adjustment, the number of Warrant Shares issuable upon Exercise of
this Warrant shall be increased such that the aggregate Exercise Price payable
in a full Cash Exercise hereunder, after taking into account the decrease in the
Exercise Price, shall be equal to the aggregate Exercise Price payable in a full
Cash Exercise prior to such adjustment, and the number of Warrant Shares
issuable in a Cashless Exercise shall be increased accordingly.

     (j) Notice of Adjustments. Whenever the Exercise Price is adjusted pursuant
to the terms of this Warrant, the Company shall within Five (5) Business Days
mail to the Holder a notice (a “Exercise Price Adjustment Notice”) setting forth
the Exercise Price after such adjustment and setting forth a statement of the
facts requiring such adjustment. The Company shall, upon the written request at
any time of the Holder, furnish to such Holder a like Warrant setting forth (i)
such adjustment or readjustment, (ii) the Exercise Price at the time in effect
and (iii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon Exercise of the
Warrant, following delivery of the original Warrant to the Company for exchange.
For purposes of clarification, whether or not the Corporation provides an
Exercise Price Adjustment Notice pursuant to this Section 5(l), upon the
occurrence of any event that leads to an adjustment of the Exercise Price, the
Holders are entitled to receive a number of Exercise Shares based upon the new
Exercise Price, as adjusted, for exercises occurring on or after the date of
such adjustment, regardless of whether a Holder accurately refers to the
adjusted Exercise Price in the Notice of Exercise.

(k)      Notice to Holder.     (i) Adjustment to Exercise Price. Whenever the
Exercise Price is adjusted  

pursuant to any provision of this Section 5, the Company shall promptly mail to
the Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. If the
Company issues Variable Equity Securities (as defined in the Purchase
Agreement), despite the prohibition thereon in the Purchase Agreement, the
Company shall be deemed to have issued Common Stock or Common Stock Equivalents
at the lowest possible conversion or exercise price at which such securities may
be converted or exercised.

     (ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Stock; (B)
the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock; (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights; (D) the approval of
any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the

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assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder is
entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such notice.

     (l) Purchase Rights. In addition to any other adjustments described herein,
if at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the
“Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the proportionate number of
shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

  6. Fractional Interests.

     No fractional shares or scrip representing fractional shares shall be
issuable upon the Exercise of this Warrant, but on Exercise of this Warrant,
Holder may purchase only a whole number of shares of Common Stock. If, on
Exercise of this Warrant, Holder would be entitled to a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares of Common Stock
issuable upon Exercise shall be the next closest number of whole shares.

  7. Reservation of Shares.

     From and after the date hereof, the Company shall at all times reserve for
issuance such number of authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) as shall be sufficient
for the Exercise of this Warrant and payment of the Exercise Price in full
without regard to any Beneficial Ownership Limitation. If at any time the number
of shares of Common Stock authorized

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and reserved for issuance is below the number of shares sufficient for the
Exercise of this Warrant (a “Share Authorization Failure”)(based on the Exercise
Price in effect from time to time), the Company will promptly take all corporate
action necessary to authorize and reserve a sufficient number of shares,
including, without limitation, calling a special meeting of stockholders to
authorize additional shares to meet the Company's obligations under this Section
7, in the case of an insufficient number of authorized shares, and using its
best efforts to obtain stockholder approval of an increase in such authorized
number of shares. The Company covenants and agrees that upon the Exercise of
this Warrant, all shares of Common Stock issuable upon such Exercise shall be
duly and validly issued, fully paid, nonassessable and not subject to liens,
claims, preemptive rights, rights of first refusal or similar rights of any
person or entity.

8.      Restrictions on Transfer.     (a) Registration or Exemption Required.
This Warrant has been issued in a  

transaction exempt from the registration requirements of the Act by virtue of
Regulation D and exempt from state registration under applicable state laws. The
Warrant and the Common Stock issuable upon the Exercise of this Warrant may not
be transferred, sold or assigned except pursuant to an effective registration
statement or an exemption to the registration requirements of the Act and
applicable state laws.

