Document:

CONVERTIBLE
PROMISSORY NOTE AND SECURITY AGREEMENT

 

	US $125,000.00	
        Las
        Vegas, Nevada

        November
        30, 2012

 

For
good and valuable
consideration, IDS SOLAR
TECHNOLOGIES, INC., a
Nevada corporation,  ("Maker"), 
hereby makes and delivers this Convertible Promissory Note  and Security Agreement
(this "Note")  in favor of Steven J.
Caspi or his assigns ("Holder"), 
and hereby agree as follows:

 

1.
Principal Obligation and Interest. For value received, Maker
promises to pay to Holder at 3010 Westchester
Ave., Purchase, NY 10577 or at such
other place as Holder may designate
in writing, in currently available funds
of the United States, the principal
sum of One Hundred and Twenty Five Thousand Dollars and No Cents ($125,000.00). Maker's obligation under
this Note shall accrue interest at
the rate of five percent (5.0%) per
annum from the date hereof until paid in full,
compounded monthly. Interest shall be
computed on the basis of a 365-day year or 366-day
year, as applicable, and actual days lapsed.

 

2. Payment Terms.

 

Maker agrees to
remit payment in full
of all principal and interest due hereunder to Holder on or before November
30, 2013.

 

All
payments shall be applied first to late charges, then to
interest, then to principal and shall be credited to the Maker's account on the date
that such payment is physically received
by the Holder.

 

Maker shall have
the right to prepay all or any part of
the principal under this Note without penalty.

 

This
Note shall be accompanied by a
Warrant giving Holder the right to purchase 15,625 shares ofthe Maker's
common stock at
a price of $2.00 per share for a
period of 5 years.

 

3.Conversion.
Holder shall have the right at any
time to convert all or any
part of the outstanding and unpaid principal
amount of this Note into fully paid and non- assessable shares of common stock of 
the Maker, at the conversion price  of $1.25 per share (the "Conversion
Price") as provided
herein (a "Conversion"). The number of shares of
common stock to be issued upon each conversion of this Note
shall be determined by dividing the
Conversion Amount (as defined below) by the Conversion Price as specified in the notice
of conversion given by Holder (the "Notice
of Conversion"), delivered to the
Maker by the Holder on such conversion date (the
"Conversion Date"). The term "Conversion Amount"
means, with respect to any conversion
of this Note, the sum of (1) the principal
amount of this Note to be converted in such conversion plus (2)
at the Holder's option, accrued and unpaid interest, if any, on
such principal amount at the interest
rates provided in this Note to
the Conversion Date. In no case, however, may Holder convert
any portion of this Note into common stock of Maker if such
Conversion Amount will result in Holder
(in combination with all of Holder's other shares
of Maker) owning more than 4.99% of the fully
diluted, total issued and outstanding shares
of Maker's common stock.

 

    	1

    	 

    

 

4.
Grant of Security Interest. As collateral security for
the prompt, complete, and timely satisfaction  of all present and future indebtedness,
liabilities, duties, and obligations of Maker to Holder evidenced by or
arising under this Note, and including, without limitation, all principal and
interest payable under this Note, any future
advances added to the principal amount due hereunder,
and all attorneys' fees, costs
and expenses incurred by Holder in
the collection or enforcement of the same (collectively, the "Obligations"),
 Maker hereby pledges, assigns and grant<; to Holder a
continuing security interest and lien in
all of Maker's  right, title and
interest in. and to the property,  whether
now  owned or hereafter  acquired 
by  Maker and  whether 
now existing or hereafter coming into
existence or acquired, including the proceeds of any disposition thereof, described on
Exhibit "A" attached hereto and incorporated
herein by this reference (collectively, the "Collateral").
As applicable, the terms of this Note with respect to Maker's granting  of a security
interest in  the Collateral
to Holder shall  be  deemed to be
a security agreement under applicable provisions of the
Uniform Commercial Code ("UCC"), with Maker as the debtor
and Holder as the secured party.

 

5.
Perfection. Upon the execution and delivery of  this
Note, Maker  authorizes Holder  to
file  such financing statements and other  documents
in  such offices  as shall 
be necessary or as Holder may reasonably deem necessary to
perfect and establish the priority of the liens granted
by this Note, including any
amendments, modifications, extensions or renewals thereof. Maker agrees, upon
Holder's request, to take all such actions
as shall be necessary or as Holder may
reasonably request to perfect and establish the priority of
the liens granted by this Note, including any amendments, modifications, extensions
or renewals thereof.

 

6.
Representations and  Warranties  of Maker.
Maker hereby  represents and warrants the following
to Holder:

 

a.
Maker and those executing  this Note on  its
behalf  have the full
right, power, and authority to execute,
deliver and perform the Obligations under
this Note, which are not prohibited
or restricted under the articles of incorporation
or bylaws of Maker. This Note has been duly
executed and delivered by an authorized officer of Maker and constitutes a
valid and legally binding obligation of Maker enforceable
in accordance with its
terms.

 

b.
The execution of  this Note and  Maker's
compliance with  the  terms, conditions
 and provisions hereof does not conflict with or violate any provision of any agreement,
contract, lease, deed of trust, indenture, or
instrument to which Maker is a party or
by which Maker is bound, or constitute
a default thereunder or result in the imposition of any lien, charge, encumbrance, claim or security
interest of any nature whatsoever upon
any of the Collateral.

 

c.
The security interest granted hereby in and
to the Collateral constitutes a present, valid,
binding and enforceable security interest as
collateral security for the Obligations, and, except as to
leased equipment or purchase-money
encumbrances existing as of the date
of this Note as expressly disclosed to Holder in writing,
such interests, upon  perfection, will be senior and prior to any liens, encumbrances,
charges, title defects, interests and rights of any others
with respect to such Collateral.

 

    	2

    	 

    

 

7. Covenants of Maker. For
so long as any Obligations remain outstanding:

 

a.
 Maker shall not
sell, assign or transfer any of the
Collateral, or any part thereof or interest therein;

 

b.
Maker shall pay or cause to be paid promptly when due all taxes
and assessments on the Collateral;
and

 

c.
Maker shall keep Holder apprised, in writing,
as to the current location
of all of the Collateral, providing Holder with
current information including any identifying serial numbers
with respect to the Collateral
so the Holder may perfect and maintain the
priority of its security interest therein.

 

d. Maker shall
not borrow or place a lien against
any of the Collateral or
the Company without the prior written consent
of Holder.

 

8. Defaults. The following
shall be events of default under this
Note:

 

a.
 Maker's failure to remit any payment under this
Note on before the date due, if such
failure is not cured in full within five
(5) days of written notice of default;

 

b.
Maker's failure to perform or breach of
any non-monetary obligation or covenant
set forth in this Note or in
any other written agreement between Maker and Holder if such failure is
not cured in full within ten
(10) days following delivery of written
notice thereof from Holder to Maker;

 

c.
If Maker is dissolved, whether pursuant to any applicable
articles of incorporation or bylaws, and/or
any applicable laws, or otherwise;

 

d. Default 
in the Maker's obligation for borrowed
 money,  other 
than this

Note, which shall
continue for a period of twenty (20) days;

 

e.
The  commencement  of any action or proceeding
which affects the Collateral or title thereto or the interest  of
Holder  therein, including,  but
not limited  to eminent domain, insolvency,
code enforcement or arrangements or proceedings involving a bankrupt or decedent;

 

    	3

    	 

    

f.
The entry  of a  decree or order 
by a  court having jurisdiction in the premises adjudging the Maker bankrupt
or insolvent, or approving  as properly filed 
a petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Maker under the federal Bankruptcy Code or any other applicable
federal or state law, or appointing a receiver,  liquidator, assignee 
or trustee of the Maker, or any substantial part if its property, or ordering  the
winding  up or liquidation of its affairs,
and the continuance  of any  such decree
or order unstayed and in effect for a period of twenty (20) days;

 

g.
Maker's  institution of proceedings to be adjudicated a bankrupt or insolvent, or the
consent  by it to the institution  of
bankruptcy or insolvency proceedings against it,  or its 
filing  of  a 
petition or  answer or  consent 
seeking  reorganization or relief under the federal Bankruptcy Code or any other
applicable  federal or state law, or its consent to the filing of any such 
petition or to the appointment of a receiver, liquidator, assignee or trustee of the company, or
of any substantial part of its property, or
its making of an assignment for the benefit
of creditors  or the admission by it in writing
of its inability to pay its debts  generally as they become due,
or the taking of corporate 
action by the Maker in furtherance of any such action; or

 

 

h.
Should Holder, in its sole and absolute discretion,  at any time deem
itself insecure or determine that repayment is at risk or unlikely and provide  not
 less than three  (3) days
written notice thereof to Maker.

 

9.Rights
and Remedies of Holder. Upon the occurrence of
an event of default  by Maker under this Note or at any time before default when
the Holder reasonably feels insecure, then, in addition to all other rights and remedies
at law or in equity, Holder may exercise any one or more of
the following rights and remedies:

 

a.Accelerate
the time for payment of all amounts payable under this Note by written notice thereof
to Maker, whereupon all such amounts shall be immediately
due and payable.

 

b.Pursue
and  enforce all of the rights 
and  remedies provided  to a secured
party with respect to the Collateral under the Uniform
Commercial Code.

 

    	4

    	 

    

c.
Make such appearance,  disburse such  sums,
and take  such action as Holder deems necessary, in its 
sole  discretion, to protect Holder's interest, including but not limited to
(i) disbursement of attorneys' fees, (ii) entry upon the Maker's
property to make repairs to the Collateral, and (iii) procurement of
satisfactory  insurance.  Any amounts
disbursed by Holder pursuant to this Section,  with interest thereon, shall become
additional  indebtedness of the Maker secured by the
Collateral and shall be immediately due and payable and shall bear interest
from the date of disbursement at
the default rate stated in this Note. Nothing
contained in this Section shall require
Holder to incur any expense or take any
action.

 

d. Require 
Maker to assemble the Collateral and make
it available to the Maker at the place
to be designated by the Holder which
is reasonably convenient to both parties. The Holder may
sell all or any part of the Collateral as a whole or in
part either by public auction, private sale,
or other method of disposition. The Holder
may bid at any public sale on all
or any portion of the Collateral. Unless the Collateral threatens
to decline speedily in value, Holder
shall give Maker reasonable notice of the time and place of any public sale or of the
time after which any private sale or other
disposition of the Collateral is to be made,
and notice given at least 10 days
before the time of the sale or other
disposition shall be conclusively presumed to be
reasonable.

 

e. Pursue any
other rights or remedies available to Holder
at law or in equity.

 

10.Interest
To Accrue Upon Default. Upon the occurrence of an event
of default by Maker under this Note,
the balance then owing under the terms
of this Note shall accrue interest at the rate of eighteen 
percent  (18.0%) per annum, compounded  monthly,
 from the date of default until Holder
is satisfied in full.

 

11.Full
Recourse. The liability of Maker for the
Obligations shall not be limited to the Collateral,
and Maker shall have full liability therefor
beyond the Collateral.

 

12.Representation
of Counsel. Maker and Holder acknowledge that
they have consulted with or have had the
opportunity to consult with their independent
legal counsels prior to executing this Note
and have freely executed a waiver of any conflict of interest with Cane Clark LLP which
has been asked to write up this note on behalf of both parties according to terms provided jointly by them. This Note has been
freely negotiated by Maker and Holder directly, and any rule
of construction to the effect that any ambiguities
are to be resolved against the
drafting party shall not be employed in
the interpretation of this Note.

 

13.Choice
 of  Laws; 
Actions. This Note shall  be constructed and 
construed in accordance with the  internal 
substantive  laws of the State of
 Nevada, without regard to the choice of
law principles of said
State. Maker acknowledges that this Note
has been negotiated in Clark County, Nevada. Accordingly,
the exclusive venue of any action,
suit, counterclaim or cross claim arising under, out of, or in connection with this
Note shall be the state or federal courts in Clark
County, Nevada. Maker hereby consents to
the personal jurisdiction of any court of competent subject matter
jurisdiction sitting in Clark County, Nevada.

 

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14.Usury
Savings Clause. Maker expressly agrees and acknowledges that Maker and Holder intend and agree that this Note
shall not be subject to the usury
laws of any state other than the State of Nevada. Notwithstanding anything contained  in
this Note to the
contrary, if collection  from Maker  of
interest at the rate set forth herein would be contrary to applicable laws of such State,
then the applicable interest rate upon default shall be the highest  interest rate that
may be collected from Maker under applicable  laws
at such time.

 

15.Costs
of Collection. Should the indebtedness represented by this  Note, or any part
hereof, be collected at  law, in equity,  or
in any bankruptcy, receivership or other  court proceeding, or this Note be
placed in the hands of any
attorney for collection after default, Maker agrees to pay, in addition to the
principal and interest due hereon, all reasonable attorneys'
fees, plus all other costs  and expenses
 of collection  and enforcement,
including any fees incurred  in connection
with such proceedings or collection of the Note and/or enforcement of Holder's rights with respect to the administration, supervision,
preservation or protection of, or realization upon, any Collateral securing payment hereof.

 

16. Miscellaneous.

 

a.This
Note shall  be  binding upon Maker and shall
inure to the benefit of Holder  and
its successors, assigns, heirs,
and legal representatives.

 

b.Any
failure or delay by Holder to insist upon the strict performance of any term, condition, covenant or agreement 
of this Note, or to exercise any right, power or remedy 
hereunder shall not constitute a waiver of any such term, condition, covenant, agreement, right, power or
remedy.

 

c.Any
provision of this Note that is unenforceable shall be severed from  this Note 
to the  extent reasonably possible without invalidating or affecting 
the intent, validity or enforceability of
any other provision of this Note.

 

d.This
Note may not be modified or amended in any respect except in a writing executed 
by the party to be charged.

 

e. Time is of the
essence.

 

17.
Notices. All notices required to be given under this Note shall be given at such
address as a party may designate by written notice to the other party. Notices may
be transmitted by facsimile, certified
mail, private  delivery,  or any
other commercially reasonable means, and shall be deemed given upon receipt by
the Party to whom they are addressed.

 

    	6

    	 

    

 

18.
 Waiver  of Certain 
Formalities.  All  parties
to  this Note hereby waive presentment, dishonor,
notice of dishonor and protest. All parties hereto  consent to, and Holder is
 hereby expressly authorized  to make, without
notice, any and all renewals, extensions, modifications or waivers of the time for or the terms of 
payment of any sum or sums due hereunder, or under any documents or instruments  relating
to or securing this Note, or of the performance of any  covenants, conditions or agreements
hereof or thereof or the taking or release of collateral securing this Note. Any such
action taken by Holder shall not discharge
the liability of any party to this
Note.

 

[signature pages
follow]

    	7

    	 

    

IN WITNESS WHEREOF,
this Note has been executed effective
the date and place first
written above.

 

“Maker”:
IDS SOLAR TECHNOLOGIES, INC.

 

By: /s/ Bruce R. Knoblich

Its: Chairman & CEO

Print Name: Bruce R. Knoblich

Date: 11-29-2012

 

“Holder”: Steven J. Caspi

 

_________________

_____

 

    	8

    	 

    

IN WITNESS WHEREOF,
this Note has been executed effective
the date and place first
written above.

 

"Maker":
IDS SOLAR TECHNOLOGIES, INC.

 

By: _____________________

Its: _____________________

Print Name: _____________________

Date: _____________________

 

“Holder”: Steven J. Caspi

 

/s/ Steven J. Caspi

11/29/12

 

 

 

    	9

    	 

    

Exhibit "A"

 

Collateral

 

Each
and all of the following in which IDS Solar  Technologies, Inc.., 
a Nevada Corporation, bas any right,  title,
or interest,  regardless  of the manner 
in which  such items are formally  held
or titled; all as defined in the Nevada
Uniform Commercial Code - Secured Transactions (Nevada 
Revised Statutes ("NRS'') §§
104.9101 et. seq.) as of the date
of the Note, and as the same may be amended hereafter:

 

(1) Accounts,
as defined in NRS 104.9102(1)(a)

(2)
Cash proceeds, as defined in NRS 104.9102(1)(1)

(3) Chattel
paper, as defined in NRS 104.9102(l)(k)

(4) Commercial tort
claims, as defined in NRS 104.9102(1)(m)

(5) Commodity 
accounts and  commodity contracts, as defined in NRS 104.9102(l)(n) and NRS
104.9102(1)(o), respectively,

(6) Deposit
accounts, as defined in NRS 104.9102(1)(cc)

(7) Documents, as defined in NRS
104.9102(l)(dd)

(8) Electronic
chattel paper, as defined in NRS 1049102(1)(ee)

(9) Equipment,
as defined in NRS 104.9102(1)(gg)

(10) General intangibles,
as defined in NRS 104.9102(1)(pp)

(11) Goods, as defined in NRS 104.9102(1)(rr)

(12) Instruments, as defined in
NRS 104.9102(1)(uu)

(13) Inventory,
 as defined in NRS 104.9102(l)(vv)

(14) Investment
property, as defined in NRS 104.9102(1)(ww)

(15) Letter-of-credit right, as defined in NRS 104.9102(l)(yy)

(16) Noncash proceeds,
as defined in NRS 104.9102(l)(fff)

    	10

    	 

    

 

(17)
Payment intangible, as defined in NRS 104.9102(l)(iii)

(18) Proceeds, as defined in
NRS 104.9102(1)(lll)

(19)
Promissory notes, as defined in NRS 104.9102(1)(mmm)

(20) Record, as
defined in NRS 104.9102(1)(qqq)

(21) Software, 
as defined in NRS 104.9102(1)(www)

(22) Supporting obligations, as defined in NRS
104.9102(1)(yyy)

(23) Tangible chattel paper, as defined in NRS 104.9102(1)(zzz)

(24) The following, as
defined in NRS 104.9102(2): certificated securities contracts for sale,  leases, lease
agreements, lease  contracts,  leasehold
interests, letters of credit, negotiable instruments, notes, proceeds
of letters of credit, securities, security certificates, security entitlements, and uncertified
securities.

    	11NEITHER 
THIS  WARRANT NOR
THE SHARES ISSUABLE 
UPON  EXERCISE HEREOF HAVE 
BEEN  REGISTERED UNDER 
THE  SECURITIES  ACT 
OF 1933,  AS AMENDED (THE "SECURITIES ACT") OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON 
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES 
ACT AND SUCH OTHER SECURITIES  LAWS.  NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED  OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

 

STOCK PURCHASE
WARRANT

 

To Purchase 15,625
Shares of Common Stock of IDS Solar Technologies, Inc.

 

THIS
CERTIFIES that, for value received,
Steven J. Caspi (the "Holder"), shall have
the right to purchase from IDS Solar Technologies, Inc., a Nevada corporation  (the
"Company"), 15,625 fully paid and non-assessable shares of the
Company's common  stock,  par value
$0.001 per share (the "Common Stock")
 at an
Exercise Price as described below,
at any time on or
before five (5) years from the date
of issuance and delivery (the "Termination Date").

 

1. Exercise
Price. The Exercise Price shall
be $2.00 per share.

 

2.Authorization
of Shares.  The  Company covenants
that all shares of Common Stock  which  may
be issued upon the exercise of rights represented
by this Warrant will, upon exercise of
the rights represented by this Warrant,
be duly authorized, validly issued, fully paid
and non-assessable and free from
all taxes, liens and charges in respect
of the issue thereof (other than taxes in respect of 
any transfer occurring  contemporaneously
with such issue).

 

3.Exercise of
Warrant.

 

(a)Exercise
of the purchase rights represented  by this Warrant may
be made at any time or times on
or after the closing of the offering,
and before the close of business on the Termination Date by the surrender of
this Warrant and the Notice  of Exercise
Form  annexed hereto duly  executed, at
the  office of  the Company (or such 
other office or agency  of the Company as it may designate by notice in
writing to the registered Holder hereof
at the address of such holder appearing
on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
 by wire transfer or
cashier's check drawn on a United States bank, the
holder of this Warrant shall be entitled to receive a certificate for
the number of shares of Common Stock so purchased.

 

(b)In
lieu of cash exercising this Warrant, the
Holder of this Warrant may elect to receive shares equal
to the value of this Warrant (or the portion 
thereof being canceled) by surrender of this Warrant at the principal office
of the Company together with notice of such election,  in which 
event the Company shall issue to the Holder hereof a number of Shares computed using the following formula:

 

 

    	1

    	 

    

Where X
-- The number of shares of Common Stock to be issued to the holder

Y
-- of this Warrant.   The number of shares of Common Stock purchasable under this Warrant.

 A -- The fair market value of one share of the Company's Common Stock.

 B -- The Exercise Price (as adjusted to the date of such calculations).

 

For
purposes of this Paragraph 3(b), the fair market
value of the Common Stock, if publicly traded, shall be the five day average of the
reported closing price each day of the Shares for
the five days immediately preceding the exercise of this Warrant. If the Shares
are not publicly traded, their fair market value shall be the price per share that the Company
could obtain from a willing buyer for shares of Common Stock
sold by the Company from authorized
but unissued shares, as
such prices shall be determined by reference
to the most recent sale or issuance by the
Company of Common Stock.

 

(c)Certificates
for shares  purchased hereunder shall be  delivered
to the Holder hereof within five (5) trading
days after the date on which this Warrant shall
have been exercised as aforesaid. This Warrant shall be deemed to
have been exercised and such certificate
or certificates shall be deemed to have been issued, and Holder or any other person so designated to be
named therein shall be deemed to have become
a Holder of record of such shares for
all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price and all taxes
required to be paid by Holder, if any,
pursuant to Section 4 prior to the issuance of such shares, have been paid.

 

(d)Charges,
Taxes and Expenses. Issuance of  certificates for 
shares of Common Stock upon the exercise of
this Warrant shall be made without
charge to the Holder hereof for any issue or transfer tax
or other incidental expense in respect
of the issuance of such certificate, and such certificates shall be
issued in the name of the Holder
of this Warrant
or in such name or names as may be directed by the Holder of this Warrant; provided,
however, that in the event certificates for
shares of Common Stock are to be issued in a name other than the name of
the Holder of this Warrant, this Warrant
when surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder hereof; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.

 

4.Closing
of Books. The Company will not close
its shareholder books or records in any manner which prevents the timely exercise of
this Warrant.

 

5. Transfer, Division and Combination.

 

(a) Subject
to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in
whole or in part, shall be
registered on the books of the Company to be maintained
for such purpose, upon surrender of this Warrant at the principal office
of the Company, together with a written
assignment of this Warrant
substantially in the form attached hereto
duly executed by Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the mailing of such transfer. 
Upon such surrender and, if required, such
payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations 
specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly
be cancelled. A Warrant, if properly assigned, may be
exercised by a new Holder for the
purchase of shares of Common Stock without having
a new Warrant issued.

    	2

    	 

    

 

(b)This
Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with
a  written notice specifying the names and
denominations in which new Warrants are to be issued, signed
by Holder or its agent or attorney. Subject to
compliance with Section 6(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant
or Warrants in exchange for
the Warrant or Warrants to be divided
or combined in accordance with such notice.

 

(c)The
Company shall prepare, issue and deliver
at its own expense (other than transfer taxes) the new warrant or warrants under this Section 6.

 

(d)The
Company agrees to maintain, at its aforesaid office, books for the registration and
the registration of transfer of the Warrants.

 

6. No Rights
as Shareholder until Exercise. This Warrant does not entitle the Holder
hereof to any voting rights
or other rights as a shareholder of the Company prior to the exercise
hereof.  Upon the
surrender of this Warrant and the payment of the aggregate Exercise Price, the
Common Stock so purchased shall be and be
deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of the date of
such surrender or payment.

 

7.Loss,
 Theft, Destruction or Mutilation  of 
Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which
shall not include the
posting of any bond), and upon surrender and cancellation
of such Warrant, if mutilated, the Company will make
and deliver a new Warrant of like
tenor and dated as of such cancellation, in lieu of such Warrant.

 

8.Saturdays,
Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the
expiration of any right required or
granted herein shall be a Saturday,
Sunday or a legal holiday, then such action
may be taken or such right may be exercised on
the next succeeding day not a Saturday, Sunday or legal holiday.

 

    	3

    	 

    

 

9. Adjustments of Exercise Price and
Number of Warrant Shares.

 

(a)Stock Splits,
etc. The number and kind of securities purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the happening
of any of the following. In case the Company shall:
(i) pay a dividend in shares of Common Stock or make a distribution in shares of Common
Stock to Holders of its outstanding Common Stock, (ii) subdivide
its outstanding shares of Common
Stock into a greater number of shares of Common 
Stock, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock, then
the number of shares of Common Stock
purchasable upon exercise of this Warrant (the "Warrant Shares") immediately
prior thereto shall be adjusted so that the Holder of this Warrant shall be entitled
to receive the kind and number 
of Warrant Shares or other securities of the Company which he
would have owned or have been entitled
to receive had such Warrant been exercised in advance thereof.  Upon each such adjustment
of the kind and number of Warrant Shares or other securities of the Company which are
purchasable hereunder,  the Holder of  this
 Warrant  shall thereafter
be entitled to purchase  the number of Warrant
Shares or other securities resulting from such adjustment
at an Exercise Price per Warrant Share or other
security obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately
prior to such adjustment  and dividing by
the number of Warrant Shares  or  other
 securities of the Company resulting from
such adjustment.  An adjustment made pursuant
to this paragraph shall become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event.

 

    	4

    	 

    

 

(b)Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. 
In case the Company shall reorganize
its capital, reclassify its capital stock,
consolidate or merge with or into another corporation (where the
Company is not the Surviving corporation or where
there is a change in or distribution
with respect to the Common Stock of the Company), or sell,
transfer or otherwise dispose of all
or substantially all its property, assets or business to another corporation  and,
pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation,
or any cash, shares
of stock or other
securities or property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or
in lieu of common stock  of
the successor or acquiring corporation ("Other Property"), are to  be
received by or distributed to the Holders of Common 
Stock of the Company, then Holder
shall have the right thereafter to receive,
upon exercise of this Warrant, the number of shares of
common stock of the successor  or
acquiring corporation or of the Company,
if it is the
surviving corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder
of the number of
shares of Common
Stock for which this Warrant  is  exercisable
immediately  prior to such event. In case of  any
such reorganization, reclassification, merger, consolidation or disposition of assets,
the successor or acquiring corporation (if other than the Company) shall expressly
assume the due and punctual observance  and
performance of each and every covenant 
and condition  of this Warrant
to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications 
as may be deemed appropriate (as determined 
in good faith by resolution of the
Board of Directors of the  Company) 
in order to provide for adjustments of shares of Common Stock for which this
 Warrant  is
exercisable  which  shall 
be as nearly equivalent  as practicable to
the adjustments provided for in this Section
10. For purposes  of this Section
10, "common stock  of the successor or  acquiring
corporation" shall include stock of such stock of such corporation of any
class which is not preferred as to
dividends or assets over any other class
of corporation  and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival
of a specified date or the happening of a specified event and
any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this Section
10 shall similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

 

(c)Subsequent
Equity Sales.  If the Company
at any time while this Warrant is outstanding,
shall offer, sell, grant any option to
purchase or offer, sell or grant any
right to reprice its securities, or otherwise dispose of or
issue any Common  Stock 
or any security entitling any Person to
acquire shares of Common Stock, at an effective
price per share less than the then Exercise Price (such issuances collectively,
a "Dilutive Issuance"), then the Exercise Price shall be adjusted,
concurrently with such issuance, to equal the effective price per share of the
Dilutive Issuance by multiplying the same by a fraction, calculated as follows:

    	5

    	 

    

 

AX+BX+CY

______________

 

A+B+C

 

A = number of
shares of Common Stock outstanding immediately prior to such

Dilutive Issuance;

 

B = the
number of Warrant Shares issuable plus the
number of shares of common stock issuable upon
exercise of all warrants of this series;

 

C =the number of shares issuable in the Dilutive
Issuance;

 

X = the Exercise Price immediate before
the Dilutive Issuance;

Y =the effective
price per share of the Dilutive Issuance;

