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EXHIBIT 10.8

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

                        RAPTOR NETWORKS TECHNOLOGY, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: M-2-1
Number of Shares of Common Stock: 2,366,433
Date of Issuance: January 19, 2007("ISSUANCE DATE")

         Raptor Networks Technology, Inc., a Colorado corporation, (the
"COMPANY"), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, CASTLERIGG MASTER
INVESTMENTS LTD., the registered holder hereof or its permitted assigns (the
"HOLDER"), is entitled, subject to the terms set forth below, to purchase from
the Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including any Warrants to
purchase Common Stock issued in exchange, transfer or replacement hereof, the
"WARRANT"), at any time or times on or after the date of the consummation of a
Mandatory Conversion (as defined in the SPA Securities) , but not after 11:59
p.m., New York Time, on the Expiration Date (as defined below), Two Million
Three Hundred Sixty-Six Thousand Four Hundred Thirty-Three (2,366,433) fully
paid nonassessable shares of Common Stock (as defined below) (the "WARRANT
SHARES"). Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 15. This Warrant is one of the
Warrants to Purchase Common Stock (including replacement warrants and additional
warrants issued pursuant to the Amendment and Exchange Agreements (as defined
below), the "SPA WARRANTS") issued pursuant to Section 1 of those certain
Amendment and Exchange Agreements, dated as of January 18, 2007 by and between
the Company and each of the investors (collectively, the "BUYERS") referred to
therein (the "AMENDMENT AND EXCHANGE AGREEMENTS").

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         1. EXERCISE OF WARRANT.

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

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                 (b) EXERCISE PRICE. For purposes of this Warrant, "EXERCISE
PRICE" means $0.43948, subject to adjustment as provided herein.

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

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

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

                                        B

                     For purposes of the foregoing formula:

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

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

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

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

                 (f) Limitations on Exercises.

                          (i) BENEFICIAL OWNERSHIP. The Company shall not effect
                 the exercise of this Warrant, and the Holder shall not have the
                 right to exercise this Warrant, to the extent that after giving
                 effect to such exercise, such Person (together with such
                 Person's affiliates) would beneficially own in excess of 4.99%
                 of the shares of Common Stock outstanding immediately after
                 giving effect to such exercise. For purposes of the foregoing
                 sentence, the aggregate number of shares of Common Stock
                 beneficially owned by such Person and its affiliates shall
                 include the number of shares of Common Stock issuable upon
                 exercise of this Warrant with respect to which the
                 determination of such sentence is being made, but shall exclude
                 shares of Common Stock which would be issuable upon (A)
                 exercise of the remaining, unexercised portion of this Warrant
                 beneficially owned by such Person and its affiliates and (B)
                 exercise or conversion of the unexercised or unconverted
                 portion of any other securities of the Company beneficially
                 owned by such Person and its affiliates (including, without
                 limitation, any convertible notes or convertible preferred
                 stock or warrants) subject to a limitation on conversion or
                 exercise analogous to the limitation contained herein. Except
                 as set forth in the preceding sentence, for purposes of this
                 paragraph, beneficial ownership shall be calculated in
                 accordance with Section 13(d) of the Securities Exchange Act of
                 1934, as amended (the "EXCHANGE ACT"). For purposes of this
                 Warrant, in determining the number of outstanding shares of
                 Common Stock, the Holder may rely on the number of outstanding
                 shares of Common Stock as reflected in (1) the Company's most
                 recent Form 10-K, 10-KSB, Form 10-Q, 10-QSB, Current Report on

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                 Form 8-K or other public filing with the Securities and
                 Exchange Commission, as the case may be, (2) a more recent
                 public announcement by the Company or (3) any other notice by
                 the Company or the Transfer Agent setting forth the number of
                 shares of Common Stock outstanding. For any reason at any time,
                 upon the written or oral request of the Holder, the Company
                 shall within two (2) Business Day confirm orally and in writing
                 to the Holder the number of shares of Common Stock then
                 outstanding. In any case, the number of outstanding shares of
                 Common Stock shall be determined after giving effect to the
                 conversion or exercise of securities of the Company, including
                 the SPA Securities and the SPA Warrants, by the Holder and its
                 affiliates since the date as of which such number of
                 outstanding shares of Common Stock was reported. By written
                 notice to the Company, the Holder may increase or decrease the
                 Maximum Percentage to any other percentage not in excess of
                 9.99% specified in such notice; provided that (i) any such
                 increase will not be effective until the sixty-first (61st) day
                 after such notice is delivered to the Company, and (ii) any
                 such increase or decrease will apply only to the Holder and not
                 to any other holder of SPA Warrants.

                          (ii) PRINCIPAL MARKET REGULATION. The Company shall
                 not be obligated to issue any shares of Common Stock upon
                 exercise of this Warrant or conversion of SPA Securities and no
                 Buyer shall be entitled to receive any shares of Common Stock
                 if the issuance of such shares of Common Stock would exceed
                 that number of shares of Common Stock which the Company may
                 issue upon exercise or conversion, as applicable, of the SPA
                 Warrants and SPA Securities or otherwise without breaching the
                 Company's obligations under the rules or regulations of any
                 applicable Eligible Market (the "EXCHANGE CAP"), except that
                 such limitation shall not apply in the event that the Company
                 (A) obtains the approval of its shareholders as required by the
                 applicable rules of the Eligible Market for issuances of shares
                 of Common Stock in excess of such amount or (B) obtains a
                 written opinion from outside counsel to the Company that such
                 approval is not required, which opinion shall be reasonably
                 satisfactory to the Required Holders. Until such approval or
                 written opinion is obtained, no Buyer shall be issued in the
                 aggregate, upon exercise or conversion, as applicable, of any
                 SPA Warrants or SPA Securities, shares of Common Stock in an
                 amount greater than the product of the Exchange Cap multiplied
                 by a fraction, the numerator of which is the total number of
                 shares of Common Stock underlying the SPA Warrants issued to
                 such Buyer pursuant to the Amendment and Exchange Agreement on
                 the Subscription Date and the denominator of which is the
                 aggregate number of shares of Common Stock underlying the SPA
                 Warrants issued to all the Buyers, on a pro rata basis,
                 pursuant to the Amendment and Exchange Agreement on the
                 Subscription Date (with respect to each Buyer, the "EXCHANGE
                 CAP ALLOCATION"). In the event that any Buyer shall sell or
                 otherwise transfer any of such Buyer's SPA Warrants, the
                 transferee shall be allocated a pro rata portion of such
                 Buyer's Exchange Cap Allocation, and the restrictions of the

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                 prior sentence shall apply to such transferee with respect to
                 the portion of the Exchange Cap Allocation allocated to such
                 transferee. In the event that any holder of SPA Warrants shall
                 exercise all of such holder's SPA Warrants into a number of
                 shares of Common Stock which, in the aggregate, is less than
                 such holder's Exchange Cap Allocation, then the difference
                 between such holder's Exchange Cap Allocation and the number of
                 shares of Common Stock actually issued to such holder shall be
                 allocated to the respective Exchange Cap Allocations of the
                 remaining holders of SPA Warrants on a pro rata basis in
                 proportion to the shares of Common Stock underlying the SPA
                 Warrants then held by each such holder. In the event that the
                 Company is prohibited from issuing any Warrant Shares for which
                 an Exercise Notice has been received as a result of the
                 operation of this Section 1(f)(ii), the Company shall pay cash
                 in exchange for cancellation of such Warrant Shares, at a price
                 per Warrant Share equal to the difference between the Closing
                 Sale Price and the Exercise Price as of the date of the
                 attempted exercise.

