<PAGE>

                                                                    EXHIBIT 10.4

                            FORM OF SERIES M WARRANT

                  NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISEABLE
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, IN A GENERALLY ACCEPTABLE FORM, 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.

                        RAPTOR NETWORKS TECHNOLOGY, INC.

                        WARRANT TO PURCHASE COMMON STOCK


Warrant No.: _____
Number of Shares of Common Stock:
Date of Issuance: July 31, 2006 ("ISSUANCE DATE")


                  Raptor Networks Technology, Inc., a Colorado corporation, (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 the date of
the consummation of a Mandatory Conversion (as defined in the SPA Securities),
but not after 11:59 p.m., New York Time, on the Expiration Date (as defined
below), ______________ ( ) 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
15. 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 July 30, 2006 (the "SUBSCRIPTION DATE"), by and among the
Company and the investors (the "BUYERS") referred to therein (the "SECURITIES
PURCHASE AGREEMENT").





<PAGE>

                  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 the date of the consummation of a Mandatory Conversion in whole or in
part, by (i) delivery of a 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 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)). 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 first 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 third Business Day following the date on
which the Company has received all of the Exercise Delivery Documents (the
"SHARE DELIVERY DATE"), the Company shall (X) provided that the Transfer Agent
is participating in The Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock 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, deliver to be received no later than the Share Delivery Date,
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. Upon delivery of the Exercise Notice and Aggregate Exercise Price
referred to in clause (ii)(A) above or notification to the Company of a Cashless
Exercise referred to in Section 1(d), 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
of delivery of the certificates evidencing such Warrant Shares. If this Warrant
is submitted in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an 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
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 which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant. Notwithstanding any provision

                                      -2-




<PAGE>

of this Warrant to the contrary, no more than the Maximum Eligibility Number of
Warrant Shares shall be exercisable hereunder, except as a result of
anti-dilution adjustments as provided herein.

                           (b) EXERCISE PRICE. For purposes of this Warrant,
"EXERCISE PRICE" means $0.5054, subject to adjustment as provided herein.

                           (c) COMPANY'S FAILURE TO TIMELY DELIVER SECURITIES.
If the Company shall fail for any reason or for no reason to issue to the Holder
within five (5) Trading Days of receipt of the Exercise Delivery Documents, a
certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company's share
register or to credit the Holder's balance account with DTC for such number of
shares of Common Stock to which the Holder is entitled upon the Holder's
exercise of this Warrant, then, in addition to all other remedies available to
the Holder, the Company shall pay in cash to the Holder on each day after such
third Business Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1.5% of the product of (A) the sum of the
number of shares of Common Stock not issued to the Holder on a timely basis and
to which the Holder is entitled and (B) the Closing Sale Price of the shares of
Common Stock on the Trading Day immediately preceding the last possible date
which the Company could have issued such shares of Common Stock to the Holder
without violating Section 1(a). In addition, if within three (3) Trading Days
after the Company's receipt of the facsimile copy of a Exercise Notice 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 such 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 (a "BUY-IN"), 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 shares of Common
Stock) or credit such Holder's balance account with DTC shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a certificate or
certificates representing such shares of Common Stock or credit such Holder's
balance account with DTC and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Closing Bid Price on the date of exercise.

                           (d) CASHLESS EXERCISE. Notwithstanding anything
contained herein to the contrary, if a Registration Statement (as defined in the
Registration Rights Agreement) covering the Warrant Shares that are the subject
of the Exercise Notice (the "UNAVAILABLE WARRANT SHARES") is not available for
the resale of such Unavailable 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"):

                                      -3-




<PAGE>

                           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 Closing Sale 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) 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
12.

                           (f) Limitations on Exercises.

