Document:

Unassociated Document

    Exhibit
      4.6

    

    SUBSCRIPTION
      AGREEMENT

    

    THIS
      SUBSCRIPTION AGREEMENT (the
      “Agreement”) is made as of the _____ day of April 2007, by and among Better
      BioDiesel, Inc., a Colorado corporation (the “Company”), and the investors
      listed on Schedule
      A
      attached
      hereto and made a part hereof (the “Investor(s)”). Capitalized terms used but
      not defined in this Agreement shall have the respective meanings given such
      terms in the Private Placement Memorandum dated as of the same date herewith
      (the “Memorandum”).

    

    W
      I T N E S S E T H

    

    WHEREAS,
      the
      Company desires to sell to the Investors that number of Shares set forth
      opposite each such Investor’s name on Schedule
      A
      attached
      hereto;

    

    WHEREAS,
      each of
      the Investors has been furnished with a Memorandum; and 

    

    WHEREAS,
      the
      Investors, after carefully reviewing the Memorandum, desire to purchase such
      Shares on the terms and conditions contained in this Agreement.

    

    NOW,
      THEREFORE, IN CONSIDERATION FOR THE MUTUAL COVENANTS AND AGREEMENTS SET FORTH
      HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
      SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO HEREBY AGREE
      AS
      FOLLOWS:

    

    1.
      Purchase
      and Sale of Units.
      The
      Investor hereby agrees to purchase that number of units, at a purchase price
      of
      Twenty thousand dollars ($20,000.00) per unit, as is set forth opposite such
      Investor’s name on Schedule
      A
      attached
      hereto, and the Company agrees to sell at the Closing to the Investor, for
      the
      aggregate purchase price set forth on Schedule
      A
      (the
“Purchase Price”), which units of securities of the Company consisting of the
      following (the “Units”):

    

    a(i).
      Shares
      of Common Stock.
      Ten
      thousand (10,000) shares of Common Stock of the Company, reflecting a per share
      purchase price of Two dollars ($2.00) per Share; and 

     

    a(ii).
      Warrants.
      A five
      (5) year warrant to purchase 10,000 shares of common stock of the Company (the
      “Shares”) at an exercise price (the “Exercise Price”) equal to the lesser of (i)
      the last trade on the day of the receipt of the Minimum (defined herein) funding
      of this Offering or (ii) the five-day Volume Weighted Average Price (VWAP)
      for
      the five days prior to the date of the receipt of the Minimum funding of this
      Offering.

    

    b.
      Delivery
      of Shares.
      The
      Shares subscribed for herein shall be issued upon the Closing (hereinafter
      defined). 

    

    c.
      Closings.
      The
      consummation of the purchase and sale of the Shares contemplated by this
      Agreement shall take place at The Otto Law Group, PLLC, 601 Union Street, Suite
      4500, Seattle, Washington 98101, upon receipt of subscriptions acceptable by
      the
      Company in an amount equal to or greater than the Minimum Amount and at such
      time as is mutually agreeable to the Company, or at such other time and place
      as
      the Company may designate (the “Closing” or “Closings”); provided,
      however,
      that
      all Closings shall take place no later than the Closing of the Offering.

    

    d.
      Binding
      and Enforceable.
      This
      Subscription Agreement will be binding upon and enforceable against the Company
      only when countersigned by an authorized agent of the Company and delivered
      to
      Investors who have agreed to purchase at least the Minimum Amount.

    

    e.
      Anti-dilution
      Provisions.
      The
      Company shall provide separate ratchet protection rights for the Common Stock
      and Warrants, as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (1)
      Common
      Stock:
      If the
      Company subsequently issues common stock or any type of securities convertible
      into common stock, excepting warrants, at any time between the Closing of this
      Offering prior to the SEC declaring a Registration Statement (defined herein)
      including the Common Stock to be effective, investors in this Offering shall
      be
      extended full-ratchet protection as to their Common Stock. Anti-dilution will
      not apply to shares issued to employees as part of a board-authorized
      compensation scheme. Anti-dilution shall not apply to shares or options issued
      to employees as part of a board-authorized compensation plan.

    

    (2)
      Warrants:
      If the
      Company issues either Warrants or options to purchase common stock during the
      term of the Warrants, at a price below the exercise price below the Exercise
      Price in this Offering, the investors in this Offering shall be extended
      full-ratchet protection as to their Warrants. Anti-dilution shall not apply
      to
      shares or options issued to employees as part of a board-authorized compensation
      plan.

    

    2.
      Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each Investor as follows:

    

    a.
      Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Colorado, and has all requisite power and
      authority to carry on its business as now conducted. The Company is duly
      qualified to transact business, and is in good standing, in each U.S.
      jurisdiction in which the failure to so qualify would have a material adverse
      effect on its business.

    

    b.
      Capitalization.
      The
      authorized capital of the Company consists of 200,000,000 shares of common
      stock
      and 5,000,000 shares of preferred stock. Prior to this Offering, 30,500,001
      shares of Common Stock and 0 shares of Preferred Stock are issued and
      outstanding.

    

    c.
      Authorization.
      All
      action on the part of the Company necessary for the authorization, execution
      and
      delivery of this Agreement, the performance of all obligations of the Company
      hereunder and the authorization, issuance and delivery of the Shares being
      sold
      hereunder, to the extent that the foregoing requires performance on or prior
      to
      the Closing, has been taken or will be taken on or prior to the Closing, and
      the
      Company has all requisite power and authority to enter into this
      Agreement.

