WARRANT PURCHASE AGREEMENT

THIS AGREEMENT made the 6th day of November, 2007

BETWEEN:

 

MALIBU HOLDINGS, LLC of                                           
                                  

(hereinafter referred to as the "Vendor")

OF THE FIRST PART

AND:

 

HS3 TECHNOLOGIES, inc., with an address at 1800 Boulder Street

 

Suite 600, Denver, CO 80211

 

 

(hereinafter referred to as the "Purchaser")

OF THE SECOND PART

WHEREAS:

A.                          The Vendor is the holder of 6,500,000 share purchase
warrants of the Purchaser entitling the holder to purchase one share of the
Purchaser’s common stock for each share purchase warrant at an exercise price of
$0.12 per share;

B.                          The Purchaser wishes to acquire 5,000,000 of the
share purchase warrants (the "Purchased Warrants") held by the Vendor and the
Vendor agrees to sell the Purchased Warrants to the Purchaser; and

C.                          The parties wish to enter into this Agreement in
order to provide for the acquisition by the Purchaser of the Purchased Warrants.

NOW THEREFORE THIS AGREEMENT WITNESSES that for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and of the
premises, covenants and agreements herein set forth, the parties hereto covenant
and agree each with the other as follows:

1.

PURCHASE AND sale

1.1                         The Purchaser hereby agrees to acquire, subject to
the terms and conditions in this Agreement, from the Vendor, and the Vendor
agrees to sell to the Purchaser on the Closing Date (as hereinafter defined),
all right, title and interest of the Vendor in and to the Purchased Warrants.

1.2                         In consideration for the Purchased Warrants, the
Purchaser shall pay the aggregate sum of US$70,000 (the "Purchase Price") to the
Vendor on the Closing Date.

2.

REPRESENTATIONS AND WARRANTIES OF THE Vendor

2.1                         To induce the Purchaser to enter into and complete
the transactions contemplated hereby and to purchase the Purchased Warrants, the
Vendor, with the knowledge and intent that the Purchaser is relying on such
representations and warranties in entering into this Agreement (which
representations and warranties, other than those set forth in Section 2.1(c)
hereof, shall not survive the Closing), hereby warrants and represents to the
Purchaser as follows:

 

--------------------------------------------------------------------------------

 

- 2 -

 

 

 

(a)

the Vendor has full right, power and authority to enter into this Agreement and
any agreement or instrument referred to or contemplated by this Agreement;

 

(b)

the Vendor is the registered and beneficial owner of the Purchased Warrants ;

 

(c)

the Vendor has good and sufficient right and authority to enter into this
Agreement on the terms and conditions herein set forth and to transfer all legal
and beneficial right, title, interest and ownership in and to the Purchased
Warrants to the Purchaser without the consent of any other person, free and
clear of any pre-emptive rights, rights of first refusal or liens, charges or
encumbrances whatsoever, in accordance with the terms hereof and this Agreement
is a legal, valid and binding obligation of such Vendor enforceable against such
Vendor in accordance with its terms; and

 

(d)

no Person has any agreement, option, understanding or commitment, or any right
or privilege (whether by law, pre-emptive or contractual right), capable of
becoming an agreement, option or commitment for the purchase from it of any of,
or the realization of a security interest over, the Purchased Warrants.

3.

covenants of the vendor

3.1                         The Vendor covenants and agrees that it will, from
the execution of this Agreement until the Closing Date, in respect of the
Purchased Warrants:

 

(a)

not permit the transfer, assignment, sale, encumbrance, hypothecation of the
Purchased Warrants;

 

(b)

not take or permit to be taken or suffer any action which would in any way
impair or derogate from the right of the Purchaser to acquire on the Closing
Date all right, title and interest, both real and beneficial, in and to the
Purchased Warrants, free and clear of all liens, changes and encumbrances
whatsoever; and

 

(c)

execute all stock Powers of Attorney, undertakings and any and all other
documents which may be required in order to transfer the Purchased Warrants to
the Purchaser on the Closing Date, and will comply with all requirements of all
applicable regulatory authorities which may be reasonably necessary to obtain
the approvals of such regulatory authorities to the transfer of the Purchased
Warrants to the Purchaser.

4.

indemnification by VENDOR

4.1                         The Vendor shall indemnify, hold harmless, reimburse
and defend the Purchaser, its directors, officers, agents and employees, each
person who controls the Purchaser (within the meaning of Section 15 of the 1933
Act and Section 20 of the Exchange Act), and the directors, officers, agents and
employees of such controlling persons, to the fullest extent permitted by
applicable law, from and against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Purchaser or any such person which results,
arises out of or is based upon (i) claims against the Purchaser or the Purchased
Warrants; (ii) any material misrepresentation by such Vendor in this Agreement,
or other agreement delivered pursuant hereto; or (iii) after any applicable
notice and/or cure periods, any material breach or default in performance by
such Vendor of any covenant or undertaking to be performed by such Vendor
hereunder, or any other agreement entered into by the Vendor and Purchaser,
relating hereto.

5.

CLOSING CONDITIONS

5.1                         The obligation of the Purchaser to carry out the
terms of this Agreement and to complete the purchase of the Purchased Warrants
is subject to the fulfilment, on or before the Closing Date, of each of the
following conditions, each of which is for the exclusive benefit of the
Purchaser:

 

--------------------------------------------------------------------------------

 

- 3 -

 

 

 

(a)

the warranties and representations of the Vendor as set forth in section 2.1 of
this Agreement shall be true and correct in every material aspect on the Closing
Date as if such warranties and representations had been made by the Vendor on
the Closing Date; and

 

(b)

any required regulatory approvals to the transfer of the Purchased Warrants
shall have been received;

5.2                         The conditions set forth in section 5.1 are for the
exclusive benefit of the Purchaser and may be waived by the Purchaser in writing
in whole or in part at any time on or before the Closing Date.

6.

CLOSING DATE

6.1                         Unless otherwise agreed, the Closing Date is, and
the Closing of the acquisition of the Purchased Warrants contemplated by this
Agreement will take place on November 6, 2007.

7.

DELIVERIES ON CLOSING

7.1                         On closing, the Vendor will deliver or cause to be
delivered to the Purchaser on behalf of the Purchaser or their assigns all
required documentation, as acceptable to the Purchaser, representing the
Purchased Warrants as registered in the name of the Vendor together with duly
completed, executed and guaranteed Stock Power of Attorneys, or such other
documentation as may be required and as acceptable to the Purchaser, in order to
duly transfer the Purchased Warrants to the Purchaser or its assigns.

8.

GENERAL PROVISIONS

 

8.1

Time is and will be of the essence of each and every provision of this
Agreement.

8.2                         Each party will, at its own expense, execute and
deliver all such further documents and instruments, given all such further
assurances, and do all such acts and things as the other parties may, either
before or after the Closing Date, reasonably require to carry out the full
intent and meaning of this Agreement, but without payment of any consideration
therefore.

8.3                         This Agreement contains the whole agreement between
the Vendor and the Purchaser in respect of the subject matter hereof and
supersedes and replaces all prior negotiations, communications and
correspondence. There are no warranties, representations, terms conditions or
collateral agreements, express or implied, statutory or otherwise, other than as
expressly set forth in this Agreement.

8.4                         This Agreement will enure to the benefit of and be
binding upon the Vendor and their respective heirs successors liquidators,
executors and assigns and upon the Purchaser and their respective heirs,
successors, liquidators, executors and assigns. No Vendor may assign any of its
right, title or interest in, to or under this Agreement. The Purchaser or any of
their assigns, may assign their rights and obligations under this Agreement
without notice to any other party.

8.5                         This Agreement is being delivered in and is intended
to be performed in Colorado, and shall be construed and interpreted in
accordance with the laws of Colorado and the laws of the United States of
America applicable therein. The parties irrevocably attorn to the jurisdiction
of the courts of Colorado and the venue for any actions or arbitrations arising
out of this Agreement will be Denver, Colorado.

8.6                         Any notices, required or permitted to be given under
this Agreement will be in writing and will be duly and properly given and
received if delivered or telecopied, in each case addressed to the intended
recipient at its respective address appearing below for the Purchaser and the
Vendor, (or at such other address as a party may from time to time designate by
notice in writing to the other parties in accordance with this subsection), and
any such notice will be deemed to have been given and received, if delivered,
when delivered to such address, and if telecopied, on the next business day
after the telecopying of the same:

 

--------------------------------------------------------------------------------

 

- 4 -

 

 

To the Purchaser:

HS3 TECHNOLOGIES, INC.

1800 Boulder Street, Suite 600,

Denver, CO 80211

To the Vendor:

MALIBU HOLDINGS, LLC

                                                           

                                                           

8.7                         If any provision of this Agreement shall be
determined by an arbitrator or any court of competent jurisdiction to be
illegal, invalid or unenforceable, that provision shall be severed from this
Agreement and the remaining provisions shall continue in full force and effect.

8.8                         This Agreement may at any time and from time to time
not later than the Closing Date, be amended by mutual agreement of the Vendor
and the Purchaser. The parties agree that if the Vendor or the Purchaser, as the
case may be, proposes any amendments to this Agreement, the other will act
reasonably in considering such amendments and if the other is not prejudiced by
reason of any such amendments, the other will co-operate in a reasonable fashion
with the Vendor or the Purchaser, as the case may be, so that such amendments
can be effected subject to applicable laws.

9.

COUNTERPARTS

9.1                         This Agreement and any certificates or other writing
delivered in connection herewith, may be executed in any number of counterparts
with the same effect as if all parties had all signed the same documents, and
all such counterparts and adopting instruments will be construed together and
will constitute one and the same instrument. The execution of this Agreement and
any other writing by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.

IN WITNESS WHEREOF the parties have executed and delivered this Agreement as of
the day and year first above written.

 

MALIBU HOLDINGS, LLC

 

 

Per:

/s/ A.B. Goldberg                                             

 

Authorized Signatory

 

 

 

HS3 TECHNOLOGIES, INC.

 

 

Per:

/s/ Robert Morrison                                          

 

Authorized Signatory