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

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

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

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                 Convertible Securities" shall be equal to the sum of the lowest
                 amounts of consideration (if any) received or receivable by the
                 Company with respect to any one share of shares of Common Stock
                 upon the granting or sale of the Option, upon exercise of the
                 Option and upon conversion, exercise or exchange of any
                 Convertible Security issuable upon exercise of such Option. No
                 further adjustment of the Exercise Price or number of Warrant
                 Shares shall be made upon the actual issuance of such shares of
                 Common Stock or of such Convertible Securities upon the
                 exercise of such Options or upon the actual issuance of such
                 shares of Common Stock upon conversion, exercise or exchange of
                 such Convertible Securities.

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

                          (iii) CHANGE IN OPTION PRICE OR RATE OF CONVERSION. If
                 the purchase price provided for in any Options, the additional
                 consideration, if any, payable upon the issue, conversion,
                 exercise or exchange of any Convertible Securities, or the rate
                 at which any Convertible Securities are convertible into or
                 exercisable or exchangeable for shares of Common Stock
                 increases or decreases at any time, the Exercise Price and the
                 number of Warrant Shares in effect at the time of such increase
                 or decrease shall be adjusted to the Exercise Price and the
                 number of Warrant Shares which would have been in effect at
                 such time had such Options or Convertible Securities provided
                 for such increased or decreased purchase price, additional
                 consideration or increased or decreased conversion rate, as the
                 case may be, at the time initially granted, issued or sold. For
                 purposes of this Section 2(a)(iii), if the terms of any Option

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                 or Convertible Security that were outstanding as of the date of
                 issuance of this Warrant are increased or decreased in the
                 manner described in the immediately preceding sentence, then
                 such Option or Convertible Security and the shares of Common
                 Stock deemed issuable upon exercise, conversion or exchange
                 thereof shall be deemed to have been issued as of the date of
                 such increase or decrease. No adjustment pursuant to this
                 Section 2(a)(iii) shall be made if such adjustment would result
                 in an increase of the Exercise Price then in effect or a
                 decrease in the number of Warrant Shares.

                          (iv) CALCULATION OF CONSIDERATION RECEIVED. In case
                 any Option or Convertible Security is issued in connection with
                 the issue or sale of other securities of the Company, together
                 comprising one integrated transaction in which no specific
                 consideration is allocated to such Option or Convertible
                 Security by the parties thereto, the Option or Convertible
                 Security will be deemed to have been issued for a consideration
                 of $0.01. If any shares of Common Stock, Options or Convertible
                 Securities are issued or sold or deemed to have been issued or
                 sold for cash, the consideration received therefor will be
                 deemed to be the net amount received by the Company therefor.
                 If any shares of Common Stock, Options or Convertible
                 Securities are issued or sold for a consideration other than
                 cash, the amount of such consideration received by the Company
                 will be the fair value of such consideration, except where such
                 consideration consists of publicly traded securities, in which
                 case the amount of consideration received by the Company will
                 be the Closing Sale Price of such security on the date of
                 receipt. If any shares of Common Stock, Options or Convertible
                 Securities are issued to the owners of the non-surviving entity
                 in connection with any merger in which the Company is the
                 surviving entity, the amount of consideration therefor will be
                 deemed to be the fair value of such portion of the net assets
                 and business of the non-surviving entity as is attributable to
                 such shares of Common Stock, Options or Convertible Securities,
                 as the case may be. The fair value of any consideration other
                 than cash or publicly traded securities will be determined
                 jointly by the Company and the Required Holders. If such
                 parties are unable to reach agreement within ten (10) days
                 after the occurrence of an event requiring valuation (the
                 "VALUATION EVENT"), the fair value of such consideration will
                 be determined within five (5) Business Days after the tenth day
                 following the Valuation Event by an independent, reputable
                 appraiser jointly selected by the Company and the Required
                 Holders. The determination of such appraiser shall be final and
                 binding upon all parties absent manifest error and the fees and
                 expenses of such appraiser shall be borne by the Company.

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

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

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

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

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

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

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

         4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

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

                                      -10-

<PAGE>

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

                 (c) Notwithstanding the foregoing and the provisions of Section
4(b) above, in the event of a Fundamental Transaction, if the Holder has not
exercised the Warrant in full prior to the consummation of the Fundamental
Transaction, then the Holder shall have the right to require such Successor
Entity to purchase this Warrant from the Holder by paying to the Holder,
simultaneously with the consummation of the Fundamental Transaction and in lieu

                                      -11-

<PAGE>

of the warrant referred to in Section 4(b), cash in an amount equal to the value
of the remaining unexercised portion of this Warrant on the date of such
consummation, which value shall be determined by use of the Black and Scholes
Option Pricing Model reflecting (i) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the remaining term of this Warrant
as of such date of request and (ii) an expected volatility equal to the greater
of 60% and the 100 day volatility obtained from the HVT function on Bloomberg.

         5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share capital of the Company for any purpose, nor shall
anything contained in this Warrant be construed to confer upon the Holder,
solely in such Person's capacity as the Holder of this Warrant, any of the
rights of a shareholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which such
Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same notices and other information given to the shareholders of the
Company generally, contemporaneously with the giving thereof to the
shareholders.

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

         7. REISSUANCE OF WARRANTS.

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

                                      -12-

<PAGE>

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

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

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

         8. NOTICES. Whenever notice is required to be given under this Warrant,
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant,
including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will
give written notice to the Holder (i) immediately upon any adjustment of the
Exercise Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen days prior to the date

                                      -13-

<PAGE>

on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to
any grants, issuances or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares
of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder.

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

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

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

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

                                      -14-

<PAGE>

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

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

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

                 (a) "AVERAGE MARKET PRICE" means the lesser of (i) the
arithmetic average of the Weighted Average Price of the Common Stock during the
twenty (20) consecutive Trading Day period commencing on the Trading Day
immediately after the date of the public disclosure of such Event of Default,
(ii) the arithmetic average of the Weighted Average Price of the Common Stock
during the five (5) consecutive Trading Day period beginning during the (20)
consecutive Trading Days period commencing on the Trading Day immediately after
the date of the public disclosure of such Event of Default and (iii) the
arithmetic average of the Weighted Average Price of the Common Stock during the
five (5) consecutive Trading Day period commencing on the sixteenth (16th)
Trading Day immediately he date of the public disclosure of such Event of
Default; provided, that all such determinations shall be appropriately adjusted
for any stock split, stock dividend, stock combination or other similar
transaction that proportionately decreases or increases the Common Stock during
such periods.

                 (b) "BLOOMBERG" means Bloomberg Financial Markets.

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

                                      -15-

<PAGE>

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

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

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

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

                 (h) "EXPIRATION DATE" means the date eighty-four (84) months
after the earlier of (x) the Additional Effective Date (as defined in the
Registration Rights Agreement) of the first Additional Registration Statement
(as defined in the Registration Rights Agreement) filed to register any of the
Warrant Shares hereunder and (y) such date that all the Warrant Shares hereunder
may be sold pursuant to Rule 144(k) of the 1933 Act without restriction, or if
such date falls on a day other than a Business Day or on which trading does not
take place on the Principal Market (a "HOLIDAY"), the next date that is not a
Holiday.

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

                                      -16-

<PAGE>

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

                 (j) "MAXIMUM ELIGIBILITY NUMBER" means initially, zero, and
shall be increased successively each time that the Company elects a Mandatory
Conversion (as defined in the SPA Securities) by the number of shares equal to
65% of the number of shares of Common Stock otherwise issuable upon conversion
of that portion of the SPA Securities being redeemed by the Company pursuant to
such Mandatory Conversion at such time.