     (b) Assignment. If Holder can provide the Company with reasonably
satisfactory evidence that the conditions of (a) above regarding registration or
exemption have been satisfied, Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a
written notice to Company, substantially in the form of the Assignment attached
hereto as Exhibit B, indicating the person or persons to whom the Warrant shall
be assigned and the respective number of warrants to be assigned to each
assignee. The Company shall effect the assignment within ten (10) days of
receipt of the original Warrant and other information required by this Section
8(b), and shall deliver to the assignee(s) designated by Holder a Warrant or
Warrants of like tenor and terms for the appropriate number of shares.

     9. Noncircumvention. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, and (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.

10.      Rights Upon Major Transaction or Change of Entity Transaction. (a)
Definitions. For purposes hereof,  

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     “Change of Entity Transaction” means (i) a consolidation, merger, exchange
of shares, recapitalization, reorganization, business combination or other
similar event, (A) following which the holders of Common Stock immediately
preceding such consolidation, merger, combination or event either (1) no longer
hold a majority of the shares of Common Stock of the Company or (2) no longer
have the ability to elect the board of directors of the Company or (B) as a
result of which shares of Common Stock shall be changed into (or the shares of
Common Stock become entitled to receive) the same or a different number of
shares of the same or another class or classes of stock or securities of the
Company or another entity.

     “Sufficient Trading Characteristics” shall mean that the average daily
dollar trading volume of the common stock of such entity on its primary exchange
or market is equal to or in excess of $100,000 for the 90th through the 31st day
prior to the public announcement of such transaction.

     “Permissible Change of Entity Transaction” shall mean a Change of Entity
Transaction where the Successor Entity (as defined below) (A) is a publicly
traded Company, which is a “Reporting Issuer” under the 1934 Act and whose
common stock is quoted on or listed for trading on an Eligible Market, (B) has
Sufficient Trading Characteristics (as defined below) and (C) meets the
Assumption Requirements (as required in Section 10(b) below).

“Eligible Market” means the over the counter Bulletin Board

(“OTC-BB”), the New York Stock Exchange, Inc., the NASDAQ Capital Market, the
NASDAQ Global Market, the NASDAQ Global Select Market or the American Stock
Exchange.

     “Impermissible Change of Entity Transaction” shall mean a Change of Entity
Transaction which does not qualify as a Permissible Change of Entity
Transaction.

  “Major Transaction” means

(i)      an Impermissible Change of Entity Transaction; and   (ii)      the sale
or transfer of more than 40%, in the aggregate, of the  

properties or assets of the Company to another Person or Persons in any rolling
12 month period (an “Asset Sale”); and

     (iii) a purchase, tender or exchange offer made to and accepted by the
holders of more than the 50% of the outstanding shares of Common Stock.

     (b) Assumption Upon Change of Entity Transaction. The Company shall not, so
long as any portion of this Warrant remains outstanding, enter into or be party
to a

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Change of Entity Transaction unless any Person purchasing the Company’s assets
or Common Stock, or any successor entity resulting from such Change of Entity
Transaction (in each case, an “Successor Entity”), assumes (an “Assumption”) in
writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 10(b) pursuant to written agreements in form
and substance satisfactory to the Required Warrant Holders (as defined below)
and approved by the Required Warrant Holders prior to such Change of Entity
Transaction, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, having an exercise price equal to the Exercise
Price of this Warrant, having similar exercise rights as this Warrant (including
but not limited to similar exercise price adjustment provisions), and
satisfactory to the Required Warrant Holders. Upon the occurrence of any Change
of Entity Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Change of Entity Transaction, the
provisions of this Warrant referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under the Warrant with the
same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of a Change of Entity Transaction, the Successor Entity shall
deliver to the Holder confirmation that there shall be issued upon exercise or
redemption of the Warrant at any time after the consummation of the Change of
Entity Transaction, in lieu of the shares of Common Stock (or other securities,
cash, assets or other property) issuable upon the exercise of this Warrant prior
to such Change of Entity Transaction, such shares of publicly traded common
stock (or their equivalent) of the Successor Entity, as adjusted in accordance
with the provisions of this Warrant. The provisions of this Section shall apply
similarly and equally to successive Change of Entity Transactions and shall be
applied without regard to any limitations on the exercise of the Warrant. The
requirements of this Section 10(b) are referred to herein as the “Assumption
Requirements.”

