Document:

SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT, dated as of the date of acceptance set
forth below, is entered into by and between URANIUIM POWER CORPORATION, a
Colorado corporation, with headquarters located at 206-475 Howe Street,
Vancouver, British Columbia, Canada V6C 2B3 (the "Company"), and each individual
or entity (other than the Company) named on a signature page hereto (as used
herein, each such signatory is referred to as the "Lender" or a "Lender") (each
agreement with a Lender being deemed a separate and independent agreement
between the Company and such Lender, except that each Lender acknowledges and
consents to the rights granted to each other Lender [each, an "Other Lender"]
under such agreement and the Transaction Agreements, as defined below, referred
to therein).

                              W I T N E S S E T H:

      WHEREAS, the Company and the Lender are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded, inter alia,
by Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and

      WHEREAS, the Lender wishes to lend funds to the Company, subject to and
upon the terms and conditions of this Agreement and acceptance of this Agreement
by the Company, the repayment of which will be represented by 6% Secured
Convertible Debentures Series 2004B of the Company (the "Convertible
Debentures"), which Convertible Debentures will be convertible into shares of
Common Stock, $.001 par value per share, of the Company (the "Common Stock"),
upon the terms and subject to the conditions of such Convertible Debentures,
together with the Warrants (as defined below) exercisable for the purchase of
shares of Common Stock;

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

      1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

            a. Purchase.

            (i) Subject to the terms and conditions of this Agreement and the
other Transaction Agreements, the undersigned hereby agrees to loan to the
Company the principal amount set forth on the Lender's signature page of this
Agreement (the "Purchase Price"), out of the aggregate amount being loaned by
all Lenders of a minimum of $1,500,000.00 (the Minimum Purchase Price) and a
maximum of $2,000,000 (the "Maximum Purchase Price"). The obligation to repay
the loan from the Lender shall be evidenced by the Company's issuance of one or
more Convertible Debentures to the Lender in such principal amount (the
Convertible Debentures issued to the Lender, the "Debentures"). Each Debenture
(i) shall provide for a conversion price (the "Conversion Price"), which price
may be adjusted from time to as provided in the Debenture or in the other
Transaction Agreements, (ii) shall have the terms and conditions of, and be
substantially in the form attached hereto as, Annex I and (iii) shall have a
Warrant attached, as provided below. The loan to be made by the Lender and the
issuance of the Debentures and Warrants to the Lender are sometimes referred to
herein and in the other Transaction Agreements as the purchase and sale of the
Debentures and Warrants.

<PAGE>

            (ii) The Purchase Price to be paid by the Lender shall be equal to
the face amount of the Debentures being purchased on the Closing Date (as
defined below) and shall be payable in United States Dollars.

            (iii) The actual total Purchase Price of all Lenders, which shall be
the Maximum Purchase Price, is hereinafter referred to as the "Aggregate
Purchase Price."

            b. Certain Definitions. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:

            "Affiliate" means, with respect to a specific Person referred to in
      the relevant provision, another Person who or which controls or is
      controlled by or is under common control with such specified Person.

            "Certificates" means the Debentures and the Warrants, each duly
      executed by the Company and issued on the Closing Date in the name of the
      Lender.

            "Closing Date" means the date of the closing of one or more
      purchases and sales of the Debentures and Warrants, as provided herein.

            "Closing Price" means the closing bid price during regular trading
      hours of the Common Stock (in U.S. Dollars) on the Principal Trading
      Market, as reported by the Reporting Service.

            (v) "Company Control Person" means each director, executive officer,
promoter, and such other Persons as may be deemed in control of the Company
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as
defined below).

            (vi) "Conversion Shares" means the shares of Common Stock issuable
upon conversion of the Debentures (including, if relevant, accrued interest on
the Debentures so converted).

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            (vii) "Effective Date" means the effective date of the Registration
Statement covering the Registrable Securities.

            (viii) "Escrow Agent" means the escrow agent identified in the Joint
Escrow Instructions attached hereto as Annex II (the "Joint Escrow
Instructions").

            (ix) "Escrow Funds" means the Purchase Price delivered to the Escrow
Agent as contemplated by Sections 1(c) and (d) hereof.

            (x) "Escrow Property" means the Escrow Funds and the Certificates
delivered to the Escrow Agent as contemplated by Section 1(c) hereof.

            (xi) "Finder" means Viscount Investments Ltd.

            (xii) [INTENTIONALLY OMITTED]

            (xiii) "Holder" means the Person holding the relevant Securities at
the relevant time.

            (xiv) [INTENTIONALLY OMITTED]

            (xv) "Last Audited Date" means April 30, 2004.

            (xvii) "Lender Control Person" means each director, executive
officer, promoter, and such other Persons as may be deemed in control of the
Lender pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

            (xviii) "Material Adverse Effect" means an event or combination of
events, which individually or in the aggregate, would reasonably be expected to
(w) adversely affect the legality, validity or enforceability of the Securities
or any of the Transaction Agreements, (x) have or result in a material adverse
effect on the results of operations, assets, prospects, or condition (financial
or otherwise) of the Company and the it subsidiaries, taken as a whole, (y)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Agreements or the transactions
contemplated thereby, or (z) materially and adversely affect the value of the
rights granted to the Lender in the Transaction Agreements.

      t 12 (xix) "Person" means any living person or any entity, such as, but
not necessarily limited to, a corporation, partnership or trust.

            (xx) "Principal Trading Market" means The Over the Counter Bulletin
Board.

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<PAGE>

            (xxi) "Registrable Securities" has the meaning set forth in the
Registration Rights Agreement.

            (xxii) "Registration Rights Agreement" means the Registration Rights
Agreement in the form annexed hereto as Annex IV, as executed by the Lender and
the Company simultaneously with the execution of this Agreement.

            (xxiii) "Registration Statement" has the meaning set forth in the
Registration Rights Agreement.

            (xxiv) "Reporting Service" means Bloomberg LP or if that service is
not then reporting the relevant information regarding the Common Stock, a
comparable reporting service of national reputation selected by the Holders of
the Debentures and reasonably acceptable to the Company.

            (xxv) "Securities" means the Debentures, the Warrants, and the
Shares.

            (xxvi) "Shares" means the shares of Common Stock representing any or
all of the Conversion Shares and the Warrant Shares.

            (xxvii) "State of Incorporation" means Colorado.

            (xxviii) "Trading Day" means any day during which the Principal
Trading Market shall be open for business.

            (xxix) "Transaction Agreements" means the Securities Purchase
Agreement, the Debentures, the Joint Escrow Instructions, the Registration
Rights Agreement, and the Warrants and includes all ancillary documents referred
to in those agreements.

            (xxx) "Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.

            c. Form of Payment; Delivery of Certificates.

            (i) The Lender shall pay the Purchase Price by delivering
immediately available good funds in United States Dollars to the Escrow Agent no
later than the date prior to the Closing Date.

            (ii) No later than the Closing Date, but in any event promptly
following payment by the Lender to the Escrow Agent of the Purchase Price, the
Company shall deliver the Certificates, each duly executed on behalf of the
Company and issued in the name of the Lender, to the Escrow Agent.

                                       4
<PAGE>

            (iii) By signing this Agreement, each of the Lender and the Company,
subject to acceptance by the Escrow Agent, agrees to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.

            d. Method of Payment. Payment into escrow of the Purchase Price
shall be made by wire transfer of funds to:

                  Bank of New York
                  350 Fifth Avenue
                  New York, New York 10001

                  ABA# 021000018
                  For credit to the account of Krieger & Prager LLP
                  Account No.: 630-0281050
                  Re:   UPC Transaction [Investor Name]

            2. LENDER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.

            The Lender represents and warrants to, and covenants and agrees
with, the Company as follows:

            a. Without limiting Lender's right to sell the Shares pursuant to
the Registration Statement or otherwise to sell any of the Securities in
compliance with the 1933 Act, the Lender is purchasing the Securities and will
be acquiring the Shares for its own account for investment only and not with a
view towards the public sale or distribution thereof and not with a view to or
for sale in connection with any distribution thereof.

            b. The Lender is (i) an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations under the 1933 Act by
reason of Rule 501(a)(3), (ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its Affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the loss of the entire Purchase
Price.

            c. All subsequent offers and sales of the Securities by the Lender
shall be made pursuant to registration of the Shares under the 1933 Act or
pursuant to an exemption from registration.

            d. The Lender understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Lender's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Lender set forth herein in order to determine the availability of such
exemptions and the eligibility of the Lender to acquire the Securities.

                                       5
<PAGE>

            e. The Lender and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities and the offer of the
Shares which have been requested by the Lender, including those set forth on
Annex V hereto. The Lender and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries. Without limiting the generality of
the foregoing, the Lender has also had the opportunity to obtain and to review
the Company's filings on EDGAR listed on Annex VII hereto (the documents listed
on such Annex VII, to the extent available on EDGAR or otherwise provided to the
Lender as indicated on said Annex VII, collectively, the "Company's SEC
Documents").

            f. The Lender understands that its investment in the Securities
involves a high degree of risk. The Lender also acknowledges that the Company
has sustained significant operating losses in the past and expects to do so for
the foreseeable future, including the term of the Convertible Debenture.

            g. The Lender hereby represents that, in connection with its
purchase of the Securities, it has not relied on any statement or representation
by the Company or the Finder or any of their respective officers, directors and
employees or any of their respective attorneys or agents or the Finder, except
as specifically set forth herein. The Finder is a third party beneficiary of
this provision.

            h. The Lender understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.

            i. This Agreement and the other Transaction Agreements to which the
Lender is a party, and the transactions contemplated thereby, have been duly and
validly authorized, executed and delivered on behalf of the Lender and are valid
and binding agreements of the Lender enforceable in accordance with their
respective terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.

            j. Except for payment of fees to the Finder, payment of which is the
sole responsibility of the Company, the Lender has taken no action which would
give rise to any claim by any Person for brokerage commission, finder's fees or
similar payments by the Company relating to this Agreement or the transactions
contemplated hereby. The Company shall have no obligation with respect to such
fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this paragraph that may be due in connection with
the transactions contemplated hereby. The Lender shall indemnify and hold
harmless each of the Company, its employees, officers, directors, agents, and
partners, and their respective Affiliates, from and against all claims, losses,
damages, costs (including the costs of preparation and attorney's fees) and
expenses suffered in respect of any such claimed or existing fees, as and when
incurred.

