NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

CLASS B

COMMON STOCK PURCHASE WARRANTS

To Purchase 2,857,143 Shares of Common Stock of

CLEAN POWER TECHNOLOGIES, INC.

No. W-B 07-10-08-1

    

      July 10, 2008

THIS CLASS A COMMON STOCK PURCHASE WARRANT (the “Warrant”) CERTIFIES that, for
value received, The Quercus Trust (the “Holder”), is entitled, upon the terms
and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date of this Warrant and on or prior to the
fifth anniversary of the date of this Warrant (the “Termination Date”) but not
thereafter, to subscribe for and purchase from Clean Power Technologies, Inc., a
Nevada corporation (the “Company”), up to 2,857,143 shares (the “Warrant
Shares”) of the Common Stock, par value $0.001 per share, of the Company (the
“Common Stock”). The purchase price per share of Common Stock (the “Exercise
Price”) under this Warrant shall be US$0.80. The Exercise Price and the number
of Warrant Shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the “Securities Purchase Agreement”), among the Company and the
Purchaser parties signatory thereto (the date of such Agreement, the “Closing
Date”). This Class B Warrant is being issued to certain Purchasers, along with a
Class A Warrant, as more fully described in the Securities Purchase Agreement.
 The Class A Warrant and the Class B Warrant are referred to collectively as the
“Class A and B Warrants”.

1.  

Title to Warrant.  Prior to the Termination Date and subject to compliance with
applicable laws, including transfer restrictions imposed by applicable
securities laws, and Section 7 of this Warrant, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Warrant together with the Assignment Form annexed hereto properly
endorsed. The transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.

2

Authorization of Shares.  Except as provided in the Securities Purchase
Agreement, the Company covenants that all Warrant Shares which may be issued
from time to time upon the exercise of the purchase rights represented by this
Warrant in accordance with the terms of this Warrant, including the payment of
the exercise price for such Warrant Shares, will, upon exercise of the purchase
rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

3.

Exercise of Warrant.

(a)

Subject to Section 3(c), exercise of the purchase rights represented by this
Warrant may be made (i) no sooner than twelve (12) months after the final
Closing Date (“Restricted Period”); provided, however, that upon termination of
the Restricted Period, the Holder shall be entitled to exercise up to
twenty-five percent (25%) of total Class A and Class B Warrants issued to the
Holder in the six (6) month period following the Restricted Period (“Initial
Exercise Period”); or (ii) at any time or times after the Initial Exercise
Period, the balance of the Class A Warrants and Class B Warrants on or before 5
p.m., New York City time, on the Termination Date by delivery to the Company of
a duly executed Notice of Exercise Form annexed hereto (or such other office or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the Company) and
surrender of this Warrant, together with payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier’s check drawn on a
United States bank in immediately available funds. In the event that an
effective Registration Statement covering the Warrant Shares is not declared
effective, the Holder may, at its discretion, effect a “cashless” exercise of
the Warrant by surrendering the Warrant at the principal office of the Company,
accompanied by a duly executed Notice of Exercise Form and a written notice
stating the Holder’s intent to effect a cashless exercise, the shares of common
stock to be issued upon exchange and the date on which the Holder’s requests
that such exercise is to occur.  Upon a Holder’s cashless exercise, such Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A)  = the Closing Price on the Trading Day preceding the date of such election;

(B)  = the Exercise Price of the Warrants, as adjusted; and

(X)  = the number of Warrant Shares issuable upon exercise of the Warrants in
accordance with the terms of this Warrant.

Certificates for Warrant Shares purchased hereunder shall be delivered to the
Holder within three (3) Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant and payment of the aggregate
Exercise Price (or by means of a cashless exercise) as set forth above (“Warrant
Share Delivery Date”). This Warrant shall be deemed to have been exercised on
the later of the date the Notice of Exercise is delivered to the Company and the
date the Exercise Price is received by the Company. The Warrant Shares shall be
deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such shares
for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price and all taxes required to be paid by the
Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have
been paid. If the Company  shall fail for any reason or for no reason to issue
to the Holder within three (3) Trading Days of receipt of the Notice of
Exercise, a certificate for the Warrant Shares to which the Holder is entitled
and register such Warrant Shares on the Company’s share register or to credit
the Holder’s balance account with DTC for such number of Warrant Shares or other
securities to which the Holder is entitled upon the Holder’s exercise of this
Warrant, and if on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares or other securities
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In” ), then the Company shall, within three (3) business days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
“Buy-In Price” ), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock, times (B) the Closing Bid Price on the date of
exercise.  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.