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

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

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

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

                 (o) "REGISTRATION RIGHTS AGREEMENT" means that certain Amended
and Restated Registration Rights Agreement dated as of January 18, 2007 by and
among the Company and the Buyers, as the same may be amended, modified or
supplemented from time to time, relating to, among other things, the
registration of the resale of the Common Stock issuable upon conversion of the
SPA Securities and exercise of the SPA Warrants.

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

                 (q) "SECURITIES PURCHASE AGREEMENT" means that certain
Securities Purchase Agreement, dated as of the Subscription Date, by and among
the Company and the Buyers referred to therein, as the same may be amended,
modified or supplemented from time to time.

                                      -17-

<PAGE>

                 (r) "SPA SECURITIES" means the Notes issued pursuant to the
Amendment and Exchange Agreements.

                 (s) "SUBSCRIPTION DATE" means July 30, 2006.

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

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

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

                            [SIGNATURE PAGE FOLLOWS]

                                      -18-

<PAGE>

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

                                         RAPTOR NETWORKS TECHNOLOGY, INC.

                                         By:   /S/ THOMAS M. WITTENSCHLAEGER
                                             -----------------------------------
                                         Name:    Thomas M. Wittenschlaeger
                                         Title:   Chief Executive Officer

<PAGE>

                                                                       EXHIBIT A

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

                        RAPTOR NETWORKS TECHNOLOGY, INC.

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

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

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

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

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

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

Date: _______________ __, ______

________________________________                   _____________________________
   Name of Registered Holder                       Social Security or Tax ID
                                                   Number of Holder

By: ________________________________________
         Name:
         Title:

<PAGE>

                                 ACKNOWLEDGMENT

         The Company hereby acknowledges this Exercise Notice and hereby directs
First American Stock Transfer to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated July 31,
2006 from the Company and acknowledged and agreed to by First American Stock
Transfer.

                                             RAPTOR NETWORKS TECHNOLOGY, INC.

                                             By: _______________________________
                                                      Name:
                                                      Title:<PAGE>

EXHIBIT 10.9

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

                  AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), dated as of January 18, 2007, by and among Raptor Networks
Technology, Inc., a Colorado corporation, with headquarters located at 1241 Dyer
Road, Suite 150, Santa Ana, California 92705 (the "COMPANY"), and the
undersigned investors (each, an "INVESTOR", and collectively, the "INVESTORS").

                  WHEREAS:

                  A. The Company and the Investors are parties to that certain
Securities Purchase Agreement, dated as of July 30, 2006 (the "EXISTING
SECURITIES PURCHASE AGREEMENT"), pursuant to which, among other things, the
Investors purchased from the Company (i) senior convertible notes (the "EXISTING
NOTES"), which are convertible into shares of the Company's common stock, par
value $0.001 per share (the "COMMON STOCK") (the Existing Notes as converted,
the "EXISTING CONVERSION SHARES"), in accordance with the terms thereof, (ii)
Series L Warrants (the "EXISTING SERIES L WARRANTS"), which are exercisable into
shares of Common Stock (the "EXISTING SERIES L WARRANT SHARES"), and (iii)
Series M Warrants (the "EXISTING SERIES M WARRANTS", and together with the
Existing Series L Warrants, the "EXISTING WARRANTS"), which are exercisable into
shares of Common Stock (the "EXISTING SERIES M WARRANT SHARES", and together
with the Existing Series L Warrant Shares, the "EXISTING WARRANT SHARES").

                  B. In connection with the Amendment and Exchange Agreements by
and among the Company and each of the Investors, dated as of the date hereof
(the "AMENDMENT AGREEMENTS"), the Company has agreed, among other things, (i) to
amend and restate all of such Investor's Existing Notes for notes in the form
attached thereto as EXHIBIT A (the "AMENDED AND RESTATED NOTES") which shall be
convertible into Common Stock (the "AMENDED AND RESTATED CONVERSION SHARES"),
(ii) to exchange all of such Investor's Existing Series L Warrants for warrants
in the form attached thereto as EXHIBIT B (the "REPLACEMENT SERIES L-1
WARRANTS") which shall be exercisable to acquire shares of Common Stock (the
"REPLACEMENT SERIES L-1 WARRANT SHARES"), and (iii) to exchange all of such
Investor's Existing Series M Warrants for warrants in the form attached thereto
as EXHIBIT C (the "REPLACEMENT SERIES M-1 WARRANTS", and together with the
Replacement Series L-1 Warrants, the "REPLACEMENT WARRANTS") which shall be
exercisable to acquire shares of Common Stock (the "REPLACEMENT SERIES M-1
WARRANT SHARES", and together with the Replacement Series L-1 Warrant Shares,
the "REPLACEMENT WARRANT SHARES").

                  C. In addition, in connection with the Amendment Agreements,
one Investor has agreed to purchase, and the Company has agreed to sell, (i) an
additional aggregate principal amount of the Notes, in substantially the form
attached thereto as EXHIBIT D (the "ADDITIONAL NOTES", and together with the
Amended and Restated Notes, the "NOTES") which shall be convertible into Common
Stock (as converted, collectively, the "ADDITIONAL CONVERSION SHARES" and
together with the Amended and Restated Conversion Shares, the "CONVERSION
SHARES"), (ii) additional warrants, in substantially the form attached thereto
as EXHIBIT E (the "SERIES L-2 WARRANTS"), to acquire shares of Common Stock (as

<PAGE>

exercised, the "SERIES L-2 WARRANT SHARES") and (iii) additional warrants in
substantially the form attached thereto as EXHIBIT F (the "SERIES M-2 WARRANTS"
and together with the Series L-2 Warrants, the "ADDITIONAL WARRANTS" and the
Additional Warrants together with the Replacement Warrants, the "WARRANTS") to
acquire shares of Common Stock (as exercised, the "SERIES M-2 WARRANT SHARES",
and collectively with the Series L-2 Warrant Shares, the "ADDITIONAL WARRANT
SHARES", and together with the Replacement Warrant Shares, the "WARRANT SHARES")

                  D. To induce the Investors to execute and deliver their
respective Amendment Agreements, the Company has agreed to execute and deliver
this Agreement which amends, restates and consolidates the terms and conditions
of that certain Registration Rights Agreement, by and among the Company and the
Investors, dated as of July 31, 2006, whereby the Company agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 ACT"), and applicable state securities laws.

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

                  1. DEFINITIONS.

                  Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement as amended by the Amendment Agreements. As used in this Agreement, the
following terms shall have the following meanings:

                           a. "ADDITIONAL EFFECTIVE DATE" means the date that
the applicable Additional Registration Statement is declared effective by
the SEC.

                           b. "ADDITIONAL EFFECTIVENESS DEADLINE" means the date
which is (i) in the event that an Additional Registration Statement is
not subject to a full review by the SEC, 60 calendar days after the date of its
applicable Investor Demand or (ii) in the event that an Additional Registration
Statement is subject to a full review by the SEC, 90 calendar days after the
date of its applicable Investor Demand.

                           c. "ADDITIONAL FILING DEADLINE" means 30 calendar
days from the date of the applicable Investor Demand; PROVIDED HOWEVER, that if
such date would otherwise fall between February 11, 2008 and March 14, 2008 and
the Company's most recent 1934 Act (as defined below) reports do not include
financial statements less than 135 days old, such date shall be extended for
that particular Additional Registration Statement to March 15, 2008.

                           d. "ADDITIONAL REGISTRABLE SECURITIES" means (i) the
Conversion Shares issued or issuable upon conversion of the Notes then
outstanding and not previously registered on a Registration Statement, (ii) the
Warrant Shares issuable upon the exercise of any Warrants then outstanding and
not previously registered on a Registration Statement and (iii) any capital
stock of the Company issued or issuable with respect to the Conversion Shares,
the Notes, the Warrant Shares, or the Warrants as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on conversions of the Notes or exercises of
the Warrants.