    

    3.
      Representations
      and Warranties of Investors.
      Each
      Investor hereby represents and warrants to the Company as follows:

    

    a.
      Organization;
      Good Standing; Power and Authority; Binding Obligation.
      Investor has full power and authority to enter into this Agreement, and, for
      those Investors which are corporations (i) such Investor is a corporation duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation, and has all requisite power and authority
      to
      carry on its business as now conducted, and (ii) all action on the part of
      the
      Investor necessary for the authorization, execution and delivery of this
      Agreement, the performance of all obligations of the Investor hereunder,
      including, without limitation, the payment of the purchase price for the Shares
      being sold such Investor hereunder has been taken, and the Investor has all
      requisite power and authority to enter into this Agreement. This Agreement
      has
      been duly executed and delivered by Investor and, assuming due authorization,
      execution and delivery by the Company, constitutes Investor’s valid and legally
      binding obligation enforceable against the Investor in accordance with its
      terms, subject to the effect of any applicable bankruptcy, reorganization,
      insolvency (including, without limitation, all laws relating to fraudulent
      transfers), moratorium or similar laws affecting creditors’ rights generally,
      subject, as to enforceability, to the effect of general principles of equity
      (regardless of whether such enforceability is considered in a proceeding in
      equity or at law) and subject to the effect of applicable securities laws as
      to
      rights of indemnification.

    

    b.
      Purchase
      Entirely for Own Account.
      The
      Shares to be purchased by Investor hereunder will be acquired for investment
      for
      Investor’s own account, not as a nominee or agent, and not with a view to the
      resale or distribution of any part thereof. Investor has no present intention
      of
      selling, granting any participation in, or otherwise distributing the Shares.
      Investor does not have any contract, undertaking, agreement or arrangement
      with
      any person to sell, transfer or grant participations to any person with respect
      to the Shares. The Investor has not construed the contents of this Agreement,
      or
      any additional agreement with respect to the proposed investment in the Shares
      or any prior or subsequent communications from the Company, or any of its
      officers, employees or representatives, as investment, tax or legal advice
      or as
      information necessarily applicable to such Investor’s particular financial
      situation. The Investor has consulted its own financial advisor, tax advisor,
      legal counsel and accountant, as necessary or desirable, as to matters
      concerning his investment in the Shares.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    c.
      Disclosure.
      Investor has received or reviewed all the information which such Investor has
      requested for the purposes of determining the merits of the Shares as an
      investment. Investor has read and understands the Risk Factors and other
      information presented in the Memorandum.

    

    Investor
      has had an opportunity to ask questions and receive answers from the Company
      regarding the Company and its respective business, operations and financial
      condition and the terms and conditions of this Offering of Shares, and answers
      have been provided to Investor’s full satisfaction. Investor has fully reviewed
      all corporate and governance documents of the Company and such other documents,
      which Investor feels is necessary or appropriate prior to purchase of the
      Shares, understands all relevant terms and has asked all questions and received
      answers thereto to Investor’s full satisfaction. If deemed necessary by
      Investor, Investor has consulted with a professional advisor who has provided
      Investor with advice concerning terms. INVESTOR
      ACKNOWLEDGES AND AGREES THAT THE PURCHASE OF THE SHARES INVOLVES A HIGH DEGREE
      OF RISK, INCLUDING, WITHOUT LIMITATION, THOSE SET FORTH IN THE MEMORANDUM,
      AND
      MAY RESULT IN A LOSS OF THE ENTIRE AMOUNT INVESTED. EACH INVESTOR FURTHER
      ACKNOWLEDGES AND AGREES THAT THERE IS NO ASSURANCE THAT THE COMPANY’S OPERATIONS
      WILL RESULT IN REVENUES OR BE PROFITABLE.

    

    d.
      Accredited
      Investor.
      Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D
      promulgated under the 1933 Act. The information provided by Investor on the
      Accredited Investor Questionnaire, attached to the Memorandum as Exhibit
      B,
      is
      true, correct and complete in all respects. Investor is capable of bearing
      the
      economic risk of an investment in the Shares, including the possible loss of
      Investor’s entire investment. Investor has such knowledge and experience in
      financial or business matters that it is capable of evaluating the merits and
      risks of an investment in the Shares offered hereby. If other than an
      individual, Investor has not been organized solely for the purpose of acquiring
      the Shares.

    

    e.
      Restricted
      Securities.
      Investor understands that the Shares being purchased hereunder are “restricted
      securities” as defined in the Securities Act, and that under federal and state
      securities laws the Shares may be resold without registration under the
      Securities Act only in certain limited circumstances. Investor is familiar
      with
      Rule 144 promulgated by the SEC under the Securities Act, and understands the
      resale limitations imposed thereby and by the Securities Act generally. Investor
      also acknowledges that the Shares are subject to significant restrictions on
      transfer, pledge or hypothecation.

    

    f.
      Legends.
      It is
      understood that certificates or other evidence of the Shares shall bear, in
      substantial form, the following legend, as well as any legend required by the
      laws of any state:

    

    “THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
      MAY
      NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
      REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
      OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
      IS
      NOT REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT
      OF
      1933.”

    

    g.
      Consents
      and Approvals; No Conflict.
      (i) The
      execution and delivery of this Agreement by the Investor does not, and the
      performance of this Agreement by the Investor will not, require any consent,
      approval, authorization or other action by, or filing with or notification
      to,
      any governmental or regulatory authority; (ii) The execution, delivery and
      performance of this Agreement by the Investor does not (A) in the case of any
      Investor that is not an individual, conflict with or violate the charter or
      by-laws, partnership or other governing documents of such Investor, or (B)
      conflict with or violate any law, rule, regulation, order, writ, judgment,
      injunction, decree, determination or award applicable to the
      Investor.

