Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Snocone Systems Inc. - Exhibit 4.9

 THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE
  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
  OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
  APRIL 29, 2005, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED
  OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
  UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY
  FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
  REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S
  UNDER SUCH ACT. 

	 	Right to Purchase 122,664 Shares of Common Stock, par value $.001
      per share 

STOCK PURCHASE WARRANT 

                          THIS
  CERTIFIES THAT, for value received, AJW Partners, LLC or its registered
  assigns, is entitled to purchase from Snocone Systems Inc., a Nevada
  corporation (the “Company”), at any time or from time to time during
  the period specified in Paragraph 2 hereof, One Hundred Twenty Two Thousand
  Six Hundred and Sixty-Four (122,664) fully paid and nonassessable shares of
  the Company’s Common Stock, par value $.001 per share (the “Common
  Stock”), at an exercise price per share equal to $1.50 (the “Exercise
  Price”). The term “Warrant Shares,” as used herein, refers
  to the shares of Common Stock purchasable hereunder. The Warrant Shares and
  the Exercise Price are subject to adjustment as provided in Paragraph 4 hereof.
  The term “Warrants” means this Warrant and the other warrants issued
  pursuant to that certain Securities Purchase Agreement, dated April 29, 2005,
  by and among the Company and the Buyers listed on the execution page thereof
  (the “Securities Purchase Agreement”), including any additional
  warrants issuable pursuant to Section 4(l) thereof.

                          This
  Warrant is subject to the following terms, provisions, and conditions:

                          1.          
  Manner of Exercise; Issuance of Certificates; Payment for Shares.
  Subject to the provisions hereof, this Warrant may be exercised by the
  holder hereof, in whole or in part, by the surrender of this Warrant, together
  with a completed exercise agreement in the form attached hereto (the “Exercise
  Agreement”), to the Company during normal business hours on any 

business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), and upon (i) payment to the Company in cash, by certified or official bank check or
by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is not then registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”), provided that the failure to register the Warrant Shares is not due to the Warrant holder’s failure to satisfy its obligations under Section 4 of the
Registration Rights Agreement, delivery to the Company of a written notice of an election to effect a “Cashless Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares
so purchased shall be deemed to be issued to the holder hereof or such holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise
Agreement shall have been delivered, and payment shall have been made for such shares as set forth above. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the holder hereof and
shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised. In addition to all other available remedies at law or in equity, if the
Company fails to deliver certificates for the Warrant Shares within five (5) business days after this Warrant is exercised, then the Company shall pay to the holder in cash a penalty (the “Penalty”) equal to 2% of the number of Warrant
Shares that the holder is entitled to multiplied by the Market Price (as hereinafter defined) for each day that the Company fails to deliver certificates for the Warrant Shares. For example, if the holder is entitled to 100,000 Warrant Shares and
the Market Price is $2.00, then the Company shall pay to the holder $4,000 for each day that the Company fails to deliver certificates for the Warrant Shares. The Penalty shall be paid to the holder by the fifth day of the month following
the month in which it has accrued. 

                                        Notwithstanding
  anything in this Warrant to the contrary, in no event shall the holder of this
  Warrant be entitled to exercise a number of Warrants (or portions thereof) in
  excess of the number of Warrants (or portions thereof) upon exercise of which
  the sum of (i) the number of shares of Common Stock beneficially owned by the
  holder and its affiliates (other than shares of Common Stock which may be deemed
  beneficially owned through the ownership of the unexercised Warrants and the
  unexercised or unconverted portion of any other securities of the Company (including
  the Notes (as defined in the Securities Purchase Agreement)) subject to a limitation
  on conversion or exercise analogous to the limitation contained herein) and
  (ii) the number of shares of Common Stock issuable upon exercise of the Warrants
  (or portions thereof) with respect to which the determination described herein
  is being made, would result in beneficial ownership by the holder and its affiliates
  of more than 4.99% of the outstanding shares of Common Stock. For purposes of
  the immediately preceding sentence, beneficial ownership shall be determined
  in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
  amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
  (i) of the preceding sentence. Notwithstanding anything to the contrary contained
  herein, the limitation on exercise of this Warrant set forth herein may not
  be amended without (i) the written consent of 

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the holder hereof and the Company and (ii) the approval of a majority of shareholders of the Company. 

                          2.          Period
  of Exercise. This Warrant is exercisable at any time or from
  time to time on or after the date on which this Warrant is issued and delivered
  pursuant to the terms of the Securities Purchase Agreement and before 6:00 p.m.,
  New York, New York time on the fifth (5th) anniversary of the date
  of issuance (the “Exercise Period”). 

                          3.          Certain
  Agreements of the Company. The Company hereby covenants and agrees
  as follows: 

                                        (a)          
  Shares to be Fully Paid. Subject to Stockholder Approval
  (as such term is defined in Section 4(n) of the Purchase Agreement), all Warrant
  Shares will, upon issuance in accordance with the terms of this Warrant, be
  validly issued, fully paid, and nonassessable and free from all taxes, liens,
  and charges with respect to the issue thereof. 

                                        (b)          Reservation
  of Shares. During the Exercise Period, the Company shall at all
  times have authorized, and reserved for the purpose of issuance upon exercise
  of this Warrant, a sufficient number of shares of Common Stock to provide for
  the exercise of this Warrant. 

                                        (c)          Listing.
  The Company shall promptly secure the listing of the shares of Common Stock
  issuable upon exercise of the Warrant upon each national securities exchange
  or automated quotation system, if any, upon which shares of Common Stock are
  then listed (subject to official notice of issuance upon exercise of this Warrant)
  and shall maintain, so long as any other shares of Common Stock shall be so
  listed, such listing of all shares of Common Stock from time to time issuable
  upon the exercise of this Warrant; and the Company shall so list on each national
  securities exchange or automated quotation system, as the case may be, and shall
  maintain such listing of, any other shares of capital stock of the Company issuable
  upon the exercise of this Warrant if and so long as any shares of the same class
  shall be listed on such national securities exchange or automated quotation
  system. 

                                        (d)          Certain
  Actions Prohibited. The Company will not, by amendment of its
  charter or through any reorganization, transfer of assets, consolidation, merger,
  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 to be observed
  or performed by it hereunder, but will at all times in good faith assist in
  the carrying out of all the provisions of this Warrant and in the taking of
  all such action as may reasonably be requested by the holder of this Warrant
  in order to protect the exercise privilege of the holder of this Warrant against
  dilution or other impairment, consistent with the tenor and purpose of this
  Warrant. Without limiting the generality of the foregoing, the Company (i) will
  not increase the par value of any shares of Common Stock receivable upon the
  exercise of this Warrant above the Exercise Price then in effect, and (ii) will
  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. 

                                        (e)          Successors
  and Assigns. This Warrant will be binding upon any entity succeeding
  to the Company by merger, consolidation, or acquisition of all or substantially
  all the Company’s assets. 

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                          4.          Antidilution
  Provisions. During the Exercise Period, the Exercise Price and
  the number of Warrant Shares shall be subject to adjustment from time to time
  as provided in this Paragraph 4. 

                          In
  the event that any adjustment of the Exercise Price as required herein results
  in a fraction of a cent, such Exercise Price shall be rounded up to the nearest
  cent. 

                                        (a)          Adjustment
  of Exercise Price and Number of Shares upon Issuance of Common
  Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e)
  hereof, if and whenever on or after the date of issuance of this Warrant, the
  Company issues or sells, or in accordance with Paragraph 4(b) hereof is deemed
  to have issued or sold, any shares of Common Stock for no consideration or for
  a consideration per share (before deduction of reasonable expenses or commissions
  or underwriting discounts or allowances in connection therewith) less than the
  Market Price on the date of issuance (a “Dilutive Issuance”), then
  immediately upon the Dilutive Issuance, the Exercise Price will be reduced to
  a price determined by multiplying the Exercise Price in effect immediately prior
  to the Dilutive Issuance by a fraction, (i) the numerator of which is an amount
  equal to the sum of (x) the number of shares of Common Stock actually outstanding
  immediately prior to the Dilutive Issuance, plus (y) the quotient of the aggregate
  consideration, calculated as set forth in Paragraph 4(b) hereof, received by
  the Company upon such Dilutive Issuance divided by the Market Price in effect
  immediately prior to the Dilutive Issuance, and (ii) the denominator of which
  is the total number of shares of Common Stock Deemed Outstanding (as defined
  below) immediately after the Dilutive Issuance.

