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                                                                  EXECUTION COPY


EXHIBIT 10.48

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of November 16, 2007, by and among MicroIslet, Inc., a Nevada
corporation (the "COMPANY"), and the investors signatory hereto (each a
"PURCHASER" and collectively, the "PURCHASERS").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, among the Company and the Purchasers (the "PURCHASE
AGREEMENT").

         The Company and the Purchasers hereby agree as follows:

         1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the respective meanings set forth in this Section 1:

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMON STOCK" means the common stock of the Company, $.001 par value
per share, and any securities into which such common stock may hereafter be
reclassified.

         "EFFECTIVE DATE" means the date that the Registration Statement is
first declared effective by the Commission.

         "EFFECTIVENESS PERIOD" shall mean the period from the Effective Date
until the Termination Date.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE ACT REPORT" means any periodic or other report filed by the
Company with the Commission pursuant to the Exchange Act or the rules and
regulations promulgated thereunder.

         "HOLDER" or "HOLDERS" means the holder or holders, as the case may be,
from time to time of Registrable Securities.

         "INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).

         "INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c)..

         "LOSSES" shall have the meaning set forth in Section 5(a).

         "NEW WARRANTS" shall have the meaning set forth in the Warrants.

         "PROCEEDING" means an action, claim, suit, investigation or proceeding
(including an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

         "PROSPECTUS" means the prospectus included in a Registration Statement
(including a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

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         "REGISTRABLE SECURITIES" means (i) the Shares, and (ii) the Warrant
Shares, which the Holder has requested to be registered pursuant to Section
2(a), until such time as (1) such securities have been sold to the public
pursuant to a registration statement or other means such that they are no longer
"restricted securities" under the Securities Act, or (2) such securities have
become Rule 415 Cutback Securities.

         "REGISTRATION STATEMENT" means the registration statement filed
hereunder in accordance with Section 2, including (in each case) the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.

         "RULE 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "RULE 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "RULE 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "SHARES" means the shares of Common Stock issued or issuable from time
to time to the Purchasers pursuant to the Purchase Agreement.

         "SPECIAL COUNSEL" means such firm as shall be designated by one or more
Holders holding no less than a majority of the outstanding Registrable
Securities. If no Special Counsel is designated, then the obligations of the
Company associated with Special Counsel shall not apply.

         "TERMINATION DATE" means the date when all Registrable Securities which
are (or pursuant to Section 2(a) may be) covered by the Registration Statement
have been sold or may be sold without volume restrictions pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer agent
and the Holders.

         "WARRANT SHARES" means, collectively, the shares of Common Stock
issuable upon exercise of the Warrants.

         "WARRANTS" means (i) the Warrants issued or issuable from time to time
under the Purchase Agreement, and (ii) any New Warrants issuable under the
Warrants.

         2. REGISTRATION RIGHTS; CUT-BACK.

                  (a) If at any time prior to the Termination Date there is not
an effective Registration Statement covering all of the Registrable Securities
and the Company files a registration statement with the Commission relating to
an offering for its own account or the account of others under the Securities


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Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or its then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or in an exchange offer for its own securities, or equity securities
issuable in connection with stock option or other employee benefit plans, then
the Company shall send to each Holder written notice of such determination and,
if within ten days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such Holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of registration rights.