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    h.  Registration
      Rights.
      The
      Investor shall have the following registration rights:

    

    (1)  The
      Investor shall be entitled to “piggy-back” registration rights for the common
      stock on all registrations (a “Registration Statement”), or earlier at the sole
      discretion of the Company, excepting registrations on Form S-4 or Form S-8
      or on
      any demand registrations of any other investor subject to the right, however,
      of
      the Company and its underwriters to reduce the number of shares proposed to
      be
      registered pro rata in view of market conditions or legal considerations,
      pursuant to Rule 415 of the Securities Act, which may limit the total number
      of
      shares included on a Registration Statement to 30% of the then issued and
      outstanding common stock of the Company. The Company shall bear registration
      expenses (exclusive of underwriting discounts and commissions) of all such
      demands, piggy-backs, and S-3 or SB-2 registrations;

     

    (2)  Notwithstanding
      the foregoing, subsequent to the date that is ninety (90) days from the Closing
      of the Offering any investor in this Offering may demand that the Company file
      a
      Registration Statement including the Common Stock purchased in this Offering,
      and the Company shall file such Registration within forty-five (45) days of
      such
      written notice of demand (the “Registration Filing Deadline”). The amount of
      Common Stock included in a Registration Statement filed pursuant to an
      investor’s demand remains subject, however, to the right of the Company and its
      underwriters to reduce the number of shares proposed to be registered pro rata
      in view of market conditions or legal considerations, pursuant to Rule 415
      of
      the Securities Act, which may limit the total number of shares included on
      a
      Registration Statement to 30% of the then issued and outstanding common stock
      of
      the Company;

    

    h.  (3)If,
      however, the Company is actively pursuing and is engaged in negotiations or
      discussions to attain financing equal to or greater than $5,000,000.00 (a
“Qualified Financing”), the investor agrees that the Company may elect to extend
      the Registration Filing Deadline by an additional ninety days and to include
      the
      Common Stock on a Registration Statement filed as part of, or concurrent with,
      such Qualified Financing. In the event that such Registration Statement is
      not
      filed in that time frame the Company shall pay to the investor penalty fees,
      payable in common stock, equal to two percent (2%) of the Common Stock that
      the
      investor purchased in this Offering for each 30 days period beyond the
      Registration Filing Deadline during which the Registration Statement has not
      yet
      been filed. 

    

    4.
      Covenant
      of Investors.
      Each
      Investor hereby covenants with the Company that, without in any way limiting
      the
      representations set forth in Section 3 above, Investor shall not make any
      disposition of all or any portion of the Shares unless and until: 

    

    a.
      there
      is then in effect a registration statement under the Securities Act covering
      such proposed disposition, and such disposition is made in accordance with
      such
      registration statement; or

     

    

    b.
      such
      Investor shall have notified the Company of the proposed disposition and shall
      have furnished the Company with a detailed statement of the circumstances
      surrounding the proposed disposition, and, if requested by the Company, such
      Investor shall have furnished the Company with an opinion of counsel, in form
      and substance satisfactory to the Company, that such disposition will not
      require registration of the Shares under the Securities Act.

     

    

    5.
      Conditions
      of Investor’s Obligations at Closing.
      The
      obligations of each Investor hereunder are subject to, and contingent upon,
      the
      fulfillment, on or before each Closing, of each of the following conditions,
      the
      waiver of which shall not be effective against any Investor who does not consent
      in writing thereto:

    

    a.
      Representations
      and Warranties.
      The
      representations and warranties of the Company contained in Section 2 hereof
      shall be true and correct on and as of the Closing with the same effect as
      though such representations and warranties had been made on and as of the date
      of such

    Closing.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    b.
      Performance.
      The
      Company shall have performed and complied with all agreements, obligations
      and
      covenants contained in this Agreement that are required to be performed or
      complied with by it on or before the Closing, provided,
      however,
      that
      the obligations of the Investors shall not be subject to or contingent upon
      the
      issuance by the Company of the Shares to the persons or entities set forth
      on
Schedule
      A
      attached
      hereto who have not performed or tendered the performance of their obligations
      required to be performed under this Agreement on or prior to the
      Closing.

    

    6.
      Conditions
      of the Company’s Obligations at Closing.
      The
      obligations of the Company to each Investor hereunder are subject to and
      contingent upon the fulfillment by such Investor, on or before the Closing,
      of
      each of the following conditions:

    

    a.
      Representations
      and Warranties.
      The
      representations and warranties of each Investor contained herein shall be true
      and correct on and as of the Closing with the same effect as though such
      representations and warranties had been made on and as of the date of such
      Closing.

    

    b.
      Payment
      of Purchase Price by Investors.
      Each
      Investor shall have delivered to the Company the Purchase Price specified in
      Schedule
      A
      attached
      hereto, in the manner specified in this Agreement and, in the event Investor
      pays by check, the Purchase Price shall have been credited to the Escrow
      Account.

    

    c.
      Statement
      of Accredited Investor.
      Each
      Investor shall have delivered to the Company a Statement of Accredited Investor
      in the form set forth in Exhibit
      B
      attached
      to the Memorandum, and the information provided therein shall be true, correct
      and complete on and as of the Closing with the same effect as though such
      information had been provided as of the date of such Closing.

    

    7.
      Miscellaneous.

    

    a.
      Survival
      of Warranties.
      The
      representations, warranties and covenants of the Investors contained in this
      Agreement shall survive the execution and delivery of this Agreement and the
      Closing.

    

    b.
      Successors
      and Assigns.
      This
      Agreement may not be assigned by any party hereto. The terms and conditions
      of
      this Agreement shall inure to the benefit of, and be binding upon, the
      respective successors of the parties. Nothing in this Agreement, express or
      implied, is intended to confer upon any party, other than the parties hereto
      or
      their respective successors, any rights, remedies, obligations or liabilities
      under or by reason of this Agreement, except as expressly provided in this
      Agreement.

    

    c.
      Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Utah, without regard to the principles of conflict of laws
      thereof.

    

    d.
      Counterparts;
      Delivery by Facsimile.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. Delivery of this Agreement may be effected by
      facsimile.

    

    e.
      Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

    

    f.
      Notices.
      Unless
      otherwise provided, any notice required or permitted hereunder shall be given
      by
      personal service upon the party to be notified, by nationwide overnight delivery
      service or upon deposit with the United States Post Office, by certified mail,
      return receipt requested and:

    

    (i)
      if to
      the Company, addressed to Better BioDiesel, Inc., 355 South 1550 West, Spanish
      Fork, Utah 84660, or at such other address as the Company may designate by
      notice to each of the Investors in accordance with the provisions of this
      Section; and

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (ii)
      if
      to the Investors, at their respective addresses indicated on the signature
      pages
      hereof, or at such other addresses as any one or more Investors may designate
      by
      notice to the Company in accordance with the provisions of this
      Section.