                                        Notwithstanding
  the foregoing, the adjustments due to Dilutive Issuances shall not apply to
  any transaction involving (i) securities issued in a firm commitment underwritten
  public offering (excluding a continuous offering pursuant to Rule 415 under
  the 1933 Act, an equity line of credit or similar financing arrangement) resulting
  in net proceeds to the Company of in excess of $1,500,000, (ii) securities
  issued as consideration for a merger, consolidation or purchase of assets, or
  in connection with any strategic partnership or joint venture (the primary purpose
  of which is not to raise equity capital), or in connection with the disposition
  or acquisition of a business, product or license by the Company, (iii) securities
  upon exercise or conversion of the Borrower’s options, warrants or other
  convertible securities outstanding as of the date hereof, or (iv) securities
  not to exceed 500,000 shares of Common Stock issued or issuable to directors,
  officers, employees, consultants or vendors (if in transactions with primarily
  non-financing purposes) directly or pursuant to stock option plans, restricted
  stock purchase agreements, employment agreements and the like as approved by
  the Company’s board of directors.

                                        (b)          Effect
  on Exercise Price of Certain Events. For purposes of determining
  the adjusted Exercise Price under Paragraph 4(a) hereof, the following will
  be applicable: 

                                                         (i)          Issuance
  of Rights or Options. If the Company in any manner issues or
  grants any warrants, rights or options, whether or not immediately exercisable,
  to subscribe for or to purchase Common Stock or other securities convertible
  into or exchangeable for Common Stock (“Convertible Securities”)
  (such warrants, rights and options to purchase Common Stock or Convertible Securities
  are hereinafter referred to as “Options”) and the price per share
  for which Common Stock is issuable upon the exercise of such Options is less
  than the 

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Market Price on the date of issuance or grant of such Options, then the maximum total number of shares of Common Stock issuable upon the exercise of all such Options will, as of the date of the issuance or grant of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per share. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is determined by
dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the
exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Exercise Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options. 

                                                         (ii)         Issuance
  of Convertible Securities. If the Company in any manner issues
  or sells any Convertible Securities, whether or not immediately convertible
  (other than where the same are issuable upon the exercise of Options) and the
  price per share for which Common Stock is issuable upon such conversion or exchange
  is less than the Market Price on the date of issuance, then the maximum total
  number of shares of Common Stock issuable upon the conversion or exchange of
  all such Convertible Securities will, as of the date of the issuance of such
  Convertible Securities, be deemed to be outstanding and to have been issued
  and sold by the Company for such price per share. For the purposes of the preceding
  sentence, the “price per share for which Common Stock is issuable upon
  such conversion or exchange” is determined by dividing (i) the total amount,
  if any, received or receivable by the Company as consideration for the issuance
  or sale of all such Convertible Securities, plus the minimum aggregate amount
  of additional consideration, if any, payable to the Company upon the conversion
  or exchange thereof at the time such Convertible Securities first become convertible
  or exchangeable, by (ii) the maximum total number of shares of Common Stock
  issuable upon the conversion or exchange of all such Convertible Securities.
  No further adjustment to the Exercise Price will be made upon the actual issuance
  of such Common Stock upon conversion or exchange of such Convertible Securities.

                                                         (iii)        Change
  in Option Price or Conversion Rate. If there is a change at any
  time in (i) the amount of additional consideration payable to the Company upon
  the exercise of any Options; (ii) the amount of additional consideration, if
  any, payable to the Company upon the conversion or exchange of any Convertible
  Securities; or (iii) the rate at which any Convertible Securities are convertible
  into or exchangeable for Common Stock (other than under or by reason of provisions
  designed to protect against dilution), the Exercise Price in effect at the time
  of such change will be readjusted to the Exercise Price which would have been
  in effect at such time had such Options or Convertible Securities still outstanding
  provided for such changed additional consideration or changed conversion rate,
  as the case may be, at the time initially granted, issued or sold. 

                                                         (iv)         Treatment
  of Expired Options and Unexercised Convertible Securities.
  If, in any case, the total number of shares of Common Stock issuable upon
  exercise 

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of any Option or upon conversion or exchange of any Convertible Securities is not, in fact, issued and the rights to exercise such Option or to convert or exchange such Convertible Securities shall have expired or terminated, the Exercise Price then
in effect will be readjusted to the Exercise Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Securities, to the extent outstanding immediately prior to such expiration or termination
(other than in respect of the actual number of shares of Common Stock issued upon exercise or conversion thereof), never been issued. 

                                                         (v)          Calculation
  of Consideration Received. If any Common Stock, Options or Convertible
  Securities are issued, granted or sold for cash, the consideration received
  therefor for purposes of this Warrant will be the amount received by the Company
  therefor, before deduction of reasonable commissions, underwriting discounts
  or allowances or other reasonable expenses paid or incurred by the Company in
  connection with such issuance, grant or sale. In case any Common Stock, Options
  or Convertible Securities are issued or sold for a consideration part or all
  of which shall be other than cash, the amount of the consideration other than
  cash received by the Company will be the fair value of such consideration, except
  where such consideration consists of securities, in which case the amount of
  consideration received by the Company will be the Market Price thereof as of
  the date of receipt. In case any Common Stock, Options or Convertible Securities
  are issued in connection with any acquisition, merger or consolidation in which
  the Company is the surviving corporation, 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 corporation as is attributable to such Common Stock, Options
  or Convertible Securities, as the case may be. The fair value of any consideration
  other than cash or securities will be determined in good faith by the Board
  of Directors of the Company. 

                                                         (vi)         Exceptions
  to Adjustment of Exercise Price. No adjustment to the Exercise
  Price will be made (i) upon the exercise of any warrants, options or convertible
  securities granted, issued and outstanding on the date of issuance of this Warrant;
  (ii) upon the grant or exercise of any stock or options which may hereafter
  be granted or exercised under any employee benefit plan, stock option plan or
  restricted stock plan of the Company now existing or to be implemented in the
  future, so long as the issuance of such stock or options is approved by a majority
  of the independent members of the Board of Directors of the Company or a majority
  of the members of a committee of independent directors established for such
  purpose; or (iii) upon the exercise of the Warrants. 

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

                                        (d)          Adjustment
  in Number of Shares. Upon each adjustment of the Exercise Price
  pursuant to the provisions of this Paragraph 4, the number of shares of Common
  Stock issuable upon exercise of this Warrant shall be adjusted by multiplying
  a number equal to 

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the Exercise Price in effect immediately prior to such adjustment by the number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product so obtained by the adjusted Exercise
Price. 

                                        (e)          Consolidation,
  Merger or Sale. In case of any consolidation of the Company with,
  or merger of the Company into any other corporation, or in case of any sale
  or conveyance of all or substantially all of the assets of the Company other
  than in connection with a plan of complete liquidation of the Company, then
  as a condition of such consolidation, merger or sale or conveyance, adequate
  provision will be made whereby the holder of this Warrant will have the right
  to acquire and receive upon exercise of this Warrant in lieu of the shares of
  Common Stock immediately theretofore acquirable upon the exercise of this Warrant,
  such shares of stock, securities or assets as may be issued or payable with
  respect to or in exchange for the number of shares of Common Stock immediately
  theretofore acquirable and receivable upon exercise of this Warrant had such
  consolidation, merger or sale or conveyance not taken place. In any such case,
  the Company will make appropriate provision to insure that the provisions of
  this Paragraph 4 hereof will thereafter be applicable as nearly as may be in
  relation to any shares of stock or securities thereafter deliverable upon the
  exercise of this Warrant. The Company will not effect any consolidation, merger
  or sale or conveyance unless prior to the consummation thereof, the successor
  corporation (if other than the Company) assumes by written instrument the obligations
  under this Paragraph 4 and the obligations to deliver to the holder of this
  Warrant such shares of stock, securities or assets as, in accordance with the
  foregoing provisions, the holder may be entitled to acquire. 

                                        (f)          Distribution
  of Assets. In case the Company shall declare or make any distribution
  of its assets (including cash) to holders of Common Stock as a partial liquidating
  dividend, by way of return of capital or otherwise, then, after the date of
  record for determining shareholders entitled to such distribution, but prior
  to the date of distribution, the holder of this Warrant shall be entitled upon
  exercise of this Warrant for the purchase of any or all of the shares of Common
  Stock subject hereto, to receive the amount of such assets which would have
  been payable to the holder had such holder been the holder of such shares of
  Common Stock on the record date for the determination of shareholders entitled
  to such distribution. 

