REGISTRATION
RIGHTS AGREEMENT

     

    This
REGISTRATION RIGHTS AGREEMENT
(the “Agreement”),
dated as of November 24, 2009, is by and among NACEL Energy Corporation,
a Wyoming corporation with offices located at 9375 E. Shea Blvd., Suite 100,
Scottsdale, Arizona 85260 (the “Company”),
and the undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).

     

    RECITALS

     

    A.           In
connection with the Securities Purchase Agreement by and among the parties
hereto, dated as of November 23, 2009 (the “Securities Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions of
the Securities Purchase Agreement, to issue and sell to each Buyer (i) the Notes
(as defined in the Securities Purchase Agreement) which will be convertible into
Conversion Shares (as defined in the Securities Purchase Agreement) in
accordance with the terms of the Notes and (ii) the Warrants (as defined in the
Securities Purchase Agreement) which will be exercisable to purchase Warrant
Shares (as defined in the Securities Purchase Agreement) in accordance with the
terms of the Warrants.

     

    B.           To
induce the Buyers to consummate the transactions contemplated by 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.

     

    AGREEMENT

     

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

     

    1.           Definitions.

     

    Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

     

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

     

    (b)           “Closing Date” shall have the meaning set forth in
the Securities Purchase Agreement.

     

    (c)           “Effective Date” means the date that the applicable
Registration Statement has been declared effective by the SEC.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (d)           “Effectiveness Deadline” means (i) with respect to the
initial Registration Statement required to be filed to pursuant to Section 2(a),
the earlier of the (A) 90th
calendar day after the Closing Date (or the 120th
calendar day after the Closing Date in the event that such Registration
Statement is subject to review by the SEC) and (B) 5th
Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement will not be
reviewed or will not be subject to further review and (ii) with respect to any
additional Registration Statements that may be required to be filed by the
Company pursuant to this Agreement, the earlier of the (A) 90th
calendar day following the date on which the Company was required to file such
additional Registration Statement (or the 120th
calendar day after such date in the event that such Registration
Statement is subject to review by the SEC) and (B) 5th
Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement will not be
reviewed or will not be subject to further review.

     

    (e)           “Filing Deadline” means (i) with respect to the
initial Registration Statement required to be filed to pursuant to Section 2(a),
December 31, 2009, and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this
Agreement, the date on which the Company was required to file such additional
Registration Statement pursuant to the terms of this Agreement.

     

    (f)           “Investor” means a Buyer or any transferee or
assignee of any Registrable Securities, Notes or Warrants, as applicable, to
whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9 and any
transferee or assignee thereof to whom a transferee or assignee of any
Registrable Securities, Notes or Warrants, as applicable, assigns its rights
under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

     

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

     

    (h)           “register,” “registered,” and “registration” refer to a registration effected by
preparing and filing one or more Registration Statements in compliance with the
1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such
Registration Statement(s) by the SEC.

     

    (i)           “Registrable Securities” means (i) the Conversion Shares,
(ii) the Warrant Shares and (iii) any capital stock of the Company issued or
issuable with respect to the Conversion Shares, the Warrant Shares, the Notes or
the Warrants, including, without limitation, (1) as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise and (2)
shares of capital stock of the Company into which the shares of Common Stock are
converted or exchanged and shares of capital stock of a Successor Entity (as
defined in the Warrants) into which the shares of Common Stock are converted or
exchanged, in each case, without regard to any limitations on conversion of the
Notes or exercise of the Warrants.

     

    (j)           “Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering
Registrable Securities.


    
      
         


      

      
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    (k)           “Required Registration Amount” means 133% of the sum of (i) the
maximum number of Conversion Shares issued and issuable pursuant to the Notes
and (ii) the maximum number of Warrant Shares issued and issuable pursuant to
the Warrants, in each case, as of the Trading Day (as defined in the Warrants)
immediately preceding the applicable date of determination (without taking into
account any limitations on the conversion of the Notes or the exercise of the
Warrants set forth therein), all subject to adjustment as provided in Section
2(d).

     

    (1)           “Rule 144” means Rule 144 promulgated by the
SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor 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.

     

    (m)           “Rule 415” means Rule 415 promulgated by the
SEC under the 1933 Act, as such rule may be amended from time to time, or any
other similar or successor rule or regulation of the SEC providing for offering
securities on a continuous or delayed basis.

     

    (n)           “SEC” means the United States Securities
and Exchange Commission or any successor thereto.

     

    2.           Registration.

     

    (a)           Mandatory
Registration. The Company shall prepare and, as soon as practicable, but
in no event later than the Filing Deadline, file with the SEC an initial
Registration Statement on Form S-l covering the resale of all of the Registrable
Securities, provided that such initial Registration Statement shall register for
resale at least the number of shares of Common Stock equal to the Required
Registration Amount as of the date such Registration Statement is initially
filed with the SEC. Such initial Registration Statement, and each other
Registration Statement required to filed pursuant to the terms of this
Agreement, shall contain (except if otherwise directed by each of the Investors)
the “Selling
Stockholders” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit
B. The Company shall use its best
efforts to have such initial Registration Statement, and each other Registration
Statement required to filed pursuant to the terms of this Agreement, declared
effective by the SEC as soon as practicable, but in no event later than the
applicable Effectiveness Deadline for such Registration Statement.

     

    (b)           Legal Counsel.
Subject to Section 5 hereof, Iroquois Master Fund Ltd. (“Iroquois”) shall have the right to select one
(1) legal counsel to review and oversee, solely on its behalf, any registration
pursuant to this Section 2 (“Legal Counsel”), which shall be Greenberg Traurig,
LLP or such other counsel as thereafter designated by Iroquois.

     

    (c)           Use of Form S-3. The
Company shall undertake to register the resale of all the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of all Registration Statements then in effect until
such time as a Registration Statement on Form S-3 covering the resale of all the
Registrable Securities has been declared effective by the SEC and the prospectus
contained therein is available for use.


