WARRANT TO PURCHASE COMMON STOCK

Exhibit 4.1

Warrant Certificate No. 325

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.

Dated: December 13, 2007		Void After: December 13, 2017

FOOTHILLS RESOURCES, INC.

WARRANT TO PURCHASE COMMON STOCK

Foothills Resources, Inc., a Nevada corporation (the “ Company ”), for value received on December 13,   2007 (the “ Effective Date ”), hereby issues to Regiment Capital Special Situations Fund III, L.P. (such person and any successors and/or assigns each being the “ Holder ” with respect to the Warrant held by it) this Warrant (the “ Warrant ”) to purchase 2,580,159 shares (each such share as from time to time adjusted as hereinafter provided being a “ Warrant Share ” and all such shares being the “ Warrant Shares ”) of the Company’s Common Stock, at the Exercise Price, as adjusted from time to time as provided herein, on or before December 13, 2017 (the “ Expiration Date ”), all subject to the following terms and conditions.

Certain terms used herein shall have the meanings set forth on Exhibit C hereto. Unless otherwise defined in this Warrant (including Exhibit C ), terms appearing in initial capitalized form shall have the meaning ascribed to them in that certain Credit Agreement, dated as of even date herewith, by and among the Company, certain subsidiaries of the Company and the other parties signatory thereto pursuant to which this Warrant was issued (the “ Credit Agreement ”).

1. DURATION AND EXERCISE OF WARRANTS

     (a)  Exercise Period . The Holder may exercise this Warrant in whole or in part on any Business Day on or before 5:00 p.m., Eastern time, on the Expiration Date, at which time this Warrant shall become void and of no value.

     (b)  Exercise Procedures .

          (i) While this Warrant remains outstanding and exercisable in accordance with Section 1(a) , the Holder may exercise this Warrant in whole or in part at any time and from time to time by (A) surrender of this Warrant, with a duly executed copy of the Notice of Exercise attached hereto as Exhibit A , to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder, and payment of the then applicable Exercise Amount

made in the form of cash, or by certified check, bank draft or money order payable in lawful money of the United States of America, (B) by exchanging a portion of this Warrant pursuant to which the Holder receives from the Company the number of Warrant Shares equal to (A) the number of Warrant Shares as to which this Warrant is being exercised minus (B) the number of Warrant Shares having a value, based on the Closing Price on the trading day immediately prior to the date of such exercise, equal to the Exercise Amount, or (C) any combination of the foregoing. The Company acknowledges that the provisions of clause (B) are intended, in part, to ensure that a full or partial exchange of this Warrant pursuant to such clause (ii) will qualify as a conversion, within the meaning of paragraph (d)(3)(iii) of Rule 144 under the Securities Act. At the request of any Holder, the Company will accept reasonable modifications to the exchange procedures provided for in this Section in order to accomplish such intent. For all purposes of this Warrant (other than this section), any reference herein to the exercise of this Warrant shall be deemed to include a reference to the exchange of this Warrant into Shares in accordance with the terms of clause (B).

          (ii) Upon the exercise of this Warrant in compliance with the provisions of this Section 1(b) , the Company shall promptly issue and cause to be delivered to the Holder a certificate for the Warrant Shares purchased by the Holder. Each exercise of this Warrant shall be effected immediately prior to the close of business on the date (the “ Date of Exercise ”) which the conditions set forth in Section 1(b) have been satisfied. On or before the first (1 ^st ) Business Day following the date on which the Company has received each of the Exercise Notice and the Exercise Amount (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 (3 ^rd ) Business Day following the date on which the Company has received all of the Exercise Delivery Documents (the “ Share Delivery Date ”), the Company shall, (X) provided that the Transfer Agent is participating in The Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice and Exercise Amount, 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 Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the actual number of Warrant Shares being acquired upon such an exercise, then the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 1(b) ) of like tenor 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 stamp or other documentary taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

          (iii) If the Company shall fail to issue to the Holder within three (3) Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which

the Holder is entitled upon the Holder’s exercise of this Warrant, and if on or after such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “ Buy-In ”), then the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “ Buy-In Price ”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the closing bid price on the date of exercise.

     (c)  Partial Exercise . This Warrant shall be exercisable, either as an entirety or, from time to time, for part only of the number of Warrant Shares referenced by this Warrant. If this Warrant is exercised in part, the Company shall issue, at its expense, a new Warrant, in substantially the form of this Warrant, referencing such reduced number of Warrant Shares which remain subject to this Warrant.

     (d)  Disputes . In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 15 .

2. ISSUANCE OF WARRANT SHARES; CERTAIN COVENANTS OF THE COMPANY

     (a) The Company represents and warrants that the Warrants and this Warrant Certificate have been duly authorized and issued by the Company and represent a valid and binding obligation on the Company, enforceable against the Company in accordance with its terms. The Company covenants that all Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be (i) duly authorized, validly issued, fully paid and non-assessable, and (ii) free from all liens, charges and security interests, with the exception of claims arising through the acts or omissions of any Holder and except as arising from applicable Federal and state securities laws.

     (b) The Company shall register this Warrant upon records to be maintained by the Company for that purpose in the name of the record holder of such Warrant from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner thereof for the purpose of any exercise thereof, any distribution to the Holder thereof and for all other purposes.

     (c) The Company will not, by amendment of its certificate of incorporation, by-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all the action as may be necessary or appropriate in order to protect the rights of the Holder to exercise this Warrant , or against impairment of such rights .

3. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES

     (a) The Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3(a) .

          (i)  Subdivision or Combination of Stock . In case the Company shall at any time subdivide (whether by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced and the number of Warrant Shares shall be proportionately increased , and conversely, in case the outstanding shares of Common Stock of the Company shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive even or events described in this Section 3(a)(i) .

          (ii)  Dividends in Stock, Property, Reclassification . If at any time, or from time to time, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefor:

     (A) any shares of stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or

     (B) additional stock or other securities or property (including cash) by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement, (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 3(a)(i) above), then and in each such case, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately, and the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clause (ii) above) which such Holder would hold on the date of such exercise had he been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Exercise Price and the Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 3(a)(ii) .

          (iii)  Reorganization, Reclassification, Consolidation, Merger or Sale . If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property (an “Organic Change”), then, as a condition of such Organic Change, lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable assuming the full exercise of the rights represented by this Warrant. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the

exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holders executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.

     (b)  Certificate as to Adjustments . Upon the occurrence of each adjustment or readjustment pursuant to this Section 3, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall promptly furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; and (ii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

     (c)  Certain Events . If any event occurs as to which the other provisions of this Section 3 are not strictly applicable but the lack of any adjustment would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of such provisions, or if strictly applicable would not fairly protect the purchase rights of the Holder under this Warrant in accordance with the basic intent and principles of such provisions, then the Company’s board of directors will, in good faith, make an appropriate adjustment to protect the rights of the Holder; provided, however, that no such adjustment pursuant to this Section 3(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 3 .

     (d)  Adjustment of Exercise Price Upon Issuance of Additional Shares of Common Stock . In the event the Company shall at any time prior to December 13, 2008, issue Additional Shares of Common Stock (as defined below), without consideration or for a consideration per share less than the Market Price in effect immediately prior to such issuance, then the Exercise Price shall be reduced, concurrently with such issuance, to a price (calculated to the nearest one hundredth of a cent) determined by multiplying such Market Price by a fraction, (A) the numerator of which shall be (1) the number of shares of Common Stock outstanding immediately prior to such issue plus (2) the number of Shares which the aggregate consideration received or to be received by the Company for the total number of Additional Shares of Common Stock so issued or to be issued would purchase at such Market Price; and (B) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of such Additional Shares of Common Stock so issued in such issuance; provided that, for the purpose of this Section 3(d), all shares of Common Stock issuable upon conversion or exchange of convertible securities outstanding immediately prior to such issue shall be deemed to be outstanding. If any issuance of Additional Shares of Common Stock shall require an adjustment to the Exercise Price pursuant to the foregoing provisions of this Section 3(d) , then, effective at the time such adjustment is made, the number of Warrant Shares subject to purchase upon exercise of this Warrant shall be increased to a number determined by multiplying the number of Warrant Shares subject to purchase immediately before such Share Distribution by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such event and the denominator of which shall be the Exercise Price as adjusted in accordance with this Section 3(d) . The provisions of this Section 3(d) shall not operate to increase the Exercise Price or reduce the number of Warrant Shares subject to purchase upon exercise of this Warrant.

For purposes of this Warrant, “Additional Shares of Common Stock” shall mean all shares of Common Stock issued by the Company after the Effective Date (including without limitation any shares of Common Stock issuable upon conversion or exchange of any convertible securities or upon exercise of any option or warrant, on an as-converted basis), other than: (i) shares of Common Stock issued or issuable upon conversion or exchange of any convertible securities or exercise of any options outstanding on the Effective Date; (ii) shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Sections 3(a)(i) through 3(a)(iii) above; or (iii) shares of Common Stock (or options with respect thereto) issued or issuable to employees or directors of, or consultants to, the Company or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Company. The provisions of this Section 3(d) shall not operate to increase the Exercise Price.