                                      -2-

<PAGE>

                           e. "ADDITIONAL REGISTRATION STATEMENT" a registration
statement or registration statements of the Company filed under the
1933 Act covering any Additional Registrable Securities.

                           f. "ADDITIONAL REQUIRED REGISTRATION AMOUNT" means
the Maximum Allowable Amount of the remaining sum of (i) the number of
previously unregistered Conversion Shares issued and issuable pursuant to the
Notes as of the trading day immediately preceding the applicable date of
determination and (ii) the number of previously unregistered Warrant Shares
issued and issuable pursuant to the Warrants as of the trading day immediately
preceding the applicable date of determination, all subject to adjustment as
provided in Section 2(f) (without regard to any limitations on conversion of the
Notes or exercise of the Warrants). Unless a different priority is specified in
writing to the Company by an Investor at least five (5) Business Days prior to
the applicable Additional Filing Deadline, the Company shall first register (x)
all Conversion Shares, then (y) all Replacement Series L-1 Warrant Shares
together with all Series L-2 Warrant Shares and finally (z) all Replacement
Series M-1 Warrant Shares together with all Series M-2 Warrant Shares.

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

                           h. "CLOSING DATE" shall have the meaning set forth in
the Amendment Agreements.

                           i. "EFFECTIVE DATE" means the Initial Effective Date
or an Additional Effective Date, as applicable.

                           j. "EFFECTIVENESS DEADLINE" means the Initial
Effectiveness Deadline or an Additional Effectiveness Deadline, as applicable.

                           k. "FILING DEADLINE" means the Initial Filing
Deadline or an Additional Filing Deadline, as applicable.

                           l. "INITIAL EFFECTIVE DATE" means the date that the
Initial Registration Statement is declared effective by the SEC.

                           m. "INITIAL FILING DEADLINE" means January 23, 2007.

                           n. "INITIAL EFFECTIVENESS DEADLINE" means the date
which is (i) in the event that the Initial Registration Statement is not subject
to a full review by the SEC, 30 calendar days after the Closing Date or (ii) in
the event that the Initial Registration Statement is subject to a full review by
the SEC, 60 calendar days after the Closing Date; provided however, that if the
Initial Registration Statement is not declared effective by the SEC by February
11, 2007, the Initial Effectiveness Deadline shall be extended to April 15,
2007.

                                      -3-

<PAGE>

                           o. "INITIAL REGISTRABLE SECURITIES" means (i) the
Conversion Shares issued or issuable upon conversion of the Notes, (ii) the
Replacement Warrant Shares issued or issuable upon exercise of the Warrants and
(iii) any capital stock of the Company issued or issuable with respect to the
Conversion Shares, the Notes, the Warrant Shares, or the Warrants as a result of
any stock split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on conversions of the Notes or
exercises of the Warrants.

                           p. "INITIAL REGISTRATION STATEMENT" means a
registration statement or registration statements of the Company filed under the
1933 Act covering the Initial Registrable Securities.

                           q. "INITIAL REQUIRED REGISTRATION AMOUNT" means the
Maximum Allowable Amount of Conversion Shares issued and issuable pursuant to
the Notes as of the trading day immediately preceding the applicable date of
determination.

                           r. "INVESTOR" means an Investor or any transferee or
assignee thereof to whom an Investor assigns its rights under this Agreement and
who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 and any transferee or assignee thereof to whom a transferee or
assignee assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9.

                           s. "INVESTOR DEMAND" means a written request by an
Investor to the Company that the Company prepare and file an Additional
Registration Statement to register Additional Registrable Securities.

                           t. "MAXIMUM ALLOWABLE AMOUNT" means a number of
shares of Common Stock equal to 30% (or such greater percentage as is permitted
by the SEC) of the issued and outstanding Common Stock of the Company that is
not beneficially owned by an affiliate of the Company.

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

                           v. "REGISTER," "REGISTERED," and "REGISTRATION" refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

                           w. "REGISTRABLE SECURITIES" means the Initial
Registrable Securities and the Additional Registrable Securities.

                           x. "REGISTRATION STATEMENT" means the Initial
Registration Statement or an Additional Registration Statement, as applicable.

                           y. "REQUIRED HOLDERS" means the holders of at least a
majority of the Registrable Securities.

                                      -4-

<PAGE>

                           z. "REQUIRED REGISTRATION AMOUNT" means with respect
to the Initial Registration Statement, the Initial Required
Registration Amount or with respect to an Additional Registration Statement, the
Additional Required Registration Amount, as applicable.

                           aa. "RULE 415" means Rule 415 under the 1933 Act or
any successor rule providing for offering securities on a continuous or delayed
basis.

                           bb. "SEC" means the United States Securities and
Exchange Commission.

                  2. REGISTRATION.

                           a. INITIAL MANDATORY REGISTRATION. The Company shall
prepare and as soon as practicable but in no event later than the
Initial Filing Deadline, file with the SEC the Initial Registration Statement on
Form SB-2 covering the resale of the Maximum Allowable Amount of the Initial
Registrable Securities. In the event that Form SB-2 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration on another appropriate form reasonably acceptable to the Required
Holders, subject to the provisions of Section 2(e). The Initial Registration
Statement prepared pursuant hereto shall register for resale at least the number
of shares of Common Stock equal to the Initial Required Registration Amount
determined as of date the Initial Registration Statement is initially filed with
the SEC. The Initial Registration Statement shall contain (except if otherwise
directed by the Required Holders) the "SELLING STOCKHOLDERS" and "PLAN OF
DISTRIBUTION" sections in substantially the form attached hereto as EXHIBIT B.
The Company shall use its best efforts to have the Initial Registration
Statement declared effective by the SEC as soon as practicable, but in no event
later than the Initial Effectiveness Deadline. By 9:30 am on the Business Day
following the Initial Effective Date, the Company shall file with the SEC in
accordance with Rule 424 under the 1933 Act the final prospectus to be used in
connection with sales pursuant to the Initial Registration Statement.

                           b. ADDITIONAL MANDATORY REGISTRATION. An Investor
successively may request in writing that the Company prepare and file with
the SEC an Additional Registration Statement to register any Additional
Registrable Securities beginning on the date which is five (5) months following
the Initial Effective Date and thereafter five (5) months following the
Additional Effective Date of the immediately preceding Additional Registration
Statement until the earlier date of when (x) all Additional Registrable
Securities have been registered on Additional Registration Statements and (y)
all Additional Registrable Securities not previously registered on an Additional
Registration Statement may be sold by the Investors without restriction under
Rule 144(k) promulgated under the 1933 Act. Upon receipt of an Investor Demand,
the Company shall (x) promptly send a copy of such Investor Demand to all other
Investors and (y) prepare and as soon as practicable but in no event later than
the Additional Filing Deadline, file with the SEC such Additional Registration
Statement on Form SB-2 covering the resale of the Maximum Allowable Amount of
the Additional Registrable Securities set forth on an Investor Demand and in any
additional Investor Demand received at least five (5) Business Days prior to the
applicable Additional Filing Deadline. In the event that Form SB-2 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration on another appropriate form reasonably
acceptable to the Required Holders, subject to the provisions of Section 2(e).

                                      -5-

<PAGE>

The Additional Registration Statement prepared pursuant hereto shall register
for resale at least the number of shares of Common Stock equal to the Additional
Required Registration Amount determined as of date the Additional Registration
Statement is initially filed with the SEC. The Additional Registration Statement
shall contain (except if otherwise directed by the Required Holders) the
"SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION" sections in substantially the
form attached hereto as EXHIBIT B. The Company shall use its best efforts to
have the Additional Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the Additional Effectiveness
Deadline. By 9:30 am on the Business Day following the Additional Effective Date
of the applicable Additional Registration Statement, the Company shall file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to
be used in connection with sales pursuant to such Additional Registration
Statement.