     For purposes hereof, “Required Warrant Holders” shall mean the Holders of
two-thirds (2/3) of the then outstanding Warrants (determined by the number of
unexercised underlying shares).

     (c) Notice of Major Transaction; Redemption Right Upon Major Transaction.
At least thirty (30) days prior to the consummation of a Major Transaction, but
not prior to the public announcement of such transaction, the Company shall
deliver written notice thereof via facsimile and overnight courier to the Holder
(a “Major Transaction Notice”), which notice shall specify the nature and terms
of the proposed transaction and nature of the Successor Entity (if any).

     (d) Redemption Right Upon Major Transaction. At any time during the period
beginning after the Holder's receipt of a Major Transaction Notice and ending on
the Trading Day immediately prior to the consummation of such Major Transaction,
the Holder may require the Company to redeem all or any portion of the Holder’s
Warrant by delivering written notice thereof (“Major Transaction Redemption
Notice”) to the Company, which Major Transaction Redemption Notice shall
indicate the number of Warrant Shares of its Warrant (the “Redemption Warrant
Amount”) that the Holder is electing to be redeemed.

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     The portion of this Warrant subject to redemption pursuant to this Section
10(d) shall be redeemed by the Company in cash at a price equal to 100% of the
greater of (i) the Black Scholes value (as defined below) of the remaining
outstanding portion of the Warrant to be redeemed on the date the Major
Transaction is consummated calculated using the Black Scholes Option Pricing
Model and (ii) the Black-Scholes value of the remaining unexercised portion of
this Warrant to be redeemed on the Trading Day immediately preceding the date
that the Major Transaction Redemption Price (as defined below) is paid to the
Holder (the greater of which is referred to as the “Major Transaction Redemption
Price”). For purposes hereof, the “Black-Scholes” value of a Warrant shall be
determined by use of the Black Scholes Option Pricing Model reflecting (A) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of this Warrant as of such date of request and (B)
an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg.

     (e) Escrow; Payment of Major Transaction Redemption Price. Following the
receipt of a Major Transaction Redemption Notice from the Holder, the Company
shall not effect a Major Transaction unless it shall first place, or shall cause
the Successor Entity to place, into an escrow account with an independent escrow
agent, at least three (3) Business Days prior to the closing date of the Major
Transaction (the “Major Transaction Escrow Deadline”), an amount equal to the
Major Transaction Redemption Price. Concurrently upon closing of any Major
Transaction, the Company shall pay or shall instruct the escrow agent to pay the
Major Transaction Redemption Price to the Holder, which payment shall constitute
a Redemption Upon Major Transaction of the Debentures.

     (f) Injunction. Following the receipt of a Major Transaction Redemption
Notice from the Holder, in the event that the Company attempts to consummate a
Major Transaction without placing the Major Transaction Redemption Price in
escrow in accordance with subsection (e) above or without payment of the Major
Transaction Redemption Price to the Holder upon consummation of such Major
Transaction, the Buyer shall have the right to apply for an injunction in any
state or federal courts sitting in the City of New York, borough of Manhattan to
prevent the closing of such Major Transaction until the Major Transaction
Redemption Price is paid to the Holder, in full.

(g) Mechanics of Redemptions Upon Major Transactions.