Such
adjustment shall be made whenever such
Common Stock or such securities are issued unless Common Stock is being issued pursuant
to (i) any conversion of any Preferred Stock; (ii) in connection with any acquisition,
joint venture or strategic alliance approved by
the Board of Directors; (iii) upon the occurrence of any
bona fide underwritten registered public
offering of Common Stock of the Corporation for cash;
(iv) as a dividend
or distribution on any
Preferred Stock; (v) any employee benefit
plan approved by the Board of Directors, including without limitation, an employee
stock option plan for the benefit of employees, consultants and I or directors,
or; (vi) pursuant to a security entitling any person to acquire shares
of Common Stock for which an adjustment to the Exercise Price has already been
made under this Section 10(c).

 

10.Notice
of  Adjustment. Whenever the  number
 of Warrant  Shares or number
or kind of securities or other property purchasable upon
the exercise of this Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall promptly mail by registered or certified mail, return receipt requested,
to the Holder of this Warrant notice of such adjustment or adjustments setting forth the number of Warrant Shares (and other
securities or property) purchasable upon the exercise of this Warrant and the
Exercise Price of such Warrant  Shares (and other securities or property)
after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made. Such notice, in the absence of manifest error, shall 
be conclusive evidence of the correctness of such adjustment.

 

    	6

    	 

    

 

11. Notice of Corporate Action. If at
any time:

 

(a)the
Company shall take a record of the Holders
 of its Common Stock for the purpose of
entitling them to receive a dividend or
other distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class
or any other securities or property, or to receive any other right, or

 

(b)there
shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital
stock of the Company or
any consolidation  or merger of
the Company with, or any sale, transfer
or other disposition  of all or substantially all the
property, assets or business of the
Company to, another corporation,  or

 

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

 

then,
in any one or more of such cases, the Company
shall give to Holder (i) at least 3 days' prior written notice of the
date on which a record date shall be selected for such dividend,
distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 3
days' prior written  notice
of the date when the same shall
take place. Such notice in accordance with
the foregoing clause also shall specify
(a) the date on which any
such record is to be taken for the
purpose of such dividend, distribution
or right, the date on which the Holders
of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and (b)
the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation  or winding
 up is to take place and the time, if any
such time is to be fixed, as of which the Holders of Common Stock
shall be entitled to exchange
their shares of Common Stock for securities
or other property deliverable  upon  such
disposition, dissolution, liquidation  or winding
up. Each such written notice shall
be sufficiently given if addressed to Holder at the
last address of Holder appearing on
the books of the Company and delivered in accordance with Section 18(e).

 

12.Authorized
Shares.  The Company covenants 
that during the period the Warrant is  outstanding,
 it will reserve  from 
its authorized and  unissued  Common
 Stock a sufficient number of shares to
provide for the issuance of
the Warrant Shares upon the exercise
of any purchase rights under this Warrant. The Company further covenants 
that its issuance of this Warrant shall 
constitute full authority to its officers 
who are  charged  with 
the duty  of executing stock certificates
to execute and issue the necessary
certificates for the Warrant Shares upon the exercise 
of the purchase rights under this
Warrant.  The Company 
will take all such reasonable action
as may be necessary to assure that such Warrant
Shares may be issued
as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed.

 

    	7

    	 

    

 

13.No
Impairment. The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or  any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all
times in good faith assist in the carrying out
of all such terms and in the
taking of all such actions as
may be necessary or appropriate to protect the
rights of Holder against impairment. Without
limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such
exercise immediately prior to such increase
in par value, (b) take all such action 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 (c) use
its best efforts to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction
thereof as may be necessary to enable the
Company to perform its obligations under
this Warrant. Before taking any action which would cause an adjustment reducing
the current Exercise Price below the then par value, if any, of the shares
of Common Stock issuable upon exercise of the
Warrants, the Company shall take any corporate action which
may be necessary in order that
the Company may validly and legally issue fully paid and non-assessable shares
of such Common Stock at such adjusted Exercise Price.

 

14.Written
Acknowledgment. Upon the request of Holder, the Company will at
any time during the period this
Warrant is outstanding acknowledge in writing,
in form reasonably satisfactory to Holder, the continuing validity of
this Warrant and the obligations of the Company hereunder.

 

15.Prior
Regulatory Approval Before taking any action
which would result in an adjustment in the number of shares of Common Stock
for which this Warrant is exercisable or
in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any
public regulatory body or bodies having jurisdiction thereof.

 

16. Miscellaneous.

 

(a)Choice
of Laws, Jurisdiction and Venue. This
Warrant shall be binding upon any successors or assigns of the Company. This Warrant
shall constitute a contract under the laws of Nevada and its interpretation and construction shall be
determined pursuant to the laws
of Nevada without regard to its conflict of law,
principles or rules. In the event
that a judicial proceeding is necessary, the sole
and exclusive forum for
resolving disputes arising out of or relating to this Warrant is the
courts sited in Clark County, Nevada, or the federal courts for such state and
county, and all related appellate courts, the parties
hereby irrevocably consent to the jurisdiction of such
courts and agree to said venue.

