FORM
        OF WARRANT

       

      NEITHER
        THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
        THE
        SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
        LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
        (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
        UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
        (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A FORM REASONABLY ACCEPTABLE
        TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
        UNLESS
        SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
        FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
        ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
        SECURITIES.

      


      AKEENA
        SOLAR, INC.

      


      Warrant
        To Purchase Common Stock

      


      Warrant
        No.: ___________

      Number
        of
        Shares of Common Stock:_______________

      Date
        of
        Issuance: November [ ], 2007 (“Issuance
        Date”)

      


      Akeena
        Solar, Inc., a corporation organized under the laws of Delaware (the
“Company”),
        hereby certifies that, for good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, _______________, the registered
        holder hereof or its permitted assigns (the “Holder”),
        is
        entitled, subject to the terms set forth below, to purchase from the Company,
        at
        the Exercise Price (as defined below) then in effect, upon surrender of this
        Warrant to Purchase Common Stock (including any Warrants to Purchase Common
        Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
        at
        any time or times on or after one hundred and eighty days (180) from the
        date
        hereof, but not after 5:30 p.m., New York time, on the Expiration Date (as
        defined below), ______________ (_____________)1 
        fully
        paid nonassessable shares of Common Stock (as defined below) (the
        “Warrant
        Shares”).
        Except as otherwise defined herein, capitalized terms in this Warrant shall
        have
        the meanings set forth in Section 16. This Warrant is one of the Warrants
        to
        purchase Common Stock (the “SPA
        Warrants”)
        issued
        pursuant to Section 1 of that certain Securities Purchase Agreement, dated
        as of
        November 1, 2007 (the “Subscription
        Date”),
        by
        and among the Company and the investors (the “Buyers”)
        referred to therein (the “Securities
        Purchase Agreement”).

       

        
          

        

      

      
        1
          Insert
          number of shares equal to 20% of the number of shares of Common Stock purchased
          under the Securities Purchase Agreement.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      1. EXERCISE
        OF WARRANT.

       

      (a) Mechanics
        of Exercise.
        Subject
        to the terms and conditions hereof (including, without limitation, the
        limitations set forth in Section 1(f)), this Warrant may be exercised by
        the
        Holder on any day on or after one hundred and eighty days (180) from the
        date
        hereof to and including the Expiration Date, in whole or in part, by
        (i) delivery of a properly completed and executed written notice, in the
        form attached hereto as Exhibit
        A
        (the
“Exercise
        Notice”),
        of
        the Holder’s election to exercise this Warrant and (ii) (A) payment to the
        Company of an amount equal to the applicable Exercise Price multiplied by
        the
        number of Warrant Shares as to which this Warrant is being exercised (the
        “Aggregate
        Exercise Price”)
        in
        cash or by wire transfer of immediately available funds or (B) by notifying
        the
        Company that this Warrant is being exercised pursuant to a Cashless Exercise
        (as
        defined in Section 1(d)). At 5:30 P.M., New York City time on the Expiration
        Date, the portion of this Warrant not exercised prior thereto shall be and
        become void and of no value. The Holder shall not be required to deliver
        the
        original Warrant in order to effect an exercise hereunder. Execution and
        delivery of the Exercise Notice with respect to less than all of the Warrant
        Shares shall have the same effect as cancellation of the original Warrant
        and
        issuance of a new Warrant evidencing the right to purchase the remaining
        number
        of Warrant Shares. On or before the second (2nd) Business Day following the
        date
        on which the Company has received each of the Exercise Notice and the Aggregate
        Exercise Price (or notice of a Cashless Exercise) (the “Exercise
        Delivery Documents”),
        the
        Company shall transmit by facsimile an acknowledgment of confirmation of
        receipt
        of the Exercise Delivery Documents to the Holder and the Company’s transfer
        agent (the “Transfer
        Agent”).
        On or
        before the second (2nd) Business Day following the date on which the Company
        has
        received all of the Exercise Delivery Documents, the Company shall (X) provided
        that the Transfer Agent is participating in The Depository Trust Company
        (“DTC”)
        Fast
        Automated Securities Transfer Program and the Warrant Shares may be issued
        without any restrictive legends in accordance with Section 4.1(b) of the
        Securities Purchase Agreement, upon the request of the Holder, credit such
        aggregate number of Warrant Shares to which the Holder is entitled pursuant
        to
        such exercise to the Holder’s or its designee’s balance account with DTC through
        its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent
        is
        not participating in the DTC Fast Automated Securities Transfer Program,
        issue
        and dispatch by overnight courier to the address as specified in the Exercise
        Notice, a certificate, registered in the Company’s share register in the name of
        the Holder or its designee, for the number of shares of Common Stock to which
        the Holder is entitled pursuant to such exercise, which certificate shall
        bear
        any legends required in accordance with Section 4.1(b) of the Securities
        Purchase Agreement. Upon delivery of the Exercise Delivery Documents, 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. If this Warrant is submitted in connection with
        any
        exercise pursuant to this Section 1(a) and the aggregate number of Warrant
        Shares represented by this Warrant at the time this Warrant submitted for
        exercise is greater than the number of Warrant Shares being acquired upon
        such
        exercise, then the Company shall as soon as practicable, and in no event
        later
        than five (5) Business Days after any exercise and at its own expense, issue
        a
        new Warrant (in accordance with Section 7(d)) representing the right to purchase
        the number of Warrant Shares purchasable immediately prior to such exercise
        under this Warrant, less the number of Warrant Shares with respect to which
        this
        Warrant is then exercised. No fractional shares of Common Stock are to be
        issued
        upon the exercise of this Warrant, but rather the number of shares of Common
        Stock to be issued shall be rounded up to the nearest whole number. The Company
        shall pay any and all taxes (other than taxes based upon the income of the
        Holder) which may be payable with respect to the issuance and delivery of
        Warrant Shares upon exercise of this Warrant. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Exercise
        Price.
        For
        purposes of this Warrant, “Exercise
        Price”
means
        $10.08 per Warrant Share, subject to adjustment as provided herein.