    
      
         


      

      
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    (d)           Sufficient Number of Shares
Registered. In the event the number of shares available under any
Registration Statement is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an
Investor’s allocated portion of the Registrable Securities pursuant to Section
2(h), the Company shall amend such Registration Statement (if permissible), or
file with the SEC a new Registration Statement (on the short form available
therefor, if applicable), or both, so as to cover at least the Required
Registration Amount as of the Trading Day immediately preceding the date of the
filing of such amendment or new Registration Statement, in each case, as soon as
practicable, but in any event not later than fifteen (15) days after the
necessity therefor arises (but taking account of any Staff position with respect
to the date on which the Staff will permit such amendment to the Registration
Statement and/or such new Registration Statement (as the case may be) to be
filed with the SEC). The Company shall use its best efforts to cause such
amendment to such Registration Statement and/or such new Registration Statement
(as the case may be) to become effective as soon as practicable following the
filing thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. For purposes of the
foregoing provision, the number of shares available under a Registration
Statement shall be deemed “insufficient to cover all of the Registrable
Securities” if at any time the number of shares of Common Stock available for
resale under the applicable Registration Statement is less than the product
determined by multiplying (i) the Required Registration Amount as of such time
by (ii) 0.90. The calculation set forth in the foregoing sentence shall be made
without regard to any limitations on (i) conversion of the Notes (and such
calculation shall assume that the Notes are then fully convertible into shares
of Common Stock at the then-prevailing applicable Conversion Price) and (ii)
exercise of the Warrants (and such calculation shall assume that the Warrants
are then fully exercisable for shares of Common Stock at the then-prevailing
applicable Exercise Price).


    
      
         


      

      
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    (e)           Effect of Failure to File
and Obtain and Maintain Effectiveness of any Registration Statement. If
(i) a Registration Statement covering the resale of all of the Registrable
Securities required to be covered thereby (disregarding any reduction pursuant
to Section 2(f)) and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline for
such Registration Statement (a “Filing Failure”)
(it being understood that if the Company files a Registration Statement
without affording each Investor the opportunity to review and comment on the
same as required by Section 3(c) hereof, the Company shall be deemed to not have
satisfied this clause (i)(A) and such event shall be deemed to be a Filing
Failure) or (B) not declared effective by the SEC on or before the Effectiveness
Deadline for such Registration Statement (an “Effectiveness Failure”)
(it being understood that if on the Business Day immediately following
the Effective Date for such Registration Statement the Company shall not have
filed a “final” prospectus for such Registration Statement with the SEC under
Rule 424(b) in accordance with Section 3(b) (whether or not such a prospectus is
technically required by such rule), the Company shall be deemed to not have
satisfied this clause (i)(B) and such event shall be deemed to be an
Effectiveness Failure), (ii) other than during an Allowable Grace Period (as
defined below), on any day after the Effective Date of a Registration Statement
sales of all of the Registrable Securities required to be included on such
Registration Statement (disregarding any reduction pursuant to Section 2(f))
cannot be made pursuant to such Registration Statement (including, without
limitation, because of a failure to keep such Registration Statement effective,
a failure to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement, a suspension or delisting of (or a
failure to timely list) the shares of Common Stock on its principal trading
market or exchange, or a failure to register a sufficient number of shares of
Common Stock or by reason of a stop order) or the prospectus contained therein
is not available for use for any reason (a “Maintenance Failure”),
or (iii) if a Registration Statement is not effective for any reason or
the prospectus contained therein is not available for use for any reason, the
Company fails to file with the SEC any required reports under Section 13 or
15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) (a “Current Public Information Default”)
as a result of which any of the Investors are unable to sell Registrable
Securities without restriction under Rule 144 (including, without limitation,
volume restrictions), then, as partial relief for the damages to any holder by
reason of any such delay in, or reduction of, its ability to sell the underlying
shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to two percent (2%) (or, solely in the case of an Effectiveness Failure
that is cured prior to the one hundred fiftieth (150th)
calendar day following the Closing Date, one percent (1%)) of such Investor’s
original principal amount stated in such Investor’s Note on the Closing Date (1)
on the date of such Filing Failure, Effectiveness Failure, Maintenance Failure
or Current Public Information Default, as applicable, and (2) on every thirty
(30) day anniversary of (I) a Filing Failure until such Filing Failure is cured;
(II) an Effectiveness Failure until such Effectiveness Failure is cured; (III) a
Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current
Public Information Default until the earlier of (i) the date such Current Public
Information Default is cured and (ii) such time that such public information is
no longer required pursuant to Rule 144 (in each case, pro rated for periods
totaling less than thirty (30) days). The payments to which a holder of
Registrable Securities shall be entitled pursuant to this Section 2(e) are
referred to herein as “Registration Delay Payments.” Following the initial Registration
Delay Payment for any particular event or failure (which shall be paid on the
date of such event or failure, as set forth above), without limiting the
foregoing, if an event or failure giving rise to the Registration Delay Payments
is cured prior to any thirty (30) day anniversary of such event or failure, then
such Registration Delay Payment shall be made on the third (3rd)
Business Day after such cure. In the event the Company fails to make
Registration Delay Payments in a timely manner in accordance with the foregoing,
such Registration Delay Payments shall bear interest at the rate of one and
one-half percent (1.5%) per month (prorated for partial months) until paid in
full. Notwithstanding the foregoing, no Registration Delay Payments shall be
owed to an Investor (other than with respect to a Maintenance Failure resulting
from a suspension or delisting of the shares of Common Stock on the Company’s
principal trading market or exchange) with respect to any period during which
all of such Investor’s Registrable Securities may be sold by such Investor
without restriction under Rule 144 (including, without limitation, volume
restrictions) and without the need for current public information required by
Rule 144(c)(1) (or Rule 144(i)(2), if applicable).