                                    (i) 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 Person (together with such
                           Person's affiliates) would beneficially own in excess
                           of 4.99% of the shares of Common Stock outstanding
                           immediately after giving effect to such exercise. For
                           purposes of the foregoing sentence, the aggregate
                           number of shares of Common Stock beneficially owned
                           by such Person 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 (A) exercise of the remaining,
                           unexercised portion of this Warrant beneficially
                           owned by such Person and its affiliates and (B)
                           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 (the "EXCHANGE ACT"). 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,
                           10-KSB, Form 10-Q, 10-QSB, Current Report on Form 8-K
                           or other public filing with the Securities and


                                      -4-




<PAGE>

                           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 or oral request of the Holder, the Company
                           shall within two (2) Business Day 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 Securities and 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. By written notice to the Company, the
                           Holder may increase or decrease the Maximum
                           Percentage to any other percentage not in excess of
                           9.99% specified in such notice; provided that (i) any
                           such increase will not be effective until the
                           sixty-first (61st) day after such notice is delivered
                           to the Company, and (ii) any such increase or
                           decrease will apply only to the Holder and not to any
                           other holder of SPA Warrants.

                                    (ii) PRINCIPAL MARKET REGULATION. The
                           Company shall not be obligated to issue any shares of
                           Common Stock upon exercise of this Warrant or
                           conversion of SPA Securities and no Buyer shall be
                           entitled to receive any shares of Common Stock if the
                           issuance of such shares of Common Stock would exceed
                           that number of shares of Common Stock which the
                           Company may issue upon exercise or conversion, as
                           applicable, of the SPA Warrants and SPA Securities or
                           otherwise without breaching the Company's obligations
                           under the rules or regulations of any applicable
                           Eligible Market (the "EXCHANGE CAP"), except that
                           such limitation shall not apply in the event that the
                           Company (A) obtains the approval of its shareholders
                           as required by the applicable rules of the Eligible
                           Market for issuances of shares of Common Stock in
                           excess of such amount or (B) obtains a written
                           opinion from outside counsel to the Company that such
                           approval is not required, which opinion shall be
                           reasonably satisfactory to the Required Holders.
                           Until such approval or written opinion is obtained,
                           no Buyer shall be issued in the aggregate, upon
                           exercise or conversion, as applicable, of any SPA
                           Warrants or SPA Securities, shares of Common Stock in
                           an amount greater than the product of the Exchange
                           Cap multiplied by a fraction, the numerator of which
                           is the total number of shares of Common Stock
                           underlying the SPA Warrants issued to such Buyer
                           pursuant to the Securities Purchase Agreement on the
                           Issuance Date and the denominator of which is the
                           aggregate number of shares of Common Stock underlying
                           the SPA Warrants issued to the Buyers pursuant to the
                           Securities Purchase Agreement on the Issuance Date
                           (with respect to each Buyer, the "EXCHANGE CAP
                           ALLOCATION"). In the event that any Buyer shall sell
                           or otherwise transfer any of such Buyer's SPA
                           Warrants, the transferee shall be allocated a pro
                           rata portion of such Buyer's Exchange Cap Allocation,
                           and the restrictions of the prior sentence shall


                                      -5-




<PAGE>

                           apply to such transferee with respect to the portion
                           of the Exchange Cap Allocation allocated to such
                           transferee. In the event that any holder of SPA
                           Warrants shall exercise all of such holder's SPA
                           Warrants into a number of shares of Common Stock
                           which, in the aggregate, is less than such holder's
                           Exchange Cap Allocation, then the difference between
                           such holder's Exchange Cap Allocation and the number
                           of shares of Common Stock actually issued to such
                           holder shall be allocated to the respective Exchange
                           Cap Allocations of the remaining holders of SPA
                           Warrants on a pro rata basis in proportion to the
                           shares of Common Stock underlying the SPA Warrants
                           then held by each such holder. In the event that the
                           Company is prohibited from issuing any Warrant Shares
                           for which an Exercise Notice has been received as a
                           result of the operation of this Section 1(f)(ii), the
                           Company shall pay cash in exchange for cancellation
                           of such Warrant Shares, at a price per Warrant Share
                           equal to the difference between the Closing Sale
                           Price and the Exercise Price as of the date of the
                           attempted exercise.