                           c. ALLOCATION OF REGISTRABLE SECURITIES. The initial
number of Registrable Securities included in any Registration
Statement and any increase in the number of Registrable Securities included
therein shall be allocated pro rata among the Investors based on the number of
Registrable Securities held by each Investor at the time the Registration
Statement covering such initial number of Registrable Securities or increase
thereof is declared effective by the SEC. In the event that an Investor sells or
otherwise transfers any of such Investor's Registrable Securities, each
transferee shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in such Registration Statement for such
transferor. Any shares of Common Stock included in a Registration Statement and
which remain allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors which are covered by such Registration Statement. In no
event shall the Company include any securities other than Registrable Securities
on any Registration Statement without the prior written consent of the Required
Holders; except that the shares of Common Stock underlying the Montgomery
Warrants (as defined in Section 30(u) of the Notes) may be included in one or
more Registration Statements pro rata with the Warrant Shares, but not until
after all of the Conversion Shares issued or issuable upon conversion of all of
the Notes have been included in one or more Registration Statements.

                           d. LEGAL COUNSEL. Subject to Section 5 hereof, each
Investor shall have the right to select one legal counsel to review and oversee
any registration pursuant to this Section 2 ("LEGAL COUNSEL") The Company and
Legal Counsel shall reasonably cooperate with each other in performing the
Company's obligations under this Agreement.

                           e. FORM S-3. The Company shall undertake to register
the Registrable Securities on Form S-3 as soon as such form is
available for use by the Company, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

                           f. SUFFICIENT NUMBER OF SHARES REGISTERED. In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) or Section 2(b) is insufficient to cover all of the
Registrable Securities required to be covered by such Registration Statement or

                                      -6-

<PAGE>

an Investor's allocated portion of the Registrable Securities pursuant to
Section 2(c), the Company shall amend the applicable Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration Amount
as of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event not later than fifteen (15) days after the necessity therefor
arises. The Company shall use its best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as practicable following
the filing thereof. For purposes of the foregoing provision, the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover all of the Registrable Securities" if at any time the number of shares of
Common Stock available for resale under the Registration Statement is less than
the product determined by multiplying (i) the Required Registration Amount as of
such time by (ii) 0.80. The calculation set forth in the foregoing sentence
shall be made without regard to any limitations on the conversion of the Notes
or the exercise of the Warrants and such calculation shall assume that the Notes
are then convertible into shares of Common Stock at the then prevailing
Conversion Rate (as defined in the Notes) and that the Warrants are then
exercisable for shares of Common Stock at the then prevailing Exercise Price (as
defined in the Warrants).

                           g. EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN
EFFECTIVENESS OF REGISTRATION STATEMENT. If (i) a Registration
Statement covering all of the Registrable Securities required to be covered
thereby and required to be filed by the Company pursuant to this Agreement is
(A) not filed with the SEC on or before the respective Filing Deadline (a
"FILING FAILURE") or (B) not declared effective by the SEC on or before the
respective Effectiveness Deadline (an "EFFECTIVENESS FAILURE") or (ii) on any
day after the applicable Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be made
(other than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such Registration
Statement, to register a sufficient number of shares of Common Stock or to
maintain the listing of the Common Stock) (a "MAINTENANCE FAILURE") then, as
partial relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each holder of Registrable Securities relating
to such Registration Statement an amount in cash equal to two percent (2.0%) of
the aggregate Purchase Price (as such term is defined in the Securities Purchase
Agreement) of such Investor's Notes relating to the Registrable Securities
included in such Registration Statement on each of the following dates: (i) the
day of a Filing Failure and on every thirtieth day (pro rated for periods
totaling less than thirty days) after a Filing Failure until such Filing Failure
is cured; (ii) (A) the day of an Effectiveness Failure (except if such
Effectiveness Failure occurs between February 12, 2008 and April 14, 2008 and
the Effectiveness Failure occurs because the Company's most recent 1934 Act
reports do not include financial statements less than 135 days old, the
Registration Delay Payment pursuant to this clause (A) shall not apply) and (B)
on every thirtieth day (pro rated for periods totaling less than thirty days)
after an Effectiveness Failure until such Effectiveness Failure is cured; and
(iii) the initial day of a Maintenance Failure and on every thirtieth day (pro
rated for periods totaling less than thirty days) after a Maintenance Failure
until such Maintenance Failure is cured. The payments to which a holder shall be

                                      -7-

<PAGE>

entitled pursuant to this Section 2(f) are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be paid on the day of the
Filing Failure, Effectiveness Failure and the initial day of a Maintenance
Failure, as applicable, and thereafter on the earlier of (I) the thirtieth day
after the event or failure giving rise to the Registration Delay Payments has
occurred and (II) the third Business Day after the event or failure giving rise
to the Registration Delay Payments is cured. In the event the Company fails to
make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of two percent (2.0%) per month
(prorated for partial months) until paid in full. Notwithstanding anything
herein to the contrary, in no event shall the aggregate Registration Delay
Payments exceed twelve and one-half percent (12.5%) of the aggregate Purchase
Price for all Investors (the "REGISTRATION DELAY PAYMENTS CAP"). Any amount in
excess of the Registration Delay Payments Cap (the "EXCESS REGISTRATION DELAY
PAYMENTS") shall cause the Conversion Price of the Investor's Notes to be
lowered by an amount equal to the quotient of the amount of such Investor's
Excess Registration Delay Payments divided by the then outstanding amount of
such Investor's Notes. Notwithstanding anything to the contrary contained
herein, in no event shall the Company be liable for any damages in connection
with the Warrant or Warrant Shares. In addition, and notwithstanding anything to
the contrary contained herein, in no event shall the Registration Delay Payments
be payable with respect to any Additional Registrable Securities that are not
included on any applicable Additional Registration Statement solely as a result
of a comment received by the SEC requiring a limit on the number of Additional
Registrable Securities included in such Additional Registration Statement in
order for such Additional Registration Statement to be able to avail itself of
Rule 415.

                  3.       RELATED OBLIGATIONS.

                  At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), 2((b), 2(e) or
2(f), the Company will use its best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

                           a. The Company shall promptly prepare and file with
the SEC a Registration Statement with respect to the Registrable Securities
and use its best efforts to cause such Registration Statement relating to the
Registrable Securities to become effective as soon as practicable after such
filing (but in no event later than the Effectiveness Deadline). The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which the Investors may sell all
of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under
the 1933 Act or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the "REGISTRATION
PERIOD"). The Company shall ensure that each 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 the case of prospectuses, in the light of the circumstances in which they
were made) not misleading. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that

                                      -8-

<PAGE>

the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c)
(which approval is immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.

                           b. The Company shall prepare and file with the SEC
such amendments (including post-effective amendments) and supplements to
a Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-QSB, Form
10-KSB or any analogous report under the Securities Exchange Act of 1934, as
amended (the "1934 ACT"), the Company shall have incorporated such report by
reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the 1934 Act
report is filed which created the requirement for the Company to amend or
supplement such Registration Statement.

                           c. The Company shall (A) permit Legal Counsel to
review and comment upon (i) the Initial Registration Statement at least one
(1) Business Day prior to its filing with the SEC and any Additional
Registration Statement at least five (5) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K and Form 10 KSB, and Reports on Form
10-Q and 10-QSB, Current Reports on Form 8-K (except those that refer to an
Investor or the transactions contemplated hereby, which will be subject to such
review and comment) and any similar or successor reports) within a reasonable
number of days prior to their filing with the SEC, and (B) not file any
Registration Statement or amendment or supplement thereto in a form to which
Legal Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company's obligations pursuant to this Section 3.