                                        (g)          Notice
  of Adjustment. Upon the occurrence of any event which requires
  any adjustment of the Exercise Price, then, and in each such case, the Company
  shall give notice thereof to the holder of this Warrant, which notice shall
  state the Exercise Price resulting from such adjustment and the increase or
  decrease in the number of Warrant Shares purchasable at such price upon exercise,
  setting forth in reasonable detail the method of calculation and the facts upon
  which such calculation is based. Such calculation shall be certified by the
  Chief Financial Officer of the Company. 

                                        (h)          Minimum
  Adjustment of Exercise Price. No adjustment of the Exercise Price
  shall be made in an amount of less than 1% of the Exercise Price in effect at
  the time such adjustment is otherwise required to be made, but any such lesser
  adjustment shall be carried forward and shall be made at the time and together
  with the next subsequent adjustment which, together with any adjustments so
  carried forward, shall amount to not less than 1% of such Exercise Price. 

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                                        (i)          No
  Fractional Shares. No fractional shares of Common Stock are to
  be issued upon the exercise of this Warrant, but the Company shall pay a cash
  adjustment in respect of any fractional share which would otherwise be issuable
  in an amount equal to the same fraction of the Market Price of a share of Common
  Stock on the date of such exercise. 

                                        (j)          Other
  Notices. In case at any time: 

                                                         (i)          the
  Company shall declare any dividend upon the Common Stock payable in shares of
  stock of any class or make any other distribution (including dividends or distributions
  payable in cash out of retained earnings) to the holders of the Common Stock;

                                                         (ii)         the
  Company shall offer for subscription pro rata to the holders of the Common Stock
  any additional shares of stock of any class or other rights; 

                                                         (iii)        there
  shall be any capital reorganization of the Company, or reclassification of the
  Common Stock, or consolidation or merger of the Company with or into, or sale
  of all or substantially all its assets to, another corporation or entity; or

                                                         (iv)         there
  shall be a voluntary or involuntary dissolution, liquidation or winding up of
  the Company; 

then, in each such case, the Company shall give to the holder of this Warrant (a) notice of the date on which the books of the Company shall close or a record shall be taken for determining the holders of Common Stock entitled to receive any such
dividend, distribution, or subscription rights or for determining the holders of Common Stock entitled to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up and (b) in
the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, notice of the date (or, if not then known, a reasonable approximation thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock shall be entitled to receive such dividend, distribution, or subscription rights or to exchange their Common Stock for stock or other securities or property deliverable
upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation, or winding-up, as the case may be. Such notice shall be given at least 30 days prior to the record date or the date on which the Company’s books
are closed in respect thereto. Failure to give any such notice or any defect therein shall not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above. 

                                        (k)          Certain
  Events. If any event occurs of the type contemplated by the adjustment
  provisions of this Paragraph 4 but not expressly provided for by such provisions,
  the Company will give notice of such event as provided in Paragraph 4(g) hereof,
  and the Company’s Board of Directors will make an appropriate adjustment
  in the Exercise Price and the number of shares of Common Stock acquirable upon
  exercise of this Warrant so that the rights of the holder shall be neither enhanced
  nor diminished by such event. 

                                        (l)          Certain
  Definitions.

                                                         (i)          “Common
  Stock Deemed Outstanding” shall mean the number of shares
  of Common Stock actually outstanding (not including shares of Common Stock held
  in the treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof,
  the maximum total 

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number of shares of Common Stock issuable upon the exercise of Options, as of the date of such issuance or grant of such Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of Common Stock issuable upon
conversion or exchange of Convertible Securities, as of the date of issuance of such Convertible Securities, if any.

                                                         (ii)         “Market
  Price,” as of any date, (i) means the average of the last
  reported sale prices for the shares of Common Stock on the OTCBB for the five
  (5) Trading Days immediately preceding such date as reported by Bloomberg, or
  (ii) if the OTCBB is not the principal trading market for the shares of Common
  Stock, the average of the last reported sale prices on the principal trading
  market for the Common Stock during the same period as reported by Bloomberg,
  or (iii) if market value cannot be calculated as of such date on any of the
  foregoing bases, the Market Price shall be the fair market value as reasonably
  determined in good faith by (a) the Board of Directors of the Company or, at
  the option of a majority-in-interest of the holders of the outstanding Warrants
  by (b) an independent investment bank of nationally recognized standing in the
  valuation of businesses similar to the business of the corporation. The manner
  of determining the Market Price of the Common Stock set forth in the foregoing
  definition shall apply with respect to any other security in respect of which
  a determination as to market value must be made hereunder. 

                                                         (iii)        “Common
  Stock,” for purposes of this Paragraph 4, includes the
  Common Stock, par value $.001 per share, and any additional class of stock
  of the Company having no preference as to dividends or distributions on liquidation,
  provided that the shares purchasable pursuant to this Warrant shall include
  only shares of Common Stock, par value $.001 per share, in respect of which
  this Warrant is exercisable, or shares resulting from any subdivision or combination
  of such Common Stock, or in the case of any reorganization, reclassification,
  consolidation, merger, or sale of the character referred to in Paragraph 4(e)
  hereof, the stock or other securities or property provided for in such Paragraph.

                          5.          Issue
  Tax. The issuance of certificates for Warrant Shares upon the
  exercise of this Warrant shall be made without charge to the holder of this
  Warrant or such shares for any issuance tax or other costs in respect thereof,
  provided that the Company shall not be required to pay any tax which may be
  payable in respect of any transfer involved in the issuance and delivery of
  any certificate in a name other than the holder of this Warrant. 

                          6.          No
  Rights or Liabilities as a Shareholder. This Warrant shall not
  entitle the holder hereof to any voting rights or other rights as a shareholder
  of the Company. No provision of this Warrant, in the absence of affirmative
  action by the holder hereof to purchase Warrant Shares, and no mere enumeration
  herein of the rights or privileges of the holder hereof, shall give rise to
  any liability of such holder for the Exercise Price or as a shareholder of the
  Company, whether such liability is asserted by the Company or by creditors of
  the Company. 

                          7.          Transfer,
  Exchange, and Replacement of Warrant. 

                                        (a)          Restriction
  on Transfer. This Warrant and the rights granted to the holder
  hereof are transferable, in whole or in part, upon surrender of this Warrant,
  together with a properly executed assignment in the form attached hereto, at
  the office or agency of the Company referred to in Paragraph 7(e) below, provided,
  however, that any transfer or assignment shall be subject to the conditions
  set forth in Paragraph 7(f) hereof and to the applicable provisions of the Securities
  Purchase Agreement. Until due presentment for 

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registration of transfer on the books of the Company, the Company may treat the registered holder hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by any notice to the contrary. Notwithstanding anything
to the contrary contained herein, the registration rights described in Paragraph 8 are assignable only in accordance with the provisions of that certain Registration Rights Agreement, dated April 29, 2005, by and among the Company and the other
signatories thereto (the “Registration Rights Agreement”). 

                                        (b)          Warrant
  Exchangeable for Different Denominations. This Warrant is exchangeable,
  upon the surrender hereof by the holder hereof at the office or agency of the
  Company referred to in Paragraph 7(e) below, for new Warrants of like tenor
  representing in the aggregate the right to purchase the number of shares of
  Common Stock which may be purchased hereunder, each of such new Warrants to
  represent the right to purchase such number of shares as shall be designated
  by the holder hereof at the time of such surrender. 

                                        (c)          Replacement
  of Warrant. Upon receipt of evidence reasonably satisfactory
  to the Company of the loss, theft, destruction, or mutilation of this Warrant
  and, in the case of any such loss, theft, or destruction, upon delivery of an
  indemnity agreement reasonably satisfactory in form and amount to the Company,
  or, in the case of any such mutilation, upon surrender and cancellation of this
  Warrant, the Company, at its expense, will execute and deliver, in lieu thereof,
  a new Warrant of like tenor. 

                                        (d)          Cancellation;
  Payment of Expenses. Upon the surrender of this Warrant in connection
  with any transfer, exchange, or replacement as provided in this Paragraph 7,
  this Warrant shall be promptly canceled by the Company. The Company shall pay
  all taxes (other than securities transfer taxes) and all other expenses (other
  than legal expenses, if any, incurred by the holder or transferees) and charges
  payable in connection with the preparation, execution, and delivery of Warrants
  pursuant to this Paragraph 7. 