4. TRANSFERS AND EXCHANGES OF WARRANT AND WARRANT SHARES

     (a)  Registration of Transfers and Exchanges . Subject to Section 4(c) and 4(d) , upon the Holder’s surrender of this Warrant, with a duly executed copy of the Assignment Notice attached as Exhibit B , to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder, the Company shall register the transfer of all or any portion of this Warrant. Upon such registration of transfer the Company shall issue a new Warrant, in substantially the form of this Warrant, evidencing the acquisition rights transferred to the transferee and a new Warrant, in similar form, evidencing the remaining acquisition rights not transferred, to the Holder requesting the transfer.

     (b)  Warrant Exchangeable for Different Denominations . The Holder may exchange this Warrant for a new Warrant or Warrants, in substantially the form of this Warrant, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder, each of such new Warrants to be dated the date of such exchange and to represent the right to purchase such number of Warrant Shares as shall be designated by the Holder. The Holder shall surrender this Warrant with duly executed instructions regarding such re-certification of this Warrant to the Secretary of the Company at its principal offices or at such other office or agency as the Company may specify in writing to the Holder.

     (c)  Restrictions on Transfers . This Warrant may not be transferred at any time without (i) registration under the Act or (ii) an exemption from such registration and a written opinion of legal counsel addressed to the Company that the proposed transfer of the Warrant may be effected without registration under the Act, which opinion will be in form and from counsel reasonably satisfactory to the Company. For the avoidance of doubt, this Warrant may be transferred separately and independently from the Notes.

     (d)  Permitted Transfers and Assignments . Notwithstanding any provision to the contrary in this Section 4 , the Holder may transfer, with or without consideration, this Warrant or any of the Warrant Shares (or a portion thereof), and the Holder may cause Warrant Shares to be issued upon exercise of any Warrant, to the Holder’s Affiliates without obtaining the opinion from counsel that may be required by Section 4(c)(ii) , provided that the Holder delivers to the Company and its counsel certification, documentation, and other assurances reasonably required by the Company’s counsel to enable the Company’s counsel to render an opinion to the Company’s transfer agent that such transfer does not violate applicable securities laws.

     (e) The legend specified at the top of the first page of this Warrant shall also be placed on all certificates issued upon transfer of, or in exchange for, or in lieu (pursuant to Section 5 ) of, this Warrant.

     (f) The Holder, by accepting this Warrant, consents and agrees with the Company and with every subsequent Holder that, prior to due presentment of this Warrant for registration of transfer, the Company may treat the Person in whose name this Warrant is registered as the owner thereof for all purposes and as the Person entitled to exercise the rights granted under this Warrant, and neither the Company nor any agent thereof shall be affected by any notice to the contrary.

5. MUTILATED OR MISSING WARRANT CERTIFICATE

If this Warrant is mutilated, lost, stolen or destroyed, upon request by the Holder , the Company will, at its expense, issue, in exchange for and upon cancellation of the mutilated Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the form of this Warrant, representing the right to acquire the equivalent number of Warrant Shares, provided however , as a prerequisite to the issuance of a substitute Warrant, the Company may require satisfactory evidence of loss, theft or destruction as well as an indemnity from the Holder of a lost, stolen or destroyed Warrant.

6. PAYMENT OF TAXES

The Company will pay all transfer and stock issuance taxes attributable to the preparation, issuance and delivery of this Warrant and the Warrant Shares (and replacement Warrants) including, without limitation, all documentary and stamp taxes; provided , however , that the Company shall not be required to pay any tax in respect of the transfer of this Warrant, or the issuance or delivery of certificates for Warrant Shares or other securities in respect of the Warrant Shares, to any person or entity other than to the Holder or its transferee.

7. FRACTIONAL WARRANT SHARES

No fractional Warrant Shares shall be issued upon exercise of this Warrant. The Company, in lieu of issuing any fractional Warrant Share, shall round up the number of Warrant Shares issuable to nearest whole share.