       

      (c) Company’s
        Failure to Timely Deliver Securities.
        If
within
        three (3) Trading Days after the
        Company’s receipt of the Exercise Delivery Documents the
        Company shall fail to
        issue
        and deliver a certificate to the Holder
        and
        register such shares of Common Stock on the Company’s share register or
credit
        the Holder’s balance account with DTC for the
        number
        of shares of Common Stock to which the Holder is entitled upon the Holder’s
        exercise hereunder,
        and if
        on or after such Trading Day the Holder purchases (in an open market transaction
        or otherwise) shares of Common Stock to deliver in satisfaction of a sale
        by the
        Holder of shares of Common Stock issuable upon such exercise that the Holder
        anticipated receiving from the Company, then the Company shall, within
five
        (5)
        Business Days after the Holder’s request and in the Holder’s discretion, either
        (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
        price (including brokerage commissions, if any) for the shares of Common
        Stock
        so purchased (the “Buy-In
        Price”),
        at
        which point the Company’s obligation to deliver such certificate (and to issue
        such Warrant Shares) shall terminate, or (ii) promptly honor its obligation
        to
        deliver to the Holder a certificate or certificates representing such Warrant
        Shares and pay cash to the Holder in an amount equal to the excess (if any)
        of
        the Buy-In Price over the product of (A) such number of shares of Common
        Stock,
        times (B) the Weighted
        Average
        Price on
        the date of exercise. 

       

      (d) Cashless
        Exercise.
         Notwithstanding
        anything contained herein to the contrary, if a Registration Statement (as
        defined in the Securities Purchase Agreement) covering the Warrant Shares
        is not
        available for the resale of such Warrant Shares, the Holder may, in its sole
        discretion, exercise this Warrant in whole or in part and, in lieu of making
        the
        cash payment otherwise contemplated to be made to the Company upon such exercise
        in payment of the Aggregate Exercise Price, elect instead to receive upon
        such
        exercise the “Net Number” of shares of Common Stock determined according to the
        following formula (a “Cashless
        Exercise”):

       

      Net
        Number = (A
        x
        B) - (A x C)

        
         B

       

      For
        purposes of the foregoing formula:

       

      
        	
              	A=	
                the
                  total number of shares with respect to which this Warrant is then
                  being
                  exercised.

              


      

       

      
        	
              	B=	
                the
                  Weighted Average Price of the shares of Common Stock (as reported
                  by
                  Bloomberg) on the date immediately preceding the date of the Exercise
                  Notice.

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
              	C=	
                the
                  Exercise Price then in effect for the applicable Warrant Shares
                  at the
                  time of such exercise.

              


      

      


      (e) Limitations
        on Exercises; Beneficial Ownership.
        The
        Company shall not effect the exercise of this Warrant, and the Holder shall
        not
        have the right to exercise this Warrant, to the extent that after giving
        effect
        to such exercise, such Holder (together with such Holder’s affiliates, and any
        other Persons whose beneficial ownership of Common Stock would be aggregated
        with such Holder’s for purposes of Section 13(d) of the Securities Exchange Act
        of 1934, as amended (the “Exchange
        Act”))
        would
        beneficially own in excess of 4.99% of the shares of Common Stock outstanding
        immediately after giving effect to such exercise (the “Maximum
        Percentage”).
        For
        purposes of the foregoing sentence, the aggregate number of shares of Common
        Stock beneficially owned by such Holder and its affiliates shall include
        the
        number of shares of Common Stock issuable upon exercise of this Warrant with
        respect to which the determination of such sentence is being made, but shall
        exclude shares of Common Stock which would be issuable upon (i) exercise of the
        remaining, unexercised portion of this Warrant beneficially owned by such
        Holder
        and its affiliates and (ii) exercise or conversion of the unexercised or
        unconverted portion of any other securities of the Company beneficially owned
        by
        such Person and its affiliates (including, without limitation, any convertible
        notes or convertible preferred stock or warrants) subject to a limitation
        on
        conversion or exercise analogous to the limitation contained herein. Except
        as
        set forth in the preceding sentence, for purposes of this paragraph, beneficial
        ownership shall be calculated in accordance with Section 13(d) of the Securities
        Exchange Act of 1934, as amended and Regulation 13D promulgated thereunder.
        For
        purposes of this Warrant, in determining the number of outstanding shares
        of
        Common Stock, the Holder may rely on the number of outstanding shares of
        Common
        Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q,
        Current Report on Form 8-K or other public filing with the Securities and
        Exchange Commission, as the case may be, (2) a more recent public announcement
        by the Company or (3) any other notice by the Company or the Transfer Agent
        setting forth the number of shares of Common Stock outstanding. For any reason
        at any time, upon the written request of the Holder, the Company shall within
        two (2) Business Days confirm orally and in writing to the Holder the number
        of
        shares of Common Stock then outstanding. In any case, the number of outstanding
        shares of Common Stock shall be determined after giving effect to the conversion
        or exercise of securities of the Company, including the SPA Warrants, by
        the
        Holder and its affiliates since the date as of which such number of outstanding
        shares of Common Stock was reported. 