     Redemptions required by this Section 10 shall be made in accordance with
the provisions of Section 12 and shall have priority to payments to shareholders
in connection with a Major Transaction. Notwithstanding anything to the contrary
in this Section 10, until the Major Transaction Redemption Price is paid in
full, the portion of the Warrant submitted for redemption under this Section may
be converted, in whole or in part, by the Holder into shares of Common Stock, or
in the event the Date of Exercise is after the consummation of a Major
Transaction, into shares of publicly traded common stock (or their equivalent)
of the Successor Entity pursuant to Section 10(b). Unless otherwise indicated by
the Holder in the applicable Notice of Exercise, any amount of this Warrant
exercised during the period from the date of the Major Transaction Redemption
Notice until the date the Major Transaction Redemption Price is paid in full
shall be considered to be an exercise (instead of a Redemption) of a portion of
the Warrant that would have been

17

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subject to such Redemption, and any amounts of this Warrant exercised from time
to time during such period shall exercised in full into Common Stock at the
Exercise Price then in effect, and the number of shares of this Warrant so
exercised into Common Stock shall be deducted from the number of Warrants that
are subject to redemption hereunder. The parties hereto agree that in the event
of the Company's redemption of any portion of the Warrant under this Section
10(d), the Holder's damages would be uncertain and difficult to estimate because
of the parties' inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the
Holder. Accordingly, any redemption premium due under this Section 10 is
intended by the parties to be, and shall be deemed, a reasonable estimate of the
Holder's actual loss of its investment opportunity and not as a penalty.

11.      Default and Redemption.     (a) Events Of Default. Each of the
following events which occur while any  

Warrants are outstanding shall be considered to be an “Event Of Default”:

(i)      Omitted.   (ii)      Failure To Authorize And Reserve Common Stock. An
Event of  

Default occurs under Section 10(g) of the Debentures with respect to any Warrant
Shares (a

“Share Reservation Default”);

     (iii) Failure To Deliver Common Stock. A Warrant Share Delivery Failure (as
defined above) occurs and remains uncured for a period of more than twenty (20)
days.

     (iv) Legend Removal Failure. A Legend Removal Failure occurs and remains
uncured for a period of twenty (20) days, where a “Legend Removal Failure” shall
be deemed to have occurred if the Company fails to issue Exercise Shares without
a restrictive legend, when and as required under Section 2(e)(ii) hereof.

     (v) Failure to Pay the Buy-In Amount. The Company fails to pay any Buy-In
Amount due to the Holder pursuant to a Buy-In hereunder, and such failure
continues for ten (10) days after the Holder notifies the Company in writing
that such amounts are payable.

     (vi) Corporate Existence; Major Transaction. The Company has effected a
Major Transaction without paying the Major Transaction Redemption Price to the
Holder pursuant to Section 10(d) or, if the Holder did not elect a Redemption
Upon Major Transaction, the Company has failed to meet the Assumption
Requirements of Section 10(b) prior to effecting a Major Transaction.

     (vii) Failure to Adjust Exercise Price; Failure to Comply With Dispute
Resolution Procedures. The Company shall have failed to comply in good faith
with the Dispute Resolution Procedures (as defined herein) or shall have failed
to adjust the Exercise Price as required hereunder following a Dilutive
Issuance, or otherwise (after any applicable Dispute Resolution Procedure
required herein) ), and such failure continues for

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ten (10) Business Days after the Holder provides written notice to the Company
that such performance by the Company is past due.

     (b) Mandatory Redemption. If any Events of Default shall occur and any such
Event of Default continues for an additional ten (10) Business Days after the
Holder provides written notice to the Company that an Event of Default has
occurred and specifying the factual basis therefor then thereafter, unless
waived by the Holder, , at the option of the Holder, such option exercisable
through the delivery of written notice to the Company by such Holder (the
“Default Notice”), the outstanding amount of this Warrant shall be immediately
redeemed by the Company and the Company shall pay to the Holder

(a “Mandatory Redemption”) an amount (the “Mandatory Redemption Amount” or the

“Default Amount”) equal to 100% of the greater of (i) the Black-Scholes value of
the remaining unexercised portion of this Warrant on the date of such Default
Notice and (2) the Black-Scholes value of the remaining unexercised portion of
this Warrant on the Trading Day immediately preceding the date that the
Mandatory Redemption Amount is paid to the Holder.