    

    g.
      Expenses.
      Irrespective of whether a Closing is effected, the Company and the Investors
      shall pay all of their own costs and expenses incurred with respect to the
      negotiation, execution, delivery and performance of this Agreement. If any
      action at law or in equity is necessary to enforce or interpret the terms of
      this Agreement, the prevailing party shall be entitled to reasonable attorney’s
      fees, costs and necessary disbursements in addition to any other relief to
      which
      such party may be entitled.

    

    h.
      Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      prospectively or retroactively), only with the written consent of the Company
      and a majority in interest of the Investors.

    

    i.
      Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable under
      applicable law, such provisions shall be excluded from this Agreement and the
      balance of this Agreement shall be interpreted as if such provision were so
      excluded, and this Agreement shall be otherwise enforceable in accordance with
      its terms.

    

    j.
      Entire
      Agreement.
      This
      Agreement (including the appendices and schedules hereto) constitutes the entire
      agreement among the parties hereto with respect to the subject matter hereof
      and
      supersedes all prior agreements, understandings, negotiations and discussions,
      whether oral or written, of the parties hereto.

     

    

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

    

     

    BETTER
      BIODIESEL, INC.

    

    

    By:
      _______________________________    

    Name:  Ron
      Crafts

    Its:       
      President
      and Chief Executive Officer

    

    

    INVESTOR

    

    

    By:
      _______________________________   

    Name:
      _____________________________    

    Its:
      _______________________________

     

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    
      	NAME
              OF INVESTOR(S)	 	
              NUMBER
                OF SHARES

            	 	
              PURCHASE
                PRICE

            

    

    
 

    

    ________________________________

    ________________________________

    ________________________________

    ________________________________

    ________________________________

     

     

     

    
      
        
        

      

      
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    WARRANT

    

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

    

    Better
      Biodiesel, Inc.

    

    Warrant
      To Purchase Common Stock

    

    Warrant
      No.:________

    Number
      of
      Shares of Common Stock: ______________________

    Date
      of
      Issuance: April 30, 2007 ("Issuance Date")

    

    BETTER
      BIODIESEL, INC., a Colorado corporation (the "Company"), hereby certifies that,
      for good and valuable consideration, the receipt and sufficiency of which are
      hereby acknowledged, INVESTOR, the registered holder hereof or its permitted
      assigns (the "Holder"), is entitled, subject to the terms set forth below,
      to
      purchase from the Company, at the Exercise Price (as defined below) then in
      effect, upon surrender of this Warrant (including any Warrants to purchase
      common stock of the Company (the “Common Stock”) (“issued in exchange, transfer
      or replacement hereof, the "Warrant"), at any time or times on or after the
      date
      hereof but not after 11:59 p.m., New York Time, on the Expiration Date (as
      defined below), ______________________ fully paid nonassessable shares of Common
      Stock (the "Warrant Shares"). Except as otherwise defined herein, capitalized
      terms in this Warrant shall have the meanings set forth in Section 16. This
      Warrant is one of the Warrants to purchase Common Stock of the Company (the
      "SPA
      Warrants") issued pursuant to Section 1 of that certain Subscription Agreement,
      dated as of April 30, 2007 (the "Subscription Date"), by and among the Company
      and the investors (the "Investors") referred to therein (the "Subscription
      Agreement").

     

    1. EXERCISE
      OF WARRANT.

     

    (a)
      Mechanics
      of Exercise.
      Subject
      to the terms and conditions hereof (including, without limitation, the
      limitations set forth in Section 1(e)), this Warrant may be exercised by the
      Holder upon the earlier of (i) the closing of a Qualified Financing (as defined
      in the Subscription Agreement and or Memorandum) or (ii) one year from the
      Subscription Date, in whole or in part, by (i) delivery of a written
      notice, in the form attached hereto as Exhibit
      A
      (the
      "Exercise Notice"), of the Holder's election to exercise this Warrant and
      (ii) (A) payment to the Company of an amount equal to the applicable
      Exercise Price multiplied by the number of Warrant Shares as to which this
      Warrant is being exercised (the "Aggregate Exercise Price") in cash or wire
      transfer of immediately available funds. The Holder shall not be required to
      deliver the original Warrant in order to effect an exercise hereunder. Execution
      and delivery of the Exercise Notice with respect to less than all of the Warrant
      Shares shall have the same effect as cancellation of the original Warrant and
      issuance of a new Warrant evidencing the right to purchase the remaining number
      of Warrant Shares. On or before the first Business Day following the date on
      which the Company has received each of the Exercise Notice and the Aggregate
      Exercise Price (the "Exercise Delivery Documents"), the Company shall transmit
      by facsimile an acknowledgment of confirmation of receipt of the Exercise
      Delivery Documents to the Holder and the Company's transfer agent (the "Transfer
      Agent"). On or before the third Business Day following the date on which the
      Company has received all of the Exercise Delivery Documents (the "Share Delivery
      Date"), the Company shall (X) provided that the Transfer Agent is participating
      in The Depository Trust Company ("DTC") Fast Automated Securities Transfer
      Program, upon the request of the Holder, credit such aggregate number of shares
      of Common Stock to which the Holder is entitled pursuant to such exercise to
      the
      Holder's or its designee's balance account with DTC through its Deposit
      Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not
      participating in the DTC Fast Automated Securities Transfer Program, issue
      and
      dispatch by overnight courier to the address as specified in the Exercise
      Notice, a certificate, registered in the Company's share register in the name
      of
      the Holder or its designee, for the number of shares of Common Stock to which
      the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise
      Notice and Aggregate Exercise Price referred to in clause (ii)(A) above, the
      Holder shall be deemed for all corporate purposes to have become the holder
      of
      record of the Warrant Shares with respect to which this Warrant has been
      exercised, irrespective of the date of delivery of the certificates evidencing
      such Warrant Shares. If this Warrant is submitted in connection with any
      exercise pursuant to this Section 1(a) and the number of Warrant Shares
      represented by this Warrant submitted for exercise is greater than the number
      of
      Warrant Shares being acquired upon an exercise, then the Company shall as soon
      as practicable and in no event later than five Business Days after any exercise
      and at its own expense, issue a new Warrant (in accordance with Section 7(d))
      representing the right to purchase the number of Warrant Shares purchasable
      immediately prior to such exercise under this Warrant, less the number of
      Warrant Shares with respect to which this Warrant is exercised. No fractional
      shares of Common Stock are to be issued upon the exercise of this Warrant,
      but
      rather the number of shares of Common Stock to be issued shall be rounded up
      to
      the nearest whole number. The Company shall pay any and all taxes which may
      be
      payable with respect to the issuance and delivery of Warrant Shares upon
      exercise of this Warrant. This Warrant may be exercised for consideration of
      the
      per share Exercise Price (i) paid of cash or (ii) on a cashless basis according
      to the following formula:

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    X
      = Y
      (A-B)

        
      -------

         
       A

    

    Where
      X =
      the number of the Shares to be issued to the Holder.

    

    Y             =
      the
      number of the Shares purchasable under this Warrant.

    

    A             =
      the
      fair market value of one Share on the date of determination.

     

    B            
      =
      the per
      share Exercise Price (as adjusted to the date of such
      calculation).

     

     

    (b)
      Exercise
      Price.
      For
      purpose of this Warrant, "Exercise Price" means an exercise price per share
      equal to the lesser of equal to the lesser of (i) the last trade on the day
      of
      the receipt of the Minimum funding of this Offering or (ii) the five-day VWAP
      for the five days prior to the date of the receipt of the Minimum funding of
      this Offering, subject to adjustment as provided herein. 

     

    (c)
      Company's
      Failure to Timely Deliver Securities.
      If the
      Company shall fail for any reason or for no reason to issue to the Holder within
      three (3) Business Days of receipt of the Exercise Delivery Documents, a
      certificate for the number of shares of Common Stock to which the Holder is
      entitled and register such shares of Common Stock on the Company's share
      register or to credit the Holder's balance account with DTC for such number
      of
      shares of Common Stock to which the Holder is entitled upon the Holder's
      exercise of this Warrant, and if on or after such Business Day the Holder
      purchases (in an open market transaction or otherwise) shares of Common Stock
      to
      deliver in satisfaction of a sale by the Holder of shares of Common Stock
      issuable upon such exercise that the Holder anticipated receiving from the
      Company (a "Buy-In"), then the Company shall, within three (3) Business Days
      after the Holder's request and in the Holder's discretion, either (i) pay cash
      to the Holder in an amount equal to the Holder's total purchase price (including
      brokerage commissions, if any) for the shares of Common Stock so purchased
      (the
      "Buy-In Price"), at which point the Company's obligation to deliver such
      certificate (and to issue such shares of Common Stock) shall terminate, or
      (ii)
      promptly honor its obligation to deliver to the Holder a certificate or
      certificates representing such shares of Common Stock and pay cash to the Holder
      in an amount equal to the excess (if any) of the Buy-In Price over the product
      of (A) such number of shares of Common Stock, times (B) the Closing Bid Price
      on
      the date of exercise.

     

    (d)
      Disputes.
      In the
      case of a dispute as to the determination of the Exercise Price or the
      arithmetic calculation of the Warrant Shares, the Company shall promptly issue
      to the Holder the number of Warrant Shares that are not disputed and resolve
      such dispute in accordance with Section
      13.

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

     

    

    2.  ADJUSTMENT
      OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
      

     

    The
      Exercise Price and the number of Warrant Shares  shall be adjusted from
      time to time as follows:

     

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

     

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (b)
      Adjustment
      of Exercise Price and Number of Warrant Shares.
      The
      Exercise Price and the number of Warrant Shares shall be further adjusted from
      time to time as follows:

    

    (1) 
      Adjustment
      upon Issuance of shares of Warrants.
      If and
      whenever on or after the Subscription Date the Company issues or sells, or
      in
      accordance with this Section is deemed to have issued or sold, either any
      warrants for shares of Common Stock or any options for the purchase of Common
      Stock (including the issuance or sale of warrants or options owned or held
      by or
      for the account of the Company, for an exercise price per share (the "New
      Issuance Price") less than a price (the "Applicable Price") equal to the
      Exercise Price in effect immediately prior to such issue or sale (the foregoing
      a "Dilutive Issuance"), then immediately after such Dilutive Issuance, the
      Exercise Price then in effect shall be reduced to an amount equal to the New
      Issuance Price; provided,
      however, that
      this Section 2(b)1 shall
      not
      apply to warrants or options issued to employees as part of a board-authorized
      compensation plan. Upon each such adjustment of the Exercise Price hereunder,
      the number of Warrant Shares shall be adjusted to the number of shares of Common
      Stock determined by multiplying the Exercise Price in effect immediately prior
      to such adjustment by the number of Warrant Shares acquirable upon exercise
      of
      this Warrant immediately prior to such adjustment and dividing the product
      thereof by the Exercise Price resulting from such adjustment, as set forth
      in
      the following formula:

    

    (Exercise
      Price)(# Warrant Shares) = Adjusted
      # Warrant Shares

    New
      Issuance Price

    

    For
      purposes of determining the adjusted Exercise Price, the following shall be
      applicable: 

    

    (2)
      Record
      Date.
      If the
      Company takes a record of the holders of shares of Common Stock for the purpose
      of entitling them (A) to receive a dividend or other distribution payable
      in shares of Common Stock, Options or in Convertible Securities or (B) to
      subscribe for or purchase shares of Common Stock, Options or Convertible
      Securities, then such record date will be deemed to be the date of the issue
      or
      sale of the shares of Common Stock deemed to have been issued or sold upon
      the
      declaration of such dividend or the making of such other distribution or the
      date of the granting of such right of subscription or purchase, as the case
      may
      be.

