Document:

EXHIBIT
      A

    

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

    

    Original
      Issue Date: August
      __, 2007

    Original
      Conversion Price (subject to adjustment herein): $0.35

    

    $_______________

     

    VARIABLE
      RATE SELF-LIQUIDATING 

    SENIOR
      SECURED CONVERTIBLE DEBENTURE

    DUE
      APRIL 17, 2009

    

    THIS
      VARIABLE RATE SELF-LIQUIDATING SENIOR SECURED CONVERTIBLE DEBENTURE is one
      of a
      series of duly authorized and validly issued Variable Rate Self-Liquidating
      Senior Secured Convertible Debentures of Solomon Technologies, Inc., a Delaware
      corporation (the “Company”),
      having its principal place of business at 1400 L&R Industrial Blvd., Tarpon
      Springs, Florida 34689, designated as its Variable Rate Self-Liquidating Senior
      Secured Convertible Debenture due April 17, 2009 (this debenture, the
“Debenture”
and,
      collectively with the other such series of debentures, the “Debentures”).

    

    FOR
      VALUE
      RECEIVED, the Company promises to pay to ________ or its registered assigns
      (the
“Holder”),
      or
      shall have paid pursuant to the terms hereunder, the principal sum of $_____
      on
      April 17, 2009 (the “Maturity
      Date”)
      or
      such earlier date as this Debenture is required or permitted to be repaid as
      provided hereunder, and to pay interest to the Holder on the aggregate
      unconverted and then outstanding principal amount of this Debenture in
      accordance with the provisions hereof. This Debenture is subject to the
      following additional provisions:

    

    Section
      1. Definitions.
      For the
      purposes hereof, in addition to the terms defined elsewhere in this Debenture,
      (a) capitalized terms not otherwise defined herein shall have
      the

    
      
        
        

      

      
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    meanings
      set forth in the Purchase Agreement and (b) the following terms shall have
      the
      following meanings:

    

    “Alternate
      Consideration”
shall
      have the meaning set forth in Section 5(e).

    

    “Bankruptcy
      Event”
means
      any of the following events: (a) the Company or any significant Subsidiary
      (as
      such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a
      case
      or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Company or any significant
      Subsidiary thereof; (b) there is commenced against the Company or any
      significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Company or any significant Subsidiary
      thereof is adjudicated insolvent or bankrupt or any order of relief or other
      order approving any such case or proceeding is entered; (d) the Company or
      any
      significant Subsidiary thereof suffers any appointment of any custodian or
      the
      like for it or any substantial part of its property that is not discharged
      or
      stayed within 60 calendar days after such appointment; (e) the Company or any
      significant Subsidiary thereof makes a general assignment for the benefit of
      creditors; (f) the Company or any significant Subsidiary thereof calls a meeting
      of its creditors with a view to arranging a composition, adjustment or
      restructuring of its debts; or (g) the Company or any significant Subsidiary
      thereof, by any act or failure to act, expressly indicates its consent to,
      approval of or acquiescence in any of the foregoing or takes any corporate
      or
      other action for the purpose of effecting any of the foregoing.

    

    “Base
      Conversion Price”
shall
      have the meaning set forth in Section 5(b).

    

    “Business
      Day”
means
      any day except Saturday, Sunday, any day which shall be a federal legal holiday
      in the United States or any day on which banking institutions in the State
      of
      New York are authorized or required by law or other governmental action to
      close.

    

    “Buy-In”
shall
      have the meaning set forth in Section 4(d)(v).

    

    “Change
      of Control Transaction”
means
      the occurrence after the date hereof of any of (i) an acquisition after the
      date
      hereof by an individual or legal entity or “group” (as described in Rule
      13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether
      through legal or beneficial ownership of capital stock of the Company, by
      contract or otherwise) of in excess of 33% of the voting securities of the
      Company (other than by means of conversion or exercise of the Debentures and
      the
      Securities issued together with the Debentures), or (ii) the Company merges
      into
      or consolidates with any other Person, or any Person merges into or consolidates
      with the Company and, after giving effect to such transaction, the stockholders
      of the Company immediately prior to such transaction own less than 66% of the
      aggregate voting power of the Company or the successor entity of such
      transaction, or (iii) the Company sells or transfers all or substantially all
      of
      its assets to another Person and the stockholders of the

    
      
        
        

      

      
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    Company
      immediately prior to such transaction own less than 66% of the aggregate voting
      power of the acquiring entity immediately after the transaction, or (iv) a
      replacement at one time or within a three year period of more than one-half
      of
      the members of the Company’s board of directors which is not approved by a
      majority of those individuals who are members of the board of directors on
      the
      date hereof (or by those individuals who are serving as members of the board
      of
      directors on any date whose nomination to the board of directors was approved
      by
      a majority of the members of the board of directors who are members on the
      date
      hereof), or (v) the execution by the Company of an agreement to which the
      Company is a party or by which it is bound, providing for any of the events
      set
      forth in clauses (i) through (iv) above.

    

    “Closing
      Price”
means,
      on any particular date, (a) the last reported closing bid price per share of
      Common Stock on such date on the Trading Market (as reported by Bloomberg L.P.
      at 4:15 p.m. (New York City time)), or (b) if there is no such price on such
      date, the closing bid price on the Trading Market on the date nearest preceding
      such date (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)),
      or
      (c) if the Common Stock is not then listed or quoted for the Trading Market
      and
      if prices for the Common Stock are then reported in the “pink sheets” published
      by Pink Sheets LLC (or a similar organization or agency succeeding to its
      functions of reporting prices), the most recent bid price per share of the
      Common Stock so reported, or (d) if the shares of Common Stock are not publicly
      traded, the fair market value of a share of Common Stock as determined by an
      appraiser selected in good faith by the Purchasers holding at least 50.1% in
      principal amount of the outstanding Debentures.

    

    “Common
      Stock”
means
      the common stock, par value $0.001 per share, of the Company and stock of any
      other class of securities into which such securities may hereafter be
      reclassified or changed into.

    

    “Conversion
      Date”
shall
      have the meaning set forth in Section 4(a).

    

    “Conversion
      Price”
shall
      have the meaning set forth in Section 4(b).

    

    “Conversion
      Shares”
means,
      collectively, the shares of Common Stock issuable upon conversion of this
      Debenture in accordance with the terms hereof.

    

    “Debenture
      Register”
shall
      have the meaning set forth in Section 2(c).

    

    “Dilutive
      Issuance”
shall
      have the meaning set forth in Section 5(b).

    

    “Dilutive
      Issuance Notice”
shall
      have the meaning set forth in Section 5(b).

    

    “Effectiveness
      Period”
shall
      have the meaning set forth in the Registration Rights Agreement.

    
      
        
        

      

      
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    “Equity
      Conditions”
means,
      during the period in question, (i)
      the
      Company shall have duly honored all conversions and redemptions scheduled to
      occur or occurring by virtue of one or more Notices of Conversion of the Holder,
      if any, (ii) the Company shall have paid all liquidated damages and other
      amounts owing to the Holder in respect of this Debenture, (iii)
      there is an effective Registration Statement pursuant to which the Holder is
      permitted to utilize the prospectus thereunder to resell all of the shares
      issuable pursuant to the Transaction Documents (and the Company believes, in
      good faith, that such effectiveness will continue uninterrupted for the
      foreseeable future), (iv) the Common Stock is trading on a Trading Market and
      all of the shares of Common Stock issuable pursuant to the Transaction Documents
      are listed or quoted for trading on such Trading Market (and the Company
      believes, in good faith, that trading of the Common Stock on a Trading Market
      will continue uninterrupted for the foreseeable future), (v) there is a
      sufficient number of authorized but unissued and otherwise unreserved shares
      of
      Common Stock for the issuance of all of the shares issuable pursuant to the
      Transaction Documents, (vi) there is no existing Event of Default or no existing
      event which, with the passage of time or the giving of notice, would constitute
      an Event of Default, (vii) the issuance of the shares in question (or, in the
      case of a Monthly Redemption, the shares issuable upon conversion in full of
      the
      Monthly Redemption Amount) to
      the
      Holder would not violate the limitations set forth in Section 4(c) herein,
      (viii)
      there has been no public announcement of a pending or proposed Fundamental
      Transaction or Change of Control Transaction that has not been consummated,
      (ix)
      the Holder is not in possession of any information provided by the Company
      that
      constitutes, or may constitute, material non-public information and (x) the
      aggregate trading volume for the Common Stock on the principal Trading Market
      exceeds $900,000 during the 12 consecutive Trading Days (except that, with
      respect to any 5 Trading Day Interest Payment Period, the such aggregate trading
      volume shall exceed $375,000) prior to the applicable date in
      question.

    

    “Event
      of Default”
shall
      have the meaning set forth in Section 8.

    

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

    

    “Fundamental
      Transaction”
shall
      have the meaning set forth in Section 5(e).

     

    “Interest
      Conversion Rate”
means
      95% of the lesser of (a) the average of the VWAPs for the 5 consecutive Trading
      Days ending on the Trading Day that is immediately prior to the applicable
      Interest Payment Date or (b) the average of the VWAPs for the 5 consecutive
      Trading Days ending on the Trading Day that is immediately prior to the date
      the
      applicable Interest Conversion Shares are issued and delivered if after the
      Interest Payment Date.

    

    “Interest
      Conversion Shares”
shall
      have the meaning set forth in Section 2(a).

    

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

    
      
        
        

      

      
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    “Interest
      Payment Date”
shall
      have the meaning set forth in Section 2(a).

    

    “Interest
      Period”
means,
      initially, the period beginning on and including the Original Issue Date and
      ending on and including September 30, 2007 and each successive period as
      follows: the
      period beginning on and including April 1 and ending on and including June
      30;
      the period beginning on and including July 1 and ending on and including
      September 30; the period beginning on and including October 1 and ending on
      and
      including December 31; and
      the
      period beginning on and including January 1 and ending on and including March
      31.

    

    “Interest
      Share Amount”
shall
      have the meaning set forth in Section 2(a).

    

    “Late
      Fees”
shall
      have the meaning set forth in Section 2(d).

    

    “LIBOR”
means,
      for each Interest Period (i) the six-month London Interbank Offered Rate for
      deposits in U.S. dollars, as shown on the Trading Day immediately prior to
      the
      beginning of such Interest Period in The Wall Street Journal (Eastern Edition)
      under the caption "Money Rates - London Interbank Offered Rates (LIBOR)"; or
      (ii) if The Wall Street Journal does not publish such rate, the offered
      one-month rate for deposits in U.S. dollars which appears on the Reuters Screen
      LIBO Page as of 10:00 a.m., New York time, on the Trading Day immediately prior
      to the beginning of such Interest Period, provided that if at least two rates
      appear on the Reuters Screen LIBO Page on any such Trading Day, the "LIBOR"
      for
      such day shall be the arithmetic mean of such rates.

    

    “Mandatory
      Default Amount”
means
      the sum of (i) the greater of (A) 130% of the outstanding principal amount
      of
      this Debenture, plus all accrued and unpaid interest hereon, or (B) the
      outstanding principal amount of this Debenture, plus all accrued and unpaid
      interest hereon, divided by the Conversion Price on the date the Mandatory
      Default Amount is either (a) demanded (if demand or notice is required to create
      an Event of Default) or otherwise due or (b) paid in full, whichever has a
      lower
      Conversion Price, multiplied by the VWAP on the date the Mandatory Default
      Amount is either (x) demanded or otherwise due or (y) paid in full, whichever
      has a higher VWAP, and (ii) all other amounts, costs, expenses and liquidated
      damages due in respect of this Debenture. Notwithstanding anything herein to
      the
      contrary, if at the applicable time the Holder is able to and there are no
      impediments to convert and immediately resell the Conversion Shares to the
      public pursuant to a Registration Statement or Rule 144(k), the Mandatory
      Default Amount shall mean (y) the sum of 130% of the outstanding principal
      amount of this Debenture, plus all accrued and unpaid interest hereon, and
      (z)
      all other amounts, costs, expenses and liquidated damages due in respect of
      this
      Debenture.

     

    “Monthly
      Redemption”
means
      the redemption of this Debenture pursuant to Section 6(a) hereof.

    
      
        
        

      

      
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    “Monthly
      Redemption Amount”
means
      an amount equal to the then outstanding principal amount of this Debenture
      on
      the first Monthly Redemption Date following August ___, 2007 multiplied by
      a
      fraction, the numerator of which is 1 and the denominator of which is the number
      of months between such first Monthly Redemption Date and April 17,
      2009.

    

    “Monthly
      Redemption Date” means
      the
      1st of each month, commencing on the first such day following the earlier of
      (i)
      the date the initial Registration Statement (as defined in the Registration
      Rights Agreement) is declared effective by the Commission and (ii) December
      1,
      2007, and ending upon the full redemption of this Debenture.

    

    “Monthly
      Redemption Notice”
shall
      have the meaning set forth in Section 6(a) hereof.

    

    “Monthly
      Redemption Period”
shall
      have the meaning set forth in Section 6(a) hereof.

    

    “Monthly
      Redemption Price”
shall
      have the meaning set forth in Section 6(a) hereof. 

    

    “Monthly
      Redemption Share Amount”
shall
      have the meaning set forth in Section 6(a) hereof. 

    

    “Notice
      of Conversion”
shall
      have the meaning set forth in Section 4(a).

    

    “Optional
      Redemption”
shall
      have the meaning set forth in Section 6(b).

    

    “Optional
      Redemption Amount”
means
      the sum of (i) 120% of the principal amount of the Debenture then outstanding
      and subject to redemption, (ii) accrued but unpaid interest on the redeemed
      principal and (iii) all liquidated damages and other amounts due in respect
      of
      the principal amount being redeemed.

    

    “Optional
      Redemption Date”
shall
      have the meaning set forth in Section 6(b).

    

    “Optional
      Redemption Notice”
shall
      have the meaning set forth in Section 6(b).

    

    “Optional
      Redemption Notice Date”
shall
      have the meaning set forth in Section 6(b).

    

    “Original
      Issue Date”
means
      the date of the first issuance of this Debenture, regardless of any transfers
      of
      any portion of this Debenture and regardless of the number of instruments which
      may be issued to evidence this Debenture.

    

    “Permitted
      Indebtedness”
      means (a) the
      Indebtedness existing on the Original Issue Date and set forth on Schedule
      3.1(aa)
      attached
      to the Purchase Agreement, (b)

    
      
        
        

      

      
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    lease
      obligations and purchase money indebtedness of up to $100,000, in the aggregate,
      incurred in connection with the acquisition of capital assets and lease
      obligations with respect to newly acquired or leased assets, (c) indebtedness
      that (i) is expressly subordinate to the Debentures pursuant to a written
      subordination agreement with the Purchasers that is acceptable to each Purchaser
      in its sole and absolute discretion and (ii) matures at a date later than the
      Maturity Date and (d) indebtedness incurred in connection with an issuance
      or
      issuances of additional Debentures contemplated by clause (g) under the
      definition of Exempt Issuance (as defined in the Purchase
      Agreement).

    

    “Permitted
      Lien”
means
      the individual and collective reference to the following: (a) Liens for taxes,
      assessments and other governmental charges or levies not yet due or Liens for
      taxes, assessments and other governmental charges or levies being contested
      in
      good faith and by appropriate proceedings for which adequate reserves (in the
      good faith judgment of the management of the Company) have been established
      in
      accordance with GAAP; (b) Liens imposed by law which were incurred in the
      ordinary course of the Company’s business, such as carriers’, warehousemen’s and
      mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
      the ordinary course of the Company’s business, and which (x) do not individually
      or in the aggregate materially detract from the value of such property or assets
      or materially impair the use thereof in the operation of the business of the
      Company and its consolidated Subsidiaries or (y) are being contested in good
      faith by appropriate proceedings, which proceedings have the effect of
      preventing for the foreseeable future the forfeiture or sale of the property
      or
      asset subject to such Lien; (c) Liens incurred in connection with Permitted
      Indebtedness under clause (a) or (d) of the definition thereof; and (d) Liens
      incurred in connection with Permitted Indebtedness under clause (b) thereunder,
      provided that such Liens are not secured by assets of the Company or its
      Subsidiaries other than the assets so acquired or leased.

     

    “Person”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

    

    “Pre-Redemption
      Conversion Shares”
shall
      have the meaning set forth in Section 6(a) hereof. 

    

    “Purchase
      Agreement”
means
      the Securities Purchase Agreement, dated as of August ____, 2007, among the
      Company and the original Holders, as amended, modified or supplemented from
      time
      to time in accordance with its terms.

    

    “Registration
      Rights Agreement”
means
      the Registration Rights Agreement, dated as of the date of the Purchase
      Agreement, among the Company and the original Holders, as amended, modified
      or
      supplemented from time to time in accordance with its terms.

    

    “Registration
      Statement”
means
      a
      registration statement that registers the resale of all Conversion Shares and
      Interest Conversion Shares of the Holder, names such Holder

    
      
        
        

      

      
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    as
      a
“selling stockholder” therein, and meets the requirements of the Registration
      Rights Agreement.

    

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

    

    “Share
      Delivery Date”
shall
      have the meaning set forth in Section 4(d).

    

    “Subsidiary”
shall
      have the meaning set forth in the Purchase Agreement.

    

    “Trading
      Day”
means
      a
      day on which the principal Trading Market is open for business.

    

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the American Stock Exchange, the Nasdaq
      Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
      the
      New York Stock Exchange or the OTC Bulletin Board.

    

    “Transaction
      Documents”
shall
      have the meaning set forth in the Purchase Agreement.

    

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Trading Market on which the Common Stock
      is
      then listed or quoted for trading as reported by Bloomberg L.P. (based on a
      Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
      time)); (b)  if the OTC Bulletin Board is not a Trading Market, the volume
      weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then
      quoted for trading on the OTC Bulletin Board and if prices for the Common Stock
      are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a
      similar organization or agency succeeding to its functions of reporting prices),
      the most recent bid price per share of the Common Stock so reported; or
      (d) in all other cases, the fair market value of a share of Common Stock as
      determined by an independent appraiser selected in good faith by the Holder
      and
      reasonably acceptable to the Company.

    

    Section
      2. Interest.

     

    a) Payment
      of Interest in Cash or Kind.
      The
      Company shall pay interest to the Holder on the aggregate unconverted and then
      outstanding principal amount of this Debenture at a rate of interest per annum
      equal to the higher of (a) 8.0% or (b) LIBOR during the applicable Interest
      Period plus 2%, payable quarterly on January 1, April 1, July 1 and October
      1,
      beginning on the first such date after the Original Issue Date, on each Monthly
      Redemption Date (as to that principal amount then being redeemed),
      on

    
      
        
        

      

      
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    each
      Conversion Date (as to that principal amount then being converted) and on the
      Maturity Date (each such date, an “Interest
      Payment Date”)
      (if
      any Interest Payment Date is not a Business Day, then the applicable payment
      shall be due on the next succeeding Business Day), in cash or duly authorized,
      validly issued, fully paid and non-assessable shares of Common Stock at the
      Interest Conversion Rate (the amount in U.S. dollars to be paid in shares,
      the
“Interest
      Share Amount”)
      or a
      combination thereof; provided,
      however,
      that
      payment in shares of Common Stock may only occur if (i) all of the Equity
      Conditions have been met (unless waived by the Holder in writing) during the
      5
      Trading Days immediately prior to the applicable Interest Payment Date (the
      “Interest
      Notice Period”)
      and
      through and including the date such shares of Common Stock are issued to the
      Holder, (ii) the Company shall have given the Holder notice in accordance with
      the notice requirements set forth below and (iii) as to such Interest Payment
      Date, prior to such Interest Notice Period (but not more than 5 Trading Days
      prior to the commencement of such Interest Notice Period), the Company shall
      have delivered to the Holder’s account with The Depository Trust Company a
      number of shares of Common Stock to be applied against such Interest Share
      Amount equal to the quotient of (x) the applicable Interest Share Amount divided
      by (y) the then Conversion Price (the “Interest
      Conversion Shares”).

     

    b) Company’s
      Election to Pay Interest in Kind.
      Subject
      to the terms and conditions herein, the decision whether to pay interest
      hereunder in cash, shares of Common Stock or a combination thereof shall be
      at
      the discretion of the Company. Prior to the commencement of any Interest Notice
      Period, the Company shall deliver to the Holder a written notice of its election
      to pay interest hereunder on the applicable Interest Payment Date either in
      cash, shares of Common Stock or a combination thereof and the Interest Share
      Amount as to the applicable Interest Payment Date, provided that the Company
      may
      indicate in such notice that the election contained in such notice shall apply
      to future Interest Payment Dates until revised by a subsequent notice. During
      any Interest Notice Period, the Company’s election (whether specific to an
      Interest Payment Date or continuous) shall be irrevocable as to such Interest
      Payment Date. Subject to the aforementioned conditions, failure to timely
      deliver such written notice to the Holder shall be deemed an election by the
      Company to pay the interest on such Interest Payment Date in cash. At any time
      the Company delivers a notice to the Holder of its election to pay the interest
      in shares of Common Stock, the Company shall timely file a prospectus supplement
      pursuant to Rule 424 disclosing such election. The aggregate number of shares
      of
      Common Stock otherwise issuable to the Holder on an Interest Payment Date shall
      be reduced by the number of Interest Conversion Shares previously issued to
      the
      Holder in connection with such Interest Payment Date.

    

    c) Interest
      Calculations.
      Interest shall be calculated on the basis of a 360-day year, consisting of
      twelve 30 calendar day periods, and shall accrue daily commencing on the
      Original Issue Date until payment in full of the principal sum, together with
      all accrued and unpaid interest, liquidated damages and other amounts which
      may
      become due hereunder, has been made. Payment of interest in shares of Common
      Stock (other than the Interest Conversion Shares issued prior to an Interest
      Notice Period) shall

    
      
        
        

      

      
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    otherwise
      occur pursuant to Section 4(d)(ii) herein and, solely for purposes of the
      payment of interest in shares, the Interest Payment Date shall be deemed the
      Conversion Date. Interest shall cease to accrue with respect to any principal
      amount converted, provided that the Company actually delivers the Conversion
      Shares within the time period required by Section 4(d)(ii) herein. Interest
      hereunder will be paid to the Person in whose name this Debenture is registered
      on the records of the Company regarding registration and transfers of this
      Debenture (the “Debenture
      Register”).
      Except as otherwise provided herein, if at any time the Company pays interest
      partially in cash and partially in shares of Common Stock to the holders of
      the
      Debentures, then such payment of cash shall be distributed ratably among the
      holders of the then-outstanding Debentures based on their (or their
      predecessor’s) initial purchases of Debentures pursuant to the Purchase
      Agreement.

    

    d) Late
      Fee.
      All
      overdue accrued and unpaid interest to be paid hereunder shall entail a late
      fee
      at an interest rate equal to the lesser of 15% per annum or the maximum rate
      permitted by applicable law (“Late
      Fees”)
      which
      shall accrue daily from the date such interest is due hereunder through and
      including the date of payment in full. Notwithstanding anything to the contrary
      contained herein, if on any Interest Payment Date the Company has elected to
      pay
      accrued interest in the form of Common Stock but the Company is not permitted
      to
      pay accrued interest in Common Stock because it fails to satisfy the conditions
      for payment in Common Stock set forth in Section 2(a) herein, then, at
      the
      option of the Holder, the
      Company shall pay the regularly scheduled interest payment in cash. If any
      Interest Conversion Shares are issued to the Holder in connection with an
      Interest Payment Date and are not applied against an Interest Share Amount,
      then
      the Holder shall promptly return such excess shares to the Company.

     

    e) Prepayment.
      Except
      as otherwise set forth in this Debenture, the Company may not prepay any portion
      of the principal amount of this Debenture without the prior written consent
      of
      the Holder. 

    

    Section
      3.  Registration
      of Transfers and Exchanges.
      

     

    a) Different
      Denominations.
      This
      Debenture is exchangeable for an equal aggregate principal amount of Debentures
      of different authorized denominations, as requested by the Holder surrendering
      the same. No service charge will be payable for such registration of transfer
      or
      exchange.

     

    b) Investment
      Representations.
      This
      Debenture has been issued subject to certain investment representations of
      the
      original Holder set forth in the Purchase Agreement and may be transferred
      or
      exchanged only in compliance with the Purchase Agreement and applicable federal
      and state securities laws and regulations. 

    

    c) Reliance
      on Debenture Register.
      Prior
      to due presentment for transfer to the Company of this Debenture, the Company
      and any agent of the Company may treat the Person in whose name this Debenture
      is duly registered on the Debenture Register as

    
      
        
        

      

      
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    the
      owner
      hereof for the purpose of receiving payment as herein provided and for all
      other
      purposes, whether or not this Debenture is overdue, and neither the Company
      nor
      any such agent shall be affected by notice to the contrary.

    

    Section
      4.  Conversion.

     

    a) Voluntary
      Conversion.
      At any
      time after the Original Issue Date until this Debenture is no longer
      outstanding, this Debenture shall be convertible, in whole or in part, into
      shares of Common Stock at the option of the Holder, at any time and from time
      to
      time (subject to the conversion limitations set forth in Section 4(c)
      hereof). The Holder shall effect conversions by delivering to the Company a
      Notice of Conversion, the form of which is attached hereto as Annex
      A
      (a
“Notice
      of Conversion”),
      specifying therein the principal amount of this Debenture to be converted and
      the date on which such conversion shall be effected (such date, the
“Conversion
      Date”).
      If no
      Conversion Date is specified in a Notice of Conversion, the Conversion Date
      shall be the date that such Notice of Conversion is deemed delivered hereunder.
      To effect conversions hereunder, the Holder shall not be required to physically
      surrender this Debenture to the Company unless the entire principal amount
      of
      this Debenture, plus all accrued and unpaid interest thereon, has been so
      converted. Conversions hereunder shall have the effect of lowering the
      outstanding principal amount of this Debenture in an amount equal to the
      applicable conversion. The Holder and the Company shall maintain records showing
      the principal amount(s) converted and the date of such conversion(s). The
      Company shall deliver an objection to any Notice of Conversion within 1 Business
      Day of delivery of such Notice of Conversion. In the event of any dispute or
      discrepancy, the records of the Company shall be controlling and determinative
      in the absence of manifest error; provided,
      however,
      in the
      event of a dispute the Company shall deliver Conversion Shares to the extent
      that no dispute exists and in the event that the Company is later proved to
      be
      in error the Holder shall have the right to seek all remedies hereunder
      retroactive to the Conversion Date. The
      Holder, and any assignee by acceptance of this Debenture, acknowledge and agree
      that, by reason of the provisions of this paragraph, following conversion of
      a
      portion of this Debenture, the unpaid and unconverted principal amount of this
      Debenture may be less than the amount stated on the face
      hereof.