 

    	8

    	 

    

(b) Restrictions. The Holder
hereof acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered, will have restrictions upon resale imposed by state and federal
securities laws.

 

(c)Successors
and Assigns; Title and Transfer. Prior to the Termination Date and subject
to compliance with applicable laws, this
Warrant and all rights hereunder
are transferable, in whole or in
part, at the office or agency of the Company by the
Holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form
annexed hereto properly endorsed. This Warrant shall be binding upon any successors
or assigns of the Company.

 

(d)Non-waiver
and Expenses. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Termination
Date.  If the Company fails
to comply with any
provision of this Warrant, the Company
shall pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but  not limited to, reasonable
attorneys' fees,  including  those of appellate
proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.

 

 

(e)Notices
- by the  Company.  Any notice, request
 or other document required or permitted to be given or
delivered to the Holder hereof by the
Company shall be deemed delivered upon deposit
by the Company in the U.S. Mail, first
class postage prepaid at the address of the Holder
in the shareholder records of the Company. The
Holder is responsible to notify the
Company of any change in the Holder's
address by delivering written notice
of the change of address to the Company in accordance with subparagraph (f), below.

 

(f)Notices
- By a Holder. Any notice, request or other document required or permitted
to be given or delivered to the Company hereof by the Holder shall be
transmitted overnight delivery via FedEx, UPS, U.S. Postal Service or other
carrier of similar reliability, signature upon delivery required, attn: General Counsel,
to. each of the Company's head office as reflected on the most recently publicly filed Annual List with the Nevada Secretary
of State or on the most recently publicly filed 10Q or 10K report, if applicable.

 

(g)Limitation
of Liability. No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Common Stock, and no
enumeration herein of the rights or privileges
of Holder hereof, shall give rise to any liability of
Holder for the purchase
price of any Common Stock or as
a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.

 

(h)Remedies.
Holder, in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be
entitled to specific performance
of its rights under this
Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby
agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.

 

(i)Successors and Assigns.
Subject  to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit
of and be binding upon the successors of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant
are intended to be for the benefit of all Holders
from time to time ·of this Warrant and shall be enforceable by any such Holder
or Holder of Warrant Shares.

 

    	9

    	 

    

(j)Indemnification.
The Company agrees to indemnify and hold harmless Holder 
from and against any liabilities, obligations, losses,  damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses and disbursements
of any kind which may be imposed upon,
incurred by or asserted against Holder in any manner relating to or arising out of
any failure by the Company to perform or observe in
any material respect any of its covenants,
agreements, undertakings or obligations
set forth in this Warrant; provided, however, that the Company 
will not be liable hereunder to the extent
that any .liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys'
fees, expenses or disbursements are found in
a final non-appealable judgment by a court to have resulted from Holder's negligence,
bad faith or willful misconduct in its
capacity as a stockholder or Warrant
Holder of the Company.

 

(k)Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent
of the Company and the Holder.

 

(l)Severability.
Wherever possible, each provision of
this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

(m) Headings.
 The headings used in
this Warrant are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Warrant

    	10

    	 

    

 

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

 

Dated this 11-29-12

 

IDS Solar Technologies,
Inc.

 

By: /s/ Bruce R. Knoblich, CEO

Authorized Representative

 

 

 

 

 

    	11

    	 

    

 

ASSIGNMENT FORM

(To assign the foregoing warrant,
execute

this form and supply required information.

Do not use this form to exercise
the warrant.)

 

FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

___________________________________, whose
address is

____________________________________________________.

 

 

Dated: ______________, ______

Holder's Signature: ________________________________

Holder's Address: ________________________________

 

 

Signature Guaranteed: ________________________________

 

 

 

NOTE: The signature to
this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change whatsoever, and must
be guaranteed by a bank
or trust company. Officers of corporations and
those acting in a fiduciary or other
representative capacity should file proper
evidence of authority to assign the foregoing
Warrant.

    	12

    	 

    

NOTICE OF EXERCISE

 

To: IDS Solar Technologies, Inc.

 

 

(1)
 The undersigned hereby elects to
purchase ___________ shares of Common Stock (the "Common Stock"),
of IDS Solar Technologies, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.

 

(2) Please issue
a certificate or certificates  representing  said
shares of

Common Stock in the name of the undersigned
or in such other name as is specified below:

 

 

 

__________________________

(Name)

 

__________________________

(Address)

 

__________________________

Social Security or Tax Identification Number

 

Dated: __________________________

 

__________________________

Signature

 

__________________________

Print Name

 

    	13

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