       

      (f) Insufficient
        Authorized Shares.
        If
        at any
        time while any of the Warrants remain outstanding the Company does not have
        a
        sufficient number of authorized and unreserved shares of Common Stock to
        satisfy
        its obligation to reserve for issuance upon exercise of the Warrants at least
        a
        number of shares of Common Stock equal to 100% (the “Required
        Reserve Amount”)
        of the
        number of shares of Common Stock as shall from time to time be necessary
        to
        effect the exercise of all of the Warrants then outstanding, then the Company
        shall immediately
        take all
        action
necessary
        to increase the Company’s authorized shares of Common Stock to an amount
        sufficient to allow the Company to reserve the Required Reserve Amount for
        this
        Warrant then outstanding. Without limiting the generality of the foregoing
        sentence, as soon as practicable after the date of the occurrence of an
        Authorized Share Failure, but in no event later than ninety (90) days (but
        in
        the case of a review by the Securities and Exchange Commission of the Company’s
        proxy statement, then in no event later than one-hundred fifty (135) days)
        after
        the occurrence of such Authorized Share Failure, the Company shall hold a
        meeting of its stockholders for the approval of an increase in the number
        of
        authorized shares of Common Stock. In connection with such meeting, the Company
        shall provide each stockholder with a proxy statement and shall use its best
        efforts to solicit its stockholders’ approval of such increase in authorized
        shares of Common Stock and to cause its board of directors to recommend to
        the
        stockholders that they approve such proposal.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (g) Disputes.
        In the
        case of a dispute as to the determination of the Exercise Price or the
        arithmetic calculation of the Warrant Shares, the Company shall promptly
        issue
        to the Holder the number of Warrant Shares that are not disputed and resolve
        such dispute in accordance with Section 14.

       

      2.  ADJUSTMENT
        OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
        The
        Exercise Price and the number of Warrant Shares shall be adjusted from time
        to
        time as follows:

       

      (a) Adjustment
        upon Issuance of shares of Common Stock.
        If and
        whenever on or after the Subscription Date and through and including the
        twelve
        (12) month anniversary of the Issuance Date, the Company issues or sells,
        or in
        accordance with this Section 2 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 any Excluded
        Securities (as defined below) for 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 Exercise Price then in effect
        shall be reduced to an amount equal to the product of (A) the Exercise Price
        in
        effect immediately prior to such Dilutive Issuance and (B) the quotient
        determined by dividing (1) the sum of (I) the product derived by multiplying
        the
        Exercise Price in effect immediately prior to such Dilutive Issuance and
        the
        number of shares of Common Stock Deemed Outstanding immediately prior to
        such
        Dilutive Issuance plus (II) the consideration, if any, received by the Company
        upon such Dilutive Issuance, by (2) the product derived by multiplying (I)
        the
        Exercise Price in effect immediately prior to such Dilutive Issuance by (II)
        the
        number of shares of Common Stock Deemed Outstanding immediately after such
        Dilutive Issuance. Upon each such adjustment of the Exercise Price hereunder,
        the number of Warrant Shares shall be adjusted to the number of shares of
        Common
        Stock determined by multiplying the Exercise Price in effect immediately
        prior
        to such adjustment by the number of Warrant Shares acquirable upon exercise
        of
        this Warrant immediately prior to such adjustment and dividing the product
        thereof by the Exercise Price resulting from such adjustment. For purposes
        of
        determining the adjusted Exercise Price under this Section 2(a), the following
        shall be applicable:

       

      (i) Issuance
        of Options. If the Company in any manner grants any Options 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 2(a)(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 issuable upon exercise of any such Option” 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.  

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (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 2(a)(ii), the “lowest price per share for which
        one share of Common Stock is issuable upon the conversion, exercise or exchange
        thereof” 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. 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
        2(a), no further adjustment of the Exercise Price or number of Warrant Shares
        shall be made by reason of such issue or sale. 

       

      (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
        Exercise 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 2(a)(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 2(a) shall be made if such adjustment would result in an
        increase of the Exercise Price then in effect 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, (x) the Options will be deemed to have been issued
        for a
        value determined by use of the Black Scholes Option Pricing Model (the
“Option
        Value”)
        and
        (y) the other securities issued or sold in such integrated transaction shall
        be
        deemed to have been issued for the difference of (I) the aggregate consideration
        received by the Company, less (II) the Option Value. 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 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 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 Holders. 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 (10th)
        day
        following the Valuation Event by an independent, reputable appraiser jointly
        selected by the Company and the Required 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 (A) to receive a dividend or other distribution
        payable in shares of Common Stock, Options or in Convertible Securities or
        (B)
        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. 

       

      (b) Adjustment
        upon Subdivision or Combination of Common Stock.
        If the
        Company at any time on
        or
        after the Subscription Date
        subdivides (by any stock split, stock dividend, recapitalization or otherwise)
        one
        or
        more classes of its
        outstanding shares of Common Stock into a greater number of shares, the Exercise
        Price in effect immediately prior to such subdivision will be proportionately
        reduced and the number of Warrant Shares will be proportionately increased.
        If
        the Company
        at any
        time on
        or
        after the Subscription Date
        combines
        (by combination, reverse stock split or otherwise)
        one or
        more classes of
        its
        outstanding shares of Common Stock into a smaller number of shares, the Exercise
        Price in effect immediately prior to such combination will be proportionately
        increased and the number of Warrant Shares will be proportionately decreased.
        Any adjustment under this Section 2(b)
        shall
        become effective at the close of business on the date the subdivision or
        combination becomes effective.