                                        (e)          Register.
  The Company shall maintain, at its principal executive offices (or such
  other office or agency of the Company as it may designate by notice to the holder
  hereof), a register for this Warrant, in which the Company shall record the
  name and address of the person in whose name this Warrant has been issued, as
  well as the name and address of each transferee and each prior owner of this
  Warrant. 

                                        (f)          Exercise
  or Transfer Without Registration. If, at the time of the surrender
  of this Warrant in connection with any exercise, transfer, or exchange of this
  Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable
  hereunder), shall not be registered under the Securities Act of 1933, as amended
  (the “Securities Act”) and under applicable state securities or
  blue sky laws, the Company may require, as a condition of allowing such exercise,
  transfer, or exchange, (i) that the holder or transferee of this Warrant, as
  the case may be, furnish to the Company a written opinion of counsel, which
  opinion and counsel are acceptable to the Company, to the effect that such exercise,
  transfer, or exchange may be made without registration under said Act and under
  applicable state securities or blue sky laws, (ii) that the holder or transferee
  execute and deliver to the Company an investment letter in form and substance
  acceptable to the Company and (iii) that the transferee be an “accredited
  investor” as defined in Rule 501(a) promulgated under the Securities Act;
  provided that no such opinion, letter or status as an “accredited investor”
  shall be required in connection with a transfer pursuant to Rule 144 under the
  Securities Act. The first holder of this Warrant, by taking and holding the

 - 10 - 

same, represents to the Company that such holder is acquiring this Warrant for investment and not with a view to the distribution thereof.

                          8.          Registration
  Rights. The initial holder of this Warrant (and certain assignees
  thereof) is entitled to the benefit of such registration rights in respect of
  the Warrant Shares as are set forth in Section 2 of the Registration Rights
  Agreement. 

                          9.          Notices.
  All notices, requests, and other communications required or permitted to
  be given or delivered hereunder to the holder of this Warrant shall be in writing,
  and shall be personally delivered, or shall be sent by certified or registered
  mail or by recognized overnight mail courier, postage prepaid and addressed,
  to such holder at the address shown for such holder on the books of the Company,
  or at such other address as shall have been furnished to the Company by notice
  from such holder. All notices, requests, and other communications required or
  permitted to be given or delivered hereunder to the Company shall be in writing,
  and shall be personally delivered, or shall be sent by certified or registered
  mail or by recognized overnight mail courier, postage prepaid and addressed,
  to the office of the Company at 3131 Camino del Rio, N, Suite 1650, San Diego,
  CA 92108, Attention: Chief Executive Officer, or at such other address as shall
  have been furnished to the holder of this Warrant by notice from the Company.
  Any such notice, request, or other communication may be sent by facsimile, but
  shall in such case be subsequently confirmed by a writing personally delivered
  or sent by certified or registered mail or by recognized overnight mail courier
  as provided above. All notices, requests, and other communications shall be
  deemed to have been given either at the time of the receipt thereof by the person
  entitled to receive such notice at the address of such person for purposes of
  this Paragraph 9, or, if mailed by registered or certified mail or with a recognized
  overnight mail courier upon deposit with the United States Post Office or such
  overnight mail courier, if postage is prepaid and the mailing is properly addressed,
  as the case may be. 

                          10.         Governing
  Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE
  WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
  BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF
  CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION
  OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
  TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION
  HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY
  WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
  PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY
  MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
  OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL
  AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
  BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
  SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
  BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES
  NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR
  ALL 

 - 11 - 

FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE. 

                          11.         Miscellaneous.

                                        (a)          Amendments.
  This Warrant and any provision hereof may only be amended by an instrument
  in writing signed by the Company and the holder hereof. 

                                        (b)          Descriptive
  Headings. The descriptive headings of the several paragraphs
  of this Warrant are inserted for purposes of reference only, and shall not affect
  the meaning or construction of any of the provisions hereof. 

                                        (c)          Cashless
  Exercise. Notwithstanding anything to the contrary contained
  in this Warrant, if the resale of the Warrant Shares by the holder is not then
  registered pursuant to an effective registration statement under the Securities
  Act pursuant to Section 1, this Warrant may be exercised by presentation and
  surrender of this Warrant to the Company at its principal executive offices
  with a written notice of the holder’s intention to effect a cashless exercise,
  including a calculation of the number of shares of Common Stock to be issued
  upon such exercise in accordance with the terms hereof (a “Cashless Exercise”).
  In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
  cash, the holder shall surrender this Warrant for that number of shares of Common
  Stock determined by multiplying the number of Warrant Shares to which it would
  otherwise be entitled by a fraction, the numerator of which shall be the difference
  between the then current Market Price per share of the Common Stock and the
  Exercise Price, and the denominator of which shall be the then current Market
  Price per share of Common Stock. For example, if the holder is exercising 100,000
  Warrants with a per Warrant exercise price of $0.75 per share through a
  cashless exercise when the Common Stock’s current Market Price per share
  is $2.00 per share, then upon such Cashless Exercise the holder will receive
  62,500 shares of Common Stock. 

                                        (d)          Remedies.
  The Company acknowledges that a breach by it of its obligations hereunder will
  cause irreparable harm to the holder, by vitiating the intent and purpose of
  the transaction contemplated hereby. Accordingly, the Company acknowledges that
  the remedy at law for a breach of its obligations under this Warrant will be
  inadequate and agrees, in the event of a breach or threatened breach by the
  Company of the provisions of this Warrant, that the holder shall be entitled,
  in addition to all other available remedies at law or in equity, and in addition
  to the penalties assessable herein, to an injunction or injunctions restraining,
  preventing or curing any breach of this Warrant and to enforce specifically
  the terms and provisions thereof, without the necessity of showing economic
  loss and without any bond or other security being required. 

 - 12 - 

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

 - 13 - 

                                        IN
  WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
  duly authorized officer. 

	 	 SNOCONE SYSTEMS INC.  
	 	 	  
	 	 	  
	 	 	  
	 	By: 	 /s/ Edon Moyal 
	 	 	 Edon Moyal  
	 	 	 Chief Executive Officer  

Dated as of April 29, 2005 

 FORM OF EXERCISE AGREEMENT 

 Dated: ________ __, 200_ 

To: ______________________

                          The
  undersigned, pursuant to the provisions set forth in the within Warrant, hereby
  agrees to purchase ________ shares of Common Stock covered by such Warrant,
  and makes payment herewith in full therefor at the price per share provided
  by such Warrant in cash or by certified or official bank check in the amount
  of, or, if the resale of such Common Stock by the undersigned is not currently
  registered pursuant to an effective registration statement under the Securities
  Act of 1933, as amended, by surrender of securities issued by the Company (including
  a portion of the Warrant) having a market value (in the case of a portion of
  this Warrant, determined in accordance with Section 11(c) of the Warrant) equal
  to $ _________ . Please issue a certificate or certificates for such shares
  of Common Stock in the name of and pay any cash for any fractional share to:

	 	 Name:  	  
	 	  	 
	 	  	 
	 	 Signature:  	  
	 	 Address:	 
	 	  	 
	 	  	 
	 	 Note:  	 The above signature should correspond exactly with the name
      on the face of the within Warrant, if applicable.  

and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new Warrant is to be issued in the name of said undersigned covering the balance of the shares purchasable thereunder less any fraction
of a share paid in cash. 

 FORM OF ASSIGNMENT 

                          FOR
  VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all
  the rights of the undersigned under the within Warrant, with respect to the
  number of shares of Common Stock covered thereby set forth hereinbelow, to:

	
Name of Assignee 
		
Address 
		
No of Shares 
	

 

 , and hereby irrevocably constitutes and appoints ___________________________________
  as agent and attorney-in-fact to transfer said Warrant on the books of the within-named
  corporation, with full power of substitution in the premises. 

 Dated: ________ __, 200_ 

	 In the presence of:  	 	  
	 	 	 
	  	Name:	  
	  	 	 
	 	 	 
	  	Signature:	  
	  	 Title of Signing Officer or Agent (if any): 
    
	  	Address: 	 
	 	 	 
	 	 	 
	  	 	 
	  	Note: 	 The above signature should correspond exactly
      with the name on the face of the within Warrant, if applicable.Filed by Automated Filing Services Inc. (604) 609-0244 - Snocone Systems Inc. - Exhibit 4.10

 REGISTRATION RIGHTS AGREEMENT 

                          REGISTRATION
  RIGHTS AGREEMENT (this “Agreement”), dated as of April 29,
  2005, by and among Snocone Systems Inc., a Nevada corporation with its headquarters
  located at 3131 Camino del Rio, N, Suite 1650, San Diego, CA 92108 (the “Company”),
  and each of the undersigned (together with their respective affiliates and any
  assignee or transferee of all of their respective rights hereunder, the “Initial
  Investors”).

