EXHIBIT
      4.1

    


    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

            	 	 
	
              900,000shares

            	 	
              Warrant
                Number ____

            


    

    


    Warrant
      to Purchase Common Stock

    of

    Alternative
      Construction Technologies, Inc.

    


    THIS
      CERTIFIES that [[BRIDGEPOINTE
      MASTER FUND LTD.,
      a Cayman Islands Exempted Company]]
      or any
      subsequent holder hereof (“Holder”)
      has the
      right to purchase from
      Alternative Construction Technologies, Inc.,
      a
      Florida corporation (the “Company”),
      up to
      Nine Hundred Thousand (900,000)
      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 May 8, 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 Line of Credit Agreement by and
      between the Company and the Holder of the Company of date even herewith (the
      “Line
      of Credit Agreement”).
      

    


    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 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, as amended (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
      Beneficial Ownership Limitation.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    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 offer 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 and the Company shall immediately refund to Holder any and all amounts
      paid to the Company in respect of such Exercise.

     

    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 notifies the Company that 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, Alternative Construction Technologies,
      Inc., Attn: Michael W. Hawkins, CEO & President, 2910 Bush Drive, Melbourne,
      FL 32935, United States, Phone: 321-421-6601, Fax: 321-308-0320, 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 delivery of a Notice of Exercise to the
      Company.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (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 or its transfer agent (“Transfer
      Agent”)
      (including but not limited to a scanned “PDF” file which is delivered as an
      attachment to an e-mail to the Company), provided that the original Warrant
      (if
      delivery of the original Warrant is required pursuant to Section 2(l) hereof)
      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
      is
      received by the Company, if Holder has not sent advance notice by facsimile.
      Upon
      delivery of the Notice
      of
Exercise
      Form to the Company by facsimile or otherwise, subject to the Beneficial
      Ownership Limitations, 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, after which it shall be deemed to have waived
      its
      right to object. 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 Date of 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
      Shares Delivery Failure”),
      the
      Company shall pay to the Holder, in cash, as liquidated damages and not as
      a
      penalty, for each $1,000 of Warrant Shares subject to such exercise (based
      on
      the VWAP (as defined below) of the Common Stock on the date of the applicable
      Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day
      on
      the fifth Trading Day after such liquidated damages begin to accrue) for each
      Trading Day after such Warrant Shares Delivery Deadline until such certificates
      are delivered (“Warrant
      Shares Delivery Failure Payments”).
      

    


    (d)
      Payment of Accrued Warrant Shares Delivery Failure Payments.
      The
      Company shall pay any payments incurred under this Section in cash, on or before
      the fifth (5th) day of each month following a month in which they accrue.
      Warrant Shares Delivery Failure Payments are in addition to any Shares that
      the
      Holder is entitled to receive upon Exercise of this Warrant. Nothing herein
      shall limit the Holder's right to pursue actual damages (to the extent in excess
      of the Warrant Shares Delivery Failure Payments) for the Company's Warrant
      Shares Delivery Failure, and the Holder shall have the right to pursue all
      remedies available at law or in equity (including a decree of specific
      performance and/or injunctive relief). 

    


    (e)
      Maximum Interest Rate.
      Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Holder and thus refunded to the Company.

    


    (f) 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.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (g)
      Legends. 

    


    (i)
      Restrictive
      Legend.
      The
      Holder understands that the Warrant and, until such time as Exercise Shares
      have
      been registered under the Securities Act of 1933, as amended (the “1933 Act”),
      or otherwise may be sold pursuant to Rule 144 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.”

    


    (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(g)(i)): (i) while a registration statement covering the resale
      of
      such security is effective under the 1933 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, or (iv) if such legend is not otherwise
      required under applicable requirements of the 1933 Act (including judicial
      interpretations and pronouncements issued by the staff of the Securities and
      Exchange Commission (“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 each Date of Exercise 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 any of the Unrestricted Conditions
      are met. If the Unrestricted Conditions are met at the time of issuance or
      resale of Exercise Shares, then such Exercise Shares shall be issued free of
      all
      legends. The Company agrees that at such time as the Unrestricted Conditions
      are
      met or such legend is otherwise no longer required under this Section 2(g),
      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 the Transfer Agent to deliver at the Company’s expense, 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 Section 2(g)(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 1933 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. 