     The Mandatory Redemption Amount shall be payable, in cash or cash
equivalent, within five (5) business days of the Date of the applicable Default
Notice (the “Default Amount Due Date”). If the Company fails to pay the
Mandatory Redemption Amount within thirty (30) days of the Default Amount Due
Date, then (A) the Exercise Price shall be permanently decreased (but not
increased) (each a “Default Adjustment”) on the first Trading Day of each
calendar month thereafter (each a “Default Adjustment Date”) until the Default
Amount is paid in full, to a price equal to the lesser of (i) the Exercise Price
then in effect, or (ii) the lowest Market Price that has occurred on any Default
Adjustment Date since the date that the Event of Default began. Notwithstanding
the occurrence of an Event of Default, Failure Payments and any other Required
Cash Payments (as defined in the Securities Purchase Agreement) shall continue
to accrue. On the date that is five (5) Business Days after the Company’s
receipt of the Holder’s Default Notice, the Default Amount, together with all
other amounts payable hereunder, shall immediately become due and payable, all
without demand, presentment or notice, all of which hereby are expressly waived,
together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity, and (B) the Holder shall have the right
at any time, so long as the Company remains in default (and so long and to the
extent that there are sufficient authorized shares), to require the Company,
upon written notice (“Default Exercise Notice”) (which may be given one or more
times, from time to time anytime after the Default Amount Due Date), to
immediately issue (a “Default Exercise”), in lieu of all or any specified
portion (the “Specified Portion”) of the unpaid portion (the “Unpaid Portion”)
of the Default Amount, a number (the “Default Share Amount”) of shares (the
“Default Shares”) of Common Stock, subject to the Beneficial Ownership
Limitation, equal to the Specified Portion of the Default Amount divided by the
Exercise Price in effect on the date such shares are issued to the Holder,
PROVIDED THAT, the Holder may require that such payment of shares be made in one
or more installments at such time and in such amounts as Holder chooses. The
Default shares are due within five (5) Business Days of the date that the Holder
delivers a Default Exercise Notice to the Company with the original Warrant (if
delivery of the original is required hereunder) (the “Default Share Delivery
Deadline”).

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     If the Company is unable to redeem all of the Warrants submitted for
redemption, the Company shall redeem a pro rata amount from each Holder based on
the number of Warrants submitted for redemption by such Holder relative to the
total number of Warrants submitted for redemption by all Holders.

     The Holder shall not be entitled to receive Default Shares on a given date
if and to the extent that such issuance would cause the Beneficial Ownership
Limitation then in effect to be exceeded. If and to the extent that the issuance
of Default Shares with respect to a given Specified Portion would result in the
a violation of the Beneficial Ownership Limitation, then that particular
Specified Portion shall be automatically reduced to a value that would cause the
number of Default Shares to be issued to equal the Maximum Percentage, and the
amount of such reduction shall be added back to the Unpaid Portion of the
Default Amount.

     (c) Redemption by Other Holders. Upon the Company's receipt of notice from
any of the holders for redemption or repayment of other Warrants that were
issued pursuant to the Securities Purchase Agreement (the “Other Warrants”) as a
result of an event or occurrence of an Event of Default or a Major Transaction
(each, an “Other Redemption Notice”), the Company shall immediately, but no
later than one (1) Business Day of its receipt thereof, forward to the Holder by
facsimile a copy of such notice. If the Company receives a Redemption Notice and
one or more Other Redemption Notices, during the seven (7) Business Day period
beginning on and including the date which is three (3) Business Days prior to
the Company's receipt of the Holder's Redemption Notice and ending on and
including the date which is three (3) Business Days after the Company's receipt
of the Holder's Redemption Notice and the Company is unable to redeem all
amounts designated in such Redemption Notice and such Other Redemption Notices
received during such seven (7) Business Day period, then the Company shall
redeem a pro rata amount from each holder of the Warrants (including the Holder)
based on the number of Warrants submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven (7) Business Day period.