                          WHEREAS:

                          A.
             In connection
  with the Securities Purchase Agreement by and among the parties hereto of even
  date herewith (the “Securities Purchase Agreement”), the Company
  has agreed, upon the terms and subject to the conditions contained therein,
  to issue and sell to the Initial Investors (i) secured convertible notes in
  the aggregate principal amount of up to Three Million Seven Hundred and Fifty
  Thousand Dollars ($3,750,000) (the “Notes”) that are convertible
  into shares of the Company’s common stock (the “Common Stock”),
  upon the terms and subject to the limitations and conditions set forth in such
  Notes and (ii) warrants (the “Warrants”) to acquire an aggregate
  of 2,628,505 shares of Common Stock, upon the terms and conditions and subject
  to the limitations and conditions set forth in the Warrants; and 

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

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

                                                   1.           
  DEFINITIONS.

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

                                                                                                     (i)           
  “Investors” means the Initial Investors and any transferee
  or assignee who agrees to become bound by the provisions of this Agreement in
  accordance with Section 9 hereof. 

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

                                                                                                     (iii)         
  “Registrable Securities” means the Conversion Shares
  issued or issuable upon conversion or otherwise pursuant to the Notes and Additional
  Notes (as 

defined in the Securities Purchase Agreement) including, without limitation, Damages Shares (as defined in the Notes) issued or issuable pursuant to the Notes, shares of Common Stock issued or issuable in payment of the Standard Liquidated Damages
Amount (as defined in the Securities Purchase Agreement), shares issued or issuable in respect of interest or in redemption of the Notes in accordance with the terms thereof) and Warrant Shares issuable, upon exercise or otherwise pursuant to the
Warrants and Additional Warrants (as defined in the Securities Purchase Agreement), and any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing. 

                                                                                                     (iv)          
  “Registration Statement” means a registration statement
  of the Company under the 1933 Act. 

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

                                                   2.           
  REGISTRATION.

                                                                            a.           
  Mandatory Registration. The Company shall prepare, and, on
  or prior to thirty (30) days from the date of Closing (as defined in the Securities
  Purchase Agreement) (the “Filing Date”), file with the SEC
  a Registration Statement on Form S-3 (or, if Form S-3 is not then available,
  on such form of Registration Statement as is then available to effect a registration
  of the Registrable Securities, subject to the consent of the Initial Investors,
  which consent will not be unreasonably withheld) covering the resale of the
  Registrable Securities underlying the Notes and Warrants issued or issuable
  pursuant to the Securities Purchase Agreement, which Registration Statement,
  to the extent allowable under the 1933 Act and the rules and regulations promulgated
  thereunder (including Rule 416), shall state that such Registration Statement
  also covers such indeterminate number of additional shares of Common Stock as
  may become issuable upon conversion of or otherwise pursuant to the Notes and
  exercise of the Warrants to prevent dilution resulting from stock splits, stock
  dividends or similar transactions. The number of shares of Common Stock initially
  included in such Registration Statement shall be no less than an amount equal
  to two (2) times the sum of the number of Conversion Shares that are then issuable
  upon conversion of the Notes and Additional Notes (based on the Variable Conversion
  Price as would then be in effect and assuming the Variable Conversion Price
  is the Conversion Price at such time), and the number of Warrant Shares that
  are then issuable upon exercise of the Warrants, without regard to any limitation
  on the Investor’s ability to convert the Notes or exercise the Warrants.
  The Company acknowledges that the number of shares initially included in the
  Registration Statement represents a good faith estimate of the maximum number
  of shares issuable upon conversion of the Notes and upon exercise of the Warrants.

                                                                            b.           
  Underwritten Offering. If any offering pursuant to a Registration
  Statement pursuant to Section 2(a) hereof involves an underwritten offering,
  the Investors who hold a majority in interest of the Registrable Securities
  subject to such underwritten offering, with the consent of a majority-in-interest
  of the Initial Investors, shall have the right to select one legal counsel and
  an investment banker or bankers and manager or managers to administer the 

 2 

offering, which investment banker or bankers or manager or managers shall be reasonably satisfactory to the Company. 

                                                                            c.           
  Payments by the Company. The Company shall use its best efforts
  to obtain effectiveness of the Registration Statement as soon as practicable.
  If (i) the Registration Statement(s) covering the Registrable Securities required
  to be filed by the Company pursuant to Section 2(a) hereof is not filed by the
  Filing Date or declared effective by the SEC on or prior to one hundred and
  twenty (120) days from the date of Closing (as defined in the Securities Purchase
  Agreement), or (ii) after the Registration Statement has been declared effective
  by the SEC, sales of all of the Registrable Securities cannot be made pursuant
  to the Registration Statement, or (iii) the Common Stock is not listed or included
  for quotation on the Nasdaq National Market (“Nasdaq”), the
  Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York
  Stock Exchange (the “NYSE”) or the American Stock Exchange
  (the “AMEX”) after being so listed or included for quotation,
  or (iv) the Common Stock ceases to be traded on the Over-the-Counter Bulletin
  Board (the “OTCBB”) or any equivalent replacement exchange
  prior to being listed or included for quotation on one of the aforementioned
  markets, provided that any such delay is not caused by the Investors’
  failure to satisfy their obligations under Section 4, then the Company will
  make payments to the Investors in such amounts and at such times as shall be
  determined pursuant to this Section 2(c) as partial relief for the damages to
  the Investors by reason of any such delay in or reduction of their ability to
  sell the Registrable Securities (which remedy shall not be exclusive of any
  other remedies available at law or in equity). The Company shall pay to each
  holder of the Notes or Registrable Securities an amount equal to the then outstanding
  principal amount of the Notes (and, in the case of holders of Registrable Securities,
  the principal amount of Notes from which such Registrable Securities were converted)
  (“Outstanding Principal Amount”), multiplied by the Applicable
  Percentage (as defined below) times the sum of (as applicable): (i) the number
  of months (prorated for partial months) after the Filing Date or the end of
  the aforementioned one hundred and twenty (120) day period and prior to the
  date the Registration Statement is declared effective by the SEC, provided,
  however, that there shall be excluded from such period any delays which are
  solely attributable to changes required by the Investors in the Registration
  Statement with respect to information relating to the Investors, including,
  without limitation, changes to the plan of distribution, or to the failure of
  the Investors to conduct their review of the Registration Statement pursuant
  to Section 3(h) below in a reasonably prompt manner; (ii) the number of months
  (prorated for partial months) that sales of all of the Registrable Securities
  cannot be made pursuant to the Registration Statement after the Registration
  Statement has been declared effective (including, without limitation, when sales
  cannot be made by reason of the Company’s failure to properly supplement
  or amend the prospectus included therein in accordance with the terms of this
  Agreement, but excluding any days during an Allowed Delay (as defined in Section
  3(f)); and (iii) the number of months (prorated for partial months) that the
  Common Stock is not listed or included for quotation on the OTCBB, Nasdaq, Nasdaq
  SmallCap, NYSE or AMEX or that trading thereon is halted after the Registration
  Statement has been declared effective. The term “Applicable Percentage”
  means two hundredths (.02). (For example, if the Registration Statement becomes
  effective one (1) month after the end of such one hundred and twenty (120) day
  period, the Company would pay $5,000 for each $250,000 of Outstanding
  Principal Amount. If thereafter, sales could not be made pursuant to the Registration
  Statement for an additional period of one (1) month, the Company would pay an
  additional $5,000 for each $250,000 of Outstanding Principal Amount.)
  Such amounts shall be paid in cash or, at the Company’s 

 3 

option, in shares of Common Stock priced at the Conversion Price (as defined in the Notes) on such payment date.