                                      -9-

<PAGE>

                           d. The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement,
without charge, (i) promptly after the same is prepared and filed with the SEC,
at least one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10)
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as such Investor may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investor.

                           e. The Company shall use its best efforts to (i)
register and qualify, unless an exemption from registration and
qualification applies, the resale by Investors of the Registrable Securities
covered by a Registration Statement under such other securities or "blue sky"
laws of all applicable jurisdictions in the United States, (ii) prepare and file
in those jurisdictions, such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of notice of the initiation or threatening of any proceeding for
such purpose.

                           f. The Company shall notify Legal Counsel and each
Investor in writing of the happening of any event, as promptly as
practicable after becoming aware of such event, as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and, subject to Section 3(r), promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission, and deliver ten (10) copies of such supplement or amendment to Legal
Counsel and each Investor (or such other number of copies as Legal Counsel or
such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile or e-mail on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments or supplements to
a Registration Statement or related prospectus or related information, and (iii)
of the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.

                                      -10-

<PAGE>

                           g. The Company shall use its best efforts to prevent
the issuance of any stop order or other suspension of effectiveness of
a Registration Statement, or the suspension or the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify Legal Counsel and each Investor who
holds Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of notice of the initiation or threat of any
proceeding for such purpose.

                           h. If any Investor is deemed to be, alleged to be or
reasonably believes it may be deemed or alleged to be, an underwriter
or is required under applicable securities laws to be described in the
Registration Statement as an underwriter, at the reasonable request of any
Investor, the Company shall furnish to such Investor, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as an Investor may reasonably request (i) a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Investors.

                           i. Upon the written request of any investor in
connection with such Investor's due diligence requirements, if any, the
Company shall make available for inspection by (i) any Investor, (ii) Legal
Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the "INSPECTORS"), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this Agreement or any other Transaction
Document. Each Investor agrees that it shall, upon learning that disclosure of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and any Investor) shall be deemed to limit the Investors' ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.

                           j. The Company shall hold in confidence and not make
any disclosure of information concerning an Investor provided to the
Company unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information is

                                      -11-

<PAGE>

necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Investor and allow such Investor, at the
Investor's expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.

                           k. The Company shall use its best efforts either to
(i) cause all of the Registrable Securities covered by a Registration
Statement to be listed on each securities exchange on which securities of the
same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such
exchange or (ii) secure the inclusion for quotation of all of the Registrable
Securities on The NASDAQ Global Market or (iii) if, despite the Company's best
efforts, the Company is unsuccessful in satisfying the preceding clauses (i) and
(ii), to secure the inclusion for quotation on The NASDAQ Capital Market or the
American Stock Exchange for such Registrable Securities and, without limiting
the generality of the foregoing, to use its best efforts to arrange for at least
two market makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable Securities. The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3(k).

                           l. The Company shall cooperate with the Investors who
hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request.

                           m. If requested by an Investor, the Company shall (i)
as soon as practicable incorporate in a prospectus supplement or
post-effective amendment such information as an Investor reasonably requests to
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being offered or sold, the purchase price being
paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering; (ii) as soon as practicable make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) as soon as practicable, supplement or make
amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.

                           n. The Company shall use its best efforts to cause
the Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such Registrable
Securities.

                                      -12-

<PAGE>

                           o. The Company shall make generally available to its
security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of Rule 158 under
the 1933 Act) covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the Effective Date of a
Registration Statement.

                           p. The Company shall otherwise use its best efforts
to comply with all applicable rules and regulations of the SEC in
connection with any registration hereunder.

                           q. Within two (2) Business Days after a Registration
Statement which covers Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as EXHIBIT A.

                           r. Notwithstanding anything to the contrary herein,
at any time after the Effective Date of an applicable Registration
Statement, the Company may (x) delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company and its
counsel, in the best interest of the Company and, in the opinion of counsel to
the Company otherwise required and (y) file supplements and/or amendments to the
Registration Statement to incorporate filings under the 1934 Act into the
Registration Statement in order to maintain the effectiveness of the
Registration Statement which may cause the Registration Statement to be
ineffective while being reviewed by the SEC (each, a "GRACE PERIOD"); provided,
that the Company shall promptly (i) notify the Investors in writing of the
existence of material, non-public information or other event giving rise to a
Grace Period (provided that in each notice the Company will not disclose the
content of such material, non-public information to the Investors) and the date
on which the Grace Period will begin, and (ii) notify the Investors in writing
of the date on which the Grace Period ends; and, provided further, that no Grace
Period of the type described in clause (x) above shall exceed ten (10)
consecutive days, no Grace Period of the type described in clause (y) above
shall exceed twenty (20) consecutive days and during any three hundred sixty
five (365) day period such Grace Periods shall not exceed an aggregate of sixty
(60) days and the first day of any Grace Period must be at least five (5)
trading days after the last day of any prior Grace Period (each, an "ALLOWABLE
GRACE PERIOD"). For purposes of determining the length of a Grace Period above,
the Grace Period shall begin on and include the date the Investors are
prohibited from selling Registrable Securities under the Registration Statement
due to the ineffectiveness of the Registration Statement and shall end on and
include the date the effectiveness of the Registration Statement is restored and
the Investors can continue to sell Registrable Securities pursuant to such
Registration Statement. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first sentence of
Section 3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale

                                      -13-

<PAGE>

of Registrable Securities with respect to which an Investor has entered into a
contract for sale and delivered a copy of the prospectus included as part of the
applicable Registration Statement (unless an exemption from such prospectus
delivery requirement exists) the ineffectiveness of the Registration Statement
and for which the Investor has not yet settled.

                  4. OBLIGATIONS OF THE INVESTORS.

                           a. At least five (5) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request.

                           b. 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 any 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 such Registration Statement.

                           c. 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(g) or the first sentence of 3(f), such Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(g) or the first sentence of 3(f) or receipt of notice
that no supplement or amendment is required. Notwithstanding anything to the
contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of
Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor's receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f) and for which the Investor has not yet settled.

                           d. Each Investor covenants and agrees that it will
comply with the prospectus delivery requirements of the 1933 Act as applicable
to it or an exemption therefrom in connection with sales of Registrable
Securities pursuant to the Registration Statement.

                  5. EXPENSES OF REGISTRATION.

                  All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and

                                      -14-

<PAGE>

fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse each Investor for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $15,000
per Investor (and limited to a total of $15,000 for each group of affiliated
Investors) for each Registration Statement filed by the Company with the SEC.

                  6.       INDEMNIFICATION.

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

                           a. To the fullest extent permitted by law, the
Company will, and hereby does, indemnify, hold harmless and defend each
Investor, the directors, officers, members, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor within
the meaning of the 1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several, (collectively, "CLAIMS") incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an indemnified party is or may be
a party thereto ("INDEMNIFIED DAMAGES"), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are offered
("BLUE SKY FILING"), or the omission or alleged omission to state 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 any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement or (iv) any violation of this Agreement (the matters in
the foregoing clauses (i) through (iv) being, collectively, "VIOLATIONS").
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
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): (i) shall not apply to a Claim by an Indemnified Person 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 such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation

                                      -15-

<PAGE>

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(d) and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

                           b. In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 6(a), the Company, each
of its directors, each of its officers who signs the Registration Statement and
each Person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act (each, an "INDEMNIFIED PARTY"), against any Claim or Indemnified
Damages to which any of them may become subject, under the 1933 Act, the 1934
Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or
are based upon any Violation, in each case to the extent, and only to the
extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to Section 6(c),
such Investor will reimburse any legal or other expenses reasonably incurred by
an Indemnified Party in connection with investigating or defending any such
Claim; provided, however, that the indemnity agreement contained in this Section
6(b) and the agreement with respect to contribution contained in Section 7 shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Investor, which consent shall
not be unreasonably withheld or delayed; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
or Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9.