    


    (h)
      Cancellation of Warrant. This
      Warrant shall be canceled upon the full 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. 

    


    (i)
      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.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (j) 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 do not bear a
      legend,
      are not 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.
      Otherwise,
      delivery of the Common Stock shall be by physical delivery to the address
      specified by the Holder in the Notice of Exercise. The time periods for delivery
      and liquidated damages described herein shall apply to the electronic
      transmittals described herein, or to physical delivery, whichever is applicable.
      

    


    (k)
      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 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 with respect to the sell order as is 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.

     

    (l)
      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 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. 

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    3. Payment
      of Warrant Exercise Price.

    


    The
      Exercise Price (“Exercise
      Price”)
      shall
      initially equal $2.50
      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:
      The
      Holder, at its option, may exercise this Warrant in one or more cashless
      exercise transactions anytime that there is not a current and effective
      registration statement then in effect covering the resale of the Warrant Shares
      issuable upon such exercise. 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), where “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.

     

    B
      = the
      Exercise Price.

     

    As
      used
      herein, 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 L.P. or an 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. 


    
      
        
        

      

      
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    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)
       Registrable
      Securities. The
      Warrant Shares shall be considered “Registrable Securities” as such term is
      defined under the Registration Rights Agreement (the “June 2007 Registration
      Rights Agreement”) entered into pursuant to the June 2007 Securities Purchase
      Agreement (as defined in the Line of Credit Agreement), and the Holder shall
      have all of the same rights, privileges and indemnities under such Registration
      Rights Agreement with respect to the Warrant Shares, and the Company shall
      have
      the same obligations with respect to the Warrant Shares, as if the Warrant
      Shares were originally included in such Registration Rights Agreement) the
      terms
      of which are incorporated herein by reference and made a part hereof. References
      in the Registration Rights Agreement to “Holder(s)” shall mean Buyer(s) as
      herein defined. 

    


    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).

    


     (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. 


    
      
        
        

      

      
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    (e)
      Adjustment Upon Issuance of Shares of Common Stock or Common Stock
      Equivalents.
      If the
      Company issues or sells, or in accordance with this Section 5(e) is deemed
      to
      have issued or sold, any shares of Common Stock (including the issuance or
      sale
      of shares of Common Stock owned or held by or for the account of the Company,
      but excluding shares of Common Stock deemed to have been issued by the Company
      in connection with an Exempt Issuance (as defined below) for no consideration
      or
      a consideration per share (the "New
      Issuance Price")
      less
      than a price (the "Applicable
      Price")
      equal
      to the Exercise Price in effect immediately prior to such issue or sale or
      deemed issuance or sale (the foregoing a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance, the Applicable Price shall be reduced
      to an amount equal to the New Issuance Price. Upon each such adjustment of
      the
      Exercise Price hereunder, the number of Warrant Shares shall be adjusted in
      accordance with Section 5(i) below. The adjustments required by this paragraph
      and by Sections 5(e)(i)-(iv) below are referred to in the singular, as a
“Subsequent
      Issuance Adjustment,“
      and
      collectively as “Subsequent
      Issuance Adjustments.”
      For
      purposes of determining the adjusted Applicable Price under this Section 5(e),
      the following shall be applicable:

    


    (i) Issuance
      of Options.
      If the
      Company in any manner grants any Options, (as hereafter defined) and the lowest
      price per share for which one share of Common Stock is issuable upon the
      exercise of any such Option or upon conversion, exercise or exchange of any
      Convertible Securities issuable upon exercise of any such Option is less than
      the Applicable Price, then such share of Common Stock shall be deemed to be
      outstanding and to have been issued and sold by the Company at the time of
      the
      granting or sale of such Option for such price per share. For purposes of this
      Section 5(e)(i), the "lowest price per share for which one share of Common
      Stock
      is issuable upon exercise of such Options or upon conversion, exercise or
      exchange of such Convertible Securities" shall be equal to the sum of the lowest
      amounts of consideration (if any) received or receivable by the Company with
      respect to any one share of Common Stock upon the granting or sale of the
      Option, upon exercise of the Option and upon conversion, exercise or exchange
      of
      any Convertible Security issuable upon exercise of such Option. No further
      adjustment of the Exercise Price or number of Warrant Shares shall be made
      upon
      the actual issuance of such shares of Common Stock or of such Convertible
      Securities upon the exercise of such Options or upon the actual issuance of
      such
      shares of Common Stock upon conversion, exercise or exchange of such Convertible
      Securities. No adjustment shall be made hereunder if such adjustment would
      result in an increase in the Applicable Price or a decrease in the number of
      Warrant Shares. 

    


    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon the
      conversion, exercise or exchange thereof is less than the Applicable Price,
      then
      such share of Common Stock shall be deemed to be outstanding and to have been
      issued and sold by the Company at the time of the issuance or sale of such
      Convertible Securities for such price per share. For the purposes of this
      Section 5(e)(ii), the "lowest price per share for which one share of Common
      Stock is issuable upon the conversion, exercise or exchange" shall be equal
      to
      the sum of the lowest amounts of consideration (if any) received or receivable
      by the Company with respect to one share of Common Stock upon the issuance
      or
      sale of the Convertible Security and upon conversion, exercise or exchange
      of
      such Convertible Security. In the case of a Convertible Security which is
      accompanied by Options (collectively, a “Unit”),
      the
      "lowest price per share for which one share of Common Stock is issuable upon
      the
      conversion, exercise or exchange of such Convertible Security” shall equal (i)
      the consideration deemed received in exchange for the Convertible Security,
      as
      determined in accordance with subsection 5(e)(iv) below, divided by (ii) the
      total number of shares into which such Convertible Security is convertible
      or
      exchangeable (without regard to any contractual limitation on the timing or
      amount of conversions). No further adjustment of the Exercise Price or number
      of
      Warrant Shares shall be made upon the actual issuance of such shares of Common
      Stock upon conversion, exercise or exchange of such Convertible Securities,
      and
      if any such issue or sale of such Convertible Securities is made upon exercise
      of any Options for which adjustment of this Warrant has been or is to be made
      pursuant to other provisions of this Section 5(e), no further adjustment of
      the
      Exercise Price or number of Warrant Shares shall be made by reason of such
      issue
      or sale. No adjustment shall be made hereunder if such adjustment would result
      in an increase of the Applicable Price or decrease in the number of Warrant
      Shares. 


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion, exercise or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exercisable or exchangeable for shares of Common Stock increases or decreases
      at any time, the Applicable Price and the number of Warrant Shares in effect
      at
      the time of such increase or decrease shall be adjusted to the Exercise Price
      and the number of Warrant Shares which would have been in effect at such time
      had such Options or Convertible Securities provided for such increased or
      decreased purchase price, additional consideration or increased or decreased
      conversion rate, as the case may be, at the time initially granted, issued
      or
      sold. For purposes of this Section 5(e)(iii), if the terms of any Option or
      Convertible Security that was outstanding as of the date of issuance of this
      Warrant are increased or decreased in the manner described in the immediately
      preceding sentence, then such Option or Convertible Security and the shares
      of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall
      be deemed to have been issued as of the date of such increase or decrease.
      No
      adjustment pursuant to this Section 5(e)(iii) shall be made if such adjustment
      would result in an increase of the Applicable Price or a decrease in the number
      of Warrant Shares.