     

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

     

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

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

     

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

     

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

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    4. FUNDAMENTAL
      TRANSACTIONS.
      If the
      Company enters into or is party to a Fundamental Transaction, then the Holder
      shall have the right to either (A) purchase and receive upon the basis and
      upon
      the terms and conditions herein specified and in lieu of the Warrant Shares
      immediately theretofore issuable upon exercise of the Warrant, such shares
      of
      stock, securities or assets (including cash) as would have been issuable or
      payable with respect to or in exchange for a number of Warrant Shares equal
      to
      the number of Warrant Shares immediately theretofore issuable upon exercise
      of
      the Warrant, had such Fundamental Transaction not taken place or (B) require
      the
      repurchase of this Warrant for a purchase price, payable in cash within five
      (5)
      business days after such request, equal to the Black Scholes Value of the
      remaining unexercised portion of this Warrant on the date of such request.
      The
      terms of any agreement pursuant to which a Fundamental Transaction is effected
      shall include terms requiring any such successor or surviving entity and Holder
      to comply with the provisions of this Section
      4.
      The
      provisions of this Section shall apply similarly and equally to successive
      Fundamental Transactions and shall be applied without regard to any limitations
      on the exercise of this Warrant.

    

    5. NONCIRCUMVENTION.
      The
      Company hereby covenants and agrees that the Company will not, by amendment
      of
      its Articles of Incorporation, Bylaws or through any reorganization, transfer
      of
      assets, consolidation, merger, scheme of arrangement, dissolution, issue or
      sale
      of securities, or any other voluntary action, for the purpose of avoiding or
      seeking to avoid the observance or performance of any of the terms of this
      Warrant, and will at all times in good faith carry out all the provisions of
      this Warrant and take all action that is required hereunder to protect the
      rights of the Holder. Without limiting the generality of the foregoing, the
      Company (i) shall not increase the par value of any shares of Common Stock
      receivable upon the exercise of this Warrant above the Exercise Price then
      in
      effect, (ii) shall take all such actions as may be necessary or appropriate
      in order that the Company may validly and legally issue fully paid and
      nonassessable shares of Common Stock upon the exercise of this Warrant, and
      (iii) shall, so long as any of the SPA Warrants are outstanding, take all action
      necessary to reserve and keep available out of its authorized and unissued
      shares of Common Stock, solely for the purpose of effecting the exercise of
      the
      SPA Warrants, 125% of the number of shares of Common Stock as shall from time
      to
      time be necessary to effect the exercise of the SPA Warrants then outstanding
      (without regard to any limitations on exercise).

    

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

     

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    7. REISSUANCE
      OF WARRANTS.

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

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

    

    8. NOTICES.
      Whenever notice is required to be given under this Warrant, unless otherwise
      provided herein, such notice shall be given in accordance with Section 7(f)
      of
      the Subscription Agreement. The Company shall provide the Holder with prompt
      written notice of all actions taken pursuant to this Warrant, including in
      reasonable detail a description of such action and the reason therefore. Without
      limiting the generality of the foregoing, the Company will give written notice
      to the Holder (i) promptly after any adjustment of the Exercise Price, setting
      forth in reasonable detail, and certifying, the calculation of such adjustment
      and (ii) at least ten days prior to the date on which the Company closes
      its books or takes a record (A) with respect to any dividend or distribution
      upon the shares of Common Stock, (B) with respect to any grants, issuances
      or
      sales of any Options, Convertible Securities or rights to purchase stock,
      warrants, securities or other property to all holders of shares of Common Stock
      or (C) for determining rights to vote with respect to any Fundamental
      Transaction, dissolution or liquidation, provided in each case that such
      information shall be made known to the public prior to or in conjunction with
      such notice being provided to the Holder.

    

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

    

    10. SEVERABILITY.
      If any
      provision of this Warrant or the application thereof becomes or is declared
      by a
      court of competent jurisdiction to be illegal, void or unenforceable, the
      remainder of the terms of this Warrant will continue in full force and
      effect.

    

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

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

    15. TRANSFER. This
      Warrant may be offered for sale, sold, transferred or assigned without the
      consent of the Company, except as may otherwise be required by Section 7(b)
      of
      the Subscription Agreement.

    

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

     

    "Black
      Scholes Value"
      means
      the value of this Warrant based on the Black and Scholes Option Pricing Model
      obtained from the "OV" function on Bloomberg determined as of the day
      immediately following the public announcement of the applicable Fundamental
      Transaction and reflecting (i) a risk-free interest rate corresponding to the
      U.S. Treasury rate for a period equal to the remaining term of this Warrant
      as
      of such date of request and (ii) an expected volatility equal to the greater
      of
      60% and the 100 day volatility obtained from the HVT function on
      Bloomberg.

     

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    "Bloomberg"
      means
      Bloomberg Financial Markets.

    

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

    

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

    

    "Common
      Stock"
      means
      (i) the Company's shares of Common Stock, $0.001 par value per share, and
      (ii) any share capital into which such Common Stock shall have been changed
      or any share capital resulting from a reclassification of such Common
      Stock.

    

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

    

    "Eligible
      Market"
      means
      the Principal Market, the American Stock Exchange, The New York Stock Exchange,
      Inc., the Nasdaq National Market or the Nasdaq Capital Market.

    

    "Expiration
      Date"
      means
      the date that is sixty months after the Issuance Date or, if such date falls
      on
      a day other than a Business Day or on which trading does not take place on
      the
      Principal Market (a "Holiday"),
      the
      next date that is not a Holiday.

    

    "Fundamental
      Transaction"
      means
      that the Company shall, directly or indirectly, in one or more related
      transactions, (i) consolidate or merge with or into (whether or not the Company
      is the surviving corporation) another Person, or (ii) sell, assign, transfer,
      convey or otherwise dispose of all or substantially all of the properties or
      assets of the Company to another Person, or (iii) allow another Person to make
      a
      purchase, tender or exchange offer that is accepted by such number of holders
      of
      outstanding shares of Common Stock resulting in such Person (together with
      any
      affiliates of such Person) holding more than 50% of the outstanding Common
      Stock
      of the Company following such purchase, tender or exchange offer, or (iv)
      consummate a stock purchase agreement or other business combination (including,
      without limitation, a reorganization, recapitalization, spin-off or scheme
      of
      arrangement) with another Person resulting in such other Person (together with
      any affiliates of such person) holding more than the 50% of the outstanding
      Common Stock of the Company following such stock purchase agreement or other
      business combination), or (v) reorganize, recapitalize or reclassify its Common
      Stock.