    
      
         


      

      
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    (f)    Offering.
Notwithstanding anything to the contrary contained in this Agreement, but
subject to the payment of the Registration Delay Payments pursuant to Section
2(e), in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any
offering pursuant to a Registration Statement filed pursuant to this Agreement
as constituting an offering of securities by, or on behalf of, the Company, or
in any other manner, such that the Staff or the SEC do not permit such
Registration Statement to become effective and used for resales in a manner that
does not constitute such an offering and that permits the continuous resale at
the market by the Investors participating therein (or as otherwise may be
acceptable to each Investor) without being named therein as an “underwriter,”
then the Company shall reduce the number of shares to be included in such
Registration Statement by all Investors until such time as the Staff and the SEC
shall so permit such Registration Statement to become effective as aforesaid. In
making such reduction, the Company shall reduce the number of shares to be
included by all Investors on a pro rata basis (based upon the number of
Registrable Securities otherwise required to be included for each Investor)
unless the inclusion of shares by a particular Investor or a particular set of
Investors are resulting in the Staff or the SEC’s “by or on behalf of the
Company” offering position, in which event the shares held by such Investor or
set of Investors shall be the only shares subject to reduction (and if by a set
of Investors on a pro rata basis by such Investors or on such other basis as
would result in the exclusion of the least number of shares by all such
Investors). In addition, in the event that the Staff or the SEC requires any
Investor seeking to sell securities under a Registration Statement filed
pursuant to this Agreement to be specifically identified as an “underwriter” in
order to permit such Registration Statement to become effective, and such
Investor does not consent to being so named as an underwriter in such
Registration Statement, then, in each such case, the Company shall reduce the
total number of Registrable Securities to be registered on behalf of such
Investor, until such time as the Staff or the SEC does not require such
identification or until such Investor accepts such identification and the manner
thereof. Any reduction pursuant to this paragraph will first reduce all
Registrable Securities other than those issued pursuant to the Securities
Purchase Agreement. In the event of any reduction in Registrable Securities
pursuant to this paragraph, an affected Investor shall have the right to
require, upon delivery of a written request to the Company signed by such
Investor, the Company to file a registration statement within thirty (30) days
of such request (subject to any restrictions imposed by Rule 415 or required by
the Staff or the SEC) for resale by such Investor in a manner acceptable to such
Investor, and the Company shall following such request cause to be and keep
effective such registration statement in the same manner as otherwise
contemplated in this Agreement for registration statements hereunder, in each
case until such time as: (i) all Registrable Securities held by such Investor
have been registered and sold pursuant to an effective Registration Statement in
a manner acceptable to such Investor or (ii) all Registrable Securities may be
resold by such Investor without restriction (including, without limitation,
volume limitations) pursuant to Rule 144 (taking account of any Staff position
with respect to “affiliate” status) and without the need for current public
information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or
(iii) such Investor agrees to be named as an underwriter in any such
Registration Statement in a manner acceptable to such Investor as to all
Registrable Securities held by such Investor and that have not theretofore been
included in a Registration Statement under this Agreement (it being understood
that the special demand right under this sentence may be exercised by an
Investor multiple times and with respect to limited amounts of Registrable
Securities in order to permit the resale thereof by such Investor as
contemplated above).

     

    (g)    Piggyback
Registrations. Without limiting any obligation of the Company hereunder
or under the Securities Purchase Agreement, if there is not an effective
Registration Statement covering all of the Registrable Securities or the
prospectus contained therein is not available for use and the Company shall
determine to prepare and 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 (each as
promulgated under the 1933 Act) 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 the Company’s stock
option or other employee benefit plans), then the Company shall deliver to each
Investor a written notice of such determination and, if within fifteen (15) days
after the date of the delivery of such notice, any such Investor shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such Investor requests to be
registered; provided, however, the Company shall not be required to register any
Registrable Securities pursuant to this Section 2(g) that are eligible for
resale pursuant to Rule 144 without restriction (including, without limitation,
volume restrictions) and without the need for current public information
required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the
subject of a then-effective Registration Statement.


    
      
         


      

      
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    (h)           Allocation of Registrable
Securities. The initial number of Registrable Securities included in any
Registration Statement and any increase in the number of Registrable Securities
included therein shall be allocated pro rata among the Investors based on the
number of Registrable Securities held by each Investor at the time such
Registration Statement covering such initial number of Registrable Securities or
increase thereof is declared effective by the SEC. In the event that an Investor
sells or otherwise transfers any of such Investor’s Registrable Securities, each
transferee or assignee (as the case may be) that becomes an Investor shall be
allocated a pro rata portion of the then-remaining number of Registrable
Securities included in such Registration Statement for such transferor or
assignee (as the case may be). Any shares of Common Stock included in a
Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement.

     

    (i)           No Inclusion of Other
Securities. In no event shall the Company include any securities other
than Registrable Securities on any Registration Statement without the prior
written consent of each of the Investors. Until the Applicable Date (as defined
in the Securities Purchase Agreement), the Company shall not enter into any
agreement providing any registration rights to any of its security
holders.

     

    3.           Related
Obligations.

     

    The
Company shall use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof, and,
pursuant thereto, the Company shall have the following obligations:

     

    (a)           The
Company shall promptly prepare and file with the SEC a Registration Statement
with respect to all the Registrable Securities (but in no event later than the
applicable Filing Deadline) and use its best efforts to cause such Registration
Statement to become effective as soon as practicable after such filing (but in
no event later than the Effectiveness Deadline). Subject to Allowable Grace
Periods, the Company shall keep each Registration Statement effective (and the
prospectus contained therein available for use) pursuant to Rule 415 for resales
by the Investors on a delayed or continuous basis at then-prevailing market
prices (and not fixed prices) at all times until the earlier of (i) the date as
of which all of the Investors may sell all of the Registrable Securities
required to be covered by such Registration Statement (disregarding any
reduction pursuant to Section 2(f)) without restriction pursuant to Rule 144
(including, without limitation, volume restrictions) and without the need for
current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if
applicable) or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall ensure that, when filed and at all times while effective, each
Registration Statement (including, without limitation, all amendments and
supplements thereto) and the prospectus (including, without limitation, all
amendments and supplements thereto) used in connection with such Registration
Statement (1) 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 (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading and (2) will disclose
(whether directly or through incorporation by reference to other SEC filings to
the extent permitted) all material information regarding the Company and its
securities. The Company shall submit to the SEC, within two (2) Business Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the Staff or that the Staff
has no further comments on a particular Registration Statement (as the case may
be) and (ii) the approval of Legal Counsel is obtained pursuant to Section 3(c)
(which approval shall be immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such request.


    
      
         


      

      
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    (b)           Subject
to Section 3(r) of this Agreement, the Company shall prepare and file with the
SEC such amendments (including, without limitation, post-effective amendments)
and supplements to each Registration Statement and the prospectus used in
connection with each such Registration Statement, which prospectus is to be
filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep each such Registration Statement effective at all times during the
Registration Period for such Registration Statement, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company required to be covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement; provided, however, by 8:30 a.m. (New York time) on the Business Day
immediately following each Effective Date, the Company shall file with the SEC
in accordance with Rule 424(b) under the 1933 Act the final prospectus to be
used in connection with sales pursuant to the applicable Registration Statement
(whether or not such a prospectus is technically required by such rule). In the
case of amendments and supplements to any Registration Statement which are
required to be filed pursuant to this Agreement (including, without limitation,
pursuant to this Section 3(b)) by reason of the Company filing a report on Form
10-Q or Form 10-K or any analogous report under the Securities Exchange Act of
1934, as amended (the “1934 Act”),
the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.

