Document:

Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of
                ,
2004, by and among Grant Ventures, Inc. (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 by and 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 following meanings:

 

“Effectiveness Date” means, with respect
to the Registration Statement required to be filed pursuant to Section 2(a),
the earlier of (a) the 150th calendar day from the Filing Date (or
the 180th day if reviewed by the Commission), and (b) the date on
which the Commission declares the effectiveness of the Registration Statement.

 

“Effectiveness Period” shall have the
meaning set forth in Section 2(a).

 

“Filing Date” means, with respect to the
Registration Statement required to be filed hereunder, the date sixty (60)
calendar days from the Closing Date.

 

“Holder” or “Holders” means the holder or holders,
as the case may be, from time to time of Registrable Securities (including any
permitted assignee).

 

“Holders’ Representative” means Duncan
Capital LLC, or any other person that has been appointed by the Holders of a
majority of the Registrable Securities to act as representative of the Holders
for purposes of this Agreement.

 

“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).

 

“Proceeding” means an action, claim,
suit, investigation or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus
included in the Registration Statement (including, without limitation, 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.

 

“Registrable Securities” means the
Shares, the Warrant Shares and any shares of Common Stock issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing or in connection with any
provisions in the Warrants.

 

“Registration Statement” means the
registration statements required to be filed hereunder, including (in each
case) the Prospectus, amendments and supplements to the 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 the registration statement.

 

“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.

 

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading
Market, or (ii) if the Common Stock is not quoted on a Trading Market, a day on
which the Common Stock is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting price); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i), and
(ii) hereof, that Trading Day shall mean a Business Day.

 

“Warrants” shall mean the Common Stock purchase warrants issued to the Purchasers
pursuant to the Purchase Agreement.

 

2.                                       Registration.

 

(a)                                  Mandatory
Registration.  No later than the
Filing Date, the Company shall prepare and file with the Commission the Registration
Statement covering the resale of all of the Registrable Securities which a
Holder has requested to be included in such Registration Statement and for
which such Holder has provided the Company with a completed Selling
Securityholder Questionnaire, which offering shall be made on a continuous
basis pursuant to Rule 415. The Registration Statement required hereunder shall
be on Form SB-2 (or other applicable form). The Registration Statement required
hereunder shall contain (except if otherwise directed by the Holders) the “Plan of Distribution” substantially in
the form attached hereto as Annex A
(which may be modified as required by the Securities Act and the rules and
regulations thereunder and to respond to comments, if any, received by the Commission).
The

 

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Company shall use its commercially reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof and shall use its commercially
reasonable efforts to keep the Registration Statement continuously effective
under the Securities Act until the date when all Registrable Securities covered
by the Registration Statement (a) have been sold pursuant to the Registration
Statement or an exemption from the registration requirements of the Securities
Act or (b) may be sold without any volume or other restrictions pursuant to
Rule 144(k) (the “Effectiveness Period”).

 

(b)                                 Filing
Default Liquidation Damages.  If a
Registration Statement is not filed on or prior to the Filing Date, then the
Company shall pay to each Holder an amount in cash until the earlier of the
date a Registration Statement is filed and the Registrable Securities may be
sold pursuant to Rule 144(k), as liquidated damages and not as a penalty, equal
to (i) one (1%) percent of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for the first thirty (30) days (or a pro
rata portion of one (1%) percent for any part thereof) following the Company’s
failure to file, and (ii) an additional one (1%) percent of the aggregate
purchase paid by such Holder thereunder for each thirty (30) day period
subsequent thereto (or a pro rata portion of one (1%) percent for any part thereof),
such payment(s) to be made in immediately available funds no later than five
(5) days after the first date of each 30 day period (or any part thereof), as
the case may be, during the Company’s failure to file.

 

(c)                                  Effectiveness
Default Liquidation Damages.  In
addition to any liquidated damages paid, accrued and/or to be paid pursuant to Section 2(b),
if (1) a Registration Statement is not declared effective on or prior to 150
days from the Closing Date (or 180 days if reviewed by the Commission), or (2)
if a Registration Statement has been declared effective and subsequent thereto
is not effective for any period of time until the date no Holder owns any
Registrable Securities or Warrants (an “Effectiveness
Default”), then the Company shall pay to each Holder an amount
in cash until the date a Registration Statement is declared effective (and
permits the resale of the Registrable Securities covered thereby)(or if
previously declared effective until the date the Registration Statement becomes
effective (and otherwise permits the resale of the Registrable Securities
covered thereby) again), as liquidated damages and not as a penalty, equal to
(i) one (1%) percent of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for the first thirty (30) days (or a pro
rata portion of one (1%) percent for any part thereof), and (ii) an additional
one (1%) percent of the aggregate purchase price paid by such Holder thereunder
for each thirty (30) day period subsequent thereto (or a pro rata portion of
one (1%) for any part thereof) until the earlier of (a) such date the
Registration Statement is declared effective (or if previously declared
effective until the date the Registration Statement becomes effective (and
otherwise permits the resale of the Registrable Securities covered thereby)
again), and (b) the Registrable Securities may be sold pursuant to Rule 144(k);
provided, however, for purposes of this
subsection (c), it shall not be considered an Effectiveness Default during
any such period in which there is a Material Development Condition (as defined
below) which is permitted pursuant to Section 6(o).  Any such payment(s) shall be made in
immediately available funds no later than five (5) days after the first day of
each 30 day period of each such Effectiveness Default.

 

(d)                                 Piggyback
Registrations Rights.

 

(i)                                     If, at any time
during the Effectiveness Period, there is not an effective Registration
Statement covering all of the Registrable Securities (other than the

 

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Registrable Securities of a Holder that failed to comply with its
obligations under Section 2(d) or Section 3(j)), and
the Company shall determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities 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 their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans), then the Company shall send to each Holder a written notice of such
determination and, if within ten (10) days after receipt by a Holder, the
Company shall receive a request in writing from any such Holder, the Company
shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered; provided, however,
that (A) if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company determines
for any reason not to proceed with such registration, the Company will be
relieved of its obligation to register any Registrable Securities in connection
with such registration, and (B) in case of a determination by the Company to
delay registration of its securities, the Company will be permitted to delay
the registration of Registrable Securities for the same period as the delay in
registering such other securities, in any such case without any obligation or
liability to any Holder.  Any Holder who
elects to include Registrable Securities in a registration statement pursuant
to this Section 2(d) shall sell such Registrable Securities on the
same terms and conditions as the equity securities of the Company or others
(other than other Holders) are being sold pursuant to such registration
statement. Notwithstanding the foregoing, nothing in this Section 2(d)
shall permit the Company to file a registration statement in contravention of
the restrictions in Section 6(b).

 

(ii)                                  Notwithstanding
anything in this Section 2(d) to the contrary, with respect to any
registration described in this Section 2(d) that is an underwritten
registration of the Company’s securities for the Company’s own account, if the
managing underwriter advises the Company that the inclusion of some or all of
the Registrable Securities requested to be included in such registration would
interfere with the successful marketing (including pricing) of the equity
securities of the Company to be registered by the Company, then the number of
shares to be included in any such registration shall be included in the
following order: (A) first, the shares to be registered by the Company; and (B)
second, the Registrable Securities of the Holders requested to be included in
such registration pursuant to Section 2(d)(i), on a pro-rata basis
based on the Holders’ respective percentage ownership of the Company on a
fully-diluted basis, and (C) third, Registrable Securities of all other holders
who are entitled to include securities in such registration, on a pro-rata
basis based on such holders’ respective percentage ownership of the Company on
a fully-diluted basis.

 

(iii)                               Notwithstanding anything
in this Section 2(d) to the contrary, with respect to any
registration described in this Section 2(d) that is an underwritten
registration of the Company’s securities for the account of other holders of
such securities (“the “Demanding Holders”), if the managing underwriter
advises the Company that the inclusion of some or all of the Registrable
Securities requested to be

 

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included in such registration pursuant to clause (i) of this Section 2(d)
would interfere with the successful marketing (including pricing) of the equity
securities of the Company to be registered by the Company, then the number of
shares to be included in any such registration shall be included in the
following order: (A) first, the securities of the Demanding Holders, (B)
second, the Registrable Securities of the Holders requested to be included in such
registration pursuant to Section 2(d)(i), on a pro-rata basis based
on the Holders’ respective percentage ownership of the Company on a
fully-diluted basis, (C) third, any shares to be registered by the Company for
its own account, and (D) fourth, Registrable Securities of all other holders
who are entitled to include securities in such registration, on a pro-rata
basis based on such holders’ respective percentage ownership of the Company on
a fully-diluted basis.

 

(e)                                  Sufficient
Number of Shares Registered.In
the event the number of shares of Common Stock covered under a Registration
Statement filed pursuant to Section 2(a) or Section 2(d)
is insufficient to cover all of the Registrable Securities which such
Registration Statement is required to cover, the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least 100% of
the Registrable Securities, in each case, as soon as practicable, but in any
event not later than ten (10) Business Days after the necessity therefor
arises. The Company shall use its commercially reasonable efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares of Common Stock covered under a Registration
Statement shall be deemed “insufficient to
cover all of the Registrable Securities” if the number of
Registrable Securities issued or issuable upon exercise of the Warrants covered
by such Registration Statement is greater than the number of shares of Common
Stock available for resale under the Registration Statement to cover shares
issued or issuable upon exercise of the Warrants.

 

(f)                                    Participation
in Underwritten Registrations.  No
Holder may participate in any underwritten registration with respect to the
Registrable Securities unless such Holder completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of such
underwriting agreements.

 

(g)                                 Other
Requirements.  In connection with any
Registration Statement under Section 2(a) or any registration
statement under Section 2(d), Holders whose Registrable Securities
are included therein shall provide such information and shall execute and
deliver to the Company such documents, including, but not limited to, a selling
securityholder questionnaire in customary form and substance reasonably
satisfactory to the Company, as the Company may reasonably request in order to
effect such registration pursuant to this Agreement and in accordance with
applicable securities laws.

 

3.                                       Registration
Procedures.  In connection with the
Company’s registration obligations hereunder, the Company shall:

 

(a)                                  Not
less than three (3) Trading Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto, (i)
furnish to the Holders’ Representative copies of all such documents
substantially in the form proposed to be

 

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filed (including documents incorporated or deemed incorporated by
reference to the extent requested by such Person) which documents will be
subject to the review of the Holders’ Representative, and (ii) subject, if
appropriate, to the execution of confidentiality agreements in form acceptable
to the Company, cause its officers and directors, counsel and independent
certified public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to conduct a
reasonable investigation within the meaning of the Securities Act.

 

(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 Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period; (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; and (iii) respond as promptly as reasonably practicable
to any comments received from the Commission with respect to the Registration
Statement or any amendment thereto and, as promptly as reasonably practicable,
upon request, provide the Holders’ Representative true and complete copies of
all correspondence from and to the Commission relating to the Registration
Statement (subject, if appropriate, to the execution of confidentiality
agreements in form acceptable to the Company).

 

(c)                                  Notify
the Holders of Registrable Securities to be sold as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than three (3) Trading
Days prior to such filing) and (if requested by any such Person) confirm such
notice in writing promptly following the day (i)(A) when a Prospectus or any
Prospectus supplement 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 the Registration Statement and whenever the
Commission comments in writing on the Registration Statement (the Company shall
upon request provide true and complete copies thereof and all written responses
thereto to each of the Holders, subject, if appropriate, to the execution of
confidentiality agreements in form acceptable to the Company); 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 or any other federal or state governmental authority 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

 

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therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

(d)                                 Use
its commercially reasonable efforts to avoid the issuance of, or, if issued,
obtain the withdrawal 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, at the earliest practicable moment.

 

(e)                                  Promptly
deliver to each Holder no later than two (2) business days after the
Effectiveness Date, without charge, two (2) copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto (and, upon the request of the Holder such additional copies
as such Persons may reasonably request in connection with resales by the Holder
of Registrable Securities). 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).

 

(f)                                    Prior
to any resale of Registrable Securities by a Holder, 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 the
registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, however,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, 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.

 

(g)                                 If
requested by the Holders, 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.

 

(h)                                 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.

 

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(i)                                     Use
its reasonable commercial efforts to comply in all material respects with all
applicable rules and regulations of the Commission relating to the registration
of the Registrable Securities pursuant to the Registration Statement or
otherwise.

 

(j)                                     The
Company shall not be required to include in any Registration Statement the
Registrable Securities of any Holder that does not complete a Selling
Shareholder Questionnaire.

 

(k)                                  The
Company shall use its commercially reasonable efforts to arrange for at least
two (2) market makers to register with the National Association of Securities
Dealers, Inc. (“NASD”) as
such with respect to such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this Section 3(k).

 

(l)                                     The
Company shall make all documents, files, books, records, officers, directors
and employees of the Company reasonably available to the Holders’
Representative, one legal counsel to the Holders and one firm of accountants
retained by the Holders (collectively, the “Inspectors”), and make such other accommodations as are
reasonably necessary for the Inspectors, if any, to perform a due diligence
review of the Company; provided, however, that all such information (“Confidential Information”) will be kept
confidential and not utilized by the Inspectors except as contemplated herein
and except as required by law or court order. 
The term Confidential Information also includes any information included
in a draft Registration Statement or any related Prospectus or any amendment or
supplement hereto provided to a Holder pursuant to Section 3(a);
for the avoidance of doubt, however, as noted in Section 3(a)
above, the Company shall not furnish to Holders, without their prior approval,
any information that constitutes or might constitute material, non-public
information.  The term Confidential
Information does not include information that (a) is already in possession of
such other party (other than that which is subject to another confidentiality
agreement or unless obtained from a third party where the receiving party knows
that the third party was subject to a confidentiality agreement), (b) becomes
generally available to the public, or (c) becomes available on a non-confidential
basis from a source other than the Company unless obtained from a third party
where the receiving party knows that the third party was subject to a
confidentiality agreement.  Each Holder
agrees that it shall, upon learning that disclosure of such Confidential
Information 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 information deemed
confidential.

 

(m)                               The
Company shall hold in confidence and not make any disclosure of information
concerning any Holder provided to the Company unless (a) such information is
already in possession of the Company, (b) such information becomes available to
the Company on a non-confidential basis from a person other than such Holder
who is not known by the Company to be otherwise bound by a confidentiality or
comparable agreement with such Holder (c) disclosure of such information is
necessary to comply with federal or state securities laws, (d) the disclosure
of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement or Prospectus, (e) 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, (f) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement to which the

 

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Company is a party, or (g) such Holder consents to the form and content
of any such disclosure (the Holders shall be deemed to consent to the inclusion
of any information provided in the Selling Shareholder Questionnaire in the
Registration Statement, any Prospectus related thereto, and any amendments or
supplements thereto). The Company agrees that it shall, upon learning that
disclosure of such information concerning any Holder is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Holder and allow such Holder, at the Holder’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

(n)                                 The
Company covenants that it shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder so long as the Holder owns any Registrable
Securities, but in no event longer than two (2) years; provided, however,
the Company may delay any such filing but only pursuant to Rule 12b-25 under
the Exchange Act, and the Company shall use commercially reasonable efforts to
take such further action as any Holder of Registrable Securities may reasonably
request (including without limitation, promptly obtaining any required legal
opinions from Company counsel necessary to effect the sale of Registrable Securities
under Rule 144 and paying the related fees and expenses of such counsel), all
to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.

 

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, other than fees and expenses of
counsel or any other advisor retained by the Holders and discounts, fees and
commissions with respect to the sale of any Registrable Securities by the
Holders. 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 the Trading Market on which the Common Stock is then listed for
trading, and (B) to effect 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),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements
of counsel for the Company, (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 or other trading market as required
hereunder.

 

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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 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,
without limitation, reasonable attorneys’ fees) and expenses (including the
cost (including without limitation, reasonable attorneys’ fees) and expenses
relating to an Indemnified Party’s actions to enforce the provisions of this Section 5)
(collectively, “Losses”),
as incurred, to the extent arising out of or relating to any untrue or alleged
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 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 (or alleged untrue) statements or omissions (or
alleged omissions) are based solely upon information regarding such Holder
furnished (or in the case of an omission, not furnished) in writing to the
Company by or on behalf of 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 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 the Holder has reviewed Annex A hereto for this purpose), (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(d), or (3) the failure of the Holder to deliver a
Prospectus as amended or supplemented prior to the confirmation of a sale.  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 the fullest
extent permitted by applicable law, from and against all Losses, as incurred,
to the extent 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 or alleged 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 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 the Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading (i) to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished (or in the case of an omission, not
furnished) in writing by or on behalf of such Holder to the Company
specifically for inclusion in the Registration Statement or such Prospectus or
(ii) to the extent that (1) such

 

10

 

untrue statements or omissions are based solely upon information
regarding such Holder furnished (or in the case of an omission, not furnished)
in writing to the Company by or on behalf of 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 by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has reviewed 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(d), or (3) the failure of
the Holder to deliver a Prospectus prior to the confirmation of a sale. In no
event shall the liability of any selling Holder hereunder be greater in amount
than the gross proceeds received by the Holder with respect to the sale of its
Registrable Securities.

 

(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
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
such failure shall have materially prejudiced the Indemnifying Party.

 

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in (but not control) 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 to
assume the defense of such Proceeding in a timely manner 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 in writing that a conflict
of interest would 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 for all Indemnified Parties in any matters
related on a factual basis shall be at the expense of the Indemnifying Party).
The Indemnifying Party shall not be liable for any settlement of any such
Proceeding affected without its written consent. 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.

 

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

 

11

 

Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within fifteen (15) Trading Days of
written notice thereof to the Indemnifying Party; provided, that the
Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined
based upon the relative faults of the parties.

 

(d)                                 Contribution.
If a claim for indemnification under Section 5(a) or Section 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 was available to such party in accordance with its terms.

 

(e)                                  The
parties hereto agree that it would not be just and equitable if contribution
pursuant to 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 Section 5(d).  Notwithstanding the provisions of Section 5(d),
no Holder shall be required to indemnify or contribute, in the aggregate,
pursuant to this Article 5, 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 are in addition to any liability that the Indemnifying
Parties may have to the Indemnified Parties. 
No party guilty of fraudulent misrepresentation pursuant to
Section 11(f) of the Securities Act shall be entitled to contribution from
any other party.

 

6.                                       Miscellaneous.

 

(a)                                  Remedies.  In the event of a breach by the Company or by
a Holder of any of their 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 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

 

12

 

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.

 

(b)                                 No
Piggyback on Registrations.  Other
than those securities (including securities issuable upon exercise of warrants)
that may be issued to Holders and/or the Placement Agent and/or its
designee(s), the securities set forth on Schedule 3.1(z) of the
Purchase Agreement and such other securities as may be consented to in writing
by the Placement Agent, neither the Company nor any of its security holders may
include securities of the Company in a Registration Statement filed pursuant to
Section 2(a) hereof.  Other
than pursuant to rights granted to the Placement Agent and/or to Holders in
this Agreement, no Person has any right to cause the Company to effect a
registration under the Securities Act of any securities of the Company.

 

(c)                                  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.

 

(d)                                 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 paragraph.

 

(e)                                  Amendments
and Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders of at least
75% of the then outstanding Registrable Securities (assuming the exercise of
all Warrants, whether exercised or not), whereupon such amendment,
modification, supplement or waiver shall be binding on all Holders; provided,
however, that no consideration shall be offered or paid to any Holder to amend
or consent to a waiver or modification of any provision of this Agreement
unless the same consideration (on a pro-rata basis) is also offered to all of
the Holders under this Agreement.

 

(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 Trading Day following the date of mailing,
if sent by nationally recognized overnight courier service, or (ii) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be delivered and addressed as set
forth in the Purchase Agreement

 

(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. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.

 

13

 

(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 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 signature were the original thereof.

 

(i)                                     Governing
Law. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without regard to the conflicts of
laws principles thereof. The parties hereto hereby irrevocably agree that any
suit or proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the
City, County and State of New York. By its execution hereof, the parties hereby
covenant and irrevocably submit to the in
personam jurisdiction of the federal and state courts located in the
City, County and State of New York and agree that any process in any such
action may be served upon any of them personally, or by certified mail or
registered mail upon them or their agent, return receipt requested, with the
same full force and effect as if personally served upon them in New York City.
The parties hereto waive any claim that any such jurisdiction is not a
convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect
thereto.

 

(j)                                     Cumulative
Remedies.  Subject to the first
sentence of Section 6(a), 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 commercially
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;
Section References. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.  References to Sections mean
Sections of this Agreement unless otherwise stated.

 

(m)                               Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser hereunder is several and not joint with the obligations of any other
Purchaser hereunder, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser hereunder.  Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Purchaser shall be entitled to independently protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary

 

14

 

for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.  Each
Purchaser represents that it has been represented by its own separate legal
counsel in its review and negotiation of this Agreement.  The Company has elected to provide all
Purchasers with the same terms and documents for the convenience of the Company
and not because it was required to do so by the Purchasers.

 

(n)                                 Assignment
of Registration Rights. The rights under this Agreement shall be
automatically assignable by any Holder to any permitted transferee of all or
any portion of Registrable Securities if: (a) such Holder agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment; (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee, and (ii) the securities with respect to which such
registration rights are being transferred or assigned; and (c)  at or before the time the Company receives
the written notice contemplated by clause (b) of this sentence the transferee
or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein.

 

(o)                                 Deferral Period.  With
respect to any Registration Statement filed or to be filed pursuant to
Section 2, if the Company determines that, in its good faith judgment, it
would (because of the existence of, or in reasonable anticipation of, any
acquisition or corporate reorganization or other transaction, financing
activity, stock repurchase or other material development involving the Company
or any subsidiary, or the unavailability for reasons beyond the Company’s
control of any required financial statements or other material information, or
any other event or condition material to the Company or any subsidiary) be
materially disadvantageous to the Company to proceed with such Registration
Statement or that the Company is required by applicable law, rules or
regulations not to proceed with the Registration Statement (a “Material Development Condition”), then
the Company shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving of a written notice that a Material Development
Condition has occurred (a “Delay Notice”)
from an officer of the Company to the Placement Agent, as the representative of
the Purchasers, (i) to cause sales of Registrable Securities by the Purchasers
pursuant to such Registration Statement to cease, (ii) to cause such
Registration Statement to be withdrawn and the effectiveness of such
Registration Statement suspended, or (iii) in the event no such Registration
Statement has yet been filed or declared effective, to delay filing or
effectiveness of any such Registration Statement until, in the good faith
judgment of the Company, such Material Development Condition shall be disclosed
or no longer exists (notice of which the Company shall promptly deliver to the
Placement Agent, as the representative of the Purchasers).  Notwithstanding the foregoing provisions of
this Section 6(o), (1) in no event may such cessation or delay be for a
period of more than sixty (60) consecutive days from giving of its Delay Notice
to the Purchasers with respect to such Material Development Condition, as above
provided, or more than one hundred twenty (120) days in any twelve (12) months;
and (2) in the event a Registration Statement is filed and subsequently
withdrawn by reason of any existing or anticipated Material Development
Condition as provided above, the Company shall cause a new Registration
Statement covering the Registrable Securities to be filed with the Commission
as soon as reasonably practicable after such Material Development Condition
ceases to exist or, if sooner, as practicable after the expiration of such
sixty (60) day period.

 

15

 

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16

 

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

 

	
   

  	
  GRANT VENTURES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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(PURCHASERS SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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ANNEX A

 

Plan of Distribution

 

The
Selling Stockholders and any of their pledgees, donees, assignees and
successors-in-interest 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:

 

•                                          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;

 

•                                          put or call options transactions;

 

•                                          settlement of short sales;

 

•                                          broker/dealers may agree with the Selling
Stockholders 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 by applicable law.

 

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

 

Broker/dealers
engaged by the Selling Stockholders may arrange for other brokers/dealers to
participate in sales. Broker/dealers may receive commissions 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 to exceed what is customary in the
types of transactions involved.

 

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 donees, pledgees or
secured parties may offer and sell the shares of common stock from time to time
under this prospectus, or under 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
donee, 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 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 purchased by them may be deemed to be underwriting commissions under the
Securities Act. The Selling Stockholders have informed the Company that it does
not have any agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock.

 

At
the time a particular offering of securities is made, to the extent required, a
prospectus supplement will be distributed which will set forth the number of
securities being offered and the terms of the offering, including the purchase
price or the public offering price, the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriters for securities
purchased from the Selling Stockholders, any discounts, commissions and other
items constituting compensation from the selling security holders and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.

 

Pursuant
to applicable rules and regulations under the Exchange Act, any person engaged
in the distribution of the securities offered under this prospectus may not
simultaneously engage in market activities for the shares of common stock for a
period of five business days prior to the commencement of such
distribution.  In addition, each Selling
Stockholder and any other person who participates in a distribution of the
securities will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including Regulation M, which may limit the
timing of purchases and may affect the marketability of the securities and the
ability of any person to engage in market activities for the shares of common
stock.

 

The
Company is required to pay all fees and expenses incident to the registration
of the shares. The Company has agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.Exhibit 4.3

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

GRANT VENTURES, INC.

WARRANT TO PURCHASE
             SHARES
OF COMMON STOCK

(SUBJECT TO ADJUSTMENT)

(Void after
                ,
2009)

 

PPW -      

 

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES
that, for value received,
                          
(the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after
                ,
2004 (the “Exercise Date”)
and on or prior to the close of business on
              ,
2009 (the “Termination Date”),
but not thereafter, to subscribe for and purchase from GRANT VENTURES, INC., a
                  
corporation (the “Company”),
up to [        ] shares (the “Warrant Shares”), of common stock, par
value $       per share, of the Company (the “Common Stock”). The initial purchase
price of one (1) share of Common Stock under this Warrant shall be equal to
$0.1835 (the “Exercise Price”).  The Exercise Price and the number of Warrant
Shares for which the Warrant is exercisable shall be subject to adjustment as
provided elsewhere herein.

 

Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
in that certain Securities Purchase Agreement dated the date hereof between the
Company and the Purchasers set forth on Schedule 1 thereto (the “Purchase
Agreement”).

 

1.                                       Title
to Warrant.  Prior to the Termination
Date and subject to compliance with applicable laws and Section 7
of this Warrant, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the Holder in
person or by duly authorized attorney, upon surrender of this Warrant together
with the Assignment Form annexed hereto properly endorsed. The transferee shall
sign an investment letter in form and substance reasonably satisfactory to the
Company.

 

2.                                       Authorization
of Shares.  The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue and liens and charges incurred by the
Holder).

 

 

3.                                       Exercise
of Warrant

 

(a)                                  Exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Exercise Date and on or before the Termination Date by
the surrender of this Warrant and the Notice of Exercise Form annexed hereto
duly executed, at the office of the Company (or such other office or agency of
the Company as it may designate by notice in writing to the registered Holder
at the address of such Holder appearing on the books of the Company), and upon
payment of the Exercise Price of the Warrant Shares (subject to Section 3(d)
below), thereby purchased by wire transfer or cashier’s check drawn on a United
States bank or by means of a cashless exercise pursuant and subject to Section 3(d)
(if applicable), the Holder shall be entitled to receive a certificate for the
number of Warrant Shares so purchased. Certificates for Warrant Shares
purchased hereunder shall be delivered to the Holder within three (3) Trading
Days after the date on which this Warrant shall have been exercised as
aforesaid; provided, however, that (i) if the Company elects
(and the Holder is able to receive electronic delivery in such manner), or (ii)
if the Holder requests, and provided that the Company’s transfer agent is
participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (or FAST) program, the Company may or shall, as the case
may be, cause its transfer agent to electronically transmit the Warrant Shares
by crediting the account of the Purchaser’s Prime Broker with DTC through its
Deposit Withdrawal Agent Commission (or DWAC) system.

 

This Warrant shall be deemed to have been
exercised and such Warrant Shares shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been properly exercised by receipt by the Company of the Notice
to Exercise and payment to the Company of the Exercise Price and all taxes
required to be paid by the Holder, if any, pursuant to Section 5
have been paid.  If such conditions by
the Holder have been met, and the Company fails to deliver to the Holder the
Warrant Shares pursuant to this Section 3(a) by the close of
business on the third (3rd ) Trading Day after the date of such
conditions being met by the Holder, then the Holder will have the right to
rescind such exercise.

 

(b)                                 If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the Warrant Shares, deliver to Holder a new Warrant evidencing
the rights of Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.

 

(c)                                  If,
but only if, at the time of exercise of this Warrant (in whole or in part) at
any time after the Exercise Date there is no effective Registration Statement
which is then available registering the resale of the Warrant Shares by the
Holder, this Warrant may also be exercised at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A) =                    the Closing Price on the Trading Day preceding the date of such
election;

(B) =                      the Exercise Price of the Warrants, as adjusted; and

(X) =                     the number of Warrant Shares issuable upon exercise of the Warrants in
accordance with the terms of this Warrant.

 

4.                                       No
Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.

 

5.                                       Charges,
Taxes and Expenses.  Issuance of the
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of

 

 

such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued
in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event the Warrant Shares are to be
issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the payment of a sum sufficient for any
transfer tax incidental thereto.

 

6.                                       Closing
of Books. The Company will not close its stockholder books or records in
any manner which prevents the timely exercise of this Warrant, pursuant to the
terms hereof.

 

7.                                       Transfer,
Division and Combination.

 

(a)                                  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 1 and Section 7(e) hereof and to the
provisions of Section 4.1 of the Purchase Agreement, this Warrant
and all rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

 

(b)                                 This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a),
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.

 

(c)                                  The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.

 

(d)                                 The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.

 

(e)                                  If,
at the time of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant to
an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel reasonably satisfactory to the Company (which opinion shall be in form,
substance and scope reasonably satisfactory to the Company) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act.

 

8.                                       No
Rights as Stockholder Until Exercise. 
This Warrant does not entitle the Holder to any voting rights or other
rights as a stockholder of the Company prior to the exercise hereof. Upon the

 

 

surrender of this Warrant and the payment of
the aggregate Exercise Price (or by means of a cashless exercise), the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of the
date of such surrender or payment.

 

9.                                       Loss,
Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

 

10.                                 Saturdays,
Sundays, Holidays, etc.  If the last
or appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday in
the State of New York, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday in
the State of New York.

 

11.                                 Certain
Adjustments to Exercise Price and Number of Warrant Shares.

 

(a)                                  Stock
Splits, Etc.  The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the happening of any of
the following. In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder pursuant to this Section 11(a), the Holder shall thereafter
be entitled to purchase the number of Warrant Shares or other securities
resulting from such adjustment at an Exercise Price per Warrant Share or other
security obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

(b)                                 Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize its
capital, reclassify its capital stock (other than as set forth in Section 11(a)),
merge with or into or consolidate with another corporation or other entity
(where the Company is not the surviving corporation or where there is a change
in or distribution with respect to any class of common stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation or other entity and,
pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation or other entity, or any cash, shares of stock or other
securities or property of any nature whatsoever (including warrants or other subscription
or purchase rights) in addition to or in lieu of common stock of the successor
or acquiring corporation or other entity (“Other
Property”), are to be received by or distributed to the holders of
common stock of

 

 

the Company, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the number of
shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event. In case
of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than
the Company) and, if an entity different from the successor or acquiring
corporation, the entity whose common stock or Other Property the holders of the
Common Stock are entitled to receive as a result of such transaction, shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this Section 11(b).
For purposes of this Section 11(b), “common stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 11(b) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

 

12.                                 Voluntary
Adjustment by the Company.  The
Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

13.                                 Notice
of Adjustment.  Whenever the number
of Warrant Shares or number or kind of securities or other property purchasable
upon the exercise of this Warrant or the Exercise Price is adjusted, as herein
provided, the Company shall give notice thereof to the Holder, which notice
shall state the number of Warrant Shares (and other securities or property)
purchasable upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares (and other securities or property) after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made.

 

14.                                 Notice
of Corporate Action. If at any time: 

 

(a)                                  the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any other
right, or

 

(b)                                 there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or substantially all the property, assets or business of the Company to,
another corporation or,

 

(c)                                  there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in any one or more of such cases, the Company shall give to
Holder (i) at least 10 days’ prior

 

 

written notice of the date on which a record date shall be selected for
such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
days’ prior written notice of the date when the same is expected to take place.
Such notice in accordance with the foregoing clause also shall specify (i) the
date on which the holders of Common Stock shall be entitled to receive any such
dividend, distribution or right, and the amount and character thereof, and (ii)
the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or
other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the Company
and delivered in accordance with Section 16(d).  Failure to give such notice, or any defect
therein, shall not affect the validity of such action, so long as such failure
does not materially prejudice the rights of the Holders.

 

15.                                 Authorized
Shares. The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for (or facilitate
electronic delivery of) the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take reasonable commercial action
to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the
principal Trading Market upon which the Common Stock may be listed. 

 

(a)                                  Except
and to the extent as waived or consented to by the Holder, the Company shall
not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant.

 

(b)                                 Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

16.                                 Miscellaneous.

 

(a)                                  Jurisdiction.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby irrevocably agree that any suit
or proceeding arising directly and/or indirectly pursuant to or under this
Agreement, shall be brought solely in a federal or state court located in the

 

 

City, County and State of New York. By its
execution hereof, the Company, and by its acceptance of this Warrant, the
Holder, hereby covenant and irrevocably submit to the in personam jurisdiction of the federal
and state courts located in the City, County and State of New York and agree
that any process in any such action may be served upon any of them personally,
or by certified mail or registered mail upon them or their agent, return
receipt requested, with the same full force and effect as if personally served
upon them in New York City. The parties hereto waive any claim that any such
jurisdiction is not a convenient forum for any such suit or proceeding and any
defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements.

 

(b)                                 Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant will have legends imprinted upon any stock certificates evidencing
such Warrant Shares and the Company will notify its transfer agent of
restrictions upon resale imposed by the applicable state and federal securities
laws.

 

(c)                                  Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right
or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all
rights hereunder terminate on the Termination Date. If the Company willfully
and knowingly fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to Holder such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto
or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

(d)                                 Notices.
Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with
the notice provisions of the Purchase Agreement; provided, however,
upon any permitted assignment of this Warrant, the assignee shall promptly
provide the Company with its contact information.

 

(e)                                  Limitation
of Liability. No provision hereof, in the absence of any affirmative action
by Holder to exercise this Warrant or purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to
any liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

 

(f)                                    Remedies.
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

 

(g)                                 Successors
and Assigns. Subject to applicable securities laws, this Warrant and the
rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

 

(h)                                 Amendment.
This Warrant may be modified or amended or the provisions hereof waived with
the written consent of the Company and the Holder.

 

(i)                                     Severability.
Wherever possible, each provision of this Warrant shall be

 

 

interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

 

(j)                                     Headings.
The headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

 

17.                                 Redemption
of Warrants.

 