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    "Options"
      means
      any rights, warrants or options to subscribe for or purchase shares of Common
      Stock or Convertible Securities.

    

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

    

    "Principal
      Market"
      means
      the OTC Bulletin Board.

    

    "Registration
      Rights Agreement"
      means
      that certain registration rights agreement by and among the Company and the
      Investors.

    

    "Required
      Holders"
      means
      the holders of the SPA Warrants representing at least a majority of shares
      of
      Common Stock underlying the SPA Warrants then outstanding.

    

    "SPA
      Securities"
      means
      the Common Stock issued pursuant to the Subscription Agreement.

    

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

    

    

    Better
      Biodiesel, Inc.

    

    

    By:
      _______________________________

    Name: Ron
      Crafts

    Title: Chairman
      & CEO

     

     

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A to Warrant

    

    EXERCISE
      NOTICE

    TO
      BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

    WARRANT
      TO PURCHASE COMMON STOCK

    

    BETTER
      BIODIESEL, INC.

     

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

    

    1.
      Form
      of Exercise Price. The Holder intends that payment of the Exercise Price shall
      be made as a "Cash
      Exercise"
      with
      respect to _________________ Warrant Shares.

    

    2.
      Cashless Exercise. The
      Holder elects to exercise the attached Warrant by means of the net exercise
      provisions of Section 1(a) of the Warrant. ____________ (State “Yes” on this
      line)

    

    3.
      Notwithstanding anything to the contrary contained herein, this Exercise Notice
      shall constitute a representation by the Holder of the Warrant submitting this
      Exercise Notice that, after giving effect to the exercise provided for in this
      Exercise Notice, such Holder (together with its affiliates) will not have
      beneficial ownership (together with the beneficial ownership of such Person's
      affiliates) of a number of shares of Common Stock which exceeds the maximum
      percentage of the total outstanding shares of Common Stock as determined
      pursuant to the provisions of Section 1(e)(i) of the Warrant.

    

    4.
      Payment of Exercise Price. In the event that the holder has elected a Cash
      Exercise with respect to some or all of the Warrant Shares to be issued pursuant
      hereto, the holder shall pay the Aggregate Exercise Price in the sum of
      $___________________ to the Company in accordance with the terms of the Warrant,
      or payment on a cashless basis, equal to the sum of ________________
      shares.

     

    5.
      Delivery of Warrant Shares. The Company shall deliver to the holder __________
      Warrant Shares in accordance with the terms of the Warrant.

    

    Date:
      _____________________, ______

    

    

    ____________________________

    Name
      of
      Registered Holder

    

    

    By:
      _____________________________

    Name:

    Title:

     

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    ACKNOWLEDGMENT

    

    The
      Company hereby acknowledges this Exercise Notice and hereby directs _________
      to
      issue the above indicated number of shares of Common Stock in accordance with
      the Transfer Agent Instructions dated ______________ from the Company and
      acknowledged and agreed to by
      _____________________________________.

    

    BETTER
      BIODIESEL, INC.

    

    

    By:
      ____________________________________

    Name:

    Title:

     

     

     

    
      
        
        

      

      
        21Exhibit
        4.3

       

       

      THE
        SECURITIES REPRESENTED BY THIS AGREEMENT AND ISSUABLE UPON THE EXERCISE OF
        THE
        OPTION EVIDENCED HEREBY (COLLECTIVELY, THE “SECURITIES”) HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE
        STATE SECURITIES LAWS AND THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED
        OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
        FROM REGISTRATION UNDER SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER
        AND AN
        OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
        NOT
        REQUIRED AND IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION FROM REGISTRATION
        UNDER ANY APPLICABLE STATE SECURITIES LAWS WITH AN OPINION OF COUNSEL
        SATISFACTORY TO THE COMPANY REGARDING COMPLIANCE WITH AND THE AVAILABILITY
        OF
        ANY SUCH STATE SECURITIES LAWS.

       

      OPTION
        AGREEMENT

       

      OPTION
        AGREEMENT, dated as of May 3, 2007 (this “Agreement”),
        by
        and among Mr. Si Chen, a resident and citizen of the People's Republic of
        China
        (the “Optionee”),
        and
        Mr. Hisashi Akazawa, a resident and citizen of Japan (the “Option
        Grantor”)
        relating to shares of stock of Millennium Quest, Inc., a Delaware corporation
        (the “Company”).

       

      BACKGROUND

       

      The
        Optionee and Option Grantor are each parties to a Share Exchange Agreement,
        dated May 3, 2007 (the “Share
        Exchange Agreement”),
        pursuant to which the Option Grantor is exchanging all of his interests in
        International Lorain Holding, Inc., a Cayman Islands company, for Series
        B
        Voting Convertible Preferred Stock of the Company.

       

      In
        order
        to close the transactions contemplated by the Share Exchange Agreement the
        Optionee and the Option Grantor are entering into this Agreement to document
        their mutual understanding regarding the Optionee's rights with respect to
        certain shares of the Series B Voting Convertible Preferred Stock of the
        Company
        owned by the Option Grantor.