                  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 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 in the SPA Securities)) for a consideration per
share (the "NEW ISSUANCE PRICE") less than the Exercise Price (the "APPLICABLE
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 New Issuance Price. 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 shares 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


                                      -6-




<PAGE>

                           Option for such price per share. For purposes of this
                           Section 2(a)(i), the "lowest price per share for
                           which one share of shares 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 shares 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 shares 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 shares 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 shares 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


                                      -7-




<PAGE>

                           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 were 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)(iii) 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 or Convertible Security is issued
                           in connection with the issue or sale of other
                           securities of the Company, together comprising one
                           integrated transaction in which no specific
                           consideration is allocated to such Option or
                           Convertible Security by the parties thereto, the
                           Option or Convertible Security will be deemed to have
                           been issued for a consideration of $0.01. 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 publicly traded
                           securities, in which case the amount of consideration
                           received by the Company will be the Closing Sale
                           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
                           publicly traded 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 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.

                                      -8-




<PAGE>

                                    (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
SHARES 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) ADJUSTMENT UPON EVENT OF DEFAULT. Upon the
occurrence of an Event of Default (as defined in the SPA Securities), the
Exercise Price shall be reset to the lower of (A) the Exercise Price then in
effect and (B) the Average Market Price of the Common Stock; provided, however,
that no such adjustment pursuant to this Section 2(d) will increase the Exercise
Price. 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. Any adjustment under this
Section 2(d) shall become effective at the close of business on the date
immediately after such Event of Default.

                                      -9-




<PAGE>

                  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, 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, 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 shares 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 ("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


                                      -10-




<PAGE>

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. The Company shall not
enter into or be party to a Fundamental Transaction unless (i) the Successor
Entity assumes in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the provisions of
this Section (4)(b) pursuant to written agreements in form and substance
satisfactory to the Required Holders and approved by the Required Holders prior
to such Fundamental 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, an adjusted exercise price equal to
the value for the shares of Common Stock reflected by the terms of such
Fundamental Transaction, and exercisable for a corresponding number of shares of
capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and satisfactory to the
Required Holders and (ii) the Successor Entity (including its Parent Entity) is
a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental 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 this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation
of the Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "CORPORATE EVENT"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the
Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. Provision made pursuant to the preceding sentence shall be in a
form and substance reasonably satisfactory to the Required Holders. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.

                                      -11-




<PAGE>

                           (c) Notwithstanding the foregoing and the provisions
of Section 4(b) above, in the event of a Fundamental Transaction, if the Holder
has not exercised the Warrant in full prior to the consummation of the
Fundamental Transaction, then the Holder shall have the right to require such
Successor Entity to purchase this Warrant from the Holder by paying to the
Holder, simultaneously with the consummation of the Fundamental Transaction and
in lieu of the warrant referred to in Section 4(b), cash in an amount equal to
the value of the remaining unexercised portion of this Warrant on the date of
such consummation, which value shall be determined by use of the Black and
Scholes Option Pricing Model reflecting (i) 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 (ii) an expected volatility equal
to the greater of 60% and the 100 day volatility obtained from the HVT function
on Bloomberg.

                  5. 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.

                  6. NONCIRCUMVENTION. The Company hereby covenants and agrees
that the Company will not, by amendment of its Articles 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, prior to the Stockholder Approval Deadline (as defined in the
Securities Purchase Agreement), 100% of the number of shares of Common Stock as


                                      -12-




<PAGE>

shall from time to time be necessary to effect the exercise of the Series L SPA
Warrants then outstanding (without regard to any limitations on exercise) and,
from and after the Stockholder Approval Deadline, 130% 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). .

                  7. REISSUANCE OF WARRANTS.

                           (a) TRANSFER OF WARRANT. If this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company, 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 then 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 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 in customary form 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 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.

                                      -13-




<PAGE>

                  8. NOTICES. Whenever notice is required to be given under this
Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) 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) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail,
and certifying, 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 increase the exercise price
of any SPA Warrant or decrease the number of shares or class of stock obtainable
upon exercise of any SPA Warrant without the written consent of the Holder. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the SPA Warrants then outstanding.

                  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. 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.

                  12. 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 two 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


                                      -14-




<PAGE>

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.

                  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.