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<PAGE>

            3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants
to the Lender as of the date hereof and as of the Closing Date that, except as
otherwise provided in the Annex V hereto or in the Company's SEC Documents:

            a. Rights of Others Affecting the Transactions. There are no
preemptive rights of any shareholder of the Company, as such, to acquire the
Debentures, the Warrants or the Shares. No party has a currently exercisable
right of first refusal which would be applicable to any or all of the
transactions contemplated by the Transaction Agreements.

            b. Status. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Incorporation and
has the requisite corporate power to own its properties and to carry on its
business as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have or result in a Material Adverse Effect. The Company
has registered its stock and is obligated to file reports pursuant to Section 12
or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act"). The Common Stock is listed and quoted on the Principal Trading Market.
The Company has received no notice, either oral or written, with respect to the
continued eligibility of the Common Stock for such listing and quotation on the
Principal Trading Market, and the Company has maintained all requirements on its
part for the continuation of such listing and quotation.

            c. Authorized Shares. The authorized capital stock of the Company
consists of (i) 40,000,000 shares of Common Stock, $.001 par value per share, of
which approximately 30,017,906 shares are outstanding as of the date hereof, and
(ii) 10,000,000 shares of Preferred Stock, $.001 par value per share of which
none have been issued. All issued and outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid. The Company has
covenanted to hold a shareholders meeting in respect of an increase to not less
than 60,000,000 authorized Shares not later than November 1, 2004. Thereafter,
the Shares will have been duly authorized and, when issued upon conversion of,
or as interest on, the Debentures or upon exercise of the Warrants, each in
accordance with its respective terms, will be duly and validly issued, fully
paid and non-assessable and, except to the extent, if any, provided by the law
of the State of Incorporation, will not subject the Holder thereof to personal
liability by reason of being such Holder.

                                       7
<PAGE>

            d. Transaction Agreements and Stock. This Agreement and each of the
other Transaction Agreements, and the transactions contemplated thereby, have
been duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the Debentures,
the Warrants and each of the other Transaction Agreements, when executed and
delivered by the Company, will be, valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.

            e. Non-contravention. The execution and delivery of this Agreement
and each of the other Transaction Agreements by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Debentures, the Warrants and the other
Transaction Agreements do not and will not conflict with or result in a breach
by the Company of any of the terms or provisions of, or constitute a default
under (i) the articles of incorporation or by-laws of the Company, each as
currently in effect, (ii) any indenture, mortgage, deed of trust, or other
material agreement or instrument to which the Company is a party or by which it
or any of its properties or assets are bound, including any listing agreement
for the Common Stock and the 6% Secured Convertible Debenture issued in January
2004 and March 2004, except as herein set forth, or (iii) to its knowledge, any
existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal or state regulatory body,
administrative agency, or other governmental body having jurisdiction over the
Company or any of its properties or assets, except such conflict, breach or
default which would not have or result in a Material Adverse Effect.

            f. Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Lender as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.

            g. Filings. None of the Company's SEC Documents contained, at the
time they were filed, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were
made, not misleading. Since April 30, 2004, the Company has filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.

            h. Absence of Certain Changes. Since the Last Audited Date, there
has been no material adverse change and no Material Adverse Effect, except as
disclosed in the Company's SEC Documents. Since the Last Audited Date, except as
provided in the Company's SEC Documents, the Company has not (i) incurred or
become subject to any material liabilities (absolute or contingent) except
liabilities incurred in the ordinary course of business consistent with past
practices; (ii) discharged or satisfied any material lien or encumbrance or paid
any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to shareholders with respect to its capital stock, or purchased or
redeemed, or made any agreements to purchase or redeem, any shares of its
capital stock; (iv) sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business
consistent with past practices; (v) suffered any substantial losses or waived
any rights of material value, whether or not in the ordinary course of business,
or suffered the loss of any material amount of existing business; (vi) made any
changes in employee compensation, except in the ordinary course of business
consistent with past practices; or (vii) experienced any material problems with
labor or management in connection with the terms and conditions of their
employment.

                                       8
<PAGE>

            i. Full Disclosure. There is no fact known to the Company (other
than general economic conditions known to the public generally or as disclosed
in the Company's SEC Documents) that has not been disclosed in writing to the
Lender that would reasonably be expected to have or result in a Material Adverse
Effect.

            j. Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or body pending
or, to the knowledge of the Company, threatened against or affecting the Company
before or by any governmental authority or nongovernmental department,
commission, board, bureau, agency or instrumentality or any other person,
wherein an unfavorable decision, ruling or finding would have a Material Adverse
Effect or which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, any of the
Transaction Agreements. The Company is not aware of any valid basis for any such
claim that (either individually or in the aggregate with all other such events
and circumstances) could reasonably be expected to have a Material Adverse
Effect. There are no outstanding or unsatisfied judgments, orders, decrees,
writs, injunctions or stipulations to which the Company is a party or by which
it or any of its properties is bound, that involve the transaction contemplated
herein or that, alone or in the aggregate, could reasonably be expect to have a
Material Adverse Effect. Except as provided for in SEC Documents, the Company is
not obligated, directly or indirectly, for the obligation of Anhydride Petroleum
(Canada) Ltd. or of any other subsidiary or affiliate.

            k. Absence of Events of Default. Except as set forth in Section 3(e)
hereof, no Event of Default (or its equivalent term), as defined in the
respective agreement to which the Company is a party, and no event which, with
the giving of notice or the passage of time or both, would become an Event of
Default (or its equivalent term) (as so defined in such agreement), has occurred
and is continuing, which would have a Material Adverse Effect.

                                       9
<PAGE>

            l. Absence of Certain Company Control Person Actions or Events. To
the best of the Company's knowledge, after due inquiry, none of the following
has occurred during the past ten (10) years with respect to a Company Control
Person:

      (1) A petition under the federal bankruptcy laws or any state insolvency
      law was filed by or against, or a receiver, fiscal agent or similar
      officer was appointed by a court for the business or property of such
      Company Control Person, or any partnership in which he was a general
      partner at or within two years before the time of such filing, or any
      corporation or business association of which he was an executive officer
      at or within two years before the time of such filing;

      (2) Such Company Control Person was convicted in a criminal proceeding or
      is a named subject of a pending criminal proceeding (excluding traffic
      violations and other minor offenses);

      (3) Such Company Control Person was the subject of any order, judgment or
      decree, not subsequently reversed, suspended or vacated, of any court of
      competent jurisdiction, permanently or temporarily enjoining him from, or
      otherwise limiting, the following activities:

            (i) acting, as an investment advisor, underwriter, broker or dealer
            in securities, or as an affiliated person, director or employee of
            any investment company, bank, savings and loan association or
            insurance company, as a futures commission merchant, introducing
            broker, commodity trading advisor, commodity pool operator, floor
            broker, any other Person regulated by the Commodity Futures Trading
            Commission ("CFTC") or engaging in or continuing any conduct or
            practice in connection with such activity;

            (ii) engaging in any type of business practice; or

            (iii) engaging in any activity in connection with the purchase or
            sale of any security or commodity or in connection with any
            violation of federal or state securities laws or federal commodities
            laws;

      (4) Such Company Control Person was the subject of any order, judgment or
      decree, not subsequently reversed, suspended or vacated, of any federal or
      state authority barring, suspending or otherwise limiting for more than 60
      days the right of such Company Control Person to engage in any activity
      described in paragraph (3) of this item, or to be associated with Persons
      engaged in any such activity; or

      (5) Such Company Control Person was found by a court of competent
      jurisdiction in a civil action or by the CFTC or SEC to have violated any
      federal or state securities law, and the judgment in such civil action or
      finding by the CFTC or SEC has not been subsequently reversed, suspended,
      or vacated.

                                       10
<PAGE>

            m. Prior Issues. Since April 30,, 2004 the Company has not issued
any stock option grants, convertible securities or any shares of its Common
Stock, except as set forth in SEC Documents and on Schedule 3(m).

            n. No Undisclosed Liabilities or Events. The Company has no
liabilities or obligations other than those disclosed in the Transaction
Agreements or the Company's SEC Documents or those incurred in the ordinary
course of the Company's business since the Last Audited Date, or which
individually or in the aggregate, do not or would not have a Material Adverse
Effect. No event or circumstances has occurred or exists with respect to the
Company or its properties, business, operations, condition (financial or
otherwise), or results of operations, which, under applicable law, rule or
regulation, requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or disclosed. There
are no proposals currently under consideration or currently anticipated to be
under consideration by the Board of Directors or the executive officers of the
Company which proposal would (X) change the certificate of incorporation or
other charter document or by-laws of the Company, each as currently in effect,
with or without shareholder approval, which change would reduce or otherwise
adversely affect the rights and powers of the shareholders of the Common Stock
or (Y) materially or substantially change the business, assets or capital of the
Company, including its interests in subsidiaries.

            o. No Default. Except as disclosed in the Company's SEC filings,
neither the Company nor any of its subsidiaries is in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property is
bound. The Company is not obligated, directly or indirectly, for the liabilities
of Anhydride Petroleum (Canada) Ltd. or of any other subsidiary or affiliate.

            p. No Integrated Offering. Neither the Company nor any of its
Affiliates nor any person acting on its or their behalf has, directly or
indirectly, at any time since April 30, 2004, made any offer or sales of any
security or solicited any offers to buy any security under circumstances that
would eliminate the availability of the exemption from registration under
Regulation D in connection with the offer and sale of the Securities as
contemplated hereby.

            q. Dilution. The number of Shares issuable upon conversion of the
Debentures may have a dilutive effect on the ownership interests of the other
shareholders (and Persons having the right to become shareholders) of the
Company. The Company's executive officers and directors have studied and fully
understand the nature of the Securities being sold hereby and recognize that
they have such a potential dilutive effect. The board of directors of the
Company has concluded, in its good faith business judgment, that such issuance
is in the best interests of the Company. The Company specifically acknowledges
that its obligation to issue the Shares upon conversion of the Debentures and
upon exercise of the Warrants is binding upon the Company and enforceable
regardless of the dilution such issuance may have on the ownership interests of
other shareholders of the Company, and the Company will honor every Notice of
Conversion (as defined in the Debentures) relating to the conversion of the
Debentures, and every Notice of Exercise (as contemplated by the Warrants),
unless the Company is subject to an injunction (which injunction was not sought
by the Company) prohibiting the Company from doing so.

                                       11
<PAGE>

            r. Trading in Securities. The Company specifically acknowledges
that, except to the extent specifically provided herein or in any of the other
Transaction Agreements (but limited in each instance to the extent so
specified), the Lender retains the right (but is not otherwise obligated) to
buy, sell, engage in hedging transactions or otherwise trade in the securities
of the Company, including, but not necessarily limited to, the Securities, at
any time before, contemporaneous with or after the execution of this Agreement
or from time to time, but only, in each case, in any manner whatsoever permitted
by applicable federal and state securities laws.

            s. Fees to Brokers, Finders and Others. Except for payment of fees
to the Finder, payment of which is the sole responsibility of the Company, the
Company has taken no action which would give rise to any claim by any Person for
brokerage commission, finder's fees or similar payments by Lender relating to
this Agreement or the transactions contemplated hereby. Lender shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each of Lender, its employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered in respect of any such claimed or
existing fees, as and when incurred.

            t. Proxies Each of October Sun, a Nevada Corporation as to 2,974,967
shares, Timothy Brock as to 800,000 shares, F. George Orr as to 800,000 shares,
Larry Thompson as to 706,000 shares, William Timmins as to 225,000 shares,
Thornton Donaldson as to 375,000 shares and United Corporate Advisors Ltd. as to
780,000 shares has delivered irrevocable proxies in the form annexed as Exhibit
8 hereto,

                                       12
<PAGE>

            4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

            a. Transfer Restrictions. The Lender acknowledges that (1) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and, except as provided in the Registration Rights Agreement or
otherwise included in an effective registration statement, the Shares have not
been and are not being registered under the 1933 Act, and may not be transferred
unless (A) subsequently registered thereunder or (B) the Lender shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the Person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in
the 1933 Act, may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (3) neither the
Company nor any other Person is under any obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.

            b. Restrictive Legend. The Lender acknowledges and agrees that,
until such time as the Common Stock has been registered under the 1933 Act as
contemplated by the Registration Rights Agreement and sold in accordance with an
effective Registration Statement or otherwise in accordance with another
effective registration statement, the certificates and other instruments
representing any of the Securities (including the Shares) shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):

      THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
      OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE
      TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

            c. Filings. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the Securities to the Lender under any
United States laws and regulations applicable to the Company, or by any domestic
securities exchange or trading market, and to provide a copy thereof to the
Lender promptly after such filing.

                                       13
<PAGE>

            d. Reporting Status. So long as the Lender beneficially owns any of
the Securities, the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the 1934 Act, shall take all reasonable
action under its control to ensure that adequate current public information with
respect to the Company, as required in accordance with Rule 144(c)(2) of the
1933 Act, is publicly available, and shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company will take
all reasonable action under its control to maintain the continued listing and
quotation and trading of its Common Stock (including, without limitation, all
Registrable Securities) on the Principal Trading Market or a listing on the
NASDAQ/Small Cap or National Markets and, to the extent applicable to it, will
comply in all material respects with the Company's reporting, filing and other
obligations under the by-laws or rules of the Principal Trading Market and/or
the National Association of Securities Dealers, Inc., as the case may be, at
least through the date which is thirty (30) days after the later of the date on
which all of the Debentures have been converted or all of the Warrants have been
exercised or have expired.

            e. Use of Proceeds. The Company will use the proceeds received
hereunder (excluding amounts paid by the Company for legal fees, finder's fees
and escrow fees in connection with the sale of the Securities) for general
corporate purposes.

            f. Warrants. The Company agrees to issue to the Lender on the
Closing Date transferable warrants (the "Warrants") as more specifically set
forth on the execution page hereof for the purchase of 3,333 common shares at
$.35 per share per $1,000 of Convertible Debenture subscribed for. The Warrants
will expire at 5:00 P.M. New York City Time on September 14, 2006. Each of the
Warrants shall be in the form annexed hereto as Annex VI, and shall have (x)
cashless exercise rights, (y) registration rights as to the shares underlying
the warrants as provided in the Registration Rights Agreement, and (z)
piggy-back registration rights after the effectiveness of the Registration
Statement expires, as contemplated by the Registration Rights Agreement.

            g. Certain Agreements.

            (i) The Company covenants and agrees that, except for the sale of
Debentures and Warrants to the Other Lenders, during the period (the "New
Transaction Period") from the Closing Date and continuing through and including
the Final Lock-up Date (as defined below), it will not, without the prior
written consent of the Lender in each instance, enter into any subsequent or
further offer or sale of Common Stock or securities convertible into and/or
other rights exercisable for the issuance of Common Stock (collectively, "New
Common Stock") to or with any third party (any such offer or sale of New Common
Stock, a "New Transaction"), except as noted in Annex XI. The term "Final
Lock-up Date" means the date which is the number of days after the Effective
Date equal to the sum of (X) one hundred and twenty (120) days, plus (Y) the
number of days, if any, during which sale of Registrable Securities was
suspended after the Effective Date.

                                       14
<PAGE>

      (A) the Conversion Price on any Unconverted Debenture (as defined in the
      Debenture) shall be adjusted to an amount (the "Adjusted Conversion
      Price") equal to the lowest of (1) ninety percent (90%) of the then
      existing Conversion Price, or (2) seventy-five percent (75%) of the of the
      lower of (X) the lowest fixed purchase price of any shares of the New
      Common Stock contemplated in the New Transaction or (Y) the lowest
      conversion price which would be applicable under the terms of the New
      Transaction;

      (B) with respect to all portions of the principal and interest of the
      Debenture converted prior to such date (or converted before the adjustment
      referred to in the immediately preceding subparagraph (A) is effected),
      the Company will issue to the Holder additional shares of Common Stock
      ("Additional Shares") equal to the excess, if any, of (1) (X) the
      aggregate amount of the principal and accrued interest of the Debenture so
      converted, divided by (Y) the Adjusted Conversion Price, over (2) the
      number of Conversion Shares and Additional Shares, if any, previously
      issued in connection with such conversion;

      (C) the number of Warrants shall be adjusted to equal the higher of (1)
      the number of Warrant Shares originally provided in the Warrants or (2)
      the number of shares equal to (I) the Purchase Price divided by (II) the
      Closing Price for the Trading Day immediately preceding the initial
      closing date of the New Transaction; and

      (D) the Exercise Price on the Warrants shall be adjusted to equal the
      lower of (1) the then existing Warrant Price or (2) one percent (100%) of
      the Adjusted Conversion Price; and

      (E) the Holder will have the such other rights as provided in Debenture.

            h. Reimbursement. If (i) the Lender, other than by reason of its
gross negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any shareholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if the Lender is impleaded in any
such action, proceeding or investigation by any Person, or (ii) the Lender,
other than by reason of its gross negligence or willful misconduct or by reason
of its trading of the Common Stock in a manner that is illegal under the federal
securities laws, becomes involved in any capacity in any action, proceeding or
investigation brought by the SEC against or involving the Company or in
connection with or as a result of the consummation of the transactions
contemplated by the Transaction Agreements, or if the Lender is impleaded in any
such action, proceeding or investigation by any Person, then in any such case,
the Company will reimburse the Lender for its reasonable legal and other
expenses (including the cost of any investigation and preparation) incurred in
connection therewith, as such expenses are incurred. In addition, other than
with respect to any matter in which Lender is a named party, the Company will
pay to the Lender the charges, as reasonably determined by Lender, for the time
of any officers or employees of the Lender devoted to appearing and preparing to
appear as witnesses, assisting in preparation for hearings, trials or pretrial
matters, or otherwise with respect to inquiries, hearing, trials, and other
proceedings relating to the subject matter of this Agreement. The reimbursement
obligations of the Company under this section shall be in addition to any
liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any Affiliates of the Lender who or which are actually named
in such action, proceeding or investigation, and partners, directors, agents,
employees and controlling persons (if any), as the case may be, of Lender and
any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, Lender
and any such affiliate and any such person. The Company also agrees that neither
the Lender nor any such affiliate, partner, director, agent, employee or
controlling person shall have any liability to the Company or any Person
asserting claims on behalf of or in right of the Company in connection with or
as a result of the consummation of any of the Transaction Agreements, except as
may be expressly and specifically provided in or contemplated by this Agreement.

                                       15
<PAGE>

            i. Shareholders Meetings; Available Shares. On or before November 1,
2004, the Company shall hold a shareholders meeting to authorize an increase in
the authorized shares to not less than 100,000,000 shares of Common Stock and
thereafter shall have reserved for issuance, free from preemptive rights, not
less than 20,000,000 common shares (the "Available Shares"). The amount of
Available Shares is to be reduced from time to time as shares are issued for the
Finders Fee, on the conversion of the Convertible Debentures or Warrants.
Additionally, the Company will not issue any securities convertible or
exercisable into Common Stock until 30 days after the Effective Date, except as
noted in Annex XI New Securities.

            j. Publicity, Filings, Releases, Etc. Each of the parties agrees
that it will not disseminate any information relating to the Transaction
Agreements or the transactions contemplated thereby, including issuing any press
releases, holding any press conferences or other forums, or filing any reports
(collectively, "Publicity"), without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such Publicity any statement or statements or other material to
which the other party reasonably objects, except as maybe required by applicable
regulatory authorities. In furtherance of the foregoing, the Company will
provide to the Lender drafts of the applicable text of any filing intended to be
made with the SEC which refers to the Transaction Agreements or the transactions
contemplated thereby as soon as practible (but at least three (3) business days
before such filing will be made and will not include in such filing any
statement or statements or other material to which the other party reasonably
objects. Notwithstanding the foregoing, each of the parties hereby consents to
the inclusion of the text of the Transaction Agreements in filings made with the
SEC (but any descriptive text accompanying or part of such filing shall be
subject to the other provisions of this paragraph).

                                       16
<PAGE>

            k. Performance by the Company. The Company agrees that unless and
until (i) the Company has affirmatively demonstrated by the use of specific
clear and convincing evidence that the Lender has traded in securities of the
Company in violation of applicable federal securities laws and (ii) there has
been issued against the Lender a final non-appealable decision from a court of
competent jurisdiction to the effect that the Lender has violated applicable
federal securities laws with respect to its trading of the Company's securities,
the Lender shall be assumed to be in compliance with such laws and the Company
shall remain obligated to fulfill all of its obligations under each of the
Transaction Agreements; provided, further, that the Company shall under no
circumstances be entitled to request or demand that the Lender affirmatively
demonstrate that it has not engaged in any such violations as a condition to the
Company's fulfillment of its obligations under any of the Transaction Agreements
and shall not assert, whether as an affirmative claim or a defense to any claim
made against the Company, that the Lender's failure to demonstrate such absence
of such violations (including, but not limited to, its failure to provide any
trading or other records, it being specifically agreed that the Company,
directly or indirectly, will request the Lender or any of its agents, advisors,
brokers or representatives to provide such records in any forum) serves either
as a defense to any breach of the Company's obligations under any of the
Transaction Agreements or otherwise reflects adversely in any manner on the
legality of any action taken by the Lender.

            l. Change In Control. The Company shall not enter into any agreement
or understanding which may, directly or indirectly, cause or effect the sale of
or substantially all of its assets or a change in "control" as defined in Rule
405 under the Securities Act of 1933, without the prior written consent of the
Lender.

      5. TRANSFER AGENT INSTRUCTIONS.

            The Company warrants that, with respect to the Securities, other
than the stop transfer instructions to give effect to Section 4(a) hereof, it
will give its transfer agent no instructions inconsistent with instructions to
issue Common Stock from time to time upon conversion of the Debentures in such
amounts as specified from time to time by the Company to the transfer agent,
bearing the restrictive legend specified in Section 4(b) of this Agreement prior
to registration of the Shares under the 1933 Act, registered in the name of the
Lender or its nominee and in such denominations to be specified by the Lender in
connection with each conversion of the Debentures. Except as so provided, the
Shares shall otherwise be freely transferable on the books and records of the
Company as and to the extent provided in this Agreement and the Registration
Rights Agreement. Nothing in this Section shall affect in any way the Lender's
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities. If the Lender provides the Company with an opinion of
counsel reasonably satisfactory to the Company that registration of a resale by
the Lender of any of the Securities in accordance with clause (1)(B) of Section
4(a) of this Agreement is not required under the 1933 Act, the Company shall
(except as provided in clause (2) of Section 4(a) of this Agreement) permit the
transfer of the Securities and, in the case of the Conversion Shares, promptly
instruct the Company's transfer agent to issue one or more certificates for
Common Stock without legend in such name and in such denominations as specified
by the Lender.

                                       17
<PAGE>

            Subject to the provisions of this Agreement, the Company will permit
the Lender to exercise its right to convert the Debentures in the manner
contemplated by the Debentures and to exercise the Warrants in the manner
contemplated by the Warrants.

            The Company understands that a delay in the issuance of the Shares
of Common Stock beyond the Delivery Date (as defined in the Debentures) could
result in economic loss to the Lender. As compensation to the Lender for such
loss, the Company agrees to pay late payments to the Lender for late issuance of
Shares upon Conversion in accordance with the following schedule (where "No.
Business Days Late" refers to the number of business days which is beyond two
(2) business days after the Delivery Date):

<TABLE>
<CAPTION>
                                    Late Payment For Each $10,000
                                    of Debenture Principal or Interest
No. Business Days Late              Amount Being Converted
----------------------              ----------------------------------
<S>                                    <C>
         1                             $100
         2                             $200
         3                             $300
         4                             $400
         5                             $500
         6                             $600
         7                             $700
         8                             $800
         9                             $900
         10                            $1,000
        >10                            $1,000 +$200 for each Business
                                       Day Late beyond 10 days
</TABLE>

The Company shall pay any payments incurred under this Section in immediately
available funds upon demand as the Lender's exclusive remedy (other than the
following provisions of this Section 5(c) and the provisions of the immediately
following Section 5(d) of this Agreement) for such delay. Furthermore, in
addition to any other remedies which may be available to the Lender, in the
event that the Company fails for any reason to effect delivery of such shares of
Common Stock by close of business on the Delivery Date, the Lender will be
entitled to revoke the relevant Notice of Conversion by delivering a notice to
such effect to the Company, whereupon the Company and the Lender shall each be
restored to their respective positions immediately prior to delivery of such
Notice of Conversion; provided, however, that an amount equal to any payments
contemplated by this Section 5(c) which have accrued through the date of such
revocation notice shall remain due and owing to the Converting Holder
notwithstanding such revocation.

                                       18
<PAGE>

            If, by the relevant Delivery Date, the Company fails for any reason
to deliver the Shares to be issued upon conversion of a Debenture and after such
Delivery Date, the Holder of the Debentures being converted (a "Converting
Holder") purchases, in an arm's-length open market transaction or otherwise,
shares of Common Stock (the "Covering Shares") in order to make delivery in
satisfaction of a sale of Common Stock by the Converting Holder (the "Sold
Shares"), which delivery such Converting Holder anticipated to make using the
Shares to be issued upon such conversion (a "Buy-In"), the Converting Holder
shall have the right, to require the Company to pay to the Converting Holder, in
addition to and not in lieu of the amounts due under Section 5(c) hereof (but in
addition to all other amounts contemplated in other provisions of the
Transaction Agreements, and not in lieu of any such other amounts), the Buy-In
Adjustment Amount (as defined below). The "Buy-In Adjustment Amount" is the
amount equal to the excess, if any, of (x) the Converting Holder's total
purchase price (including brokerage commissions, if any) for the Covering Shares
over (y) the net proceeds (after brokerage commissions, if any) received by the
Converting Holder from the sale of the Sold Shares. The Company shall pay the
Buy-In Adjustment Amount to the Company in immediately available funds
immediately upon demand by the Converting Holder. By way of illustration and not
in limitation of the foregoing, if the Converting Holder purchases shares of
Common Stock having a total purchase price (including brokerage commissions) of
$11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net
proceeds of $10,000, the Buy-In Adjustment Amount which Company will be required
to pay to the Converting Holder will be $1,000.

            In lieu of delivering physical certificates representing the Common
Stock issuable upon conversion, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer program, upon request of the Holder and its compliance with the
provisions contained in this paragraph, so long as the certificates therefor do
not bear a legend and the Holder thereof is not obligated to return such
certificate for the placement of a legend thereon, the Company shall use its
best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
system.

            The holder of any Debentures shall be entitled to exercise its
conversion privilege with respect to the Debentures notwithstanding the
commencement of any case under 11 U.S.C. ss.101 et seq. (the "Bankruptcy Code").
In the event the Company is a debtor under the Bankruptcy Code, the Company
hereby waives, to the fullest extent permitted, any rights to relief it may have
under 11 U.S.C. ss.362 in respect of such holder's conversion privilege. The
Company hereby waives, to the fullest extent permitted, any rights to relief it
may have under 11 U.S.C. ss.362 in respect of the conversion of the Debentures.
The Company agrees, without cost or expense to such holder, to take or to
consent to any and all action reasonably necessary to effectuate relief under 11
U.S.C. ss.362.

                                       19
<PAGE>

            The Company will authorize its transfer agent to give information
relating to the Company directly to the Lender or the Lender's representatives
upon the request of the Lender or any such representative, to the extent such
information relates to (i) the status of shares of Common Stock issued or
claimed to be issued to the Lender in connection with a Notice of Conversion or
exercise of a Warrant, or (ii) the number of outstanding shares of Common Stock
of all shareholders as of a current or other specified date. On the Closing
Date, the Company will provide the Lender with a copy of the authorization so
given to the transfer agent.

            6. CLOSING DATE.

            a. The Closing Date shall occur on the date which is the first
Trading Day after each of the conditions contemplated by Sections 7 and 8 hereof
shall have either been satisfied or been waived by the party in whose favor such
conditions run.

            b. The closing of the purchase and issuance of Debentures and
Warrants shall occur on the Closing Date at the offices of the Escrow Agent and
shall take place no later than 3:00 P.M., New York time, on such day or such
other time as is mutually agreed upon by the Company and the Finder.

            c. Notwithstanding anything to the contrary contained herein, the
Escrow Agent will be authorized to release the Escrow Funds to the Company and
to others and to release the other Escrow Property on the Closing Date upon
satisfaction of the conditions set forth in Sections 7 and 8 hereof and as
provided in the Joint Escrow Instructions.