8. NO STOCK RIGHTS AND LEGEND

     (a) No holder of this Warrant Certificate, as such, shall be entitled to vote or be deemed the holder of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained herein be construed to confer upon the holder of this Warrant Certificate, as such, the rights of a stockholder of the Company or the right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or give or withhold consent to any corporate action or to receive notice of meetings or other actions affecting stockholders (except as provided herein), or to receive dividends or subscription rights or otherwise (except as provided herein).

     (b) Each certificate for Warrant Shares initially issued upon the exercise of this Warrant Certificate, and each certificate for Warrant Shares issued to any subsequent transferee of any such certificate, except for any Warrant Shares that (i) have been registered under the Securities Act pursuant to Section 9 or (ii) transferred pursuant to Rule 144 or another exemption therefrom pursuant to clause (ii) of Section 4(c) and with respect to which issuance or transfer the opinion required under such clause (ii) is also to the effect that the following legend is not required for the Company to establish compliance with any provision of the Securities Act), shall be stamped or otherwise imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,

AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.”

9. REGISTRATION RIGHTS

     Neither the Warrant nor the Warrant Shares have been registered with the Commission under the Securities Act or qualified for sale pursuant to any state blue sky law, and neither may be sold or transferred without such registration or qualification, except pursuant to an exemption therefrom. No rights shall be hereby granted which are in violation of applicable securities laws or regulations.

     (a)  Demand Registration.

          (i) At any time following March 31, 2008, upon delivery to the Company by the holder or holders of at least 50% of all Warrants and Warrant Shares (such percentage determined by aggregating the number of Warrant Shares into which Warrants are then exercisable and the number of Warrant Shares then outstanding) (such holder or holders, the “ Initiating Holders ”) of a written request (a “ Registration Request ”) that the Company effect a registration under the Securities Act of Registrable Securities, which Registration Request shall specify the number of Registrable Securities proposed to be sold (which number of Registrable Securities for all such Initiating Holder(s) must aggregate at least 50% of the Warrant Shares as of such date), and the intended method of disposition thereof, the Company will:

               (x) promptly (but in any case within ten (10) days) give written notice of such Registration Request to all other holders of Warrants and to all other holders of Registrable Securities, which holders shall be entitled to join such Registration Request by delivering to the Company within thirty (30) days a notice specifying the number of Registrable Securities proposed to be sold and the intended method of disposition thereof, in which case the term “Initiating Holders” shall include such other holders and the Registration Request shall be deemed to cover such holders and such number of Registrable Securities proposed to be sold by such holders; and

               (y) use its commercially reasonable efforts to effect, as expeditiously as practicable, the registration of all Registrable Securities covered by such Registration Request;

provided that (A) subject to Section 9(a)(ii) the Company shall not be obligated to effect a registration of Registrable Securities pursuant to the Warrants on more than one (1) occasion for a Registration Request from the Holders ( provided that in the event that notwithstanding its best efforts, the Company is unable to register 100% of the Registrable Securities in connection with such Registration Request by a Holder or Holders, the Holders shall be entitled to one (1) additional Registration Request), (B) the Company shall not be obligated to effect a registration of Registrable Securities pursuant hereto on more than one (1) occasion in any six (6) month period, and (C) notwithstanding any provision to the contrary herein, the Company may delay the filing of a registration statement for such Registrable Securities for a period

of up to ninety (90) days, measured from the date that the Company receives the applicable Registration Request, by furnishing to each Initiating Holder within ten (10) Business Days of such receipt a certified resolution of the Board of Directors of the Company stating that in the good faith judgment of the Board it would be detrimental or otherwise disadvantageous to the Company and its shareholders for such a registration statement to be filed at such time. If the Company furnishes such certified resolution, the Initiating Holders may, in their discretion, elect to relieve the Company of its obligation to proceed to effect the requested registration of the Registrable Securities upon the expiration of the ninety (90) day period by withdrawing their Registration Request.

          (ii) If the Initiating Holders or the Company so elect, the offering of the Registrable Securities to be registered following a Registration Request shall be in the form of an underwritten offering, in which case (x) the Initiating Holders and the Company shall mutually agree upon and select the managing underwriters and any additional investment bankers and managers to be used in connection with the offering; provided that if the Initiating Holders and the Company cannot mutually agree, the Company will be entitled to select the managing underwriters and additional investment bankers, but the managing underwriters and additional investment bankers so selected must by reasonably satisfactory to the Initiating Holders, (y) the right of any Initiating Holder to cause the Company to register its Registrable Securities pursuant to this Section 9(a) shall be conditioned upon the inclusion of such Initiating Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by such Initiating Holder and a majority in interest of all Initiating Holders) to the extent prov