(b)

If this Warrant shall have been exercised in part, the Company shall, at the
time of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.

(c)

In no event shall the Holder be entitled to exercise such number of Warrants,
which when added to the sum of the number of shares of Common Stock beneficially
owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934
Act), by the Holder, would exceed 4.99% of the number of shares of Common Stock
outstanding on the Warrant Share Delivery Date, as determined in accordance with
Rule 13d-1(j) of the 1934 Act.

4.

No Fractional Shares or Scrip.

No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Warrant. As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.

5.

Charges, Taxes and Expenses.

Issuance of certificates for Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided, however,
that in the event certificates for Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.

6.

Closing of Books.

The Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms hereof.

7.

Transfer, Division and Combination.

(a)

Subject to compliance with any applicable securities laws and the conditions set
forth in Sections 1 and 7(e) hereof and to the provisions of the Securities
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
 Notwithstanding the foregoing, the Holder will not voluntarily and knowingly
assign or transfer this Warrant or the Warrant Shares to any direct competitor
of the Company without the Company’s prior written consent.

(b)

This Warrant may be divided or combined with other Warrants upon presentation
hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

(c)

The Company shall prepare, issue and deliver at its own expense (other than
transfer taxes) the new Warrant or Warrants under this Section 7.

(d)

The Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the Warrants.

(e)

The Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel reasonably acceptable to the Company (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities or
blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act or a qualified institutional buyer as
defined in Rule 144A(a) under the Securities Act.

8.

No Rights as Shareholder until Exercise.  This Warrant does not entitle the
Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be
deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.

9.

Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

10.

Saturdays, Sundays, Holidays, etc.

If the last or appointed day for the taking of any action or the expiration of
any right required or granted herein shall be a Saturday, Sunday or a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday.

11.

Adjustments of Exercise Price and Number of Warrant Shares.

 (a) The number and kind of securities purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time to time
upon the happening of any of the following:  in case the Company shall (i) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock to holders of its outstanding Common Stock; (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares; (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock; or (iv) issue any shares of its capital stock in a reclassification of
the Common Stock, then the number of Warrant Shares purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the Holder
shall be entitled to receive the kind and number of Warrant Shares or other
securities of the Company which it would have owned or have been entitled to
receive had such Warrant been exercised in advance thereof. Upon each such
adjustment of the kind and number of Warrant Shares or other securities of the
Company which are purchasable hereunder, the Holder shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company that are purchasable pursuant hereto immediately after such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

(b)

In the event that on or subsequent to the Closing Date, the Company issues or
sells any Common Stock, any convertible securities, or any warrants or other
rights to subscribe for or to purchase or any options for the purchase of its
Common Stock or any such convertible securities (other than (i) shares which are
issued pursuant to the Warrants or the Company’s 8% Senior Secured Convertible
Promissory Notes (“Notes”) being issued pursuant to the Securities Purchase
Agreement, (ii) shares of Common Stock or options to purchase such shares issued
to employees, consultants, officers or directors in accordance with stock plans
stock option plans approved by the Company’s board of directors and existing on
the date hereof, and shares of Common Stock issuable under employment or
consulting agreements, existing loan agreements, options, or warrants that are
outstanding as of the date hereof, or (iii) shares of Common Stock issued
pursuant to a stock dividend, split or other similar transaction) at an
effective price per share which is less than the then applicable Exercise Price
(such effective price per share, the “Adjusted Exercise Price”), then the
Exercise Price in effect immediately prior to such issue or sale shall be
reduced effective concurrently with such issue or sale to an amount equal to the
Adjusted Exercise Price, provided, however, that the Adjusted Exercise Price
shall at no time be equal to less than $0.35 per share as a result of this
Section 11(b).