                  (b) Notwithstanding the provisions of this Section 2, if (i)
after the Effective Date, the Registration Statement ceases to be effective and
available to the Holders as to all of the Registrable Securities (whether upon
the delivery of a notice pursuant to Section 6(c) or otherwise) at any time
prior to the expiration of the Effectiveness Period without becoming available
to the Holders as to all of the Registrable Securities within twenty (20)
Trading Days pursuant to the delivery of an Advice, or (ii) at the time of
effectiveness of the Registration Statement is not available to the Holder as to
all of the Registrable Securities; in either case, caused by the assertion by
the Commission that the number of shares proposed to be registered under the
Registration Statement constitutes an offering by or on behalf of the Company
not at a fixed price, the Company shall use its best efforts to register the
maximum number of shares permissible by the Commission to retain the status of
the offering as a secondary offering under Rule 415. In reducing the number of
shares to be registered under the Registration Statement, the Company shall omit
Registrable Securities (such omitted Registrable Securities, the "RULE 415
CUTBACK SECURITIES") in the following order of priority: FIRST, all Warrant
Shares, PRO RATA per Holder; and, THEREAFTER, all Shares, PRO RATA per Holder.
With respect to any Shares which are Rule 415 Cutback Securities, the Company
shall issue to each Holder as liquidated damages, and not as a penalty, a
warrant, substantially in the form of the Warrants, exercisable from and after
the date one year after the applicable Closing Date at an exercise price of
$0.60 per share and expiring on the date six years after the applicable Closing
Date, for a number of shares of Common Stock equal to the product of (x) 0.04;
and (y) the number of Shares held by such Holder which are Rule 415 Cutback
Securities. Except as provided in the immediately preceding sentence, the
Company shall not be liable to any Holder for any damages in respect of its
failure to register Rule 415 Cutback Securities for resale under the Securities
Act or any state securities or blue sky laws.

                  (c) Notwithstanding anything herein to the contrary, during
the Effectiveness Period, the Company shall prepare and file a supplement to the
Prospectus (if required and permitted for such purpose under the Securities Act)
within seven (7) Trading Days following the written request of the holder of a
New Warrant for the purpose of listing such holder as a selling stockholder in
the Prospectus.

         3. REGISTRATION PROCEDURES. In connection with the Company's
registration obligations hereunder, the Company shall:

                  (a) Not less than two Trading Days prior to the filing of the
Registration Statement or any related Prospectus or any amendment or supplement
thereto (other than a supplement which attaches a previously filed Exchange Act
Report), furnish to the Holders and the Special Counsel copies of all such
documents proposed to be filed which documents will be subject to the review of
such Holders and the Special Counsel. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders of a majority of the Registrable Securities or the
Special Counsel shall reasonably object in good faith.

                  (b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the


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Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably practical to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and, as promptly as reasonably practical provide the Holders true and complete
copies of all correspondence from and to the Commission relating to the
Registration Statement (except to the extent such correspondence would disclose
material non-public information); and (iv) comply in all material respects with
the provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.

                  (c) Notify the Holders of Registrable Securities to be sold
and the Special Counsel as promptly as reasonably possible (and, in the case of
(i)(A) below, not less than three Trading Days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than two
Trading Days following the day (i)(A) when a Prospectus or any Prospectus
supplement (other than a supplement which attaches a previously filed Exchange
Act Report) or post-effective amendment to the Registration Statement is
proposed to be filed; (B) when the Commission notifies the Company whether there
will be a "review" of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement (the Company shall provide
true and complete copies thereof and all written responses thereto to each of
the Holders, except to the extent such correspondence would disclose material
non-public information); and (C) with respect to the Registration Statement or
any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

                  (d) Use its reasonable best efforts to avoid the issuance of,
or, if issued, obtain the withdrawal as promptly as reasonably possible of (i)
any order suspending the effectiveness of the Registration Statement, or (ii)
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction.

                  (e) Furnish to each Holder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.

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                  (f) Promptly deliver to each Holder, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(c) to discontinue disposition of Registrable Securities
pursuant to the Registration Statement.

                  (g) Prior to any public offering of Registrable Securities,
use its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of all
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement; PROVIDED that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or subject
the Company to any material tax in any such jurisdiction where it is not then so
subject or file a general consent to service of process in any such
jurisdiction.

                  (h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holders may request
in writing a reasonable period of time prior to any sale of Registrable
Securities.

                  (i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an 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 light of the circumstances under which they were made,
not misleading.

                  (j) Comply in all material respects with all applicable rules
and regulations of the Commission.

         In connection with a registration request made by a Holder pursuant to
Section 2(a) and from time to time thereafter, the Company may require a selling
Holder to furnish to the Company a Registration Statement Questionnaire in the
form attached to the Purchase Agreement as Appendix 1, as such form may be
revised from time to time by the Company to correspond to information required
by the Commission. Each Holder shall furnish the information required in a
Registration Statement Questionnaire within five Trading Days of the Company's
request. During any periods that the Company is unable to meet its obligations
hereunder with respect to the registration of the Registrable Securities solely
because any Holder fails to furnish such information within five Trading Days of
the Company's request, any liquidated or other damages that are accruing at such
time shall be tolled until such information is delivered to the Company.

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         4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to
the Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market, and (B) in compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and up to $2,500 of the fees and disbursements of Special Counsel, (v)
Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement. In addition, the Company shall be responsible for all of its internal
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit and the fees and expenses incurred in connection
with the listing of the Registrable Securities on any securities exchange as
required hereunder.

         5. INDEMNIFICATION.

                  (a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including reasonable costs of
preparation and reasonable attorneys' fees) and expenses (collectively,
"LOSSES"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based upon information
regarding such Holder or such other indemnified party furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that each Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c). The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware in connection with the transactions contemplated by this
Agreement.

                  (b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to

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the fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising out of or based upon: (x) such Holder's failure to comply with
the prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading to the extent that such untrue statement or omission is contained in
any information furnished in writing by such Holder to the Company specifically
for inclusion in such Registration Statement or such Prospectus or to the extent
that (1) such untrue statements or omissions are based upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement (it being understood that each
Holder has approved Annex A hereto for this purpose), such Prospectus or such
form of Prospectus or in any amendment or supplement thereto or (2) in the case
of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the
use by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(c).
In no event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation.

                  (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and
the Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses incurred in connection with the
defense thereof; PROVIDED that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and the reasonable fees and expenses of one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

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         All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section 3) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; PROVIDED that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

                  (d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section 5 were available to
such party in accordance with its terms.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

         The indemnity and contribution agreements contained in this Section
5(d) are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.

         6. MISCELLANEOUS.

                  (a) REMEDIES. In the event of a breach by the Company or by a
Holder of any of its obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate. Notwithstanding the foregoing,
the Holders shall have no right to take any action to restrain, enjoin or
otherwise delay any registration statement filed by or proposed to be filed by
the Company as a result of any controversy that may arise with respect to the
interpretation or implementation of this Agreement.

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

                  (c) DISCONTINUED DISPOSITION. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section
3(c), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or
until it is advised in writing (the "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
Section 6(c).

                  (d) REGULATION M. Each Holder agrees not to take any action
with respect to any distribution deemed to be made pursuant to such Registration
Statement which would constitute a violation of Regulation M under the Exchange
Act or any other applicable rule, regulation or law.

                  (e) AMENDMENTS AND WAIVERS. No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Holders who collectively hold one-half or more
of the Shares then held by all Holders (PROVIDED, HOWEVER, that any such
amendment that adversely affects any Holder or class of Holders in a manner that
does not apply uniformly to all Holders, as applicable, shall require the
written consent of such adversely affected Holders or class) or, in the case of
a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.

                  (f) NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number or via email at the email address specified pursuant
to this Section 6(f) prior to 6:30 p.m. (New York City time) on a Trading Day,
(ii) the Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number or
via email at the email address specified pursuant to this Agreement later than
6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Trading Day following the date of mailing, if
sent by nationally recognized overnight courier service to the address specified
pursuant to this Section, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:

         If to the Company:         MicroIslet, Inc.
                                    6370 Nancy Ridge Drive, Suite 112
                                    San Diego, CA  92121
                                    Attn:  Chief Executive Officer
                                    Email:  MANDREWS@MICROISLET.COM
                                    Facsimile No.:  (858) 657-0288

                                      -9-
<PAGE>

         With a copy to:            Sheppard, Mullin, Richter & Hampton LLP
                                    12275 El Camino Real, Suite 200
                                    San Diego, California  92130-2006
                                    Attn:  John D. Tishler, Esq.
                                    Email:  JTISHLER@SHEPPARDMULLIN.COM
                                    Facsimile No.:  (858) 509-3691

         If to a Purchaser:         To the address set forth under such
                                    Purchaser's name on the signature
                                    pages hereto.

         If to any other Person who is then the registered Holder:

                                    To the address of such Holder as it appears
                                    in the stock transfer books of the Company

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

                  (g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. Except to its
successors, the Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

                  (h) EXECUTION AND COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile or
electronic transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile or electronic signature were
an original thereof.

                  (i) GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) shall
be commenced exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan (the "NEW YORK COURTS"). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for 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. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

                                      -10-
<PAGE>

                  (j) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.

                  (k) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

                  (l) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (m) CONSTRUCTION. The rules of construction set forth in
Section 5.5 of the Purchase Agreement shall apply MUTATIS MUTANDIS to this
Agreement.

                  (n) END OF EFFECTIVENESS PERIOD. At the end of the
Effectiveness Period the Holders shall discontinue sales of Shares pursuant to
such Registration Statement upon receipt of notice from the Company of its
intention to remove from registration the shares covered by such Registration
Statement which remain unsold.

                  (o) INDEPENDENT NATURE OF HOLDERS' OBLIGATIONS AND RIGHTS. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]

                                      -11-
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                                     MICROISLET, INC.

                                                     By: /S/ MICHAEL J. ANDREWS
                                                         -----------------------
                                                         Michael J. Andrews
                                                         Chief Executive Officer


                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF PURCHASER TO FOLLOW]














                                      -12-
<PAGE>



         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                SMR 1996 TRUST III, a trust
                                organized under the laws of
                                the State of New York

                                By: /S/ RONALD KATZ
                                    ---------------
                                    Ronald Katz
                                    Trustee

                                Address for Notice:
                                               6370 Nancy Ridge Dr., Ste. 112
                                               San Diego, California  92121-3212

                                Facsimile No.: (212) 375-6888
                                Email:         RKATZ@MICROISLET.COM
                                Attention:     Ronald Katz














                                      -13-
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.


                                       _________________________________________
                                       Name of Purchaser, if applicable

                                       By:______________________________________
                                          Print Name:
                                          Title:

                                       Address for Notice:
                                       _________________________________________
                                       _________________________________________
                                       _________________________________________
                                       _________________________________________
                                       Facsimile No.: __________________________
                                       Email:___________________________________
                                       Attn:____________________________________










                                      -14-
<PAGE>

                                                                         ANNEX A
                                                                         -------

                              PLAN OF DISTRIBUTION
                              --------------------

                  The selling stockholders may, from time to time, sell any or
all of their shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. The selling stockholders may use any one
or more of the following methods when selling shares:

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

                  o        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;

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

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

                  o        privately negotiated transactions;

                  o        short sales;

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

                  o        a combination of any such methods of sale; and

                  o        any other method permitted pursuant to applicable
                           law.

                  The selling stockholders may also sell shares under Rule 144
under the Securities Act, if available, rather than under this prospectus.

                  The selling stockholders may also engage in short sales
against the box, puts and calls and other transactions in our securities or
derivatives of our securities and may sell or deliver shares in connection with
these trades.

                  Broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.

                                      -15-
<PAGE>

                  The selling stockholders may from time to time pledge or grant
a security interest in some or all of the 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 under this prospectus after we have filed an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending 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 the shares of
common stock in other circumstances, in which case the transferees, pledgees or
other successors in interest will be the selling beneficial owners for purposes
of this prospectus and may sell the shares of common stock from time to time
under this prospectus after we have filed an amendment to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act of 1933
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus.

                  The selling stockholders and any broker-dealers or agents that
are involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.

                  We are required to pay all fees and expenses incident to the
registration of the shares of common stock. We have agreed to indemnify the
selling stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.

                  The selling stockholders have advised us that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares of common
stock, nor is there an underwriter or coordinating broker acting in connection
with a proposed sale of shares of common stock by any selling stockholder. If we
are notified by any selling stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares of common stock, if
required, we will file a supplement to this prospectus. If the selling
stockholders use this prospectus for any sale of the shares of common stock,
they will be subject to the prospectus delivery requirements of the Securities
Act.

                  The anti-manipulation rules of Regulation M under the
Securities Exchange Act of 1934 may apply to sales of our common stock and
activities of the selling stockholders.

                                      -16-