                  14. TRANSFER. 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 2(g) of the Securities Purchase Agreement.

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

                           (a) "AVERAGE MARKET PRICE" means the lesser of (i)
the arithmetic average of the Weighted Average Price of the Common Stock during
the twenty (20) consecutive Trading Day period commencing on the Trading Day
immediately after the date of the public disclosure of such Event of Default,
(ii) the arithmetic average of the Weighted Average Price of the Common Stock
during the five (5) consecutive Trading Day period beginning during the (20)
consecutive Trading Days period commencing on the Trading Day immediately after
the date of the public disclosure of such Event of Default and (iii) the
arithmetic average of the Weighted Average Price of the Common Stock during the
five (5) consecutive Trading Day period commencing on the sixteenth (16th)
Trading Day immediately he date of the public disclosure of such Event of
Default; provided, that all such determinations shall be appropriately adjusted
for any stock split, stock dividend, stock combination or other similar
transaction that proportionately decreases or increases the Common Stock during
such periods.

                           (b) "BLOOMBERG" means Bloomberg Financial Markets.

                           (c) "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.

                                      -15-




<PAGE>

                           (d) "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 4:00:00 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 12. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the
applicable calculation period.

                           (e) "COMMON STOCK" means (i) the Company's shares of
Common Stock, par value $.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.

                           (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) "ELIGIBLE MARKET" means the Principal Market, the
American Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Global
Market, The NASDAQ Global Select Market or The NASDAQ Capital Market.

                           (h) "EXPIRATION DATE" means the date sixty (60)
months after the Issuance 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.

                           (i) "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 (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 either
the outstanding shares of Common Stock (not including any shares of Common Stock


                                      -16-




<PAGE>

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 Common Stock (not including any
shares of Common 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), or (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), 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.

                           "MAXIMUM ELIGIBILITY NUMBER" means initially, zero,
and shall be increased successively each time that the Company elects a
Mandatory Conversion (as defined in the SPA Securities) by the number of shares
equal to 65% of the number of shares of Common Stock otherwise issuable upon
conversion of that portion of the SPA Securities being redeemed by the Company
pursuant to such Mandatory Conversion at such time.

                           (j) "OPTIONS" means any rights, warrants or options
to subscribe for or purchase shares of Common Stock or Convertible Securities.

                           (k) "PARENT ENTITY" of a Person means an entity that,
directly or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market capitalization as of the date of consummation of
the Fundamental Transaction.

                           (l) "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.

                           (m) "PRINCIPAL MARKET" means the OTC Bulletin Board.

                           (n) "REGISTRATION RIGHTS AGREEMENT" means that
certain Registration Rights Agreement dated as of the Issuance Date by and among
the Company and the Buyers.

                           (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) "SPA SECURITIES" means the Notes issued pursuant
to the Securities Purchase Agreement.

                           (q) "SUCCESSOR ENTITY" means the Person (or, if so
elected by the Required Holders, the Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction or the Person (or, if so elected by the
Required Holders, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

                                      -17-




<PAGE>

                           (r) "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 4:00:00 p.m., New York Time).

                           (s) "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 Time
(or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00:00 p.m., New York Time (or such other time
as the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its "Volume at Price" functions, 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 Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) 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 a security on a particular 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 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 12. All such
determinations are to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

                            [SIGNATURE PAGE FOLLOWS]


                                      -18-




<PAGE>


         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.


                                          RAPTOR NETWORKS TECHNOLOGY, INC.


                                          By:      /S/ THOMAS M. WITTENSCHLAEGER
                                                   -----------------------------
                                          Name:    Thomas M. Wittenschlaeger
                                          Title:   Chief Executive Officer




                                      -19-




<PAGE>


                                                                       EXHIBIT A
                                 EXERCISE NOTICE
            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                        RAPTOR NETWORKS TECHNOLOGY, INC.

         The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Raptor
Networks Technology, Inc., a Colorado corporation (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                      Social Security or Tax ID
                                                  Number of Holder


By:
   __________________________________
   Name:
   Title:






<PAGE>



                                 ACKNOWLEDGMENT


         The Company hereby acknowledges this Exercise Notice and hereby directs
First American Stock Transfer to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated July 31,
2006 from the Company and acknowledged and agreed to by First American Stock
Transfer.

                                              RAPTOR NETWORKS TECHNOLOGY, INC.



                                              By:   ____________________________
                                                    Name:
                                                    Title: