Document:

ICP Solar Technologies, Inc.: Exhibit 10.5 - Prepared by TNT Filings
   Inc.

  

Exhibit 10.5

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR
EXERCISED UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER,
SALE OR TRANSFER. 

AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF
RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT
OF THE RISKS INVOLVED.

	Warrant to Purchase 	  
	3,333,333 shares 	Warrant Number ______

Series C Warrant to Purchase Common Stock 
of 
ICP
Solar Technologies, Inc. 

          THIS
CERTIFIES that BRIDGEPOINTE MASTER FUND LTD., a Cayman Islands Exempted
Company or any subsequent holder hereof (“Holder”) has the right to
purchase from ICP Solar Technologies, Inc., a Nevada corporation (the
“Company”), up to Three Million Three Hundred Thirty Three Thousand Three
Hundred Thirty-Three (3,333,333) fully paid and nonassessable shares, of the
Company's common stock, $0.00001 par value per share (“Common Stock”),
subject to adjustment as provided herein, at a price equal to the Exercise Price
as defined in Section 3 below, at any time during the Term (as defined
below).

          Holder
agrees with the Company that this Warrant to Purchase Common Stock of the
Company (this “Warrant” or this “Agreement”) is issued and all
rights hereunder shall be held subject to all of the conditions, limitations and
provisions set forth herein. 

         
1.      Date of Issuance and Term. 

          This
Warrant shall be deemed to be issued on June 13, 2008 (“Date of
Issuance”). The term of this Warrant begins on the Date of Issuance and ends
at 5:00 p.m., New York City time, on the date that is six (6) years after
the Date of Issuance (the “Term”). This Warrant was issued in conjunction
with the issuance of Debentures of the Company (“the “Debentures”) to the
Holder pursuant to the terms of the Securities Purchase Agreement
(“Securities Purchase Agreement”), and the Registration Rights Agreement
(“Registration Rights Agreement”) by and between the Company and Holder
dated on or about June 13, 2008.

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          Notwithstanding
anything to the contrary herein, the applicable portion of this Warrant shall
not be exercisable during any time that, and only to the extent that, the number
of shares of Common Stock to be issued to Holder upon such Exercise (as defined
in Section 2(a)), when added to the number of shares of Common Stock, if any,
that the Holder otherwise beneficially owns (outside of this Warrant, and not
including any other warrants or securities of Holder’s having a provision
substantially similar to this paragraph) at the time of such Exercise, would
exceed 4.99% (the “Maximum Percentage”) of the number of shares of Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon Exercise of this Warrant held by the Holder, as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934 (the “Beneficial Ownership Limitation”). The Beneficial Ownership
Limitation shall be conclusively satisfied if the applicable Notice of Exercise
includes a signed representation by the Holder that the issuance of the shares
in such Notice of Exercise will not violate the Limitation, and the Company
shall not be entitled to require additional documentation of such satisfaction.

          Notwithstanding
the above, in the event that the Company receives any purchase, tender or
exchange offer or any offer to enter into a merger with another entity whereby
the Company shall not be the surviving entity (an “Offer”), then the
Maximum Percentage shall be increased (but not decreased) to 9.99%, and “4.99%”
shall be automatically revised immediately after such offer to read “9.99%” each
place it occurs in this Section 1. The Beneficial Ownership Limitation
provisions of this Section 1 may be waived by such Holder, at the election of
such Holder, upon not less than 61 days’ prior notice to the Company, to change
the Beneficial Ownership Limitation to any amount not in excess of 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon Exercise of this Warrant held by
the Holder and the Beneficial Ownership Limitation shall continue to apply. Upon
such a change by a Holder of the Beneficial Ownership Limitation from such 4.99%
limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder, provided that, if an Event of Default occurs,
thereafter the Beneficial Ownership Limitation provisions of this Section 1 may
be waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, to change the Maximum Percentage to any other
percentage (and not limited to 9.99%) of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock upon Exercise of the Warrants held by the Holder and the provisions
of this Section 1 shall continue to apply. The limitations on Exercise set forth
in this subsection are referred to as the “Beneficial Ownership Limitations.”
The provisions of this paragraph shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this Section 1 to
correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.

          Notwithstanding
the above, Holder shall retain the option to either Exercise or not Exercise its
option(s) to acquire Common Stock pursuant to the terms hereof after an Offer,
and, in the event of a cash Exercise following a tender offer, the Exercise
Price per share that would otherwise be due shall instead be offset against the
tender price per share to be received by the Holder, provided, however, that in
the event a tender offer is not 

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completed, Holder, at its option may either (i) complete any
Exercise that was initiated after the Offer by promptly paying to the Company
the Exercise Price that would have been due at the time the Warrant was
Exercised, or (ii) cancel such Exercise by providing written notice to the
Company, in which case such Exercise shall be deemed void ad initio. 

          Maximum
Exercise of Rights. In the event the Holder notifies the Company that the
Exercise of the rights described herein would result in the issuance of an
amount of Common Stock of the Company that would exceed the maximum amount that
may be issued to a Holder calculated in the manner described above, then the
issuance of such additional shares of Common Stock of the Company to such Holder
will be deferred in whole or in part until such time as such Holder is able to
beneficially own such Common Stock without exceeding the maximum amount
calculated in the manner described herein. The determination of when such Common
Stock may be issued shall be made by each Holder as to only such Holder.

         
2.      Exercise. 

                    (a)     
  Manner of Exercise. This Series C Warrant may not be exercised until
  after the Series B Warrant of the Holder has been exercised in full. Thereafter,
  during the Term, this Warrant may be Exercised as to all or any lesser number
  of full shares of Common Stock covered hereby (the “Warrant Shares”
  or the “Shares”) upon surrender of this Warrant, with the Notice
  of Exercise Form attached hereto as Exhibit A (the “Notice of
  Exercise”) duly completed and executed, together with the full Exercise
  Price (as defined below, which may be satisfied by either a Cash Exercise or
  a Cashless Exercise, as each is defined below) for each share of Common Stock
  as to which this Warrant is Exercised, at the office of the Company, Attn: Sass
  Peress, President, CEO & Chairman; ICP Solar Technologies, Inc., 7075 Place
  Robert-Joncas, Unit 131, Montreal H4M272, Phone: 514-270-5770, Fax: (514) 270-3677
  or at such other location as the Company may then be located or such other office
  or agency as the Company may designate in writing, by overnight mail, by facsimile
  (such surrender and payment of the Exercise Price hereinafter called the “Exercise”
  of this Warrant). In the case of a Cashless Exercise, the Exercise Price is
  deemed to have been delivered upon the Holder’s deliver of a Notice of
  Exercise to the Company.

                    (b)     
Date of Exercise. The “Date of Exercise” of the Warrant shall be
defined as the date that a copy of the Notice of Exercise Form attached hereto
as Exhibit A, completed and executed, is sent by facsimile to the Company or its
transfer agent (“Transfer Agent”) (including but not limited to a scanned
“PDF” file which is delivered as an attachment to an e-mail to the Company),
provided that the original Warrant (if delivery of the original Warrant is
required pursuant to Section 2(l) hereof) and Notice of Exercise Form are
received by the Company and the Exercise Price is satisfied, each as soon as
practicable thereafter. Alternatively, the Date of Exercise shall be defined as
the date the original Notice of Exercise Form is received by the Company, if
Holder has not sent advance notice by facsimile. Upon delivery of the Notice of
Exercise Form to the Company by facsimile or otherwise, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder's DTC
account or the date of delivery of the certificates evidencing such Warrant 

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Shares as the case may be. The Company shall deliver any
objection to any Notice of Exercise within 1 Business Day of receipt of such
notice. In the event of any dispute or discrepancy, the records of the Holder
shall be controlling and determinative in the absence of manifest error. 

                    (c)     
  Delivery of Common Stock Upon Exercise. Within 3 Trading Days from
  the delivery to the Company of the Notice of Exercise, surrender of this Warrant
  (if required) and payment of the aggregate Exercise Price (which, in the case
  of a Cashless Exercise, shall be deemed to have been paid upon the submission
  by the Holder of a Notice of Exercise)(the “Warrant Shares Delivery
  Deadline”), the Company shall issue and deliver (or cause its transfer
  agent so to issue and deliver) in accordance with the terms hereof to or upon
  the order of the Holder that number of shares of Common Stock (“Exercise
  Shares”) for the portion of this Warrant converted as shall be determined
  in accordance herewith. Upon the Exercise of this Warrant or any part thereof,
  the Company shall, at its own cost and expense, take all necessary action, including
  obtaining and delivering, an opinion of counsel to assure that the Company's
  transfer agent shall issue stock certificates in the name of Holder (or its
  nominee) or such other persons as designated by Holder and in such denominations
  to be specified at Exercise representing the number of shares of Common Stock
  issuable upon such Exercise. The Company warrants that no instructions other
  than these instructions have been or will be given to the transfer agent of
  the Company's Common Stock and that, unless waived by the Holder, the Exercise
  Shares will be free-trading, and freely transferable, and will not contain a
  legend restricting the resale or transferability of the Exercise Shares if the
  Unrestricted Conditions (as defined below) are met. If the Company fails for
  any reason to deliver to the Holder certificates evidencing the Warrant Shares
  subject to a Notice of Exercise by the Warrant Shares Delivery Deadline (a “Warrant
  Shares Delivery Failure”), the Company shall pay to the Holder, in
  cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
  Shares subject to such exercise (based on the VWAP (as defined below) of the
  Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
  Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated
  damages begin to accrue) for each Trading Day after such Warrant Shares Delivery
  Deadline until such certificates are delivered (“Warrant Shares Delivery
  Failure Payments”).

                    (d)     
Payment of Accrued Warrant Shares Delivery Failure Payments. The Company
shall pay any payments incurred under this Section in cash or cash equivalent
upon demand or, if not demanded sooner, on or before the fifth (5th) day of each
month following a month in which they accrue. Warrant Shares Delivery Failure
Payments are in addition to any Shares that the Holder is entitled to receive
upon Exercise of this Warrant. Nothing herein shall limit the Holder's right to
pursue actual damages (to the extent in excess of the Warrant Shares Delivery
Failure Payments) for the Company's Warrant Shares Delivery Failure, and the
Holder shall have the right to pursue all remedies available at law or in equity
(including a decree of specific performance and/or injunctive relief).

                    (e)     
Maximum Interest Rate. Nothing contained herein or in any document
referred to herein or delivered in connection herewith shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest or dividends required to be paid or other charges hereunder exceed the
maximum permitted by such law, any payments 

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in excess of such maximum shall be credited against amounts
owed by the Company to the Holder and thus refunded to the Company. 

                    (f)     
Revocation of Exercise Upon Delivery Failure. In addition to any
other remedies which may be available to the Holder, in the event that the
Company fails for any reason to effect delivery of the Exercise Shares by the
Warrant Shares Delivery Deadline, the Holder will be entitled to revoke all or
part of the relevant Notice of Exercise by delivery of a notice to such effect
to the Company whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the delivery of such notice,
except that the liquidated damages described above shall be payable through the
date notice of revocation or rescission is given to the Company. 

                   
(g)      Legends.

                              (i)     
Restrictive Legend. The Holder understands that the Warrant and, until
such time as Exercise Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement or otherwise may be sold
pursuant to Rule 144 or Rule 144(k) under the 1933 Act without any restriction
as to the number of securities as of a particular date that can then be
immediately sold, the Exercise Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such securities): 

  
              “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
      THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
      AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR
      AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY
      TO COUNSEL TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID
      ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.” 

  

                              (ii)     
Removal of Restrictive Legends. Certificates evidencing the Exercise
Shares shall not contain any legend restricting the transfer thereof (including
the legend set forth above in subsection 2(g)(i)): (i) while a registration
statement (including the Registration Statement, as defined in the Registration
Rights Agreement) covering the resale of such security is effective under the
Securities Act, or (ii) following any sale of such Exercise Shares pursuant to
Rule 144, or (iii) if such Exercise Shares are eligible for sale under Rule
144(k), or (iv) if such legend is not required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission) (collectively, the “Unrestricted
Conditions”). The Company shall cause its counsel to issue a legal opinion
to the Company’s transfer agent promptly after the Effective Date (as defined
below) of the Registration Statement if required by the Company’s transfer agent
to effect the issuance of Exercise Shares without a restrictive legend or
removal of the legend hereunder. If the Unrestricted Conditions are met at the
time of issuance or resale of Exercise Shares, then such Exercise Shares shall
be issued free 

5

of all legends. The Company agrees that following the Effective
Date or at such time as the Unrestricted Conditions are met or such legend is
otherwise no longer required under this Section 2(g), it will, no later than
three (3) Trading Days following the delivery (the “Unlegended Shares
Delivery Deadline”) by the Holder to the Company or the Company’s transfer
agent of a certificate representing Exercise Shares, as applicable, issued with
a restrictive legend (such third Trading Day, the “Legend Removal Date”),
deliver, or cause the Transfer Agent to deliver at the Company’s expense, to
such Holder a certificate (or electronic transfer) representing such shares that
is free from all restrictive and other legends. For purposes hereof,
“Effective Date” shall mean the date that the Registration Statement that
the Company is required to file pursuant to the Registration Rights Agreement
has been declared effective by the Securities and Exchange Commission (the
“Commission”).

                              (iii)     
Sale of Unlegended Shares. Holder agrees that the removal of the
restrictive legend from certificates representing Securities as set forth in
this Section 2(g)(i) above is predicated upon the Company’s reliance that the
Holder will sell any Exercise Shares pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein.

                    (h)     
Cancellation of Warrant. This Warrant shall be canceled upon the full
Exercise of this Warrant, and, as soon as practical after the Date of Exercise,
Holder shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise of this Warrant, and if this Warrant is not
Exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant) representing any unexercised portion of this
Warrant in addition to such Common Stock.

                    (i)     
Holder of Record. Each person in whose name any Warrant for shares of
Common Stock is issued shall, for all purposes, be deemed to be the Holder of
record of such shares on the Date of Exercise of this Warrant, irrespective of
the date of delivery of the Common Stock purchased upon the Exercise of this
Warrant. Nothing in this Warrant shall be construed as conferring upon Holder
any rights as a stockholder of the Company. 

                    (j)     
Delivery of Electronic Shares. In lieu of delivering physical
certificates representing the unlegended shares of Common Stock issuable upon
Exercise (the “Unlegended Shares”), provided the Company’s transfer agent
is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon written request of the Holder,
so long as the certificates therefor do not bear a legend, are not required to
bear a legend, and the Holder is not obligated to return such certificate for
the placement of a legend thereon, the Company shall cause its transfer agent to
electronically transmit the Unlegended Shares to the Holder by crediting the
account of the Holder's prime broker with DTC identified in the written request
through its Deposit Withdrawal Agent Commission (“DWAC”) system.
Otherwise, delivery of the Common Stock shall be by physical delivery to the
address specified by the Holder in the Notice of Exercise. The time periods for
delivery and liquidated damages described herein shall apply to the electronic
transmittals described herein, or to physical delivery, whichever is
applicable.

6

                    (k)     
Buy-In. In addition to any other rights available to the Holder, if the
Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Exercise Shares pursuant to an
Exercise on or before the Warrant Shares Delivery Deadline, and if after such
date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm otherwise purchases
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Exercise Shares which the Holder anticipated receiving upon such Exercise (a
“Buy-In”), then the Company shall (1) pay in cash to the Holder the
amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Exercise Shares that the
Company was required to deliver to the Holder in connection with the Exercise at
issue times (B) the price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Exercise Shares for which
such Exercise was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with
its Exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted Exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In, together
with applicable confirmations and other evidence reasonably requested by the
Company. Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon Exercise of the Warrant as required pursuant to the
terms hereof. 

                    (l)     
Surrender of Warrant Upon Exercise; Book-Entry. Notwithstanding anything to
the contrary set forth herein, upon Exercise of this Warrant in accordance with
the terms hereof, the Holder shall not be required to physically surrender the
original Warrant Certificate to the Company unless all of this Warrant is
Exercised, in which case such Holder shall deliver the original Warrant being
Exercised to the Company promptly following the Date of Exercise at issue.
Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of
lowering the outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased. The Holder
and the Company shall maintain records showing the amount of this Warrant that
is so Exercised and the dates of such Exercises or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this original Warrant upon each such Exercise. In the
event of any dispute or discrepancy, such records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

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3.      Payment of Warrant Exercise Price. 

                    The
  Exercise Price (“Exercise Price”) shall initially equal $1.00
  per share (the “Initial Exercise Price”), subject to adjustment
  pursuant to the terms hereof, including but not limited to Section 5 below.

          Payment
of the Exercise Price may be made by either of the following, or a combination
thereof, at the election of Holder: 

                         (i)     
Cash Exercise: The Holder may exercise this Warrant in
cash, bank or cashiers check or wire transfer (a “Cash Exercise”); or

                         (ii)     
Cashless Exercise: The Holder, at its option, may exercise this
Warrant in one or more cashless exercise transactions anytime that there is not
a current and effective Registration Statement (as defined in the Registration
Rights Agreement) then in effect covering the resale of the Warrant Shares
issuable upon such exercise. In order to effect a Cashless Exercise, the Holder
shall surrender of this Warrant at the principal office of the Company
together with notice of cashless election, in which event the Company shall
issue Holder a number of shares of Common Stock computed using the following
formula (a “Cashless Exercise”): 

X = Y (A-B)/A 

where: X = the number of shares of Common Stock to be issued to
Holder. 

Y = the number of shares of Common
Stock for which this Warrant is being Exercised. 

A = the Market Price of one (1) share
of Common Stock (for purposes of this Section 3(ii), where “Market
Price,” as of any date, means the Volume Weighted Average Price (as defined
herein) of the Company’s Common Stock during the five (5) consecutive trading
day period immediately preceding the date of Exercise, or other applicable date.

B = the Exercise Price. 

          As
used herein, the “Volume Weighted Average Price” or “VWAP” for any
security as of any date means the volume weighted average sale price on the Over
the Counter Electronic Bulletin Board (the “OTC-BB”) as reported by, or
based upon data reported by, Bloomberg L.P. or an equivalent, reliable reporting
service mutually acceptable to and hereafter designated by holders of a majority
in interest of the Warrants and the Company (“Bloomberg”) or, if the
OTC-BB is not the principal trading market for such security, the volume
weighted average sale price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported
by Bloomberg, or, if no volume weighted average sale price is reported for such
security, then the last closing trade 

8

price of such security as reported by
Bloomberg, or, if no last closing trade price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
that are listed in the “pink sheets” by the National Quotation Bureau,
Inc. If the Volume Weighted Average Price cannot be calculated for such security
on such date in the manner provided above, the volume weighted average price
shall be the fair market value as mutually determined by the Company and the
holders of a majority in interest of the Warrants being Exercised for which the
calculation of the volume weighted average price is required in order to
determine the Exercise Price of such Warrants. “Trading Day” shall mean
any day on which the Common Sock is traded for any period on the OTC-BB, or on
the principal securities exchange or other securities market on which the Common
Stock is then being traded.

          For
purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
understood and acknowledged that the Common Stock issuable upon Exercise of this
Warrant in a cashless Exercise transaction shall be deemed to have been acquired
at the time this Warrant was issued. Moreover, it is intended, understood and
acknowledged that the holding period for the Common Stock issuable upon Exercise
of this Warrant in a cashless Exercise transaction shall be deemed to have
commenced on the date this Warrant was issued.

         
4.      Transfer and Registration. 

                    (a)     
Transfer Rights. Subject to the provisions of Section 8 of this
Warrant, this Warrant may be transferred on the books of the Company, in whole
or in part, in person or by attorney, upon surrender of this Warrant properly
completed and endorsed. This Warrant shall be canceled upon such surrender and,
as soon as practicable thereafter, the person to whom such transfer is made
shall be entitled to receive a new Warrant or Warrants as to the portion of this
Warrant transferred, and Holder shall be entitled to receive a new Warrant as to
the portion hereof retained.

                    (b)     
Registrable Securities. The Common Stock issuable upon the Exercise of
this Warrant has registration rights pursuant to that certain Registration
Rights Agreements between the Company and the Holder dated even herewith. 

         
5.      Anti-Dilution Adjustments; Additional
Adjustments; Purchase Rights.

                   
(a)      [Omitted].

                    (b)     
Recapitalization or Reclassification. If the Company shall at any time
effect a recapitalization, reclassification or other similar transaction of such
character that the shares of Common Stock shall be changed into or become
exchangeable for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which Holder shall be
entitled to purchase upon Exercise of this Warrant shall be increased or
decreased, as the case may be, in direct proportion to the increase or decrease
in the number of shares of Common Stock by reason of such recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares, proportionally decreased and, in
the case of decrease in 

9

the number of shares, proportionally increased. The Company
shall give Holder the same notice it provides to holders of Common Stock of any
transaction described in this Section 5(b). 

                    
(c)      Exercise Price Adjusted. As
used in this Warrant, the term “Exercise Price” shall mean the purchase
price per share specified in Section 3 of this Warrant, until the occurrence of
an event stated in this Section 5 or otherwise set forth in this Warrant, and
thereafter shall mean said price as adjusted from time to time in accordance
with the provisions of said subsection. No such adjustment under this Section 5
shall be made unless such adjustment would change the Exercise Price at the time
by $.01 or more; provided, however, that all adjustments not so made shall be
deferred and made when the aggregate thereof would change the Exercise Price at
the time by $.01 or more. No adjustment made pursuant to any provision of this
Section 5 shall have the net effect of increasing the Exercise Price in relation
to the split adjusted and distribution adjusted price of the Common Stock.

                    (d)     
Adjustments: Additional Shares, Securities or Assets. In the event that
at any time, as a result of an adjustment made pursuant to this Section 5 or
otherwise, Holder shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

                    (e)     
Adjustment Upon Issuance of Shares of Common Stock or Common Stock
Equivalents. If the Company issues or sells, or in accordance with this
Section 5(e) is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company, but excluding shares of Common Stock deemed to
have been issued by the Company in connection with an Exempt Issuance (as
defined in the Securities Purchase Agreement) for a consideration per share (the
"New Issuance Price") less than a price (the "Applicable Price")
equal to the Exercise Price in effect immediately prior to such issue or sale or
deemed issuance or sale (the foregoing a "Dilutive Issuance"), then
immediately after such Dilutive Issuance, the Exercise Price then in effect
shall be reduced to an amount equal to the New Issuance Price. Upon each such
adjustment of the Exercise Price hereunder, the number of Warrant Shares shall
be adjusted in accordance with Section 5(k) below. The adjustments required by
this paragraph and by Sections 5(e)(i)-(iv) below are referred to in the
singular, as a “Subsequent Issuance Adjustment,“ and collectively as
“Subsequent Issuance Adjustments.” For purposes of determining the
adjusted Exercise Price under this Section 5(e), the following shall be
applicable: 

                              (i)     
Issuance of Options. If the Company in any manner grants any Options and the
lowest price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such 

10

Option for such price per share. For purposes of this Section
5(e)(i), the "lowest price per share for which one share of Common Stock is
issuable upon exercise of such Options or upon conversion, exercise or exchange
of such Convertible Securities" shall be equal to the sum of the lowest amounts
of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting or sale of the Option, upon
exercise of the Option and upon conversion, exercise or exchange of any
Convertible Security issuable upon exercise of such Option. 

                              (ii)     
Issuance of Convertible Securities. If the Company in any manner issues or sells
any Convertible Securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion, exercise or exchange thereof is
less than the Applicable Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per share.
For the purposes of this Section 5(e)(ii), the "lowest price per share for which
one share of Common Stock is issuable upon the conversion, exercise or exchange"
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security. In the case of a Convertible
Security which is accompanied Options (collectively, a “Unit”), the
"lowest price per share for which one share of Common Stock is issuable upon the
conversion, exercise or exchange of such Convertible Security” shall equal (i)
the consideration deemed received in exchange for the Convertible Security, as
determined in accordance with subsection 5(e)(iv) below, divided by (ii) the
total number of shares into which such Convertible Security is convertible or
exchangeable (without regard to any contractual limitation on the timing or
amount of conversions).

                              (iii)     
Change in Option Price or Rate of Conversion. If the purchase price provided for
in any Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price and the number of Warrant Shares in effect at the time of such
increase or decrease shall be adjusted to the Exercise Price and the number of
Warrant Shares which would have been in effect at such time had such Options or
Convertible Securities provided for such increased or decreased purchase price,
additional consideration or increased or decreased conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this
Section 5(e)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Note are increased or decreased
in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such increase or decrease. No adjustment pursuant to this Section
5(e)(iii) shall be made if such adjustment would result in an increase of the
Exercise Price then in effect or a decrease in the number of Warrant Shares.

                              (iv)     
Calculation of Consideration Received. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together

11

comprising one integrated transaction, the Options will be
deemed to have been issued for their Black Scholes value, and the other
securities issued or sold in such integrated transaction will be deemed to have
been issued or sold for the balance of the consideration received by the
Company. If any shares of Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount received by the Company
therefor. If any shares of Common Stock, Options or Convertible Securities are
issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company will be the Weighted
Average Price of such security on the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the
fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock, Options or Convertible
Securities, as the case may be. The fair value of any consideration other than
cash or securities will be determined jointly by the Company and the Required
Warrant Holders. If such parties are unable to reach agreement within ten (10)
days after the occurrence of an event requiring valuation (the "Valuation
Event"), the fair value of such consideration will be determined within five
(5) Business Days after the tenth day following the Valuation Event by an
independent, reputable appraiser jointly selected by the Company and the
Required Warrant Holders. The determination of such appraiser shall be final and
binding upon all parties absent manifest error and the fees and expenses of such
appraiser shall be borne by the Company. 

                              (v)     
  Record Date. If the Company takes a record of the holders of shares of Common
  Stock for the purpose of entitling them (i) to receive a dividend or other distribution
  payable in shares of Common Stock, Options or in Convertible Securities or (ii)
  to subscribe for or purchase shares of Common Stock, Options or Convertible
  Securities, then such record date will be deemed to be the date of the issue
  or sale of the shares of Common Stock deemed to have been issued or sold upon
  the declaration of such dividend or the making of such other distribution or
  the date of the granting of such right of subscription or purchase, as the case
  may be.

12

          For
purposes hereof: 

          “Common
Stock Equivalents,” “Exempt Issuance” and “Variable Equity
Securities” shall each have the meanings ascribed to them in the Securities
Purchase Agreement.

          “Convertible
Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for Common Stock.

          “Options”
means any rights, warrants or options to subscribe for or purchase Common Stock
or Convertible Securities. 

                    (f)     
Subsequent Rights Offerings. If the Company, at anytime prior to the
date that all of the Warrants have been Exercised, redeemed or otherwise
satisfied in accordance with their terms, shall issue rights, options or
warrants to all holders of Common Stock (and not to Holders) entitling them to
subscribe for or purchase shares of Common Stock at a price per share (the
“Base Rights Offering Price”) that is lower than the Exercise Price then
in effect, then the Exercise Price then in effect shall be reduced (but not
increased) to the Base Rights Offering Price (a “Subsequent Rights Offering
Adjustment”). Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants. No adjustment shall be made hereunder if such adjustment would result
in an increase of the Exercise Price then in effect. 

                    (g)     
Milestone Adjustments. If the Company shall have failed (each a
“Milestone Failure”) to meet or exceed any of the milestone goals
(“Milestone Goals”) that are set forth on Schedule 5(g) annexed
hereto for any one or more of the following periods (each a “Milestone
Period”): (i) the six (6) month period ending October 31, 2008 or (ii) the
twelve (12) month period ending April 30, 2009 (each a “Milestone Date”),
as reported in the Company’s Form 10-QSB (or Form 10-KSB, if applicable) for
such fiscal period, then the Exercise Price shall be reduced (but not increased)
(each, a “Milestone Adjustment”) to equal the lesser of (a) the Exercise
Price then in effect, (b) the Market Price as determined on the applicable
Milestone Date, or (c) the Market Price as determined on the date (each, a
“Milestone Adjustment Date”) that is five (5) Trading Days after the date
that Company files its next Form 10-QSB (or Form 10-KSB, if applicable) with the
Commission following the end of the applicable Milestone Period (the
“Milestone Adjustment Price”).

          Each
such adjustment shall be effective as of the first day following each Milestone
Date (by way of example, if the Milestone Goal is not met for the Milestone
Period ending October 31, 2008, the reduction is effective immediately on
November 1, 2008). As to any Exercises by the Holder that occurred following the
end of a Milestone Period but prior to the date the Company’s periodic report
was filed (“Interim Period”), the Company shall retroactively send the
Holder additional Warrant Shares (“Interim Warrant Shares”) within 3
Trading Days of the date of the applicable filing if an adjustment is required
hereunder (provided that to the extent any such shares would cause the
Beneficial Ownership Limitation to be exceeded, such excess shares shall not be
issued and delivered until such time as such shares may be so issued without
exceeding the 

13

Beneficial Ownership Limitation). The number of additional
Warrant Shares issued shall be equal to the number of Warrant Shares receivable
from such Exercises based on the adjusted Exercise Price less any Warrant Shares
previously received on account of such Exercises. Any subsequent restatements of
the Company’s financials shall require similar retroactive issuances if the
aforementioned events are subsequently deemed to have occurred. The Company
shall provide written notice to the Holder no later than 1 Business Day
following the Company’s filing of the applicable periodic report with the
Commission, indicating therein the new Exercise Price, the increased number of
shares represented by the Warrant, and the revenue and EBITDA for the applicable
Milestone Period. In the event that there is an adjustment to the Exercise Price
pursuant to any other provision under this Warrant during the Interim Period,
the Exercise Price shall be the lower of (i) the Exercise Price as adjusted
pursuant to the other provisions of this Warrant and (ii) the new Exercise Price
as determined hereunder. Notwithstanding anything herein to the contrary, (i)
the provision shall only have the effect of reducing the Exercise Price and (ii)
each adjustment shall be permanent notwithstanding future Revenue or the
achievement of any other milestones and cumulative with any other adjustments
hereunder.

                   
(h)      Adjustments to Exercise Price During Major
Announcements.

Notwithstanding anything contained in this Debenture to the
contrary, in the event the Company makes any public announcement (the date of
such announcement is hereinafter referred to as the “Announcement Date”) anytime
during the period beginning five (5) Business Days before any Milestone
Adjustment Date and ending five (5) Business Days after such Milestone
Adjustment Date (the “Protected Period”), then the “Milestone Adjustment Price”
for such Milestone Adjustment shall equal the lesser of (X) the Milestone
Adjustment Price as determined pursuant to Section 5(h) above, (Y) the Market
Price as determined on the Trading Day immediately preceding the Announcement
Date and (Z) the Market Price as determined on the date that is ten (10) Trading
Days after the Announcement Date.

                    (i)     
Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced and the number of
shares represented by this Warrant shall proportionally increase. If the Company
at any time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of shares
represented by this Warrant shall proportionally decrease. 

                    (j)     
Voluntary Adjustment By 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 (a “Voluntary Adjustment”). 

14

                    (k)     
Adjustment to Number of Shares. In the event of any adjustment to the
Exercise Price pursuant to the terms of this Warrant, including but not limited
to any Subsequent Issuance Adjustment any Subsequent Rights Offering Adjustment,
or any Voluntary Adjustment, the number of Warrant Shares issuable upon Exercise
of this Warrant shall be increased such that the aggregate Exercise Price
payable in a full Cash Exercise hereunder, after taking into account the
decrease in the Exercise Price, shall be equal to the aggregate Exercise Price
payable in a full Cash Exercise prior to such adjustment, and the number of
Warrant Shares issuable in a Cashless Exercise shall be increased
accordingly.

                    (l)     
Notice of Adjustments; Notice Failure Adjustment. The Company shall
notify the Holder in writing, no later than one (1) Business Day following any
Dilutive Issuance, indicating therein the applicable issuance price, or
applicable reset price, exchange price, conversion price, exercise price and
other pricing terms (such notice, the “Dilutive Issuance Notice”). In the
event that the Company fails to provide the Holder with an Exercise Price
Adjustment Notice within five (5) Business Days of any Dilutive Issuance (the
“Dilutive Issuance Notice Deadline”), the Exercise Price shall be
permanently reduced (but not increased) on the Dilutive Issuance Notice
Deadline, and on the same day of each calendar month thereafter until such
notice is given (each, a “Notice Failure Adjustment Date”), or in each
case if not a business day, then on the next business day (each, a “Notice
Failure Adjustment”) to a price equal to the lesser of (a) the Exercise
Price then in effect or (b) 100% of the VWAP for five (5) trading day period
immediately preceding the applicable Notice Failure Adjustment Date
(collectively, the “Notice Failure Adjustment Price”). 

                    Whenever
the Exercise Price is required to be adjusted pursuant to the terms of this
Warrant, the Company shall within Five (5) Business Days mail to the Holder a
notice (a “Exercise Price Adjustment Notice”) setting forth the new
Exercise Price and specifying the new number of shares into which the Warrant is
convertible after such adjustment and setting forth a statement of the facts
requiring such adjustment. The Company shall, upon the written request at any
time of the Holder, furnish to such Holder a like Warrant setting forth (i) such
adjustment or readjustment, (ii) the Exercise Price at the time in effect and
(iii) the number of shares of Common Stock and the amount, if any, of other
securities or property which at the time would be received upon Exercise of the
Warrant, following delivery of the original Warrant to the Company for exchange.
If the Company issues Variable Equity Securities (as defined in the Securities
Purchase Agreement), despite the prohibition thereon in the Securities Purchase
Agreement, the Company shall be deemed to have issued Common Stock or Common
Stock Equivalents at the lowest possible conversion or exercise price at which
such securities may be converted or exercised. For purposes of clarification,
whether or not the Corporation provides an Exercise Price Adjustment Notice
pursuant to this Section 5(l), upon the occurrence of any event that leads to an
adjustment of the Exercise Price, the Holders are entitled to receive an
Exercise Price and a number of Exercise Shares based upon the new Exercise
Price, as adjusted, for exercises occurring on or after the date of such
adjustment, regardless of whether a Holder accurately refers to the adjusted
Exercise Price in the Notice of Exercise.

                    (m)     
Notice to Allow Exercise by Holder. If (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Stock; (B)
the 

15

Company shall declare a special nonrecurring cash dividend on
or a redemption of the Common Stock; (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights; (D) the
approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice. The Holder is
entitled to exercise this Warrant during the period commencing on the date of
such notice to the effective date of the event triggering such notice. 

                    (n)     
Purchase Rights. In addition to any other adjustments described herein,
if at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the
“Purchase Rights”), then the Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the proportionate number
of shares of Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on the exercise of this Warrant) immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights. 

         
6.      Fractional Interests. 

          No
fractional shares or scrip representing fractional shares shall be issuable upon
the Exercise of this Warrant, but on Exercise of this Warrant, Holder may
purchase only a whole number of shares of Common Stock. If, on Exercise of this
Warrant, Holder would be entitled to a fractional share of Common Stock or a
right to acquire a fractional share of Common Stock, such fractional share shall
be disregarded and the number of shares of Common Stock issuable upon Exercise
shall be the next closest number of whole shares. 

16

         
7.      Reservation of Shares. 

          From and
after the date hereof, the Company shall at all times reserve for issuance such
number of authorized and unissued shares of Common Stock (or other securities
substituted therefor as herein above provided) equal to 125% (the “Minimum
Warrant Share Reservation Amount”) of such number as shall be sufficient for
the Exercise of this Warrant and payment of the Exercise Price in full without
regard to any Beneficial Ownership Limitation. If at any time the number of
shares of Common Stock authorized and reserved for issuance is below 125% of the
number of shares sufficient for the Exercise of this Warrant (a “Share
Authorization Failure”)(based on the Exercise Price in effect from time to
time), the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company's obligations under this Section 7, in the case of an
insufficient number of authorized shares, and using its best efforts to obtain
stockholder approval of an increase in such authorized number of shares such
that the number of shares authorized and reserved for the Exercise of this
Warrant shall exceed the Minimum Warrant Share Reservation Amount. The Company
covenants and agrees that upon the Exercise of this Warrant, all shares of
Common Stock issuable upon such Exercise shall be duly and validly issued, fully
paid, nonassessable and not subject to liens, claims, preemptive rights, rights
of first refusal or similar rights of any person or entity. 

         
8.      Restrictions on Transfer. 

          (a)     
Registration or Exemption Required. This Warrant has been issued in a
transaction exempt from the registration requirements of the Act by virtue of
Regulation D and exempt from state registration under applicable state laws. The
Warrant and the Common Stock issuable upon the Exercise of this Warrant may not
be transferred, sold or assigned except pursuant to an effective registration
statement or an exemption to the registration requirements of the Act and
applicable state laws. 

          (b)     
Assignment. If Holder can provide the Company with reasonably
satisfactory evidence that the conditions of (a) above regarding registration or
exemption have been satisfied, Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a
written notice to Company, substantially in the form of the Assignment attached
hereto as Exhibit B, indicating the person or persons to whom the Warrant
shall be assigned and the respective number of warrants to be assigned to each
assignee. The Company shall effect the assignment within ten (10) days of
receipt of such notice, and shall deliver to the assignee(s) designated by
Holder a Warrant or Warrants of like tenor and terms for the appropriate number
of shares. 

          9.     
Noncircumvention. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, 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, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required 

17

to protect the rights of the Holder. Without limiting the
generality of the foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, and (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant. 

         
10.      Rights Upon Major Transaction or Change of
Entity Transaction. 

          (a)     
  Definitions. For purposes hereof, 

          “Change
of Entity Transaction” means (i) a consolidation, merger, exchange of
shares, recapitalization, reorganization, business combination or other similar
event, (A) following which the holders of Common Stock immediately preceding
such consolidation, merger, combination or event either (1) no longer hold a
majority of the shares of Common Stock of the Company or (2) no longer have the
ability to elect the board of directors of the Company or (B) as a result of
which shares of Common Stock shall be changed into (or the shares of Common
Stock become entitled to receive) the same or a different number of shares of
the same or another class or classes of stock or securities of the Company or
another entity. 

          “Sufficient
Trading Characteristics” shall mean that the average daily dollar trading
volume of the common stock of such entity on its primary exchange or market is
equal to or in excess of $100,000 for the 90th through the 31st day prior to the
public announcement of such transaction. 

          “Permissible
Change of Entity Transaction” shall mean a Change of Entity Transaction
where the Successor Entity (as defined below) (A) is a publicly traded Company
whose common stock is quoted on or listed for trading on an Eligible Market, (B)
has Sufficient Trading Characteristics (as defined above) and (C) meets the
Assumption Requirements (as required in Section 10(b) below). 

          “Eligible
  Market” means the over the counter Bulletin Board (“OTC-BB”),
  the New York Stock Exchange, Inc., the NASDAQ Capital Market, the NASDAQ Global
  Market, the NASDAQ Global Select Market or the American Stock Exchange.

          “Impermissible
Change of Entity Transaction” shall mean a Change of Entity Transaction
which does not qualify as a Permissible Change of Entity Transaction. 

          “
Major Transaction” means

         
(i)      an Impermissible Change of Entity Transaction;
and 

18

          (ii)     
the sale or transfer of more than 40%, in the aggregate, of the properties or
assets of the Company to another Person or Persons in one or a series of related
transactions in any rolling 12 month period (an “Asset Sale”); and 

          (iii)     
a purchase, tender or exchange offer made to and accepted by the holders of more
than the 50% of the outstanding shares of Common Stock. 

                    (b)     
  Assumption Upon Change of Entity Transaction. The Company shall not,
  so long as any portion of this Warrant remains outstanding, enter into or be
  party to a Change of Entity Transaction unless any Person purchasing the Company’s
  assets or Common Stock, or any successor entity resulting from such Change of
  Entity Transaction (in each case, an “Successor Entity”), assumes
  (an “Assumption”) in writing all of the obligations of the
  Company under this Warrant in accordance with the provisions of this Section
  10(b) pursuant to written agreements in form and substance satisfactory to the
  Required Warrant Holders (as defined below) and approved by the Required Warrant
  Holders prior to such Change of Entity Transaction, including agreements to
  deliver to each holder of Warrants in exchange for such Warrants a security
  of the Successor Entity evidenced by a written instrument substantially similar
  in form and substance to this Warrant, including, without limitation, having
  an exercise price equal to the Exercise Price of this Warrant, having similar
  exercise rights as this Warrant (including but not limited to similar exercise
  price adjustment provisions), and reasonably satisfactory to the Required Warrant
  Holders. Upon the occurrence of any Change of Entity Transaction, the Successor
  Entity shall succeed to, and be substituted for (so that from and after the
  date of such Change of Entity Transaction, the provisions of this Warrant referring
  to the “Company” shall refer instead to the Successor Entity), and
  may exercise every right and power of the Company and shall assume all of the
  obligations of the Company under the Warrant with the same effect as if such
  Successor Entity had been named as the Company herein. Upon consummation of
  a Change of Entity Transaction, the Successor Entity shall deliver to the Holder
  confirmation that there shall be issued upon exercise or redemption of the Warrant
  at any time after the consummation of the Change of Entity Transaction, in lieu
  of the shares of Common Stock (or other securities, cash, assets or other property)
  issuable upon the exercise of this Warrant prior to such Change of Entity Transaction,
  such shares of common stock (or their equivalent) of the Successor Entity, as
  adjusted in accordance with the provisions of this Warrant. The provisions of
  this Section shall apply similarly and equally to successive Change of Entity
  Transactions and shall be applied without regard to any limitations on the exercise
  of the Warrant. The requirements of this Section 10(b) are referred to herein
  as the “Assumption Requirements.” 

          For
purposes hereof, “Required Warrant Holders” shall mean the Holders of
greater than seventy five percent (75%) of the then outstanding Warrants
(determined by the number of unexercised underlying shares). 

                    (c)     
Notice of Major Transaction; Redemption Right Upon Major
Transaction. At least thirty (30) days prior to the consummation
of a Major Transaction, but not prior to the public announcement of such
transaction, the Company shall deliver written notice 

19

thereof to the Holder (a “Major Transaction Notice”),
which notice shall specify the nature and terms of the proposed transaction and
nature of the Successor Entity (if any).

                    (d)     
Redemption Right Upon Major Transaction. At any time during the period
beginning after the Holder's receipt of a Major Transaction Notice and ending on
the Trading Day immediately prior to the consummation of such Major Transaction,
the Holder may require the Company to redeem all or any portion of the Holder’s
Warrant by delivering written notice thereof (“Major Transaction Redemption
Notice”) to the Company, which Major Transaction Redemption Notice shall
indicate the number of Warrant Shares of its Warrant (the “Redemption Warrant
Amount”) that the Holder is electing to be redeemed.

          The
portion of this Warrant subject to redemption pursuant to this Section 10(d)
shall be redeemed by the Company in cash at a price equal to 100% of the greater
of (i) the Black Scholes value (as defined below) of the remaining outstanding
portion of the Warrant to be redeemed on the date the Major Transaction is
consummated calculated using the Black Scholes Option Pricing Model and (ii) the
Black-Scholes value of the remaining unexercised portion of this Warrant to be
redeemed on the Trading Day immediately preceding the date that the Major
Transaction Redemption Price (as defined below) is paid to the Holder (the
greater of which is referred to as the “Major Transaction Redemption
Price”). For purposes hereof, the “Black-Scholes” value of a Warrant
shall be determined by use of the Black Scholes Option Pricing Model reflecting
(A) a risk-free interest rate corresponding to the U.S. Treasury rate for a
period equal to the remaining term of this Warrant as of such date of request
and (B) an expected volatility equal to the greater of 100% and the 100 day
volatility obtained from the HVT function on Bloomberg.

               (e)     
Escrow; Payment of Major Transaction Redemption Price. The Company shall
not effect a Major Transaction unless it shall first place, or shall cause the
Successor Entity to place, into an escrow account with an independent escrow
agent, prior to or concurrently with the closing date of the Major Transaction
(the “Major Transaction Escrow Deadline”), an amount equal to the Major
Transaction Redemption Price. Concurrently upon closing of any Major
Transaction, the Company shall pay or shall instruct the escrow agent to pay the
Major Transaction Redemption Price to the Holder, which payment shall constitute
a Redemption Upon Major Transaction of the Warrants.

               (f)     
Injunction. In the event that the Company attempts to consummate a Major
Transaction without placing the Major Transaction Redemption Price in escrow in
accordance with subsection (e) above or without payment of the Major Transaction
Redemption Price to the Holder upon consummation of such Major Transaction, the
Buyer shall have the right to apply for an injunction in any state or federal
courts sitting in the City of New York, borough of Manhattan to prevent the
closing of such Major Transaction until the Major Transaction Redemption Price
is paid to the Holder, in full. 

              
(g)      Mechanics of Redemptions Upon
Major Transactions.

          Redemptions
required by this Section 10 shall be made in accordance with the provisions of
Section 12. Notwithstanding anything to the contrary in this Section 10, until
the Major Transaction Redemption Price is paid in full, the portion of the
Warrant 

20

submitted for redemption under this Section may be converted,
in whole or in part, by the Holder into shares of Common Stock, or in the event
the Exercise Date is after the consummation of a Major Transaction, into shares
of common stock (or their equivalent) of the Successor Entity pursuant to
Section 10(b). Unless otherwise indicated by the Holder in the applicable Notice
of Exercise, any amount of this Warrant exercised during the period from the
date of the Major Transaction Redemption Notice until the date the Major
Transaction Redemption Price is paid in full shall be considered to be an
exercise (instead of a Redemption) of a portion of the Warrant that would have
been subject to such Redemption, and any amounts of this Warrant exercised from
time to time during such period shall exercised in full into Common Stock at the
Exercise Price then in effect, and the number of shares of this Warrant so
exercised into Common Stock shall be deducted from the number of Warrants that
are subject to redemption hereunder. The parties hereto agree that in the event
of the Company's redemption of any portion of the Warrant under this Section
10(d), the Holder's damages would be uncertain and difficult to estimate because
of the parties' inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the
Holder. Accordingly, any redemption premium due under this Section 10 is
intended by the parties to be, and shall be deemed, a reasonable estimate of the
Holder's actual loss of its investment opportunity and not as a penalty. 

         
11.      Default and Redemption.

                    (a)     
Events of Default. Each of the following events which occur while any
Warrants are outstanding shall be considered to be an “Event of
Default”: 

                              (i)     
Failure To File and Pursue Registration. An Event of Default
occurs under Section 10(c) of the Debentures, with respect to any Warrant Shares
(a “Registration Default”); 

                              (ii)     
Failure To Authorize and Reserve Common Stock. A Share Authorization
Failure occurs under Section 7 hereof, and such Share Authorization Failure
remains uncured for a period of more than twenty (20) days. (a “Share
Reservation Default”); 

                              (iii)     
Failure To Deliver Common Stock. A Warrant Shares Delivery Failure (as
defined above) occurs and remains uncured for a period of more than twenty (20)
days.

                              (iv)     
Legend Removal Failure. A Legend Removal Failure occurs and remains
uncured for a period of twenty (20) days, where a “Legend Removal
Failure” shall be deemed to have occurred if the Company fails to issue
Exercise Shares without a restrictive legend, when and as required under Section
2(g)(ii) hereof or under Section 6 of the Securities Purchase Agreement. 

                              (v)     
Corporate Existence; Major Transaction. The Company has effected a Major
Transaction without paying the Major Transaction Redemption Price to the Holder
pursuant to Section 10(d) or, if the Holder did not elect a Redemption Upon
Major 

21

Transaction, the Company has failed to meet the Assumption
Requirements of Section 10(b) prior to effecting a Major Transaction.

                              (vi)     
Failure to Adjust Exercise Price; Failure to Comply With Dispute
Resolution Procedures. The Company shall have failed to comply in
good faith with the Dispute Resolution Procedures (as defined herein) or shall
have failed to adjust the Exercise Price as required under Section 5(e)
following a Dilutive Issuance, or otherwise (after any applicable Dispute
Resolution Procedure required herein), and such failure continues for ten (10)
Business Days after the Holder provides written notice to the Company that such
performance by the Company is past due. 

                   
  (b)      Mandatory Redemption; Certain
  Adjustments on Default.

                              (i)     
Mandatory Redemption Amount. If any Events of Default shall occur
and any such Event of Default continues for an additional ten (10) Business Days
after the Holder provides written notice to the Company that an Event of Default
has occurred and specifying the factual basis therefor, then thereafter, unless
waived by the Holder, upon the occurrence and during the continuation of any
Event of Default, at the option of the Holder, such option exercisable through
the delivery of written notice to the Company by such Holder (the “Default
Notice”), the outstanding amount of this Warrant shall be immediately
redeemed by the Company and the Company shall pay to the Holder (a “Mandatory
Redemption”) an amount (the “Mandatory Redemption Amount” or the
“Default Amount”) equal to 100% of the greater of (i) the Black-Scholes
value of the remaining unexercised portion of this Warrant on the date of such
Default Notice and (2) the Black-Scholes value of the remaining unexercised
portion of this Warrant on the Trading Day immediately preceding the date that
the Mandatory Redemption Amount is paid to the Holder.

                    The
Mandatory Redemption Amount shall be payable, in cash or cash equivalent, within
five (5) business days of the Date of the applicable Default Notice (the
“Default Amount Due Date”). If the Company fails to pay the Mandatory
Redemption Amount within thirty (30) days of the Default Amount Due Date, then
(A) the Exercise Price shall be permanently decreased (but not increased) on the
first Trading Day of each calendar month thereafter (each a “Default
Adjustment Date”) until the Default Amount is paid in full, to a price equal
to the lesser of (i) the Exercise Price then in effect, or (ii) the lowest
Market Price that has occurred on any Default Adjustment Date since the date
that the Event of Default began. Notwithstanding the occurrence of an Event of
Default, Failure Payments and any other Required Cash Payments (as defined in
the Securities Purchase Agreement) shall continue to accrue. On the date that is
five (5) Business Days after the Company’s receipt of the Holder’s Default
Notice, the Default Amount, together with all other amounts payable hereunder,
shall immediately become due and payable, all without demand, presentment or
notice, all of which hereby are expressly waived, together with all costs,
including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at
law or in equity, and (B) .

        If the Company
fails to pay the Default Amount within the (10)Business Days of written notice
that such amount is due and payable (the “Default Amount Due Date”), 

22

then interest shall accrue thereon at a rate of eighteen
percent (18%) per annum, compounded monthly (or the maximum amount allowed by
applicable law, whichever is less), and the Holder shall have the right at any
time, so long as the Company remains in default (and so long and to the extent
that there are sufficient authorized shares), to require the Company, upon
written notice (“Default Exercise Notice”) (which may be given one or
more times, from time to time anytime after the Default Amount Due Date), to
immediately issue (a “Default Exercise”), in lieu of all or any specified
portion (the “Specified Portion”) of the unpaid portion (the “Unpaid
Portion”) of the Default Amount, a number (the “Default Share
Amount”) of shares (the “Default Shares”) of Common Stock, subject to
the Beneficial Ownership Limitation, equal to the Specified Portion of the
Default Amount divided by the Exercise Price in effect on the date such
shares are issued to the Holder, PROVIDED THAT, the Holder may require that such
payment of shares be made in one or more installments at such time and in such
amounts as Holder chooses. The Default shares are due within five (5) Business
Days of the date that the Holder delivers a Default Exercise Notice to the
Company (the “Default Share Delivery Deadline”). 

          Upon a
Default Exercise, the Company shall be required to deliver a number of Common
Shares to the Holder equal to the applicable Default Share Amount (as described
above). 

          If
the Company is unable to redeem all of the Warrants submitted for redemption,
the Company shall redeem a pro rata amount from each Holder based on the number
of Warrants submitted for redemption by such Holder relative to the total number
of Warrants submitted for redemption by all Holders.

          The
Holder shall not be entitled to receive Default Shares on a given date if and to
the extent that such issuance would cause the Beneficial Ownership Limitation
then in effect to be exceeded. If and to the extent that the issuance of Default
Shares with respect to a given Specified Portion would result in the a violation
of the Beneficial Ownership Limitation, then that particular Specified Portion
shall be automatically reduced to a value that would cause the number of Default
Shares to be issued to equal the Maximum Percentage, and the amount of such
reduction shall be added back to the Unpaid Portion of the Default Amount. 

                              
(ii)      Liquidated Damages. The parties hereto
acknowledge and agree that the sums payable as liquidated damages or pursuant to
a Mandatory Redemption shall give rise to liquidated damages and not penalties.
The parties further acknowledge that (i) the amount of loss or damages likely to
be incurred by the Holder is incapable or is difficult to precisely estimate,
(ii) the amounts specified bear a reasonable proportion and are not plainly or
grossly disproportionate to the probable loss likely to be incurred by the
Investor, and (iii) the parties are sophisticated business parties and have been
represented by sophisticated and able legal and financial counsel and negotiated
this Agreement at arm’s length. 

          The
Default Amount, together with all other amounts payable hereunder, shall
immediately become due and payable, all without demand, presentment or notice,
all of which hereby are expressly waived, together with all costs, including,
without limitation, 

23

legal fees and expenses, of collection, and the Holder shall be
entitled to Exercise all other rights and remedies available at law or in
equity.

                   
(c)      Redemption by Other Holders.
Upon the Company's receipt of notice from any of the holders for redemption
or repayment of other Warrants that were issued pursuant to the Securities
Purchase Agreement (the “Other Warrants”) as a result of an event or
occurrence of an Event of Default or a Major Transaction (each, an “Other
Redemption Notice”), the Company shall immediately, but no later than one
(1) Business Day of its receipt thereof, forward to the Holder by facsimile a
copy of such notice. If the Company receives a Redemption Notice and one or more
Other Redemption Notices, during the seven (7) Business Day period beginning on
and including the date which is three (3) Business Days prior to the Company's
receipt of the Holder's Redemption Notice and ending on and including the date
which is three (3) Business Days after the Company's receipt of the Holder's
Redemption Notice and the Company is unable to redeem all amounts designated in
such Redemption Notice and such Other Redemption Notices received during such
seven (7) Business Day period, then the Company shall redeem a pro rata amount
from each holder of the Warrants (including the Holder) based on the number of
Warrants submitted for redemption pursuant to such Redemption Notice and such
Other Redemption Notices received by the Company during such seven (7) Business
Day period. 

                    (d)     
Posting of Bond. In the event that any Event of Default occurs hereunder or
any Event of Default occurs under any of the Transaction Documents, the Company
may not raise as a legal defense (in any Lawsuit, as defined below, or
otherwise) or justification to such Event of Default any claim that such Holder
or any one associated or affiliated with such Holder has been engaged in any
violation of law, unless the Company has posted a surety bond (a “Surety
Bond”) for the benefit of such Holder in the amount of 130% of the aggregate
Surety Bond Value (as defined below) of all of the Holder’s Debentures and
Warrants (the “Bond Amount”), which Surety Bond shall remain in effect
until the completion of litigation of the dispute and the proceeds of which
shall be payable to such Holder to the extent Holder obtains judgment.

          For
purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or other
dispute resolution filed by either party herein pertaining to any of the
Transaction Documents.

          “Surety
Bond Value,” for the Warrants shall mean 130% of the of the Black-Scholes
value of the remaining unexercised portion of this Warrant on the Trading Day
immediately preceding the date that such bond goes into effect) and “Surety
Bond Value” for the Debentures shall have the meaning ascribed to it in the
Debenture.

                    (e)     
Injunction and Posting of Bond. In the event that the Event of Default
referred to in subsection (d) above pertains to the Company’s failure to deliver
unlegended shares of Common Stock to the Holder pursuant to a Warrant Exercise,
legend removal request, or otherwise, the Company may not refuse such unlegended
share delivery based on any claim that such Holder or any one associated or
affiliated with such Holder has been engaged in any violation of law, unless an
injunction from a court, on prior notice to Holder, restraining and or enjoining
Exercise of all or part of said Warrant shall have been sought and obtained by
the Company and the Company has posted a Surety Bond for the 

24

benefit of such Holder in the amount of the Bond Amount (as
described above), which Surety Bond shall remain in effect until the completion
of litigation of the dispute and the proceeds of which shall be payable to such
Holder to the extent Holder obtains judgment.

                    (f)     
Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant and the other Transaction Documents, at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to
pursue actual damages for any failure by the Company to comply with the terms of
this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder could cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant could
seek, in addition to all other available remedies, an injunction restraining any
breach.

         
12.      Holder’s Redemptions.

                    (a)     
Mechanics of Holder’s Redemptions. In the event that the Holder has
sent a Major Transaction Redemption Notice to the Company pursuant to Section
10(d) or a Default Notice pursuant to Section 11(b)(i), respectively (each, a
“Redemption Notice”), the Holder shall promptly submit this Warrant to
the Company (if delivery of the original Warrant is required pursuant to Section
2(l). In the event of a redemption of less than all of the outstanding portion
of this Warrant, the Company shall promptly cause to be issued and delivered to
the Holder a new Warrant representing the outstanding number of underlying
Warrant Shares which have not been redeemed. In the event that the Company does
not pay the applicable Redemption Price to the Holder within the time period
required, at any time thereafter and until the Company pays such unpaid
Redemption Price in full, the Holder shall have the option, in lieu of
redemption, to require the Company to promptly return to the Holder all or any
portion of this Warrant that was submitted for redemption and for which the
applicable Major Transaction Redemption Price (together with any late charges
thereon) has not been paid. Upon the Company's receipt of such notice, (x) the
applicable Redemption Notice shall be null and void with respect to such
Redemption Share Amount, (y) the Company shall immediately return this Warrant,
or issue a new Warrant to the Holder representing the portion of this Warrant
that was submitted for redemption. The Holder's delivery of a notice voiding a
Redemption Notice and exercise of its rights following such notice shall not
affect the Company's obligations to make any payments of Failure Payments which
have accrued prior to the date of such notice with respect to the Warrant
subject to such notice. 

                    (b)     
Warrants Detachable. The Warrants constitute a separate, detachable
security from the Debentures. In the event of any redemption of the Debentures,
in whole or in part, by the Company, the Holder shall retain its outstanding
Warrants. 

          13.     
Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant and the other Transaction Documents, at
law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by 

25

the Company to comply with the terms of this Warrant. The
Company acknowledges that a breach by it of its obligations hereunder could
cause irreparable harm to the Holder and that the remedy at law for any such
breach may be inadequate. The Company therefore agrees that, in the event of any
such breach or threatened breach, the holder of this Warrant could seek, in
addition to all other available remedies, an injunction restraining any breach.

          14.     
Dispute Resolution. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the number of Warrant Shares
issuable upon any exercise of this Warrant, the Company shall promptly issue to
the Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with this subsection. In the case of a dispute as to the
determination of the closing price or the Volume Weighted Average Price of the
Company’s Common Stock or the arithmetic calculation of the Exercise Price,
Market Price or any Redemption Price, or the determination of whether or not a
Dilutive Issuance or a Milestone Failure has occurred, the Company shall submit
the disputed determinations or arithmetic calculations via facsimile within two
(2) Business Days of receipt, or deemed receipt, of the Notice of Exercise or
Redemption Notice or other event giving rise to such dispute, as the case may
be, to the Holder. If the Holder and the Company are unable to agree upon such
determination or calculation within two (2) Business Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two (2) Business Days submit via facsimile (i) the
disputed determination of the closing price or the Volume Weighted Average Price
of the Company’s Common Stock to an independent, reputable investment bank
selected by the Company and approved by the Holder, which approval shall not be
unreasonably withheld, (ii) the disputed arithmetic calculation of the Exercise
Price, Market Price or any Redemption Price to the Company’s independent,
outside accountant or (iii) the disputed facts regarding the occurrence of a
Dilutive Issuance or Milestone Failure (or any other matter referred to above
that is not expressly designated to the independent investment bank or the
independent outside accountant pursuant to (i) or (ii) immediately above) to an
expert attorney from a nationally recognized outside law firm (having at least
50 attorneys and having with no prior relationship with the Company) selected by
the Company and approved by the Holder. The Company, at the Company’s expense,
shall cause the investment bank or the accountant, law firm, or other expert, as
the case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than five (5) Business Days from
the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error (collectively,
the “Dispute Resolution Procedures”).

         
15.      Benefits of this Warrant. 

          Nothing
in this Warrant shall be construed to confer upon any person other than the
Company and Holder any legal or equitable right, remedy or claim under this
Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and Holder. 

         
16.      Governing Law.

26

All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by jury.
If either party shall commence an action or proceeding to enforce any provisions
of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.

         
17.      Loss of Warrant. 

          Upon
receipt by the Company of evidence of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) of indemnity or
security reasonably satisfactory to the Company, and upon surrender and
cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date. 

         
18.      Notice or Demands. 

          Notices
or demands pursuant to this Warrant to be given or made by Holder to or on the
Company shall be sufficiently given or made if sent by certified or registered
mail, return receipt requested, postage prepaid, and addressed, until another
address is designated in writing by the Company, to the address set forth in
Section 2(a) above. Notices or demands pursuant to this Warrant to be given or
made by the Company to or on Holder shall be sufficiently given or made if sent
by certified or registered mail, return receipt requested, postage prepaid, and
addressed, to the address of Holder set forth in the Company’s records, until
another address is designated in writing by Holder. 

27

          19.     
Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Required Warrant
Holders.

28

          IN
WITNESS WHEREOF, the undersigned has executed this Warrant as of the
13th day of June, 2008. 

ICP Solar Technologies, Inc.

     By:
________________________
     Print Name:
__________________
     Title:
________________________

29

EXHIBIT A 

NOTICE OF EXERCISE FORM FOR WARRANT 

TO: ICP SOLAR TECHNOLOGIES, INC. 

          The
undersigned hereby irrevocably Exercises the right to purchase ____________ of
the shares of Common Stock (the “Common Stock”) of ICP SOLAR
TECHNOLOGIES, INC., a Nevada corporation (the “Company”), evidenced
by the attached warrant (the “Warrant”), and herewith makes payment of
the Exercise price with respect to such shares in full, all in accordance with
the conditions and provisions of said Warrant. 

1. The undersigned agrees not to offer, sell, transfer or
otherwise dispose of any of the Common Stock obtained on Exercise of the
Warrant, except in accordance with the provisions of Section 8(a) of the
Warrant. 

2. The undersigned requests that stock certificates for such
shares be issued free of any restrictive legend, if appropriate, and a warrant
representing any unexercised portion hereof be issued, pursuant to the Warrant
in the name of the undersigned and delivered to the undersigned at the address
set forth below: 

Dated:________

	 
	Signature 
	 
	 
	Print Name 
	 
	 
	Address 

 

	 
	NOTICE 
	 
	
      The signature to the foregoing Notice of Exercise Form
      must correspond to the name as written upon the face of the attached
      Warrant in every particular, without alteration or enlargement or any
      change whatsoever. 

	 

30

EXHIBIT B 

ASSIGNMENT 

(To be executed by the registered holder 
desiring to
transfer the Warrant) 

FOR VALUE RECEIVED, the undersigned holder of the attached
warrant (the “Warrant”) hereby sells, assigns and transfers unto the
person or persons below named the right to purchase _______ shares of the Common
Stock of ICP SOLAR TECHNOLOGIES, INC., a Nevada corporation, evidenced by
the attached Warrant and does hereby irrevocably constitute and appoint
_______________________ attorney to transfer the said Warrant on the books of
the Company, with full power of substitution in the premises. 

	Dated: __________________	
	 	Signature 

	Fill in for new registration of Warrant: 	 
	 	 
	 	 
	               
                         
         Name 	 
	 	 
	 	 
	               
                         
         Address 	 
	 	 
	 	 
	Please print name and address of assignee 	 
	(including zip code number) 	 

 

	 
	NOTICE 
	 
	
      The signature to the foregoing Assignment must correspond
      to the name as written upon the face of the attached Warrant in every
      particular, without alteration or enlargement or any change whatsoever.
      

	 

31 

SCHEDULE 5(g) 

MILESTONE GOALS 

	Milestone
      Date 	Milestone Goals 
	October 31, 2008 

	
      - 2 Quarter Trailing Revenues as reported in the
      Company’s public filings equal or exceed $4,000,000 

- 2 Quarter
      Trailing Consolidated EBITDA as reported in the Company’s public filings
      equal or exceed $50,000 

	April 30, 2009 

	
      - 4 Quarter Trailing Revenues as reported in the
      Company’s public filings equal or exceed $13,000,000 

- 4 Quarter
      Trailing Consolidated EBITDA as reported in the Company’s public filings
      equal or exceed $1,100,000 

For purposes of the above, the following definitions shall
apply: 

“Consolidated EBITDA” means, with respect to any Person
for any period, the Consolidated Net Income of such Person and its Subsidiaries
for such period, plus, without duplication, the sum of the following amounts of
such Person and its Subsidiaries for such period and to the extent deducted in
determining Consolidated Net Income of such Person for such period: (A)
Consolidated Net Interest Expense, (B) income tax expense, (C) depreciation
expense, (D) amortization expense, and (E) any additional non-cash charges
including but not limited to compensation expense and accretion. 

“Consolidated Net Income” means, with respect to any
Person for any period, the net income (loss) of such Person and its Subsidiaries
for such period, determined on a consolidated basis and in accordance with GAAP,
but excluding from the determination of Consolidated Net Income (without
duplication) (a) any extraordinary or non recurring gains or losses or gains or
losses from Dispositions, (b) restructuring charges, (c) any tax refunds, net
operating losses or other net tax benefits and (d) effects of discontinued
operations. 

“Consolidated Net Interest Expense” means, with respect
to any Person, for any period, gross interest expense of such Person and its
Subsidiaries for such period determined on a consolidated basis and in
accordance with GAAP (excluding the interest component of any Capitalized Lease
Obligations), less interest income determined on a consolidated basis and in
accordance with GAAP.

32ICP Solar Technologies, Inc.: Exhibit 10.6 - Prepared by TNT Filings
   Inc.

  

Exhibit 10.6

REGISTRATION RIGHTS AGREEMENT 

          This
Registration Rights Agreement (this "Agreement"), dated as of June 13,
2008, by and between ICP Solar Technologies, Inc., a Nevada corporation (the
"Company"), and each buyer identified on the Schedule of Buyers attached
hereto (collectively, the “BUYERS” and each individually, the “BUYER”). 

WHEREAS: 

          A. In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Buyer the following (as each capitalized term
not otherwise defined herein shall have the meaning ascribed to it in the
Securities Purchase Agreement): 

          (i)
Convertible debentures of the Company (the “Debentures”) issued pursuant
to the Securities Purchase Agreement, and 

          (ii)
Warrants in the amount described in the Securities Purchase Agreement, 

where the Debenture is convertible into shares of the Company's
common stock, par value $0.00001 per share (the "Common Stock"),
upon the terms and subject to the limitations and conditions set forth in the
Debenture and where each of the Warrants is exercisable into shares of the
Company's Common Stock, each upon the terms and conditions and subject to the
limitations and conditions set forth in the Warrants, all subject to the terms
and conditions of the Securities Purchase Agreement; and 

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

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

         
1. DEFINITIONS. 

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

         
“Additional Registration Statement” shall have the meaning
ascribed to it in Section 3(b) below. 

         
“Additional Registration Effectiveness Deadline” shall have the
meaning ascribed to it in Section 3(b) below. 

1

         
“Additional Registration Filing Deadline” shall have the
meaning ascribed to it in Section 3(b) below. 

         
"Buyer" means the purchaser of Debentures and Warrants pursuant
to the Securities Purchase Agreement specified on the signature page hereof, and
any transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 10 hereof. 

         
"Cutback Shares" means any of the Target Registration Amount of
Registrable Securities not included in any of the Registration Statements
previously declared effective hereunder as a result of a limitation on the
maximum number of shares of Common Stock of the Company permitted to be
registered by the staff of the SEC pursuant to Rule 415. 

         
“Effective Date” shall mean the date that the initial
Registration Statement is first declared effective by the Commission. 

         
"Effectiveness Period" means, as to any Registration Statement
required to be filed pursuant to this Agreement, the period commencing on the
Effective Date of such Registration Statement and ending on the earliest to
occur of (a) the second (2nd) anniversary of such Effective Date
(provided that, if the Registrable Securities are not eligible for resale under
Rule 144 as of such second (2nd) anniversary, such period shall be
extended for up to three (3) additional years until the Registrable Securities
become eligible for resale under Rule 144), (b) such time as all of the
Registrable Securities covered by such Registration Statement have been publicly
sold by the Holders of the Registrable Securities included therein, or (iii)
such time as all of the Registrable Securities covered by such Registration
Statement may be sold by the Holders pursuant to Rule 144 as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the affected
Holders. 

         
“Effectiveness Deadline,” (a) with respect to the Initial
Registration Statement, shall mean the ninetieth (90th) calendar day
after the date hereof and with respect to any Additional Registration Statements
which may be required pursuant to Section 3(b), the 90th calendar day following
the date on which an additional Registration Statement is required to be filed
hereunder; provided, however, that in the event the Company is notified by the
Commission that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Deadline as to such Registration Statement shall be the fifth
Trading Day following the date on which the Company is so notified if such date
precedes the dates otherwise required above and (b) with respect to any
Additional Registration Statement, shall mean the Additional Registration
Effectiveness Deadline.

         
“Exclusion Period” shall have the meaning set forth in Section
3(p) below. 

         
“Filing Deadline” shall mean the Initial Registration Filing
Deadline, or any applicable Additional Registration Filing Deadline. 

         
“FINRA” shall mean the Financial Industry Regulatory Authority
(f/k/a the National Association of Securities Dealers, Inc.). 

2

         
“Initial Registration Filing Deadline” shall mean, with respect
to the Initial Registration Statement required hereunder, July 15, 2008. 

         
“Initial Registration Minimum” means a number of Registrable
Securities equal to the lesser of (i) the total number of Registrable Securities
and (ii) the maximum number which would enable the Company to conduct such
offering in accordance with the provisions of Rule 415 as advised by the staff
of the Commission (the “Staff”) in a written comment letter or otherwise
(which number shall be no less than thirty percent (30%) of the number of issued
and outstanding shares of Common Stock that are held by non-affiliates of the
Company on the day immediately prior to the filing date of the Initial
Registration Statement, unless the Staff expressly requires otherwise). 

         
"Investor" means a Buyer or any transferee or assignee thereof to whom a
Buyer assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 10 hereof and any
transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 10. 

         
“Prospectus” means the prospectus included in a 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 by the Commission pursuant to
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 a 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. 

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

         
"Registrable Securities," for a given Registration, means
(a)any shares of Common Stock (the “Warrant Shares”) issued or issuable
upon exercise of or otherwise pursuant to the Warrant(s), and (b) any shares of
capital stock issued or issuable as a dividend on or in exchange for or
otherwise with respect to any of the foregoing, (c) any additional shares of
Common Stock issuable in connection with any anti-dilution provisions in the
Warrants (in each case, without giving effect to any limitations on exercise set
forth in the Warrant), and (d) any other shares of common stock issued pursuant
to the terms of the Securities Purchase Agreement, the Warrants, this
Registration Rights Agreement or any other Transaction Document (as defined in
the Securities Purchase Agreement), and (e) any securities issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing. 

         
“Registration Failure Liquidated Damages” shall have the
meaning set forth in Section 4 below. 

3

         
"Registration Statement(s)" means a registration statement(s)
of the Company under the 1933 Act. 

         
“Registration Trigger Date” shall have the meaning set forth in
Section 3(b) below. 

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

         
“SEC Guidance” means (i) the Securities Act, and (ii) any
publicly-available written or oral guidance, comments, requirements or requests
of the Commission staff. 

         
“SEC Share Reduction” shall have the meaning ascribed to it in
Section 2(a) below. 

         
“Securities” shall have the meaning ascribed to it in the
Securities Purchase Agreement. 

         
“Series A Warrant Shares” shall mean the Warrant Shares
issuable upon the exercise of the Series A Warrants. 

         
“Series B Warrant Shares” shall mean the Warrant Shares
issuable upon the exercise of the Series B Warrants. 

         
“Series C Warrant Shares” shall mean the Warrant Shares
issuable upon the exercise of the Series C Warrants. 

         
“Target Registration Amount” shall have the meaning set forth
in Section 2(a) below. 

         
“Target Registration Shortfall” shall have the meaning set
forth in Section 2(a) below. 

         
“Underlying Debenture Shares” means the shares of Common Stock
issuable upon conversion of the Debentures and payment of interest thereunder.

         
“Warrants” means the warrants issued by the Company pursuant to
the Securities Purchase Agreement in conjunction with the Debenture issued by
the Company. 

         
“Warrant Shares” means the shares of Common Stock issuable upon
exercise of the Warrants. 

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

         
2. REGISTRATION. 

                   
a. MANDATORY REGISTRATION. Following the Closing of any
Debenture pursuant to the Securities Purchase Agreement, the Company shall
prepare, and, on or prior to the Initial Registration Filing Deadline (as
defined above) file with the Commission a Registration 

4

Statement on Form S-1 (or, if Form S-1 is not then available,
on such form of Registration Statement as is then available to effect a
registration of the Registrable Securities, subject to the consent of the Buyer,
which consent will not be unreasonably withheld)(the “Initial Registration
Statement”) covering the resale of the Registrable Securities which
Registration Statement, to the extent allowable under the 1933 Act and the rules
and regulations promulgated thereunder (including Rule 416), shall state that
such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of or otherwise
pursuant to the Debenture and exercise of or otherwise pursuant to the Warrants
to prevent dilution resulting from stock splits, stock dividends or similar
transactions and shall contain (unless otherwise directed by at least a
three-fourths (3/4) majority in interest of the Holders) substantially the
“Plan of Distribution” attached hereto as Annex
A. The number of shares of Common Stock initially included in such
Registration Statement shall be no less than 150% of the aggregate number of
Conversion Shares that are then issuable upon conversion of the Debenture or
otherwise pursuant to the Debenture (based on the Conversion Price [as defined
in the Debenture] then in effect) and assuming that all interest that accrues
for the entire term of the Debentures is payable in Common Stock, plus the
aggregate number of Warrant Shares that are then issuable upon exercise of or
otherwise pursuant to the Warrants, without regard to any limitation on the
Buyer's ability to convert the Debenture or exercise the Warrants (collectively,
the “Target Registration Amount”). Notwithstanding the foregoing, if the
Company is advised by the staff of the Commission in a written comment letter or
otherwise that it is not eligible to conduct the offering of the Debentures
under Rule 415 promulgated under the 1933 Act because of the number of shares
sought to be included in the Registration Statement, then, subject to any
applicable Registration Failure Liquidated Damages (as defined herein), the
Company may reduce (an “SEC Share Reduction”) the number of shares
covered by such Registration Statement to the maximum number which would enable
the Company to conduct such offering in accordance with the provisions of Rule
415 (“Rule 415 Eligible”)(subject to Registration Failure Liquidated
Damages, as defined below, if the Company reduces unilaterally the number of
shares covered by such Registration Statement to a number less than the Initial
Registration Minimum). In the event of an SEC Share Reduction, the number of
Registrable Securities registered shall be cut back pro rata (based upon the
relative number of Warrants held by each Holder), provided that (i) the
inclusion of the Series A Warrant Shares in such initial Registration Statement
shall take precedence over and shall not be cut back until the following
securities of the Company are cut back and removed from such Registration
Statement (in the following order): As necessary, (i) Series C Warrants shares
shall be cut back and removed from the Registration Statement first, and (ii)
Series B Warrants shall be cut back and removed from the Registration Statement
first and (iii) Series A Warrants shall be cut back and removed from the
Registration Statement third. In the event that, due to an SEC Share Reduction
or otherwise, any Registration Statement filed hereunder shall (when combined
with any previous Registration Statements that are current and effective)
register a number of shares of Common Stock which less than the Target
Registration Amount (a “Target Registration Shortfall”), then the unregistered
portion of the Target Registration Amount (the “Target Registration Shortfall
Amount”) shall be included in the next Additional Registration Statement (in
accordance with Section 3(b) below).

The Company shall, as early as practicable on the Trading Day
after the effective date of such Registration Statement, file a final Prospectus
with the Commission as required by Rule 424. The Company acknowledges that the
number of shares initially included in each Registration Statement 

5

represents a good faith estimate of the maximum number of
shares issuable upon conversion of the Debenture or otherwise pursuant to the
Debenture and exercise of or otherwise pursuant to the Warrants and shall be
amended if not sufficient. Each Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided to (and subject to the approval of) the Buyer and its counsel
prior to its filing or other submission.

                   
b. PIGGY-BACK REGISTRATIONS. If at any time prior to the
expiration of the Registration Period (as hereinafter defined) the Company shall
determine to file with the Commission a Registration Statement relating to an
offering for its own account or the account of others under the 1933 Act of any
of its equity securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans), the Company shall
send to Buyer written notice of such determination and, if within fifteen (15)
days after the effective date of such notice, the Buyer shall so request in
writing, the Company shall include in such Registration Statement all or any
part of the Registrable Securities which are not then registered for resale
pursuant to a current and effective Registration Statement, and which the Buyer
requests to be registered, except that if, (i) inclusion of such shares would
result in the offering not being Rule 415 Eligible, or (ii) in connection with
any underwritten public offering for the account of the Company, the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)' judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which the Buyer has
requested inclusion hereunder (i) as would enable the offering to be Rule 415
Eligible or (ii) as the underwriter shall permit; 

         
PROVIDED, HOWEVER, that the Company shall not exclude any
Registrable Securities unless the Company has first excluded all outstanding
securities, the holders of which are not entitled by contract to inclusion of
such securities in such Registration Statement or are not entitled to pro rata
inclusion with the Registrable Securities; and 

         
PROVIDED, FURTHER, HOWEVER, that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable Securities shall be
made pro rata with holders of other securities having the contractual right to
include such securities in the Registration Statement other than holders of
securities entitled to inclusion of their securities in such Registration
Statement by reason of demand registration rights. No right to registration of
Registrable Securities under this Section 2(b) shall be construed to limit any
registration required under Section 2(a) hereof. If an offering in connection
with which the Buyer is entitled to registration under this Section 2(d) is an
underwritten offering, then the Buyer shall, unless otherwise agreed by the
Company, offer and sell such Registrable Securities in an underwritten offering
using the same underwriter or underwriters and, subject to the provisions of
this Agreement, on the same terms and conditions as other shares of Common Stock
included in such underwritten offering. Notwithstanding anything to the contrary
set forth herein, the registration rights of the Buyer pursuant to this Section
2(b) shall only be available in the event the Company fails to timely file,
obtain effectiveness or maintain effectiveness of any Registration Statement to
be filed pursuant to Section 2(a) in accordance with the terms of this 

6

Agreement and shall terminate and be of no further force and
effect once the Company satisfies its obligations under this Agreement. 

         
3. OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall have the following
obligations: 

                   
a. The Company shall prepare promptly, and file with the Commission as soon as
practicable after the date of the Closing under the Securities Purchase
Agreement (the "CLOSING DATE") (but no later than the Filing Deadline),
Registration Statements with respect to the number of Registrable Securities
provided in Section 2(a), and thereafter use its best efforts to cause each such
Registration Statement relating to Registrable Securities to become effective as
soon as possible after such filing, but in any event shall cause each such
Registration Statement relating to Registrable Securities to become effective no
later than the Effectiveness Deadline, and shall keep the Registration Statement
current and effective pursuant to Rule 415 at all times until such date as is
the earlier of (i) the date on which all of the Registrable Securities for such
Registration Statement have been sold and (ii) the date on which all of the
Registrable Securities for such Registration Statement (in the opinion of
counsel to the Buyer) may be immediately sold to the public without registration
or restriction (including without limitation as to volume by each holder
thereof) under the 1933 Act (the "REGISTRATION PERIOD"), which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein not misleading. 

                   
b. The Company shall prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to each Registration
Statements and the prospectus used in connection with the Registration
Statements as may be necessary to keep the Registration Statements current and
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statements
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statements. In the event of a Target
Registration Shortfall (the date of each of which is referred to as a
“Registration Trigger Date”), or in the event that on any Trading Day (as
defined in the Debenture) (each such Trading Day is also referred to as a
"Registration Trigger Date") the number of shares available under a
Registration Statement filed pursuant to this Agreement is otherwise
insufficient to cover all of the Registrable Securities issued or issuable upon
conversion of the Debenture or otherwise pursuant to the Debenture (based on the
Conversion Price [as defined in the Debenture] then in effect), exercise of or
otherwise pursuant to the Warrants (based on the Exercise Price [as defined in
the Warrants] then in effect), and otherwise issuable pursuant to the
Transaction Documents, in each case without giving effect to any limitations on
the Buyer' ability to convert the Debenture, exercise the Warrants or otherwise
receive shares of Common Stock pursuant to the Transaction Documents, the
Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefore, if applicable), or both (each,
an “Additional Registration Statement”), so as to cover at least 150% of
the total number of Registrable Securities so issued or issuable (based on the
Conversion Prices of the Debenture, the Exercise Prices of the Warrants, and
other relevant factors on which the Company reasonably elects to rely, and
without giving effect to any limitations on 

7

conversion contained in the Debenture, limitations on exercise
contained in the Warrants or limitations on conversion or exercise or other
payment of shares contained in the Securities Purchase Agreement) as of the
Registration Trigger Date (subject to an SEC Share Reduction, if applicable).
The Company shall prepare and file each Additional Registration Statement as
soon as practicable following any Registration Trigger Date, but not later than
the date that is sixty (60) days following the applicable Registration Trigger
Date (the “Additional Registration Filing Deadline”) provided that, if
Cutback Shares are required to be included in the Additional Registration
Statement, the “Additional Registration Filing Deadline” shall mean the
later of (i) the date that is sixty (60) days after the date substantially all
(as such term is then interpreted by the Commission) of the Registrable
Securities registered under the immediately preceding Registration Statement are
sold and (ii) the date that is six (6) months following the date of
effectiveness of the most recently effective Registration Statement or
Additional Registration Statement filed hereunder. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof, but in any event
the Company shall cause such amendment and/or new Registration Statement to
become effective within one hundred eighty (180) days of the Registration
Trigger Date (the “Additional Registration Effectiveness Deadline”) or as
promptly as practicable in the event the Company is required to increase its
authorized shares.

                   
c. The Company shall furnish to the Buyer and its legal counsel (i) promptly
after the same is prepared and publicly distributed, filed with the Commission,
or received by the Company, one copy of each Registration Statement and any
amendment thereto, each preliminary prospectus and prospectus and each amendment
or supplement thereto, and, in the case of the Registration Statement referred
to in Section 2(a), each letter written by or on behalf of the Company to the
Commission or the staff of the Commission, and each item of correspondence from
the Commission or the staff of the Commission, in each case relating to such
Registration Statement (other than any portion of any thereof which contains
information for which the Company has sought confidential treatment), and (ii)
such number of copies of a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other documents as the Buyer may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Buyer. The Company will immediately notify the Buyer in
writing of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly respond to any and all
comments received from the Commission, with a view towards causing each
Registration Statement or any amendment thereto to be declared effective by the
Commission as soon as practicable and shall file an acceleration request as soon
as practicable, but no later than five (5) business days (the "Acceleration
Request Deadline") following the resolution or clearance of all Commission
comments or, if applicable, following notification by the Commission that any
such Registration Statement or any amendment thereto will not be subject to
review. 

                   
d. The Company shall use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statements under such other
securities or "blue sky" laws of such jurisdictions in the United States as the
Buyer shall reasonably request, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations 

8

and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;

                   
e. As promptly as practicable after becoming aware of such event, the Company
shall notify the Buyer of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in any Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and use its best efforts promptly to
prepare a supplement or amendment to any Registration Statement to correct such
untrue statement or omission, and deliver such number of copies of such
supplement or amendment to the Buyer as the Buyer may reasonably request;
provided that, for not more than twenty (20) consecutive days (or a total of not
more than sixty (60) days in any twelve (12) month period), the Company may
delay the disclosure of material non-public information concerning the Company
(as well as prospectus or Registration Statement updating) the disclosure of
which at the time is not, in the good faith opinion of the Company, in the best
interests of the Company (an "Allowed Delay"); provided, further, that
the Company shall promptly (i) notify the Buyer in writing of the existence of
(but in no event, without the prior written consent of the Buyer, shall the
Company disclose to the Buyer any of the facts or circumstances regarding)
material non-public information giving rise to an Allowed Delay and (ii) advise
the Buyer in writing to cease all sales under such Registration Statement until
the end of the Allowed Delay, provided the above actions are consistent with the
requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon
expiration of the Allowed Delay, the Company shall again be bound by the first
sentence of this Section 3(e) with respect to the information giving rise
thereto. Nothing herein relieves the obligations set forth in the Debenture or
the Warrants relative to Registration Failure Liquidated Damages or
payments of the Default Amount pursuant to Events of Default.

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

                   
g. The Company shall permit a single firm of counsel designated by the Buyer to
review such Registration Statement and all amendments and supplements thereto
(as well as all requests for acceleration or effectiveness thereof), at Buyer’s
own cost, a reasonable period of time prior to their filing with the Commission
(not less than three (3) business days but not more than ten (10) business days)
and not file any document in a form to which such counsel reasonably objects and
will not request acceleration of such Registration Statement without prior
notice to such counsel.

                   
h. The Company shall hold in confidence and not make any disclosure of
information concerning the Buyer provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it 

9

shall, upon learning that disclosure of such information
concerning the Buyer is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the Buyer
prior to making such disclosure, and allow the Buyer, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information. 

                   
i. If the Company becomes eligible for listing on a national securities
exchange, the Company shall use its best efforts to (i) cause all the
Registrable Securities covered by the Registration Statement to be listed on
each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) to the extent the securities of the same class or series are not then
listed on a national securities exchange, secure the designation and quotation,
of all the Registrable Securities covered by the Registration Statement on the
Nasdaq Global Select Market or, if not eligible for the or the Nasdaq Global
Select Market on the Nasdaq Global Market or, if not eligible for the Nasdaq
Global Market, on the Over the Counter electronic bulletin board and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register with FINRA as such with respect to such Registrable
Securities.

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

                   
k. The Company shall cooperate with the Buyer who holds Registrable Securities
being offered and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Registrable Securities to be offered pursuant
to such Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or
underwriters, if any, or the Buyer may reasonably request and registered in such
names as the managing underwriter or underwriters, if any, or the Buyer may
request, and, within five (5) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the Commission, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Buyer) an appropriate instruction and an opinion of such counsel in the form
required by the transfer agent in order to issue the Registrable Securities free
of restrictive legends. 

                   
l. At the request of the holders of a three-fourths (3/4) majority-in-interest
of the Registrable Securities, the Company shall prepare and file with the
Commission such amendments (including post-effective amendments) and supplements
to a Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement, provided that if such
change is not legally necessary in order for the Buyers to timely sell their
Registrable Securities, the Company shall not be required to effect such
amendments if they will impose any additional requirements, including costs, on
the Company. 

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

10

                   
n. The Company shall comply with all applicable laws related to a Registration
Statement and offering and sale of securities and all applicable rules and
regulations of governmental authorities in connection therewith (including
without limitation the 1933 Act and the 1934 Act and the rules and regulations
promulgated by the Commission). 

                   
o. Further Registration Statements. Except for a registration statement
filed on behalf of the Buyer pursuant to Section 2 or Section 3 of this
Agreement, and except for an underwritten public offering, the Company will not
file any registration statements or amend (in such a manner as to increase the
number of shares registered) any already filed registration statement with the
Commission or with state regulatory authorities without the consent of the Buyer
until the expiration of the "Exclusion Period," which shall be defined as
the sooner of (i) the date that the Registration Statement shall have been
current and available for use in connection with the resale of the Registrable
Securities for a period of 180 days, or (ii) until all the Shares and Warrant
Shares have been resold or transferred by the Subscribers pursuant to the
Registration Statement or are eligible for immediate unrestricted resale
pursuant to Rule 144, without volume limitations. The Exclusion Period will be
tolled during the pendency of an Event of Default as defined in the Debenture or
an Event of Default as defined in the Warrants.

                   
p. NASD Rule 2710 Filing; Broker Compensation. The Company shall effect a
filing with respect to the public offering contemplated by the Registration
Statement (an “Issuer Filing”) with FINRA pursuant to NASD Rule
2710within one Trading Day of the date that the Registration Statement is first
filed with the Commission and pay the filing fee required by such Issuer Filing.
The Company shall use commercially reasonable efforts to pursue the Issuer
Filing until the NASD issues a letter confirming that it does not object to the
terms of the offering contemplated by the Registration Statement.

                   
q. NO PIGGYBACK ON REGISTRATIONS. Except for legally required amendments
or supplements to the existing registration statement specified in Schedule
3(dd) to the Securities Purchase Agreement, neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in a Registration Statement (including but
not limited to any Registration Statement under Section 2(a) hereof or any
amendment or supplement thereto under Section 3(b) hereof) other than the
Registrable Securities, and the Company shall not during the Effectiveness
Period enter into any agreement providing any such right to any of its security
holders. In addition, the Company shall not offer any securities for its own
account or the account of others in any Registration Statement under Section
2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof
without the consent of the holders of a three-fourths (3/4) majority-in-interest
of the Registrable Securities.

         
4. REGISTRATION FAILURE. If:

    
                   
(i) in the aggregate among all Holders on a pro-rata basis based on their
purchase of the Securities pursuant to the Securities Purchase Agreement, a
Registration Statement registering for resale all of the Initial Registration
Minimum is not declared effective by the Commission by the Effectiveness
Deadline of the Initial Registration, or

11

                         (ii)
the Company files the Initial Registration Statement without affording the
Holders the opportunity to review and comment on the same as required by Section
3(g) herein, or

                         (iii)
the Company fails to file with the Commission a request for acceleration of a
Registration Statement in accordance with Rule 461 promulgated by the Commission
pursuant to the Securities Act, within five Trading Days of the date that the
Company is notified (orally or in writing, whichever is earlier) by the
Commission that such Registration Statement will not be “reviewed” or will not
be subject to further review, or

                         (iv)
prior to the effective date of a Registration Statement, the Company fails to
file a pre-effective amendment and otherwise respond in writing to comments made
by the Commission in respect of such Registration Statement within 10 Trading
Days after the receipt of comments by or notice from the Commission that such
amendment is required in order for such Registration Statement to be declared
effective, or

                         (v)
after the effective date of a Registration Statement, such Registration
Statement ceases for any reason to remain continuously effective as to all
Registrable Securities included in such Registration Statement, or the Holders
are otherwise not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for more than 10 consecutive calendar days or more than
an aggregate of 15 calendar days (which need not be consecutive calendar days)
during any 12-month period, or 

                         (vi)
any Additional Registration Statement required to be filed hereunder is not
filed by the applicable Additional Registration Filing Deadline or it is not
declared effective by the applicable Additional Registration Effectiveness
Deadline (any such failure or breach being referred to as a “Registration
Failure”, and for purposes of clause (i) or (ii), the date on which such
Registration Failure occurs, and for purpose of clause (iii) the date on which
such five Trading Day period is exceeded, and for purpose of clause (iv) the
date which such 10 calendar day period is exceeded, and for purpose of clause
(v) the date on which such 10 or 15 calendar day period, as applicable, is
exceeded being referred to as a “Registration Failure Date”), then, in
addition to any other rights the Holders may have hereunder or under applicable
law, on each such Registration Failure Date and on each monthly anniversary of
each such Registration Failure Date (if the applicable Registration Failure
shall not have been cured by such date) until the applicable Registration
Failure is cured, the Company shall pay to each Holder an amount
(“Registration Failure Liquidated Damages”) in cash, as liquidated
damages and not as a penalty, equal to 2% of the aggregate purchase price paid
by such Holder pursuant to the Purchase Agreement for any unregistered
Registrable Securities then held by such Holder. The parties agree that (1) the
Company shall not be liable for liquidated damages under this Agreement with
respect to any Warrants or Warrant Shares, provided that such Warrants are
exerciseable in a cashless exercise and the underlying Warrant Shares are
eligible for sale under Rule 144 following a cashless exercise, and (2) no
Registration Failure Liquidated Damages shall accrue with respect to the
Debentures during any time that the underlying Conversion Shares are eligible
for sale under Rule 144.

                         (vii)
Notwithstanding (i) – (vi) above, the Company shall not be liable for
Registration Failure Liquidated Damages if (1) the Company makes all filings as
and when required by this Agreement, (2) the Company responds to any comments
from the SEC regarding a 

12

Registration Statement within ten (10) days of the date of
receipt of such comments, and (3) uses its best efforts to have the subject
Registration Statement declared effective for the number of shares required
hereunder as quickly as reasonably possible. Registration Failure Liquidated
Damages shall be due and payable by the fifth (5th) day of the
calendar month in which they accrue. If the Company fails to pay any liquidated
damages pursuant to this Section in full within five (5) days after the date
payable, the Company will pay interest thereon at a rate of 18% per annum (or
such lesser maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The liquidated
damages pursuant to the terms hereof shall apply on a daily pro rata basis for
any portion of a month prior to the cure of a Registration Failure. 

         
5. OBLIGATIONS OF THE BUYER. In connection with the
registration of the Registrable Securities, the Buyer shall have the following
obligations: 

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

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

                   
c. In the event of an underwritten offering pursuant to Section 2(b) in which
any Registrable Securities are to be included, the Buyer agrees to enter into
and perform the Buyer's obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such offering and
take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities, unless the Buyer has
notified the Company in writing of the Buyer's election to exclude all of the
Buyer's Registrable Securities from such Registration Statement. 

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

13

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

                   
f. Each Holder agrees to furnish to the Company a completed questionnaire in the
form attached to this Agreement as Annex B (a “Selling Shareholder
Questionnaire”) by the end of the third (3rd) Trading Day
following the date on which such Holder receives draft materials in accordance
with this Section.

         
6. EXPENSES OF REGISTRATION. All reasonable expenses, other
than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualification fees,
printers and accounting fees, the fees and disbursements of counsel for the
Company shall be borne by the Company. 

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

                   
a. To the extent permitted by law, the Company will indemnify, hold harmless and
defend (i) the Buyer, (ii) the directors, officers, partners, managers, members,
employees, agents and each person who controls any Buyer within the meaning of
the 1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), if any, (iii) any underwriter (as defined in the 1933 Act) for the
Buyer in connection with an underwritten offering pursuant to Section 2(b)
hereof, and (iv) the directors, officers, partners, employees and each person
who controls any such underwriter within the meaning of the 1933 Act or the 1934
Act, if any (each, an "Indemnified Person"), against any joint or several
losses, claims, damages, liabilities or expenses (collectively, together with
actions, proceedings or inquiries by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof,
"Claims") to which any of them may become subject insofar as such Claims
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or the omission or
alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the
Commission) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). The Company shall reimburse the
Indemnified Person, promptly as such 

14

expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 7(a): (i) shall not apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by any Indemnified Person or
underwriter for such Indemnified Person expressly for use in connection with the
preparation of such Registration Statement or any such amendment thereof or
supplement thereto; (ii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Buyer pursuant to Section 10.

                   
b. Promptly after receipt by an Indemnified Person under this Section 7 of
notice of the commencement of any action (including any governmental action),
such Indemnified Person shall, if Claim in respect thereof is to be made against
any the Company under this Section 7, deliver to the Company a written notice of
the commencement thereof, and the Company shall have the right to participate
in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company and the Indemnified
Person, as the case may be.

         
PROVIDED, HOWEVER, that an Indemnified Person shall have the
right to retain its own counsel with the fees and expenses to be paid by the
Company, if, in the reasonable opinion of counsel retained by the Company, the
representation by such counsel of the Indemnified Person and the Company would
be inappropriate due to actual or potential differing interests between such
Indemnified Person and any other party represented by such counsel in such
proceeding. The Company shall pay for only one separate legal counsel for the
Indemnified Persons, and such legal counsel shall be selected by Buyer and shall
be reasonably acceptable to the Company, if the Buyer is entitled to
indemnification hereunder. The failure to deliver written notice to the Company
within a reasonable time of the commencement of any such action shall not
relieve the Company of any liability to the Indemnified Person under this
Section 6, except to the extent that the Company is actually prejudiced in its
ability to defend such action. The indemnification required by this Section 7
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable. 

                   
c. To the extent permitted by law, but in an aggregate amount not to exceed the
Buyer’s Subscription Amount (as defined in the Securities Purchase Agreement)
the Buyer will indemnify, hold harmless and defend (i) the Company, and (ii) the
directors, officers, partners, managers, members, employees, or agents of the
Company, if any (each, a "Company Indemnified Person"), against any joint
or several losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries by any regulatory or
self-regulatory organization, whether 

15

commenced or threatened, in respect thereof, "Claims")
to which any of them may become subject insofar as such Claims arise out of or
are based upon a Claim arising out of or based upon any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities, which occurs due to the inclusion by the Company in a Registration
Statement of false or misleading information about the Buyer, where such
information was furnished in writing to the Company by the Buyer for the purpose
of inclusion in such Registration Statement. 

         
8. CONTRIBUTION. To the extent any indemnification by the
Company is prohibited or limited by law, the Company agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 7 to the fullest extent permitted by law, based upon a comparative
fault standard.

         
9. REPORTS UNDER THE 1934 ACT. With a view to making available
to the Buyer the benefits of Rule 144 promulgated under the 1933 Act or any
other similar rule or regulation of the Commission that may at any time permit
the Buyer to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to: 

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

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

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

         
10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this
Agreement shall be automatically assignable by the Buyers to any transferee of
all or any portion of Registrable Securities if: (i) the Buyer agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the 1933 Act and applicable state
securities laws, (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions 

16

contained herein, and (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement. In the event that the Buyer transfers all or any portion of its
Registrable Securities pursuant to this Section, the Company shall have at least
ten (10) days to file any amendments or supplements necessary to keep the
Registration Statement current and effective pursuant to Rule 415, and the
commencement date of any Event of Default under the Debenture or the Warrants
caused thereby will be extended by ten (10) days. 

         
11. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with written consent of the Company, and Buyers who hold a
three-fourths (3/4) majority interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon the Buyer and the Company. 

         
12. MISCELLANEOUS.

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

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

If to the Company: To the address set
forth immediately below such 
Company’s name on the signature pages hereto.

With copy to: 

Josef B. Volman 
Burns &
Levinson LLP 
125 Summer Street 
Boston, Ma. 02110 
Telephone:
617-345-3895 
Fax: 617-345-3299 

          If to a
Buyer: To the address set forth immediately below such Buyer's name on the
signature pages hereto. 

Each party shall provide notice to the other party of any
change in address. 

17

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

                   
d. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. The parties hereby waive all rights to a trial by jury.
If either party shall commence an action or proceeding to enforce any provisions
of the this Agreement, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding. 

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

                   
f. Subject to the requirements of Section 10 hereof, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties hereto. 

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

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

18

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

                   
j. Except as otherwise provided herein, all consents and other determinations to
be made by the Buyer pursuant to this Agreement shall be made by Buyers holding
a three-fourths (3/4) majority of the Registrable Securities, determined as if
the all of the Debenture and Warrants then outstanding have been converted or
exercised into for Registrable Securities. 

                   
k. The Company acknowledges that a breach by it of its obligations hereunder
could cause irreparable harm to the Buyer by vitiating the intent and purpose of
the transactions contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for breach of its obligations hereunder could be inadequate
and agrees, in the event of a breach or threatened breach by the Company of any
of the provisions hereunder, that the Buyer could be entitled, in addition to
all other available remedies in law or in equity, to seek an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to seek to enforce specifically the terms and provisions hereof, without the
necessity of showing economic loss and without any bond or other security being
required. 

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

                   
m. In the event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof. 

                   
n. The initial number of Registrable Securities included in any Registration
Statement and each increase to the number of Registrable Securities included
therein shall be allocated pro rata among the Buyers based on the number of
Registrable Securities held by the Buyer at the time of such establishment or
increase, as the case may be. In the event a Buyer shall sell or otherwise
transfer any of such holder's Registrable Securities, each transferee shall be
allocated a pro rata portion of the number of Registrable Securities included in
a Registration Statement for such transferor. Any shares of Common Stock
included in a Registration Statement and which remain allocated to any person or
entity which does not hold any Registrable Securities shall be allocated to the
remaining Buyers, pro rata based on the number of shares of Registrable
Securities then held by the Buyers. For the avoidance of doubt, the number of
Registrable Securities held by a Buyer shall be determined as if all the
Debenture and Warrants then outstanding and held by a Buyer were converted into
or exercised for Registrable Securities, without regard to any limitation on the
Buyer's ability to convert the Debenture or exercise the Warrants. 

19

                   
o. There shall be no oral modifications or amendments to this Agreement. This
Agreement may be modified or amended only in writing.

[INTENTIONALLY LEFT BLANK] 

          IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
Agreement to be duly executed as of the 13th day of June, 2008. 

	COMPANY: 	BUYER: 
	ICP SOLAR TECHNOLOGIES, INC. 	BRIDGEPOINTE MASTER FUND 
	  	LTD. 
	 
    	  
	 
    	  
	By:      
      ___________________________________________	By:      
      ___________________________________________
	Sass Peress, President, CEO & Chairman 	           
       Eric S. Swartz, Director 
	 
    	  
	 
    	  
	ADDRESS: 	ADDRESS: 
	 
    	  
	7075 Place Robert-Joncas, Unit 131, 	1120 Sanctuary Parkway 
	Montreal H4M272 	Suite 325 
	Phone: 514-270-5770 	Alpharetta, GA 30004 
	  	Phone: 770-640-8130 
	Fax: 514-270-3677 	Facsimile: 770-777-5844 

20

SCHEDULE OF BUYERS

	  	 	  	 	Legal Representative’s 
	  	 	Address and 	 	Address and 
	Buyer 	 	Facsimile Number 	 	Facsimile Number 
	  	 	  	 	  
	  	 	  	 	  
	BridgePointe Master Fund Ltd. 	 	1120 Sanctuary Parkway 	 	P. Bradford Hathorn, Esq. 
	  	 	Suite 325 	 	Roswell Capital Partners, LLC 
	  	 	Alpharetta, GA 30004 	 	1120 Sanctuary Parkway, Suite 325 
	  	 	Phone: 770-640-8130 	 	Alpharetta, GA 30004 
	  	 	Facsimile: 770-777-5844 	 	Phone: 770-640-8130 
	  	 	  	 	Facsimile: 770-777-5844 
	Gemini Master Fund, Ltd. 	 	c/o Gemini Strategies, LLC 	 	  
	  	 	135 Liverpool Drive, Suite C 	 	None. 
	  	 	Cardiff CA 92007 	 	  
	  	 	Phone: 858-480-2828 	 	  
	  	 	Facsimile: 858-509-8808 	 	  
	  	 	  	 	  
	  	 	  	 	  
	Platinum Long Term Growth 	 	152 West 57th Street 	 	Shane W. McCormack 
	VI, LLC 	 	4th Floor 	 	Burak Anderson & Melloni, PLC 
	  	 	New York, NY 10019 	 	30 Main Street, P.O. Box 787 
	Investment Amount: 	 	Phone: 212-581-0500 	 	Burlington, VT 05402-0787 
	  	 	Facsimile: 212-582-2222 	 	Phone: 802-862-0500 
	$1,000,000 	 	  	 	Facsimile: 802-862-8176 

21

Annex A 

Plan of Distribution 

Each Selling Stockholder (the “Selling Stockholders”) of the
common stock and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their shares of common stock on the
OTC Bulletin Board or any other 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. A Selling Stockholder 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; 
          •
settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a
part; 
          • broker
dealers may agree with the Selling Stockholders to sell a specified number of
such shares at a stipulated price per
share; 
          • through
the writing or settlement of options or other hedging transactions, whether
through an options exchange or
otherwise; 
          • a
combination of any such methods of sale;
or 
          • any other
method permitted pursuant to applicable law. 

          The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (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 or
discounts from the Selling Stockholders (or, if any broker dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be negotiated,
but, except as set forth in a supplement to this Prospectus, in the case of an
agency transaction not in excess of a customary brokerage commission in
compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

          In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of 

22

shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). 

          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 or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%). 

          The
Company is required to pay certain fees and expenses incurred by the Company
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.

          Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the Selling Stockholders. 

          We
agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume limitations by reason of Rule 144 under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with. 

          Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders 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
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act). 

23

Annex B 
ICP SOLAR TECHNOLOGIES, INC. 
Selling
Securityholder Notice and Questionnaire 

The undersigned beneficial owner of common stock (the
“Registrable Securities”) of ICP SOLAR TECHNOLIGES, INC., a Nevada
corporation (the “Company”), understands that the Company has filed or intends
to file with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “Registration Rights Agreement”) to which
this document is annexed. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement. 

          Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus. 

NOTICE 

The undersigned beneficial owner (the “Selling Securityholder”)
of Registrable Securities hereby elects to include the Registrable Securities
owned by it in the Registration Statement. 

The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate: 

1.          
Name. 

              
(a)           Full Legal Name
of Selling Securityholder 

              
(b)      Full Legal Name of Registered Holder (if not
the same as (a) above) through which Registrable Securities are held: 

              
(c)      Full Legal Name of Natural Control Person
(which means a natural person who directly or indirectly alone or with others
has power to vote or dispose of the securities covered by this Questionnaire):

24

2.          
Address for Notices to Selling Securityholder: 

Telephone: 
Fax: 
Contact Person: 

3.          
Broker-Dealer Status: 

              
(a)      Are you a
broker-dealer? 
              
Yes       No     

              
(b)      If “yes” to Section 3(a), did you receive your
Registrable Securities as compensation for investment banking services to the
Company? 
              
Yes     
 No 
              
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement. 

              
(c)      Are you an affiliate of a
broker-dealer? 
              
Yes       No 

              
(d)      If you are an affiliate of a broker-dealer, do
you certify that you purchased the Registrable Securities in the ordinary course
of business, and at the time of the purchase of the Registrable Securities to be
resold, you had no agreements or understandings, directly or indirectly, with
any person to distribute the Registrable
Securities? 
              
Yes     
 No 
              
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you
should be identified as an underwriter in the Registration Statement. 

4.          
Beneficial Ownership of Securities of the Company Owned by the Selling
Securityholder. Except as set forth below in this Item 4, the undersigned is not
the beneficial or registered owner of any securities of the Company other than
the securities issuable pursuant to the Purchase
Agreement. 
              
(a) Type and Amount of other securities beneficially owned by the Selling
Securityholder: 

_______________________________________________ 

_______________________________________________ 

5.      Relationships with the
Company: 

Except as set forth below, neither the undersigned nor any of
its affiliates, officers, directors or principal equity holders (owners of 5% of
more of the equity securities of the undersigned) has held 

25

any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during the
past three years. 

              
State any exceptions here: 

_____________________________________________

_____________________________________________

The undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Registration Statement
remains effective. 

By signing below, the undersigned consents to the disclosure of
the information contained herein in its answers to Items 1 through 5 and the
inclusion of such information in the Registration Statement and the related
prospectus and any amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of the Registration Statement and
the related prospectus. 

IN WITNESS WHEREOF the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent. 

Date:                         
Beneficial Owner:

                                    By:

                                                         Name:
___________________
                                                        
Title ____________________

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 

[_________________________________________________________]

26

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