            7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

            a. The Lender understands that the Company's obligation to sell the
Debentures and the Warrants to the Lender pursuant to this Agreement on the
relevant Closing Date is conditioned upon:

            b. The execution and delivery of this Agreement and the Registration
Rights Agreement by the Lender;

            c. Delivery by the Lender to the Escrow Agent of good funds as
payment in full of an amount equal to the Purchase Price for the Securities in
accordance with this Agreement;

                                       20
<PAGE>

            d. The accuracy on such Closing Date of the representations and
warranties of the Lender contained in this Agreement, each as if made on such
date, and the performance by the Lender on or before such date of all covenants
and agreements of the Lender required to be performed on or before such date;
and

            e. There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

            8. CONDITIONS TO THE LENDER'S OBLIGATION TO PURCHASE.

            The Company understands that the Lender's obligation to purchase the
Debentures and the Warrants on the relevant Closing Date is conditioned upon:

            The execution and delivery of this Agreement and the other
Transaction Agreements by the Company;

            Delivery by the Company to the Escrow Agent of the Certificates in
accordance with this Agreement;

            Delivery by the Company of irrevocable proxies from each of October
Sun, a Nevada Corporation as to 2,974,967 shares, Timothy Brock as to 800,000
shares, F. George Orr as to 800,000 shares, Larry Thompson as to 706,000 shares,
William Timmins as to 225,000 shares, Thornton Donaldson as to 375,000 shares
and United Corporate Advisors Ltd. as to 780,000 shares in the form annexed as
Exhibit 8 hereto.

            The accuracy in all material respects on such Closing Date of the
representations and warranties of the Company contained in this Agreement, each
as if made on such date, and the performance by the Company on or before such
date of all covenants and agreements of the Company required to be performed on
or before such date;

            On such Closing Date, the Registration Rights Agreement shall be in
full force and effect and the Company shall not be in default thereunder;

            On such Closing Date, the Lender shall have received (a) an opinion
of counsel for the Company, dated the Closing Date in form, scope and substance
reasonably satisfactory to the Lender, substantially to the effect set forth in
Annex III attached hereto (b) signed lock up agreements of the persons named on
Schedule 5(b) to the Registration Rights Agreement and (c) acknowledgement by
the Transfer Agent of "stop transfer" instructions in respect thereof .

            There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained; and

                                       21
<PAGE>

            From and after the date hereof to and including such Closing Date,
each of the following conditions will remain in effect: (i) the trading of the
Common Stock shall not have been suspended by the SEC or on the Principal
Trading Market; (ii) trading in securities generally on the Principal Trading
Market shall not have been suspended or limited; (iii), no minimum prices shall
been established for securities traded on the Principal Trading Market; and (iv)
there shall not have been any material adverse change in any financial market
that, in the reasonable judgment of the Lender, makes it impracticable or
inadvisable to purchase the Debentures.

            9. INDEMNIFICATION

            a. (i) The Company agrees to indemnify and hold harmless Lender and
its officers, directors, employees, and agents, and each Lender Control Person
from and against any losses, claims, damages, liabilities or expenses incurred
(collectively, "Damages"), joint or several, and any action in respect thereof
to which Lender, its partners, Affiliates, officers, directors, employees, and
duly authorized agents, and any such Lender Control Person becomes subject to,
resulting from, arising out of or relating to any misrepresentation, breach of
warranty or nonfulfillment of or failure to perform any covenant or agreement on
the part of Company contained in this Agreement, as such Damages are incurred,
except to the extent such Damages result primarily from Lender's failure to
perform any covenant or agreement contained in this Agreement or Lender's or its
officers, directors, employees, agents or Lender Control Persons negligence,
recklessness or bad faith in performing its obligations under this Agreement.

            (ii) If (x) the Lender becomes involved in any capacity in any
action, proceeding or investigation brought by any stockholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by this Agreement or the other Transaction Agreements, or if the
Lender is impleaded in any such action, proceeding or investigation by any
Person, or (y) the Lender becomes involved in any capacity in any action,
proceeding or investigation brought by the SEC, any self-regulatory organization
or other body having jurisdiction, against or involving the Company or in
connection with or as a result of the consummation of the transactions
contemplated by this Agreement or the other Transaction Agreements, or if the
Lender is impleaded in any such action, proceeding or investigation by any
Person, then in any such case, other than by reason of the Lender's actions
(other than the Lender's execution of the Transaction Agreements to which it is
a signatory, the payment of the Purchase Price, and/or the exercise of any of
the Lender's rights under any one or more of the Transaction Agreements), the
Company hereby agrees to indemnify, defend and hold harmless the Lender from and
against and in respect of all losses, claims, liabilities, damages or expenses
resulting from, imposed upon or incurred by the Lender, directly or indirectly,
and reimburse such Lender for its reasonable legal and other expenses (including
the cost of any investigation and preparation) for a single firm of counsel

                                       22
<PAGE>

incurred in connection therewith, as such expenses are incurred. In addition,
the Company will reimburse the Lender for reasonable internal and overhead costs
for the time of any officers or employees of the Lender devoted to appearing and
preparing to appear as witnesses, assisting in preparation for hearings, trials
or pretrial matters, or otherwise with respect to inquiries, hearing, trials,
and other proceedings relating to the subject matter of this Agreement or the
other Transaction Agreements, other than by reason of the Lender's actions
(other than the Lender's execution of the Transaction Agreements to which it is
a signatory, the payment of the Purchase Price, and/or the exercise of any of
the Lender's rights under any one or more of the Transaction Agreements). The
indemnification and reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company may otherwise
have (other than matters specifically addressed in the Registration Rights
Agreement, which shall be governed solely by that agreement), shall extend upon
the same terms and conditions to any Affiliates of the Lender who are actually
named in such action, proceeding or investigation, and partners, directors,
agents, employees and Lender Control Persons (if any), as the case may be, of
the Lender and any such Affiliate, and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company, the Lender, any such Affiliate and any such Person. The Company also
agrees that neither the Lender nor any such Affiliate, partner, director, agent,
employee or Lender Control Person shall have any liability to the Company or any
Person asserting claims on behalf of or in right of the Company in connection
with or as a result of the consummation of this Agreement or the other
Transaction Agreements, other than by reason of the Lender's actions (other than
the Lender's execution of the Transaction Agreements to which it is a signatory,
the payment of the Purchase Price, and/or the exercise of any of the Lender's
rights under any one or more of the Transaction Agreements)

            All claims for indemnification by any Indemnified Party (as defined
below) under this Section 9 shall be asserted and resolved as follows:

            (i) In the event any claim or demand in respect of which any Person
claiming indemnification under any provision of this Section 9 (an "Indemnified
Party") might seek indemnity under Section 9(a) is asserted against or sought to
be collected from such Indemnified Party by a Person other than a party hereto
or an Affiliate thereof (a "Third Party Claim"), the Indemnified Party shall
deliver a written notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party Claim and for the
Indemnified Party's claim for indemnification that is being asserted under any
provision of this Section 9 against any Person (the "Indemnifying Party"),
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such Third Party Claim (a "Claim Notice")
with reasonable promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party shall not be obligated to indemnify the Indemnified Party with respect to
such Third Party Claim to the extent that the Indemnifying Party's ability to
defend has been prejudiced by such failure of the Indemnified Party. The
Indemnifying Party shall notify the Indemnified Party as soon as practicable
within the period ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined
below) (the "Dispute Period") whether the Indemnifying Party disputes its
liability or the amount of its liability to the Indemnified Party under this
Section 9 and whether the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Third Party Claim. The
following provisions shall also apply.

                                       23
<PAGE>

      (x) If the Indemnifying Party notifies the Indemnified Party within the
      Dispute Period that the Indemnifying Party desires to defend the
      Indemnified Party with respect to the Third Party Claim pursuant to this
      Section 9(b), then the Indemnifying Party shall have the right to defend,
      with counsel reasonably satisfactory to the Indemnified Party, at the sole
      cost and expense of the Indemnifying Party, such Third Party Claim by all
      appropriate proceedings, which proceedings shall be vigorously and
      diligently prosecuted by the Indemnifying Party to a final conclusion or
      will be settled at the discretion of the Indemnifying Party (but only with
      the consent of the Indemnified Party in the case of any settlement that
      provides for any relief other than the payment of monetary damages or that
      provides for the payment of monetary damages as to which the Indemnified
      Party shall not be indemnified in full pursuant to Section 9(a)). The
      Indemnifying Party shall have full control of such defense and
      proceedings, including any compromise or settlement thereof; provided,
      however, that the Indemnified Party may, at the sole cost and expense of
      the Indemnified Party, at any time prior to the Indemnifying Party's
      delivery of the notice referred to in the first sentence of this
      subparagraph (x), file any motion, answer or other pleadings or take any
      other action that the Indemnified Party reasonably believes to be
      necessary or appropriate protect its interests; and provided further, that
      if requested by the Indemnifying Party, the Indemnified Party will, at the
      sole cost and expense of the Indemnifying Party, provide reasonable
      cooperation to the Indemnifying Party in contesting any Third Party Claim
      that the Indemnifying Party elects to contest. The Indemnified Party may
      participate in, but not control, any defense or settlement of any Third
      Party Claim controlled by the Indemnifying Party pursuant to this
      subparagraph (x), and except as provided in the preceding sentence, the
      Indemnified Party shall bear its own costs and expenses with respect to
      such participation. Notwithstanding the foregoing, the Indemnified Party
      may take over the control of the defense or settlement of a Third Party
      Claim at any time if it irrevocably waives its right to indemnity under
      Section 9(a) with respect to such Third Party Claim.

      (y) If the Indemnifying Party fails to notify the Indemnified Party within
      the Dispute Period that the Indemnifying Party desires to defend the Third
      Party Claim pursuant to Section 9(b), or if the Indemnifying Party gives
      such notice but fails to prosecute vigorously and diligently or settle the
      Third Party Claim, or if the Indemnifying Party fails to give any notice
      whatsoever within the Dispute Period, then the Indemnified Party shall
      have the right to defend, at the sole cost and expense of the Indemnifying
      Party, the Third Party Claim by all appropriate proceedings, which
      proceedings shall be prosecuted by the Indemnified Party in a reasonable
      manner and in good faith or will be settled at the discretion of the

                                       24
<PAGE>

      Indemnified Party (with the consent of the Indemnifying Party, which
      consent will not be unreasonably withheld). The Indemnified Party will
      have full control of such defense and proceedings, including any
      compromise or settlement thereof; provided, however, that if requested by
      the Indemnified Party, the Indemnifying Party will, at the sole cost and
      expense of the Indemnifying Party, provide reasonable cooperation to the
      Indemnified Party and its counsel in contesting any Third Party Claim
      which the Indemnified Party is contesting. Notwithstanding the foregoing
      provisions of this subparagraph (y), if the Indemnifying Party has
      notified the Indemnified Party within the Dispute Period that the
      Indemnifying Party disputes its liability or the amount of its liability
      hereunder to the Indemnified Party with respect to such Third Party Claim
      and if such dispute is resolved in favor of the Indemnifying Party in the
      manner provided in subparagraph(z) below, the Indemnifying Party will not
      be required to bear the costs and expenses of the Indemnified Party's
      defense pursuant to this subparagraph (y) or of the Indemnifying Party's
      participation therein at the Indemnified Party's request, and the
      Indemnified Party shall reimburse the Indemnifying Party in full for all
      reasonable costs and expenses incurred by the Indemnifying Party in
      connection with such litigation. The Indemnifying Party may participate
      in, but not control, any defense or settlement controlled by the
      Indemnified Party pursuant to this subparagraph (y), and the Indemnifying
      Party shall bear its own costs and expenses with respect to such
      participation.

      (z) If the Indemnifying Party notifies the Indemnified Party that it does
      not dispute its liability or the amount of its liability to the
      Indemnified Party with respect to the Third Party Claim under Section 9(a)
      or fails to notify the Indemnified Party within the Dispute Period whether
      the Indemnifying Party disputes its liability or the amount of its
      liability to the Indemnified Party with respect to such Third Party Claim,
      the amount of Damages specified in the Claim Notice shall be conclusively
      deemed a liability of the Indemnifying Party under Section 9(a) and the
      Indemnifying Party shall pay the amount of such Damages to the Indemnified
      Party on demand. If the Indemnifying Party has timely disputed its
      liability or the amount of its liability with respect to such claim, the
      Indemnifying Party and the Indemnified Party shall proceed in good faith
      to negotiate a resolution of such dispute; provided, however, that it the
      dispute is not resolved within thirty (30) days after the Claim Notice,
      the Indemnifying Party shall be enlisted to institute such legal action as
      it deems appropriate.

                                       25
<PAGE>

            (ii) In the event any Indemnified Party should have a claim under
Section 9(a) against the Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver a written notification of a claim for
indemnity under Section 9(a) specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such claim (an "Indemnity Notice") with
reasonable promptness to the Indemnifying Party. The failure by any Indemnified
Party to give the Indemnity Notice shall not impair such party's rights
hereunder except to the extent that the Indemnifying Party demonstrates that it
has been irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the amount of the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim or
the amount of the claim described in such Indemnity Notice, the amount of
Damages specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 9(a) and the Indemnifying
Party shall pay the amount of such Damages to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute;
provided, however, that it the dispute is not resolved within thirty (30) days
after the Claim Notice, the Indemnifying Party shall be enlisted to institute
such legal action as it deems appropriate.

            The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar rights of the indemnified party against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to.

            10. JURY TRIAL WAIVER. The Company and the Lender hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties hereto against the other in respect of any matter arising out or in
connection with the Transaction Agreements.

            11. GOVERNING LAW: MISCELLANEOUS.

            This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the exclusive jurisdiction of
the federal courts whose districts encompass any part of the City of New York or
the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement or any of the other
Transaction Agreements and hereby waives, to the maximum extent permitted by
law, any objection, including any objection based on forum non conveniens, to
the bringing of any such proceeding in such jurisdictions. To the extent
determined by such court, the Company shall reimburse the Lender for any
reasonable legal fees and disbursements incurred by the Lender in enforcement of
or protection of any of its rights under any of the Transaction Agreements.

                                       26
<PAGE>

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

            This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.

            All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

            A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.

            This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.

            The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.

            If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

            This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.

            This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.

            12. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of

            (a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission, or

            (b) the third business day after mailing by domestic or
international express courier, with delivery costs and fees prepaid, in each
case, addressed to each of the other parties thereunto entitled at the following
addresses (or at such other addresses as such party may designate by ten (10)
days' advance written notice similarly given to each of the other parties
hereto):

                                       27
<PAGE>

Company:          URANIUM POWER CORPORATION
                  at its address at the head of this Agreement
                  Attn: Thornton Donaldson
                  Telephone No.: (604) 685-8355
                  Telecopier No.: (604) 687-8789

                  with a copy to:

                  George Orr
                  Suite 420 - 475 Howe Street
                  Vancouver, British Columbia, Canada
                  V6C-2B3
                  Telephone No.: (604) 606-7978
                  Telecopier No.: (604) 606-7980

Lender:           At the address set forth on the signature page of this
                  Agreement.

                  with a copy to:

                  Krieger & Prager LLP, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel M. Krieger, Esq.
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

Escrow Agent:     Krieger & Prager LLP
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel Krieger, Esq.
                  New York, New York 10016
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

                                       28
<PAGE>

      13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and the
Lender's representations and warranties herein shall survive the execution and
delivery of this Agreement and the delivery of the Certificates and the payment
of the Purchase Price, and shall inure to the benefit of the Lender and the
Company and their respective successors and assigns.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]

                                       29
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been duly executed by the
Lender (if an entity, by one of its officers thereunto duly authorized) as of
the date set forth below.

PURCHASE PRICE:                                 $
                                                 ---------------------

NUMBER OF WARRANTS:
                                                 ---------------------

                             SIGNATURES FOR LENDERS

      IN WITNESS WHEREOF, the undersigned represents that the foregoing
statements are true and correct and that it has caused this Securities Purchase
Agreement to be duly executed on its behalf this day of , 2004.

-----------------------------------     ----------------------------------------
Address                                 Printed Name of Lender

                                        By:
                                           -------------------------------------

Telecopier No. _________________            (Signature of Authorized Person)

-----------------------------------     ----------------------------------------
Jurisdiction of Incorporation           Printed Name and Title
or Organization

As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.

URANIUM POWER CORPORATION

By:
   --------------------------------

Title: President
     ------------------------------

Date: September 14, 2004
     ------------------------------

                                       30
<PAGE>

ANNEX I       FORM OF DEBENTURE

ANNEX II      JOINT ESCROW INSTRUCTIONS

ANNEX III     OPINION OF COUNSEL

ANNEX IV      REGISTRATION RIGHTS AGREEMENT

ANNEX V       COMPANY DISCLOSURE MATERIALS

ANNEX VI      FORM OF WARRANT

ANNEX VII     COMPANY'S SEC DOCUMENTS AVAILABLE ON EDGAR

ANNEX VIII    FORM OR IRREVOCABLE PROXY

ANNEX IX      DELETED

ANNEX X       INVESTOR QUESTIONNAIRE

ANNEX XI      NEW SECURITIES

                                       31ANNEX IV
                                                                              TO
                                                             SECURITIES PURCHASE
                                                                       AGREEMENT

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT, dated as of September 14, 2004 (this
"Agreement"), is made by and between URANIUM POWER CORPORATION, a Colorado
corporation, with headquarters located at 206-475 Howe Street, Vancouver,
British Columbia, Canada V6C 2B3 (the "Company"), each entity named on a
signature page hereto, (each, an "Initial Investor") and Viscount Investments,
Ltd. ("Viscount") (each agreement with an Initial Investor being deemed a
separate and independent agreement between the Company and such Initial
Investor, except that each Initial Investor acknowledges and consents to the
rights granted to each other Initial Investor under such agreement).

                              W I T N E S S E T H:

      WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreements, dated as of September 14, 2004, between inter alia, the
Initial Investor and the Company (the "Securities Purchase Agreement";
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Securities Purchase Agreement), the Company has agreed to issue
and sell to the Initial Investors the Debentures; and

      WHEREAS, the Debentures are convertible into shares of Common Stock (the
"Conversion Shares"; which term, for purposes of this Agreement, shall include
shares of Common Stock of the Company issuable in lieu of accrued interest
through the Maturity Date of the Debentures, as that term is defined in and as
contemplated by the Debentures) upon the terms and subject to the conditions
contained in the Debentures; and

      WHEREAS, upon and subject to the terms of the Securities Purchase
Agreement, the Company has agreed to issue the Warrants to the Initial Investor
and Viscount Investments Ltd. in connection with the issuance of the Debentures,
and the Warrants may be exercised for the purchase of shares of Common Stock
(the "Warrant Shares") upon the terms and conditions of the Warrants; and

      WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities (as defined
below);

<PAGE>

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

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

            (a) "Closing Date" shall mean ___________,2004.

            (b) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.

            (c) "Held Shares Value" means, for shares of Common Stock acquired
by the Investor upon a conversion of a Debenture within the thirty (30) days
preceding the Restricted Sale Date, but not yet sold by the Investor, the
principal amount of the Debentures converted into such Conversion Shares;
provided, however, that if the Investor effected more than one such conversion
during such thirty (30) day period and sold less than all of such shares, the
sold shares shall be deemed to be derived first from the conversions in the
sequence of such conversions (that is, for example, until the number of shares
from the first of such conversions have been sold, all shares shall be deemed to
be from the first conversion; thereafter, from the second conversion until all
such shares are sold).

            (d) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Debentures, Warrants
or Registrable Securities.

            (e) "Payment Shares" means shares of Common Stock issued by the
Company as provided in Section 2(b) below.

            (f) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the business
and affairs of the Company or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a registration statement
at such time; in each case where such determination shall be accompanied by a
good faith determination by the Board of Directors of the Company that the
registration statement would be materially misleading absent the inclusion of
such information.

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

                                       2
<PAGE>

      (h) "Registrable Securities" means, collectively, the Conversion Shares,
the Warrant Shares, the Additional Shares and those Shares listed on Schedule
5(b) (1)

      (i) "Registration Statement" means a registration statement of the Company
under the Securities Act covering Registrable Securities on Form SB-2.

      (j) "Required Effective Date" means the relevant Initial Required
Effective Date or Increased Required Effective Date (as those terms are defined
below).

      (k) "Restricted Sale Date" means the first date, other than a date during
a Permitted Suspension Period (as defined below), on which the Investor is
restricted from making sales of Registrable Securities covered by any previously
effective Registration Statement.

      2. Registration.

      (a) Mandatory Registration.

      (i) The Company shall retain Sichenzia Ross Friedman Ference LLP to
prepare and file with the SEC, prior to October 27, 2004, but no later than
November 1,, 2004 (the "Required Filing Date"), either a Registration Statement
or an amendment to an existing Registration Statement, in either event
registering for resale by the Investor a sufficient number of shares of Common
Stock for the Initial Investors to sell the Registrable Securities, but in no
event less than sixteen million (16,000,000) Conversion Shares and four million
(4,000,000) Warrant Shares. Unless otherwise specifically agreed to in writing
in advance by the Initial Investor, the Registration Statement (W) shall include
only the Registrable Securities, and (X) shall also state that, in accordance
with Rule 416 and 457 under the Securities Act, it also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon conversion of the Debentures or exercise of the Warrants to prevent
dilution resulting from stock splits, or stock dividends. The Company will use
its reasonable best efforts to cause such Registration Statement to be declared
effective on a date (the "Initial Required Effective Date") which is no later
than the earlier of (Y) five (5) days after oral or written notice by the SEC
that it may be declared effective or (Z) sixty (60) days after the Required
Filing Date.

      (ii) If at any time (an "Increased Registered Shares Date"), the number of
shares of Common Stock represented by the Registrable Shares, issued or to be
issued as contemplated by the Transaction Agreements, exceeds seventy percent
(70%) of the aggregate number of shares of Common Stock then registered, the
Company shall either

      (X) amend the relevant Registration Statement filed by the Company
      pursuant to the preceding provisions of this Section 2, if such
      Registration Statement has not been declared effective by the SEC at that
      time, to register, in the aggregate, at least the number of shares (the
      "Increased Shares Amount") equal to (A) the number of shares theretofore
      issued on conversion of the Debentures (including any interest paid on
      conversion by the issuance of Conversion Shares) , plus (B) the number of
      shares theretofore issued on exercise of the Warrants, plus (C) one
      hundred fifty percent (150%) of

                                       3
<PAGE>

            (I) the number of shares into which the unconverted Debentures and
            all interest thereon through the Maturity Date would be convertible
            at the date of such filing (assuming for such purposes that all such
            Debentures had been issued, had been eligible to be converted, and
            had been converted, into Conversion Shares in accordance with their
            terms, whether or not such issuance eligibility, accrual of
            interest, or conversion had in fact occurred as of such date), and

            (II) the number of Warrant Shares which would be issuable on
            exercise of the unexercised Warrants (assuming for such purposes
            that all such Warrants had been issued, had been eligible for
            exercise and had been exercised for Warrant Shares in accordance
            with their terms, whether or not such issuance, eligibility or
            exercise had in fact occurred as of such date), or

      (Y) if such Registration Statement has been declared effective by the SEC
      at that time, file with the SEC an additional Registration Statement (an
      "Additional Registration Statement") to register the number of shares
      equal to the excess of the Increased Shares Amount over the aggregate
      number of shares of Common Stock already registered.

The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (each, an "Increased Required
Effective Date") which is no later than (q) with respect to a Registration
Statement under clause (X) of this subparagraph (ii), the Initial Required
Effective Date and (r) with respect to an Additional Registration Statement, the
earlier of (I) five (5) days after notice by the SEC that it may be declared
effective or (II) thirty (30) days after the Increased Registered Shares Date.

      (iii) The aggregate number of shares registered for the Investors in each
Registration Statement or amendment thereto shall be allocated among the
Investors on a pro rata basis among them according to their relative Registrable
Shares included in such Registration Statement.

      (b) Payments by the Company.

      (i) If the Registration Statement covering the Registrable Securities is
not filed in proper form with the SEC by the Required Filing Date, the Company
will make payment to the Initial Investor in such amounts and at such times as
shall be determined pursuant to this Section 2(b).

      (ii) If the Registration Statement covering the Registrable Securities is
not effective by the relevant Required Effective Date or if there is a
Restricted Sale Date, then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).

                                       4
<PAGE>

      (iii) The amount (the "Periodic Amount") to be paid by the Company to the
Initial Investor shall be determined as of each Computation Date (as defined
below) and such amount shall be equal to the Periodic Amount Percentage (as
defined below) of the Purchase Price for all Debentures for the period from the
date following the Increased Required Filing Date or the relevant Required
Effective Date or a Restricted Sale Date, as the case may be, to the first
relevant Computation Date, and thereafter to each subsequent Computation Date.
The "Periodic Amount Percentage" means (A) two percent (2%) of the Purchase
Price of all Debentures for the first Computation Date after the relevant
Required Filing Date, Required Effective Date or Restricted Sale Date, as the
case may be: and (B) two percent (2%) of the Purchase Price of all Debentures to
each Computation Date thereafter. Anything in the preceding provisions of this
paragraph (iii) to the contrary notwithstanding, after the relevant Effective
Date the Purchase Price shall be deemed to refer to the sum of (X) the principal
amount of all Debentures not yet converted and (Y) the Held Shares Value. By way
of illustration and not in limitation of the foregoing, if the Registration
Statement is filed on or before the Required Filing Date, but is not declared
effective until one hundred (100) days after the Required Filing Date, the
Periodic Amount will aggregate four percent (4%) of the Purchase Price of the
Debentures theretofore issued (2% for days 61-90 plus 2% for days 91-100).

      (iv) Each Periodic Amount will be payable by the Company, except as
provided in the other provisions of this subparagraph (iv), in cash or other
immediately available funds to the Investor (1) on the day after the Required
Filing Date, the Required Effective Date or a Restricted Sale Date, as the case
may be, and (2) on the earlier of (A) each thirtieth day thereafter, (B) the
third business day after the date the Registration Statement is filed or is
declared effective, or (C) the third business day after the Registration
Statement has its restrictions removed after the relevant Effective Date, in
each case without requiring demand therefor by the Investor.

      (v) The parties acknowledge that the damages which may be incurred by the
Investor if the Registration Statement is not filed by the Required Filing Date
or the Registration Statement has not been declared effective by a Required
Effective Date, including if the right to sell Registrable Securities under a
previously effective Registration Statement is suspended or the shares of the
Company's stock are not listed on the Principal Trading Market, may be difficult
to ascertain. The parties agree that the amounts payable pursuant to the
foregoing provisions of this Section 2(b) represent a reasonable estimate on the
part of the parties, as of the date of this Agreement, of the amount of such
damages.

      (vi) Notwithstanding the foregoing, the amounts payable by the Company
pursuant to this provision shall not be payable to the extent any delay in the
filing or effectiveness of the Registration Statement occurs because of an act
of, or a failure to act or to act timely by the Initial Investor or its counsel.

                                       5
<PAGE>

      (vii) "Computation Date" means (A) the date which is the earlier of (1)
thirty (30) days after any relevant Required Effective Date or a Restricted Sale
Date, as the case may be, or (2) the date after the Required Effective Date or
Restricted Sale Date on which the Registration Statement is filed (with respect
to payments due as contemplated by Section 2(b) hereof) or is declared effective
or has its restrictions removed or the shares of the Company's stock are listed
on the Principal Trading Market (with respect to payments due as contemplated by
Section 2(b)(ii) hereof), as the case may be, and (B) each date which is the
earlier of (1) thirty (30) days after the previous Computation Date or (2) the
date after the previous Computation Date on which the Registration Statement is
filed (with respect to payments due as contemplated by Section 2(b) hereof) or
is declared effective or has its restrictions removed or the shares of the
Company's stock are listed on the Principal Trading Market (with respect to
payments due as contemplated by Section 2(b)(ii) hereof), as the case may be,
provided, however, that if the Registration Statement is not filed by the
Initial Required Filing Date, or if filed and comments from the SEC are not
responded to within ten (10) days of receipt ("Filing Default"),, the term
Computation Date shall be deemed to be ten (10) days after the previous
Computation Date until the Filing Default is cured.

      3. Obligations of the Company. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:

      (a) Not later than November 1, 2204, take all necessary action at its
expense to hold a special Shareholders Meeting to secure an increase in its
authorized shares of Common Stock to not less than 100,000,000 shares of Common
Stock .

      (b) Retain Sichenzia Ross Friedman Ference LLP to prepare promptly, and
file with the SEC by the Required Filing Date a Registration Statement with
respect to not less than the number of Registrable Securities provided in
Section 2(a) above, and thereafter use its reasonable best efforts to cause such
Registration Statement relating to Registrable Securities to become effective by
the Required Effective Date and keep the Registration Statement effective at all
times during the period (the "Registration Period") continuing until the earlier
of (i) the date when the Investors may sell all Registrable Securities under
Rule 144 without volume or other restrictions or limits or (ii) the date the
Investors no longer own any of the Registrable Securities,(provided however, the
the Company will not be required to include the Warrant Shares in any
Registration Statement for in excess of one year from the issuance date of the
Warrants) which Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;

      (c) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

                                       6
<PAGE>

      (d) Permit a single firm of counsel designated by the Initial Investors
(which, until further notice, shall be deemed to be Krieger & Prager LLP, Attn:
Samuel Krieger, Esq., which firm has requested to receive such notification;
each, an "Investor's Counsel") to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time (but not less
than three (3) business days) prior to their filing with the SEC, and not file
any document in a form to which such counsel reasonably objects;

      (e) Notify the Finder and the Investor's Counsel and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than three
(3) business days prior to such filing) and (if requested by any such person)
confirm such notice in writing no later than one (1) business day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B) whenever
the SEC notifies the Company whether there will be a "review" of such
Registration Statement; (C) whenever the Company receives (or a representative
of the Company receives on its behalf) any oral or written comments from the SEC
in respect of a Registration Statement (copies or, in the case of oral comments,
summaries of such comments shall be promptly furnished by the Company to the
Investors); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any proceedings for that
purpose; (iv) if at any time any of the representations or warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall furnish the Investor's
Counsel with copies of all intended written responses to the comments
contemplated in clause (C) of this Section 3(e) not later than one (1) business
day in advance of the filing of such responses with the SEC so that the
Investors shall have the opportunity to comment thereon;

      (f) Furnish to each Investor and to Investor's Counsel (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received
by the Company, one (1) copy of the Registration Statement, each preliminary
prospectus and prospectus, and each amendment or supplement thereto, and (ii)
such number of copies of a prospectus, and all amendments and supplements
thereto and such other documents, as such Investor may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Investor;

                                       7
<PAGE>

      (g) As promptly as practicable after becoming aware thereof, notify each
Investor of the happening of any event of which the Company has knowledge, as a
result of which the prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request;

      (h) As promptly as practicable after becoming aware thereof, notify each
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by the SEC of
a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;

      (i) Comply with Regulation FD or any similar rule or regulation regarding
the dissemination of information regarding the Company, and in furtherance of
the foregoing, and not in limitation thereof, not disclose to the Investor any
non-public material information regarding the Company;

      (j) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing that the effectiveness of the Registration
Statement is suspended for any reason, whether due to a Potential Material Event
or otherwise, the Investors shall not offer or sell any Registrable Securities,
or engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of such notice until such Investor
receives written notice from the Company that such the effectiveness of the
Registration Statement has been restored, whether because the Potential Material
Event has been disclosed to the public or it no longer constitutes a Potential
Material Event or otherwise; provided, however, that the Company may not so
suspend the right to such holders of Registrable Securities during the periods
the Registration Statement is required to be in effect other than during a
Permitted Suspension Period (and the applicable provisions of Section 2(b) shall
apply with respect to any such suspension other than during a Permitted
Suspension Period) . The term "Permitted Suspension Period" means up to two such
suspension periods during any consecutive 12-month period, each of which
suspension period shall not either (i) be for more than ten (10) days or (ii)
begin less than ten (10) business days after the last day of the preceding
suspension (whether or not such last day was during or after a Permitted
Suspension Period);

      (k) Use its reasonable efforts to secure and maintain the designation of
all the Registrable Securities covered by the Registration Statement on the
Principal Trading Market within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
quotation of the Registrable Securities on the Principal Trading Market;

                                       8
<PAGE>

      (l) Provide a transfer agent ("Transfer Agent") and registrar, which may
be a single entity, for the Registrable Securities not later than the initial
Effective Date;

      (m) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may reasonably
request, and, within five (5) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to the Transfer Agent for the Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and opinion of such counsel, which shall
include, without limitation, directions to the Transfer Agent to issue
certificates of Registrable Securities(including certificates for Registrable
Securities to be issued after the Effective Date and replacement certificates
for Registrable Securities previously issued) without legends or other
restrictions; and

      (n) Take all other reasonable actions necessary to expedite and facilitate
disposition by the Investor of the Registrable Securities pursuant to the
Registration Statement.

      4. Obligations of the Investors. In connection with the registration of
the Registrable Securities, the Investors shall have the following obligations:

      (a) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and

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

      Expenses of Registration. (a) All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company.

                                       9
<PAGE>

      (b) Except as and to the extent specifically set forth in Schedule 5(b)
attached hereto, neither the Company nor any of its subsidiaries has, as of the
date hereof, nor shall the Company nor any of its subsidiaries, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Except as and to the extent
specifically set forth in Schedule 5(b)(1) attached hereto, neither the Company
nor any of its subsidiaries has previously entered into any agreement granting
any registration rights with respect to any of its securities to any Person.
Without limiting the generality of the foregoing, without the written consent of
the Holders of a majority of the then outstanding Registrable Securities, the
Company shall not grant to any person the right to request the Company to
register any securities of the Company under the Securities Act unless the
rights so granted are subject in all respects to the prior rights in full of the
Holders set forth herein, and are not otherwise in conflict or inconsistent with
the provisions of this Agreement. Schedule 5(b) sets forth the name of each
Person who has executed a "lockup agreement" with respect to its Registrable
Securities, in form and substance acceptable to the Investors.

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

      (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, and each Lender
Control Person (each, an "Indemnified Party"), against any losses, claims,
damages, liabilities or expenses (joint or several) incurred (collectively,
"Claims") to which any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations in the
Registration Statement, or any post-effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively referred to as
"Violations"). Subject to clause (b) of this Section 6, the Company shall
reimburse the Investors, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) shall not (I) apply to any Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf

                                       10
<PAGE>

of such Indemnified Party expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to
Section 3(b) hereof; (II) be available to the extent such Claim is based on a
failure of the Investor to deliver or cause to be delivered the prospectus made
available by the Company or the amendment or supplement thereto made available
by the Company; (III) be available to the extent such Claim is based on the
delivery of a prospectus by the Investor after receiving notice from the Company
under Section 3(f), (g) or (h) hereof (other than a notice regarding the
effectiveness of the Registration Statement or any amendment or supplement
thereto), or (IV) apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. The Investor will
indemnify the Company and its officers, directors and agents (each, an
"Indemnified Party") against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company, by or on behalf of such Investor, expressly for use in
connection with the preparation of the Registration Statement or the amendment
or supplement thereto, subject to such limitations and conditions as are
applicable to the indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Party and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.

      (b) Promptly after receipt by an Indemnified Party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Party or the Indemnified Party, as
the case may be. In case any such action is brought against any Indemnified
Party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
Indemnified Party under this Section 6 for any legal or other reasonable
out-of-pocket expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and reasonable out-of-pocket expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the Indemnified
Party provided such counsel is of the opinion that all defenses available to the
Indemnified Party can be maintained without prejudicing the rights of the
indemnifying party. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Party under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.

                                       11
<PAGE>

      7. Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
except where the seller has committed fraud (other than a fraud by reason of the
information included or omitted from the Registration Statement as to which the
Company has not given notice as contemplated under Section 3 hereof) or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

      8. Reports under Securities Act and Exchange Act. With a view to making
available to Investor the benefits of Rule 144 promulgated under the Securities
Act or any other similar rule or regulation of the SEC that may at any time
permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:

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

      (b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and

      (c) furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) if not available on the SEC's EDGAR system, a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant to
Rule 144 without Registration; and

      (d) at the request of any Investor holding Registrable Securities (a
"Holder"), give its Transfer Agent instructions to the effect that, upon the
Transfer Agent's receipt from such Holder of

      (i) a certificate (a "Rule 144 Certificate") certifying (A) that the
      Holder's holding period (as determined in accordance with the provisions
      of Rule 144) for the shares of Registrable Securities which the Holder
      proposes to sell (the "Securities Being Sold") is not less than (1) year
      and (B) as to such other matters as may be appropriate in accordance with
      Rule 144 under the Securities Act, and

                                       12
<PAGE>

      (ii) an opinion of counsel acceptable to the Company (for which purposes
      it is agreed that the initial Investor's Counsel shall be deemed
      acceptable) that, based on the Rule 144 Certificate, Securities Being Sold
      may be sold pursuant to the provisions of Rule 144, even in the absence of
      an effective Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the Holder,
as the seller or transferor thereof, or the status, including any relevant
legends or restrictions, of the shares of the Securities Being Sold while held
by the Holder). If the Transfer Agent reasonably requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.

      9. Assignment of the Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debentures) only if the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee and (b) the securities with respect to which such registration rights
are being transferred or assigned.

      10. Amendment of Registration Rights. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a eighty (80%) percent
interest of the Registrable Securities (as calculated by the stated value of the
Debentures). Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company.

      11. Miscellaneous.

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

      (b) Notices required or permitted to be given hereunder shall be given in
the manner contemplated by the Securities Purchase Agreement, (i) if to the
Company or to the Initial Investor, to their respective address contemplated by
the Securities Purchase Agreement, and (ii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 11(b).

                                       13
<PAGE>

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

      (d) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
coveniens, to the bringing of any such proceeding in such jurisdictions.

      (e) The Company and the Investor hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection with
this Agreement or any of the other Transaction Agreements.

      (f) If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

      (g) Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

      (h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

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

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

      (k) The Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a) and 3(b) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.

                                       14
<PAGE>

      (l) This Agreement (including to the extent relevant the provisions of
other Transaction Agreements) constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                        COMPANY:

                                        URANIUM POWER CORPORATION

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

                                        INITIAL INVESTOR:

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

                                       16
<PAGE>

                                  SCHEDULE 5(b)

NAME                            NUMBER OF SHARES       DATE OF LOCKUP EXPIRATION
--------------------------------------------------------------------------------

                                       17
<PAGE>

                                                                SCHEDULE 5(b)(1)

                        ADDITIONAL REGISTRABLE SECURITIES

                                       18

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