     (d) Posting Of Bond. In the event that any Event of Default occurs
hereunder or any Event of Default occurs under any of the Transaction Documents,
the Company may not raise as a legal defense (in any Lawsuit, as defined below,
or otherwise) or justification to such Event of Default any claim that such
Holder or any one associated or affiliated with such Holder has been engaged in
any violation of law, unless the Company has posted a surety bond (a “Surety
Bond”) for the benefit of such Holder in the amount of 130% of the aggregate
Surety Bond Value (as defined below) of all of the Holder’s Debentures and
Warrants (the “Bond Amount”), which Surety Bond shall remain in effect until the
completion of litigation of the dispute and the proceeds of which shall be
payable to such Holder to the extent Holder obtains judgment.

     For purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or
other dispute resolution filed by either party herein pertaining to any of the
Transaction Documents.

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     “Surety Bond Value,” for the Warrants shall mean 130% of the of the
Black-Scholes value of the remaining unexercised portion of this Warrant on the
Trading Day immediately preceding the date that such bond goes into effect) and
“Surety Bond Value” for the Debentures shall have the meaning ascribed to it in
the Certificate of Designation.

     (e) Injunction And Posting Of Bond. In the event that the Event of Default
referred to in subsection (c) above pertains to the Company’s failure to deliver
unlegended shares of Common Stock to the Holder pursuant to a Warrant Exercise,
legend removal request, the Company may not refuse such unlegended share
delivery based on any claim that such Holder or any one associated or affiliated
with such Holder has been engaged in any violation of law, unless an injunction
from a court, on prior notice to Holder, restraining and or enjoining Exercise
of all or part of said Warrant shall have been sought and obtained by the
Company and the Company has posted a Surety Bond for the benefit of such Holder
in the amount of the Bond Amount (as described above), which Surety Bond shall
remain in effect until the completion of litigation of the dispute and the
proceeds of which shall be payable to such Holder to the extent Holder obtains
judgment.

12.      Holder’s Redemptions.     (a) Mechanics of Holder’s Redemptions. In the
event that the Holder has sent a  

Major Transaction Redemption Notice to the Company pursuant to Section 10(d) or
a Default Notice pursuant to Section 11(b)(i), respectively (each, a “Redemption
Notice”), the Holder shall promptly submit this Warrant to the Company (if
delivery of the original Warrant is required pursuant to Section 2(j). In the
event of a redemption of less than all of the outstanding portion of this
Warrant, the Company shall promptly cause to be issued and delivered to the
Holder a new Warrant representing the outstanding number of underlying Warrant
Shares which have not been redeemed. In the event that the Company does not pay
the applicable Redemption Price to the Holder within the time period required,
at any time thereafter and until the Company pays such unpaid Redemption Price
in full, the Holder shall have the option, in lieu of redemption, to require the
Company to promptly return to the Holder all or any portion of this Warrant that
was submitted for redemption and for which the applicable Major Transaction
Redemption Price (together with any late charges thereon) has not been paid.
Upon the Company's receipt of such notice, (x) the applicable Redemption Notice
shall be null and void with respect to such Redemption Share Amount, and (y) the
Company shall immediately return this Warrant, or issue a new Warrant to the
Holder representing the portion of this Warrant that was submitted for
redemption The Holder's delivery of a notice voiding a Redemption Notice and
exercise of its rights following such notice shall not affect the Company's
obligations to make any payments of Failure Payments which have accrued prior to
the date of such notice with respect to the Warrant subject to such notice.

