THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO ESSENTIAL INNOVATIONS TECHNOLOGY CORP. THAT
SUCH REGISTRATION IS NOT REQUIRED.

     Right to Purchase up to 8,586,754 Shares of Common Stock of Essential
    Innovations Technology Corp. (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                                  Issue Date: March 2, 2006

ESSENTIAL INNOVATIONS TECHNOLOGY CORP., a corporation organized under the laws
of the State of Nevada (the "Company"), hereby certifies that, for value
received, LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company (as defined
herein) from and after the Issue Date of this Common Stock Purchase Warrant
(this "Warrant") and at any time or from time to time before 5:00 p.m., New York
time, through the close of business March 2, 2050 (the "Expiration Date"), up to
8,586,754 fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the applicable Exercise Price per share
(as defined below). The number and character of such shares of Common Stock and
the applicable Exercise Price per share are subject to adjustment as provided
herein.

As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

                  (a) The term "Company" shall include Essential Innovations
         Technology Corp. and any person or entity which shall succeed, or
         assume the obligations of, Essential Innovations Technology Corp.
         hereunder.

                  (b) The term "Common Stock" includes (i) the Company's Common
         Stock, par value $0.001 per share; and (ii) any other securities into
         which or for which any of the securities described in the preceding
         clause (i) may be converted or exchanged pursuant to a plan of
         recapitalization, reorganization, merger, sale of assets or otherwise.

                  (c) The term "Other Securities" refers to any stock (other
         than Common Stock) and other securities of the Company or any other
         person (corporate or otherwise) which the holder of the Warrant at any
         time shall be entitled to receive, or shall have received, on the
         exercise of the Warrant, in lieu of or in addition to Common Stock, or
         which at any time shall be issuable or shall have been issued in
         exchange for or in replacement of Common Stock or Other Securities
         pursuant to Section 4 or otherwise.

                  (d) The "Exercise Price" applicable under this Warrant shall
         be $0.001.

         1. Exercise of Warrant.

         1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as

<PAGE>

Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.

         1.2 Fair Market Value. For purposes hereof, the "Fair Market Value" of
a share of Common Stock as of a particular date (the "Determination Date") shall
mean:

                  (a) If the Company's Common Stock is traded on the American
         Stock Exchange or another national exchange or is quoted on the
         National or Capital Market of The Nasdaq Stock Market, Inc. ("Nasdaq"),
         then the closing or last sale price, respectively, reported for the
         last business day immediately preceding the Determination Date.

                  (b) If the Company's Common Stock is not traded on the
         American Stock Exchange or another national exchange or on the Nasdaq
         but is traded on the NASD Over The Counter Bulletin Board, then the
         mean of the average of the closing bid and asked prices reported for
         the last business day immediately preceding the Determination Date.

                  (c) Except as provided in clause (d) below, if the Company's
         Common Stock is not publicly traded, then as the Holder and the Company
         agree or in the absence of agreement by arbitration in accordance with
         the rules then in effect of the American Arbitration Association,
         before a single arbitrator to be chosen from a panel of persons
         qualified by education and training to pass on the matter to be
         decided.

                  (d) If the Determination Date is the date of a liquidation,
         dissolution or winding up, or any event deemed to be a liquidation,
         dissolution or winding up pursuant to the Company's charter, then all
         amounts to be payable per share to holders of the Common Stock pursuant
         to the charter in the event of such liquidation, dissolution or winding
         up, plus all other amounts to be payable per share in respect of the
         Common Stock in liquidation under the charter, assuming for the
         purposes of this clause (d) that all of the shares of Common Stock then
         issuable upon exercise of the Warrant are outstanding at the
         Determination Date.