     

    b) Conversion
      Price.
      The
      conversion price in effect on any Conversion Date shall be equal to $0.35
      subject
      to adjustment herein (the “Conversion
      Price”).

    

    c) Holder’s
      Restriction on Conversion.
      The
      Company shall not effect any conversion of this Debenture, and a Holder shall
      not have the right to convert any portion of this Debenture, to the extent
      that
      after giving effect to the conversion set forth on the applicable Notice of
      Conversion, such Holder (together with such Holder’s Affiliates, and any other
      person or entity acting as a group together with such Holder or any of such
      Holder’s Affiliates) would beneficially own in excess of the Beneficial
      Ownership Limitation (as defined below).  For purposes of the foregoing
      sentence, the number of shares of Common Stock beneficially owned by such Holder
      and its Affiliates shall

    
      
        
        

      

      
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    include
      the number of shares of Common Stock issuable upon conversion of this Debenture
      with respect to which such determination is being made, but shall exclude the
      number of shares of Common Stock which are issuable upon (A) conversion of
      the
      remaining, unconverted principal amount of this Debenture beneficially owned
      by
      such Holder or any of its Affiliates and (B) exercise or conversion of the
      unexercised or unconverted portion of any other securities of the Company
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein (including, without limitation, any other Debentures or the
      Warrants) beneficially owned by such Holder or any of its Affiliates. 
Except as set forth in the preceding sentence, for purposes of this Section
      4(c), beneficial ownership shall be calculated in accordance with Section 13(d)
      of the Exchange Act and the rules and regulations promulgated thereunder. To
      the
      extent that the limitation contained in this Section 4(c) applies, the
      determination of whether this Debenture is convertible (in relation to other
      securities owned by such Holder together with any Affiliates) and of which
      principal amount of this Debenture is convertible shall be in the sole
      discretion of such Holder, and the submission of a Notice of Conversion shall
      be
      deemed to be such Holder’s determination of whether this Debenture may be
      converted (in relation to other securities owned by such Holder together with
      any Affiliates) and which principal amount of this Debenture is convertible,
      in
      each case subject to such aggregate percentage limitations. To ensure compliance
      with this restriction, each Holder will be deemed to represent to the Company
      each time it delivers a Notice of Conversion that such Notice of Conversion
      has
      not violated the restrictions set forth in this paragraph and the Company shall
      have no obligation to verify or confirm the accuracy of such determination.
      In
      addition, a determination as to any group status as contemplated above shall
      be
      determined in accordance with Section 13(d) of the Exchange Act and
      the
      rules and regulations promulgated thereunder. For
      purposes of this Section 4(c), in determining the number of outstanding shares
      of Common Stock, a Holder may rely on the number of outstanding shares of Common
      Stock as stated in the most recent of the following: (A) the Company’s most
      recent Form 10-QSB or Form 10-KSB, as the case may be; (B) a more recent public
      announcement by the Company; or (C) a more recent notice by the Company or
      the
      Company’s transfer agent setting forth the number of shares of Common Stock
      outstanding.  Upon the written or oral request of a Holder, the Company
      shall within two Trading Days confirm orally and in writing to such Holder
      the
      number of shares of Common Stock then outstanding.  In any case, the number
      of outstanding shares of Common Stock shall be determined after giving effect
      to
      the conversion or exercise of securities of the Company, including this
      Debenture, by such Holder or its Affiliates since the date as of which such
      number of outstanding shares of Common Stock was reported. The “Beneficial
      Ownership Limitation”
shall
      be 4.99% of the number of shares of the Common Stock outstanding immediately
      after giving effect to the issuance of shares of Common Stock issuable upon
      conversion of this Debenture held by the Holder. The Beneficial Ownership
      Limitation provisions of this Section 4(c) 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 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 conversion of this Debenture held by
      the
      Holder and the provisions of this Section 4(c)

    
      
        
        

      

      
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    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. The provisions
      of
      this paragraph shall be construed and implemented in a manner otherwise than
      in
      strict conformity with the terms of this Section 4(c) 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.
      The
      limitations contained in this paragraph shall apply to a successor holder of
      this
      Debenture.

     

    d) Mechanics
      of Conversion.

     

    i. Conversion
      Shares Issuable Upon Conversion of Principal Amount.
      The
      number of shares of Common Stock issuable upon a conversion hereunder shall
      be
      determined by the quotient obtained by dividing (x) the outstanding principal
      amount of this Debenture to be converted by (y) the Conversion
      Price.

     

    ii. Delivery
      of Certificate Upon Conversion.
      Not
      later than three Trading Days after each Conversion Date (the “Share
      Delivery Date”),
      the
      Company shall deliver, or cause to be delivered, to the Holder (A) a certificate
      or certificates representing the Conversion Shares which, on or after the
      Effective Date, shall be free of restrictive legends and trading restrictions
      (other than those which may then be required by the Purchase Agreement)
      representing the number of shares of Common Stock being acquired upon the
      conversion of this Debenture (including, if the Company has given continuous
      notice pursuant to Section 2(b) for payment of interest in shares of Common
      Stock at least 5 Trading Days prior to the date on which the Conversion Notice
      is delivered to the Company, shares of Common Stock representing the payment
      of
      accrued interest otherwise determined pursuant to Section 2(a) but assuming
      that
      the Interest Payment Period is the 5 Trading Days period immediately prior
      to
      the date on which the Conversion Notice is delivered to the Company and
      excluding for such issuance the condition that the Company deliver Interest
      Conversion Shares as to such interest payment) and (B) a Company check or wire
      transfer of immediately available funds in the amount of accrued and unpaid
      interest (if the Company has elected or is required to pay accrued interest
      in
      cash). On or after the Effective Date, the Company shall use its best efforts
      to
      deliver any certificate or certificates required to be delivered by the Company
      under this Section 4 electronically through the Depository Trust Company or
      another established clearing corporation performing similar functions.

     

    iii. Failure
      to Deliver Certificates.
      If in
      the case of any Notice of Conversion such certificate or certificates are not
      delivered to or as directed by the applicable Holder by the 2nd
      Trading
      Day immediately following the Shares

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    Delivery
      Date, the Holder shall be entitled to elect by written notice to the Company
      at
      any time on or before its receipt of such certificate or certificates, to
      rescind such Conversion, in which event the Company shall promptly return to
      the
      Holder any original Debenture delivered to the Company and the Holder shall
      promptly return the Common Stock certificates representing the principal amount
      of this Debenture tendered for conversion to the Company. 

     

    iv. Obligation
      Absolute; Partial Liquidated Damages.
      The
      Company’s obligations to issue and deliver the Conversion Shares upon conversion
      of this Debenture in accordance with the terms hereof are absolute and
      unconditional, irrespective of any action or inaction by the Holder to enforce
      the same, any waiver or consent with respect to any provision hereof, the
      recovery of any judgment against any Person or any action to enforce the same,
      or any setoff, counterclaim, recoupment, limitation or termination, or any
      breach or alleged breach by the Holder or any other Person of any obligation
      to
      the Company or any violation or alleged violation of law by the Holder or any
      other Person, and irrespective of any other circumstance which might otherwise
      limit such obligation of the Company to the Holder in connection with the
      issuance of such Conversion Shares; provided,
      however,
      that
      such delivery shall not operate as a waiver by the Company of any such action
      the Company may have against the Holder. In the event the Holder of this
      Debenture shall elect to convert any or all of the outstanding principal amount
      hereof, the Company may not refuse conversion based on any claim that the Holder
      or anyone associated or affiliated with the Holder has been engaged in any
      violation of law, agreement or for any other reason, unless an injunction from
      a
      court, on notice to Holder, restraining and or enjoining conversion of all
      or
      part of this Debenture shall have been sought and obtained, and the Company
      posts a surety bond for the benefit of the Holder in the amount of 150% of
      the
      outstanding principal amount of this Debenture, which is subject to the
      injunction, which bond shall remain in effect until the completion of
      arbitration/litigation of the underlying dispute and the proceeds of which
      shall
      be payable to such Holder to the extent it obtains judgment. In the absence
      of
      such injunction, the Company shall issue Conversion Shares or, if applicable,
      cash, upon a properly noticed conversion. If the Company fails for any reason
      to
      deliver to the Holder such certificate or certificates pursuant to Section
      4(d)(ii) by the fifth Trading Day after the Conversion Date, the Company shall
      pay to such Holder, in cash, as liquidated damages and not as a penalty, for
      each $1000 of principal amount being converted, $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 the 2nd
      Trading
      Day immediately following the Shares Delivery Date until such certificates
      are
      delivered. Nothing herein shall limit a Holder’s right to pursue actual damages
      or declare an Event of Default pursuant to Section 8 hereof for the Company’s
      failure to deliver Conversion Shares within the period specified herein and
      such
      Holder shall have the right to pursue all remedies available to it hereunder,
      at
      law or in equity

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    including,
      without limitation, a decree of specific performance and/or injunctive relief.
      The exercise of any such rights shall not prohibit the Holder from seeking
      to
      enforce damages pursuant to any other Section hereof or under applicable
      law.

     

    v. Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Conversion.
      In
      addition to any other rights available to the Holder, if the Company fails
      for
      any reason to deliver to the Holder such certificate or certificates by the
      2nd
      Trading
      Day immediately following the Share Delivery Date pursuant to Section 4(d)(ii),
      and if after such Share Delivery Date the Holder is required by its brokerage
      firm 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 such Holder of the Conversion Shares which the Holder
      was entitled to receive upon the conversion relating to such Share Delivery
      Date
      (a “Buy-In”),
      then
      the Company shall (A) pay in cash to the Holder (in addition to any other
      remedies available to or elected by the Holder) the amount by which (x) the
      Holder’s total purchase price (including any brokerage commissions) for the
      Common Stock so purchased exceeds (y) the product of (1) the aggregate number
      of
      shares of Common Stock that such Holder was entitled to receive from the
      conversion at issue multiplied by (2) the actual sale price at which the sell
      order giving rise to such purchase obligation was executed (including any
      brokerage commissions) and (B) at the option of the Holder, either reissue
      (if
      surrendered) this Debenture in a principal amount equal to the principal amount
      of the attempted conversion or deliver to the Holder the number of shares of
      Common Stock that would have been issued if the Company had timely complied
      with
      its delivery requirements under Section 4(d)(ii). 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 conversion of this Debenture with respect
      to
      which the actual sale price of the Conversion Shares (including any brokerage
      commissions) giving rise to such purchase obligation was a total of $10,000
      under clause (A) 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
      and, upon request of the Company, evidence of the amount of such loss. 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
      conversion of this Debenture as required pursuant to the terms
      hereof.

     

    vi. Reservation
      of Shares Issuable Upon Conversion.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized and unissued shares of Common Stock for the sole purpose of
      issuance upon

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    conversion
      of this Debenture and payment of interest on this Debenture, each as herein
      provided, free from preemptive rights or any other actual contingent purchase
      rights of Persons other than the Holder (and the other holders of the
      Debentures), not less than such aggregate number of shares of the Common Stock
      as shall (subject to the terms and conditions set forth in the Purchase
      Agreement) be issuable (taking into account the adjustments and restrictions
      of
      Section 5) upon the conversion of the outstanding principal amount of this
      Debenture and payment of interest hereunder. The Company covenants that all
      shares of Common Stock that shall be so issuable shall, upon issue, be duly
      authorized, validly issued, fully paid and nonassessable and, if the
      Registration Statement is then effective under the Securities Act, shall be
      registered for public sale in accordance with such Registration
      Statement.

    

    vii. Fractional
      Shares.
      Upon a
      conversion hereunder the Company shall not be required to issue stock
      certificates representing fractions of shares of Common Stock, but shall instead
      round the fraction to the nearest whole share.

    

    viii. Transfer
      Taxes.
      The
      issuance of certificates for shares of the Common Stock on conversion of this
      Debenture shall be made without charge to the Holder hereof for any documentary
      stamp or similar taxes that may be payable in respect of the issue or delivery
      of such certificates, provided that the Company shall not be required to pay
      any
      tax that may be payable in respect of any transfer involved in the issuance
      and
      delivery of any such certificate upon conversion in a name other than that
      of
      the Holder of this Debenture so converted and the Company shall not be required
      to issue or deliver such certificates unless or until the person or persons
      requesting the issuance thereof shall have paid to the Company the amount of
      such tax or shall have established to the satisfaction of the Company that
      such
      tax has been paid.

    

    Section
      5. Certain
      Adjustments.

     

    a) Stock
      Dividends and Stock Splits.
      If the
      Company, at any time while this Debenture is outstanding: (A) pays a stock
      dividend or otherwise makes a distribution or distributions payable in shares
      of
      Common Stock on shares of Common Stock or any Common Stock Equivalents (which,
      for avoidance of doubt, shall not include any shares of Common Stock issued
      by
      the Company upon conversion of, or payment of interest on, the Debentures);
      (B)
      subdivides outstanding shares of Common Stock into a larger number of shares;
      (C) combines (including by way of a reverse stock split) outstanding shares
      of
      Common Stock into a smaller number of shares; or (D) issues, in the event of
      a
      reclassification of shares of the Common Stock, any shares of capital stock
      of
      the Company, then the Conversion Price shall be multiplied by a fraction of
      which the numerator shall be the number of shares of Common Stock (excluding
      any
      treasury shares of the Company) outstanding immediately before such event and
      of
      which the denominator shall be the number of shares of Common Stock outstanding
      immediately

    
      
        
        

      

      
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    after
      such event. Any adjustment made pursuant to this Section shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution and shall become effective immediately
      after the effective date in the case of a subdivision, combination or
      re-classification.

     

    b) Subsequent
      Equity Sales.
      If, at
      any time while this Debenture is outstanding, the Company or any Subsidiary,
      as
      applicable, sells or grants any option to purchase or sells or grants any right
      to reprice, or otherwise disposes of or issues (or announces any sale, grant
      or
      any option to purchase or other disposition), any Common Stock or Common Stock
      Equivalents entitling any Person to acquire shares of Common Stock at an
      effective price per share that is lower than the then Conversion Price (such
      lower price, the “Base
      Conversion Price”
and
      such issuances, collectively, a “Dilutive
      Issuance”)
      (if
      the holder of the Common Stock or Common Stock Equivalents so issued shall
      at
      any time, whether by operation of purchase price adjustments, reset provisions,
      floating conversion, exercise or exchange prices or otherwise, or due to
      warrants, options or rights per share which are issued in connection with such
      issuance, be entitled to receive shares of Common Stock at an effective price
      per share that is lower than the Conversion Price, such issuance shall be deemed
      to have occurred for less than the Conversion Price on such date of the Dilutive
      Issuance), then the Conversion Price shall be reduced to equal the Base
      Conversion Price. Such adjustment shall be made whenever such Common Stock
      or
      Common Stock Equivalents are issued. Notwithstanding
      the foregoing, no adjustment will be made under this Section 5(b) in respect
      of
      an Exempt Issuance.
      Notwithstanding anything herein or in any other Transaction Document to the
      contrary, it is expressly agreed that any amendments, adjustments or resets
      that
      result in future issuances of Common Stock or Common Stock Equivalents pursuant
      to that certain Securities Purchase Agreement, dated August 17, 2006, by and
      among the Company, Integrated Power Systems LLC, Power Designs Inc., The Vantage
      Partners LLC, Technipower LLC and the other parties listed on the signature
      pages thereto, or pursuant to any other agreements or documents entered into
      or
      issued in connection therewith, shall not be an Exempt Issuance and shall result
      in an adjustment hereunder. The
      Company shall notify the Holder in writing, no later than 2 Business Days
      following the issuance of any Common Stock or Common Stock Equivalents subject
      to this Section 5(b), indicating therein the applicable issuance price, or
      applicable reset price, exchange price, conversion price and other pricing
      terms
      (such notice, the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section 5(b), upon the occurrence of any
      Dilutive Issuance, the Holder shall be entitled to receive upon conversion
      of
      this Debenture a number of Conversion Shares based upon the Base Conversion
      Price on or after the date of such Dilutive Issuance, regardless of whether
      the
      Holder accurately refers to the Base Conversion Price in the Notice of
      Conversion. For purposes of any adjustment in the Conversion Price made pursuant
      to this Section 5(b), the following shall apply: (i) in the case of the issuance
      of Common Stock for cash, the consideration shall be deemed to be the amount
      of
      cash paid; (ii) in the case of the issuance of Common Stock for a consideration
      in whole or in part other than cash, the consideration other than cash
      shall

     

    
      
        
        

      

      
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    be
      deemed
      to be the fair value thereof as determined in good faith by the Board; (iii)
      the
      number of shares of Common Stock deliverable upon exercise of Common Stock
      Equivalents shall be deemed to have been issued at the time such Common Stock
      Equivalents were issued and for a consideration equal to the consideration
      (determined in the manner provided in (i) and (ii) above), if any, received
      by
      the Company upon the issuance of such Common Stock Equivalents plus the purchase
      price, if any, provided in such Common Stock Equivalents for the additional
      Common Stock covered thereby; (iv) the number of shares of Common Stock
      deliverable upon conversion of or in exchange for any Common Stock Equivalents
      and subsequent conversion or exchange thereof shall be deemed to have been
      issued at the time such Common Stock Equivalents were issued and for a
      consideration equal to the consideration, if any, received by the Company for
      any such Common Stock Equivalents, plus the additional consideration, if any,
      to
      be received by the Company upon the conversion or exchange of such securities
      or
      the exercise of any related Common Stock Equivalents (the consideration in
      each
      case to be determined in the manner provided in (i) and (ii) above); (v) in
      the
      event of any change in the number of shares of Common Stock deliverable or
      any
      increase or decrease in the consideration payable to the Company upon exercise
      of Common Stock Equivalents or upon conversion of or in exchange for such Common
      Stock Equivalents (including, but not limited to, a change resulting from the
      anti-dilution provisions thereof), the Conversion Price in effect at the time
      obtained with respect to the adjustment which was made upon the issuance of
      such
      Common Stock Equivalents, and any subsequent adjustments based thereon, shall
      be
      recomputed to reflect such change (assuming no exercise or conversion occurred
      of such Common Stock Equivalents), but no further adjustment shall be made
      for
      the actual issuance of Common Stock or any payment of such consideration upon
      the exercise of or the conversion or exchange of such Common Stock Equivalents,
      provided that the Company shall have provided the Holder at least 5 days’ prior
      written notice of any such adjustment during which the Holder may convert at
      the
      prevailing conversion rate; and (vi) upon the expiration or termination of
      any
      such Common Stock Equivalents, assuming no exercise or conversion thereof,
      in
      whole or in part, the Conversion Price in effect at the time obtained with
      respect to the adjustment which was made upon the issuance of such Common Stock
      Equivalents shall be adjusted to the price that would have been in effect had
      the adjustment not occurred, subject to other adjustments in the interim,
      provided that the Company shall have provided the Holder at least 5 days’ prior
      written notice of any such adjustment during which the Holder may convert at
      the
      prevailing conversion rate.

     

    c) [INTENTIONALLY
      DELETED]. 

     

    d) [INTENTIONALLY
      DELETED]

     

    e) Fundamental
      Transaction.
      If, at
      any time while this Debenture is outstanding, (A) the Company effects any merger
      or consolidation of the Company with or into another Person, (B) the Company
      effects any sale of all or substantially all of its assets in one transaction
      or
      a series of related transactions, (C) any tender offer or

    
      
        
        

      

      
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    exchange
      offer (whether by the Company or another Person) is completed pursuant to which
      holders of Common Stock are permitted to tender or exchange their shares for
      other securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash or property (in any such case, a “Fundamental
      Transaction”),
      then,
      upon any subsequent conversion of this Debenture, the Holder shall have the
      right to receive, for each Conversion Share that would have been issuable upon
      such conversion immediately prior to the occurrence of such Fundamental
      Transaction, the same kind and amount of securities, cash or property as it
      would have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of 1 share of Common Stock (the “Alternate
      Consideration”).
      For
      purposes of any such conversion, the determination of the Conversion Price
      shall
      be appropriately adjusted to apply to such Alternate Consideration based on
      the
      amount of Alternate Consideration issuable in respect of 1 share of Common
      Stock
      in such Fundamental Transaction, and the Company shall apportion the Conversion
      Price among the Alternate Consideration in a reasonable manner reflecting the
      relative value of any different components of the Alternate Consideration.
      If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder shall
      be
      given the same choice as to the Alternate Consideration it receives upon any
      conversion of this Debenture following such Fundamental Transaction. To the
      extent necessary to effectuate the foregoing provisions, any successor to the
      Company or surviving entity in such Fundamental Transaction shall issue to
      the
      Holder a new debenture consistent with the foregoing provisions and evidencing
      the Holder’s right to convert such debenture into Alternate Consideration. The
      terms of any agreement pursuant to which a Fundamental Transaction is effected
      shall include terms requiring any such successor or surviving entity to comply
      with the provisions of this Section 5(e) and insuring that this Debenture (or
      any such replacement security) will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction.

     

    f) Calculations.
      All
      calculations under this Section 5 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      5,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      any treasury shares of the Company) issued and outstanding.

    

    g) Notice
      to the Holder.

    

    i. Adjustment
      to Conversion Price.
      Whenever the Conversion Price is adjusted pursuant to any provision of this
      Section 5, the Company shall promptly mail to each Holder a notice setting
      forth
      the Conversion Price after such adjustment and setting forth a brief statement
      of the facts requiring such adjustment and basic terms of the dilutive security.
      If the Company enters into a

    
      
        
        

      

      
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    Variable
      Rate Transaction, despite the prohibition thereon in the Purchase Agreement,
      the
      Company shall be deemed to have issued Common Stock or Common Stock Equivalents
      at the lowest possible conversion price at which such securities may be
      converted or exercised.

     

    ii. Notice
      to Allow Conversion by Holder.
      If (A)
      the Company shall declare a dividend (or any other distribution in whatever
      form) on the Common Stock, (B) the 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 of 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
      or
      (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 filed at each office or agency maintained for the purpose of
      conversion of this Debenture, and shall cause to be delivered
      to the Holder at its last address as it shall appear upon the Debenture
      Register, at least 10 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 deliver such notice or any defect therein or in the delivery thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to convert this Debenture during the
      10-day period commencing on the date of such notice through the effective date
      of the event triggering such notice.

     

    Section
      6. Monthly
      Redemption.

    

    a) Monthly
      Redemption.
      On each
      Monthly Redemption Date, the Company shall redeem the Monthly Redemption Amount
      (such redemption, the “Monthly
      Redemption”).
      The
      Monthly Redemption Amount payable on each Monthly Redemption Date shall be
      paid
      in cash; provided,
      however,
      as to
      any Monthly Redemption and upon 12 Trading Days’ prior written irrevocable
      notice (the “Monthly
      Redemption Notice”),
      in

    
      
        
        

      

      
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    lieu
      of a
      cash redemption payment the Company may elect to pay all or part of a Monthly
      Redemption Amount in Conversion Shares (such amount in U.S. dollars to be paid
      on a Monthly Redemption Date in Conversion Shares, the “Monthly
      Redemption Share Amount”)
      based
      on a conversion price equal to 82.5% of the average of the VWAPs for the 10
      consecutive Trading Days ending on the Trading Day that is immediately prior
      to
      the applicable Monthly Redemption Date (the price calculated during the 10
      Trading Day period immediately prior to the Monthly Redemption Date, the
“Monthly
      Redemption Price”
and
      such 10 Trading Day period, the “Monthly
      Redemption Period”);
      provided,
      further,
      that
      the Company may not pay the Monthly Redemption Amount in Conversion Shares
      unless (y) from the date the Holder receives the duly delivered Monthly
      Redemption Notice through and until the date such Monthly Redemption is paid
      in
      full, the Equity Conditions have been satisfied, unless waived in writing by
      the
      Holder, and (z) as to such Monthly Redemption, prior to such Monthly Redemption
      Period (but not more than 5 Trading Days prior to the commencement of the
      Monthly Redemption Period), the Company shall have delivered to the Holder’s
      account with The Depository Trust Company (the date of such delivery, the
“Pre-Redemption
      Conversion Shares Delivery Date”)
      a
      number of shares of Common Stock to be applied against such Monthly Redemption
      Share Amount equal to the applicable Monthly Redemption Share Amount divided
      by
      82.5% of the average of the VWAPs for the 10 consecutive Trading Days
      immediately preceding the Pre-Redemption Conversion Shares Delivery Date (the
      “Pre-Redemption
      Conversion Shares”).
      The
      Holder may convert, pursuant to Section 4(a), any principal amount of this
      Debenture subject to a Monthly Redemption at any time prior to the date that
      the
      Monthly Redemption Amount is due and paid in full. Unless otherwise indicated
      by
      the Holder in the applicable Notice of Conversion, any principal amount of
      this
      Debenture converted during the applicable Monthly Redemption Period until the
      date the Monthly Redemption Amount is paid in full shall be first applied to
      the
      principal amount subject to the Monthly Redemption Amount payable in cash and
      then to the Monthly Redemption Share Amount. Any principal amount of this
      Debenture converted during the applicable Monthly Redemption Period in excess
      of
      the Monthly Redemption Amount shall be applied against the last principal amount
      of this Debenture scheduled to be redeemed hereunder, in reverse time order
      from
      the Maturity Date; provided,
      however,
      if any
      such conversion is applied against such Monthly Redemption Amount, the
      Pre-Redemption Conversion Shares, if any were issued in connection with such
      Monthly Redemption or were not already applied to such conversions, shall be
      first applied against such conversion. The Company covenants and agrees that
      it
      will honor all Notices of Conversion tendered up until such amounts are paid
      in
      full. The Company’s determination to pay a Monthly Redemption in cash, shares of
      Common Stock or a combination thereof shall be applied ratably to all of the
      holders of the then outstanding Debentures based on their (or their
      predecessor’s) initial purchases of Debentures pursuant to the Purchase
      Agreement. At any time the Company delivers a notice to the Holder of its
      election to pay the Monthly Redemption Amount in shares of Common Stock, the
      Company shall file a prospectus supplement pursuant to Rule 424 disclosing
      such
      election.

    
      
        
        

      

      
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    b) Optional
      Redemption at Election of Company.
      Subject
      to the provisions of this Section 6, at any time after the Effective Date,
      the
      Company may deliver a notice to the Holder (an “Optional
      Redemption Notice”
and
      the
      date such notice is deemed delivered hereunder, the “Optional
      Redemption Notice Date”)
      of its
      irrevocable election to redeem some or all of the then outstanding principal
      amount of this Debenture for cash in an amount equal to the Optional Redemption
      Amount on the 12th
      Trading
      Day following the Optional Redemption Notice Date (such date, the “Optional
      Redemption Date”
and
      such redemption, the “Optional
      Redemption”).
      The
      Optional Redemption Amount is payable in full on the Optional Redemption Date.
      The Company may only effect an Optional Redemption if each of the Equity
      Conditions shall have been met on each Trading Day during the period commencing
      on the Optional Redemption Notice Date through to the Optional Redemption Date
      and
      through and including the date payment of the Optional Redemption Amount is
      actually made.
      If any
      of the Equity Conditions shall cease to be satisfied at any time during the
      12
      Trading Day period, then the Holder may elect to nullify the Optional Redemption
      Notice by notice to the Company within 3 Trading Days after the first day on
      which any such Equity Condition has not been met (provided that if, by a
      provision of the Transaction Documents, the Company is obligated to notify
      the
      Holder of the non-existence of an Equity Condition, such notice period shall
      be
      extended to the third Trading Day after proper notice from the Company) in
      which
      case the Optional Redemption Notice shall be null and void, ab initio.
      The
      Company covenants and agrees that it will honor all Notices of Conversion
      tendered from the time of delivery of the Optional Redemption Notice through
      the
      date all amounts owing thereon are paid in full.

    

    c) Redemption
      Procedure.
      The
      payment of cash or, in the case of a Monthly Redemption, the issuance of Common
      Stock if applicable, shall be payable on the Monthly Redemption Date or Optional
      Redemption Date, as the case may be. In the case of a Monthly Redemption, in
      the
      event that the number of Pre-Redemption Conversion Shares exceeds the number
      of
      Conversion Shares required to be issued on the Monthly Redemption Date as set
      forth in Section 6(a), within 3 Trading Days the Holder shall either (i) return
      such excess Pre-Redemption Conversion Shares to the Company for cancellation
      or
      (ii) convert an additional principal amount of this Debenture at the Conversion
      Price to be applied against such excess Pre-Redemption Conversion Shares. If
      any
      portion of the payment pursuant to a Monthly Redemption or Optional Redemption
      shall not be paid by the Company by the applicable due date, interest shall
      accrue thereon at an interest rate equal to the lesser of 15% per annum or
      the
      maximum rate permitted by applicable law until such amount is paid in full.
      Notwithstanding anything herein contained to the contrary, if any portion of
      the
      Optional Redemption Amount or Monthly Redemption Amount, as applicable, remains
      unpaid after such date, the Holder may elect, by written notice to the Company
      given at any time thereafter accompanied by any payments of cash or Common
      Stock
      therefore paid by the Company in respect of such redemption, to invalidate
      such Optional Redemption or Monthly Redemption, ab initio.
      Notwithstanding anything to the contrary in this Section 6, the Company’s
      determination to redeem in cash or its elections under Section 6(a) shall be
      applied ratably among the Holders of Debentures.
      The
      Holder may elect to convert the outstanding principal amount

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    of
      the
      Debenture subject to redemptions under Sections 6(a) or 6(b) pursuant to Section
      4 at any time prior to actual payment in cash for any redemption under this
      Section 6 by the delivery of a Notice of Conversion to the Company. For purposes
      of clarification, the Warrants held by the Holder shall not be required to
      be
      surrendered in any redemption under this Debenture.

     

    Section
      7. Negative
      Covenants.
      As long
      as any portion of this Debenture remains outstanding, the Company shall not,
      and
      shall not permit any of its Subsidiaries to, directly or indirectly, except
      with
      the prior written consent of the Agent (as defined in the Security
      Agreement):

    

    a) other
      than Permitted Indebtedness, enter into, create, incur, assume, guarantee or
      suffer to exist any indebtedness for borrowed money of any kind, including
      but
      not limited to, a guarantee;

     

    b) other
      than Permitted Liens, enter into, create, incur, assume or suffer to exist
      any
      Liens of any kind, on or with respect to any of its property or assets now
      owned
      or hereafter acquired or any interest therein or any income or profits
      therefrom;

    

    c) amend
      its
      charter documents, including, without limitation, the certificate of
      incorporation and bylaws, in any manner that materially and adversely affects
      any rights of the Holder;

    

    d) repay,
      repurchase or offer to repay, repurchase or otherwise acquire more than a
de minimis
      number
      of shares of its Common Stock or Common Stock Equivalents other than as to
      (a)
      the Conversion Shares or Warrant Shares as permitted or required under the
      Transaction Documents, (b) shares of Common Stock or Common Stock Equivalents
      as
      permitted or required under the transaction documents pertaining to the
      Company’s Variable Rate Self-Liquidating Senior Secured Convertible Debentures
      Due March 17, 2008, and the related Common Stock Purchase Warrants, and (b)
      repurchases of Common Stock or Common Stock Equivalents of departing officers
      and directors of the Company, provided that such repurchases shall not exceed
      an
      aggregate of $100,000 for all officers and directors during the term of this
      Debenture; 

    

    e) pay
      cash
      dividends or distributions on any equity securities of the Company;

    

    f) enter
      into any transaction with any Affiliate of the Company which would be required
      to be disclosed in any public filing with the Commission, unless such
      transaction is made on an arm’s-length basis and expressly approved by a
      majority of the disinterested directors of the Company (even if less than a
      quorum otherwise required for board approval); or

    

    g) enter
      into any agreement with respect to any of the foregoing.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    Section
      8. Events
      of Default.
      

    

    a) “Event
      of Default”
means,
      wherever used herein, any of the following events (whatever the reason for
      such
      event and whether such event shall be voluntary or involuntary or effected
      by
      operation of law or pursuant to any judgment, decree or order of any court,
      or
      any order, rule or regulation of any administrative or governmental
      body):

    

    i. any
      default in the payment of (A) the principal amount of any Debenture or (B)
      interest, liquidated damages and other amounts owing to a Holder on any
      Debenture, as and when the same shall become due and payable (whether on a
      Conversion Date or the Maturity Date or by acceleration or otherwise) which
      default, solely in the case of an interest payment or other default under clause
      (B) above, is not cured within 3 Trading Days;

     

    ii. the
      Company shall fail to observe or perform any other covenant or agreement
      contained in the Debentures (other than a breach by the Company of its
      obligations to deliver shares of Common Stock to the Holder upon conversion,
      which breach is addressed in clause (xi) below) which failure is not cured,
      if
      possible to cure, within the earlier to occur
      of
(A)
      5
Trading
      Days after notice of such failure sent by the Holder or by any other
      Holder
      and (B)
      10 Trading Days after the Company has become or should have become aware of
      such
      failure;

    

    iii. a
      default
      or event of default (subject to any grace or cure period provided in the
      applicable agreement, document or instrument) shall occur under (A) any of
      the
      Transaction Documents or (B) any other material agreement, lease, document
      or
      instrument to which the Company or any Subsidiary is obligated (and not covered
      by clause (vi) below);

    

    iv. any
      representation
      or warranty made in this Debenture, any other Transaction Documents, any written
      statement pursuant hereto or thereto or any other report, financial statement
      or
      certificate made or delivered to the Holder or any other Holder shall
      be
      untrue or incorrect in any material respect as of the date when made or deemed
      made;

    

    v. the
      Company or any significant Subsidiary shall be subject to a Bankruptcy
      Event;

     

    vi. the
      Company or any Subsidiary shall default on any of its obligations under any
      mortgage, credit agreement or other facility, indenture agreement, factoring
      agreement or other instrument under which there may be issued, or by which
      there
      may be secured or evidenced, any indebtedness for borrowed money or money due
      under any long term leasing or factoring

    
      
        
        

      

      
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    arrangement
      that (a) involves an obligation greater than $150,000, whether such indebtedness
      now exists or shall hereafter be created, and (b) results in such indebtedness
      becoming or being declared due and payable prior to the date on which it would
      otherwise become due and payable; 

    

    vii. the
      Common Stock shall not be eligible for listing or quotation for trading on
      a
      Trading Market and shall not be eligible to resume listing or quotation for
      trading thereon within five Trading Days;

    

    viii. the
      Company shall be a party to any Change of Control Transaction or Fundamental
      Transaction or shall agree to sell or dispose of all or in excess of 40% of
      its
      assets in one transaction or a series of related transactions (whether or not
      such sale would constitute a Change of Control Transaction);

    

    ix. a
      Registration Statement shall not have been declared effective by the Commission
      on or prior to the 210th calendar
      day after the Closing Date; 

    

    x. if,
      during the Effectiveness Period (as defined in the Registration Rights
      Agreement), either (a) the effectiveness of the Registration Statement lapses
      for any reason or (b) the Holder shall not be permitted to resell Registrable
      Securities (as defined in the Registration Rights Agreement) under the
      Registration Statement for a period of more than 30 consecutive Trading Days
      or
      40 non-consecutive Trading Days during any 12 month period; provided,
      however,
      that if
      the Company
      is negotiating a merger, consolidation, acquisition or sale of all or
      substantially all of its assets or a similar transaction and, in the written
      opinion of counsel to the Company, the Registration Statement would be required
      to be amended to include information concerning such pending transaction(s)
      or
      the parties thereto which information is not available or may not be publicly
      disclosed at the time, the Company shall be permitted an additional 10
      consecutive Trading Days during any 12 month period pursuant to this Section
      8(a)(x);

    

    xi. the
      Company shall fail for any reason to deliver certificates to a Holder prior
      to
      the seventh Trading Day after a Conversion Date pursuant to Section 4(d) or
      the
      Company shall provide at any time notice to the Holder, including by way of
      public announcement, of the Company’s intention to not honor requests for
      conversions of any Debentures in accordance with the terms hereof;

    

    xii. any
      monetary judgment, writ or similar final process shall be entered or filed
      against the Company, any Subsidiary or any of their respective property or
      other
      assets for more than $50,000, and such judgment, writ or similar final process
      shall remain unvacated, unbonded or unstayed for a period of 45 calendar days;
      or

    
      
        
        

      

      
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    xiii. if
      a
      proper Disclosure Request has been made pursuant to Section 4.6(b) of the
      Purchase Agreement and the Company fails to either (i) make public disclosure
      of
      the information that is the subject of such Disclosure Request in a manner
      consistent with Rule 101(e) of Regulation FD or (ii) provide such Purchaser
      with
      a written statement that the Company does not believe that such information
      is
      material nonpublic information or that it was delivered pursuant to the prior
      request or consent of such Purchaser, in either case within 5 business days
      of
      its receipt of such Disclosure Request.

     

    b) Remedies
      Upon Event of Default.
      If any
      Event of Default occurs, the outstanding principal amount of this Debenture,
      plus accrued but unpaid interest, liquidated damages and other amounts owing
      in
      respect thereof through the date of acceleration, shall become, at the Holder’s
      election, immediately due and payable in cash at the Mandatory Default Amount.
      Commencing 5 days after the occurrence of any Event of Default that results
      in
      the eventual acceleration of this Debenture, the interest rate on this Debenture
      shall accrue at an interest rate equal to the lesser of 15% per annum or the
      maximum rate permitted under applicable law. Upon the payment in full of the
      Mandatory Default Amount, the Holder shall promptly surrender this Debenture
      to
      or as directed by the Company. In connection with such acceleration described
      herein, the Holder need not provide, and the Company hereby waives, any
      presentment, demand, protest or other notice of any kind, and the Holder may
      immediately and without expiration of any grace period enforce any and all
      of
      its rights and remedies hereunder and all other remedies available to it under
      applicable law. Such acceleration may be rescinded and annulled by Holder at
      any
      time prior to payment hereunder and the Holder shall have all rights as a holder
      of the Debenture until such time, if any, as the Holder receives full payment
      pursuant to this Section 8(b). No such rescission or annulment shall affect
      any
      subsequent Event of Default or impair any right consequent thereon.

     

    Section
      9. Miscellaneous.

     

    a) Notices.
      Any and
      all notices or other communications or deliveries to be provided by the Holder
      hereunder, including, without limitation, any Notice of Conversion, shall be
      in
      writing and delivered personally, by facsimile, or sent by a nationally
      recognized overnight courier service, addressed to the Company, at the address
      set forth above, facsimile number (727)
      934-8779,
      Attention: Peter W. DeVecchis, Jr. or
      such
      other facsimile number or address as the Company may specify for such purpose
      by
      notice to the Holder delivered in accordance with this Section 9. Any and all
      notices or other communications or deliveries to be provided by the Company
      hereunder shall be in writing and delivered personally, by facsimile, or sent
      by
      a nationally recognized overnight courier service addressed to each Holder
      at
      the facsimile number or address of such Holder appearing on the books of the
      Company, or if no such facsimile number or address appears, at the principal
      place of business of the Holder. Any notice or other

    
      
        
        

      

      
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    communication
      or deliveries hereunder shall be deemed given and effective on the earliest
      of
      (i) the date of transmission, if such notice or communication is delivered
      via
      facsimile at the facsimile number specified in this Section 9 prior to 5:30
      p.m.
      (New York City time), (ii) the date immediately following the date of
      transmission, if such notice or communication is delivered via facsimile at
      the
      facsimile number specified in this Section 9 between 5:30 p.m. (New York City
      time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business
      Day following the date of mailing, if sent by nationally recognized overnight
      courier service, or (iv) upon actual receipt by the party to whom such notice
      is
      required to be given.

     

    b) Absolute
      Obligation.
      Except
      as expressly provided herein, no provision of this Debenture shall alter or
      impair the obligation of the Company, which is absolute and unconditional,
      to
      pay the principal of, liquidated damages and accrued interest, as applicable,
      on
      this Debenture at the time, place, and rate, and in the coin or currency, herein
      prescribed. This Debenture is a direct debt obligation of the Company. This
      Debenture ranks pari passu
      with all
      other Debentures now or hereafter issued under the terms set forth
      herein.  

     

    c) Lost
      or Mutilated Debenture.
      If this
      Debenture shall be mutilated, lost, stolen or destroyed, the Company shall
      execute and deliver, in exchange and substitution for and upon cancellation
      of a
      mutilated Debenture, or in lieu of or in substitution for a lost, stolen or
      destroyed Debenture, a new Debenture for the principal amount of this Debenture
      so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
      of
      such loss, theft or destruction of such Debenture, and of the ownership hereof,
      reasonably satisfactory to the Company.

    

    d) Governing
      Law; Arbitration.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York. Any controversy or claim arising out of or
      related to this Debenture or the breach thereof, shall be settled by binding
      arbitration in New York, New York in accordance with the Expedited Procedures
      (Rules 53-57) of the Commercial Arbitration Rules of the American Arbitration
      Association (“AAA”).
      A
      proceeding shall be commenced upon written demand by the Company or Holder
      to
      the other. The arbitrator(s) shall enter a judgment by default against any
      party, which fails or refuses to appear in any properly noticed arbitration
      proceeding. The proceeding shall be conducted by one (1) arbitrator, unless
      the
      amount alleged to be in dispute exceeds two hundred fifty thousand dollars
      ($250,000), in which case three (3) arbitrators shall preside. The arbitrator(s)
      will be chosen by the parties from a list provided by the AAA, and if the
      parties are unable to agree within ten (10) days, the AAA shall select the
      arbitrator(s). The arbitrators must be experts in securities law and financial
      transactions. The arbitrators shall assess costs and expenses of the
      arbitration, including all attorneys’ and experts’ fees, as the arbitrators
      believe is appropriate in light of the merits of the parties’ respective
      positions in the issues in dispute. Each party submits irrevocably to the
      jurisdiction of any state court sitting in New York, New York or to the United
      States District Court sitting in New

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    York,
      New
      York for purposes of enforcement of any discovery order, judgment or award
      in
      connection with such arbitration. The award of the arbitrator(s) shall be final
      and binding upon the parties and may be enforced in any court having
      jurisdiction. The arbitration shall be held in such place as set by the
      arbitrator(s) in accordance with Rule 55. With respect to any arbitration
      proceeding in accordance with this section, the prevailing party’s reasonable
      attorney’s fees and expenses shall be borne by the non-prevailing
      party.

    

    Although
      the parties, as expressed above, agree that all claims, including claims that
      are equitable in nature, for example specific performance, shall initially
      be
      prosecuted in the binding arbitration procedure outlined above, if the
      arbitration panel dismisses or otherwise fails to entertain any or all of the
      equitable claims asserted by reason of the fact that it lacks jurisdiction,
      power and/or authority to consider such claims and/or direct the remedy
      requested, then, in only that event, will the parties have the right to initiate
      litigation respecting such equitable claims or remedies. The forum for such
      equitable relief shall be in either a state or federal court sitting in New
      York, New York. Each party waives any right to a trial by jury, assuming such
      right exists in an equitable proceeding, and irrevocably submits to the
      jurisdiction of said New York court. New York law shall govern both the
      proceeding as well as the interpretation and construction of this Agreement
      and
      the transaction as a whole.

     

    e) Waiver.
      Any
      waiver by the Company or the Holder of a breach of any provision of this
      Debenture shall not operate as or be construed to be a waiver of any other
      breach of such provision or of any breach of any other provision of this
      Debenture. The failure of the Company or the Holder to insist upon strict
      adherence to any term of this Debenture on one or more occasions shall not
      be
      considered a waiver or deprive that party of the right thereafter to insist
      upon
      strict adherence to that term or any other term of this Debenture. Any waiver
      by
      the Company or the Holder must be in writing.

     

    f) Severability.
      If any
      provision of this Debenture is invalid, illegal or unenforceable, the balance
      of
      this Debenture shall remain in effect, and if any provision is inapplicable
      to
      any Person or circumstance, it shall nevertheless remain applicable to all
      other
      Persons and circumstances. If it shall be found that any interest or other
      amount deemed interest due hereunder violates the applicable law governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum rate of interest permitted under applicable law.
      The Company covenants (to the extent that it may lawfully do so) that it shall
      not at any time insist upon, plead, or in any manner whatsoever claim or take
      the benefit or advantage of, any stay, extension or usury law or other law
      which
      would prohibit or forgive the Company from paying all or any portion of the
      principal of or interest on this Debenture as contemplated herein, wherever
      enacted, now or at any time hereafter in force, or which may affect the
      covenants or the performance of this indenture, and the Company (to the extent
      it may lawfully do so) hereby expressly waives all benefits or advantage of
      any
      such law, and covenants that it will not, by resort to any such law, hinder,
      delay or impeded the execution of any power

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    herein
      granted to the Holder, but will suffer and permit the execution of every such
      as
      though no such law has been enacted.

     

    g) Next
      Business Day.
      Whenever any payment or other obligation hereunder shall be due on a day other
      than a Business Day, such payment shall be made on the next succeeding Business
      Day.

    

    h) Headings.
      The
      headings contained herein are for convenience only, do not constitute a part
      of
      this Debenture and shall not be deemed to limit or affect any of the provisions
      hereof.

    

    i) Assumption. 
      Any successor to the Company or any surviving entity in a Fundamental
      Transaction shall (i) assume, prior to such Fundamental Transaction, all of
      the
      obligations of the Company under this Debenture and the other Transaction
      Documents pursuant to written agreements in form and substance satisfactory
      to
      the Holder (such approval not to be unreasonably withheld or delayed) and (ii)
      issue to the Holder a new debenture of such successor entity evidenced by a
      written instrument substantially similar in form and substance to this
      Debenture, including, without limitation, having a principal amount and interest
      rate equal to the principal amount and the interest rate of this Debenture
      and
      having similar ranking to this Debenture, which shall be satisfactory to the
      Holder (any such approval not to be unreasonably withheld or delayed).  The
      provisions of this Section 9(i) shall apply similarly and equally to successive
      Fundamental Transactions and shall be applied without regard to any limitations
      of this Debenture.

    

    j) Secured
      Obligation.
      The
      obligations of the Company under this Debenture are secured by all assets of
      the
      Company and certain of the Subsidiaries pursuant to the Security Agreement,
      dated as of August ___, 2007, between the Company, certain of the Subsidiaries
      of the Company and the Secured Parties (as defined therein).

    

    *********************

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Debenture to be duly executed
      by a
      duly authorized officer as of the date first above indicated.

     

     

    
      	
              SOLOMON
                TECHNOLOGIES, INC.

            
	 
	 
	
              By: 
                _______________________________________

              Name:

              Title:

            

    

    

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    NOTICE
      OF CONVERSION

     

    The
      undersigned hereby elects to convert principal under the Variable Rate
      Self-Liquidating Senior Secured Convertible Debenture due April 17, 2009 of
      Solomon Technologies, Inc., a Delaware corporation (the “Company”),
      into
      shares of common stock, par value $0.001 per share (the “Common
      Stock”),
      of
      the Company according to the conditions hereof, as of the date written below.
      If
      shares of Common Stock are to be issued in the name of a person other than
      the
      undersigned, the undersigned will pay all transfer taxes payable with respect
      thereto and is delivering herewith such certificates and opinions as reasonably
      requested by the Company in accordance therewith. No fee will be charged to
      the
      holder for any conversion, except for such transfer taxes, if any.

    

    By
      the
      delivery of this Notice of Conversion the undersigned represents and warrants
      to
      the Company that its ownership of the Common Stock does not exceed the amounts
      specified under Section 4 of this Debenture, as determined in accordance with
      Section 13(d) of the Exchange Act.

    

    The
      undersigned agrees to comply with the prospectus delivery requirements under
      the
      applicable securities laws in connection with any transfer of the aforesaid
      shares of Common Stock. 

    

    Conversion
      calculations:   

    Date
      to
      Effect Conversion:

     

    Principal
      Amount of Debenture to be Converted:

     

    Payment
      of Interest in Common Stock __ yes __ no

    If
      yes,
      $_____ of Interest Accrued on Account of Conversion at Issue.

     

    Number
      of
      shares of Common Stock to be issued:

     

    Signature:

     

    Name:

     

    Address:

    

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Schedule
      1

    

    CONVERSION
      SCHEDULE

    

    The
      Variable Rate Self-Liquidating Senior Secured Convertible Debentures due on
      April 17, 2009 in the aggregate principal amount of $______ are issued by
      Solomon Technologies, Inc. This Conversion Schedule reflects conversions made
      under Section 4 of the above referenced Debenture.

    

    Dated:

     

    
      	
              Date
                of Conversion

              (or
                for first entry, Original Issue Date)

            	
              Amount
                of Conversion

            	
              Aggregate
                Principal Amount Remaining Subsequent to Conversion

              (or
                original Principal Amount)

            	
              Company
                Attest

            
	   
	  
	  
	 

	  
	  
	  
	  

	
               
                

            	 
	  
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	  
	  

	  
	  
	   
	  

	  
	  
	  
	  

	 
	 
	 
	 

    

    
 

    
      
        
        

      

      32EXHIBIT
      B

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of August 30, 2007, among Solomon Technologies, Inc.,
      a
      Delaware corporation (the “Company”)
      and
      the several purchasers signatory hereto (each such purchaser, a “Purchaser”
and,
      collectively, the “Purchasers”).

     

    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof, between the Company and each Purchaser (the “Purchase
      Agreement”).

     

    The
      Company and each Purchaser hereby agrees as follows:

     

    1.
       Definitions

     

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

    

    “Effectiveness
      Date”
means,
      (a) with respect to the initial Registration Statement required to be filed
      hereunder, January 22, 2008 and (b) with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 60th
      calendar
      day following the date on which the Company first knows, or reasonably should
      have known, that such additional Registration Statement is required hereunder;
      provided,
      however,
      that in
      the event the Company is notified by the Commission that one of the above
      Registration Statements will not be reviewed or is no longer subject to further
      review and comments, the Effectiveness Date 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 required above.

    

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

    

    “Event”
shall
      have the meaning set forth in Section 2(b).

    

    “Event
      Date”
shall
      have the meaning set forth in Section 2(b).

    

    “Filing
      Date”
means,
      with respect to the initial Registration Statement required hereunder, October
      1, 2007 and, with respect to any additional Registration Statements which may
      be
      required pursuant to Section 3(c), the 30th
      calendar
      day following the date on which the Company first knows, or reasonably should
      have known, that such additional Registration Statement is required
      hereunder.

    

    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 5(c).

    

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 5(c).

    

    “Losses”
shall
      have the meaning set forth in Section 5(a).

    

    “Plan
      of Distribution”
shall
      have the meaning set forth in Section 2(a). 

    

    “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 under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by 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.

    

    “Registrable
      Securities”
means
      (i) all of the shares of Common Stock issuable upon conversion in full of the
      Debentures, (ii) all shares of Common Stock issuable as interest or principal
      on
      the Debentures assuming all permissible interest and principal payments are
      made
      in shares of Common Stock and the Debentures are held until maturity, (iii)
      all
      Warrant Shares, (iv) any additional shares of Common Stock issuable in
      connection with any anti-dilution provisions in the Debentures or the Warrants
      (in each case, without giving effect to any limitations on conversion set forth
      in the Debenture or limitations on exercise set forth in the Warrant) and (v)
      any securities issued or issuable upon any stock split, dividend or other
      distribution, recapitalization or similar event with respect to the foregoing.
      

    

    “Registration
      Statement”
means
      the registration statements required to be filed hereunder and any additional
      registration statements contemplated by Section 3(c), including (in each case)
      the Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

    

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

    

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

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Selling
      Shareholder Questionnaire”
shall
      have the meaning set forth in Section 3(a).

    

    2.
       Shelf
      Registration

    

    (a) On
      or
      prior to each Filing Date, the Company shall prepare and file with the
      Commission a “Shelf” Registration Statement covering the resale of 100% of the
      Registrable Securities on such Filing Date for an offering to be made on a
      continuous basis pursuant to Rule 415. The Registration Statement shall be
      on
      Form SB-2 (except if the Company is not then eligible to register for resale
      the
      Registrable Securities on Form SB-2, in which case such registration shall
      be on
      another appropriate form in accordance herewith) and shall contain (unless
      otherwise directed by at least an 85% majority in interest of the Holders and
      except to the extent the Company determines that modifications thereto are
      required under applicable law) substantially the “Plan
      of Distribution”
      attached hereto as Annex
      A.
      Subject
      to the terms of this Agreement, the Company shall use its best efforts to cause
      a Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event prior to the
      applicable Effectiveness Date, and shall use its best efforts to keep such
      Registration Statement continuously effective under the Securities Act until
      the
      date that is three years after the date the Registration Statement is declared
      effective by the Commission or such earlier date when all Registrable Securities
      covered by such Registration Statement have been sold, or may be sold without
      volume restrictions pursuant to Rule 144(k), as determined by the counsel to
      the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness
      Period”).
      The
      Company shall telephonically request effectiveness of a Registration Statement
      as of 5:00 p.m. New York City time on a Trading Day. The Company shall
      immediately notify the Holders via facsimile of the effectiveness of a
      Registration Statement on the same Trading Day that the Company telephonically
      confirms effectiveness with the Commission, which shall be the date requested
      for effectiveness of a Registration Statement. The Company shall, on the Trading
      Day after the Effective Date (as defined in the Purchase Agreement), file a
      final Prospectus with the Commission as required by Rule 424. Failure to so
      notify the Holder within 1 Trading Day of such notification of effectiveness
      or
      failure to file a final Prospectus as foresaid shall be deemed an Event under
      Section 2(b).

     

    (b) If:
      (i) a
      Registration Statement is not filed on or prior to its Filing Date (if the
      Company files a Registration Statement without affording the Holders an
      opportunity to review and comment on the same, the Company shall be deemed
      to
      have not satisfied this clause (i)), or (ii) the Company fails to file with
      the
      Commission a request for acceleration in accordance with Rule 461 promulgated
      under 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
      a Registration Statement will not be “reviewed,” or not subject to further
      review, or (iii) prior to its Effectiveness Date, 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 15

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    calendar
      days after the receipt of comments by or notice from the Commission that such
      amendment is required in order for a Registration Statement to be declared
      effective, or (iv) a Registration Statement filed or required to be filed
      hereunder is not declared effective by the Commission by its Effectiveness
      Date,
      or (v) after the Effectiveness Date, a Registration Statement ceases for any
      reason to remain continuously effective as to all Registrable Securities for
      which it is required to be effective, or the Holders are otherwise not permitted
      to utilize the Prospectus therein to resell such Registrable Securities, for
      more than 20 consecutive calendar days or more than an aggregate of 30 Trading
      Days during any 12-month period (which need not be consecutive calendar days)
      (any such failure or breach being referred to as an “Event”,
      and
      for purposes of clause (i) or (iv) the date on which such Event occurs, or
      for
      purposes of clause (ii) the date on which such five Trading Day period is
      exceeded, or for purposes of clause (iii) the date which such 15 calendar day
      period is exceeded, or for purposes of clause (v) the date on which such 20
      or
      30 calendar day period, as applicable, is exceeded being referred to as
“Event
      Date”),
      then,
      in addition to any other rights the Holders may have hereunder or under
      applicable law, on each such Event Date and on each monthly anniversary of
      each
      such Event Date (if the applicable Event shall not have been cured by such
      date)
      until the applicable Event is cured, the Company shall pay to each Holder an
      amount in cash, as partial 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 Registrable Securities then held by such Holder (calculated
      as
      if all convertible securities had been fully converted); provided,
      however,
      if,
      notwithstanding the Company’s best efforts to avoid an Event, such Event is
      caused solely because the Commission will not allow a Registration Statement
      to
      be declared effective because of the Commission’s interpretation of Rule
      415(a)(1)(i), partial liquidated damages shall accrue at the rate of 1.0% rather
      than 2% during the continuation of any such Events. 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, (2) in no event shall the Company
      be
      liable for liquidated damages under this Agreement in excess of 2% of the
      aggregate Subscription Amount of the Holders in any 30-day period and (3) the
      maximum aggregate liquidated damages payable to a Holder under this Agreement
      shall be twenty-four percent (24%) of the aggregate Subscription Amount paid
      by
      such Holder pursuant to the Purchase Agreement. If the Company fails to pay
      any
      partial liquidated damages pursuant to this Section in full within 10 days
      after
      the date payable, the Company will pay interest thereon at a rate of 15% 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 partial liquidated damages
      are due until such amounts, plus all such interest thereon, are paid in full.
      The partial 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 an
      Event.

    

    3.
       Registration
      Procedures.

    

    In
      connection with the Company’s registration obligations hereunder, the Company
      shall:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (a) Not
      less
      than five Trading Days prior to the filing of each Registration Statement and
      not less than one Trading Day prior to the filing of any related Prospectus
      or
      any amendment or supplement thereto (including any document that would be
      incorporated or deemed to be incorporated therein by reference), the Company
      shall (i) furnish to each Holder copies of all such documents proposed to be
      filed, which documents (other than those incorporated or deemed to be
      incorporated by reference) will be subject to the review of such Holders and
      (ii) cause its officers and directors, counsel and independent certified public
      accountants to respond to such inquiries as shall be necessary, in the
      reasonable opinion of respective counsel to each Holder, to conduct a reasonable
      investigation within the meaning of the Securities Act. The Company shall not
      file a Registration Statement or any such Prospectus or any amendments or
      supplements thereto to which the Holders of a majority of the Registrable
      Securities shall reasonably object in good faith, provided that the Company
      is
      notified of such objection in writing no later than 5 Trading Days after the
      Holders have been so furnished copies of a Registration Statement or 1 Trading
      Day after the Holders have been so furnished copies of any related Prospectus
      or
      amendments or supplements thereto. 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”)
      not
      less than two Trading Days prior to the Filing Date or by the end of the fourth
      Trading Day following the date on which such Holder receives draft materials
      in
      accordance with this Section.

    

    (b) (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and prepare and file with the Commission such additional Registration
      Statements as may be required hereunder to register for resale under the
      Securities Act all of the Registrable Securities; (ii) cause the related
      Prospectus to be amended or supplemented by any required Prospectus supplement
      (subject to the terms of this Agreement), and, as so supplemented or amended,
      to
      be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible
      to any comments received from the Commission with respect to a Registration
      Statement or any amendment thereto and provide as promptly as reasonably
      possible to the Holders true and complete copies of all correspondence from
      and
      to the Commission relating to a Registration Statement (provided that the
      Company may excise any information contained therein which would constitute
      material non-public information as to any Holder which has not executed a
      confidentiality agreement with the Company); and (iv) comply in all material
      respects with the provisions of the Securities Act and the Exchange Act with
      respect to the disposition of all Registrable Securities covered by a
      Registration Statement during the applicable period in accordance (subject
      to
      the terms of this Agreement) with the intended methods of disposition by the
      Holders thereof set forth in such Registration Statement as so amended or in
      such Prospectus as so supplemented.

    

    (c) If
      during
      the Effectiveness Period, the number of Registrable Securities at any time
      exceeds 100% of the number of shares of Common Stock then registered in a
      Registration Statement, then the Company shall file as soon as reasonably
      practicable, but in any case prior to the applicable Filing Date, an additional
      Registration Statement

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    covering
      the resale by the Holders of not less than 100% of the number of such
      Registrable Securities.

    

    (d) Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (iii) through (vi) hereof, be accompanied by an instruction to
      suspend the use of the Prospectus until the requisite changes have been made)
      as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      one Trading Day prior to such filing) and (if requested by any such Person)
      confirm such notice in writing no later than two Trading Days following the
      day
      (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement; and (C) with respect to a Registration Statement or
      any
      post-effective amendment, when the same has become effective; (ii) of any
      request by the Commission or any other federal or state governmental authority
      for amendments or supplements to a Registration Statement or Prospectus or
      for
      additional information; (iii) of the issuance by the Commission or any other
      federal or state governmental authority of any stop order suspending the
      effectiveness of a Registration Statement covering any or all of the Registrable
      Securities or the initiation of any Proceedings for that purpose; (iv) of the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction, or the initiation or threatening of
      any
      Proceeding for such purpose; (v) of the occurrence of any event or passage
      of
      time that makes the financial statements included in a Registration Statement
      ineligible for inclusion therein or any statement made in a Registration
      Statement or Prospectus or any document incorporated or deemed to be
      incorporated therein by reference untrue in any material respect or that
      requires any revisions to a Registration Statement, Prospectus or other
      documents so that, in the case of a Registration Statement or the Prospectus,
      as
      the case may be, it will not contain any untrue statement of a material fact
      or
      omit to state any material fact required to be stated therein or necessary
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading; and (vi) the occurrence or existence of any pending
      corporate development with respect to the Company that the Company believes
      may
      be material and that, in the determination of the Company, makes it not in
      the
      best interest of the Company to allow continued availability of a Registration
      Statement or Prospectus, provided that any and all of such information shall
      remain confidential to each Holder until such information otherwise becomes
      public, unless disclosure by a Holder is required by law; provided,
      further,
      that
      notwithstanding each Holder’s agreement to keep such information confidential,
      the Holders make no acknowledgement that any such information is material,
      non-public information.

    

    (e) Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of a Registration Statement, or
      (ii)
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction, at the earliest
      practicable moment.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

    

    (g) Subject
      to the terms of this Agreement, the Company hereby consents to the use of such
      Prospectus and each amendment or supplement thereto by each of the selling
      Holders in connection with the offering and sale of the Registrable Securities
      covered by such Prospectus and any amendment or supplement thereto, except
      after
      the giving of any notice pursuant to Section 3(d).

    

    (h) If
      requested in writing by a Holder and if required of the Holder’s selling
      registered broker-dealer by NASD (as defined below) in order to effect the
      resale of the Registrable Securities by the Holder, the Company shall use
      commercially reasonable efforts to effect a filing with respect to the public
      offering contemplated by the Registration Statement (an “Issuer
      Filing”)
      with
      the National Association of Securities Dealers, Inc. (“NASD”)
      Corporate Financing Department pursuant to NASD Rule 2710(b)(10)(A)(i) within
      five Trading Days of such request 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.

    

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

    

    (j) If
      requested by the Holders, cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holders may
      request.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (k) Upon
      the
      occurrence of any event contemplated by Section 3(d), as promptly as reasonably
      possible under the circumstances taking into account the Company’s good faith
      assessment of any adverse consequences to the Company and its stockholders
      of
      the premature disclosure of such event, prepare a supplement or amendment,
      including a post-effective amendment, to a Registration Statement or a
      supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit to state
      a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading. If
      the
      Company notifies the Holders in accordance with clauses (iii) through (vi)
      of
      Section 3(d) above to suspend the use of any Prospectus until the requisite
      changes to such Prospectus have been made, then the Holders shall suspend use
      of
      such Prospectus. The Company will use its best efforts to ensure that the use
      of
      the Prospectus may be resumed as promptly as is practicable except that in
      the
      case of suspension of the availability of the Registration Statement and
      Prospectus pursuant to clause (vi) of Section 3(d), the Company shall not be
      required to take such action until such time as it shall determine that the
      continued availability of the Registration Statement and Prospectus is no longer
      not in the best interests of the Company. The Company shall be entitled to
      exercise its right under this Section 3(k) to suspend the availability of a
      Registration Statement and Prospectus, subject to the payment of partial
      liquidated damages pursuant to Section 2(b), for a period not to exceed 90
      calendar days (which need not be consecutive days) in any 12 month
      period.

    

    (l) Comply
      with all applicable rules and regulations of the Commission.

    

    (m) The
      Company may require each selling Holder to furnish to the Company a certified
      statement as to the number of shares of Common Stock beneficially owned by
      such
      Holder, such Holder’s Selling Shareholder Questionnaire and, if requested by the
      Commission, the natural persons thereof that have voting and dispositive control
      over the Shares within three Trading Days of the Company’s request. During any
      periods that the Company is unable to meet its obligations hereunder with
      respect to the registration of the Registrable Securities solely because any
      Holder fails to furnish such information, including the Selling Shareholder
      Questionnaire, within three Trading Days of the Company’s request, any
      liquidated damages that are accruing at such time as to such Holder only shall
      be tolled and any Event that may otherwise occur solely because of such delay
      shall be suspended as to such Holder only, until such information is delivered
      to the Company provided that if such information is not provided at least 3
      Trading Days prior to the Effective Date the Company shall have the right to
      exclude such Holder from the pending Registration Statement (but not future
      registration statements). Notwithstanding anything herein to the contrary,
      the
      Company shall use commercially reasonable efforts to include such Holder’
Registrable Securities on a pre-effective amendment to the Registration
      Statement or the soonest possible new Registration Statement otherwise required
      pursuant to the terms of this Agreement.

    

    4.
       Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or
      not

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    any
      Registrable Securities are sold pursuant to a Registration Statement. The fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses) (A) with respect to filings required to be made with any
      Trading Market on which the Common Stock is then listed for trading, (B) in
      compliance with applicable state securities or Blue Sky laws reasonably agreed
      to by the Company in writing (including, without limitation, fees and
      disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities) and (C) if not
      previously paid by the Company in connection with an Issuer Filing, with respect
      to any filing that may be required to be made by any broker through which a
      Holder intends to make sales of Registrable Securities with NASD Regulation,
      Inc. pursuant to the NASD Rule 2710, so long as the broker is receiving no
      more
      than a customary brokerage commission in connection with such sale, (ii)
      printing expenses (including, without limitation, expenses of printing
      certificates for Registrable Securities), (iii) messenger, telephone and
      delivery expenses, (iv) fees and disbursements of counsel for the Company,
      (v)
      Securities Act liability insurance, if the Company so desires such insurance,
      and (vi) fees and expenses of all other Persons retained by the Company in
      connection with the consummation of the transactions contemplated by this
      Agreement. In addition, the Company shall be responsible for all of its internal
      expenses incurred in connection with the consummation of the transactions
      contemplated by this Agreement (including, without limitation, all salaries
      and
      expenses of its officers and employees performing legal or accounting duties),
      the expense of any annual audit and the fees and expenses incurred in connection
      with the listing of the Registrable Securities on any securities exchange as
      required hereunder. In no event shall the Company be responsible for any broker
      or similar commissions of any Holder or, except to the extent provided for
      in
      the Transaction Documents, any legal fees or other costs of the
      Holders.

     

    5.
       Indemnification.

    

    (a) Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, members, partners, agents,
      brokers (including brokers who offer and sell Registrable Securities as
      principal as a result of a pledge or any failure to perform under a margin
      call
      of Common Stock), investment advisors and employees (and any other Persons
      with
      a functionally equivalent role of a Person holding such titles, notwithstanding
      a lack of such title or any other title) of each of them, each Person who
      controls any such Holder (within the meaning of Section 15 of the Securities
      Act
      or Section 20 of the Exchange Act) and the officers, directors, members,
      shareholders, partners, agents and employees (and any other Persons with a
      functionally equivalent role of a Person holding such titles, notwithstanding
      a
      lack of such title or any other title) of each such controlling Person, to the
      fullest extent permitted by applicable law, from and against any and all losses,
      claims, damages, liabilities, costs (including, without limitation, reasonable
      attorneys’ fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to (1) any untrue or alleged untrue
      statement of a material fact contained in a Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    of
      prospectus or supplement thereto, in light of the circumstances under which
      they
      were made) not misleading or (2) any violation or alleged violation by the
      Company of the Securities Act, the Exchange Act or any state securities law,
      or
      any rule or regulation thereunder, in connection with the performance of its
      obligations under this Agreement, except to the extent, but only to the extent,
      that (i) such untrue statements or omissions are based solely upon information
      regarding such Holder furnished in writing to the Company by such Holder
      expressly for use therein, or to the extent that such information relates to
      such Holder or such Holder’s proposed method of distribution of Registrable
      Securities and was reviewed and expressly approved in writing by such Holder
      expressly for use in a Registration Statement, such Prospectus or such form
      of
      Prospectus or in any amendment or supplement thereto (it being understood that
      the Holder has approved Annex A hereto for this purpose) or (ii) in the case
      of
      an occurrence of an event of the type specified in Section 3(d)(iii)-(vi),
      the
      use by such Holder of an outdated or defective Prospectus after the Company
      has
      notified such Holder in writing that the Prospectus is outdated or defective.
      The Company shall notify the Holders promptly of the institution, threat or
      assertion of any Proceeding arising from or in connection with the transactions
      contemplated by this Agreement of which the Company is aware.

    

    (b) Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      solely upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue statement
      of a material fact contained in any Registration Statement, any Prospectus,
      or
      any form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent, but only to the extent,
      that such untrue statement or omission is contained in any information so
      furnished in writing by such Holder to the Company specifically for inclusion
      in
      such Registration Statement or such Prospectus or (ii) to the extent that such
      information relates to such Holder’s proposed method of distribution of
      Registrable Securities and was reviewed and expressly approved in writing by
      such Holder expressly for use in a Registration Statement (it being understood
      that the Holder has approved Annex A hereto for this purpose), such Prospectus
      or such form of Prospectus or in any amendment or supplement thereto or (iii)
      in
      the case of an occurrence of an event of the type specified in Section
      3(d)(iii)-(vi), the use by such Holder of an outdated or defective Prospectus
      after the Company has notified such Holder in writing that the Prospectus is
      outdated or defective. In no event shall the liability of any selling Holder
      hereunder be greater in amount than the dollar amount of the net proceeds
      received by such Holder upon the sale of the Registrable Securities giving
      rise
      to such indemnification obligation.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (c) Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall have the right to assume the defense
      thereof, including the employment of counsel reasonably satisfactory to the
      Indemnified Party and the payment of all fees and expenses incurred in
      connection with defense thereof; provided, that the failure of any Indemnified
      Party to give such notice shall not relieve the Indemnifying Party of its
      obligations or liabilities pursuant to this Agreement, except (and only) to
      the
      extent that such failure shall have prejudiced the Indemnifying
      Party.

    

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

    

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection with investigating or preparing to defend such Proceeding in
      a
      manner not inconsistent with this Section) shall be paid to the Indemnified
      Party, as incurred, within ten Trading Days of written notice thereof to the
      Indemnifying Party; provided, that the Indemnified Party shall promptly
      reimburse the Indemnifying Party for that portion of such fees and expenses
      applicable to such actions for which such Indemnified Party is judicially
      determined to be not entitled to indemnification hereunder.

    

    (d) Contribution.
      If the
      indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
      Party, then each Indemnifying Party, in lieu of indemnifying such Indemnified
      Party shall contribute to the amount paid or payable by such Indemnified Party,
      in such proportion as is appropriate to reflect the relative fault
      of

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    the
      Indemnifying Party and Indemnified Party as a result of such Losses, in
      connection with the actions, statements or omissions that resulted in such
      Losses as well as any other relevant equitable considerations. The relative
      fault of such Indemnifying Party and Indemnified Party shall be determined
      by
      reference to, among other things, whether any action in question, including
      any
      untrue or alleged untrue statement of a material fact or omission or alleged
      omission of a material fact, has been taken or made by, or relates to
      information supplied by, such Indemnifying Party or Indemnified Party, and
      the
      parties’ relative intent, knowledge, access to information and opportunity to
      correct or prevent such action, statement or omission. The amount paid or
      payable by a party as a result of any Losses shall be deemed to include, subject
      to the limitations set forth in this Section 5, any reasonable attorneys’ or
      other reasonable fees or expenses incurred by such party in connection with
      any
      Proceeding to the extent such party would have been indemnified for such fees
      or
      expenses if the indemnification provided for in this Section was available
      to
      such party in accordance with its terms.

    

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

    

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

    

    6.
       Miscellaneous.

    

    (a) Remedies.
      In the
      event of a breach by the Company or by a Holder of any of their respective
      obligations under this Agreement, each Holder or the Company, as the case may
      be, in addition to being entitled to exercise all rights granted by law and
      under this Agreement, including recovery of damages, shall be entitled to
      specific performance of its rights under this Agreement. The Company and each
      Holder agree that monetary damages would not provide adequate compensation
      for
      any losses incurred by reason of a breach by it of any of the provisions of
      this
      Agreement and hereby further agrees that, in the event of any action for
      specific performance in respect of such breach, it shall not assert or shall
      waive the defense that a remedy at law would be adequate.

    

    (b) No
      Piggyback on Registrations.
      Except
      as set forth in the registration rights agreements listed on Schedule
      6(b)
      attached
      hereto, 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 the Registration Statements other than the Registrable Securities. The
      Company shall not file any other registration statements until all Registrable
      Securities are registered

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    pursuant
      to a Registration Statement that is declared effective by the Commission,
      provided that this Section 6(b) shall not prohibit the Company from filing
      (i)
      amendments to registration statements filed prior to the date of this Agreement,
      (ii) registration statement(s) required to be filed by the Company under that
      certain Registration Rights Agreement dated January 17, 2007 among the Company
      and the investors signatory thereto, as amended to date, (iii) registration
      statement(s) registering securities issued to JMC Venture Partners LLC (“JMC”)
      or assigns in connection with and pursuant to the acquisition line of credit
      to
      be made available to the Company by JMC and that qualify as Exempt Issuances
      or
      (iv) a registration statement on Form S-8 covering no more than 1,250,000 shares
      of Common Stock and Common Stock Equivalents, in the aggregate, issued
      to
      members of the Company’s senior management that qualify as Exempt
      Issuances.

    

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

     

    (d) [Intentionally
      Deleted]

    

    (e) Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with the stock option or other employee benefit plans, then the
      Company shall send to each Holder a written notice of such determination and,
      if
      within fifteen days after the date of such notice, any such Holder shall so
      request in writing, the Company shall include in such registration statement
      all
      or any part of such Registrable Securities such Holder requests to be
      registered; provided,
      however,
      that
      the Company shall not be required to register any Registrable Securities
      pursuant to this Section 6(e) that are eligible for resale pursuant to Rule
      144(k) promulgated under the Securities Act or that are the subject of a then
      effective Registration Statement.

    

    (f) Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and Holders of at least 67% of the then outstanding
      Registrable Securities. Notwithstanding the foregoing, a waiver or consent
      to
      depart from the provisions hereof with respect to a matter that relates
      exclusively to the rights of Holders and that does not directly or indirectly
      affect the rights of other Holders may be given by Holders of all of the
      Registrable Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding sentence.
      

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (g) Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase Agreement.
      

    

    (h) Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign (except by merger) its rights or obligations
      hereunder without the prior written consent of all of the Holders of the
      then-outstanding Registrable Securities. Each Holder may assign their respective
      rights hereunder in the manner and to the Persons as permitted under the
      Purchase Agreement.

    

    (i) No
      Inconsistent Agreements.
      Neither
      the Company nor any of its Subsidiaries, on or after the date of this Agreement,
      shall enter into any agreement with respect to its securities, that would have
      the effect of impairing the rights granted to the Holders in this Agreement
      or
      otherwise conflicts with the provisions hereof. Except as set forth on
Schedule
      6(b),
      neither
      the Company nor any of its subsidiaries has previously entered into any
      agreement granting any registration rights with respect to any of its securities
      to any Person that have not been satisfied in full.

    

    (j) Execution
      and Counterparts.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission or by e-mail delivery of a “.pdf” format data file, such signature
      shall create a valid and binding obligation of the party executing (or on whose
      behalf such signature is executed) with the same force and effect as if such
      facsimile or “.pdf” signature page were an original thereof.

    

    (k) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined in accordance with the provisions of
      the
      Purchase Agreement.

    

    (l) Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any other remedies
      provided by law.

    

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

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    (n) Headings.
      The
      headings in this Agreement are for convenience only, do not constitute a part
      of
      the Agreement and shall not be deemed to limit or affect any of the provisions
      hereof.

    

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

    

    ********************

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    

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

    

    
      	
              SOLOMON
                TECHNOLOGIES, INC.

            
	 
	 
	
              By: 
                __________________________________________

              Name:

              Title:

            

    

         

    

    

    

    

    

    

    

    

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    [SIGNATURE
      PAGE OF HOLDERS TO SOLM RRA]

     

    Name
      of
      Holder: __________________________

    Signature
      of Authorized Signatory of Holder:
      __________________________

    Name
      of
      Authorized Signatory: _________________________

    Title
      of
      Authorized Signatory: __________________________

     

    

    

    [SIGNATURE
      PAGES CONTINUE]

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    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

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    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 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(k) 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.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    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).

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Annex
      B

     

    SOLOMON
      TECHNOLOGIES, INC.

     

    Selling
      Securityholder Notice and Questionnaire

     

    The
      undersigned beneficial owner of common stock (the “Registrable
      Securities”)
      of
      Solomon Technologies, Inc., a Delaware 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.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

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

     

    QUESTIONNAIRE

     

    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 the
                questionnaire):

            

    

     

    
      	  

	 

    

    

    2.
      Address for Notices to Selling Securityholder:

     

    
      	 
	 
	 
	
              Telephone: 

            
	
              Fax: 

            
	
              Contact
                Person: 

            

    

    

    3.
      Broker-Dealer Status:

     

    
      	 	
              (a)

            	
              Are
                you a broker-dealer?

            

    

     

    Yes
o  No
o

     

    
      	 	
              (b)

            	
              If
                “yes” to Section 3(a), did you receive your Registrable Securities as
                compensation for investment banking services to the
                Company.

            

    

     

    Yes
o  No
o

     

    
      	 	
              Note:

            	
              If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.

            

    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	 	
              (c)

            	
              Are
                you an affiliate of a
                broker-dealer?

            

    

     

    Yes o  No
o

     

    
      	 	
              (d)

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                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
o  No
o

     

    
      	 	
              Note:

            	
              If
                no, 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:

            

    

     

    
      	  

	  

	 

    

    

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    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 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.

     

    Dated:
      _______________

    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:

     

     

    
      
         

      

        24

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