                                                                            d.           
  Piggy-Back Registrations. Subject to the last sentence of
  this Section 2(d), if at any time prior to the expiration of the Registration
  Period (as hereinafter defined) the Company shall determine to file with the
  SEC a Registration Statement relating to an offering for its own account or
  the account of others under the 1933 Act of any of its equity securities (other
  than on Form S-4 or Form S-8 or their then equivalents relating to equity securities
  to be issued solely in connection with any acquisition of any entity or business
  or equity securities issuable in connection with stock option or other bona
  fide, employee benefit plans), the Company shall send to each Investor
  who is entitled to registration rights under this Section 2(d) written notice
  of such determination and, if within fifteen (15) days after the effective date
  of such notice, such Investor shall so request in writing, the Company shall
  include in such Registration Statement all or any part of the Registrable Securities
  such Investor requests to be registered, except that if, in connection with
  any underwritten public offering for the account of the Company the managing
  underwriter(s) thereof shall impose a limitation on the number of shares of
  Common Stock which may be included in the Registration Statement because, in
  such underwriter(s)’ judgment, marketing or other factors dictate such
  limitation is necessary to facilitate public distribution, then the Company
  shall be obligated to include in such Registration Statement only such limited
  portion of the Registrable Securities with respect to which such Investor has
  requested inclusion hereunder as the underwriter shall permit. Any exclusion
  of Registrable Securities shall be made pro rata among the Investors seeking
  to include Registrable Securities in proportion to the number of Registrable
  Securities sought to be included by such Investors; provided, however,
  that the Company shall not exclude any Registrable Securities unless the Company
  has first excluded all outstanding securities, the holders of which are not
  entitled to inclusion of such securities in such Registration Statement or are
  not entitled to pro rata inclusion with the Registrable Securities; and provided,
  further, however, that, after giving effect to the immediately
  preceding proviso, any exclusion of Registrable Securities shall be made pro
  rata with holders of other securities having the right to include such securities
  in the Registration Statement other than holders of securities entitled to inclusion
  of their securities in such Registration Statement by reason of demand registration
  rights. No right to registration of Registrable Securities under this Section
  2(d) shall be construed to limit any registration required under Section 2(a)
  hereof. If an offering in connection with which an Investor is entitled to registration
  under this Section 2(d) is an underwritten offering, then each Investor whose
  Registrable Securities are included in such Registration Statement shall, unless
  otherwise agreed by the Company, offer and sell such Registrable Securities
  in an underwritten offering using the same underwriter or underwriters and,
  subject to the provisions of this Agreement, on the same terms and conditions
  as other shares of Common Stock included in such underwritten offering. Notwithstanding
  anything to the contrary set forth herein, the registration rights of the Investors
  pursuant to this Section 2(d) shall only be available in the event the Company
  fails to timely file, obtain effectiveness or maintain effectiveness of any
  Registration Statement to be filed pursuant to Section 2(a) in accordance with
  the terms of this Agreement. 

                                                                            e.           
  Eligibility for Form S-3, SB-2 or S-1; Conversion to Form S-3.
  The Company represents and warrants that it meets the requirements for the use
  of Form S-3, SB-2 or S-1 for registration of the sale by the Initial Investors
  and any other Investors of the Registrable Securities. The Company agrees to
  file all reports required to be filed by the 

 4 

Company with the SEC in a timely manner so as to remain eligible or become eligible, as the case may be, and thereafter to maintain its eligibility, for the use of Form S-3. If the Company is not currently eligible to use Form S-3, not later than
five (5) business days after the Company first meets the registration eligibility and transaction requirements for the use of Form S-3 (or any successor form) for registration of the offer and sale by the Initial Investors and any other Investors of
Registrable Securities, the Company shall file a Registration Statement on Form S-3 (or such successor form) with respect to the Registrable Securities covered by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed
pursuant to Section 2(a) (and include in such Registration Statement on Form S-3 the information required by Rule 429 under the 1933 Act) or convert the Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed pursuant to
Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933 Act and cause such Registration Statement (or such amendment) to be declared effective no later than sixty (60) days after filing. In the event of a breach by the Company of the
provisions of this Section 2(e), the Company will be required to make payments pursuant to Section 2(c) hereof. 

                                                   3.           
  OBLIGATIONS OF THE COMPANY.

                          In
  connection with the registration of the Registrable Securities, the Company
  shall have the following obligations: 

                                                                            a.           
  The Company shall prepare promptly, and file with the SEC not later than
  the Filing Date, a Registration Statement with respect to the number of Registrable
  Securities provided in Section 2(a), and thereafter use its best efforts to
  cause such Registration Statement relating to Registrable Securities to become
  effective as soon as possible after such filing but in no event later than one
  hundred and twenty (120) days from the date of Closing), and keep the Registration
  Statement effective pursuant to Rule 415 at all times until such date as is
  the earlier of (i) the date on which all of the Registrable Securities have
  been sold and (ii) the date on which the Registrable Securities (in the opinion
  of counsel to the Initial Investors) may be immediately sold to the public without
  registration or restriction (including, without limitation, as to volume by
  each holder thereof) under the 1933 Act (the “Registration Period”),
  which Registration Statement (including any amendments or supplements thereto
  and prospectuses contained therein) shall not contain any untrue statement of
  a material fact or omit to state a material fact required to be stated therein,
  or necessary to make the statements therein not misleading. 

                                                                            b.           
  The Company shall prepare and file with the SEC such amendments (including
  post-effective amendments) and supplements to the Registration Statements and
  the prospectus used in connection with the Registration Statements as may be
  necessary to keep the Registration Statements effective at all times during
  the Registration Period, and, during such period, comply with the provisions
  of the 1933 Act with respect to the disposition of all Registrable Securities
  of the Company covered by the Registration Statements until such time as all
  of such Registrable Securities have been disposed of in accordance with the
  intended methods of disposition by the seller or sellers thereof as set forth
  in the Registration Statements. In the event the number of shares available
  under a Registration Statement filed pursuant to this Agreement is insufficient
  to cover all of the Registrable Securities issued or issuable upon conversion
  of the Notes and exercise of the Warrants, the Company shall amend 

 5 

the Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover all of the Registrable Securities, in each case, as soon as practicable, but in any event within fifteen
(15) days after the necessity therefor arises (based on the market price of the Common Stock and other relevant factors on which the Company reasonably elects to rely). The Company shall use its best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the filing thereof, but in any event within thirty (30) days after the date on which the Company reasonably first determines (or reasonably should have determined) the need
therefor. The provisions of Section 2(c) above shall be applicable with respect to such obligation, with the one hundred and twenty (120) days running from the day the Company reasonably first determines (or reasonably should have determined) the
need therefor. 

                                                                            c.
             The Company
  shall furnish to each Investor whose Registrable Securities are included in
  a Registration Statement and its legal counsel (i) promptly (but in no event
  more than two (2) business days) after the same is prepared and publicly distributed,
  filed with the SEC, or received by the Company, one copy of each Registration
  Statement and any amendment thereto, each preliminary prospectus and prospectus
  and each amendment or supplement thereto, and, in the case of the Registration
  Statement referred to in Section 2(a), each letter written by or on behalf of
  the Company to the SEC or the staff of the SEC, and each item of correspondence
  from the SEC or the staff of the SEC, in each case relating to such Registration
  Statement (other than any portion of any thereof which contains information
  for which the Company has sought confidential treatment), and (ii) promptly
  (but in no event more than two (2) business days) after the Registration Statement
  is declared effective by the SEC, such number of copies of a prospectus, including
  a preliminary prospectus, and all amendments and supplements thereto and such
  other documents as such Investor may reasonably request in order to facilitate
  the disposition of the Registrable Securities owned by such Investor. The Company
  will immediately notify each Investor by facsimile of the effectiveness of each
  Registration Statement or any post-effective amendment. The Company will promptly
  (but in no event more than five (5) business days) respond to any and all comments
  received from the SEC (which comments shall promptly be made available to the
  Investors upon request), with a view towards causing each Registration Statement
  or any amendment thereto to be declared effective by the SEC as soon as practicable,
  shall promptly file an acceleration request as soon as practicable (but in no
  event more than two (2) business days) following the resolution or clearance
  of all SEC comments or, if applicable, following notification by the SEC that
  any such Registration Statement or any amendment thereto will not be subject
  to review and shall promptly file with the SEC a final prospectus as soon as
  practicable (but in no event more than two (2) business days) following receipt
  by the Company from the SEC of an order declaring the Registration Statement
  effective. In the event of a breach by the Company of the provisions of this
  Section 3(c), the Company will be required to make payments pursuant to Section
  2(c) hereof. 

                                                                            d.           
  The Company shall use reasonable efforts to (i) register and qualify the
  Registrable Securities covered by the Registration Statements under such other
  securities or “blue sky” laws of such jurisdictions in the United
  States as the Investors who hold a majority in interest of the Registrable Securities
  being offered reasonably request, (ii) prepare and file in those jurisdictions
  such amendments (including post-effective amendments) and supplements to such
  registrations and qualifications as may be necessary to maintain the 

 6 

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 (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (b) subject itself to general taxation in any such jurisdiction, (c) file a general consent to service of process in any such jurisdiction,
(d) provide any undertakings that cause the Company undue expense or burden, or (e) make any change in its charter or bylaws, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and
its shareholders. 