         1.3 Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

         1.4 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of this Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

         1.5 Pro-Rated Issue. The Company hereby acknowledges and agrees that in
the event that the Holder advances US$2,000,000 pursuant to the US$2,000,000
Secured Term Note, but does not make any advances pursuant to the US$4,000,000
Secured Revolving Note, in each case on or before March 31, 2006, then on March
31, 2006 the Holder shall return this Warrant to the Company and the Company
shall issue to the Holder a new warrant dated as of March 2, 2006 entitling the
Holder to purchase from the Company from and after such Issue Date and at any
time or from time to time before 5:00 p.m., New York time, through the close of
business on the Expiration Date, up to 2,919,497 fully paid and nonassessable
shares of Common Stock, $0.001 par value per share, at $0.001 per share (the
"Pro-Rated Warrant"). The Holder acknowledges and agrees that in the event that,

                                      -2-
<PAGE>

on or before March 31, 2006, the Holder does not make any advances pursuant to
either the US$2,000,000 Secured Term Note or the US$4,000,000 Secured Revolving
Note, then the Holder shall return this Warrant to the Company.

         2. Procedure for Exercise.

         2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

         2.2      Exercise.

                  (a) Payment may be made either (i) in cash or by certified or
         official bank check payable to the order of the Company equal to the
         applicable aggregate Exercise Price, (ii) by delivery of this Warrant,
         or shares of Common Stock and/or Common Stock receivable upon exercise
         of this Warrant in accordance with the formula set forth in subsection
         (b) below, or (iii) by a combination of any of the foregoing methods,
         for the number of Common Shares specified in such Exercise Notice (as
         such exercise number shall be adjusted to reflect any adjustment in the
         total number of shares of Common Stock issuable to the Holder per the
         terms of this Warrant) and the Holder shall thereupon be entitled to
         receive the number of duly authorized, validly issued, fully-paid and
         non-assessable shares of Common Stock (or Other Securities) determined
         as provided herein.

                  (b) Notwithstanding any provisions herein to the contrary, if
         the Fair Market Value of one share of Common Stock is greater than the
         Exercise Price (at the date of calculation as set forth below), in lieu
         of exercising this Warrant for cash, the Holder may elect to receive
         shares equal to the value (as determined below) of this Warrant (or the
         portion thereof being exercised) by surrender of this Warrant at the
         principal office of the Company together with the properly endorsed
         Exercise Notice in which event the Company shall issue to the Holder a
         number of shares of Common Stock computed using the following formula:

         X=                         Y(A-B)
                                    ----------
                                        A

         Where X =                  the number of shares of Common Stock to be
                                    issued to the Holder

         Y =                        the number of shares of Common Stock
                                    purchasable under this Warrant or, if only a
                                    portion of this Warrant is being exercised,
                                    the portion of this Warrant being exercised
                                    (at the date of such calculation)

                                      -3-
<PAGE>

         A =                        the Fair Market Value of one share of the
                                    Company's Common Stock (at the date of such
                                    calculation)

         B =                        the Exercise Price per share (as adjusted
                                    to the date of such calculation)

         3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

         3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

         3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder.

         3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holder will be delivered to the Holder or the Trustee as contemplated by Section
3.2.

         4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock or any preferred stock issued by
the Company, (b) subdivide its outstanding shares of Common Stock, (c) combine
its outstanding shares of the Common Stock into a smaller number of shares of
the Common Stock, then, in each such event, the Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock
that the holder shall thereafter, on the exercise hereof as provided in Section
1, be entitled to receive shall be adjusted to a number determined by

                                      -4-
<PAGE>

multiplying the number of shares of Common Stock that would otherwise (but for
the provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise (taking into account the
provisions of this Section 4).

         5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder and any Warrant agent of the
Company (appointed pursuant to Section 11 hereof).

         6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

         7. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, a legal opinion from the Transferor's counsel (at
the Company's expense) that such transfer is exempt from the registration
requirements of applicable securities laws, the Company at its expense (but with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

         8. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         9. Registration Rights. The Holder has been granted certain
registration rights by the Company. These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and Holder dated as of
the date hereof, as the same may be amended, modified and/or supplemented from
time to time.

         10. Maximum Exercise. Notwithstanding anything herein to the contrary,
in no event shall the Holder be entitled to exercise any portion of this Warrant
in excess of that portion of this Warrant upon exercise of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially

                                      -5-
<PAGE>

owned through the ownership of the unexercised portion of the Warrant or the
unexercised or unconverted portion of any other security of the Holder subject
to a limitation on conversion analogous to the limitations contained herein) and
(2) the number of shares of Common Stock issuable upon the exercise of the
portion of this Warrant with respect to which the determination of this proviso
is being made, would result in beneficial ownership by the Holder and its
Affiliates of any amount greater than 4.99% of the then outstanding shares of
Common Stock (whether or not, at the time of such exercise, the Holder and its
Affiliates beneficially own more than 4.99% of the then outstanding shares of
Common Stock). For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G
thereunder, except as otherwise provided in clause (1) of the immediately
preceding sentence. The Holder may waive the limitations set forth herein by
sixty-one (61) days written notice to the Company and such limitations shall
automatically become null and void upon an Event of Default under and as defined
in the Security and Purchase Agreement dated as of the date hereof, by and among
the Company and the Holder (as amended, restated, modified or supplemented from
time to time, the "Security and Purchase Agreement"). As used herein, the term
"Affiliate" means any person or entity that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a person or entity, as such terms are used in and construed under Rule 144
under the Securities Act.

         11. Warrant Agent. The Company may, by written notice to the each
Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock
(or Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8 or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.

         12. Transfer on the Company's Books. Until this Warrant is transferred
on the books of the Company, the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

         13. Notices, Etc. All notices and other communications from the Company
to the Holder shall be mailed by first class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company in
writing by such Holder or, until any such Holder furnishes to the Company an
address, then to, and at the address of, the last Holder who has so furnished an
address to the Company.

         14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL
COURTS LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY
CHOOSE TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW
YORK. The individuals executing this Warrant on behalf of the Company agree to
submit to the jurisdiction of such courts and waive trial by jury. The
prevailing party shall be entitled to recover from the other party its
reasonable attorneys' fees and costs. In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of this Warrant. The headings in this Warrant are for purposes of reference

                                      -6-
<PAGE>

only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision hereof. The Company
acknowledges that legal counsel participated in the preparation of this Warrant
and, therefore, stipulates that the rule of construction that ambiguities are to
be resolved against the drafting party shall not be applied in the
interpretation of this Warrant to favour any party against the other party.

         15. No Shorting. Neither the Holder nor any Affiliate of the Holder
will directly engage in "short sales" of the Company's Common Stock as long as
the Notes (as defined in the Security and Purchase Agreement) are outstanding.

         IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.

                                         ESSENTIAL INNOVATIONS TECHNOLOGY CORP.
WITNESS

/s/ Stephen D. Holmes                    By: /s/ Jason McDiarmid
Holmes & Company                         Name: Jason McDiarmid
1880--1066 West Hastings Street          Title: President
Vancouver, British Columbia
V6E 3X1 Canada

                                      -7-
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise of Warrant)

TO: ESSENTIAL INNOVATIONS TECHNOLOGY CORP.
_________________________________________

_________________________________________


Attention:        Chief Financial Officer

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):

________   ________ shares of the common stock covered by such Warrant; or

________   the maximum number of shares of common stock covered by such Warrant
           pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is $_________.
Such payment takes the form of (check applicable box or boxes):

________   $__________ in lawful money of the United States; and/or

________   the cancellation of such portion of the attached Warrant as is
           exercisable for a total of _______  shares of Common  Stock (using a
           Fair Market Value of $_______ per share for purposes of this
           calculation); and/or

________   the cancellation of such number of shares of Common Stock as is
           necessary, in accordance with the formula set forth in Section 2.2,
           to exercise this Warrant with respect to the maximum number of shares
           of Common Stock purchasable pursuant to the cashless exercise
           procedure set forth in Section 2.

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _____________________________________ whose address is
______________________________________________________________________________.

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:__________________             _________________________________________
                                     (Signature must conform to name of holder
                                     as specified on the face of the Warrant)
                                     Address:  ___________________________
                                               ___________________________

                                      -8-
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading "Transferees" the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of Essential Innovations Technology Corp. into which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
Essential Innovations Technology Corp. with full power of substitution in the
premises.

                                               Percentage            Number
   Transferees              Address            Transferred         Transferred
   -----------              -------            -----------         -----------




Dated:   __________________________   __________________________________________
                                      (Signature must conform to name of holder
                                      as specified on the face of the Warrant)
                                      Address:  ________________________________
                                                ________________________________

                                      SIGNED IN THE PRESENCE OF:

                                      __________________________________________
                                      (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

___________________________________
(Name)