    


    (iv)
      Calculation
      of Consideration Received.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction, the Options will
      be
      deemed to have been issued for their Black Scholes value, and the other
      securities issued or sold in such integrated transaction will be deemed to
      have
      been issued or sold for the balance of the consideration received by the
      Company. If any shares of Common Stock, Options or Convertible Securities are
      issued or sold or deemed to have been issued or sold for cash, the consideration
      received therefor will be deemed to be the net amount actually received by
      the
      Company therefor. If any shares of Common Stock, Options or Convertible
      Securities are issued or sold for a consideration other than cash, the amount
      of
      such consideration received by the Company will be the fair value of such
      consideration, except where such consideration consists of securities, in which
      case the amount of consideration received by the Company will be the Volume
      Weighted Average Price of such security on the date of receipt. If any shares
      of
      Common Stock, Options or Convertible Securities are issued to the owners of
      the
      non-surviving entity in connection with any merger in which the Company is
      the
      surviving entity, the amount of consideration therefor will be deemed to be
      the
      fair value of such portion of the net assets and business of the non-surviving
      entity as is attributable to such shares of Common Stock, Options or Convertible
      Securities, as the case may be. The fair value of any consideration other than
      cash or securities will be determined jointly by the Company and the Required
      Warrant Holders (as defined in Section 10(b) hereof). If such parties are unable
      to reach agreement within ten (10) days after the occurrence of an event
      requiring valuation (the "Valuation
      Event"),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth day following the Valuation Event by an independent,
      reputable appraiser jointly selected by the Company and the Required Warrant
      Holders. The determination of such appraiser shall be final and binding upon
      all
      parties absent manifest error and the fees and expenses of such appraiser shall
      be borne by the Company.

    


    (v) Record
      Date.
      If the
      Company takes a record of the holders of shares of Common Stock for the purpose
      of entitling them (i) to receive a dividend or other distribution payable in
      shares of Common Stock, Options or in Convertible Securities or (ii) to
      subscribe for or purchase shares of Common Stock, Options or Convertible
      Securities, then such record date will be deemed to be the date of the issue
      or
      sale of the shares of Common Stock deemed to have been issued or sold upon
      the
      declaration of such dividend or the making of such other distribution or the
      date of the granting of such right of subscription or purchase, as the case
      may
      be.

    


    For
      purposes hereof:

    


    "Approved
      Stock Plan"
      means any employee benefit plan which has been duly
      adopted by a majority of the non-employee members of the Board of Directors
      of
      the Company or a majority of the members of a committee of non-employee
      directors established for such purpose,
      pursuant to which the Company's securities may be issued to any employee,
      consultant, officer or director for services provided to the
      Company.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “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.

    


    “Exempt
      Issuance”
      means
      the issuance of (a) any
      Common Stock issued or issuable in connection with any Approved Stock Plan
      at a
      price equal to or greater than 90% of the initial Exercise Price (as defined
      in
      the Warrant), up to a maximum of five percent (5%) of the outstanding Common
      Stock, in the aggregate (provided that no such securities shall be issued to
      consultants or advisors unless such securities are not registered, either at
      the
      time of issuance or at any time thereafter, and are subject to volume
      limitations under Rule 144),
      except
      that, as to any anti-dilution provisions or Subsequent Issuance Adjustments
      in
      the Notes or Warrants, this item (a) shall not constitute an Exempt Issuance
      until after the 90th
      day
      following the first date that the Warrant Shares may be resold pursuant to
      Rule
      144, (b) securities upon the exercise, exchange of, conversion or redemption
      of,
      or payment of interest or liquidated or similar damages on, any Securities
      issued hereunder, provided that the principal amount thereof is not increased
      and the terms thereof are not otherwise amended or modified after the Closing
      Date, (c) other securities exercisable, exchangeable for, convertible into,
      or
      redeemable for shares of Common Stock issued and outstanding on the date of
      this
      Agreement, provided that such securities have not been amended since the date
      of
      this Agreement to directly or indirectly effectively increase the number of
      such
      securities or to decrease the exercise, exchange or conversion price of such
      securities (and including any issuances of securities pursuant to the
      anti-dilution provisions of any such securities), and (d)
      any Common Stock issued or issuable in connection with any acquisition by the
      Company, whether through an acquisition of stock or a merger of any business,
      assets or technologies the primary purpose of which is not to raise equity
      capital.
      

    


    “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 Applicable Price, then the Applicable Price 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
      Applicable Price or a decrease in the number of Warrant Shares.