                                                                            e.           
  In the event Investors who hold a majority-in-interest of the Registrable
  Securities being offered in the offering (with the approval of a majority-in-interest
  of the Initial Investors) select underwriters for the offering, the Company
  shall enter into and perform its obligations under an underwriting agreement,
  in usual and customary form, including, without limitation, customary indemnification
  and contribution obligations, with the underwriters of such offering. 

                                                                            f.
             As promptly
  as practicable after becoming aware of such event, the Company shall notify
  each Investor of the happening of any event, of which the Company has knowledge,
  as a result of which the prospectus included in any Registration Statement,
  as then in effect, includes an untrue statement of a material fact or omission
  to state a material fact required to be stated therein or necessary to make
  the statements therein not misleading, and use its best efforts promptly to
  prepare a supplement or amendment to any Registration Statement to correct such
  untrue statement or omission, and deliver such number of copies of such supplement
  or amendment to each Investor as such Investor may reasonably request; provided
  that, for not more than ten (10) consecutive trading days (or a total of not
  more than twenty (20) trading days in any twelve (12) month period), the Company
  may delay the disclosure of material non-public information concerning the Company
  (as well as prospectus or Registration Statement updating) the disclosure of
  which at the time is not, in the good faith opinion of the Company, in the best
  interests of the Company (an “Allowed Delay”); provided,
  further, that the Company shall promptly (i) notify the Investors in writing
  of the existence of (but in no event, without the prior written consent of an
  Investor, shall the Company disclose to such investor any of the facts or circumstances
  regarding) material non-public information giving rise to an Allowed Delay and
  (ii) advise the Investors in writing to cease all sales under such Registration
  Statement until the end of the Allowed Delay. Upon expiration of the Allowed
  Delay, the Company shall again be bound by the first sentence of this Section
  3(f) with respect to the information giving rise thereto. 

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

 7 

                                                                            h.
             The Company
  shall permit a single firm of counsel designated by the Initial Investors to
  review such Registration Statement and all amendments and supplements thereto
  (as well as all requests for acceleration or effectiveness thereof) a reasonable
  period of time prior to their filing with the SEC, and not file any document
  in a form to which such counsel reasonably objects and will not request acceleration
  of such Registration Statement without prior notice to such counsel. The sections
  of such Registration Statement covering information with respect to the Investors,
  the Investor’s beneficial ownership of securities of the Company or the
  Investors intended method of disposition of Registrable Securities shall conform
  to the information provided to the Company by each of the Investors. 

                                                                            i.
             The Company
  shall make generally available to its security holders as soon as practicable,
  but not later than ninety (90) days after the close of the period covered thereby,
  an earnings statement (in form complying with 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 the Registration Statement. 

                                                                            j.
             At the
  request of any Investor, the Company shall furnish, on the date that Registrable
  Securities are delivered to an underwriter, if any, for sale in connection with
  any Registration Statement or, if such securities are not being sold by an underwriter,
  on the date of effectiveness thereof (i) an opinion, dated as of such date,
  from 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 underwriters, if any, and the Investors and (ii)
  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 underwriters, if any, and the Investors. 

                                                                            k.
             The Company
  shall make available for inspection by (i) any Investor, (ii) any underwriter
  participating in any disposition pursuant to a Registration Statement, (iii)
  one firm of attorneys and one firm of accountants or other agents retained by
  the Initial Investors, (iv) one firm of attorneys and one firm of accountants
  or other agents retained by all other Investors, and (v) one firm of attorneys
  retained by all such underwriters (collectively, the “Inspectors”)
  all pertinent financial and other records, and pertinent corporate documents
  and properties of the Company, including without limitation, records of conversions
  by other holders of convertible securities issued by the Company and the issuance
  of stock to such holders pursuant to the conversions (collectively, the “Records”),
  as shall be reasonably deemed necessary by each Inspector to enable each Inspector
  to exercise its due diligence responsibility, and cause the Company’s
  officers, directors and employees to supply all information which any Inspector
  may reasonably request for purposes of such due diligence; provided,
  however, that each Inspector shall hold in confidence and shall not make
  any disclosure (except to an Investor) 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, (b) the release of such Records is ordered pursuant to a subpoena
  or other 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 or any other agreement.
  The Company shall not be required to 

 8 

disclose any confidential information in such Records to any Inspector until and unless such Inspector shall have entered into confidentiality agreements (in form and substance satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). 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 Investor’s ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

                                                                            l.
             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 necessary to avoid or correct a misstatement or omission
  in any Registration Statement, (iii) the release of such information is ordered
  pursuant to a subpoena or other order from a court or governmental body of competent
  jurisdiction, or (iv) such information has been made generally available to
  the public other than by disclosure in violation of this or any other agreement.
  The Company agrees that it 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 notice to such Investor prior
  to making such disclosure, and allow the Investor, at its expense, to undertake
  appropriate action to prevent disclosure of, or to obtain a protective order
  for, such information. 

                                                                            m.
             The Company
  shall (i) cause all the Registrable Securities covered by the Registration Statement
  to be listed on each national securities exchange on which securities of the
  same class or series issued by the Company are then listed, if any, if the listing
  of such Registrable Securities is then permitted under the rules of such exchange,
  or (ii) to the extent the securities of the same class or series are not then
  listed on a national securities exchange, secure the designation and quotation,
  of all the Registrable Securities covered by the Registration Statement on Nasdaq
  or, if not eligible for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq
  or Nasdaq SmallCap, on the OTCBB and, without limiting the generality of the
  foregoing, 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. 

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

                                                                            o.
             The Company
  shall cooperate with the Investors who hold Registrable Securities being offered
  and the managing underwriter or underwriters, if any, to facilitate the timely
  preparation and delivery of certificates (not bearing any restrictive legends)
  representing Registrable Securities to be offered pursuant to a Registration
  Statement and enable such certificates to be in such denominations or amounts,
  as the case may be, as the managing underwriter or underwriters, if any, or
  the Investors may reasonably request and registered in such names as the managing
  underwriter or underwriters, if any, or the Investors may request, and, within
  three (3) business days after a Registration Statement which includes Registrable

 9 

Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Investors whose Registrable Securities
are included in such Registration Statement) an instruction in the form attached hereto as Exhibit 1 and an opinion of such counsel in the form attached hereto as Exhibit 2. 

                                                                            p.
             At the
  request of the holders of a majority-in-interest of the Registrable Securities,
  the Company shall prepare and file with the SEC such amendments (including post-effective
  amendments) and supplements to a Registration Statement and any prospectus used
  in connection with the Registration Statement as may be necessary in order to
  change the plan of distribution set forth in such Registration Statement. 

                                                                            q.
             From and
  after the date of this Agreement, the Company shall not, and shall not agree
  to, allow the holders of any securities of the Company to include any of their
  securities in any Registration Statement under Section 2(a) hereof or any amendment
  or supplement thereto under Section 3(b) hereof without the consent of the holders
  of a majority-in-interest of the Registrable Securities. 

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

                                                   4.           
  OBLIGATIONS OF THE INVESTORS.

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

                                                                            a.
             It shall
  be a condition precedent to the obligations of the Company to complete the registration
  pursuant to this Agreement with respect to the Registrable Securities of 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 registration of such Registrable Securities and shall execute such
  documents in connection with such registration as the Company may reasonably
  request. At least three (3) business days prior to the first anticipated filing
  date of the Registration Statement, the Company shall notify each Investor of
  the information the Company requires from each such Investor.

                                                                            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 the Registration Statements
  hereunder, unless such Investor has notified the Company in writing of such
  Investor’s election to exclude all of such Investor’s Registrable
  Securities from the Registration Statements. 

                                                                            c.
             In the
  event Investors holding a majority-in-interest of the Registrable Securities
  being registered (with the approval of the Initial Investors) determine to engage
  the services of an underwriter, each Investor agrees to enter into and perform
  such Investor’s obligations under an underwriting agreement, in usual
  and customary form, including, without limitation, customary indemnification
  and contribution obligations, with the managing 

 10 

underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless 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. 

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

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

                                                   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 qualification
  fees, printers and accounting fees, the fees and disbursements of counsel for
  the Company, and the reasonable fees and disbursements of one counsel selected
  by the Initial Investors pursuant to Sections 2(b) and 3(h) hereof shall be
  borne by the Company. 