12.

Reorganization, Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of its property, assets or business to another corporation and, pursuant
to the terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
holders of Common Stock of the Company, then, from and after the consummation of
such transaction or event, the Holder shall have the right thereafter to
receive, instead of the Warrant Shares, at the option of the Holder, (a) upon
exercise of this Warrant, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula. For purposes of this Section 12,
“common stock of the successor or acquiring corporation” shall include stock of
such corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 12 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

13.

Notice of Adjustment.

Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall give notice thereof to the
Holder, which notice shall state the number of Warrant Shares (and other
securities or property) purchasable upon the exercise of this Warrant and the
Exercise Price of such Warrant Shares (and other securities or property) after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.

14.

Other Adjustments.  If any event occurs of the type contemplated by the
provisions of Sections 11 or 12 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s Board of Directors will make an appropriate adjustment in the Exercise
Price and/or the number of shares of Common Stock and other securities or
property to be issued to the Holder upon exercise of the Warrant so as to
protect the rights of the Holder; provided that no such adjustment pursuant to
Sections 11 or 12 will increase the Exercise Price or decrease the number or
amount of securities or other property issuable or deliverable to the Holder as
otherwise determined pursuant to Sections 11 and/or 12.

15.

Notice of Corporate Action.

If at any time:

(a)

the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or other distribution, or

(b)

there shall be any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,

(c)

there shall be a voluntary or involuntary dissolution, liquidation or winding up
of the Company; then, in any one or more of such cases, the Company shall give
to Holder (i) prior written notice of the date on which a record date shall be
selected for such dividend or distribution or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, prior written
notice of the date when the same shall take place. Such notice in accordance
with the foregoing clause also shall specify (i) the date on which the holders
of Common Stock shall be entitled to any such dividend or distribution, and the
amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 16(d).

16.

Authorized Shares.  Except as provided in the Securities Purchase Agreement, the
Company covenants that during the period the Warrant is outstanding, it will
take all reasonable action to ensure that the Company is authorized to issue a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant.   The Company shall
also reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant. The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be listed.

Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, 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, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefore upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

17.

Miscellaneous.

(a)

Jurisdiction.  All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be determined in accordance with the
provisions of the Securities Purchase Agreement relating to the same.

(b)

Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant, if not registered for resale, will have restrictions
upon resale imposed by state and federal securities laws.

(c)

Nonwaiver and Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

(d)

Notices.  Any notice, request or other document required or permitted to be
given or delivered to the Holder by the Company shall be delivered in accordance
with the notice provisions of the Securities Purchase Agreement.

(e)

Limitation of Liability.

 No provision hereof, in the absence of any affirmative action by Holder to
exercise this Warrant or purchase Warrant Shares, and no enumeration herein of
the rights or privileges of Holder, shall give rise to any liability of Holder
for the purchase price of any Common Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

(f)

Successors and Assigns.  Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

(g)

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

(h)

Severability.  Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

(i)

Headings.  The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

(a)

Disputes.  In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the securities or other property, the
Company shall promptly issue and deliver to the Holder the securities or other
property that are not disputed.

(b)

Remedies.  The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under Section 3 of this Warrant.  The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of Section 3 of this Warrant and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

Dated: July 10, 2008

CLEAN POWER TECHNOLOGIES, INC.

By:  /s/ Abdul Mitha
Name: Abdul Mitha
Title:   Chief Executive Officer

NOTICE OF EXERCISE

To:

Clean Power Technologies, Inc.

(1)

The undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

(2)

Payment shall be made by wire transfer or cashier’s check drawn on a United
States bank in immediately available funds.

(3)

Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the following:

(4)

Accredited Investor.

The undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.

[PURCHASER]

By: ___________________________
Name:
Title:

Dated: ________________________

ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form and supply required
information. Do

not use this form to exercise the warrant.)

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to _______________________________________________ whose address
is _________________________________________________________.

Dated: ______________, _______

Holder’s Signature                

____________________________

Holder’s Address:                  

____________________________

____________________________

____________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing