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                                                                    EXHIBIT 10.4

                            FORM OF SERIES M WARRANT

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

                        RAPTOR NETWORKS TECHNOLOGY, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: _____
Number of Shares of Common Stock:
Date of Issuance: July 31, 2006 ("ISSUANCE DATE")

                  Raptor Networks Technology, Inc., a Colorado corporation, (the
"COMPANY"), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
_________________________________________ the registered holder hereof or its
permitted assigns (the "HOLDER"), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as defined below)
then in effect, upon surrender of this Warrant to Purchase Common Stock
(including any Warrants to purchase Common Stock issued in exchange, transfer or
replacement hereof, the "WARRANT"), at any time or times on or after the date of
the consummation of a Mandatory Conversion (as defined in the SPA Securities),
but not after 11:59 p.m., New York Time, on the Expiration Date (as defined
below), ______________ ( ) fully paid nonassessable shares of Common Stock (as
defined below) (the "WARRANT SHARES"). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
15. This Warrant is one of the Warrants to purchase Common Stock (the "SPA
WARRANTS") issued pursuant to Section 1 of that certain Securities Purchase
Agreement, dated as of July 30, 2006 (the "SUBSCRIPTION DATE"), by and among the
Company and the investors (the "BUYERS") referred to therein (the "SECURITIES
PURCHASE AGREEMENT").

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                  1. EXERCISE OF WARRANT.

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

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of this Warrant to the contrary, no more than the Maximum Eligibility Number of
Warrant Shares shall be exercisable hereunder, except as a result of
anti-dilution adjustments as provided herein.

                           (b) EXERCISE PRICE. For purposes of this Warrant,
"EXERCISE PRICE" means $0.5054, subject to adjustment as provided herein.

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

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

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

                           For purposes of the foregoing formula:

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

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

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

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

                           (f) Limitations on Exercises.

                                    (i) BENEFICIAL OWNERSHIP. The Company shall
                           not effect the exercise of this Warrant, and the
                           Holder shall not have the right to exercise this
                           Warrant, to the extent that after giving effect to
                           such exercise, such Person (together with such
                           Person's affiliates) would beneficially own in excess
                           of 4.99% of the shares of Common Stock outstanding
                           immediately after giving effect to such exercise. For
                           purposes of the foregoing sentence, the aggregate
                           number of shares of Common Stock beneficially owned
                           by such Person and its affiliates shall include the
                           number of shares of Common Stock issuable upon
                           exercise of this Warrant with respect to which the
                           determination of such sentence is being made, but
                           shall exclude shares of Common Stock which would be
                           issuable upon (A) exercise of the remaining,
                           unexercised portion of this Warrant beneficially
                           owned by such Person and its affiliates and (B)
                           exercise or conversion of the unexercised or
                           unconverted portion of any other securities of the
                           Company beneficially owned by such Person and its
                           affiliates (including, without limitation, any
                           convertible notes or convertible preferred stock or
                           warrants) subject to a limitation on conversion or
                           exercise analogous to the limitation contained
                           herein. Except as set forth in the preceding
                           sentence, for purposes of this paragraph, beneficial
                           ownership shall be calculated in accordance with
                           Section 13(d) of the Securities Exchange Act of 1934,
                           as amended (the "EXCHANGE ACT"). For purposes of this
                           Warrant, in determining the number of outstanding
                           shares of Common Stock, the Holder may rely on the
                           number of outstanding shares of Common Stock as
                           reflected in (1) the Company's most recent Form 10-K,
                           10-KSB, Form 10-Q, 10-QSB, Current Report on Form 8-K
                           or other public filing with the Securities and

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

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

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

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

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

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

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                           Option for such price per share. For purposes of this
                           Section 2(a)(i), the "lowest price per share for
                           which one share of shares of Common Stock is issuable
                           upon exercise of such Options or upon conversion,
                           exercise or exchange of such Convertible Securities"
                           shall be equal to the sum of the lowest amounts of
                           consideration (if any) received or receivable by the
                           Company with respect to any one share of shares of
                           Common Stock upon the granting or sale of the Option,
                           upon exercise of the Option and upon conversion,
                           exercise or exchange of any Convertible Security
                           issuable upon exercise of such Option. No further
                           adjustment of the Exercise Price or number of Warrant
                           Shares shall be made upon the actual issuance of such
                           shares of Common Stock or of such Convertible
                           Securities upon the exercise of such Options or upon
                           the actual issuance of such shares of Common Stock
                           upon conversion, exercise or exchange of such
                           Convertible Securities.

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

                                    (iii) CHANGE IN OPTION PRICE OR RATE OF
                           CONVERSION. If the purchase price provided for in any
                           Options, the additional consideration, if any,
                           payable upon the issue, conversion, exercise or
                           exchange of any Convertible Securities, or the rate
                           at which any Convertible Securities are convertible
                           into or exercisable or exchangeable for shares of
                           Common Stock increases or decreases at any time, the
                           Exercise Price and the number of Warrant Shares in
                           effect at the time of such increase or decrease shall
                           be adjusted to the Exercise Price and the number of
                           Warrant Shares which would have been in effect at

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

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

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

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

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

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

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

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

                  4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

                           (a) PURCHASE RIGHTS. In addition to any adjustments
pursuant to Section 2 above, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
shares of Common Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
immediately before the date on which a record is taken for the grant, issuance

                                      -10-

<PAGE>

or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

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

                                      -11-

<PAGE>

                           (c) Notwithstanding the foregoing and the provisions
of Section 4(b) above, in the event of a Fundamental Transaction, if the Holder
has not exercised the Warrant in full prior to the consummation of the
Fundamental Transaction, then the Holder shall have the right to require such
Successor Entity to purchase this Warrant from the Holder by paying to the
Holder, simultaneously with the consummation of the Fundamental Transaction and
in lieu of the warrant referred to in Section 4(b), cash in an amount equal to
the value of the remaining unexercised portion of this Warrant on the date of
such consummation, which value shall be determined by use of the Black and
Scholes Option Pricing Model reflecting (i) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the remaining term
of this Warrant as of such date of request and (ii) an expected volatility equal
to the greater of 60% and the 100 day volatility obtained from the HVT function
on Bloomberg.

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

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

                                      -12-

<PAGE>

shall from time to time be necessary to effect the exercise of the Series L SPA
Warrants then outstanding (without regard to any limitations on exercise) and,
from and after the Stockholder Approval Deadline, 130% of the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise
of the SPA Warrants then outstanding (without regard to any limitations on
exercise). .

                  7. REISSUANCE OF WARRANTS.

                           (a) TRANSFER OF WARRANT. If this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of the Holder a new
Warrant (in accordance with Section 7(d)), registered as the Holder may request,
representing the right to purchase the number of Warrant Shares being
transferred by the Holder and, if less 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.

                           (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.

                                      -13-

<PAGE>

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

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

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

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

                  12. DISPUTE RESOLUTION. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within two Business Days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the Holder. If the
Holder and the Company are unable to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the Holder, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination of the Exercise Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to
the Company's independent, outside accountant. The Company shall cause at its

                                      -14-

<PAGE>

expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

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

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

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

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

                           (b) "BLOOMBERG" means Bloomberg Financial Markets.

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

                                      -15-

<PAGE>

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

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

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

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

                           (h) "EXPIRATION DATE" means the date sixty (60)
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.

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

                                      -16-

<PAGE>

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

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

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

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

                           (l) "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.

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

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

                           (o) "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.

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

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

                                      -17-

<PAGE>

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

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

                            [SIGNATURE PAGE FOLLOWS]

                                      -18-

<PAGE>

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

                                          RAPTOR NETWORKS TECHNOLOGY, INC.

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

                                      -19-

<PAGE>

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

                        RAPTOR NETWORKS TECHNOLOGY, INC.

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

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

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

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

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

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

Date: _______________ __, ______

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

By:
   __________________________________
   Name:
   Title:

<PAGE>

                                 ACKNOWLEDGMENT

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

                                              RAPTOR NETWORKS TECHNOLOGY, INC.

                                              By:   ____________________________
                                                    Name:
                                                    Title:<PAGE>

                                                                    EXHIBIT 10.5

                          REGISTRATION RIGHTS AGREEMENT

                  REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
July 31, 2006, by and among Raptor Networks Technology, Inc., a Colorado
corporation, with headquarters located at 1241 Dyer Road, Suite 150, Santa Ana,
California 92705 (the "COMPANY"), and the undersigned buyers (each, a "BUYER",
and collectively, the "BUYERS").

                  WHEREAS:

                  A. In connection with the Securities Purchase Agreement, dated
as of July 30, 2006, by and among the Company and the Buyers (the "SECURITIES
PURCHASE AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions set forth in the Securities Purchase Agreement, to issue and sell to
each Buyer (i) senior convertible notes of the Company (the "NOTES"), which
will, among other things, be convertible into shares of the Company's common
stock, $0.001 par value per share (the "COMMON STOCK", as converted, the
"CONVERSION SHARES") in accordance with the terms of the Notes, and (ii) two
series of warrants (the "WARRANTS"), which will be exercisable to purchase
shares of Common Stock (as exercised collectively, the "WARRANT SHARES").

                  B. In accordance with the terms of 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 Buyers hereby agree as follows:

                  1. DEFINITIONS.
                     ------------

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

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

                           b. "CLOSING DATE" shall have the meaning set forth in
the Securities Purchase Agreement.

                           c. "EFFECTIVE DATE" means the date the Registration
Statement is declared effective by the SEC.

                           d. "EFFECTIVENESS DEADLINE" means the date which is
(i) in the event that the Registration Statement is not subject to a full review
by the SEC, 90 calendar days after the Closing Date or (ii) in the event that
the Registration Statement is subject to a full review by the SEC, 120 calendar
days after the Closing Date.

<PAGE>

                           e. "FILING DEADLINE" means 30 calendar days after the
Closing Date.

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

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

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

                           i. "REGISTRABLE SECURITIES" means (i) the Conversion
Shares issued or issuable upon conversion of the Notes, (ii) the Warrant Shares
issued or issuable upon exercise of the Warrants and (iii) any capital stock of
the Company issued or issuable with respect to the Conversion Shares, the Notes,
the Warrant Shares, or the Warrants as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on conversions of the Notes or exercises of the
Warrants; PROVIDED that prior to the ninetieth day after the earlier of (A) the
Stockholder Approval Date (as defined in the Securities Purchase Agreement) and
(B) the Stockholder Meeting Deadline (as defined in the Securities Purchase
Agreement), the number of Registrable Securities shall not be required to be
greater than 34,078,554 shares of Common Stock.

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

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

                           l. "REQUIRED REGISTRATION AMOUNT" means, (A) prior to
the ninetieth day after the Stockholder Approval Date, 34,078,554 shares of
Common Stock and (B) from and after the ninetieth day following the Stockholder
Approval Date, 130% of the sum of (i) the number of Conversion Shares issued and
issuable pursuant to the Notes as of the trading day immediately preceding the
applicable date of determination, and (ii) the number of Warrant Shares issued
and issuable pursuant to the Warrants as of the trading day immediately
preceding the applicable date of determination, all subject to adjustment as
provided in Section 2(e) (without regard to any limitations on conversion of the
Notes or exercise of the Warrants).

                                      -2-

<PAGE>

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

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

                  2. REGISTRATION.
                     -------------

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

                           b. ALLOCATION OF REGISTRABLE SECURITIES. The initial
number of Registrable Securities included in any Registration Statement and any
increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities, each transferee shall be
allocated a pro rata portion of the then remaining number of Registrable
Securities included in such Registration Statement for such transferor. Any
shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered
by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall
the Company include any securities other than Registrable Securities on any
Registration Statement without the prior written consent of the Required
Holders, except that: (i) up to 455,100 shares of Common Stock underlying the
Montgomery Warrants (as defined in Section 30(u) of the Securities Purchase
Agreement) may be included in any Registration Statement, and (ii) to the extent
permitted by applicable securities law, whether pursuant to Rule 429 under the
1933 Act or any similar provision, from time to time after the Effective Date
the Company may consolidate or combine the Registrable Securities and/or the
Registration Statement with that certain registration statement on Form SB-2
(File No. 333-131184) that has been declared effective by the SEC on June 16,
2006.

                                      -3-

<PAGE>

                           c. LEGAL COUNSEL. Subject to Section 5 hereof, the
Required Holders shall have the right to select one legal counsel to review and
oversee any registration pursuant to this Section 2 ("LEGAL COUNSEL"), which
shall be Schulte Roth & Zabel LLP or such other counsel as thereafter designated
by the Required Holders. The Company and Legal Counsel shall reasonably
cooperate with each other in performing the Company's obligations under this
Agreement.

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

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

                           f. EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN
EFFECTIVENESS OF REGISTRATION STATEMENT. If (i) a Registration Statement
covering all of the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the respective Filing Deadline (a "FILING FAILURE") or
(B) not declared effective by the SEC on or before the respective Effectiveness
Deadline (an "EFFECTIVENESS FAILURE") or (ii) on any day after the Effective
Date sales of all of the Registrable Securities required to be included on such
Registration Statement cannot be made (other than during an Allowable Grace
Period (as defined in Section 3(r)) pursuant to such Registration Statement
(including, without limitation, because of a failure to keep such Registration
Statement effective, to disclose such information as is necessary for sales to
be made pursuant to such Registration Statement, to register a sufficient number
of shares of Common Stock or to maintain the listing of the Common Stock) (a
"MAINTENANCE FAILURE") then, as partial relief for the damages to any holder by

                                      -4-

<PAGE>

reason of any such delay in or reduction of its ability to sell the underlying
shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to two percent (2.0%) of the aggregate Purchase Price (as such term is
defined in the Securities Purchase Agreement) of such Investor's Notes relating
to the Registrable Securities included in such Registration Statement on each of
the following dates: (i) the day of a Filing Failure and on every thirtieth day
(pro rated for periods totaling less than thirty days) after a Filing Failure
until such Filing Failure is cured; (ii) the day of an Effectiveness Failure and
on every thirtieth day (pro rated for periods totaling less than thirty days)
after an Effectiveness Failure until such Effectiveness Failure is cured; and
(iii) the initial day of a Maintenance Failure and on every thirtieth day (pro
rated for periods totaling less than thirty days) after a Maintenance Failure
until such Maintenance Failure is cured. The payments to which a holder shall be
entitled pursuant to this Section 2(f) are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be paid on the day of the
Filing Failure, Effectiveness Failure and the initial day of a Maintenance
Failure, as applicable, and thereafter on the earlier of (I) the thirtieth day
after the event or failure giving rise to the Registration Delay Payments has
occurred and (II) the third Business Day after the event or failure giving rise
to the Registration Delay Payments is cured. In the event the Company fails to
make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of two percent (2.0%) per month
(prorated for partial months) until paid in full. Notwithstanding anything
herein to the contrary, in no event shall the aggregate Registration Delay
Payments exceed twelve and one-half percent (12.5%) of the aggregate Purchase
Price for all Investors (the "REGISTRATION DELAY PAYMENTS CAP"). Any amount in
excess of the Registration Delay Payments Cap (the "EXCESS REGISTRATION DELAY
PAYMENTS") shall cause the Conversion Price of the Investor's Notes to be
lowered by an amount equal to the quotient of the amount of such Investor's
Excess Registration Delay Payments divided by the then outstanding amount of
such Investor's Notes. Notwithstanding anything to the contrary contained
herein, in no event shall the Company be liable for any damages in connection
with the Warrant or Warrant Shares.

                  3. RELATED OBLIGATIONS.
                     --------------------

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

                           a. The Company shall promptly prepare and file with
the SEC a Registration Statement with respect to the Registrable Securities and
use its best efforts to cause such Registration Statement relating to the
Registrable Securities to become effective as soon as practicable after such
filing (but in no event later than the Effectiveness Deadline). The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which the Investors may sell all
of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under
the 1933 Act or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the "REGISTRATION
PERIOD"). The Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall

                                      -5-

<PAGE>

not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
(in the case of prospectuses, in the light of the circumstances in which they
were made) not misleading. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c)
(which approval is immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.

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

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

                                      -6-

<PAGE>

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

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

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

                                      -7-

<PAGE>

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

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

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

                                      -8-

<PAGE>

                           j. The Company shall hold in confidence and not make
any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

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

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

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

                                      -9-

<PAGE>

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

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

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

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

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

                                      -10-

<PAGE>

anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale and delivered a copy of the prospectus included as part of the
applicable Registration Statement (unless an exemption from such prospectus
delivery requirement exists) the ineffectiveness of the Registration Statement
and for which the Investor has not yet settled.

                  4. OBLIGATIONS OF THE INVESTORS.
                     -----------------------------

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

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

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

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

                                      -11-

<PAGE>

                  5. EXPENSES OF REGISTRATION.
                     -------------------------

                  All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $15,000.

                  6. INDEMNIFICATION.
                     ----------------

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

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

                                      -12-

<PAGE>

with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to
Section 3(d) and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

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

                                      -13-

<PAGE>

Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made.

                           d. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Indemnified
Damages are incurred.

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

                  7. CONTRIBUTION.
                     -------------

                  To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution

                                      -14-

<PAGE>

from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.