     (b) Warrants Detachable. The Warrants constitute a separate, detachable
security from the Debentures. In the event of any redemption of the Debentures,
in whole or in part, by the Company, the Holder shall retain any of its Warrants
that have not been exercised or redeemed in accordance with their terms and in
the event of any redemption of the Warrants, in whole or in part, by the
Company, the Holder shall retain any of its Warrants that have not been
exercised or redeemed in accordance with their terms.

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14. Remedies, Other Obligations, Breaches And Injunctive Relief.

     The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant and the other Transaction
Documents, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the
Holder right to pursue actual damages for any failure by the Company to comply
with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.

  15. Benefits of this Warrant.

     Nothing in this Warrant shall be construed to confer upon any person other
than the Company and Holder any legal or equitable right, remedy or claim under
this Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and Holder.

  16. Governing Law.

     All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding. 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 via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law. The
parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such action or
proceeding.

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  17. Loss of Warrant.

     Upon receipt by the Company of evidence of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Company, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.

  18. Amendment.

     This Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.

  19. Notice or Demands.

     Notices or demands pursuant to this Warrant to be given or made by Holder
to or on the Company shall be sufficiently given or made if sent by certified or
registered mail, return receipt requested, postage prepaid, and addressed, until
another address is designated in writing by the Company, to the address set
forth in Section 2(a) above. Notices or demands pursuant to this Warrant to be
given or made by the Company to or on Holder shall be sufficiently given or made
if sent by certified or registered mail, return receipt requested, postage
prepaid, and addressed, to the address of Holder set forth in the Company’s
records, until another address is designated in writing by Holder.

  20. Warrant Holder Not a Stockholder.

     The Holder of this Warrant, as such, shall not be entitled by reason of
this Warrant to any rights whatsoever as a stockholder of the Company, including
but not limited to voting rights.

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     IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
____ day of October, 2008.

Universal Energy Corp.

By:
________________________
Print Name: _Dyron M. Watford__
Title: __Chief Financial Officer _

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EXHIBIT A

NOTICE OF EXERCISE FORM FOR WARRANT

TO: UNIVERSAL ENERGY CORP.

     The undersigned hereby irrevocably Exercises the right to purchase
____________
of the shares of Common Stock (the “Common Stock”) of UNIVERSAL ENERGY CORP., a
Delaware corporation (the “Company”), evidenced by the attached warrant (the
“Warrant”), and herewith makes payment of the Exercise price with respect to
such shares in full, all in accordance with the conditions and provisions of
said Warrant.

1. The undersigned agrees not to offer, sell, transfer or otherwise dispose of
any of the Common Stock obtained on Exercise of the Warrant, except in
accordance with the provisions of Section 8(a) of the Warrant.

2. The undersigned requests that stock certificates for such shares be issued
free of any restrictive legend, if appropriate, and a warrant representing any
unexercised portion hereof be issued, pursuant to the Warrant in the name of the
undersigned and delivered to the undersigned at the address set forth below:

Dated:
________

________________________________________________________________________
Signature

_______________________________________________________________________
Print Name

________________________________________________________________________
Address

NOTICE

The signature to the foregoing Notice of Exercise Form must correspond to the
name as written upon the face of the attached Warrant in every particular,
without alteration or enlargement or any change whatsoever.

________________________________________________________________________

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EXHIBIT B

ASSIGNMENT

(To be executed by the registered holder
desiring to transfer the Warrant)

FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the
“Warrant”) hereby sells, assigns and transfers unto the person or persons below
named the right to purchase
_______
shares of the Common Stock of UNIVERSAL ENERGY CORP., a Delaware corporation,
evidenced by the attached Warrant and does hereby irrevocably constitute and
appoint
_______________________
attorney to transfer the said Warrant on the books of the Company, with full
power of substitution in the premises.

Dated:
_________

______________________________
Signature

Fill in for new registration of Warrant:

___________________________________
Name

___________________________________
Address

___________________________________
Please print name and address of assignee
(including zip code number)

NOTICE

The signature to the foregoing Assignment must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration or
enlargement or any change whatsoever.

________________________________________________________________________

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