       

      (c) Other
        Events.
        If any
        event occurs of the type contemplated by the provisions of this Section 2
        but
        not expressly provided for by such provisions (including, without limitation,
        the granting of stock appreciation rights, phantom stock rights or other
        rights
        with equity features), then the Company’s Board of Directors will make an
        appropriate adjustment in the Exercise Price and the number of Warrant Shares
        so
        as to protect the rights of the Holder; provided that no such adjustment
        pursuant to this Section 2(c) will increase the Exercise Price or decrease
        the
        number of Warrant Shares as otherwise determined pursuant to this Section
        2.

       

      (d) De
        Minimis Adjustments.
        No
        adjustment in the Conversion Price shall be required unless such adjustment
        would require an increase or decrease of at least $0.01 in such price, provided,
        however, that any adjustment which by reason of this Section 2(d) is not
        required to be made shall be carried forward and taken into account in any
        subsequent adjustments under this Section 2. All calculations under this
        Section
        2 shall be made by the Company in good faith and shall be made to the nearest
        cent or to the nearest one hundredth of a share, as applicable. No adjustment
        need be made for a change in the par value or no par value of the Company’s
        Common Stock.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (e) Voluntary
        Adjustment By Company.
        The
        Company may at any time during the term of this Warrant reduce the then current
        Exercise Price to any amount and for any period of time deemed appropriate
        by
        the Board of Directors of the Company.

       

      3. RIGHTS
        UPON DISTRIBUTION OF ASSETS.
        If the
        Company shall declare or make any dividend or other distribution of its assets
        (or rights to acquire its assets) to holders of shares of Common Stock (which
        dividend or other distribution has not already been given to the Holders
        of the
        Warrants), by way of return of capital or otherwise (including, without
        limitation, any distribution of cash, stock or other securities, property
        or
        options by way of a dividend, spin off, reclassification, corporate
        rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”),
        at
        any time after the issuance of this Warrant and prior to the Expiration Date,
        then, in each such case:

       

      (a) any
        Exercise Price in effect immediately prior to the close of business on the
        record date fixed for the determination of holders of shares of Common Stock
        entitled to receive the Distribution shall be reduced, effective as of the
        close
        of business on such record date, to a price determined by multiplying such
        Exercise Price by a fraction of which (i) the numerator shall be the Closing
        Bid
        Price of the shares of Common Stock on the Trading Day immediately preceding
        such record date minus the value of the Distribution (as determined in good
        faith by the Company’s Board of Directors) applicable to one share of Common
        Stock, and (ii) the denominator shall be the Closing Bid Price of the shares
        of
        Common Stock on the Trading Day immediately preceding such record date;
        and

       

      (b) the
        number of Warrant Shares shall be increased to a number of shares equal to
        the
        number of shares of Common Stock obtainable immediately prior to the close
        of
        business on the record date fixed for the determination of holders of shares
        of
        Common Stock entitled to receive the Distribution multiplied by the reciprocal
        of the fraction set forth in the immediately preceding paragraph (a); provided
        that in the event that the Distribution is of shares of Common Stock (or
        common
        stock) (“Other
        Shares of Common Stock”)
        of a
        company whose common shares are traded on a national securities exchange
        or a
        national automated quotation system, then the Holder may elect to receive
        a
        warrant to purchase Other Shares of Common Stock in lieu of an increase in
        the
        number of Warrant Shares, the terms of which shall be identical to those
        of this
        Warrant, except that such warrant shall be exercisable into the number of
        shares
        of Other Shares of Common Stock that would have been payable to the Holder
        pursuant to the Distribution had the Holder exercised this Warrant immediately
        prior to such record date and with an aggregate exercise price equal to the
        product of the amount by which the exercise price of this Warrant was decreased
        with respect to the Distribution pursuant to the terms of the immediately
        preceding paragraph (a) and the number of Warrant Shares calculated in
        accordance with the first part of this paragraph (b).

       

      4. PURCHASE
        RIGHTS; FUNDAMENTAL TRANSACTIONS.
        

       

      (a) Purchase
        Rights.
        In
        addition to any adjustments pursuant to Section 2 above, 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 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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Fundamental
        Transactions.
        If, at
        any time while this Warrant is outstanding there is a Fundamental Transaction,
        then the Holder shall have the right thereafter to receive, upon exercise
        of
        this Warrant, the same amount and kind of securities, cash or property as
        it
        would have been entitled to receive upon the occurrence of such Fundamental
        Transaction if it had been, immediately prior to such Fundamental Transaction,
        the Holder of the number of Warrant Shares then issuable upon exercise in
        full
        of this Warrant (the “Alternate
        Consideration”).
        For
        purposes of any such exercise, the determination of the Exercise Price shall
        be
        appropriately adjusted to apply to such Alternate Consideration based on
        the
        amount of Alternate Consideration issuable in respect of one share of Common
        Stock in such Fundamental Transaction, and the Company shall apportion the
        Exercise Price among the Alternate Consideration in a reasonable manner
        reflecting the relative value of any different components of the Alternate
        Consideration. If holders of Common Stock are given any choice as to the
        securities, cash or property to be received in a Fundamental Transaction,
        then
        the Holder shall be given the same choice as to the Alternate Consideration
        it
        receives upon any exercise of this Warrant following such Fundamental
        Transaction. Any successor to the Company or surviving entity in such
        Fundamental Transaction shall issue to the Holder a new warrant substantially
        in
        the form of this Warrant and consistent with the foregoing provisions and
        evidencing the Holder’s right to purchase the Alternate Consideration for the
        aggregate Exercise Price upon exercise thereof. The terms of any agreement
        pursuant to which a Fundamental Transaction is effected shall include terms
        requiring any such successor or surviving entity to comply with the provisions
        of this Section 4 and insuring that the Warrant (or any such replacement
        security) will be similarly adjusted upon any subsequent transaction analogous
        to a Fundamental Transaction.

       

      5. NONCIRCUMVENTION.
        The
        Company hereby covenants and agrees that the Company will not, except and
        to the
        extent as waived or consented to by the Holder, by amendment of its Certificate
        of Incorporation, Bylaws or through any reorganization, transfer of assets,
        consolidation, merger, scheme of arrangement, dissolution, issue or sale
        of
        securities, or any other voluntary action, avoid or seek to avoid the observance
        or performance of any of the terms of this Warrant, and will at all times
        in
        good faith carry out all the provisions of this Warrant and take all action
        as
        may be required to protect the rights of the Holder. Without limiting the
        generality of the foregoing, the Company (i) shall not increase the par
        value of any shares of Common Stock receivable upon the exercise of this
        Warrant
        above the Exercise Price then in effect, (ii) shall take all such actions
        as may be necessary or appropriate in order that the Company may validly
        and
        legally issue fully paid and nonassessable shares of Common Stock upon the
        exercise of this Warrant, and (iii) shall, so long as any of the SPA Warrants
        are outstanding, take all action necessary to reserve and keep available
        out of
        its authorized and unissued shares of Common Stock, solely for the purpose
        of
        effecting the exercise of the SPA Warrants, 100% of the number of shares
        of
        Common Stock as shall from time to time be necessary to effect the exercise
        of
        the SPA Warrants then outstanding (without regard to any limitations on
        exercise).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      6. WARRANT
        HOLDER NOT DEEMED A STOCKHOLDER.
        Except
        as otherwise specifically provided herein, the Holder, solely in such Person’s
        capacity as a holder of this Warrant, shall not be entitled to vote or receive
        dividends or be deemed the holder of share capital of the Company for any
        purpose, nor shall anything contained in this Warrant be construed to confer
        upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
        any of the rights of a shareholder of the Company or any right to vote, give
        or
        withhold consent to any corporate action (whether any reorganization, issue
        of
        stock, reclassification of stock, consolidation, merger, conveyance or
        otherwise), receive notice of meetings, receive dividends or subscription
        rights, or otherwise, prior to the issuance to the Holder of the Warrant
        Shares
        which such Person is then entitled to receive upon the due exercise of this
        Warrant. In addition, nothing contained in this Warrant shall be construed
        as
        imposing any liabilities on the Holder to purchase any securities (upon exercise
        of this Warrant or otherwise) or as a shareholder of the Company, whether
        such
        liabilities are asserted by the Company or by creditors of the Company.
        Notwithstanding this Section 6, the Company shall provide the Holder with
        copies
        of the same notices and other information given to the shareholders of the
        Company generally, contemporaneously with the giving thereof to the
        shareholders.

       

      7. REISSUANCE
        OF WARRANTS.

       

      (a) Transfer
        of Warrant.
        If this
        Warrant is to be transferred, the Holder shall surrender this Warrant to
        the
        Company, together with a written assignment of this Warrant duly executed
        by the
        Holder or its agent or attorney and funds sufficient to pay any transfer
        taxes
        payable upon the making of such transfer, if any, whereupon the Company will
        forthwith issue and deliver upon the order of the Holder a new Warrant (in
        accordance with Section 7(d)), registered as the Holder may request,
        representing the right to purchase the number of Warrant Shares being
        transferred by the Holder and, if less than the total number of Warrant Shares
        then underlying this Warrant is being transferred, a new Warrant (in accordance
        with Section 7(d)) to the Holder representing the right to purchase the balance
        of the number of Warrant Shares not being transferred.

       

      (b) Lost,
        Stolen or Mutilated Warrant.
        Upon
        receipt by the Company of evidence reasonably satisfactory to the Company
        of the
        loss, theft, destruction or mutilation of this Warrant, and, in the case
        of
        loss, theft or destruction, of any indemnification undertaking by the Holder
        to
        the Company reasonably satisfactory to the Company and, in the case of
        mutilation, upon surrender and cancellation of this Warrant, the Company
        shall
        execute and deliver to the Holder a new Warrant (in accordance with Section
        7(d)) representing the right to purchase the Warrant Shares then underlying
        this
        Warrant.

       

      (c) Exchangeable
        for Multiple Warrants.
        This
        Warrant is exchangeable, upon the surrender hereof by the Holder at the
        principal office of the Company, for a new Warrant or Warrants (in accordance
        with Section 7(d)) representing in the aggregate the right to purchase the
        number of Warrant Shares then underlying this Warrant, and each such new
        Warrant
        will represent the right to purchase such portion of such Warrant Shares
        as is
        designated in writing by the Holder at the time of such surrender; provided,
        however, that no Warrants for fractional shares of Common Stock shall be
        given.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d) Issuance
        of New Warrants.
        Whenever the Company is required to issue a new Warrant pursuant to the terms
        of
        this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
        (ii) shall represent, as indicated on the face of such new Warrant, the right
        to
        purchase the Warrant Shares then underlying this Warrant (or in the case
        of a
        new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant
        Shares designated by the Holder which, when added to the number of shares
        of
        Common Stock underlying the other new Warrants issued in connection with
        such
        issuance, does not exceed the number of Warrant Shares then underlying this
        Warrant), (iii) shall have an issuance date, as indicated on the face of
        such
        new Warrant which is the same as the Issuance Date, and (iv) shall have the
        same
        rights and conditions as this Warrant.

