Document:

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Exhibit 10.5

                                [FORM OF WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISEABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

                        RAPTOR NETWORKS TECHNOLOGY, INC.

              AMENDED AND RESTATED WARRANT TO PURCHASE COMMON STOCK

Warrant No.:
             --------------
Number of Shares of Common Stock:
                                  -------------
Date of Issuance: March 31, 2008 ("ISSUANCE DATE")

         Raptor Networks Technology, Inc., a Colorado corporation, (the
"COMPANY"), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [CASTLERIGG MASTER
INVESTMENTS LTD.], [CEDAR HILL CAPITAL PARTNERS ONSHORE, LP] [CEDAR HILL CAPITAL
PARTNERS OFFSHORE, LTD.] the registered holder hereof or its permitted assigns
(the "HOLDER"), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including any Warrants to
purchase Common Stock issued in exchange, transfer or replacement hereof, the
"WARRANT"), at any time or times on or after the Initial Exercise Eligibility
Date, but not after 11:59 p.m., New York Time, on the Expiration Date (as
defined below), [FOUR MILLION TWO HUNDRED FIFTY THOUSAND (4,250,000)] [NINE
HUNDRED THOUSAND (900,000)] [ONE MILLION ONE HUNDRED THOUSAND (1,100,000)] fully
paid nonassessable shares of Common Stock (as defined below) (the "WARRANT
SHARES"). Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 16. This Warrant amends,
supplements, modifies and completely restates and supersedes the Warrants (the
"EXISTING WARRANTS") dated as of the Issuance Date, issued by the Company to the
Holder pursuant to Section 1 of that certain Securities Purchase Agreement,
dated as of March 31, 2008, by and among the Company and each of the investors

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(collectively, the "BUYERS") referred to therein (the "SECURITIES PURCHASE
AGREEMENT") for the exercise of [FOUR MILLION TWO HUNDRED FIFTY THOUSAND
(4,250,000)] [NINE HUNDRED THOUSAND (900,000)] [ONE MILLION ONE HUNDRED THOUSAND
(1,100,000)] shares of Common Stock, but shall not, except as specifically
amended hereby or as set forth in the New Securities Purchase Agreement (as
defined below), constitute a release, satisfaction or novation of any of the
obligations under the Existing Warrants or any other Transaction Document (as
defined in the Securities Purchase Agreements). This Warrant is one of an issue
of Warrants to Purchase Common Stock (the "SPA WARRANTS") amending and restating
the terms of the Existing Warrants pursuant to Section 1 of that certain
Securities Purchase Agreement, dated as of July 28, 2008, by and among the
Company and each of the Buyers (the "NEW SECURITIES PURCHASE AGREEMENT").

         1. EXERCISE OF WARRANT.

              (a) MECHANICS OF EXERCISE. Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the
Initial Exercise Eligibility Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as EXHIBIT A (the "EXERCISE
NOTICE"), of the Holder's election to exercise this Warrant and (ii) (A) payment
to the Company of an amount equal to the applicable Exercise Price multiplied by
the number of Warrant Shares as to which this Warrant is being exercised (the
"AGGREGATE EXERCISE PRICE") in cash or wire transfer of immediately available
funds or (B) by notifying the Company that this Warrant is being exercised
pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall
not be required to deliver the original Warrant in order to effect an exercise
hereunder. Execution and delivery of the Exercise Notice with respect to less
than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. On or before the first Business Day
following the date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the
"EXERCISE DELIVERY DOCUMENTS"), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company's transfer agent (the "TRANSFER AGENT"). On or before
the third Business Day following the date on which the Company has received all
of the Exercise Delivery Documents (the "SHARE DELIVERY DATE"), the Company
shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company ("DTC") Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder's or its
designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, deliver to be received no later than
the Share Delivery Date, to the address as specified in the Exercise Notice, a
certificate, registered in the Company's share register in the name of the
Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon delivery of the Exercise
Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or
notification to the Company of a Cashless Exercise referred to in Section 1(d),
the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. If this Warrant is submitted in connection with any

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exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon
as practicable and in no event later than five (5) Business Days after any
exercise and at its own expense, issue a new Warrant (in accordance with Section
7(d)) representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is exercised. No
fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number. The Company shall pay any and all taxes
which may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant.

              (b) EXERCISE PRICE. For purposes of this Warrant, "EXERCISE PRICE"
means the lower of (i) $0.50 and (ii) 75% of the Warrant Average Market Price on
the date a Registration Statement (as defined in the Registration Rights
Agreement) covering the Warrant Shares is declared effective by the Securities
and Exchange Commission (the "WARRANT SHARE EFFECTIVE DATE"), subject to
adjustment as provided herein. For the avoidance of doubt, if at the time of
exercise of this Warrant the Warrant Share Effective Date has not occurred, the
Exercise Price shall be $0.50, subject to adjustment as provided herein.

              (c) COMPANY'S FAILURE TO TIMELY DELIVER SECURITIES. If the Company
shall fail for any reason or for no reason to issue to the Holder within five
(5) Trading Days of receipt of the Exercise Delivery Documents, a certificate
for the number of shares of Common Stock to which the Holder is entitled and
register such shares of Common Stock on the Company's share register or to
credit the Holder's balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder's exercise of this
Warrant, then, in addition to all other remedies available to the Holder, the
Company shall pay in cash to the Holder on each day after such third Business
Day that the issuance of such shares of Common Stock is not timely effected an
amount equal to 1.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis and to which the Holder
is entitled and (B) the Closing Sale Price of the shares of Common Stock on the
Trading Day immediately preceding the last possible date which the Company could
have issued such shares of Common Stock to the Holder without violating Section
1(a). In addition, if within three (3) Trading Days after the Company's receipt
of the facsimile copy of a Exercise Notice the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of Common Stock on
the Company's share register or credit the Holder's balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon such
holder's exercise hereunder, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a "BUY-IN"), then the Company shall, within five (5) Business Days
after the Holder's request and in the Holder's discretion, either (i) pay cash
to the Holder in an amount equal to the Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
"BUY-IN PRICE"), at which point the Company's obligation to deliver such
certificate (and to issue such shares of Common Stock) or credit such Holder's
balance account with DTC shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such shares
of Common Stock or credit such Holder's balance account with DTC and pay cash to
the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock, times (B) the Closing
Bid Price on the date of exercise.

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              (d) CASHLESS EXERCISE. Notwithstanding anything contained herein
to the contrary, if a Registration Statement covering the Warrant Shares that
are the subject of the Exercise Notice (the "UNAVAILABLE WARRANT Shares") is not
available for the resale of such Unavailable Warrant Shares, after the date the
Warrant Shares are permitted to be sold pursuant to Rule 144 under the
Securities Act of 1933, as amended, the Holder may, in its sole discretion,
exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined according to the
following formula (a "CASHLESS EXERCISE"):

                           Net Number = (A X B) - (A X C)
                                        -----------------

                                            B

              For purposes of the foregoing formula:

         A= the total number of shares with respect to which this Warrant is
then being exercised.

         B= the Closing Sale Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise Notice.

         C= the Exercise Price then in effect for the applicable Warrant Shares
at the time of such exercise.

              (e) DISPUTES. In the case of a dispute as to the determination of
the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 12.

              (f) Limitations on Exercises.

                   (i) BENEFICIAL OWNERSHIP. The Company shall not effect the
              exercise of this Warrant, and the Holder shall not have the right
              to exercise this Warrant, to the extent that after giving effect
              to such exercise, such Person (together with such Person's
              affiliates) would beneficially own in excess of 4.99% (the
              "MAXIMUM PERCENTAGE") of the shares of Common Stock outstanding
              immediately after giving effect to such exercise. For purposes of
              the foregoing sentence, the aggregate number of shares of Common
              Stock beneficially owned by such Person and its affiliates shall

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              include the number of shares of Common Stock issuable upon
              exercise of this Warrant with respect to which the determination
              of such sentence is being made, but shall exclude shares of Common
              Stock which would be issuable upon (A) exercise of the remaining,
              unexercised portion of this Warrant beneficially owned by such
              Person and its affiliates and (B) exercise or conversion of the
              unexercised or unconverted portion of any other securities of the
              Company beneficially owned by such Person and its affiliates
              (including, without limitation, any convertible notes or
              convertible preferred stock or warrants) subject to a limitation
              on conversion or exercise analogous to the limitation contained
              herein. Except as set forth in the preceding sentence, for
              purposes of this paragraph, beneficial ownership shall be
              calculated in accordance with Section 13(d) of the Securities
              Exchange Act of 1934, as amended (the "EXCHANGE ACT"). For
              purposes of this Warrant, in determining the number of outstanding
              shares of Common Stock, the Holder may rely on the number of
              outstanding shares of Common Stock as reflected in (1) the
              Company's most recent Form 10-K, 10-KSB, Form 10-Q, 10-QSB,
              Current Report on Form 8-K or other public filing with the
              Securities and Exchange Commission, as the case may be, (2) a more
              recent public announcement by the Company or (3) any other notice
              by the Company or the Transfer Agent setting forth the number of
              shares of Common Stock outstanding. For any reason at any time,
              upon the written or oral request of the Holder, the Company shall
              within two (2) Business Day confirm orally and in writing to the
              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 the SPA Securities and the
              SPA Warrants, by the Holder and its affiliates since the date as
              of which such number of outstanding shares of Common Stock was
              reported. By written notice to the Company, the Holder may
              increase or decrease the Maximum Percentage to any other
              percentage not in excess of 9.99% specified in such notice;
              provided that (i) any such increase will not be effective until
              the sixty-first (61st) day after such notice is delivered to the
              Company, and (ii) any such increase or decrease will apply only to
              the Holder and not to any other holder of SPA Warrants.

                   (ii) PRINCIPAL MARKET REGULATION. The Company shall not be
              obligated to issue any shares of Common Stock upon exercise of
              this Warrant or conversion of SPA Securities and no Buyer shall be
              entitled to receive any shares of Common Stock if the issuance of
              such shares of Common Stock would exceed that number of shares of
              Common Stock which the Company may issue upon exercise or
              conversion, as applicable, of the SPA Warrants and SPA Securities
              or otherwise without breaching the Company's obligations under the
              rules or regulations of any applicable Eligible Market (the
              "EXCHANGE CAP"), except that such limitation shall not apply in
              the event that the Company (A) obtains the approval of its
              shareholders as required by the applicable rules of the Eligible
              Market for issuances of shares of Common Stock in excess of such
              amount or (B) obtains a written opinion from outside counsel to
              the Company that such approval is not required, which opinion
              shall be reasonably satisfactory to the Required Holders. Until
              such approval or written opinion is obtained, no Buyer shall be
              issued in the aggregate, upon exercise or conversion, as

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              applicable, of any SPA Warrants or SPA Securities, shares of
              Common Stock in an amount greater than the product of the Exchange
              Cap multiplied by a fraction, the numerator of which is the total
              number of shares of Common Stock underlying the SPA Warrants
              issued to such Buyer pursuant to the Securities Purchase Agreement
              on the Issuance Date and the denominator of which is the aggregate
              number of shares of Common Stock underlying the SPA Warrants
              issued to all of the Buyers pursuant to the Securities Purchase
              Agreement on the Issuance Date (with respect to each Buyer, the
              "EXCHANGE CAP ALLOCATION"). In the event that any Buyer shall sell
              or otherwise transfer any of such Buyer's SPA Warrants, the
              transferee shall be allocated a pro rata portion of such Buyer's
              Exchange Cap Allocation, and the restrictions of the prior
              sentence shall apply to such transferee with respect to the
              portion of the Exchange Cap Allocation allocated to such
              transferee. In the event that any holder of SPA Warrants shall
              exercise all of such holder's SPA Warrants into a number of shares
              of Common Stock which, in the aggregate, is less than such
              holder's Exchange Cap Allocation, then the difference between such
              holder's Exchange Cap Allocation and the number of shares of
              Common Stock actually issued to such holder shall be allocated to
              the respective Exchange Cap Allocations of the remaining holders
              of SPA Warrants on a pro rata basis in proportion to the shares of
              Common Stock underlying the SPA Warrants then held by each such
              holder. In the event that the Company is prohibited from issuing
              any Warrant Shares for which an Exercise Notice has been received
              as a result of the operation of this Section 1(f)(ii), the Company
              shall pay cash in exchange for cancellation of such Warrant
              Shares, at a price per Warrant Share equal to the difference
              between the Closing Sale Price and the Exercise Price as of the
              date of the attempted exercise.

              (g) INSUFFICIENT AUTHORIZED SHARES. If at any time while any of
the Warrants remain outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of the Warrants at least a number of shares
of Common Stock equal to (i) prior to the Stockholder Approval Deadline (as
defined in the Securities Purchase Agreement), 100% of the number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of
the SPA Warrants then outstanding (without regard to any limitations on
exercise) and (ii) from and after the Stockholder Approval Deadline, 130% of the
number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise) (the "Required Reserve Amount") (an "Authorized Share
Failure"), then the Company shall immediately take all action necessary to
increase the Company's authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for the Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than seventy-five (75) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its
stockholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they
approve such proposal.

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         2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows:

              (a) ADJUSTMENT UPON ISSUANCE OF SHARES OF COMMON STOCK. If and
whenever on or after the Subscription Date the Company issues or sells, or in
accordance with this Section 2 is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding shares of Common Stock
deemed to have been issued by the Company in connection with any Excluded
Securities (as defined in the SPA Securities)) for a consideration per share
(the "NEW ISSUANCE PRICE") less than the Exercise Price (the "APPLICABLE PRICE")
in effect immediately prior to such issue or sale or deemed issuance or sale
(the foregoing a "DILUTIVE ISSUANCE"), then immediately after such Dilutive
Issuance, the Exercise Price then in effect shall be reduced to an amount equal
to the New Issuance Price. Upon each such adjustment of the Exercise Price
hereunder, the number of Warrant Shares shall be adjusted to the number of
shares of Common Stock determined by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Exercise Price resulting from such adjustment. For
purposes of determining the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:

                   (i) ISSUANCE OF OPTIONS. If the Company in any manner grants
              any Options and the lowest price per share for which one share of
              shares of Common Stock is issuable upon the exercise of any such
              Option or upon conversion, exercise or exchange of any Convertible
              Securities issuable upon exercise of any such Option is less than
              the Applicable Price, then such share of Common Stock shall be
              deemed to be outstanding and to have been issued and sold by the
              Company at the time of the granting or sale of such Option for
              such price per share. For purposes of this Section 2(a)(i), the
              "lowest price per share for which one share of shares of Common
              Stock is issuable upon exercise of such Options or upon
              conversion, exercise or exchange of such Convertible Securities"
              shall be equal to the sum of the lowest amounts of consideration
              (if any) received or receivable by the Company with respect to any
              one share of shares of Common Stock upon the granting or sale of
              the Option, upon exercise of the Option and upon conversion,
              exercise or exchange of any Convertible Security issuable upon
              exercise of such Option. No further adjustment of the Exercise
              Price or number of Warrant Shares shall be made upon the actual
              issuance of such shares of Common Stock or of such Convertible
              Securities upon the exercise of such Options or upon the actual
              issuance of such shares of Common Stock upon conversion, exercise
              or exchange of such Convertible Securities.

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                   (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in
              any manner issues or sells any Convertible Securities and the
              lowest price per share for which one share of shares of Common
              Stock is issuable upon the conversion, exercise or exchange
              thereof is less than the Applicable Price, then such share of
              Common Stock shall be deemed to be outstanding and to have been
              issued and sold by the Company at the time of the issuance or sale
              of such Convertible Securities for such price per share. For the
              purposes of this Section 2(a)(ii), the "lowest price per share for
              which one share of shares of Common Stock is issuable upon the
              conversion, exercise or exchange" shall be equal to the sum of the
              lowest amounts of consideration (if any) received or receivable by
              the Company with respect to one share of shares of Common Stock
              upon the issuance or sale of the Convertible Security and upon
              conversion, exercise or exchange of such Convertible Security. No
              further adjustment of the Exercise Price or number of Warrant
              Shares shall be made upon the actual issuance of such shares of
              Common Stock upon conversion, exercise or exchange of such
              Convertible Securities, and if any such issue or sale of such
              Convertible Securities is made upon exercise of any Options for
              which adjustment of this Warrant has been or is to be made
              pursuant to other provisions of this Section 2(a), no further
              adjustment of the Exercise Price or number of Warrant Shares shall
              be made by reason of such issue or sale.

                   (iii) CHANGE IN OPTION PRICE OR RATE OF CONVERSION. If the
              purchase price provided for in any Options, the additional
              consideration, if any, payable upon the issue, conversion,
              exercise or exchange of any Convertible Securities, or the rate at
              which any Convertible Securities are convertible into or
              exercisable or exchangeable for shares of Common Stock increases
              or decreases at any time, the Exercise Price and the number of
              Warrant Shares in effect at the time of such increase or decrease
              shall be adjusted to the Exercise Price and the number of Warrant
              Shares which would have been in effect at such time had such
              Options or Convertible Securities provided for such increased or
              decreased purchase price, additional consideration or increased or
              decreased conversion rate, as the case may be, at the time
              initially granted, issued or sold. For purposes of this Section
              2(a)(iii), if the terms of any Option or Convertible Security that
              were outstanding as of the date of issuance of this Warrant are
              increased or decreased in the manner described in the immediately
              preceding sentence, then such Option or Convertible Security and
              the shares of Common Stock deemed issuable upon exercise,
              conversion or exchange thereof shall be deemed to have been issued
              as of the date of such increase or decrease. No adjustment
              pursuant to this Section 2(a)(iii) shall be made if such
              adjustment would result in an increase of the Exercise Price then
              in effect or a decrease in the number of Warrant Shares.

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                   (iv) CALCULATION OF CONSIDERATION RECEIVED. In case any
              Option or Convertible Security is issued in connection with the
              issue or sale of other securities of the Company, together
              comprising one integrated transaction, (x) the Options will be
              deemed to have been issued for a value determined by use of the
              Black Scholes Option Pricing Model (the "OPTION VALUE") and (y)
              the other securities issued or sold in such integrated transaction
              shall be deemed to have been issued for the difference of (I) the
              aggregate consideration received by the Company, less (II) the
              Option Value. If any shares of Common Stock, Options or
              Convertible Securities are issued or sold or deemed to have been
              issued or sold for cash, the consideration received therefor will
              be deemed to be the net amount received by the Company therefor.
              If any shares of Common Stock, Options or Convertible Securities
              are issued or sold for a consideration other than cash, the amount
              of such consideration received by the Company will be the fair
              value of such consideration, except where such consideration
              consists of publicly traded securities, in which case the amount
              of consideration received by the Company will be the Closing Sale
              Price of such security on the date of receipt. If any shares of
              Common Stock, Options or Convertible Securities are issued to the
              owners of the non-surviving entity in connection with any merger
              in which the Company is the surviving entity, the amount of
              consideration therefor will be deemed to be the fair value of such
              portion of the net assets and business of the non-surviving entity
              as is attributable to such shares of Common Stock, Options or
              Convertible Securities, as the case may be. The fair value of any
              consideration other than cash or publicly traded securities will
              be determined jointly by the Company and the Required Holders. If
              such parties are unable to reach agreement within ten (10) days
              after the occurrence of an event requiring valuation (the
              "VALUATION EVENT"), the fair value of such consideration will be
              determined within five (5) Business Days after the tenth day
              following the Valuation Event by an independent, reputable
              appraiser jointly selected by the Company and the Required
              Holders. The determination of such appraiser shall be final and
              binding upon all parties absent manifest error and the fees and
              expenses of such appraiser shall be borne by the Company.

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

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              (b) ADJUSTMENT UPON SUBDIVISION OR COMBINATION OF SHARES OF COMMON
STOCK. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision will
be proportionately reduced and the number of Warrant Shares will be
proportionately increased. If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares
will be proportionately decreased. Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

              (c) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

              (d) OTHER EVENTS. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price and the number of Warrant Shares so as to protect the rights of the
Holder; provided that no such adjustment pursuant to this Section 2(d) will
increase the Exercise Price or decrease the number of Warrant Shares as
otherwise determined pursuant to this Section 2.

              (e) ADJUSTMENT UPON EVENT OF DEFAULT. Upon the occurrence of any
Event of Default (as defined in the SPA Securities), the Exercise Price shall be
reset to the lower of (A) the Exercise Price then in effect and (B) the Warrant
Average Market Price of the Common Stock; provided, however, that no such
adjustment pursuant to this Section 2(e) will increase the Exercise Price. Upon
each such adjustment of the Exercise Price pursuant to this Section 2(e), the
number of Warrant Shares shall be adjusted to the number of shares of Common
Stock determined by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares acquirable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment. Any adjustment
under this Section 2(e) shall become effective at the close of business on the
date immediately after such Event of Default.

         3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "DISTRIBUTION"), at any time after the issuance of this
Warrant, then, in each such case:

              (a) any Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the close of business on such record date, to a price determined by
multiplying such Exercise Price by a fraction of which (i) the numerator shall

                                     - 10 -

<PAGE>

be the Closing Bid Price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company's Board of Directors) applicable to one
share of shares of Common Stock, and (ii) the denominator shall be the Closing
Bid Price of the shares of Common Stock on the Trading Day immediately preceding
such record date; and

              (b) the number of Warrant Shares shall be increased to a number of
shares equal to the number of shares of Common Stock obtainable immediately
prior to the close of business on the record date fixed for the determination of
holders of shares of Common Stock entitled to receive the Distribution
multiplied by the reciprocal of the fraction set forth in the immediately
preceding paragraph (a); provided that in the event that the Distribution is of
shares of common stock ("OTHER SHARES OF COMMON STOCK") of a company whose
common shares are traded on a national securities exchange or a national
automated quotation system, then the Holder may elect to receive a warrant to
purchase Other Shares of Common Stock in lieu of an increase in the number of
Warrant Shares, the terms of which shall be identical to those of this Warrant,
except that such warrant shall be exercisable into the number of shares of Other
Shares of Common Stock that would have been payable to the Holder pursuant to
the Distribution had the Holder exercised this Warrant immediately prior to such
record date and with an aggregate exercise price equal to the product of the
amount by which the exercise price of this Warrant was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph
(a) and the number of Warrant Shares calculated in accordance with the first
part of this paragraph (b).

         4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

              (a) PURCHASE RIGHTS. In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) immediately before
the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights.

              (b) FUNDAMENTAL TRANSACTIONS. The Company shall not enter into or
be party to a Fundamental Transaction unless (i) the Successor Entity assumes in
writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section (4)(b)
pursuant to written agreements in form and substance satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental
Transaction, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital

                                     - 11 -

<PAGE>

stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and satisfactory to the
Required Holders and (ii) the Successor Entity (including its Parent Entity) is
a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation
of the Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "CORPORATE EVENT"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the
Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. Provision made pursuant to the preceding sentence shall be in a
form and substance reasonably satisfactory to the Required Holders. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.

              (c) Notwithstanding the foregoing and the provisions of Section
4(b) above, in the event of a Fundamental Transaction, at the request of the
Holder delivered before the 90th day after such Fundamental Transaction, the
Holder shall have the right to require the Company (or the Successor Entity), to
purchase this Warrant from the Holder by paying to the Holder, within seven (7)
Business Days after such request (or, if later, on the effective date of the
Fundamental Transaction), in lieu of the warrant referred to in Section 4(b),
cash in an amount equal to the value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction, which value shall be
determined by use of the Black and Scholes Option Pricing Model reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of this Warrant as of such date of request and (ii)
an expected volatility equal to the greater of 60% and the 100 day volatility
obtained from the HVT function on Bloomberg.

                                     - 12 -

<PAGE>

         5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 5, the Company shall provide the Holder with copies
of the same notices and other information given to the shareholders of the
Company generally, contemporaneously with the giving thereof to the
shareholders.

         6. NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Articles of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above any Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the
SPA Warrants, prior to the Stockholder Approval Deadline, 100% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any limitations
on exercise) and, from and after the Stockholder Approval Deadline, 130% of the
number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise).

         7. REISSUANCE OF WARRANTS.

              (a) TRANSFER OF WARRANT. If this Warrant is to be transferred, the
Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

                                     - 13 -

<PAGE>

              (b) LOST, STOLEN OR MUTILATED WARRANT. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

              (c) EXCHANGEABLE FOR MULTIPLE WARRANTS. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder
at the time of such surrender; provided, however, that no Warrants for
fractional shares of Common Stock shall be given.

              (d) ISSUANCE OF NEW WARRANTS. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i)
shall be of like tenor with this Warrant, (ii) shall represent, as indicated on
the face of such new Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being issued pursuant
to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder
which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then underlying this Warrant), (iii) shall have an issuance
date, as indicated on the face of such new Warrant which is the same as the
Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

         8. NOTICES. Whenever notice is required to be given under this Warrant,
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant,
including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any adjustment of the
Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen days prior to the date
on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to
any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder.

         9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrant or decrease the number of shares or class of stock obtainable upon
exercise of any SPA Warrant without the written consent of the Holder. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.

                                     - 14 -

<PAGE>

         10. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

         11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly
drafted by the Company and all the Buyers and shall not be construed against any
person as the drafter hereof. The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant.

         12. DISPUTE RESOLUTION. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder. If the
Holder and the Company are unable to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the Holder, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to
the Company's independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

         13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to
pursue actual damages for any failure by the Company to comply with the terms of
this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

         14. TRANSFER. This Warrant may be offered for sale, sold, transferred
or assigned without the consent of the Company, except as may otherwise be
required by Section 2(g) of the Securities Purchase Agreement and provided that
the transferee agrees to be bound by Section 15 below.

                                     - 15 -

<PAGE>

         15. FORCED EXERCISE.

              (a) At any time after the Warrant Share Effective Date (the
"ELIGIBILITY DATE"), the Company may, no more than once during any thirty (30)
consecutive calendar day period following the Eligibility Date, deliver a notice
to the Holder (a "FORCED EXERCISE NOTICE" and the date such notice is received
by the Holder, the "FORCED EXERCISE NOTICE DATE"), of its irrevocable election
to require the exercise of all, or any portion, of this Warrant (such required
exercise amount, the "FORCED EXERCISE NUMBER"); provided that the Forced
Exercise Number shall not exceed 15% of the volume in number of shares of Common
Stock traded over the twenty (20) consecutive Trading Day period immediately
preceding the Forced Exercise Notice Date (the "FORCED EXERCISE MEASURING
Period"). The date of such forced exercise shall be the tenth (10th) Trading Day
following the Forced Exercise Notice Date (the "FORCED EXERCISE DATE"). The
Company may only deliver a Forced Exercise Notice, and the forced exercise
thereunder may only occur on the Forced Exercise Date, if each of the following
shall be true: (i) there has been no Equity Conditions Failure (unless the
Holder has waived such Equity Conditions Failure) and (ii) prior to the Forced
Exercise Notice Date the Weighted Average Price on each Trading Day during the
Forced Exercise Measuring Period shall equal or exceed the then current Exercise
Price (subject to adjustment for any stock dividend, stock split, stock
combination or other similar transaction which occur after the Issuance Date).
If any of the foregoing conditions shall cease to be satisfied at any time
during the required period, then the Forced Exercise Notice shall be null and
void, ab initio. Notwithstanding the foregoing, nothing in this subsection shall
prevent the Holder from exercising this Warrant, in whole or part, prior to the
Forced Exercise Date and the number of Warrant Shares with respect to which this
Warrant is exercised by the Holder after the Forced Exercise Notice Date shall
reduce the Forced Exercise Number required to be exercised on the Forced
Exercise Date. The Company covenants and agrees that it will honor all Exercise
Notices tendered from the time of delivery of the Forced Exercise Notice through
the Forced Exercise Date and the Holder covenants and agrees that it will
exercise this Warrant with respect to the applicable Forced Exercise Number on
or prior to the Forced Exercise Date.

              (b) PRO RATA REQUIREMENT. If the Company elects to cause a forced
exercise of all or any portion of this Warrant pursuant to Section 15(a), then
it must simultaneously take the similar action, pro rata, with respect to all
other SPA Warrants and the Forced Exercise Number for each holder of SPA
Warrants must be equal to such holder's Forced Exercise Allocation Percentage
multiplied by the aggregate of all Forced Exercise Numbers which the Company
elects pursuant to Section 15(a) of all SPA Warrants. The "FORCED EXERCISE
ALLOCATION PERCENTAGE" for any holder of SPA Warrants shall mean a fraction, the
numerator of which is the number of Warrant shares initially issued to such
holder on the Issuance Date and the denominator of which is the sum of the
aggregate number of Warrant Shares issuable upon exercise of all the SPA
Warrants. In the event that the initial holder of any such SPA Warrants shall
sell or otherwise transfer any of such holder's SPA Warrants, the transferee
shall be allocated a pro rata portion of such holder's Forced Exercise
Allocation Percentage. The Forced Exercise Notice shall state (I) the aggregate
Forced Exercise Numbers of all SPA Warrants which the Company has elected to
forced to be exercised from all of the holders of SPA Warrants pursuant to
Section 15(a) and (II) each holder's Forced Exercise Number that the Company has
elected to force to be exercised pursuant to Section 15(a).

                                     - 16 -

<PAGE>

         16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

              (a) "BLOOMBERG" means Bloomberg Financial Markets.

              (b) "BUSINESS DAY" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

              (c) "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for any
security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section 12. All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

              (d) "COMMON STOCK" means (i) the Company's shares of Common Stock,
par value $.001 per share, and (ii) any share capital into which such Common
Stock shall have been changed or any share capital resulting from a
reclassification of such Common Stock.

              (e) "CONVERTIBLE SECURITIES" means any stock or securities (other
than Options) directly or indirectly convertible into or exercisable or
exchangeable for shares of Common Stock.

              (f) "ELIGIBLE MARKET" means the Principal Market, the American
Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Global Market, The
NASDAQ Global Select Market or The NASDAQ Capital Market.

                                     - 17 -

<PAGE>

              (g) "EQUITY CONDITIONS" means that each of the following
conditions is satisfied: (i) the Registration Statements filed pursuant to the
Registration Rights Agreement shall be effective and available for the resale of
all remaining Registrable Securities in accordance with the terms of the
Registration Rights Agreement and there shall not have been any Grace Periods
(as defined in the Registration Rights Agreement); (ii) on each day during the
period beginning six (6) months prior to the applicable date of determination
and ending on and including the applicable date of determination (the "EQUITY
CONDITIONS MEASURING PERIOD"), the Common Stock is designated for quotation on
the Principal Market or any other Eligible Market and shall not have been
suspended from trading on such exchange or market (other than suspensions of not
more than two (2) days and occurring prior to the applicable date of
determination due to business announcements by the Company) nor shall delisting
or suspension by such exchange or market been threatened or pending either (A)
in writing by such exchange or market or (B) by falling below the then effective
minimum listing maintenance requirements of such exchange or market; (iii)
during the one (1) year period ending on and including the date immediately
preceding the applicable date of determination, the Company shall have delivered
shares of Common Stock upon conversion of the SPA Securities and upon exercise
of the SPA Warrants to the holders on a timely basis as set forth in Section
1(a) of the SPA Warrants and Section 3(c)(i) of the SPA Securities; (iv) any
applicable shares of Common Stock to be issued in connection with the event
requiring determination may be issued in full without violating Section 1(f)
hereof and the rules or regulations of the Principal Market or any applicable
Eligible Market; (v) the Company shall not have failed to timely make any
payments within ten (10) Business Days of when such payment is due pursuant to
any Transaction Document; (vi) during the Equity Conditions Measuring Period,
there shall not have occurred either (A) the public announcement of a pending,
proposed or intended Fundamental Transaction which has not been abandoned,
terminated or consummated, or (B) an Event of Default or (C) an event that with
the passage of time or giving of notice would constitute an Event of Default;
(vii) the Company shall have no knowledge of any fact that would cause the
Registration Statements required pursuant to the Registration Rights Agreement
not to be effective and available for the resale of all remaining Registrable
Securities in accordance with the terms of the Registration Rights Agreement and
(viii) the Company otherwise shall have been in compliance with any provision,
covenant, representation or warranty of any Transaction Document.

              (h) "EQUITY CONDITIONS FAILURE" means that during the period
commencing on the first (1st) Trading Day of the Forced Exercise Measuring
Period through the Forced Exercise Date, the Equity Conditions have not been
satisfied (or waived in writing by the Holder).

              (i) "EXPIRATION DATE" means the date eighty-four (84) months after
the Issuance Date, or if such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a "HOLIDAY"), the
next date that is not a Holiday.

              (j) "FUNDAMENTAL TRANSACTION" means that the Company shall
directly or indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation)
another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another
Person, or (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of either the

                                     - 18 -

<PAGE>

outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer),
or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock purchase agreement or other business combination), or (v) reorganize,
recapitalize or reclassify its Common Stock, or (vi) any "person" or "group" (as
these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act), become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.

              (k) "INITIAL EXERCISE ELIGIBILITY DATE" means the date hereof.

              (l) "OPTIONS" means any rights, warrants or options to subscribe
for or purchase shares of Common Stock or Convertible Securities.

              (m) "PARENT ENTITY" of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more
than one such Person or Parent Entity, the Person or Parent Entity with the
largest public market capitalization as of the date of consummation of the
Fundamental Transaction.

              (n) "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency
thereof.

              (o) "PRINCIPAL MARKET" means the OTC Bulletin Board.

              (p) "REGISTRATION RIGHTS AGREEMENT" means that certain
Registration Rights Agreement dated as of the Issuance Date by and among the
Company and the Buyers.

              (q) "REQUIRED HOLDERS" means the holders of the SPA Warrants
representing at least a majority of shares of Common Stock underlying the SPA
Warrants then outstanding.

              (r) "SPA SECURITIES" means the Notes issued pursuant to the
Securities Purchase Agreement.

              (s) "SUCCESSOR ENTITY" means the Person (or, if so elected by the
Required Holders, the Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or the Person (or, if so elected by the Required
Holders, the Parent Entity) with which such Fundamental Transaction shall have
been entered into.

                                     - 19 -

<PAGE>

              (t) "TRADING DAY" means any day on which the Common Stock is
traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Stock, then on the principal securities exchange
or securities market on which the Common Stock is then traded; provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York Time).

              (u) "WARRANT AVERAGE MARKET PRICE" means, for any given date, the
lesser of (i) the arithmetic average of the Weighted Average Price of the Common
Stock during the fifteen (15) consecutive Trading Days immediately (x) in the
case of Section 2(e), after the date of the public disclosure of such Event of
Default or (y) in the case of Section 1(b), preceding the Warrant Share
Effective Date (each, a "MEASURING PERIOD") (the last day of such Measuring
Period, the "MEASURING PERIOD TERMINATION DATE"), (ii) the arithmetic average of
the lowest Weighted Average Price of the Common Stock during the thirty (30)
consecutive Trading Day period ending on the applicable Measuring Period
Termination Date, (iii) the arithmetic average of the Weighted Average Price of
the Common Stock during the first three (3) consecutive Trading Day period of
such Measuring Period and (iv) the arithmetic average of the Weighted Average
Price of the Common Stock during the last three (3) consecutive Trading Day
period of such Measuring Period; provided, that all such determinations shall be
appropriately adjusted for any stock split, stock dividend, stock combination or
other similar transaction that proportionately decreases or increases the Common
Stock during such periods.

              (v) "WEIGHTED AVERAGE PRICE" means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York Time (or
such other time as the Principal Market publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York Time (or such other time as
the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its "Volume at Price" functions, or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 12. All such
determinations are to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

                            [SIGNATURE PAGE FOLLOWS]

                                     - 20 -

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
Common Stock to be duly executed as of the Issuance Date set out above.

                                 RAPTOR NETWORKS TECHNOLOGY, INC.

                                 By:
                                    --------------------------------------------
                                     Name:
                                     Title:

                                     - 21 -

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE

            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                        RAPTOR NETWORKS TECHNOLOGY, INC.

         The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Raptor
Networks Technology, Inc., a Colorado corporation (the "COMPANY"), evidenced by
the attached Warrant to Purchase Common Stock (the "WARRANT"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

         1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:

                  ____________   a "CASH EXERCISE" with respect to _____________
                              Warrant Shares; and/or

                  ____________   a "CASHLESS EXERCISE" with respect to _________
                              Warrant Shares.

         2. Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

         3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

-------------------------------------                  -------------------------
   Name of Registered Holder                           Social Security or Tax ID
                                                       Number of Holder

By:
   -----------------------------------
     Name:
     Title:

                                     - 22 -

<PAGE>

                                 ACKNOWLEDGMENT

         The Company hereby acknowledges this Exercise Notice and hereby directs
First American Stock Transfer to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated July __,
2008 from the Company and acknowledged and agreed to by First American Stock
Transfer.

                                       RAPTOR NETWORKS TECHNOLOGY, INC.

                                       By:
                                          --------------------------------------
                                            Name:
                                            Title:

                                     - 23 -<PAGE>

Exhibit 10.6

                                [FORM OF WARRANT]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISEABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

                        RAPTOR NETWORKS TECHNOLOGY, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:
             --------------
Number of Shares of Common Stock:
                                  --------------
Date of Issuance: July 28, 2008 ("ISSUANCE DATE")

         Raptor Networks Technology, Inc., a Colorado corporation, (the
"COMPANY"), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [CASTLERIGG MASTER
INVESTMENTS LTD.], [CEDAR HILL CAPITAL PARTNERS ONSHORE, LP] [CEDAR HILL CAPITAL
PARTNERS OFFSHORE, LTD.] the registered holder hereof or its permitted assigns
(the "HOLDER"), is entitled, subject to the terms set forth below, to purchase
from the Company, at the applicable Exercise Price (as defined below) then in
effect, upon surrender of this Warrant to Purchase Common Stock (including any
Warrants to purchase Common Stock issued in exchange, transfer or replacement
hereof, the "WARRANT"), at any time or times on or after the Initial Exercise
Eligibility Date, but not after 11:59 p.m., New York Time, on the Expiration
Date (as defined below), [FOUR MILLION TWO HUNDRED FIFTY THOUSAND (4,250,000)]
[NINE HUNDRED THOUSAND (900,000)] [ONE MILLION ONE HUNDRED THOUSAND (1,100,000)]
fully paid nonassessable shares of Common Stock (as defined below) (the "WARRANT
Shares"). Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 15. This Warrant is one of the
Warrants to purchase Common Stock (the "SPA WARRANTS") issued pursuant to
Section 1 of that certain Securities Purchase Agreement, dated as of July 28,
2008 (the "SUBSCRIPTION DATE"), by and among the Company and the investors (the
"BUYERS") referred to therein (the "SECURITIES PURCHASE Agreement").

<PAGE>

         1. EXERCISE OF WARRANT.

              (a) MECHANICS OF EXERCISE. Subject to the terms and conditions
hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the
Initial Exercise Eligibility Date, in whole or in part, by (i) delivery of a
written notice, in the form attached hereto as EXHIBIT A (the "EXERCISE
NOTICE"), of the Holder's election to exercise this Warrant and (ii) (A) payment
to the Company of an amount equal to the applicable Exercise Price multiplied by
the number of Warrant Shares as to which this Warrant is being exercised (the
"AGGREGATE EXERCISE PRICE") in cash or wire transfer of immediately available
funds or (B) by notifying the Company that this Warrant is being exercised
pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall
not be required to deliver the original Warrant in order to effect an exercise
hereunder. Execution and delivery of the Exercise Notice with respect to less
than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares. On or before the first Business Day
following the date on which the Company has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the
"EXERCISE DELIVERY DOCUMENTS"), the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Company's transfer agent (the "TRANSFER AGENT"). On or before
the third Business Day following the date on which the Company has received all
of the Exercise Delivery Documents (the "SHARE DELIVERY DATE"), the Company
shall (X) provided that the Transfer Agent is participating in The Depository
Trust Company ("DTC") Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder's or its
designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, deliver to be received no later than
the Share Delivery Date, to the address as specified in the Exercise Notice, a
certificate, registered in the Company's share register in the name of the
Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise. Upon delivery of the Exercise
Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or
notification to the Company of a Cashless Exercise referred to in Section 1(d),
the Holder shall be deemed for all corporate purposes to have become the holder
of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date of delivery of the certificates evidencing
such Warrant Shares. If this Warrant is submitted in connection with any
exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon
as practicable and in no event later than five (5) Business Days after any
exercise and at its own expense, issue a new Warrant (in accordance with Section
7(d)) representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is exercised. No
fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number. The Company shall pay any and all taxes
which may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant. Notwithstanding any provision of this Warrant to
the contrary, no more than the Maximum Eligibility Number of Warrant Shares
shall be exercisable hereunder, except as a result of anti-dilution adjustments
as provided herein.

                                     - 2 -

<PAGE>

              (b) EXERCISE PRICE. For purposes of this Warrant, "EXERCISE PRICE"
means with respect to the number of Warrant Shares that become exercisable on a
Maximum Eligibility Number Increase Date, as set forth in column (2) of Schedule
I hereto, the Exercise Price listed in column (3) to Schedule I opposite such
number of Warrant Shares which amount shall equal the lowest of (i) $0.50, (ii)
75% of the Warrant Average Market Price on the date a registration statement
covering the shares of Common Stock underlying the Series Q Warrants initially
issued to the Holder on March 31, 2008, as amended from time to time, (the
"SERIES Q WARRANTS") is declared effective by the Securities and Exchange
Commission (the "WARRANT SHARE EFFECTIVE DATE") and (iii) 75% of the Warrant
Average Market Price on the applicable Maximum Eligibility Number Increase Date
with respect to such Warrant Shares, subject to adjustment as provided herein.
For the avoidance of doubt, if at the time of exercise of this Warrant the
Warrant Share Effective Date has not occurred, the Exercise Price shall be the
lower of clause (i) and clause (iii) in the immediately preceding sentence,
subject to adjustment as provided herein. On Each Maximum Eligibility Number
Increase Date, the Company shall calculate the Exercise Price with respect to
the applicable Warrant Shares and send a notice to the Holder (as provided in
Section 8 below) setting forth such determination.

              (c) COMPANY'S FAILURE TO TIMELY DELIVER SECURITIES. If the Company
shall fail for any reason or for no reason to issue to the Holder within five
(5) Trading Days of receipt of the Exercise Delivery Documents, a certificate
for the number of shares of Common Stock to which the Holder is entitled and
register such shares of Common Stock on the Company's share register or to
credit the Holder's balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder's exercise of this
Warrant, then, in addition to all other remedies available to the Holder, the
Company shall pay in cash to the Holder on each day after such third Business
Day that the issuance of such shares of Common Stock is not timely effected an
amount equal to 1.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis and to which the Holder
is entitled and (B) the Closing Sale Price of the shares of Common Stock on the
Trading Day immediately preceding the last possible date which the Company could
have issued such shares of Common Stock to the Holder without violating Section
1(a). In addition, if within three (3) Trading Days after the Company's receipt
of the facsimile copy of a Exercise Notice the Company shall fail to issue and
deliver a certificate to the Holder and register such shares of Common Stock on
the Company's share register or credit the Holder's balance account with DTC for
the number of shares of Common Stock to which the Holder is entitled upon such
holder's exercise hereunder, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a "BUY-IN"), then the Company shall, within five (5) Business Days
after the Holder's request and in the Holder's discretion, either (i) pay cash
to the Holder in an amount equal to the Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the

                                     - 3 -

<PAGE>

"BUY-IN PRICE"), at which point the Company's obligation to deliver such
certificate (and to issue such shares of Common Stock) or credit such Holder's
balance account with DTC shall terminate, or (ii) promptly honor its obligation
to deliver to the Holder a certificate or certificates representing such shares
of Common Stock or credit such Holder's balance account with DTC and pay cash to
the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock, times (B) the Closing
Bid Price on the date of exercise.

              (d) CASHLESS EXERCISE. Notwithstanding anything contained herein
to the contrary, if a Registration Statement (as defined in the Registration
Rights Agreement) covering the Warrant Shares that are the subject of the
Exercise Notice (the "UNAVAILABLE WARRANT SHARES") is not available for the
resale of such Unavailable Warrant Shares, after the date the Warrant Shares are
permitted to be sold pursuant to Rule 144 under the Securities Act of 1933, as
amended, the Holder may, in its sole discretion, exercise this Warrant in whole
or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the "Net Number" of shares of
Common Stock determined according to the following formula (a "CASHLESS
EXERCISE"):

                           Net Number = (A X B) - (A X C)
                                        -----------------

                                               B

                           For purposes of the foregoing formula:

         A= the total number of shares with respect to which this Warrant is
then being exercised.

         B= the Closing Sale Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise Notice.

         C= the Exercise Price then in effect for the applicable Warrant Shares
at the time of such exercise.

              (e) DISPUTES. In the case of a dispute as to the determination of
any Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 12.

              (f) Limitations on Exercises.

                   (i) BENEFICIAL OWNERSHIP. The Company shall not effect the
              exercise of this Warrant, and the Holder shall not have the right
              to exercise this Warrant, to the extent that after giving effect
              to such exercise, such Person (together with such Person's
              affiliates) would beneficially own in excess of 4.99% (the
              "MAXIMUM PERCENTAGE") of the shares of Common Stock outstanding
              immediately after giving effect to such exercise. For purposes of
              the foregoing sentence, the aggregate number of shares of Common
              Stock beneficially owned by such Person and its affiliates shall
              include the number of shares of Common Stock issuable upon

                                     - 4 -

<PAGE>

              exercise of this Warrant with respect to which the determination
              of such sentence is being made, but shall exclude shares of Common
              Stock which would be issuable upon (A) exercise of the remaining,
              unexercised portion of this Warrant beneficially owned by such
              Person and its affiliates and (B) exercise or conversion of the
              unexercised or unconverted portion of any other securities of the
              Company beneficially owned by such Person and its affiliates
              (including, without limitation, any convertible notes or
              convertible preferred stock or warrants) subject to a limitation
              on conversion or exercise analogous to the limitation contained
              herein. Except as set forth in the preceding sentence, for
              purposes of this paragraph, beneficial ownership shall be
              calculated in accordance with Section 13(d) of the Securities
              Exchange Act of 1934, as amended (the "EXCHANGE ACT"). For
              purposes of this Warrant, in determining the number of outstanding
              shares of Common Stock, the Holder may rely on the number of
              outstanding shares of Common Stock as reflected in (1) the
              Company's most recent Form 10-K, 10-KSB, Form 10-Q, 10-QSB,
              Current Report on Form 8-K or other public filing with the
              Securities and Exchange Commission, as the case may be, (2) a more
              recent public announcement by the Company or (3) any other notice
              by the Company or the Transfer Agent setting forth the number of
              shares of Common Stock outstanding. For any reason at any time,
              upon the written or oral request of the Holder, the Company shall
              within two (2) Business Day confirm orally and in writing to the
              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 the SPA Securities and the
              SPA Warrants, by the Holder and its affiliates since the date as
              of which such number of outstanding shares of Common Stock was
              reported. By written notice to the Company, the Holder may
              increase or decrease the Maximum Percentage to any other
              percentage not in excess of 9.99% specified in such notice;
              provided that (i) any such increase will not be effective until
              the sixty-first (61st) day after such notice is delivered to the
              Company, and (ii) any such increase or decrease will apply only to
              the Holder and not to any other holder of SPA Warrants.

                   (ii) PRINCIPAL MARKET REGULATION. The Company shall not be
              obligated to issue any shares of Common Stock upon exercise of
              this Warrant or conversion of SPA Securities and no Buyer shall be
              entitled to receive any shares of Common Stock if the issuance of
              such shares of Common Stock would exceed that number of shares of
              Common Stock which the Company may issue upon exercise or
              conversion, as applicable, of the SPA Warrants and SPA Securities
              or otherwise without breaching the Company's obligations under the
              rules or regulations of any applicable Eligible Market (the
              "EXCHANGE CAP"), except that such limitation shall not apply in
              the event that the Company (A) obtains the approval of its
              shareholders as required by the applicable rules of the Eligible
              Market for issuances of shares of Common Stock in excess of such
              amount or (B) obtains a written opinion from outside counsel to
              the Company that such approval

                                     - 5 -

<PAGE>

is not required, which opinion shall be reasonably satisfactory to the Required
Holders. Until such approval or written opinion is obtained, no Buyer shall be
issued in the aggregate, upon exercise or conversion, as applicable, of any SPA
Warrants or SPA Securities, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is
the total number of shares of Common Stock underlying the SPA Warrants issued to
such Buyer pursuant to the Securities Purchase Agreement on the Issuance Date
and the denominator of which is the aggregate number of shares of Common Stock
underlying the SPA Warrants issued to all of the Buyers pursuant to the
Securities Purchase Agreement on the Issuance Date (with respect to each Buyer,
the "EXCHANGE CAP ALLOCATION"). In the event that any Buyer shall sell or
otherwise transfer any of such Buyer's SPA Warrants, the transferee shall be
allocated a pro rata portion of such Buyer's Exchange Cap Allocation, and the
restrictions of the prior sentence shall apply to such transferee with respect
to the portion of the Exchange Cap Allocation allocated to such transferee. In
the event that any holder of SPA Warrants shall exercise all of such holder's
SPA Warrants into a number of shares of Common Stock which, in the aggregate, is
less than such holder's Exchange Cap Allocation, then the difference between
such holder's Exchange Cap Allocation and the number of shares of Common Stock
actually issued to such holder shall be allocated to the respective Exchange Cap
Allocations of the remaining holders of SPA Warrants on a pro rata basis in
proportion to the shares of Common Stock underlying the SPA Warrants then held
by each such holder. In the event that the Company is prohibited from issuing
any Warrant Shares for which an Exercise Notice has been received as a result of
the operation of this Section 1(f)(ii), the Company shall pay cash in exchange
for cancellation of such Warrant Shares, at a price per Warrant Share equal to
the difference between the Closing Sale Price and the Exercise Price applicable
to such Warrant Shares as of the date of the attempted exercise.

              (g) INSUFFICIENT AUTHORIZED SHARES. If at any time while any of
the Warrants remain outstanding the Company does not have a sufficient number of
authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of the Warrants at least a number of shares
of Common Stock equal to (i) prior to the Stockholder Approval Deadline (as
defined in the Securities Purchase Agreement), 100% of the number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of
the SPA Warrants then outstanding (without regard to any limitations on
exercise) and (ii) from and after the Stockholder Approval Deadline, 130% of the
number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise) (the "Required Reserve Amount") (an "Authorized Share
Failure"), then the Company shall immediately take all action necessary to
increase the Company's authorized shares of Common Stock to an amount sufficient

                                     - 6 -

<PAGE>

to allow the Company to reserve the Required Reserve Amount for the Warrants
then outstanding. Without limiting the generality of the foregoing sentence, as
soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than seventy-five (75) days after the occurrence
of such Authorized Share Failure, the Company shall hold a meeting of its
stockholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they
approve such proposal.

         2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The
Exercise Price and the number of Warrant Shares shall be adjusted from time to
time as follows:

              (a) ADJUSTMENT UPON ISSUANCE OF SHARES OF COMMON STOCK. If and
whenever on or after the Subscription Date the Company issues or sells, or in
accordance with this Section 2 is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding shares of Common Stock
deemed to have been issued by the Company in connection with any Excluded
Securities (as defined in the SPA Securities)) for a consideration per share
(the "NEW ISSUANCE PRICE") less than any applicable Exercise Price (the
"APPLICABLE PRICE") in effect immediately prior to such issue or sale or deemed
issuance or sale (the foregoing a "DILUTIVE ISSUANCE"), then immediately after
such Dilutive Issuance, all applicable Exercise Prices then in effect shall be
reduced to an amount equal to the New Issuance Price. Upon each such adjustment
of any Exercise Price hereunder, the number of Warrant Shares related to such
Exercise Price shall be adjusted to the number of shares of Common Stock
determined by multiplying the applicable Exercise Price in effect immediately
prior to such adjustment by the applicable number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Exercise Price resulting from such adjustment. For
purposes of determining the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:

                   (i) ISSUANCE OF OPTIONS. If the Company in any manner grants
              any Options and the lowest price per share for which one share of
              shares of Common Stock is issuable upon the exercise of any such
              Option or upon conversion, exercise or exchange of any Convertible
              Securities issuable upon exercise of any such Option is less than
              the Applicable Price, then such share of Common Stock shall be
              deemed to be outstanding and to have been issued and sold by the
              Company at the time of the granting or sale of such Option for
              such price per share. For purposes of this Section 2(a)(i), the
              "lowest price per share for which one share of shares of Common
              Stock is issuable upon exercise of such Options or upon
              conversion, exercise or exchange of such Convertible Securities"
              shall be equal to the sum of the lowest amounts of consideration
              (if any) received or receivable by the Company with respect to any
              one share of shares of Common Stock upon the granting or sale of
              the Option, upon exercise of the Option and upon conversion,
              exercise or exchange of any Convertible Security issuable upon

                                     - 7 -

<PAGE>
              exercise of such Option. No further adjustment of the Exercise
              Price or number of Warrant Shares shall be made upon the actual
              issuance of such shares of Common Stock or of such Convertible
              Securities upon the exercise of such Options or upon the actual
              issuance of such shares of Common Stock upon conversion, exercise
              or exchange of such Convertible Securities.

                   (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in
              any manner issues or sells any Convertible Securities and the
              lowest price per share for which one share of shares of Common
              Stock is issuable upon the conversion, exercise or exchange
              thereof is less than the Applicable Price, then such share of
              Common Stock shall be deemed to be outstanding and to have been
              issued and sold by the Company at the time of the issuance or sale
              of such Convertible Securities for such price per share. For the
              purposes of this Section 2(a)(ii), the "lowest price per share for
              which one share of shares of Common Stock is issuable upon the
              conversion, exercise or exchange" shall be equal to the sum of the
              lowest amounts of consideration (if any) received or receivable by
              the Company with respect to one share of shares of Common Stock
              upon the issuance or sale of the Convertible Security and upon
              conversion, exercise or exchange of such Convertible Security. No
              further adjustment of the Exercise Price or number of Warrant
              Shares shall be made upon the actual issuance of such shares of
              Common Stock upon conversion, exercise or exchange of such
              Convertible Securities, and if any such issue or sale of such
              Convertible Securities is made upon exercise of any Options for
              which adjustment of this Warrant has been or is to be made
              pursuant to other provisions of this Section 2(a), no further
              adjustment of the Exercise Price or number of Warrant Shares shall
              be made by reason of such issue or sale.

                   (iii) CHANGE IN OPTION PRICE OR RATE OF CONVERSION. If the
              purchase price provided for in any Options, the additional
              consideration, if any, payable upon the issue, conversion,
              exercise or exchange of any Convertible Securities, or the rate at
              which any Convertible Securities are convertible into or
              exercisable or exchangeable for shares of Common Stock increases
              or decreases at any time, the applicable Exercise Price and the
              applicable number of Warrant Shares in effect at the time of such
              increase or decrease shall be adjusted to the Exercise Price and
              the number of Warrant Shares which would have been in effect at
              such time had such Options or Convertible Securities provided for
              such increased or decreased purchase price, additional
              consideration or increased or decreased conversion rate, as the
              case may be, at the time initially granted, issued or sold. For
              purposes of this Section 2(a)(iii), if the terms of any Option or
              Convertible Security that were outstanding as of the date of
              issuance of this Warrant are increased or decreased in the manner
              described in the immediately preceding sentence, then such Option
              or Convertible Security and the shares of Common Stock deemed
              issuable upon exercise, conversion or exchange thereof shall be
              deemed to have been issued as of the date of such increase or
              decrease. No adjustment pursuant to this Section 2(a)(iii) shall
              be made if such adjustment would result in an increase of any
              Exercise Price then in effect or a decrease in the number of
              Warrant Shares.

                                     - 8 -

<PAGE>

                   (iv) CALCULATION OF CONSIDERATION RECEIVED. In case any
              Option or Convertible Security is issued in connection with the
              issue or sale of other securities of the Company, together
              comprising one integrated transaction, (x) the Options will be
              deemed to have been issued for a value determined by use of the
              Black Scholes Option Pricing Model (the "OPTION VALUE") and (y)
              the other securities issued or sold in such integrated transaction
              shall be deemed to have been issued for the difference of (I) the
              aggregate consideration received by the Company, less (II) the
              Option Value. If any shares of Common Stock, Options or
              Convertible Securities are issued or sold or deemed to have been
              issued or sold for cash, the consideration received therefor will
              be deemed to be the net amount received by the Company therefor.
              If any shares of Common Stock, Options or Convertible Securities
              are issued or sold for a consideration other than cash, the amount
              of such consideration received by the Company will be the fair
              value of such consideration, except where such consideration
              consists of publicly traded securities, in which case the amount
              of consideration received by the Company will be the Closing Sale
              Price of such security on the date of receipt. If any shares of
              Common Stock, Options or Convertible Securities are issued to the
              owners of the non-surviving entity in connection with any merger
              in which the Company is the surviving entity, the amount of
              consideration therefor will be deemed to be the fair value of such
              portion of the net assets and business of the non-surviving entity
              as is attributable to such shares of Common Stock, Options or
              Convertible Securities, as the case may be. The fair value of any
              consideration other than cash or publicly traded securities will
              be determined jointly by the Company and the Required Holders. If
              such parties are unable to reach agreement within ten (10) days
              after the occurrence of an event requiring valuation (the
              "VALUATION EVENT"), the fair value of such consideration will be
              determined within five (5) Business Days after the tenth day
              following the Valuation Event by an independent, reputable
              appraiser jointly selected by the Company and the Required
              Holders. The determination of such appraiser shall be final and
              binding upon all parties absent manifest error and the fees and
              expenses of such appraiser shall be borne by the Company.

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

                                     - 9 -

<PAGE>

              (b) ADJUSTMENT UPON SUBDIVISION OR COMBINATION OF SHARES OF COMMON
STOCK. If the Company at any time on or after the Subscription Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price(s) in effect immediately prior to such subdivision
will be proportionately reduced and the number of Warrant Shares will be
proportionately increased. If the Company at any time on or after the
Subscription Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price(s) in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares
will be proportionately decreased. Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

              (c) VOLUNTARY ADJUSTMENT BY COMPANY. The Company may at any time
during the term of this Warrant reduce any then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

              (d) OTHER EVENTS. If any event occurs of the type contemplated by
the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in all
applicable Exercise Prices and the related number of Warrant Shares so as to
protect the rights of the Holder; provided that no such adjustment pursuant to
this Section 2(d) will increase any Exercise Price or decrease the number of
Warrant Shares as otherwise determined pursuant to this Section 2.

              (e) ADJUSTMENT UPON EVENT OF DEFAULT. Upon the occurrence of any
Event of Default (as defined in the SPA Securities), each Exercise Price shall
be reset to the lower of (A) such Exercise Price then in effect and (B) the
Warrant Average Market Price of the Common Stock; provided, however, that no
such adjustment pursuant to this Section 2(e) will increase any Exercise Price.
Upon each such adjustment of an Exercise Price pursuant to this Section 2(e),
the related number of Warrant Shares shall be adjusted to the number of shares
of Common Stock determined by multiplying the applicable Exercise Price in
effect immediately prior to such adjustment by the related number of Warrant
Shares acquirable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment. Any adjustment under this Section 2(e) shall become effective
at the close of business on the date immediately after such Event of Default.

         3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "DISTRIBUTION"), at any time after the issuance of this
Warrant, then, in each such case:

                                     - 10 -

<PAGE>

              (a) any Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the close of business on such record date, to a price determined by
multiplying such Exercise Price by a fraction of which (i) the numerator shall
be the Closing Bid Price of the shares of Common Stock on the Trading Day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company's Board of Directors) applicable to one
share of shares of Common Stock, and (ii) the denominator shall be the Closing
Bid Price of the shares of Common Stock on the Trading Day immediately preceding
such record date; and

              (b) the related number of Warrant Shares shall be increased to a
number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the
determination of holders of shares of Common Stock entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding paragraph (a); provided that in the event that the
Distribution is of shares of common stock ("OTHER SHARES OF COMMON STOCK") of a
company whose common shares are traded on a national securities exchange or a
national automated quotation system, then the Holder may elect to receive a
warrant to purchase Other Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the number of shares
of Other Shares of Common Stock that would have been payable to the Holder
pursuant to the Distribution had the Holder exercised this Warrant immediately
prior to such record date and with an aggregate exercise price equal to the
product of the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the immediately
preceding paragraph (a) and the number of Warrant Shares calculated in
accordance with the first part of this paragraph (b).

         4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

              (a) PURCHASE RIGHTS. In addition to any adjustments pursuant to
Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) immediately before
the date on which a record is taken for the grant, issuance or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights.

                                     - 11 -

<PAGE>

              (b) FUNDAMENTAL TRANSACTIONS. The Company shall not enter into or
be party to a Fundamental Transaction unless (i) the Successor Entity assumes in
writing all of the obligations of the Company under this Warrant and the other
Transaction Documents in accordance with the provisions of this Section (4)(b)
pursuant to written agreements in form and substance satisfactory to the
Required Holders and approved by the Required Holders prior to such Fundamental
Transaction, including agreements to deliver to each holder of Warrants in
exchange for such Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital
stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and satisfactory to the
Required Holders and (ii) the Successor Entity (including its Parent Entity) is
a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the "Company" shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon consummation
of the Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Warrant been converted immediately
prior to such Fundamental Transaction, as adjusted in accordance with the
provisions of this Warrant. In addition to and not in substitution for any other
rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a "CORPORATE EVENT"), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the
Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. Provision made pursuant to the preceding sentence shall be in a
form and substance reasonably satisfactory to the Required Holders. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.

                                     - 12 -

<PAGE>

              (c) Notwithstanding the foregoing and the provisions of Section
4(b) above, in the event of a Fundamental Transaction, at the request of the
Holder delivered before the 90th day after such Fundamental Transaction, the
Holder shall have the right to require the Company (or the Successor Entity), to
purchase this Warrant from the Holder by paying to the Holder, within seven (7)
Business Days after such request (or, if later, on the effective date of the
Fundamental Transaction), in lieu of the warrant referred to in Section 4(b),
cash in an amount equal to the value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction, which value shall be
determined by use of the Black and Scholes Option Pricing Model reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of this Warrant as of such date of request and (ii)
an expected volatility equal to the greater of 60% and the 100 day volatility
obtained from the HVT function on Bloomberg.

         5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 5, the Company shall provide the Holder with copies
of the same notices and other information given to the shareholders of the
Company generally, contemporaneously with the giving thereof to the
shareholders.

                                     - 13 -

<PAGE>

         6. NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Articles of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above any Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued
shares of Common Stock, solely for the purpose of effecting the exercise of the
SPA Warrants, prior to the Stockholder Approval Deadline, 100% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any limitations
on exercise) and, from and after the Stockholder Approval Deadline, 130% of the
number of shares of Common Stock as shall from time to time be necessary to
effect the exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise).

         7. REISSUANCE OF WARRANTS.

              (a) TRANSFER OF WARRANT. If this Warrant is to be transferred, the
Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in
accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less than the total number of Warrant Shares
then underlying this Warrant is being transferred, a new Warrant (in accordance
with Section 7(d)) to the Holder representing the right to purchase the number
of Warrant Shares not being transferred.

              (b) LOST, STOLEN OR MUTILATED WARRANT. Upon receipt by the Company
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

              (c) EXCHANGEABLE FOR MULTIPLE WARRANTS. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase such portion of such Warrant Shares as is designated by the Holder
at the time of such surrender; provided, however, that no Warrants for
fractional shares of Common Stock shall be given.

                                     - 14 -

<PAGE>

              (d) ISSUANCE OF NEW WARRANTS. Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i)
shall be of like tenor with this Warrant, (ii) shall represent, as indicated on
the face of such new Warrant, the right to purchase the Warrant Shares then
underlying this Warrant (or in the case of a new Warrant being issued pursuant
to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder
which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then underlying this Warrant), (iii) shall have an issuance
date, as indicated on the face of such new Warrant which is the same as the
Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

                                     - 15 -

<PAGE>

         8. NOTICES. Whenever notice is required to be given under this Warrant,
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant,
including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any determination or
adjustment of any Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment or determination, as applicable,
and (ii) at least fifteen days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or distribution upon
the shares of Common Stock, (B) with respect to any grants, issuances or sales
of any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property to holders of shares of Common Stock or (C) for
determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to the Holder.

         9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of this Warrant may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrant or decrease the number of shares or class of stock obtainable upon
exercise of any SPA Warrant without the written consent of the Holder. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.

         10. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.

         11. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly
drafted by the Company and all the Buyers and shall not be construed against any
person as the drafter hereof. The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Warrant.

         12. DISPUTE RESOLUTION. In the case of a dispute as to the
determination of an Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder. If the
Holder and the Company are unable to agree upon such determination or
calculation of an Exercise Price or the Warrant Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the Holder, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination of an Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant. The Company shall cause at its expense the
investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

                                     - 16 -

<PAGE>

         13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to
pursue actual damages for any failure by the Company to comply with the terms of
this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

         14. TRANSFER. This Warrant may be offered for sale, sold, transferred
or assigned without the consent of the Company, except as may otherwise be
required by Section 2(g) of the Securities Purchase Agreement.

         15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

              (a) "BLOOMBERG" means Bloomberg Financial Markets.

              (b) "BUSINESS DAY" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

              (c) "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for any
security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a

                                     - 17 -

<PAGE>

particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section 12. All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

              (d) "COMMON STOCK" means (i) the Company's shares of Common Stock,
par value $.001 per share, and (ii) any share capital into which such Common
Stock shall have been changed or any share capital resulting from a
reclassification of such Common Stock.

              (e) "CONVERTIBLE SECURITIES" means any stock or securities (other
than Options) directly or indirectly convertible into or exercisable or
exchangeable for shares of Common Stock.

              (f) "ELIGIBLE MARKET" means the Principal Market, the American
Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Global Market, The
NASDAQ Global Select Market or The NASDAQ Capital Market.

              (g) "EXPIRATION DATE" means the date eighty-four (84) months after
the Issuance Date, or if such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a "HOLIDAY"), the
next date that is not a Holiday.

              (h) "FUNDAMENTAL TRANSACTION" means that the Company shall
directly or indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation)
another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another
Person, or (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of either the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer),
or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person whereby such other Person acquires
more than the 50% of the outstanding shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated with the other Persons making or party to, such
stock purchase agreement or other business combination), or (v) reorganize,
recapitalize or reclassify its Common Stock, or (vi) any "person" or "group" (as
these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act), become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.

              (i) "INITIAL EXERCISE ELIGIBILITY DATE" means the date hereof.

                                     - 18 -

<PAGE>

              (j) "MAXIMUM ELIGIBILITY NUMBER" means initially, zero, and shall
be increased successively each time that Series Q Warrants are exercised by a
number of shares equal to the number of Warrant Shares (as defined in the Series
Q Warrants) as to which the Series Q Warrants are exercised at such time.

              (k) "MAXIMUM ELIGIBILITY NUMBER INCREASE DATE" means each date on
which the Maximum Eligibility Number increases.

              (l) "OPTIONS" means any rights, warrants or options to subscribe
for or purchase shares of Common Stock or Convertible Securities.

              (m) "PARENT ENTITY" of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more
than one such Person or Parent Entity, the Person or Parent Entity with the
largest public market capitalization as of the date of consummation of the
Fundamental Transaction.

              (n) "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency
thereof.

              (o) "PRINCIPAL MARKET" means the OTC Bulletin Board.

              (p) "REGISTRATION RIGHTS AGREEMENT" means that certain
Registration Rights Agreement dated as of the Issuance Date by and among the
Company and the Buyers.

              (q) "REQUIRED HOLDERS" means the holders of the SPA Warrants
representing at least a majority of shares of Common Stock underlying the SPA
Warrants then outstanding.

              (r) "SPA SECURITIES" means the Notes issued pursuant to the
Securities Purchase Agreement.

              (s) "SUCCESSOR ENTITY" means the Person (or, if so elected by the
Required Holders, the Parent Entity) formed by, resulting from or surviving any
Fundamental Transaction or the Person (or, if so elected by the Required
Holders, the Parent Entity) with which such Fundamental Transaction shall have
been entered into.

              (t) "TRADING DAY" means any day on which the Common Stock is
traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Stock, then on the principal securities exchange
or securities market on which the Common Stock is then traded; provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York Time).

                                     - 19 -

<PAGE>

              (u) "WARRANT AVERAGE MARKET PRICE" means, for any given date, the
lower of (i) the arithmetic average of the Weighted Average Price of the Common
Stock during the thirty (30) consecutive Trading Days immediately (x) in the
case of Section 2(e), after the date of the public disclosure of such Event of
Default or (y) in the case of Section 1(b), preceding the applicable date of
determination (the "MEASURING PERIOD") and (ii) the arithmetic average of the
three (3) lowest Weighted Average Prices of the Common Stock during such
Measuring Period; provided, that all such determinations shall be appropriately
adjusted for any stock split, stock dividend, stock combination or other similar
transaction that proportionately decreases or increases the Common Stock during
such periods.

              (v) "WEIGHTED AVERAGE PRICE" means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York Time (or
such other time as the Principal Market publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York Time (or such other time as
the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its "Volume at Price" functions, or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 12. All such
determinations are to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

                            [SIGNATURE PAGE FOLLOWS]

                                     - 20 -

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase
Common Stock to be duly executed as of the Issuance Date set out above.

                                     RAPTOR NETWORKS TECHNOLOGY, INC.

                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                     - 21 -

<PAGE>

<TABLE>
<S>     <C>
                                   SCHEDULE I

Column (1)                       Column (2)                                   Column (3)

                                 Number of Warrant Shares THat Became         Exercise Price for Warrant Shares
Maximum Eligibility Date         Exercisable On Such Date                     Specified in Column (2)
------------------------         ------------------------                     -----------------------
</TABLE>

                                     - 22 -

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE

            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                        RAPTOR NETWORKS TECHNOLOGY, INC.

         The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Raptor
Networks Technology, Inc., a Colorado corporation (the "COMPANY"), evidenced by
the attached Warrant to Purchase Common Stock (the "WARRANT"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

         1. Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as:

                  ____________  a "CASH EXERCISE" with respect to ______________
                              Warrant Shares; and/or

                  ____________  a "CASHLESS EXERCISE" with respect to __________
                              Warrant Shares.

         2. Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

         3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

-------------------------------                        -------------------------
   Name of Registered Holder                           Social Security or Tax ID
                                                       Number of Holder

By:
         -----------------------------------
         Name:
         Title:

                                     - 23 -

<PAGE>

                                 ACKNOWLEDGMENT

         The Company hereby acknowledges this Exercise Notice and hereby directs
First American Stock Transfer to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated July __,
2008 from the Company and acknowledged and agreed to by First American Stock
Transfer.

                                       RAPTOR NETWORKS TECHNOLOGY, INC.

                                       By:
                                           -------------------------------------
                                              Name:
                                              Title:

                                     - 24 -

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