     

    (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 Applicable 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 Applicable 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
      Applicable Price to any amount and for any 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 Applicable Price pursuant to the terms of this
      Warrant, including but not limited to any Subsequent Issuance Adjustment, any
      Subsequent Rights Offering Adjustment, or any Voluntary Adjustment, the number
      of Warrant Shares issuable upon Exercise of this Warrant shall be increased
      such
      that the aggregate Applicable 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. 


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (j)
      Notice of Adjustments; Notice Failure Adjustment. The Company shall notify
      the
      Holder in writing, no later than one (1) Business Day following any Dilutive
      Issuance, indicating therein the applicable issuance price, or applicable reset
      price, exchange price, conversion price, exercise price and other pricing terms
      (such notice, the “Dilutive Issuance Notice”). In the event that the Company
      fails to provide the Holder with an Exercise Price Adjustment Notice within
      five
      (5) Business Days of any Dilutive Issuance (the “Dilutive Issuance Notice
      Deadline”), the Applicable Price shall be permanently reduced (but not
      increased) on the Dilutive Issuance Notice Deadline, and on the same day of
      each
      calendar month thereafter until such notice is given (each, a “Notice Failure
      Adjustment Date”), or in each case if not a business day, then on the next
      business day (each, a “Notice Failure Adjustment”) to a price equal to the
      lesser of (a) the Applicable Price or (b) 100% of the VWAP for five (5) trading
      day period immediately preceding the applicable Notice Failure Adjustment Date
      (collectively, the “Notice Failure Adjustment Price”). 

     

    Whenever
      the Applicable 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 new Exercise Price and
      specifying the new number of shares into which the Warrant is convertible 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 Applicable Price 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. 

     

    (k)
      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 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 10 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.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (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 Applicable Price in full without
      regard to any Beneficial Ownership Limitation. If at any time the number of
      shares of Common Stock authorized and reserved for issuance is below the number
      of shares sufficient for the Exercise of this Warrant (a “Share
      Authorization Failure”)(based
      on the Applicable Price), 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 1933 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
      from the registration requirements of the 1933 Act and applicable state
      laws.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (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 such notice, 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 of Common Stock or other
      securities for which this Warrant is then exercisable.

    


    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 Applicable Price, and
      (ii) shall not take any actions which might prevent the Company from
      validly and legally issuing 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, 

    


    “Change
      of Entity Transaction” means
      (i) a consolidation, merger, exchange of shares, recapitalization,
      reorganization, business combination or other similar event in one or a series
      of transactions, (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 whose common stock is quoted on or
      listed for trading on an Eligible Market, (B) has Sufficient Trading
      Characteristics (as defined above) 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


    
      
        
        

      

      
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    (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 one or a series of related
      transactions in any rolling 12 month period (an “Asset
      Sale”).

    


    (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 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 Applicable 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 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 75% 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 ten (10) Business 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
      portion of its Warrant (the “Redemption
      Warrant Amount”)
      that the Holder is electing to be redeemed. 

    


    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.



    
      
        
        

      

      
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    (e) Escrow;
      Payment of Major Transaction Redemption Price.
      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 Warrants.
      

    


    (f) Injunction.
      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
      this Section and Section 12. 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 Exercise Date is after the consummation of a Major Transaction,
      into shares of 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 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 Applicable Price, 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(g),
      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)
      Failure
      To Authorize and Reserve Common Stock.
      A Share
      Authorization Failure occurs (a “Share
      Reservation Default”);

    


    (ii)
      Failure
      To Deliver Common Stock.
      A
      Warrant Shares Delivery Failure occurs; 

    


    (iii)
      Legend
      Removal Failure. A
      Legend
      Removal Failure, 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(g)(ii)
      hereof;

    


    (iv)
      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; 


    
      
        
        

      

      
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    (v) Failure
      to Adjust Applicable 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 Applicable
      Price as required under Section 5(e) following a Dilutive Issuance; or otherwise
      (after any applicable Dispute Resolution Procedure required herein), and such
      failure continues for five (5) Business Days after the Holder provides written
      notice to the Company that such performance by the Company is past
      due.

    


     (b) Mandatory
      Redemption; Certain Adjustments on Default. 