       

      8. NOTICES.
        Whenever notice is required or permitted to be given under this Warrant,
        unless
        otherwise provided herein, such notice shall be given in accordance with
        Section
        7(d) of the Securities Purchase Agreement. The Company shall provide the
        Holder
        with prompt written notice of all actions taken pursuant to this Warrant,
        including in reasonable detail a description of such action and the reason
        therefore. Without limiting the generality of the foregoing, the Company
        will
        give written notice to the Holder (i) promptly upon any adjustment of the
        Exercise Price, setting forth in reasonable detail, the calculation of such
        adjustment and (ii) at least fifteen days prior to the date on which the
        Company
        closes its books or takes a record (A) with respect to any dividend or
        distribution upon the shares of Common Stock, (B) with respect to any grants,
        issuances or sales of any Options, Convertible Securities or rights to purchase
        stock, warrants, securities or other property to holders of shares of Common
        Stock or (C) for determining rights to vote with respect to any Fundamental
        Transaction, dissolution or liquidation, provided in each case that such
        information shall be made known to the public prior to or in conjunction
        with
        such notice being provided to the Holder.

       

      9. AMENDMENT
        AND WAIVER.
        Except
        as otherwise provided herein, the provisions of this Warrant may be amended
        and
        the Company may take any action herein prohibited, or omit to perform any
        act
        herein required to be performed by it, only if the Company has obtained the
        written consent of the Required Holders; provided that no such action may
        (i)
        increase the exercise price of any SPA Warrant, (ii) decrease the number
        of
        shares or class of stock obtainable upon exercise of any SPA Warrant, (iii)
        increase the
        beneficial ownership of Common Stock held by such Holder’s for purposes of
        Section 13(d) of the Exchange Act where such beneficial ownership of Common
        Stock would be in excess of the Maximum Percentage after exercise of this
        Warrant or (iv) amend or remove Section 1(e) hereof without
        the written consent of the Holder. 

       

      10. GOVERNING
        LAW.
        This
        Warrant shall be governed by and construed and enforced in accordance with,
        and
        all questions concerning the construction, validity, interpretation and
        performance of this Warrant shall be governed by, the internal laws of the
        State
        of New York, without giving effect to any choice of law or conflict of law
        provision or rule (whether of the State of New York or any other jurisdictions)
        that would cause the application of the laws of any jurisdictions other than
        the
        State of New York.

       

      11. SEVERABILITY.
        If any
        provision of this Agreement is prohibited by law or otherwise determined
        to be
        invalid or unenforceable by a court of competent jurisdiction, the provision
        that would otherwise be prohibited, invalid or unenforceable shall be deemed
        amended to apply to the broadest extent that it would be valid and enforceable,
        and the invalidity or unenforceability of such provision shall not affect
        the
        validity of the remaining provisions of this Agreement so long as this Agreement
        as so modified continues to express, without material change, the original
        intentions of the parties as to the subject matter hereof and the prohibited
        nature, invalidity or unenforceability of the provision(s) in question does
        not
        substantially impair the respective expectations or reciprocal obligations
        of
        the parties or the practical realization of the benefits that would otherwise
        be
        conferred upon the parties. The parties will endeavor in good faith negotiations
        to replace the prohibited, invalid or unenforceable provision(s) with a valid
        provision(s), the effect of which comes as close as possible to that of the
        prohibited, invalid or unenforceable provision(s). 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12. CONSTRUCTION;
        HEADINGS.
        This
        Warrant shall be deemed to be jointly drafted by the Company and all the
        Buyers
        and shall not be construed against any person as the drafter hereof. The
        headings of this Warrant are for convenience of reference and shall not form
        part of, or affect the interpretation of, this Warrant.

       

      13. DISPUTE
        RESOLUTION.
        In the
        case of a dispute as to the determination of the Exercise Price or the
        arithmetic calculation of the Warrant Shares, the Company shall submit the
        disputed determinations or arithmetic calculations via facsimile within five
        (5)
        Business Days of receipt of the Exercise Notice 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 of the Exercise Price or the
        Warrant Shares within three Business Days of such disputed determination
        or
        arithmetic calculation being submitted to the Holder, then the Company shall,
        within two Business Days submit via facsimile (a) the disputed determination
        of
        the Exercise Price to an independent, reputable investment bank selected
        by the
        Company and approved by the Holder or (b) the disputed arithmetic calculation
        of
        the Warrant Shares to the Company’s independent, outside accountant. The Company
        shall cause at its expense the investment bank or the accountant, as the
        case
        may be, to perform the determinations or calculations and notify the Company
        and
        the Holder of the results no later than ten 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.

       

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

       

      15. TRANSFER. Subject
        to applicable law, this Warrant may be offered for sale, sold, transferred
        or
        assigned without the consent of the Company, except as may otherwise be required
        by Section 4(a) of the Securities Purchase Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      16. CERTAIN
        DEFINITIONS.
        For
        purposes of this Warrant, the following terms shall have the following
        meanings:

       

      (a) “Bloomberg”
means
        Bloomberg Financial Markets.

       

      (b) “Business
        Day”
means
        any day other than Saturday, Sunday or other day on which commercial banks
        in
        The City of New York are authorized or required by law to remain
        closed.