                           c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or 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
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an

                                      -16-

<PAGE>

Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. 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 Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

                           d. 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 and when bills are received or Indemnified
Damages are incurred.

                           e. The indemnity agreements contained herein shall be
in addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

                  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:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) 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 pursuant to
such Registration Statement.

                                      -17-

<PAGE>

                  8. REPORTS UNDER THE 1934 ACT.

                  With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors 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 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; and

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

                  9. ASSIGNMENT OF REGISTRATION RIGHTS.

                  The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor's Registrable Securities if: (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act or applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

                  10. AMENDMENT OF REGISTRATION RIGHTS.

                  Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is offered to all
of the parties to this Agreement.

                                      -18-

<PAGE>

                  11.      MISCELLANEOUS.

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

                           b. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

         If to the Company:

                  Raptor Networks Technology, Inc.
                  1241 E. Dyer Road, Suite 150
                  Santa Ana, CA 92705
                  Telephone:        (949) 623-9300
                  Facsimile:        (949) 623-9400
                  Attention:        Chief Executive Officer

                  With a copy to:

                  Rutan & Tucker , LLP
                  611 Anton Blvd. 14th Floor
                  Costa Mesa, CA 92626
                  Telephone:        (949) 641-5100
                  Facsimile:        (949) 546-9035
                  Attention:        Thomas J. Crane, Esq.

         If to Legal Counsel:

                  Schulte Roth & Zabel LLP
                  919 Third Avenue
                  New York, New York  10022
                  Telephone:        (212) 756-2000
                  Facsimile:        (212) 593-5955
                  Attention:        Eleazer N. Klein, Esq.

                                      -19-

<PAGE>

                  and

                  Sadis & Goldberg LLP
                  551 5th Avenue
                  New York, New York 10176
                  Telephone:        (212) 947-3793
                  Facsimile:        (212) 947-3796
                  Attention:        Ron Geffner, Esq.

If to an Investor, to its address and facsimile number set forth on the Schedule
of Investors attached hereto, with copies to such Investor's representatives as
set forth on the Schedule of Investors, or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

                           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. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed
by the internal laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. 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 in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

                                      -20-

<PAGE>

                           e. This Agreement, the other Transaction Documents
(as defined in the Amendment Agreements) and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

                           f. Subject to the requirements of Section 9, this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.

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

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

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

                           j. All consents and other determinations required to
be made by the Investors pursuant to this Agreement shall be made,
unless otherwise specified in this Agreement, by the Required Holders.

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

                           l. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.

                           m. The obligations of each Investor hereunder are
several and not joint with the obligations of any other Investor, and no
provision of this Agreement is intended to confer any obligations on any
Investor vis-a-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated herein.

                            [Signature Page Follows]

                                      -21-

<PAGE>

                  IN WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Amended and Restated Registration Rights
Agreement to be duly executed as of the date first written above.

                                           COMPANY:

                                           RAPTOR NETWORKS TECHNOLOGY, INC.

                                           By:   /S/ THOMAS M. WITTENSCHLAEGER
                                                 -------------------------------
                                                 Name: Thomas M. Wittenschlaeger
                                                 Title: Chief Executive Officer

<PAGE>

                  IN WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Amended and Restated Registration Rights
Agreement to be duly executed as of the date first written above.

                                          INVESTORS:

                                          CASTLERIGG MASTER INVESTMENTS LTD.
                                          BY: SANDELL ASSET MANAGEMENT CORP.

                                          By:    /S/ TIMOTHY O'BRIEN
                                                 ------------------------------
                                                 Name: Timothy O'Brien
                                                 Title: Chief Financial Officer

<PAGE>

                  IN WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Amended and Restated Registration Rights
Agreement to be duly executed as of the date first written above.

                                         INVESTORS:

                                         CEDAR HILL CAPITAL PARTNERS ONSHORE, LP

                                         By:    /S/ CHARLES CASCARILLA
                                                --------------------------------
                                                Name: Charles Cascarilla
                                                Title: Principal

<PAGE>

                  IN WITNESS WHEREOF, each Investor and the Company have caused
their respective signature page to this Amended and Restated Registration Rights
Agreement to be duly executed as of the date first written above.

                                      INVESTORS:

                                      CEDAR HILL CAPITAL PARTNERS OFFSHORE, LTD.

                                      By:    /S/ CHARLES CASCARILLA
                                             -----------------------------------
                                             Name: Charles Cascarilla
                                             Title: Principal

<PAGE>

<TABLE>
<S>     <C>
                                            SCHEDULE OF INVESTORS

                                              INVESTOR'S ADDRESS                  INVESTOR'S REPRESENTATIVE'S
           INVESTOR                          AND FACSIMILE NUMBER                           ADDRESS
           --------                          --------------------                     AND FACSIMILE NUMBER
                                                                                      --------------------

CASTLERIGG MASTER INVESTMENTS LTD    c/o Sandell Asset Management Corp.           Schulte Roth & Zabel LLP
                                     40 West 57th Street                          919 Third Avenue
                                     26th Floor                                   New York, New York 10022
                                     New York, New York  10019                    Attn:  Eleazer Klein, Esq.
                                     Attention: Cem Hacioglu/Matthew Pliskin      Facsimile:  (212) 593-5955
                                     Facsimile:     (212) 603-5710                Telephone:  (212) 756-2000
                                     Telephone:     (212) 603-5775
CEDAR HILL CAPITAL PARTNERS          747 Third Avenue, 33rd Floor                 Sadis & Goldberg LLP
ONSHORE, LP                          New York, NY 10017                           551 5th Avenue
                                     Attention: Charles Cascarilla                New York, New York 10176
                                     Facsimile: (212) 821-1492                    Attention: Ron Geffner, Esq.
                                     Telephone: (212) 821-1491                    Facsimile: (212) 947-3796
                                     Residence: New York                          Telephone: (212) 947-3793

CEDAR HILL CAPITAL PARTNERS          747 Third Avenue, 33rd Floor                 Sadis & Goldberg LLP
OFFSHORE. LTD                        New York, NY 10017                           551 5th Avenue
                                     Attention: Charles Cascarilla                New York, New York 10176
                                     Facsimile: (212) 821-1492                    Attention: Ron Geffner, Esq.
                                     Telephone: (212) 821-1491                    Facsimile: (212) 947-3796
                                     Residence: Cayman Islands                    Telephone: (212) 947-3793
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                         -------------------------------
                            OF REGISTRATION STATEMENT
                            -------------------------

First American Stock Transfer
706 E. Bell Road
Phoenix, Arizona 85022
Attention:  Salli Marinov

                      Re: RAPTOR NETWORKS TECHNOLOGY, INC.