                  8. REPORTS UNDER THE 1934 ACT.
                     ---------------------------

                  With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("RULE 144"), the
Company agrees to:

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

                           b. file with the SEC in a timely manner all reports
and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144; and

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

                  9. ASSIGNMENT OF REGISTRATION RIGHTS.
                     ----------------------------------

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

                                      -15-

<PAGE>

                  10. AMENDMENT OF REGISTRATION RIGHTS.
                      ---------------------------------

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

                  11. MISCELLANEOUS.
                      --------------

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

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

         If to the Company:

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

                  With a copy to:

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

                                      -16-

<PAGE>

         If to Legal Counsel:

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

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

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

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

                                      -17-

<PAGE>

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

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

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

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

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

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

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

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

                           m. The obligations of each Investor hereunder are
several and not joint with the obligations of any other Investor, and no
provision of this Agreement is intended to confer any obligations on any
Investor vis-a-vis any other Investor. Nothing contained herein, and no action
taken by any Investor pursuant hereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of

                                      -18-

<PAGE>

entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated herein.

                            [Signature Page Follows]

                                      -19-

<PAGE>

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

                                         COMPANY:

                                         RAPTOR NETWORKS TECHNOLOGY, INC.

                                         By: /S/ THOMAS M. WITTENSCHLAEGER
                                            -----------------------------------
                                            Name: Thomas M. Wittenschlaeger
                                            Title: CEO

                                      -20-

<PAGE>

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

                                          BUYERS:

                                          CASTLERIGG MASTER INVESTMENTS LTD.

                                          By: /S/ PATRICK T. BURKE
                                             --------------------------------
                                             Name: Patrick T. Burke
                                             Title:  Senior Managing Director

                                      -21-

<PAGE>

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

                                        BUYERS:

                                        CEDAR HILL CAPITAL PARTNERS ONSHORE, LP

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

                                      -22-

<PAGE>

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

                                         BUYERS:

                                         CEDAR HILL CAPITAL PARTNERS
                                         OFFSHORE, LTD

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

                                      -23-

<PAGE>
<TABLE>
<S>     <C>

                                                SCHEDULE OF BUYERS

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

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

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

</TABLE>

<PAGE>

                                                                       EXHIBIT A

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

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

                             Re:    RAPTOR NETWORKS TECHNOLOGY, INC.

Ladies and Gentlemen:

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

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

                  This letter shall serve as our standing instruction to you
that the shares of Common Stock are freely transferable by the Holders pursuant
to the Registration Statement. You need not require further letters from us to
effect any future legend-free issuance or reissuance of shares of Common Stock
to the Holders as contemplated by the Company's Irrevocable Transfer Agent
Instructions dated July __, 2006.

                                                         Very truly yours,

                                                         [ISSUER'S COUNSEL]

                                                         By:___________________
CC:       [LIST NAMES OF HOLDERS]

<PAGE>

                                                                       EXHIBIT B

                              SELLING STOCKHOLDERS

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

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

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

         In accordance with the terms of registration rights agreement among the
Company and the selling stockholders, this prospectus generally covers the
resale of at least 130% of the sum of (i) the number of shares of Common Stock
issuable upon conversion of the convertible notes as of the trading day
immediately preceding the date the registration statement is initially filed
with the SEC and (ii) the number of shares of Common Stock issuable upon
exercise of the related warrants as of the trading day immediately preceding the
date the registration statement is initially filed with the SEC. Because the
conversion price of the convertible notes and the exercise price of the warrants
may be adjusted, the number of shares that will actually be issued may be more
or less than the number of shares being offered by this prospectus. The fourth
column assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.

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

<PAGE>
<TABLE>
<S>     <C>

                                                                    MAXIMUM NUMBER OF SHARES
                                                                    ------------------------
                                          NUMBER OF SHARES OWNED     TO BE SOLD PURSUANT TO      NUMBER OF SHARES
                                          ----------------------     ----------------------      ----------------
NAME OF SELLING STOCKHOLDER                  PRIOR TO OFFERING           THIS PROSPECTUS        OWNED AFTER OFFERING
---------------------------                  -----------------           ---------------        --------------------

CASTLERIGG MASTER INVESTMENTS (1)                                                                        0

         (1) Sandell Asset Management Corp. is the investment manager of
Castlerigg Master Investment Ltd. ("Castlerigg") and has shared voting and
dispositive power over the securities owned by Castlerigg. Sandell Asset
Management Corp. and Thomas E. Sandell, its sole shareholder, disclaim
beneficial ownership of the securities owned by Castlerigg.

</TABLE>

<PAGE>

                              PLAN OF DISTRIBUTION

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

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

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

         o        in the over-the-counter market;

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

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

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

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

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

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

         o        privately negotiated transactions;

         o        short sales;

         o        sales pursuant to Rule 144;

<PAGE>

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

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

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

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

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

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

<PAGE>

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

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

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

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

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