(a)                                  Commencing on
                    ,
2004, on not less than ten (10) days’ written notice (the “Redemption Notice”), to the holder of
this Warrant, this Warrant may be redeemed, at the option of the Company, in
whole and not in part, at a redemption price of $.01 per Warrant (the “Redemption Price”), provided (i) the
“Market Price” of a share of Common Stock shall equal at least two hundred
percent (200%) of the Exercise Price for the twenty (20) consecutive Trading
Days ending on the Trading Day immediately prior to the date of the Redemption
Notice (the “Target Price”),
subject to adjustments as set forth in Section 11 hereof, (ii) the
Company then has sufficient authorized capital to permit issuance of the full
number of Warrant Shares upon exercise of the Warrant, (iii) the Warrant Shares
are  listed or included for trading on a
Trading Market and (iv) a registration statement covering the Warrant Shares
filed under the Securities Act of 1933, as amended (the “Securities Act”) has been declared
effective by the Securities and Exchange Commission and remains effective on
the date fixed for redemption of this Warrant (the “Redemption Date”). For purposes of this
Warrant, Market Price is defined as the closing bid price per share of Common
Stock on the principal Trading Market on which the Common Stock is included for
trading; provided,  that if there
is no trading in the Common Stock on a particular Trading Day on the relevant
principal Trading Market, the Market Price for that day shall be the Market
Price on the last preceding Trading Day on which there was trading in the
Common Stock on the principal Trading Market.

 

(b)                                 If the conditions set forth in Section 17
are met, and the Company desires to exercise its right to redeem this Warrant,
it shall mail a Redemption Notice to the registered holder of this Warrant by
first class mail, postage prepaid, not later than the fifth (5th)
day before the date fixed for redemption, as provided in Section 17(a)
hereof.

 

(c)                                  The Redemption Notice shall specify (i) the
Redemption Price, (ii) the Redemption Date, (iii) the place where the Warrant
certificates shall be delivered and the redemption price paid, and (iv) that
the right to exercise this Warrant shall terminate at 5:00 p.m. (New York time)
on the business day immediately preceding the Redemption Date. No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity of the proceedings for such redemption except as to a holder (a)
to whom notice was not mailed, or (b) whose notice was defective. An affidavit
of the Secretary or an Assistant Secretary of the Company that the Redemption Notice
has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

(d)                                 Any right to exercise a Warrant shall
terminate at 5:00 p.m. (New York time) on the business day immediately
preceding the Redemption Date. On and after the Redemption Date, the holder of
this Warrant shall have no further rights except to receive, upon surrender of
this Warrant, the Redemption Price.

 

(e)                                  From and after the Redemption Date, the
Company shall, at the place specified in the Redemption Notice, upon
presentation and surrender to the Company by or on behalf of the holder thereof
the warrant certificates evidencing this Warrant being redeemed, deliver, or
cause to be delivered to or upon the written order of such holder, a sum in
cash equal to the Redemption Price of

 

 

this Warrant. From and after the Redemption
Date, this Warrant shall expire and become void and all rights hereunder and
under the warrant certificates, except the right to receive payment of the
Redemption Price, shall cease.

 

(f)                                    If the shares of Common Stock are subdivided
or combined into a greater or smaller number of shares of Common Stock, the
Target Price shall be proportionately adjusted by the ratio which the total
number of shares of Common Stock outstanding immediately prior to such event
bears to the total number of shares of Common Stock to be outstanding
immediately after such event.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS
WHEREOF, the Company
has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

 

Dated: 
            ,
2004

 

	
   

  	
  GRANT VENTURES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

NOTICE OF EXERCISE*

 

To:                                                    GRANT VENTURES, INC.

 

The undersigned hereby elects to purchase
                
Warrant Shares of GRANT VENTURES, INC. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

 

1.                                       Payment shall take the form of (check
applicable box):

o                                    in lawful money of the United States; or

o                                    the cancellation of such number of Warrant
Shares as is necessary, in accordance with and pursuant to Section 2(c)
(but only if, at the time of exercise of this Warrant at any time after the
Exercise Date there is no effective Registration Statement registering the
resale of the Warrant Shares by the Holder or the Holder is otherwise
prohibited from reselling its Warrant Shares pursuant to an effective
Registration Statement), to exercise this Warrant with respect to the number of
Warrant Shares specified above purchasable pursuant to the cashless exercise
procedures set forth in Section 2(c).

2.                                       Please issue a certificate or certificates
representing (or facilitate electronic delivery of) said Warrant Shares in the
name of the undersigned or in such other name as is specified below:

 

The Warrant Shares shall be delivered to the following:

 

3.                                       The undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended, and reaffirms the representations and warranties set forth in Section 3.2
of the Purchase Agreement as if made on the date hereof.

 

	
   

  	
  [PURCHASER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

*  All
capitalized terms not otherwise defined herein shall have the meanings set
forth in or incorporated by reference in the Warrant.

 

 

FORM OF ASSIGNMENT*

 

FOR VALUE
RECEIVED the
undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
under the within the Warrant, with respect to the number of Warrant Shares of
Common Stock set forth below:

 

	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  No. of Warrant Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

and does hereby irrevocably constitute and
appoint
                                                    
Attorney to make such transfer on the books of GRANT VENTURES, INC., maintained
for the purpose, with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  (Witness)

  

 

The undersigned Assignee of the Warrant
hereby makes to GRANT VENTURES, INC., as of the date hereof, with respect to
the Assignee, all of the representations and warranties made by the Holder in
the Registration Rights Agreement and the Purchase Agreement, and the
undersigned Assignee agrees to be bound by all the terms and conditions of the
Purchase Agreement, the Warrant and the Registration Rights Agreement.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  

 

*  All
capitalized terms not otherwise defined herein shall have the meanings set
forth in or incorporated by reference in 
the Warrant.

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