                                                   6.           
  INDEMNIFICATION.

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

                                                                            a.
             To the
  extent permitted by law, the Company will indemnify, hold harmless and defend
  (i) each Investor who holds such Registrable Securities, (ii) the directors,
  officers, partners, employees, agents and each person who controls any Investor
  within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as
  amended (the “1934 Act”), if any, (iii) any underwriter (as
  defined in the 1933 Act) for the Investors, and (iv) the directors, officers,
  partners, employees and each person who controls any such underwriter within
  the meaning of the 1933 Act or the 1934 Act, if any (each, an “Indemnified
  Person”), against any joint or several losses, claims, damages, liabilities
  or expenses (collectively, together with actions, proceedings or inquiries by
  any regulatory or self-regulatory organization, whether 

 11 

commenced or threatened, in respect thereof, “Claims”) to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or the omission or alleged omission to state therein a material fact required to be stated or necessary to make the statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the
SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading; or (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities (the matters in the
foregoing clauses (i) through (iii) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6(c) with respect to the number of legal counsel, the Company shall reimburse the Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person or underwriter for such Indemnified Person expressly for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably
withheld; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented, such corrected prospectus was timely made available by the Company pursuant to Section 3(c) hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior
to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Registrable Securities by the Investors pursuant to Section 9. 

                                                                            b.           
  In connection with any Registration Statement in which an Investor is participating,
  each such Investor agrees severally and not jointly to indemnify, hold harmless
  and defend, to the same extent and in the same manner set forth in Section 6(a),
  the Company, each of its directors, each of its officers who signs the Registration
  Statement, each person, if any, who controls the Company within the meaning
  of the 1933 Act or the 1934 Act, any underwriter and any other shareholder selling
  securities pursuant to the Registration Statement or any of its directors or
  officers or any person who controls such shareholder or underwriter within the
  meaning of the 1933 Act or the 1934 Act (collectively and together with an Indemnified
  Person, an “Indemnified Party”), against any Claim to which
  any of them may become subject, under the 1933 Act, the 1934 Act or otherwise,
  insofar as such Claim arises out of or is based upon any Violation by such Investor,
  in each case to the extent (and only to the 

 12 

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 (promptly as such expenses are incurred and are due and payable) reasonably incurred by them in connection with investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) 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; provided,
further, however, that the Investor shall be liable under this Agreement (including this Section 6(b) and Section 7) for only that amount 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. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(b) with respect to any preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented. 

                                                                            c.
             Promptly
  after receipt by an Indemnified Person or Indemnified Party under this Section
  6 of notice of the commencement of any action (including any governmental action),
  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 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. The indemnifying party shall pay for only
  one separate legal counsel for the Indemnified Persons or the Indemnified Parties,
  as applicable, and such legal counsel shall be selected by Investors holding
  a majority-in-interest of the Registrable Securities included in the Registration
  Statement to which the Claim relates (with the approval of a majority-in-interest
  of the Initial Investors), if the Investors are entitled to indemnification
  hereunder, or the Company, if the Company is entitled to indemnification hereunder,
  as applicable. 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 actually prejudiced in its ability to defend such action. The indemnification
  required by this Section 6 shall be made by periodic payments of the amount
  thereof during the course of the investigation or defense, as such expense,
  loss, damage or liability is incurred and is due and payable. 

 13 

                                                   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 contribution shall be made under circumstances where the maker would
  not have been liable for indemnification under the fault standards set forth
  in Section 6, (ii) no seller of Registrable Securities guilty of fraudulent
  misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
  be entitled to contribution from any seller of Registrable Securities who was
  not guilty of such fraudulent misrepresentation, and (iii) contribution (together
  with any indemnification or other obligations under this Agreement) by any seller
  of Registrable Securities shall be limited in amount to the net amount of proceeds
  received by such seller from the sale of such Registrable Securities. 

                                                   8.           
  REPORTS UNDER 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 (it being understood that nothing herein shall limit the Company’s
  obligations under Section 4(c) of the Securities Purchase Agreement) and the
  filing of such reports and other documents is required for the applicable provisions
  of Rule 144; and 

                                                                            c.
             furnish
  to each Investor so long as such Investor owns Registrable Securities, promptly
  upon request, (i) a written statement by the Company that it has complied with
  the reporting requirements of Rule 144, the 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 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) following
  such transfer or assignment, the further disposition of such securities by the
  transferee or assignee is restricted under the 1933 

 14 

Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the
provisions contained herein, (v) such transfer shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement, and (vi) such transferee shall be an “accredited investor” as that term
defined in Rule 501 of Regulation D promulgated under the 1933 Act. 

                                                   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 written consent of the Company, each of the Initial Investors (to
  the extent such Initial Investor still owns Registrable Securities) and Investors
  who hold a majority interest of the Registrable Securities. Any amendment or
  waiver effected in accordance with this Section 10 shall be binding upon each
  Investor and the Company. 

                                                   11.           
  MISCELLANEOUS.

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

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

If to the Company: 

Snocone Systems Inc. 

  3131 Camino del Rio, N, Suite 1650 

  San Diego, CA 92108 

  Attention: Chief Executive Officer 

  Telephone:       (619) 284-4807 

  Facsimile:          (619) 284-4344

 15 

With a copy to: 

Fish & Richardson, P.C. 

  12390 El Camino Real 

  San Diego, CA 92130 

  Attention: Edith A. Bauer, Esq. 

  Telephone:      858-678-5070 

  Facsimile:          858-678-5099

 If to an Investor: to the address set forth immediately below such Investor’s
  name on the signature pages to the Securities Purchase Agreement.

With a copy to: 

Ballard Spahr Andrews & Ingersoll, LLP

  1735 Market Street 

  51st Floor 

  Philadelphia, Pennsylvania 19103 

  Attention: Gerald J. Guarcini, Esq. 

  Telephone:      215-865-8625 

  Facsimile:          215-864-8999

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

                                                                            d.
             THIS AGREEMENT
  SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
  THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
  WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. THE
  PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
  FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING
  UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR
  THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE
  THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.
  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST
  CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON
  THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER
  PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH
  PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING
  SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH
  JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN
  ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR 

 16 

ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE. 

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

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

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

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

                                                                            i.
             This Agreement
  may be executed in two or more counterparts, each of which shall be deemed an
  original but all of which shall constitute one and the same agreement and shall
  become effective when counterparts have been signed by each party and delivered
  to the other party. 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. 

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

                                                                            k.
             Except
  as otherwise provided herein, all consents and other determinations to be made
  by the Investors pursuant to this Agreement shall be made by Investors holding
  a majority of the Registrable Securities, determined as if the all of the Notes
  then outstanding have been converted into for Registrable Securities. 

                                                                            l.
             The Company
  acknowledges that a breach by it of its obligations hereunder will cause irreparable
  harm to each Investor by vitiating the intent and purpose of the transactions
  contemplated hereby. Accordingly, the Company acknowledges that the remedy at
  law for breach of its obligations under this Agreement will be inadequate and
  agrees, in the event of a breach or threatened breach by the Company of any
  of the provisions under this Agreement, that each Investor shall be entitled,
  in addition to all other available remedies in law or in equity, and in addition
  to the penalties assessable herein, to an injunction or injunctions restraining,

 17 

 preventing or curing any breach of this Agreement and to enforce
  specifically the terms and provisions hereof, without the necessity of showing
  economic loss and without any bond or other security being required. 

                                                                            m.
             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. 

 

 

 

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 18 

                          IN
  WITNESS WHEREOF, the Company and the undersigned Initial Investors have
  caused this Agreement to be duly executed as of the date first above written.

	 SNOCONE SYSTEMS INC.  	 
	 	 
	 	 
	 	 
	 Edon Moyal  	 
	 Chief Executive Officer  	 
	  	 
	  	 
	  	 
	 AJW PARTNERS, LLC  	 
	By: SMS Group, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 AJW OFFSHORE, LTD.  	 
	By: First Street Manager II, LLC  	 
	  	 
	 	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 AJW QUALIFIED PARTNERS, LLC  	 
	By: AJW Manager, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 
	  	 
	  	 
	 NEW MILLENNIUM CAPITAL PARTNERS, II, LLC  	 
	By: First Street Manager II, LLC  	 
	  	 
	  	 
	  	 
	 Corey S. Ribotsky  	 
	 Manager  	 

 19

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