Ladies and Gentlemen:

                  [We are][I am] counsel to Raptor Networks Technology, Inc., a
Colorado corporation (the "COMPANY"), and have represented the Company in
connection with that certain Securities Purchase Agreement as amended by a
certain Amendment Agreement (the "PURCHASE AGREEMENT") entered into by and among
the Company and the investors named therein (collectively, the "HOLDERS")
pursuant to which the Company issued to the Holders convertible notes (the
"NOTES") convertible into the Company's common stock, $0.001 par value per share
(the "COMMON STOCK") and two series of warrants exercisable for shares of Common
Stock (the "WARRANTS"). Pursuant to the Purchase Agreement, the Company also has
entered into an Amended and Restated Registration Rights Agreement with the
Holders (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company
agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the shares of Common Stock
issuable upon conversion of the Notes and the shares of Common Stock issuable
upon exercise of the Warrants, under the Securities Act of 1933, as amended (the
"1933 ACT"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ___, 200_, the Company filed a Registration
Statement on Form SB-2 (File No. 333-_____________) (the "REGISTRATION
Statement") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities which names each of the Holders as a selling
stockholder thereunder.

                  In connection with the foregoing, [we][I] advise you that a
member of the SEC's staff has advised [us][me] by telephone that the SEC has
entered an order declaring the Registration Statement effective under the 1933
Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and
[we][I] have no knowledge, after telephonic inquiry of a member of the SEC's
staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC
and the Registrable Securities are available for resale under the 1933 Act
pursuant to the Registration Statement.

<PAGE>

                  This letter shall serve as our standing instruction to you
that the shares of Common Stock are freely transferable by the Holders pursuant
to the Registration Statement. You need not require further letters from us to
effect any future legend-free issuance or reissuance of shares of Common Stock
to the Holders as contemplated by the Company's Irrevocable Transfer Agent
Instructions dated _____________, 2007.

                                             Very truly yours,

                                             [ISSUER'S COUNSEL]

                                             By:______________________________

CC: [LIST NAMES OF HOLDERS]

<PAGE>

                                                                       EXHIBIT B

                              SELLING STOCKHOLDERS

         The shares of Common Stock being offered by the selling stockholders
are issuable upon conversion of the convertible notes and upon exercise of the
warrants. For additional information regarding the issuance of those convertible
notes and warrants, see "Private Placement of Convertible Notes and Warrants"
above. We are registering the shares of Common Stock in order to permit the
selling stockholders to offer the shares for resale from time to time. Except
for the ownership of the Convertible Notes and the Warrants issued pursuant to
the Securities Purchase Agreement, the selling stockholders have not had any
material relationship with us within the past three years.

         The table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of Common Stock by each of the
selling stockholders. The second column lists the number of shares of Common
Stock beneficially owned by each selling stockholder, based on its ownership of
the convertible notes and warrants, as of ________, 200_, assuming conversion of
all convertible notes and exercise of the warrants held by the selling
stockholders on that date, without regard to any limitations on conversions or
exercise.

         The third column lists the shares of Common Stock being offered by this
prospectus by the selling stockholders.

         In accordance with the terms of registration rights agreement among the
Company and the selling stockholders, this prospectus covers the resale of (i) [
] shares of Common Stock issuable upon conversion of the convertible notes as of
the trading day immediately preceding the date the registration statement is
initially filed with the SEC and (ii) [ ] shares of Common Stock issuable upon
exercise of the related warrants as of the trading day immediately preceding the
date the registration statement is initially filed with the SEC. Because the
conversion price of the convertible notes and the exercise price of the warrants
may be adjusted, the number of shares that will actually be issued may be more
or less than the number of shares being offered by this prospectus. The fourth
column assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.

         Under the terms of the convertible notes and the warrants, a selling
stockholder may not convert the convertible notes or exercise the warrants to
the extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 4.99% of our then outstanding shares of Common Stock
following such conversion or exercise, excluding for purposes of such
determination shares of Common Stock issuable upon conversion of the convertible
notes which have not been converted and upon exercise of the warrants which have
not been exercised. The number of shares in the second column does not reflect
this limitation. The selling stockholders may sell all, some or none of their
shares in this offering. See "Plan of Distribution."

<PAGE>

<TABLE>
<S>     <C>
                                                                  MAXIMUM NUMBER OF SHARES
                                       NUMBER OF SHARES OWNED       TO BE SOLD PURSUANT TO     NUMBER OF SHARES
NAME OF SELLING STOCKHOLDER               PRIOR TO OFFERING           THIS PROSPECTUS        OWNED AFTER OFFERING
---------------------------               -----------------           ---------------        --------------------
CASTLERIGG MASTER INVESTMENTS (1)                                                                     0
</TABLE>

         (1) Sandell Asset Management Corp. ("SAMC") is the investment manager
of Castlerigg Master Investments Ltd. ("Master"). Thomas Sandell is the
sole-shareholder of SAMC and may be deemed to have voting and dispositive power
over the shares beneficially owned by Master. No other natural person has voting
or dispositive power over the shares being registered on behalf of Master.
Castlerigg International Ltd. ("Castlerigg International") is the controlling
shareholder of Castlerigg International Holdings Limited ("Holdings"). Holdings
is the controlling shareholder of Master. Each of Holdings and Castlerigg
International may be deemed to share beneficial ownership of the shares
beneficially owned by Castlerigg Master Investments. SAMC, Mr. Sandell, Holdings
and Castlerigg International each disclaims beneficial ownership of the
securities with respect to which indirect beneficial ownership is described.

<PAGE>

                              PLAN OF DISTRIBUTION

         We are registering the shares of Common Stock issuable upon conversion
of the convertible notes and upon exercise of the warrants to permit the resale
of these shares of Common Stock by the holders of the convertible notes and
warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the
shares of Common Stock. We will bear all fees and expenses incident to our
obligation to register the shares of Common Stock.

         The selling stockholders may sell all or a portion of the shares of
Common Stock beneficially owned by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers or agents. If the
shares of Common Stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or
commissions or agent's commissions. The shares of Common Stock may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,

         o        on any national securities exchange or quotation service on
                  which the securities may be listed or quoted at the time of
                  sale;

         o        in the over-the-counter market;

         o        in transactions otherwise than on these exchanges or systems
                  or in the over-the-counter market;

         o        through the writing of options, whether such options are
                  listed on an options exchange or otherwise;

         o        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         o        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         o        privately negotiated transactions;

         o        short sales;

         o        sales pursuant to Rule 144;

<PAGE>

         o        broker-dealers may agree with the selling securityholders to
                  sell a specified number of such shares at a stipulated price
                  per share;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         If the selling stockholders effect such transactions by selling shares
of Common Stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of Common Stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of Common Stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of Common Stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of Common
Stock short and deliver shares of Common Stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of Common
Stock to broker-dealers that in turn may sell such shares.

         The selling stockholders may pledge or grant a security interest in
some or all of the convertible notes, warrants or shares of Common Stock owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of Common Stock
from time to time pursuant to this prospectus or any amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933, as amended, amending, if necessary, the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling stockholders also may
transfer and donate the shares of Common Stock in other circumstances in which
case the transferees, donees, pledgees or other successors in interest will be
the selling beneficial owners for purposes of this prospectus.

         The selling stockholders and any broker-dealer participating in the
distribution of the shares of Common Stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of Common Stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of Common Stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.

         Under the securities laws of some states, the shares of Common Stock
may be sold in such states only through registered or licensed brokers or
dealers. In addition, in some states the shares of Common Stock may not be sold
unless such shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.

<PAGE>

         There can be no assurance that any selling stockholder will sell any or
all of the shares of Common Stock registered pursuant to the registration
statement, of which this prospectus forms a part.

         The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of Common Stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.

         We will pay all expenses of the registration of the shares of Common
Stock pursuant to the registration rights agreement, estimated to be $125,000 in
total, including, without limitation, Securities and Exchange Commission filing
fees and expenses of compliance with state securities or "blue sky" laws;
provided, however, that a selling stockholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreement, or we may be entitled
to contribution.

         Once sold under the registration statement, of which this prospectus
forms a part, the shares of Common Stock will be freely tradable in the hands of
persons other than our affiliates.

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