       

      NOW,
        THEREFORE, in consideration of the premises, mutual covenants herein set
        forth
        and other good and valuable consideration, subject to the terms and conditions
        herein, the Option Grantor and the Optionee hereby agree as
        follows:

       

      
        1.             Grant
          of Option.
          

         

        Subject
          to the terms and conditions herein, the Option Grantor hereby grants to
          the
          Optionee an option (the “Option”)
          to
          purchase 627,897
          shares
          of the Company’s Series B Voting Convertible Preferred Stock along with any of
          the Company's Common Stock that such Series B Voting Convertible Stock
          may be
          converted into (the “Option
          Shares”)
          for an
          exercise price equal to $66.15 per share. The number of Series B Voting
          Convertible Preferred Stock and Common Stock that such Series B Voting
          Convertible Preferred Stock will be converted into will be adjusted for
          an
          splits, reverse splits, stock dividends or any other adjustments to the
          capital
          structure of the Company. Specifically, the Company contemplates completing
          a 1
          for 32.84 reverse split and the number of Common Shares covered by this
          Agreement will be reduced to reflect such 1 for 32.84 reverse split. The
          Optionee, may exercise the option in this Agreement for all of the Option
          Shares
          or a portion of the Option Shares, at his sole discretion. 

         

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    

      2.   Exercise
        of the Option.
        

       

           
The
        Optionee may exercise the option described in this Agreement at any time
        at the
        Optinonee's discretion, but in no event may the option be exercised on any
        date
        after the seventh anniversary of the date hereof.

       

      3.    Rights
        of Optionee.
        

       

      The
        Optionee shall not have any rights to dividends or any other rights of a
        stockholder with respect to any Option Shares until such Option Shares shall
        have been issued to Optionee (as evidenced by the appropriate entry on the
        transfer books of the Company) upon purchase of such Option Shares upon exercise
        of the Option. 

       

      4.    Exercise
        Procedure.

       

      (a) The
        Optionee may only exercise this Option for the purchase of all of the Option
        Shares. This Option may not be exercised in part. The Optionee may exercise
        this
        Option by delivering to the Option Grantor a written notice duly signed by
        the
        Optionee indicating that the Optionee is exercising the Option accompanied
        by
        payment in an amount equal to the full purchase price for the Option Shares.
        

       

      (b) Following
        receipt by the Option Grantor of such notice of exercise and full payment
        of the
        Exercise Price, the Option Grantor shall issue, as soon as practicable, a
        duly
        executed stock power for the Option Shares transferring the Option Shares
        as
        designated by the Optionee and deliver the underlying stock certificate and
        the
        executed stock power as directed by the Optionee.

       

      (c)
        In
        order to exercise the option under this Agreement, the Optionee must comply
        with
        all applicable law. The Optionee must provide satisfactory assuance that
        all PRC
        law and other applicable laws related to the transfer of the Shares to the
        Optionee have been satisified. 

       

      
        5.    Lock-up.
          

         

        If
          the
          Optionee exercises the Option in accordance with Section 4 above, then
          the
          Optionee shall be bound to the lock-up provisions of Section 2.07 of the
          Share
          Exchange Agreement to the same extent to which the Option Grantor is bound
          as if
          the Optionee had been an original party to the Share Exchange
          Agreement.

         

        6.    Legend.
          

         

        If
          the
          Option Shares are not then covered by a registration statement, each certificate
          for the Option Shares shall bear a legend that is substantially similar
          to the
          following:

         

        
          “THESE
            SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
            AS
            AMENDED. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
            UNLESS THE REGISTRATION PROVISIONS OF SAID ACT HAVE BEEN COMPLIED WITH
            OR UNLESS
            THE COMPANY HAS RECEIVED AN OPINION OF ITS COUNSEL THAT SUCH REGISTRATION
            IS NOT
            REQUIRED.”

           

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      
        7.    Notices.
          

         

        Each
          notice relating to this Agreement shall be in writing and delivered in
          person or
          by facsimile or certified mail to the addresses of the respective parties
          hereto
          as specified on the signature page hereto, or to such other address as
          either
          party hereto may hereinafter duly give to the other.

         

        8.    Binding.
          

         

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

         

        9.    Entire
          Agreement.
          

         

        This
          Agreement constitutes the entire agreement between the parties hereto with
          respect to the matters herein, and cannot be amended, modified or terminated
          except by an agreement in writing executed by the parties hereto.

         

        10.    Governing
          Law; Jursidiction.

         

        This
          Agreement shall be construed in accordance with and governed by the laws
          of the
          State of New York without regard to the conflicts of law principles thereof.
          Each party agrees that all proceedings concerning the interpretations,
          enforcement and defense of the transactions contemplated by this Agreement
          may
          be commenced in the state and federal courts sitting in the City of New
          York,
          Borough of Manhattan (“New York Courts”). Each party hereto hereby irrevocably
          submits to the jurisdiction of the New York Courts for the adjudication
          of any
          dispute hereunder or in connection herewith or with any transaction contemplated
          hereby or discussed herein, and hereby irrevocably waives, and agrees not
          to
          assert in any proceeding, any claim that it is not personally subject to
          the
          jurisdiction of any such New York Court, or that such proceeding has been
          commenced in an improper or inconvenient forum. 

         

        11.    Remedies.

         

        In
          addition to being entitled to exercise all rights provided herein or granted
          by
          law, including recovery of damages, each of the parties will, to the fullest
          extent permitted by law, be entitled to specific performance under this
          Agreement. The parties agree that monetary damages may not be adequate
          compensation for any loss incurred by reason of any breach by Option Grantor
          of
          its obligations under Section 4b and Option Grantor hereby agrees, to the
          fullest extent permitted by law, to waive in any action for specific performance
          of any such obligation the defense that a remedy at law would be
          adequate.

         

        [Signature
          Page Follows]

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

        IN
          WITNESS WHEREOF, the parties hereto have executed this Agreement as of
          the date
          first set forth above.

         

        
          	
                   

                  /s/
                    Si Chen

                  Optionee:
                    Si Chen 

                  Address:
                    

                  Beihuan
                    Zhong Road

                  Junan
                    County

                  Shandong,
                    China  276600

                	
                   

                  /s/
                    Hisashi Akazawa

                  Option
                    Grantor: Hisashi Akazawa 

                  Address:
                    

                  Beihuan
                    Zhong Road

                  Junan
                    County

                  Shandong,
                    China  276600

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