Filed by Automated Filing Services Inc. (604) 609-0244 - Snocone Systems Inc. - Exhibit 4.10





 REGISTRATION RIGHTS AGREEMENT 

                          REGISTRATION
  RIGHTS AGREEMENT (this “Agreement”), dated as of April 29,
  2005, by and among Snocone Systems Inc., a Nevada corporation with its headquarters
  located at 3131 Camino del Rio, N, Suite 1650, San Diego, CA 92108 (the “Company”),
  and each of the undersigned (together with their respective affiliates and any
  assignee or transferee of all of their respective rights hereunder, the “Initial
  Investors”).

                          WHEREAS:


                          A.
             In connection
  with the Securities Purchase Agreement by and among the parties hereto of even
  date herewith (the “Securities Purchase Agreement”), the Company
  has agreed, upon the terms and subject to the conditions contained therein,
  to issue and sell to the Initial Investors (i) secured convertible notes in
  the aggregate principal amount of up to Three Million Seven Hundred and Fifty
  Thousand Dollars ($3,750,000) (the “Notes”) that are convertible
  into shares of the Company’s common stock (the “Common Stock”),
  upon the terms and subject to the limitations and conditions set forth in such
  Notes and (ii) warrants (the “Warrants”) to acquire an aggregate
  of 2,628,505 shares of Common Stock, upon the terms and conditions and subject
  to the limitations and conditions set forth in the Warrants; and 

                          B.
             To induce
  the Initial Investors to execute and deliver the Securities Purchase Agreement,
  the Company has agreed to provide certain registration rights under the Securities
  Act of 1933, as amended, and the rules and regulations thereunder, or any similar
  successor statute (collectively, the “1933 Act”), and applicable
  state securities laws; 

                          NOW,
  THEREFORE, in consideration of the premises and the mutual covenants contained
  herein and other good and valuable consideration, the receipt and sufficiency
  of which are hereby acknowledged, the Company and each of the Initial Investors
  hereby agree as follows: 

                                                   1.           
  DEFINITIONS.

                                                                            a.
             As used
  in this Agreement, the following terms shall have the following meanings: 

                                                                                                     (i)           
  “Investors” means the Initial Investors and any transferee
  or assignee who agrees to become bound by the provisions of this Agreement in
  accordance with Section 9 hereof. 

                                                                                                     (ii)          
  “register,” “registered,” and “registration”
  refer to a registration effected by preparing and filing a Registration Statement
  or Statements in compliance with the 1933 Act and pursuant to Rule 415 under
  the 1933 Act or any successor rule providing for offering securities on a continuous
  basis (“Rule 415”), and the declaration or ordering of effectiveness
  of such Registration Statement by the United States Securities and Exchange
  Commission (the “SEC”). 

                                                                                                     (iii)         
  “Registrable Securities” means the Conversion Shares
  issued or issuable upon conversion or otherwise pursuant to the Notes and Additional
  Notes (as 









defined in the Securities Purchase Agreement) including, without limitation, Damages Shares (as defined in the Notes) issued or issuable pursuant to the Notes, shares of Common Stock issued or issuable in payment of the Standard Liquidated Damages
Amount (as defined in the Securities Purchase Agreement), shares issued or issuable in respect of interest or in redemption of the Notes in accordance with the terms thereof) and Warrant Shares issuable, upon exercise or otherwise pursuant to the
Warrants and Additional Warrants (as defined in the Securities Purchase Agreement), and any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing. 

                                                                                                     (iv)          
  “Registration Statement” means a registration statement
  of the Company under the 1933 Act. 

                                                                            b.
             Capitalized
  terms used herein and not otherwise defined herein shall have the respective
  meanings set forth in the Securities Purchase Agreement or the Convertible Note.


                                                   2.           
  REGISTRATION.

                                                                            a.           
  Mandatory Registration. The Company shall prepare, and, on
  or prior to thirty (30) days from the date of Closing (as defined in the Securities
  Purchase Agreement) (the “Filing Date”), file with the SEC
  a Registration Statement on Form S-3 (or, if Form S-3 is not then available,
  on such form of Registration Statement as is then available to effect a registration
  of the Registrable Securities, subject to the consent of the Initial Investors,
  which consent will not be unreasonably withheld) covering the resale of the
  Registrable Securities underlying the Notes and Warrants issued or issuable
  pursuant to the Securities Purchase Agreement, which Registration Statement,
  to the extent allowable under the 1933 Act and the rules and regulations promulgated
  thereunder (including Rule 416), shall state that such Registration Statement
  also covers such indeterminate number of additional shares of Common Stock as
  may become issuable upon conversion of or otherwise pursuant to the Notes and
  exercise of the Warrants to prevent dilution resulting from stock splits, stock
  dividends or similar transactions. The number of shares of Common Stock initially
  included in such Registration Statement shall be no less than an amount equal
  to two (2) times the sum of the number of Conversion Shares that are then issuable
  upon conversion of the Notes and Additional Notes (based on the Variable Conversion
  Price as would then be in effect and assuming the Variable Conversion Price
  is the Conversion Price at such time), and the number of Warrant Shares that
  are then issuable upon exercise of the Warrants, without regard to any limitation
  on the Investor’s ability to convert the Notes or exercise the Warrants.
  The Company acknowledges that the number of shares initially included in the
  Registration Statement represents a good faith estimate of the maximum number
  of shares issuable upon conversion of the Notes and upon exercise of the Warrants.

                                                                            b.           
  Underwritten Offering. If any offering pursuant to a Registration
  Statement pursuant to Section 2(a) hereof involves an underwritten offering,
  the Investors who hold a majority in interest of the Registrable Securities
  subject to such underwritten offering, with the consent of a majority-in-interest
  of the Initial Investors, shall have the right to select one legal counsel and
  an investment banker or bankers and manager or managers to administer the 

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offering, which investment banker or bankers or manager or managers shall be reasonably satisfactory to the Company. 

                                                                            c.           
  Payments by the Company. The Company shall use its best efforts
  to obtain effectiveness of the Registration Statement as soon as practicable.
  If (i) the Registration Statement(s) covering the Registrable Securities required
  to be filed by the Company pursuant to Section 2(a) hereof is not filed by the
  Filing Date or declared effective by the SEC on or prior to one hundred and
  twenty (120) days from the date of Closing (as defined in the Securities Purchase
  Agreement), or (ii) after the Registration Statement has been declared effective
  by the SEC, sales of all of the Registrable Securities cannot be made pursuant
  to the Registration Statement, or (iii) the Common Stock is not listed or included
  for quotation on the Nasdaq National Market (“Nasdaq”), the
  Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York
  Stock Exchange (the “NYSE”) or the American Stock Exchange
  (the “AMEX”) after being so listed or included for quotation,
  or (iv) the Common Stock ceases to be traded on the Over-the-Counter Bulletin
  Board (the “OTCBB”) or any equivalent replacement exchange
  prior to being listed or included for quotation on one of the aforementioned
  markets, provided that any such delay is not caused by the Investors’
  failure to satisfy their obligations under Section 4, then the Company will
  make payments to the Investors in such amounts and at such times as shall be
  determined pursuant to this Section 2(c) as partial relief for the damages to
  the Investors by reason of any such delay in or reduction of their ability to
  sell the Registrable Securities (which remedy shall not be exclusive of any
  other remedies available at law or in equity). The Company shall pay to each
  holder of the Notes or Registrable Securities an amount equal to the then outstanding
  principal amount of the Notes (and, in the case of holders of Registrable Securities,
  the principal amount of Notes from which such Registrable Securities were converted)
  (“Outstanding Principal Amount”), multiplied by the Applicable
  Percentage (as defined below) times the sum of (as applicable): (i) the number
  of months (prorated for partial months) after the Filing Date or the end of
  the aforementioned one hundred and twenty (120) day period and prior to the
  date the Registration Statement is declared effective by the SEC, provided,
  however, that there shall be excluded from such period any delays which are
  solely attributable to changes required by the Investors in the Registration
  Statement with respect to information relating to the Investors, including,
  without limitation, changes to the plan of distribution, or to the failure of
  the Investors to conduct their review of the Registration Statement pursuant
  to Section 3(h) below in a reasonably prompt manner; (ii) the number of months
  (prorated for partial months) that sales of all of the Registrable Securities
  cannot be made pursuant to the Registration Statement after the Registration
  Statement has been declared effective (including, without limitation, when sales
  cannot be made by reason of the Company’s failure to properly supplement
  or amend the prospectus included therein in accordance with the terms of this
  Agreement, but excluding any days during an Allowed Delay (as defined in Section
  3(f)); and (iii) the number of months (prorated for partial months) that the
  Common Stock is not listed or included for quotation on the OTCBB, Nasdaq, Nasdaq
  SmallCap, NYSE or AMEX or that trading thereon is halted after the Registration
  Statement has been declared effective. The term “Applicable Percentage”
  means two hundredths (.02). (For example, if the Registration Statement becomes
  effective one (1) month after the end of such one hundred and twenty (120) day
  period, the Company would pay $5,000 for each $250,000 of Outstanding
  Principal Amount. If thereafter, sales could not be made pursuant to the Registration
  Statement for an additional period of one (1) month, the Company would pay an
  additional $5,000 for each $250,000 of Outstanding Principal Amount.)
  Such amounts shall be paid in cash or, at the Company’s 

 3 









option, in shares of Common Stock priced at the Conversion Price (as defined in the Notes) on such payment date.

                                                                            d.           
  Piggy-Back Registrations. Subject to the last sentence of
  this Section 2(d), if at any time prior to the expiration of the Registration
  Period (as hereinafter defined) the Company shall determine to file with the
  SEC a Registration Statement relating to an offering for its own account or
  the account of others under the 1933 Act of any of its equity securities (other
  than on Form S-4 or Form S-8 or their then equivalents relating to equity securities
  to be issued solely in connection with any acquisition of any entity or business
  or equity securities issuable in connection with stock option or other bona
  fide, employee benefit plans), the Company shall send to each Investor
  who is entitled to registration rights under this Section 2(d) written notice
  of such determination and, if within fifteen (15) days after the effective date
  of such notice, such Investor shall so request in writing, the Company shall
  include in such Registration Statement all or any part of the Registrable Securities
  such Investor requests to be registered, except that if, in connection with
  any underwritten public offering for the account of the Company the managing
  underwriter(s) thereof shall impose a limitation on the number of shares of
  Common Stock which may be included in the Registration Statement because, in
  such underwriter(s)’ judgment, marketing or other factors dictate such
  limitation is necessary to facilitate public distribution, then the Company
  shall be obligated to include in such Registration Statement only such limited
  portion of the Registrable Securities with respect to which such Investor has
  requested inclusion hereunder as the underwriter shall permit. Any exclusion
  of Registrable Securities shall be made pro rata among the Investors seeking
  to include Registrable Securities in proportion to the number of Registrable
  Securities sought to be included by such Investors; provided, however,
  that the Company shall not exclude any Registrable Securities unless the Company
  has first excluded all outstanding securities, the holders of which are not
  entitled to inclusion of such securities in such Registration Statement or are
  not entitled to pro rata inclusion with the Registrable Securities; and provided,
  further, however, that, after giving effect to the immediately
  preceding proviso, any exclusion of Registrable Securities shall be made pro
  rata with holders of other securities having the right to include such securities
  in the Registration Statement other than holders of securities entitled to inclusion
  of their securities in such Registration Statement by reason of demand registration
  rights. No right to registration of Registrable Securities under this Section
  2(d) shall be construed to limit any registration required under Section 2(a)
  hereof. If an offering in connection with which an Investor is entitled to registration
  under this Section 2(d) is an underwritten offering, then each Investor whose
  Registrable Securities are included in such Registration Statement shall, unless
  otherwise agreed by the Company, offer and sell such Registrable Securities
  in an underwritten offering using the same underwriter or underwriters and,
  subject to the provisions of this Agreement, on the same terms and conditions
  as other shares of Common Stock included in such underwritten offering. Notwithstanding
  anything to the contrary set forth herein, the registration rights of the Investors
  pursuant to this Section 2(d) shall only be available in the event the Company
  fails to timely file, obtain effectiveness or maintain effectiveness of any
  Registration Statement to be filed pursuant to Section 2(a) in accordance with
  the terms of this Agreement. 

                                                                            e.           
  Eligibility for Form S-3, SB-2 or S-1; Conversion to Form S-3.
  The Company represents and warrants that it meets the requirements for the use
  of Form S-3, SB-2 or S-1 for registration of the sale by the Initial Investors
  and any other Investors of the Registrable Securities. The Company agrees to
  file all reports required to be filed by the 

 4 









Company with the SEC in a timely manner so as to remain eligible or become eligible, as the case may be, and thereafter to maintain its eligibility, for the use of Form S-3. If the Company is not currently eligible to use Form S-3, not later than
five (5) business days after the Company first meets the registration eligibility and transaction requirements for the use of Form S-3 (or any successor form) for registration of the offer and sale by the Initial Investors and any other Investors of
Registrable Securities, the Company shall file a Registration Statement on Form S-3 (or such successor form) with respect to the Registrable Securities covered by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed
pursuant to Section 2(a) (and include in such Registration Statement on Form S-3 the information required by Rule 429 under the 1933 Act) or convert the Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed pursuant to
Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933 Act and cause such Registration Statement (or such amendment) to be declared effective no later than sixty (60) days after filing. In the event of a breach by the Company of the
provisions of this Section 2(e), the Company will be required to make payments pursuant to Section 2(c) hereof. 

                                                   3.           
  OBLIGATIONS OF THE COMPANY.

                          In
  connection with the registration of the Registrable Securities, the Company
  shall have the following obligations: 

                                                                            a.           
  The Company shall prepare promptly, and file with the SEC not later than
  the Filing Date, a Registration Statement with respect to the number of Registrable
  Securities provided in Section 2(a), and thereafter use its best efforts to
  cause such Registration Statement relating to Registrable Securities to become
  effective as soon as possible after such filing but in no event later than one
  hundred and twenty (120) days from the date of Closing), and keep the Registration
  Statement effective pursuant to Rule 415 at all times until such date as is
  the earlier of (i) the date on which all of the Registrable Securities have
  been sold and (ii) the date on which the Registrable Securities (in the opinion
  of counsel to the Initial Investors) may be immediately sold to the public without
  registration or restriction (including, without limitation, as to volume by
  each holder thereof) under the 1933 Act (the “Registration Period”),
  which Registration Statement (including any amendments or supplements thereto
  and prospectuses contained therein) shall not contain any untrue statement of
  a material fact or omit to state a material fact required to be stated therein,
  or necessary to make the statements therein not misleading. 

                                                                            b.           
  The Company shall prepare and file with the SEC such amendments (including
  post-effective amendments) and supplements to the Registration Statements and
  the prospectus used in connection with the Registration Statements as may be
  necessary to keep the Registration Statements effective at all times during
  the Registration Period, and, during such period, comply with the provisions
  of the 1933 Act with respect to the disposition of all Registrable Securities
  of the Company covered by the Registration Statements until such time as all
  of such Registrable Securities have been disposed of in accordance with the
  intended methods of disposition by the seller or sellers thereof as set forth
  in the Registration Statements. In the event the number of shares available
  under a Registration Statement filed pursuant to this Agreement is insufficient
  to cover all of the Registrable Securities issued or issuable upon conversion
  of the Notes and exercise of the Warrants, the Company shall amend 

 5 









the Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within fifteen
(15) days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably elects to rely). The Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the filing thereof, but in any event within thirty (30) days after the date on which the Company reasonably first determines (or reasonably should have determined) the need
therefor. The provisions of Section 2(c) above shall be applicable with respect to such obligation, with the one hundred and twenty (120) days running from the day the Company reasonably first determines (or reasonably should have determined) the
need therefor. 

                                                                            c.
             The Company
  shall furnish to each Investor whose Registrable Securities are included in
  a Registration Statement and its legal counsel (i) promptly (but in no event
  more than two (2) business days) after the same is prepared and publicly distributed,
  filed with the SEC, or received by the Company, one copy of each Registration
  Statement and any amendment thereto, each preliminary prospectus and prospectus
  and each amendment or supplement thereto, and, in the case of the Registration
  Statement referred to in Section 2(a), each letter written by or on behalf of
  the Company to the SEC or the staff of the SEC, and each item of correspondence
  from the SEC or the staff of the SEC, in each case relating to such Registration
  Statement (other than any portion of any thereof which contains information
  for which the Company has sought confidential treatment), and (ii) promptly
  (but in no event more than two (2) business days) after the Registration Statement
  is declared effective by the SEC, such number of copies of a prospectus, including
  a preliminary prospectus, and all amendments and supplements thereto and such
  other documents as such Investor may reasonably request in order to facilitate
  the disposition of the Registrable Securities owned by such Investor. The Company
  will immediately notify each Investor by facsimile of the effectiveness of each
  Registration Statement or any post-effective amendment. The Company will promptly
  (but in no event more than five (5) business days) respond to any and all comments
  received from the SEC (which comments shall promptly be made available to the
  Investors upon request), with a view towards causing each Registration Statement
  or any amendment thereto to be declared effective by the SEC as soon as practicable,
  shall promptly file an acceleration request as soon as practicable (but in no
  event more than two (2) business days) following the resolution or clearance
  of all SEC comments or, if applicable, following notification by the SEC that
  any such Registration Statement or any amendment thereto will not be subject
  to review and shall promptly file with the SEC a final prospectus as soon as
  practicable (but in no event more than two (2) business days) following receipt
  by the Company from the SEC of an order declaring the Registration Statement
  effective. In the event of a breach by the Company of the provisions of this
  Section 3(c), the Company will be required to make payments pursuant to Section
  2(c) hereof. 

                                                                            d.           
  The Company shall use reasonable efforts to (i) register and qualify the
  Registrable Securities covered by the Registration Statements under such other
  securities or “blue sky” laws of such jurisdictions in the United
  States as the Investors who hold a majority in interest of the Registrable Securities
  being offered reasonably request, (ii) prepare and file in those jurisdictions
  such amendments (including post-effective amendments) and supplements to such
  registrations and qualifications as may be necessary to maintain the 

 6 









effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such jurisdiction,
(d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its charter or bylaws, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and
its shareholders. 

                                                                            e.           
  In the event Investors who hold a majority-in-interest of the Registrable
  Securities being offered in the offering (with the approval of a majority-in-interest
  of the Initial Investors) select underwriters for the offering, the Company
  shall enter into and perform its obligations under an underwriting agreement,
  in usual and customary form, including, without limitation, customary indemnification
  and contribution obligations, with the underwriters of such offering. 

                                                                            f.
             As promptly
  as practicable after becoming aware of such event, the Company shall notify
  each Investor of the happening of any event, of which the Company has knowledge,
  as a result of which the prospectus included in any Registration Statement,
  as then in effect, includes an untrue statement of a material fact or omission
  to state a material fact required to be stated therein or necessary to make
  the statements therein not misleading, and use its best efforts promptly to
  prepare a supplement or amendment to any Registration Statement to correct such
  untrue statement or omission, and deliver such number of copies of such supplement
  or amendment to each Investor as such Investor may reasonably request; provided
  that, for not more than ten (10) consecutive trading days (or a total of not
  more than twenty (20) trading days in any twelve (12) month period), the Company
  may delay the disclosure of material non-public information concerning the Company
  (as well as prospectus or Registration Statement updating) the disclosure of
  which at the time is not, in the good faith opinion of the Company, in the best
  interests of the Company (an “Allowed Delay”); provided,
  further, that the Company shall promptly (i) notify the Investors in writing
  of the existence of (but in no event, without the prior written consent of an
  Investor, shall the Company disclose to such investor any of the facts or circumstances
  regarding) material non-public information giving rise to an Allowed Delay and
  (ii) advise the Investors in writing to cease all sales under such Registration
  Statement until the end of the Allowed Delay. Upon expiration of the Allowed
  Delay, the Company shall again be bound by the first sentence of this Section
  3(f) with respect to the information giving rise thereto. 

                                                                            g.
             The Company
  shall use its best efforts to prevent the issuance of any stop order or other
  suspension of effectiveness of any Registration Statement, and, if such an order
  is issued, to obtain the withdrawal of such order at the earliest possible moment
  and to notify each Investor who holds Registrable Securities being sold (or,
  in the event of an underwritten offering, the managing underwriters) of the
  issuance of such order and the resolution thereof. 

 7 





                                                                            h.
             The Company
  shall permit a single firm of counsel designated by the Initial Investors to
  review such Registration Statement and all amendments and supplements thereto
  (as well as all requests for acceleration or effectiveness thereof) a reasonable
  period of time prior to their filing with the SEC, and not file any document
  in a form to which such counsel reasonably objects and will not request acceleration
  of such Registration Statement without prior notice to such counsel. The sections
  of such Registration Statement covering information with respect to the Investors,
  the Investor’s beneficial ownership of securities of the Company or the
  Investors intended method of disposition of Registrable Securities shall conform
  to the information provided to the Company by each of the Investors. 

                                                                            i.
             The Company
  shall make generally available to its security holders as soon as practicable,
  but not later than ninety (90) days after the close of the period covered thereby,
  an earnings statement (in form complying with the provisions of Rule 158 under
  the 1933 Act) covering a twelve-month period beginning not later than the first
  day of the Company’s fiscal quarter next following the effective date
  of the Registration Statement. 

                                                                            j.
             At the
  request of any Investor, the Company shall furnish, on the date that Registrable
  Securities are delivered to an underwriter, if any, for sale in connection with
  any Registration Statement or, if such securities are not being sold by an underwriter,
  on the date of effectiveness thereof (i) an opinion, dated as of such date,
  from counsel representing the Company for purposes of such Registration Statement,
  in form, scope and substance as is customarily given in an underwritten public
  offering, addressed to the underwriters, if any, and the Investors and (ii)
  a letter, dated such date, from the Company’s independent certified public
  accountants in form and substance as is customarily given by independent certified
  public accountants to underwriters in an underwritten public offering, addressed
  to the underwriters, if any, and the Investors. 

                                                                            k.
             The Company
  shall make available for inspection by (i) any Investor, (ii) any underwriter
  participating in any disposition pursuant to a Registration Statement, (iii)
  one firm of attorneys and one firm of accountants or other agents retained by
  the Initial Investors, (iv) one firm of attorneys and one firm of accountants
  or other agents retained by all other Investors, and (v) one firm of attorneys
  retained by all such underwriters (collectively, the “Inspectors”)
  all pertinent financial and other records, and pertinent corporate documents
  and properties of the Company, including without limitation, records of conversions
  by other holders of convertible securities issued by the Company and the issuance
  of stock to such holders pursuant to the conversions (collectively, the “Records”),
  as shall be reasonably deemed necessary by each Inspector to enable each Inspector
  to exercise its due diligence responsibility, and cause the Company’s
  officers, directors and employees to supply all information which any Inspector
  may reasonably request for purposes of such due diligence; provided,
  however, that each Inspector shall hold in confidence and shall not make
  any disclosure (except to an Investor) of any Record or other information which
  the Company determines in good faith to be confidential, and of which determination
  the Inspectors are so notified, unless (a) the disclosure of such Records is
  necessary to avoid or correct a misstatement or omission in any Registration
  Statement, (b) the release of such Records is ordered pursuant to a subpoena
  or other order from a court or government body of competent jurisdiction, or
  (c) the information in such Records has been made generally available to the
  public other than by disclosure in violation of this or any other agreement.
  The Company shall not be required to 

 8 









disclose any confidential information in such Records to any Inspector until and unless such Inspector shall have entered into confidentiality agreements (in form and substance satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to
the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the
Company and any Investor) shall be deemed to limit the Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

                                                                            l.
             The Company
  shall hold in confidence and not make any disclosure of information concerning
  an Investor provided to the Company unless (i) disclosure of such information
  is necessary to comply with federal or state securities laws, (ii) the disclosure
  of such information is necessary to avoid or correct a misstatement or omission
  in any Registration Statement, (iii) the release of such information is ordered
  pursuant to a subpoena or other order from a court or governmental body of competent
  jurisdiction, or (iv) such information has been made generally available to
  the public other than by disclosure in violation of this or any other agreement.
  The Company agrees that it shall, upon learning that disclosure of such information
  concerning an Investor is sought in or by a court or governmental body of competent
  jurisdiction or through other means, give prompt notice to such Investor prior
  to making such disclosure, and allow the Investor, at its expense, to undertake
  appropriate action to prevent disclosure of, or to obtain a protective order
  for, such information. 

                                                                            m.
             The Company
  shall (i) cause all the Registrable Securities covered by the Registration Statement
  to be listed on each national securities exchange on which securities of the
  same class or series issued by the Company are then listed, if any, if the listing
  of such Registrable Securities is then permitted under the rules of such exchange,
  or (ii) to the extent the securities of the same class or series are not then
  listed on a national securities exchange, secure the designation and quotation,
  of all the Registrable Securities covered by the Registration Statement on Nasdaq
  or, if not eligible for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq
  or Nasdaq SmallCap, on the OTCBB and, without limiting the generality of the
  foregoing, to arrange for at least two market makers to register with the National
  Association of Securities Dealers, Inc. (“NASD”) as such
  with respect to such Registrable Securities. 

                                                                            n.
             The Company
  shall provide a transfer agent and registrar, which may be a single entity,
  for the Registrable Securities not later than the effective date of the Registration
  Statement. 

                                                                            o.
             The Company
  shall cooperate with the Investors who hold Registrable Securities being offered
  and the managing underwriter or underwriters, if any, to facilitate the timely
  preparation and delivery of certificates (not bearing any restrictive legends)
  representing Registrable Securities to be offered pursuant to a Registration
  Statement and enable such certificates to be in such denominations or amounts,
  as the case may be, as the managing underwriter or underwriters, if any, or
  the Investors may reasonably request and registered in such names as the managing
  underwriter or underwriters, if any, or the Investors may request, and, within
  three (3) business days after a Registration Statement which includes Registrable


 9 









Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Investors whose Registrable Securities
are included in such Registration Statement) an instruction in the form attached hereto as Exhibit 1 and an opinion of such counsel in the form attached hereto as Exhibit 2. 

                                                                            p.
             At the
  request of the holders of a majority-in-interest of the Registrable Securities,
  the Company shall prepare and file with the SEC such amendments (including post-effective
  amendments) and supplements to a Registration Statement and any prospectus used
  in connection with the Registration Statement as may be necessary in order to
  change the plan of distribution set forth in such Registration Statement. 

                                                                            q.
             From and
  after the date of this Agreement, the Company shall not, and shall not agree
  to, allow the holders of any securities of the Company to include any of their
  securities in any Registration Statement under Section 2(a) hereof or any amendment
  or supplement thereto under Section 3(b) hereof without the consent of the holders
  of a majority-in-interest of the Registrable Securities. 

                                                                            r.
             The Company
  shall take all other reasonable actions necessary to expedite and facilitate
  disposition by the Investors of Registrable Securities pursuant to a Registration
  Statement. 

                                                   4.           
  OBLIGATIONS OF THE INVESTORS.

                          In
  connection with the registration of the Registrable Securities, the Investors
  shall have the following obligations: 

                                                                            a.
             It shall
  be a condition precedent to the obligations of the Company to complete the registration
  pursuant to this Agreement with respect to the Registrable Securities of a particular
  Investor that such Investor shall furnish to the Company such information regarding
  itself, the Registrable Securities held by it and the intended method of disposition
  of the Registrable Securities held by it as shall be reasonably required to
  effect the registration of such Registrable Securities and shall execute such
  documents in connection with such registration as the Company may reasonably
  request. At least three (3) business days prior to the first anticipated filing
  date of the Registration Statement, the Company shall notify each Investor of
  the information the Company requires from each such Investor.

                                                                            b.           
  Each Investor, by such Investor’s acceptance of the Registrable Securities,
  agrees to cooperate with the Company as reasonably requested by the Company
  in connection with the preparation and filing of the Registration Statements
  hereunder, unless such Investor has notified the Company in writing of such
  Investor’s election to exclude all of such Investor’s Registrable
  Securities from the Registration Statements. 

                                                                            c.
             In the
  event Investors holding a majority-in-interest of the Registrable Securities
  being registered (with the approval of the Initial Investors) determine to engage
  the services of an underwriter, each Investor agrees to enter into and perform
  such Investor’s obligations under an underwriting agreement, in usual
  and customary form, including, without limitation, customary indemnification
  and contribution obligations, with the managing 

 10 









underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless such Investor has notified the Company in writing of such Investor’s
election to exclude all of such Investor’s Registrable Securities from such Registration Statement. 

                                                                            d.
             Each Investor
  agrees that, upon receipt of any notice from the Company of the happening of
  any event of the kind described in Section 3(f) or 3(g), such Investor will
  immediately discontinue disposition of Registrable Securities pursuant to the
  Registration Statement covering such Registrable Securities until such Investor’s
  receipt of the copies of the supplemented or amended prospectus contemplated
  by Section 3(f) or 3(g) and, if so directed by the Company, such Investor shall
  deliver to the Company (at the expense of the Company) or destroy (and deliver
  to the Company a certificate of destruction) all copies in such Investor’s
  possession, of the prospectus covering such Registrable Securities current at
  the time of receipt of such notice. 

                                                                            e.
             No Investor
  may participate in any underwritten registration hereunder unless such Investor
  (i) agrees to sell such Investor’s Registrable Securities on the basis
  provided in any underwriting arrangements in usual and customary form entered
  into by the Company, (ii) completes and executes all questionnaires, powers
  of attorney, indemnities, underwriting agreements and other documents reasonably
  required under the terms of such underwriting arrangements, and (iii) agrees
  to pay its pro rata share of all underwriting discounts and commissions and
  any expenses in excess of those payable by the Company pursuant to Section 5
  below. 

                                                   5.           
  EXPENSES OF REGISTRATION.

                          All
  reasonable expenses, other than underwriting discounts and commissions, incurred
  in connection with registrations, filings or qualifications pursuant to Sections
  2 and 3, including, without limitation, all registration, listing and qualification
  fees, printers and accounting fees, the fees and disbursements of counsel for
  the Company, and the reasonable fees and disbursements of one counsel selected
  by the Initial Investors pursuant to Sections 2(b) and 3(h) hereof shall be
  borne by the Company. 

                                                   6.           
  INDEMNIFICATION.

                          In
  the event any Registrable Securities are included in a Registration Statement
  under this Agreement: 

                                                                            a.
             To the
  extent permitted by law, the Company will indemnify, hold harmless and defend
  (i) each Investor who holds such Registrable Securities, (ii) the directors,
  officers, partners, employees, agents and each person who controls any Investor
  within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as
  amended (the “1934 Act”), if any, (iii) any underwriter (as
  defined in the 1933 Act) for the Investors, and (iv) the directors, officers,
  partners, employees and each person who controls any such underwriter within
  the meaning of the 1933 Act or the 1934 Act, if any (each, an “Indemnified
  Person”), against any joint or several losses, claims, damages, liabilities
  or expenses (collectively, together with actions, proceedings or inquiries by
  any regulatory or self-regulatory organization, whether 

 11 









commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented, such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior
to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. 

                                                                            b.           
  In connection with any Registration Statement in which an Investor is participating,
  each such Investor agrees severally and not jointly to indemnify, hold harmless
  and defend, to the same extent and in the same manner set forth in Section 6(a),
  the Company, each of its directors, each of its officers who signs the Registration
  Statement, each person, if any, who controls the Company within the meaning
  of the 1933 Act or the 1934 Act, any underwriter and any other shareholder selling
  securities pursuant to the Registration Statement or any of its directors or
  officers or any person who controls such shareholder or underwriter within the
  meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified
  Person, an “Indemnified Party”), against any Claim to which
  any of them may become subject, under the 1933 Act, the 1934 Act or otherwise,
  insofar as such Claim arises out of or is based upon any Violation by such Investor,
  in each case to the extent (and only to the 

 12 









extent) that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and subject to Section 6(c) such Investor will
reimburse any legal or other expenses (promptly as such expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Agreement (including this Section 6(b) and Section 7) for only that amount as does not exceed the net proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by
the Investors pursuant to Section 9. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 

                                                                            c.
             Promptly
  after receipt by an Indemnified Person or Indemnified Party under this Section
  6 of notice of the commencement of any action (including any governmental action),
  such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof
  is to be made against any indemnifying party under this Section 6, deliver to
  the indemnifying party a written notice of the commencement thereof, and the
  indemnifying party shall have the right to participate in, and, to the extent
  the indemnifying party so desires, jointly with any other indemnifying party
  similarly noticed, to assume control of the defense thereof with counsel mutually
  satisfactory to the indemnifying party and the Indemnified Person or the Indemnified
  Party, as the case may be; provided, however, that an Indemnified
  Person or Indemnified Party shall have the right to retain its own counsel with
  the fees and expenses to be paid by the indemnifying party, if, in the reasonable
  opinion of counsel retained by the indemnifying party, the representation by
  such counsel of the Indemnified Person or Indemnified Party and the indemnifying
  party would be inappropriate due to actual or potential differing interests
  between such Indemnified Person or Indemnified Party and any other party represented
  by such counsel in such proceeding. The indemnifying party shall pay for only
  one separate legal counsel for the Indemnified Persons or the Indemnified Parties,
  as applicable, and such legal counsel shall be selected by Investors holding
  a majority-in-interest of the Registrable Securities included in the Registration
  Statement to which the Claim relates (with the approval of a majority-in-interest
  of the Initial Investors), if the Investors are entitled to indemnification
  hereunder, or the Company, if the Company is entitled to indemnification hereunder,
  as applicable. The failure to deliver written notice to the indemnifying party
  within a reasonable time of the commencement of any such action shall not relieve
  such indemnifying party of any liability to the Indemnified Person or Indemnified
  Party under this Section 6, except to the extent that the indemnifying party
  is actually prejudiced in its ability to defend such action. The indemnification
  required by this Section 6 shall be made by periodic payments of the amount
  thereof during the course of the investigation or defense, as such expense,
  loss, damage or liability is incurred and is due and payable. 

 13 





                                                   7.           
  CONTRIBUTION.

                          To
  the extent any indemnification by an indemnifying party is prohibited or limited
  by law, the indemnifying party agrees to make the maximum contribution with
  respect to any amounts for which it would otherwise be liable under Section
  6 to the fullest extent permitted by law; provided, however, that
  (i) no contribution shall be made under circumstances where the maker would
  not have been liable for indemnification under the fault standards set forth
  in Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
  misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
  be entitled to contribution from any seller of Registrable Securities who was
  not guilty of such fraudulent misrepresentation, and (iii) contribution (together
  with any indemnification or other obligations under this Agreement) by any seller
  of Registrable Securities shall be limited in amount to the net amount of proceeds
  received by such seller from the sale of such Registrable Securities. 

                                                   8.           
  REPORTS UNDER THE 1934 ACT.

                          With
  a view to making available to the Investors the benefits of Rule 144 promulgated
  under the 1933 Act or any other similar rule or regulation of the SEC that may
  at any time permit the investors to sell securities of the Company to the public
  without registration (“Rule 144”), the Company agrees to:


                                                                            a.
             make and
  keep public information available, as those terms are understood and defined
  in Rule 144; 

                                                                            b.
             file with
  the SEC in a timely manner all reports and other documents required of the Company
  under the 1933 Act and the 1934 Act so long as the Company remains subject to
  such requirements (it being understood that nothing herein shall limit the Company’s
  obligations under Section 4(c) of the Securities Purchase Agreement) and the
  filing of such reports and other documents is required for the applicable provisions
  of Rule 144; and 

                                                                            c.
             furnish
  to each Investor so long as such Investor owns Registrable Securities, promptly
  upon request, (i) a written statement by the Company that it has complied with
  the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
  a copy of the most recent annual or quarterly report of the Company and such
  other reports and documents so filed by the Company, and (iii) such other information
  as may be reasonably requested to permit the Investors to sell such securities
  pursuant to Rule 144 without registration. 

                                                   9.           
  ASSIGNMENT OF REGISTRATION RIGHTS.

                          The
  rights under this Agreement shall be automatically assignable by the Investors
  to any transferee of all or any portion of Registrable Securities if: (i) the
  Investor agrees in writing with the transferee or assignee to assign such rights,
  and a copy of such agreement is furnished to the Company within a reasonable
  time after such assignment, (ii) the Company is, within a reasonable time after
  such transfer or assignment, furnished with written notice of (a) the name and
  address of such transferee or assignee, and (b) the securities with respect
  to which such registration rights are being transferred or assigned, (iii) following
  such transfer or assignment, the further disposition of such securities by the
  transferee or assignee is restricted under the 1933 

 14 









Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein, (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement, and (vi) such transferee shall be an “accredited investor” as that term
defined in Rule 501 of Regulation D promulgated under the 1933 Act. 

                                                   10.           
  AMENDMENT OF REGISTRATION RIGHTS.

                          Provisions
  of this Agreement may be amended and the observance thereof may be waived (either
  generally or in a particular instance and either retroactively or prospectively),
  only with written consent of the Company, each of the Initial Investors (to
  the extent such Initial Investor still owns Registrable Securities) and Investors
  who hold a majority interest of the Registrable Securities. Any amendment or
  waiver effected in accordance with this Section 10 shall be binding upon each
  Investor and the Company. 

                                                   11.           
  MISCELLANEOUS.

                                                                            a.
             A person
  or entity is deemed to be a holder of Registrable Securities whenever such person
  or entity owns of record such Registrable Securities. If the Company receives
  conflicting instructions, notices or elections from two or more persons or entities
  with respect to the same Registrable Securities, the Company shall act upon
  the basis of instructions, notice or election received from the registered owner
  of such Registrable Securities. 

                                                                            b.
             Any notices
  required or permitted to be given under the terms hereof shall be sent by certified
  or registered mail (return receipt requested) or delivered personally or by
  courier (including a recognized overnight delivery service) or by facsimile
  and shall be effective five days after being placed in the mail, if mailed by
  regular United States mail, or upon receipt, if delivered personally or by courier
  (including a recognized overnight delivery service) or by facsimile, in each
  case addressed to a party. The addresses for such communications shall be:

If to the Company: 

Snocone Systems Inc. 

  3131 Camino del Rio, N, Suite 1650 

  San Diego, CA 92108 

  Attention: Chief Executive Officer 

  Telephone:       (619) 284-4807 

  Facsimile:          (619) 284-4344

 15 





With a copy to: 

Fish & Richardson, P.C. 

  12390 El Camino Real 

  San Diego, CA 92130 

  Attention: Edith A. Bauer, Esq. 

  Telephone:      858-678-5070 

  Facsimile:          858-678-5099


 If to an Investor: to the address set forth immediately below such Investor’s
  name on the signature pages to the Securities Purchase Agreement.

With a copy to: 

Ballard Spahr Andrews & Ingersoll, LLP

  1735 Market Street 

  51st Floor 

  Philadelphia, Pennsylvania 19103 

  Attention: Gerald J. Guarcini, Esq. 

  Telephone:      215-865-8625 

  Facsimile:          215-864-8999


                                                                            c.           
  Failure of any party to exercise any right or remedy under this Agreement
  or otherwise, or delay by a party in exercising such right or remedy, shall
  not operate as a waiver thereof. 

                                                                            d.
             THIS AGREEMENT
  SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
  THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
  WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
  PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
  FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING
  UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR
  THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
  THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.
  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
  CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
  THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER
  PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH
  PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING
  SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH
  JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN
  ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR 

 16 









ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE. 

                                                                            e.
             In the
  event that any provision of this Agreement 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 provision hereof which may prove
  invalid or unenforceable under any law shall not affect the validity or enforceability
  of any other provision hereof. 

                                                                            f.
             This Agreement,
  the Notes, the Warrants and the Securities Purchase Agreement (including all
  schedules and exhibits thereto) constitute the entire agreement among the parties
  hereto with respect to the subject matter hereof and thereof. There are no restrictions,
  promises, warranties or undertakings, other than those set forth or referred
  to herein and therein. This Agreement and the Securities Purchase Agreement
  supersede all prior agreements and understandings among the parties hereto with
  respect to the subject matter hereof and thereof. 

                                                                            g.
             Subject
  to the requirements of Section 9 hereof, this Agreement shall be binding upon
  and inure to the benefit of the parties and their successors and assigns. 

                                                                            h.
             The headings
  in this Agreement are for convenience of reference only and shall not form part
  of, or affect the interpretation of, this Agreement. 

                                                                            i.
             This Agreement
  may be executed in two or more counterparts, each of which shall be deemed an
  original but all of which shall constitute one and the same agreement and shall
  become effective when counterparts have been signed by each party and delivered
  to the other party. This Agreement, once executed by a party, may be delivered
  to the other party hereto by facsimile transmission of a copy of this Agreement
  bearing the signature of the party so delivering this Agreement. 

                                                                            j.
             Each party
  shall do and perform, or cause to be done and performed, all such further acts
  and things, and shall execute and deliver all such other agreements, certificates,
  instruments and documents, as the other party may reasonably request in order
  to carry out the intent and accomplish the purposes of this Agreement and the
  consummation of the transactions contemplated hereby. 

                                                                            k.
             Except
  as otherwise provided herein, all consents and other determinations to be made
  by the Investors pursuant to this Agreement shall be made by Investors holding
  a majority of the Registrable Securities, determined as if the all of the Notes
  then outstanding have been converted into for Registrable Securities. 

                                                                            l.
             The Company
  acknowledges that a breach by it of its obligations hereunder will cause irreparable
  harm to each Investor by vitiating the intent and purpose of the transactions
  contemplated hereby. Accordingly, the Company acknowledges that the remedy at
  law for breach of its obligations under this Agreement will be inadequate and
  agrees, in the event of a breach or threatened breach by the Company of any
  of the provisions under this Agreement, that each Investor shall be entitled,
  in addition to all other available remedies in law or in equity, and in addition
  to the penalties assessable herein, to an injunction or injunctions restraining,


 17 








 preventing or curing any breach of this Agreement and to enforce
  specifically the terms and provisions hereof, without the necessity of showing
  economic loss and without any bond or other security being required. 

                                                                            m.
             The language
  used in this Agreement will be deemed to be the language chosen by the parties
  to express their mutual intent, and no rules of strict construction will be
  applied against any party. 

 

 

 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 18 





                          IN
  WITNESS WHEREOF, the Company and the undersigned Initial Investors have
  caused this Agreement to be duly executed as of the date first above written.


	 SNOCONE SYSTEMS INC.  	 
	 	 
	 	 
	 	 
	 Edon Moyal  	 
	 Chief Executive Officer  	 
	  	 
	  	 
	  	 
	 AJW PARTNERS, LLC  	 
	By: SMS Group, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 AJW OFFSHORE, LTD.  	 
	By: First Street Manager II, LLC  	 
	  	 
	 	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 AJW QUALIFIED PARTNERS, LLC  	 
	By: AJW Manager, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 NEW MILLENNIUM CAPITAL PARTNERS, II, LLC  	 
	By: First Street Manager II, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 


 19