    


    (i)
      Mandatory
      Redemption Amount.
      If any
      Event of Default shall occur then thereafter, unless waived by the Holder,
      upon
      the occurrence and during the continuation of any Event of Default, 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 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 Applicable Price shall be permanently
      decreased (but not increased) 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
      Applicable Price, 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 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) .


     

    If
      the
      Company fails to pay the Default Amount within the (5) Business Days of written
      notice that such amount is due and payable (the “Default
      Amount Due Date”),
      then
      interest shall accrue thereon at a rate of eighteen percent (18%) per annum,
      compounded monthly (or the maximum amount allowed by applicable law, whichever
      is less), and 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 Applicable Price 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 (the “Default
      Share Delivery Deadline”).
      


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Upon
      a
      Default Exercise, the Company shall be required deliver a number of Common
      Shares to the Holder equal to the applicable Default Share Amount.

     

    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, the amount of such
      reduction shall be added back to the Unpaid Portion of the Default Amount and
      the issuance of Default Shares which were not issued as a result of the above
      reduction shall be deferred until the Holder instructs the Company in writing
      to
      issue such Default Shares.

     

    (ii)
      Liquidated
      Damages.
      The
      parties hereto acknowledge and agree that the sums payable as late delivery
      payments or pursuant to a Mandatory Redemption shall give rise to liquidated
      damages and not penalties. The parties further acknowledge that (i) the amount
      of loss or damages likely to be incurred by the Holder is incapable or is
      difficult to precisely estimate, (ii) the amounts specified bear a reasonable
      proportion and are not plainly or grossly disproportionate to the probable
      loss
      likely to be incurred by the Holder, and (iii) the parties are sophisticated
      business parties and have been represented by sophisticated and able legal
      and
      financial counsel and negotiated this Warrant at arm’s length.

    


    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. 


    
      
        
        

      

      
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    (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 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 (as defined in Section 12 below), 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 Surety Bond Value (as
      defined below) of all of the Holder’s 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. 

     

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

     

    “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). 

     

    (e)
      Injunction and Posting of Bond.
      In the
      event that the Event of Default referred to in subsection (d) 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, or otherwise, 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(l). 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, (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 Notes that may
      be
      issued pursuant to the Line of Credit Agreement between the Company and the
      Holder. In the event of any redemption of the Notes, in whole or in part, by
      the
      Company, or in the event that the Notes are never issued, the Holder shall
      retain its outstanding Warrants.

    


    13. 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.

     

    
      
        
          
          

        

        
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    14. Dispute
      Resolution.
      In the case of a dispute as to the determination of the Applicable Price, the
      VWAP, 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
      Applicable Price, Market Price, Exercise Price or any Redemption Price, or
      the
      determination of whether or not a Dilutive Issuance has occurred, 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 immediately 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 outside
      accountant pursuant to (i) or (ii) immediately above) to an expert attorney
      from
      a nationally recognized outside law firm (having at least 50 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”).
      

     

    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. 


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    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. 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. 

     

    IN
      WITNESS WHEREOF, the undersigned has executed this Warrant as of the 8th day
      of
      May, 2008.

     

    
      
        	 	
                Alternative
                  Construction Technologies, Inc.

              
	 	 	 	 
	 	 	 	 
	 	
                By:
                  

              	          
                	 
	 	
                Print
                  Name: 

              	
                      
                  

              	 
	 	
                Title:
                  

              	
                             
                  

              	 


      


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
      A

    


    NOTICE
      OF
      EXERCISE FORM FOR WARRANT

    


    TO:
      ALTERNATIVE
      CONSTRUCTION TECHNOLOGIES, INC.

    


    The
      undersigned hereby irrevocably Exercises the right to purchase ____________
      of
      the shares of Common Stock (the “Common
      Stock”)
      of
ALTERNATIVE
      CONSTRUCTION TECHNOLOGIES, INC.,
      a
      Florida 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.

     

    
      
 

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

     

    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 ALTERNATIVE
      CONSTRUCTION TECHNOLOGIES, INC.,
      a
      Florida 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.

     

    
      
 

      
        
          
          

        

        
          23