       

      (c) “Closing
        Bid Price”
and
        “Closing
        Sale Price”
means,
        for any security as of any date, the last closing bid price and last closing
        trade price, respectively, for such security on the Principal Market, as
        reported by Bloomberg, or, if the Principal Market begins to operate on an
        extended hours basis and does not designate the closing bid price or the
        closing
        trade price, as the case may be, then the last bid price or last trade price,
        respectively, of such security prior to 4:00 p.m., New York time, as reported
        by
        Bloomberg, or, if the Principal Market is not the principal securities exchange
        or trading market for such security, the last closing bid price or last trade
        price, respectively, of such security on the principal securities exchange
        or
        trading market where such security is listed or traded as reported by Bloomberg,
        or if the foregoing do not apply, the last closing bid price or last trade
        price, respectively, of such security in the over-the-counter market on the
        electronic bulletin board for such security as reported by Bloomberg, or,
        if no
        closing bid price or last trade price, respectively, is reported for such
        security by Bloomberg, the average of the bid prices, or the ask prices,
        respectively, of any market makers for such security as reported in the “pink
        sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If
        the Closing Bid Price or the Closing Sale Price cannot be calculated for
        a
        security on a particular date on any of the foregoing bases, the Closing
        Bid
        Price or the Closing Sale Price, as the case may be, of such security on
        such
        date shall be the fair market value as mutually determined by the Company
        and
        the Holder. If the Company and the Holder are unable to agree upon the fair
        market value of such security, then such dispute shall be resolved pursuant
        to
        Section 14. All such determinations to be appropriately adjusted for any
        stock
        dividend, stock split, stock combination or other similar transaction during
        the
        applicable calculation period.

       

      (d) “Common
        Stock”
means
        (i) the Company’s shares of Common Stock, par value $0.001 per share, and
        (ii) any share capital into which such Common Stock shall have been changed
        or any share capital resulting from a reclassification of such Common
        Stock.

       

      (e) “Common
        Stock Deemed Outstanding”
means,
        at any given time, the number of shares of Common Stock actually outstanding
        at
        such time, plus the number of shares of Common Stock deemed to be outstanding
        pursuant to Sections 2(a)(i) and 2(a)(ii) hereof regardless of whether the
        Options or Convertible Securities are actually exercisable at such time,
        but
        excluding any shares of Common Stock owned or held by or for the account
        of the
        Company or issuable upon exercise of the SPA Warrants.

       

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

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (g) “Dollar”,
        “US
        Dollar”
and
        “$”
each
        mean the lawful money of the United States.

       

      (h) “Eligible
        Market”
means
        the Principal Market, The New York Stock Exchange, Inc., the American Stock
        Exchange, The NASDAQ Global Market or The NASDAQ Global Select
        Market.

       

      (i) "Excluded
        Securities"
        means
        any Common Stock issued or issuable: (i) in connection with the Company’s 2006
        Stock Incentive Plan or 2001 Stock Option Plan; (ii) upon exercise of the
        Warrants; (iii) pursuant to a bona fide firm commitment underwritten public
        offering with a nationally recognized underwriter which generates gross proceeds
        to the Company in excess of $20,000,000 (other than an "at-the-market offering"
        as defined in Rule 415(a)(4) under the 1933 Act and "equity lines"); (iv)
        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; (v) in connection with any other
        strategic transaction or alliance the primary purpose of which is not to
        raise
        equity capital; and (vii) upon conversion or exercise of any Options or
        Convertible Securities which are outstanding on the day immediately preceding
        the Subscription Date, provided that the conversion or exercise price of
        such
        Options or Convertible Securities is not amended, modified or changed on
        or
        after the Subscription Date.

       

      (j) “Expiration
        Date”
means
        the date 60 months from the Closing Date or, if such date falls on a day
        other
        than a Business Day or on which trading does not take place on the Principal
        Market (a “Holiday”),
        the
        next date that is not a Holiday.

       

      (k) “Fundamental
        Transaction”
means
        that the Company shall, directly or indirectly, in one or more related
        transactions, (i) consolidate or merge with or into (whether or not the Company
        is the surviving corporation) another Person
        or
        Persons, if the holders of the Voting Stock (not including any shares of
        Voting
        Stock held by the Person or Persons making or party to, or associated or
        affiliated with the Persons making or party to, such consolidation or merger)
        immediately prior to such consolidation or merger shall hold or have the
        right
        to direct the voting of less than 50% of the Voting Stock or such voting
        securities of such other surviving Person immediately following such
        transaction,
        or
        (ii)
        sell, assign, transfer, convey or otherwise dispose of all or substantially
        all
        of the properties or assets of the Company to another Person, or (iii) allow
        another Person to make a purchase, tender or exchange offer that is accepted
        by
        the holders of more than the 50% of the outstanding shares of Voting Stock
        (not
        including any shares of Voting Stock held by the Person or Persons making
        or
        party to, or associated or affiliated with the Persons making or party to,
        such
        purchase, tender or exchange offer), or (iv) consummate a stock purchase
        agreement or other business combination (including, without limitation, a
        reorganization, recapitalization, spin-off or scheme of arrangement) with
        another Person whereby such other Person acquires more than the 50% of the
        outstanding shares of Voting Stock (not including any shares of Voting Stock
        held by the other Person or other Persons making or party to, or associated
        or
        affiliated with the other Persons making or party to, such stock purchase
        agreement or other business combination), (v) reorganize, recapitalize or
        reclassify its Common Stock, or (vi) any “person” or “group” (as these terms are
        used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or
        shall
        become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
        directly or indirectly, of 50% of the aggregate ordinary voting power
        represented by issued and outstanding Common Stock.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (l) “Options”
means
        any rights, warrants or options to subscribe for or purchase shares of Common
        Stock or Convertible Securities.