     

    (c)           The
Company shall (A) permit Legal Counsel and legal counsel for each other Investor
to review and comment upon (i) each Registration Statement at least five (5)
Business Days prior to its filing with the SEC and (ii) all amendments and
supplements to each Registration Statement (including, without limitation, the
prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and any similar or successor
reports) within a reasonable number of days prior to their filing with the SEC,
and (B) not file any Registration Statement or amendment or supplement thereto
in a form to which Legal Counsel or any legal counsel for any other Investor
reasonably objects. The Company shall not submit a request for acceleration of
the effectiveness of a Registration Statement or any amendment or supplement
thereto or to any prospectus contained therein without the prior consent of
Legal Counsel, which consent shall not be unreasonably withheld. The Company
shall promptly furnish to Legal Counsel and legal counsel for each other
Investor, without charge, (i) copies of any correspondence from the SEC or the
Staff to the Company or its representatives relating to each Registration
Statement, provided that such correspondence shall not contain any material,
non-public information regarding the Company or any of its Subsidiaries (as
defined in the Securities Purchase Agreement), (ii) after the same is prepared
and filed with the SEC, one (1) copy of each Registration Statement and any
amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if
requested by an Investor, and all exhibits and (iii) upon the effectiveness of
each Registration Statement, one (1) copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel and legal counsel for each other
Investor in performing the Company’s obligations pursuant to this Section
3.


    
      
         


      

      
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    (d)           The
Company shall promptly furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) after the same is
prepared and filed with the SEC, at least one (1) copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without
limitation, financial statements and schedules, all documents incorporated
therein by reference, if requested by an Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, ten (10) copies of the prospectus included in such Registration
Statement and all amendments and supplements thereto (or such other number of
copies as such Investor may reasonably request from time to time) and (iii) such
other documents, including, without limitation, copies of any preliminary or
final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.

     

    (e)           The
Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors
of the Registrable Securities covered by a Registration Statement under such
other securities or “blue sky” laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including, without limitation, post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the
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, the Company shall not be
required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(e), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel, legal counsel for
each other Investor and each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    (f)           The
Company shall notify Legal Counsel, legal counsel for each other Investor and
each Investor in writing of the happening of any event, as promptly as
practicable after becoming aware of such event, as a result of which the
prospectus included in a 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, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, non-public
information regarding the Company or any of its Subsidiaries), and, subject to
Section 3(r), promptly prepare a supplement or amendment to such Registration
Statement and such prospectus contained therein to correct such untrue statement
or omission and deliver ten (10) copies of such supplement or amendment to Legal
Counsel, legal counsel for each other Investor and each Investor (or such other
number of copies as Legal Counsel, legal counsel for each other Investor or such
Investor may reasonably request). The Company shall also promptly notify Legal
Counsel, legal counsel for each other Investor and each Investor in writing (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed, when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to Legal
Counsel, legal counsel for each other Investor and each Investor by facsimile or
e-mail on the same day of such effectiveness and by overnight mail), and when
the Company receives written notice from the SEC that a Registration Statement
or any post-effective amendment will be reviewed by the SEC, (ii) of any request
by the SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate; and (iv) of the receipt of any request by the SEC or any other
federal or state governmental authority for any additional information relating
to the Registration Statement or any amendment or supplement thereto or any
related prospectus. The Company shall respond as promptly as practicable to any
comments received from the SEC with respect to each Registration Statement or
any amendment thereto (it being understood and agreed that the Company’s
response to any such comments shall be delivered to the SEC no later than ten
(10) Business Days after the receipt thereof).

     

    (g)           The
Company shall (i) use its best efforts to prevent the issuance of any stop order
or other suspension of effectiveness of each Registration Statement or the use
of any prospectus contained therein, or the suspension of the qualification, or
the loss of an exemption from qualification, of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and (ii) notify Legal Counsel, legal counsel for each other
Investor and each Investor who holds Registrable Securities of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

     

    (h)           If
any Investor may be required under applicable securities law to be described in
any Registration Statement as an underwriter and such Investor consents to so
being named an underwriter, at the request of any Investor, the Company shall
furnish to such Investor, on the date of the effectiveness of such Registration
Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) 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 Investors, and (ii) an opinion, dated as of
such date, of 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 Investors.


    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

    (i)           If
any Investor may be required under applicable securities law to be described in
any Registration Statement as an underwriter and such Investor consents to so
being named an underwriter, upon the written request of such Investor, the
Company shall make available for inspection by (i) such Investor, (ii) legal
counsel for such Investor and (iii) one (1) firm of accountants or other agents
retained by such Investor (collectively, the “Inspectors”),
all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, each Inspector shall agree
in writing to hold in strict confidence and not to make any disclosure (except
to such Investor) or use of any Record or other information which the Company’s
board of directors 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 or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or 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 Agreement or any other Transaction
Document (as defined in the Securities Purchase Agreement). Such 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 such Investor, if any) shall
be deemed to limit any Investor’s ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and
regulations.

     

    (j)           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 or is otherwise required
to be disclosed in such Registration Statement pursuant to the 1933 Act, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable 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 Agreement or any other
Transaction Document. 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 written notice to such Investor and allow such Investor, at such
Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    (k)           Without
limiting any obligation of the Company under the Securities Purchase Agreement,
the Company shall use its best efforts either to (i) cause all of the
Registrable Securities covered by each Registration Statement to be listed on
each 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, (ii) secure
designation and quotation of all of the Registrable Securities covered by each
Registration Statement on the OTC Bulletin Board, or (iii) if, despite the
Company’s best efforts to satisfy the preceding clauses (i) or (ii) the Company
is unsuccessful in satisfying the preceding clauses (i) or (ii), without
limiting the generality of the foregoing, to use its best efforts to arrange for
at least two market makers to register with the Financial Industry Regulatory
Authority (“FINRA”) as such with respect to such
Registrable Securities. In addition, the Company shall cooperate with each
Investor and any broker or dealer through which any such Investor proposes to
sell its Registrable Securities in effecting a filing with FINRA pursuant to
FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section
3(k).

     

    (1)           The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
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 Investors may reasonably request from time to time and registered in
such names as the Investors may request.

     

    (m)           If
requested by an Investor, the Company shall as soon as practicable after receipt
of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate
in a prospectus supplement or post-effective amendment such information as an
Investor reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment
after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make amendments
to any Registration Statement or prospectus contained therein if reasonably
requested by an Investor holding any Registrable Securities.

     

    (n)           The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.

     

    (o)           The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, 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 applicable Effective Date of each Registration
Statement.

     

    (p)           The
Company shall otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC in connection with any registration
hereunder.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    

     

    (q)           Within
one (1) Business Day after a Registration Statement which covers Registrable
Securities is declared effective by the SEC, the Company shall deliver, and
shall cause legal counsel for the Company to deliver, to the transfer agent for
such Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
A.

     

    (r)           Notwithstanding
anything to the contrary herein (but subject to the last sentence of this
Section 3(r)), at any time after the Effective Date of a particular Registration
Statement, the Company may delay the disclosure of material, non-public
information concerning the Company or any of its Subsidiaries the disclosure of
which at the time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the opinion of counsel
to the Company, otherwise required (a “Grace Period”),
provided that the Company shall promptly notify the Investors in writing
of the (i) existence of material, nonpublic information giving rise to a Grace
Period (provided that in each such notice the Company shall not disclose the
content of such material, non-public information to any of the Investors) and
the date on which such Grace Period will begin and (ii) date on which such Grace
Period ends, provided further that (I) no Grace Period shall exceed ten (10)
consecutive days and during any three hundred sixty five (365) day period all
such Grace Periods shall not exceed an aggregate of thirty (30) days, (II) the
first day of any Grace Period must be at least five (5) Trading Days after the
last day of any prior Grace Period and (III) no Grace Period may exist during
the first sixty (60) Trading Days after the Effective Date of such Registration
Statement (each, an “Allowable Grace Period”).
For purposes of determining the length of a Grace Period above, such
Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) above and shall end on and include the later of
the date the Investors receive the notice referred to in clause (ii) above and
the date referred to in such notice. The provisions of Section 3(g) hereof shall
not be applicable during the period of any Allowable Grace Period. Upon
expiration of each Grace Period, the Company shall again be bound by the first
sentence of Section 3(f) with respect to the information giving rise thereto
unless such material, non-public information is no longer applicable.
Notwithstanding anything to the contrary contained in this Section 3(r), the
Company shall cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which such Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the particular
Registration Statement to the extent applicable, prior to such Investor’s
receipt of the notice of a Grace Period and for which the Investor has not yet
settled.

     

    (s)           The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by each Investors of its Registrable Securities pursuant
to each Registration Statement.


    
      
         


      

      
        13

        
          

        

      

      
         


      

    

     

    4.           Obligations of the
Investors.

     

    (a)           At
least five (5) Business Days prior to the first anticipated filing date of each
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor with respect to such
Registration Statement. 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 and maintain
the effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

     

    (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 each Registration Statement 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 such Registration
Statement.

     

    (c)           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(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary in this Section 4(c), the
Company shall cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which such Investor has entered into a contract for
sale prior to the Investor’s receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of Section 3(f) and for which such Investor has not yet
settled.

     

    (d)           Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of
Registrable Securities pursuant to a Registration Statement.

     

    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
qualifications fees, printers and accounting fees, FINRA filing fees (if any)
and fees and disbursements of counsel for the Company shall be paid by the
Company. The Company shall also reimburse Iroquois for the fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 of this Agreement which amount shall
be limited to $10,000.


    
      
         


      

      
        14

        
          

        

      

      
         


      

    

     

    6.           Indemnification.

     

    (a)           In
the event any Registrable Securities are included in any Registration Statement
under this Agreement, to the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor and each of
its directors, officers, shareholders, members, partners, employees, agents,
advisors, representatives (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding the lack of such title or
any other title) and each Person, if any, who controls such Investor within the
meaning of the 1933 Act or the 1934 Act and each of the directors, officers,
shareholders, members, partners, employees, agents, advisors, representatives
(and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”),
against any losses, obligations, claims, damages, liabilities,
contingencies, judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs of defense and
investigation), amounts paid in settlement or expenses, joint or several,
(collectively, “Claims”) incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an indemnified party is or may be
a party thereto (“Indemnified Damages”), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged
omission to state a material fact required to be stated therein 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 pursuant to a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified
Persons, promptly as such expenses are incurred and are due and payable, for any
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 by an Indemnified Person 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 such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of such Registration Statement or any such amendment thereof or supplement
thereto and (ii) shall not be available to a particular Investor to the extent
such Claim is based on a failure of such Investor to deliver or to cause to be
delivered the prospectus made available by the Company (to the extent
applicable), including, without limitation, a corrected prospectus, if such
prospectus or corrected prospectus was timely made available by the Company
pursuant to Section 3(d) and then only if, and to the extent that, following the
receipt of the corrected prospectus no grounds for such Claim would have
existed; and (iii) 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 or delayed. 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 any of the
Registrable Securities by any of the Investors pursuant to Section
9.


    
      
         


      

      
        15

        
          

        

      

      
         


      

    

     

    (b)           In
connection with any Registration Statement in which an Investor is
participating, such Investor agrees to severally and not jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth
in Section 6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the 1934
Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or
are based upon any Violation, in each case, to the extent, and only to the
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) and
the below provisos in this Section 6(b), such Investor will reimburse an
Indemnified Party any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, the indemnity agreement contained in this Section 6(b) and
the agreement with respect to contribution contained in Section 7 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 or delayed, provided further that such Investor shall be
liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
applicable 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 any of the Registrable Securities by any of the
Investors pursuant to Section 9.


    
      
         


      

      
        16

        
          

        

      

      
         


      

    

     

    (c)        Promptly
after receipt by an Indemnified Person or Indemnified Party (as the case may be)
under this Section 6 of notice of the commencement of any action or proceeding
(including, without limitation, any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party (as the case may be)
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, an Indemnified Person or Indemnified Party (as the case may be) shall
have the right to retain its own counsel with the fees and expenses of such
counsel to be paid by the indemnifying party if: (i) the indemnifying party has
agreed in writing to pay such fees and expenses; (ii) the indemnifying party
shall have failed promptly to assume the defense of such Claim and to employ
counsel reasonably satisfactory to such Indemnified Person or Indemnified Party
(as the case may be) in any such Claim; or (iii) the named parties to any such
Claim (including, without limitation, any impleaded parties) include both such
Indemnified Person or Indemnified Party (as the case may be) and the
indemnifying party, and such Indemnified Person or such Indemnified Party (as
the case may be) shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Person
or such Indemnified Party and the indemnifying party (in which case, if such
Indemnified Person or such Indemnified Party (as the case may be) notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party shall not have
the right to assume the defense thereof and such counsel shall be at the expense
of the Indemnifying Party, provided further that in the case of clause (iii)
above the indemnifying party shall not be responsible for the reasonable fees
and expenses of more than one (1) separate legal counsel for such Indemnified
Person or Indemnified Party (as the case may be). The Indemnified Party or
Indemnified Person (as the case may be) shall reasonably cooperate with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person (as the case may be) which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
(as the case may be) reasonably apprised at all times as to the status of the
defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the Indemnified
Party or Indemnified Person (as the case may be), consent to entry of any
judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person (as the case may be) of a release from
all liability in respect to such Claim or litigation, and such settlement shall
not include any admission as to fault on the part of the Indemnified Party.
Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Indemnified Party or Indemnified Person
(as the case may be) with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. 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 (as the case may be)
under this Section 6, except to the extent that the indemnifying party is
materially and adversely prejudiced in its ability to defend such
action.

     

    (d)        No
Person involved in the sale of Registrable Securities who is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to indemnification from any
Person involved in such sale of Registrable Securities who is not guilty of
fraudulent misrepresentation.

     

    (e)       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 and
when bills are received or Indemnified Damages are incurred.

     

    (f)         The
indemnity and contribution agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.


    
      
         


      

      
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    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: (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 of this
Agreement, (ii) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the amount of net
proceeds received by such seller from the applicable sale of such Registrable
Securities pursuant to such Registration Statement. Notwithstanding the
provisions of this Section 7, no Investor shall be required to contribute, in
the aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Investor from the applicable sale of the Registrable
Securities subject to the Claim exceeds the amount of any damages that such
Investor has otherwise been required to pay, or would otherwise be required to
pay under Section 6(b), by reason of such untrue or alleged untrue statement or
omission or alleged omission.

     

    8.           
Reports Under the 1934
Act.

     

    With a
view to making available to the Investors the benefits of 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 and agreed that nothing herein
shall limit any obligations of the Company under 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, if true, that it has
complied with the reporting, submission and posting requirements of Rule 144 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 with the
SEC if such reports are not publicly available via EDGAR, and (iii) such other
information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.



    
      
         


      

      
        18

        
          

        

      

      
         


      

    

     

    9.           
Assignment of
Registration Rights.


     

    All or
any portion of the rights under this Agreement shall be automatically assignable
by each Investor to any transferee or assignee (as the case may be) of all or
any portion of such Investor’s Registrable Securities, Notes or Warrants if: (i)
such Investor agrees in writing with such transferee or assignee (as the case
may be) to assign all or any portion of such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
transfer or assignment (as the case may be); (ii) the Company is, within a
reasonable time after such transfer or assignment (as the case may be),
furnished with written notice of (a) the name and address of such transferee or
assignee (as the case may be), and (b) the securities with respect to which such
registration rights are being transferred or assigned (as the case may be);
(iii) immediately following such transfer or assignment (as the case may be) the
further disposition of such securities by such transferee or assignee (as the
case may be) is restricted under the 1933 Act or applicable state securities
laws if so required; (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence such transferee or assignee
(as the case may be) agrees in writing with the Company to be bound by all of
the provisions contained herein; (v) such transfer or assignment (as the case
may be) shall have been made in accordance with the applicable requirements of
the Securities Purchase Agreement, the Notes and the Warrants (as the case may
be); and (vi) such transfer or assignment (as the case may be) shall have been
conducted in accordance with all applicable federal and state securities
laws.


     

    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 the written consent of the Company and each of the
Investors, provided that any Investor may give a waiver in writing as to itself.
Any amendment or waiver effected in accordance with this Section 10 shall be
binding upon each Investor and the Company. No such amendment or waiver (unless
given pursuant to the foregoing proviso in the case of a waiver) shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.


     

    11.          Miscellaneous.

     

    (a)       Solely
for purposes of this Agreement, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns, or is deemed to own, of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from such record owner of such Registrable
Securities.

     

    (b)       Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
(iii) with respect to Section 3(c), by electronic mail (provided confirmation of
transmission is electronically generated and kept on file by the sending party);
or (iv) one (1) Business Day after deposit with a nationally recognized
overnight delivery service with next day delivery specified, in each case,
properly addressed to the party to receive the same. The addresses and facsimile
numbers for such communications shall be:


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


     

    If to the
Company:

     

    NACEL
Energy Corporation

    9375 E.
Shea Blvd., Suite 100

    Scottsdale,
Arizona 85260

    Telephone: 
(602) 235-0355

    Facsimile: 
(602) 235-0355

    Attention: 
Chief Executive Officer


     

    With a
copy (for informational purposes only) to:


     

    Allen
& Vellone, P.C.

    1600
Stout Street, Suite 1100

    Denver,
Colorado 80202

    Telephone:
(303) 534-4499

    Facsimile:
(303) 893-8332

    Attention:
Patrick J. Russell, Esq.


     

    If to the
Transfer Agent:


     

    Island
Stock Transfer

    100
Second Avenue South, Suite 705S

    St.
Petersburg, FL 33701

    Telephone:
(727) 289-0010

    Facsimile:
(727) 286-0069

    Attention:
Olessia Kurtskaia


     

    If to
Legal Counsel:

     

    Greenberg
Traurig, LLP

    77 W.
Wacker Drive, Suite 3100

    Chicago,
Illinois 60601

    Telephone:
(312) 456-8400

    Facsimile:
(312) 456-8435

    Attention: 
Peter H. Lieberman, Esq.

    Todd A.
Mazur, Esq.

     

    If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers
attached to the Securities Purchase Agreement, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers, or to such other address
and/or facsimile number and/or to the attention of such other Person as the
recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change, provided that Greenberg
Traurig, LLP shall only be provided notices sent to Iroquois. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by
the sender’s facsimile machine or electronic mail transmission containing the
time, date, recipient facsimile number or electronic mail address and an image
of the first page of such transmission or (C) provided by a courier or overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.


    
      
         


      

      
        20

        
          

        

      

      
         


      

    

     

    (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. The Company and each Investor acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each party hereto shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement by any other party hereto 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), this being
in addition to any other remedy to which any party may be entitled by law or
equity.

     

    (d)       The
parties hereby agree that pursuant to 735 Illinois Compiled Statutes 105/5-5
they have chosen that all questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Illinois, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Illinois or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
Chicago, Illinois, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

     

    (e)        This
Agreement, the other Transaction Documents, the schedules and exhibits attached
hereto and thereto and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto and thereto solely 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, the other Transaction Documents, the schedules and
exhibits attached hereto and thereto and the instruments referenced herein and
therein supersede all prior agreements and understandings among the parties
hereto solely with respect to the subject matter hereof and thereof; provided,
however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) have any effect on any agreements any Investor
has entered into with the Company or any of its Subsidiaries prior to the date
hereof with respect to any prior investment made by such Investor in the
Company, (ii) waive, alter, modify or amend in any respect any obligations of
the Company or any of its Subsidiaries or any rights of or benefits to any
Investor or any other Person in any agreement entered into prior to the date
hereof between or among the Company and/or any of its Subsidiaries and any
Investor and all such agreements shall continue in full force and effect or
(iii) limit any obligations of the Company under any of the other Transaction
Documents.


    
      
         


      

      
        21

        
          

        

      

      
         


      

    

     

    (f)        Subject
to compliance with Section 9 (if applicable), this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto. This Agreement is not for the benefit of, nor may any
provision hereof be enforced by, any Person, other than the parties hereto,
their respective permitted successors and assigns and the Persons referred to in
Sections 6 and 7 hereof.

     

    (g)       The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. Unless the context clearly
indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of
like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire
Agreement instead of just the provision in which they are
found.


     

    (h)       This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party. In
the event that any signature is delivered by facsimile transmission or by an
e-mail which contains a portable document format (.pdf) file of an executed
signature page, such signature page shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such signature page were an original
thereof.


     

    (i)        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 any 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.


     

    (j)        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. Notwithstanding anything to the contrary set forth
in Section 10, terms used in this Agreement but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date in
such other Transaction Documents unless otherwise consented to in writing by
each Investor. Notwithstanding any references to “Buyers” herein, Iroquois and
the Company acknowledge and agree that Iroquois is the only Buyer that is a
party hereto.


    
      
         


      

      
        22

        
          

        

      

      
         


      

    

     

    (k)       The
obligations of each Investor under this Agreement and the other Transaction
Documents are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under this Agreement or any other Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Investor pursuant hereto or thereto, shall be deemed to
constitute the Investors as, and the Company acknowledges that the Investors do
not so constitute, a partnership, an association, a joint venture or any other
kind of group or entity, or create a presumption that the Investors are in any
way acting in concert or as a group or entity with respect to such obligations
or the transactions contemplated by the Transaction Documents or any matters,
and the Company acknowledges that the Investors are not acting in concert or as
a group, and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by this Agreement or any of the
other the Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained herein was
solely in the control of the Company, not the action or decision of any
Investor, and was done solely for the convenience of the Company and not because
it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in
each other Transaction Document is between the Company and an Investor, solely,
and not between the Company and the Investors collectively and not between and
among Investors.


     

    [signature pages follow]


    
      
         


      

      
        23

        
          

        

      

      
         


      

    

     

    IN WITNESS WHEREOF, Buyer and
the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.


     

    
      
        
          
            
              	
                      COMPANY:

                    
	 
      
	
                      NACEL
      ENERGY CORPORATION

                    
	 
      
	
                      By:

                    	
                      

                    
	 
      	
                      Name:
      Murray Fleming

                    
	 
      	
                      Title:
      Director

                    


            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    IN WITNESS WHEREOF, Buyer and
the Company have caused their respective signature page to this Registration
Rights Agreement to be duly executed as of the date first written
above.


     

    
      
        
          
            
              	
                      BUYER:

                    
	 
      
	
                      IROQUOIS
      MASTER FUND LTD.

                    
	 
	
	
                      By:
      Joshua Silverman, Authorized
Signatory

                    


            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    EXHIBIT
A

     

    FORM OF NOTICE OF
EFFECTIVENESS

    OF REGISTRATION
STATEMENT

    


    ________________________

    ________________________

    ________________________

    Attention:
_______________

     

    Re:    NACEL
Energy Corporation

     

    Ladies
and Gentlemen:

     

    [We are]
[I am] counsel to NACEL Energy Corporation, a Wyoming corporation (the “Company”),
and have represented the Company in connection with that certain
Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the
Company and the buyers named therein (collectively, the “Holders”)
pursuant to which the Company issued to the Holders secured
convertible notes (the “Notes”)
convertible into the Company’s shares of common stock, $0,001 par
value per share (the “Common Stock”), and warrants exercisable for
shares of Common Stock (the “Warrants”). Pursuant to the Securities
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement with the Holders (the “Registration Rights Agreement”) pursuant to which the Company
agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the shares of Common Stock
issuable upon conversion of the Notes and exercise of the Warrants, under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on ___________ ___, 20__,
the Company filed a Registration Statement on Form S-l (File No.
333-___________) (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the Registrable
Securities which names each of the Holders as a selling stockholder
thereunder.

     

    In
connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.


     

    This
letter shall serve as our standing opinion to you that the shares of Common
Stock underlying the Notes and Warrants are freely transferable by the Holders
pursuant to the Registration Statement. You need not require further letters
from us to effect any future legend-free issuance or reissuance of such shares
of Common Stock to the Holders as contemplated by the Company’s Irrevocable
Transfer Agent Instructions dated ___________________ __, 20__.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                  Very
      truly yours,

                
	 
      
	
                  [ISSUER’S
      COUNSEL]

                
	 
      
	
                  By:

                	 
      


        

      

    

    


    CC:    [LIST NAMES OF
HOLDERS]


      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    EXHIBIT
B

     

    SELLING
STOCKHOLDERS

     

    The
shares of common stock being offered by the selling stockholders are those
issuable to the selling stockholders upon conversion of the notes and exercise
of the warrants. For additional information regarding the issuance of the notes
and the warrants, see “Private Placement of Notes and Warrants” above. We are
registering the shares of common stock in order to permit the selling
stockholders to offer the shares for resale from time to time. Except for the
ownership of the notes and the warrants issued pursuant to the Securities
Purchase Agreement, the selling stockholders have not had any material
relationship with us within the past three years.

     

    The table
below lists the selling stockholders and other information regarding the
beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of
the shares of common stock held by each of the selling stockholders. The second
column lists the number of shares of common stock beneficially owned by the
selling stockholders, based on their respective ownership of shares of
common
stock, notes and warrants, as of ___________, 2009, assuming conversion of the
notes and exercise
of the warrants held by each such selling stockholder on that date but taking
account of any limitations on conversion and exercise set forth
therein.

     

    The third
column lists the shares of common stock being offered by this prospectus by the
selling stockholders and does not take in account any limitations on (i)
conversion of the notes set forth therein or (ii) exercise of the warrants set
forth therein.

     

    In
accordance with the terms of a registration rights agreement with the holders of
the notes and the warrants, this prospectus generally covers the resale of 133%
of the sum of (i) the maximum number of shares of common stock issuable upon
conversion of the notes and (ii) the maximum number of shares of common stock
issuable upon exercise of the warrants, in each case, determined as if the
outstanding notes and warrants were converted or exercised (as the case may be)
in full (without regard to any limitations on conversion or exercise contained
therein) as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC. Because the conversion price of the
notes and the exercise price of the warrants may be adjusted, the number of
shares that will actually be issued may be more or less than the number of
shares being offered by this prospectus. The fourth column assumes the sale of
all of the shares offered by the selling stockholders pursuant to this
prospectus.


     

    Under the
terms of the notes and the warrants, a selling stockholder may not convert the
notes or exercise the warrants to the extent (but only to the extent) such
selling stockholder or any of its affiliates would beneficially own a number of
shares of our common stock which would exceed 4.9% (as applicable). The number
of shares in the second column reflects these limitations. The selling
stockholders may sell all, some or none of their shares in this offering. See
“Plan of Distribution.”


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    
      
        
          
            
              	
                      Name of Selling Stockholder

                    	 
      	
                      Number of Shares of

                      Common Stock Owned

                      Prior to Offering

                    	 
      	
                      Maximum Number of

                      Shares of Common Stock to

                      be Sold Pursuant to this

                      Prospectus

                    	 
      	
                      Number of Shares of

                      Common Stock of Owned

                      After Offering

                    	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                      Iroquois
      Master Fund Ltd.

                    	 
      	 
      	 
      	 
      	 
      	 
      	 
      


            

          

        

      

    

    


    (1)


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    PLAN
OF DISTRIBUTION

     

    We are
registering the shares of common stock issuable upon conversion of the notes and
exercise of the warrants to permit the resale of these shares of common stock by
the holders of the notes and warrants from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
stockholders of the shares of common stock. We will bear all fees and expenses
incident to our obligation to register the shares of common stock.

     

    The
selling stockholders may sell all or a portion of the shares of common stock
held by them and offered hereby from time to time directly or through one or
more underwriters, broker-dealers or agents. If the shares of common stock are
sold through underwriters or broker-dealers, the selling stockholders will be
responsible for underwriting discounts or commissions or agent’s commissions.
The shares of common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block transactions,
pursuant to one or more of the following methods:

     

    
      	
               
      

            	
              ●

            	
              on
      any national securities exchange or quotation service on which the
      securities may be listed or quoted at the time of
  sale;

            


    

     

    
      	 	
                    
                ● 

              

            	
              in
      the over-the-counter market;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              in
      transactions otherwise than on these exchanges or systems or in the
      over-the-counter market;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              through
      the writing or settlement of options, whether such options are listed on
      an options exchange or otherwise;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            


    

     

    
      	 	
                    
                ●

              

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            


    

     

    
      	 	
                    
                ●

              

            	
              privately
      negotiated transactions;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              short
      sales made after the date the Registration Statement is declared effective
      by the SEC;

            


    

     

    
      	
               
      

            	
                    
                ●

              

            	
              broker-dealers
      may agree with the selling securityholders to sell a specified number of
      such shares at a stipulated price per
share;

            


    

     

    
      	 	
                    
                ●

              

            	
              a
      combination of any such methods of sale;
and

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
            	
                    
                ●

              

            	
              any
      other method permitted pursuant to applicable
  law.

            


    

     

    The
selling stockholders may also sell shares of common stock under Rule 144
promulgated under the Securities Act of 1933, as amended, if available, rather
than under this prospectus. In addition, the selling stockholders may transfer
the shares of common stock by other means not described in this prospectus. If
the selling stockholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of common stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of common stock short and
deliver shares of common stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.

     

    The
selling stockholders may pledge or grant a security interest in some or all of
the notes, warrants or shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending, if necessary, the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this
prospectus.

     

    To the
extent required by the Securities Act and the rules and regulations thereunder,
the selling stockholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if
required, will be distributed, which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling stockholders and any
discounts, commissions or concessions allowed or re-allowed or paid to
broker-dealers.

     

    Under the
securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in
some states the shares of common stock may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied
with.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    There can
be no assurance that any selling stockholder will sell any or all of the shares
of common stock registered pursuant to the registration statement, of which this
prospectus forms a part.

     

    The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common stock
by the selling stockholders and any other participating person. To the extent
applicable, Regulation M may also restrict the ability of any person engaged in
the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing may
affect the marketability of the shares of common stock and the ability of any
person or entity to engage in market-making activities with respect to the
shares of common stock.

     

    We will
pay all expenses of the registration of the shares of common stock pursuant to
the registration rights agreement, estimated to be $[   ] in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or “blue sky” laws; provided,
however, a selling stockholder will pay all underwriting discounts and selling
commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act that
may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreements or we may be entitled to
contribution.


     

    Once sold
under the registration statement, of which this prospectus forms a part, the
shares of common stock will be freely tradable in the hands of persons other
than our affiliates.