       

      (m) “Person”
means
        an individual, a limited liability company, a partnership, a joint venture,
        a
        corporation, a trust, an unincorporated organization, any other entity and
        a
        government or any department or agency thereof.

       

      (n) “Principal
        Market”
means
        The NASDAQ Capital Market.

       

      (o) “Required
        Holders”
means
        the holders of the SPA Warrants representing at least a majority of shares
        of
        Common Stock underlying the SPA Warrants then outstanding.

       

      (p) “Trading
        Day”
means
        any day on which the Common Stock is traded on the Principal Market, or,
        if the
        Principal Market is not the principal trading market for the Common Stock,
        then
        on the principal securities exchange or securities market on which the Common
        Stock is then traded; provided that “Trading Day” shall not include any day on
        which the Common Stock is scheduled to trade on such exchange or market for
        less
        than 4.5 hours or any day that the Common Stock is suspended from trading
        during
        the final hour of trading on such exchange or market (or if such exchange
        or
        market does not designate in advance the closing time of trading on such
        exchange or market, then during the hour ending at 4:00 p.m., New York
        time).

       

      (q) “Voting
        Stock”
of
        a
        Person means capital stock of such Person of the class or classes pursuant
        to
        which the holders thereof have the general voting power to elect, or the
        general
        power to appoint, at least a majority of the board of directors, managers
        or
        trustees of such Person (irrespective of whether or not at the time capital
        stock of any other class or classes shall have or might have voting power
        by
        reason of the happening of any contingency).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (r) “Weighted
        Average Price”
means,
        for any security as of any date, the dollar volume-weighted average price
        for
        such security on the Principal Market during the period beginning at 9:30:01
        a.m., New York City time, and ending at 4:00:00 p.m., New York City time,
        as
        reported by Bloomberg through its “Volume at Price” function or, if the
        foregoing does not apply, the dollar volume-weighted average price of such
        security in the over-the-counter market on the electronic bulletin board
        for
        such security during the period beginning at 9:30:01 a.m., New York City
        time,
        and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg,
        or, if
        no dollar volume-weighted average price is reported for such security by
        Bloomberg for such hours, the average of the highest closing bid price and
        the
        lowest closing ask price of any of the market makers for such security as
        reported in the “pink sheets” by Pink Sheets LLC (formerly the National
        Quotation Bureau, Inc.). If the Weighted Average Price cannot be calculated
        for
        such security on such date on any of the foregoing bases, the Weighted Average
        Price of such security on such date shall be the fair market value as mutually
        determined by the Company and the Required Holders. If the Company and the
        Required Holders are unable to agree upon the fair market value of the such
        security, then such dispute shall be resolved pursuant to Section 14 with
        the
        term “Weighted Average Price” being substituted for the term “Exercise Price.”
All such determinations shall be appropriately adjusted for any share dividend,
        share split or other similar transaction during such period.

       

      [Signature
        Page Follows]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF,
        the
        Company has caused this Warrant to Purchase Common Stock to be duly executed
        as
        of the Issuance Date set out above.

       

      
        
          
            	
                    AKEENA
                      SOLAR, INC.

                  
	 	 
	 	 
	
                    By:

                  	
                    /s/
                      Gary Effren

                  
	
                    Name:

                  	
                    Gary
                      Effren

                  
	
                    Title:

                  	
                    Chief
                      Financial Officer

                  


          


          
            
              
                 

              

              
              

            

            
              
              

              
                

              

            

            
              
              

              
              

            

          

        

      

       

      EXHIBIT
        A

       

      


      EXERCISE
        NOTICE

       

      TO
        BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

      WARRANT
        TO PURCHASE COMMON STOCK

      


      AKEENA
        SOLAR,
        INC.

       

      The
        undersigned holder hereby exercises the right to purchase _________________
        of
        the shares of Common Stock (“Warrant
        Shares”)
        of
Akeena
        Solar, Inc., a corporation organized under the laws of Delaware
        (the
“Company”),
        evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”).
        Capitalized terms used herein and not otherwise defined shall have the
        respective meanings set forth in the Warrant.

      


      1.
        Form
        of Exercise Price. The Holder intends that payment of the Exercise Price
        shall
        be made as:

      


      ____________ a
        “Cash
        Exercise”
        with
        respect to _________________ Warrant Shares; and/or

      


      ____________ a
        “Cashless
        Exercise”
        with
        respect to _______________ Warrant Shares.

      


      2.
        Payment of Exercise Price. In the event that the holder has elected a Cash
        Exercise with respect to some or all of the Warrant Shares to be issued pursuant
        hereto, the holder shall pay the Aggregate Exercise Price in the sum of
        $___________________ to the Company in accordance with the terms of the
        Warrant.

      


      3.
        Delivery of Warrant Shares. The Company shall deliver to the holder __________
        Warrant Shares in accordance with the terms of the Warrant.

      


      Date:
        _______________ __, ______

      


      ____________________________

      Name
        of
        Registered Holder

      

        
          	
                  By:

                	 
	 	
                  Name:

                
	 	
                  Title:

                


        

        

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          



      

      ACKNOWLEDGMENT

       

      The
        Company hereby acknowledges this Exercise Notice and hereby directs Empire
        Stock
        Transfer Inc to issue the above indicated number of shares of Common Stock
        in
        accordance with the Transfer Agent Instructions dated November 1, 2007 from
        the
        Company and acknowledged and agreed to by Empire Stock Transfer
        Inc.

       

      
        
          	
                  AKEENA
                    SOLAR, INC.

                
	 	 
	 	 
	
                  By:

                	 
	
                  Name:

                	 
	
                  Title: