Exhibit 10.3

                             SUBSCRIPTION AGREEMENT


     Subscription  Agreement,   dated  as  of  July  9,  2001,  among  NetWolves
Corporation, a New York corporation (the "Company"), Pequot Partners Fund, L.P.,
and Pequot International Fund, Inc. (the "Purchasers").

     WHEREAS, the Purchaser desires to subscribe for, and the Company desires to
issue to the  Purchasers,  units (the "Units"),  each Unit  consisting of 20,000
shares of common  stock (the "common  stock") all upon the terms and  conditions
set forth in this Agreement;

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and  of the  mutual
premises,  covenants,  representations  and warranties herein  contained,  it is
hereby agreed as follows:

     1. Subscription Price; Issuance.

     In reliance on the  representations  and  warranties  contained  herein and
subject to the terms and conditions  hereof, the Purchasers hereby subscribe for
60 Units and  concurrently  with  delivery  hereof  have paid to the  Company an
amount equal to $50,000 per Unit or $3,000,000 in the aggregate,  in immediately
available  funds upon the  execution  and  delivery of this  Agreement,  and the
Company  will  issue upon the  closing as  contemplated  by the  Memorandum  (as
hereinafter  defined) to the  Purchasers  20,000 shares of common stock for each
Unit or an aggregate of 1,200,000 shares of common stock.

     2. Representations and Warranties of the Company.

     The Company represents and warrants to the Purchasers as follows:

     2.1.  Corporate  Status.  The  Company  and each of its  subsidiaries  is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it was  incorporated  with full corporate power and
authority  to carry on its  business  as now  conducted  and as  proposed  to be
conducted.

     2.2.  Authority of  Agreement.  The Company has the power and  authority to
execute and deliver this Agreement and to carry out its  obligations  hereunder.
The execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions  contemplated  hereby have been duly authorized
by all necessary  corporate action on the part of the Company and this Agreement
constitutes the valid and legally binding obligation of the Company  enforceable
against  the  Company in  accordance  with its terms,  except as the same may be
limited by bankruptcy,  insolvency,  reorganization  or other laws affecting the
enforcement  of  creditors'  rights  generally  now or  hereafter  in effect and
subject to the  application  of equitable  principles  and the  availability  of
equitable remedies. The issuance of these shares are not and will not be subject
to  preemptive  rights or right of first  refusal  that  have not been  properly
waived or complied with.
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     2.3.  No  Conflicts.  The  execution,  delivery  and  performance  of  this
Agreement and the other instruments and agreements to be executed, delivered and
performed  by  the  Company   pursuant  hereto  and  the   consummation  of  the
transactions  contemplated hereby and thereby by the Company do not and will not
with or without the giving of notice or the passage of time or both,  violate or
conflict  with or result  in a breach or  termination  of any  provision  of, or
constitute a default under,  the Certificate of  Incorporation or the By-Laws of
the  Company or any order,  judgment,  decree,  statute,  regulation,  contract,
agreement  or any  other  restriction  of any kind or  description  to which the
Company or its assets may be bound or subject.  The Company is not in  violation
of or (with or without  notice or lapse of time or both) in default  under,  any
material term or provision of its Certificate of Incorporation or By-Laws or any
indenture,  loan  or  credit  agreement,  note  agreement,   mortgage,  security
agreement  or  other  agreement,  lease  or  other  instrument,   commitment  or
arrangement to which the Company is a party or by which the Company's assets are
bound.

     2.4 Fully Paid and  Non-Assessable.  Upon issuance of the Units and payment
therefor pursuant to the terms hereof, each Share shall be validly issued, fully
paid and non-assessable.

     2.5 Certificate and Bylaws.  The copies of the Certificate of Incorporation
and Bylaws of the Company  which have been  delivered to (or made  available for
inspection  by) the Purchaser  prior to the execution of this Agreement are true
and complete and have not been amended or repealed.

     2.6 Qualification.  The Company is duly qualified as a foreign  corporation
and in good standing in the State of Florida. The Company is not qualified to do
business as a foreign  corporation in any other  jurisdiction and the failure to
be so qualified  would not have a material and adverse  effect on the  business,
assets,  property,  or  financial  condition of the Company  ("Material  Adverse
Effect").

     2.7 Capital Stock.

     (a) As of the Closing  Date,  the  authorized  capital stock of the Company
will consist of (i) 2,000,000  shares of preferred  stock,  par value $.0033 per
share, none of which are issued and outstanding;  and, (ii) 50,000,000 shares of
Common  Stock of which  9,142,638  are  issued and  outstanding  prior to giving
effect to the  transaction  contemplated  by this  Agreement and prior to giving
effect to the issuance of any shares of Common Stock pursuant to the exercise of
outstanding  options and warrants,  and the Company will have no authority under
its  Certificate of  Incorporation  to issue any other capital  stock.  All such
outstanding  shares of Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable.

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     (b) As of the Closing  Date,  the Company has reserved a total of 6,918,000
shares of Common  Stock for  issuance  upon the  exercise  of stock  options  or
purchase  rights  granted  under its stock  plans or under  other  stock  option
agreements or warrants.

     (c)  Except  as  contemplated  by this  Agreement  and as set  forth in the
Memorandum and SEC filings, the Company has no outstanding subscription, option,
warrant,  right of first refusal,  preemptive  right,  call,  contract,  demand,
commitment,  convertible security or other instrument,  agreement or arrangement
of any  character  or  nature  whatever  under  which the  Company  is or may be
obligated to issue common stock, preferred stock or other equity security of any
kind.

     2.8 Binding Obligations.

     (a) This Agreement  constitutes the legal, valid and binding obligations of
the  Company,  enforceable  against  the Company in  accordance  with its terms,
except as such  enforcement  is  limited  by  bankruptcy,  insolvency  and other
similar laws affecting the enforcement of creditors'  rights  generally,  and by
general equitable principles.

     (b) The Units and  underlying  shares of common  stock are duly  authorized
and,  when issued and paid for in accordance  with the terms of this  Agreement,
will  be duly  authorized,  validly  issued  and  outstanding,  fully  paid  and
nonassessable and free and clear of all liens and restrictions, other than liens
that might have been  created or suffered by any  Purchaser  with respect to its
Units and  restrictions  imposed by the Securities Act, state securities laws or
this Agreement.

     2.9 Securities  Laws.  Subject to the accuracy of the  representations  and
warranties  contained  in Section 3, the offer,  issue and sale of the Units and
underlying  common stock are and will be exempt from registration and prospectus
delivery  requirements  of the  Securities  Act,  are and  will be  exempt  from
qualification  under  Florida  Securities  Law  and are and  will be  issued  in
compliance with all applicable federal and state securities laws.

     2.10  Financial  Statements.  Included in the Form 10-Q for the nine months
ended March 31, 2001 are the  Company's  unaudited  balance  sheet (the "Balance
Sheet") as of March 31, 2001 ("Form 10-Q") (the "Balance  Sheet Date"),  and the
unaudited statement of operations for the nine-month period then ended. Included
in the 2000 Annual Report are the Company's  audited  balance  sheets as of June
30,  2000 and the audited  statements  of  operations,  cash flow and changes of
stockholders' equity for the period then ended, together with the related report
of Richard A. Eisner & Company,  LLP, independent  certified public accountants.
The foregoing financial  statements (i) are complete and correct in all material
respects and are in accordance  with the books and records of the Company,  (ii)
present fairly the financial  condition of the Company at the Balance Sheet Date
and other dates therein  specified and the results of operations  and changes in
financial position of the Company for the periods therein  specified,  and (iii)
have been prepared in accordance with generally accepted  accounting  principles
applied on a basis  consistent with prior  accounting  periods,  except that the
unaudited financial  statements are subject to year-end audit adjustments and do
not contain  complete  footnotes  or  statement  of  stockholders'  equity.  The


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Company, or its subsidiaries, has no liabilities or obligations, either acquired
or absolute, contingent or otherwise, which are not reflected or provided for in
the financial  statements  except  liabilities  not in excess of $100,000 in the
aggregate  arising  after the  Balance  Sheet Date which  were  incurred  in the
ordinary course of business.

     2.11 Changes. Since the Balance Sheet Date, except as disclosed in the Form
10-Q or Private Placement Memorandum, there has been no event which would have a
Material  Adverse Effect.  Since the Balance Sheet Date,  except as disclosed in
the Form 10-Q or in the Private  Placement  Memorandum,  the Company has not (a)
mortgaged,  pledged or subjected to lien any of its material assets, tangible or
intangible,  (b) sold,  transferred or leased a material  portion of its assets,
(c) cancelled or compromised  any material debt or claim,  or waived or released
any right, of material value, (d) suffered any physical  damage,  destruction or
loss  (whether  or not  covered  by  insurance)  having a material  effect,  (e)
declared or paid any dividends on or made any other  distributions  with respect
to, or purchased or redeemed,  any of its outstanding equity securities,  or (f)
suffered or  experienced  any  material  adverse  change or loss in its business
other than its continuing losses from operations.

     2.12 Material  Agreements of the Company.  The Company is not a party to or
otherwise bound by any written or oral agreement, instrument or arrangement that
is material to the Company except for those  agreements  included as exhibits to
the 2000 Annual Report or the Form 10-Q or as set forth in the Private Placement
Memorandum ("Material  Contracts").  The Company has furnished or made available
to each Purchaser true and complete  copies of all such agreements and all other
agreements,  instruments and other  documents  requested by any Purchaser or its
authorized  representative.  The  Company  is not  in  default  of any  Material
Contract.

     2.13  Litigation.  Except  as  disclosed  in the  10-Q,  there is no action
pending and, to the best knowledge of the Company,  there is no material  action
threatened  against the Company or its properties or assets.  The Company is not
in default  with  respect  to any order,  writ,  judgment,  injunction,  decree,
determination  or  award  of  any  court  or of  any  governmental  entity.  The
litigations disclosed in the 10-Q will not have a Material Adverse Effect.

     2.14 Brokers or Finders. The Company has not incurred,  and will not incur,
directly or  indirectly,  as a result of any action  taken by the  Company,  any
liability for brokerage or finders' fees or agents'  commissions  or any similar
charges in connection with this  Agreement.  The Company agrees to indemnify and
hold  harmless  the  Purchaser  from any  damages  they incur as a result of any
claims for such fees, commissions or charges.

     2.15  Disclosure.   The  representations  and  warranties  of  the  Company
contained herein, when read together with the Private Offering  Memorandum,  the
Form 10-Q and the 2000  Annual  Report do not contain  any untrue  statement  of
material fact or omit to state a material fact  necessary to make the statements
therein,  in  light  of  the  circumstances  under  which  they  are  made,  not
misleading.

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     2.16 Intellectual Property.

     (a) To the  best of the  Company's  knowledge  (after  due  inquiry  of all
officers of the Company),  the Company has sufficient  title to and ownership of
or  rights to all  patents,  patent  rights,  patent  applications,  inventions,
trademarks, service marks, trade names, copyrights and information,  proprietary
rights and processes  necessary for the conduct of its business,  and the use by
the  Company  of  the  foregoing   does  not  conflict  with  or  constitute  an
infringement  of the rights of others.  The  Company  has  sufficient  licenses,
permits and other  governmental  authorizations  required for the conduct of its
business as currently  conducted  and is not in default  with  respect  thereto,
except as the failure to have any such license,  permit or  authorization or any
default with respect thereto would not have a Material Adverse Effect.

     (b) The Company has not received any  communications  alleging  that it has
violated,  has no knowledge that the Company has violated,  or by conducting its
business,  the Company will not, to the best of its knowledge,  violate,  any of
the patents, patent applications,  inventions,  trademarks, service marks, trade
names, copyrights or trade secrets, confidential information, proprietary rights
or processes of any other person.

     2.17 Retirement Obligations. Except for a non-contributory 401(k) plan, the
Company  does not have any  Employee  Benefit  Plan as defined  in the  Employee
Retirement Income Security Act of 1974, as amended.

     2.18 No  Governmental  Consent or Approval  Required.  Based in part on the
representations  made  by the  Purchaser  in  Section  3 of this  Agreement,  no
authorization,   consent,  approval  or  other  order  of,  declaration  to,  or
registration,  qualification,  designation or filing with, any federal, state or
local  governmental  agency or body is  required  by or from the Company for the
valid and lawful  authorization,  execution  and delivery by the Company of this
Agreement or any other agreement  entered into by the Company in connection with
this Agreement,  and  consummation of the  transactions  contemplated  hereby or
thereby, or for the valid and lawful authorization,  issuance, sale and delivery
of the Units or for the valid and lawful authorization,  reservation,  issuance,
sale and delivery of the Units,  other than the qualification (or taking of such
action as may be  necessary  to  secure  an  exemption  from  qualification,  if
available) of the offer and sale of the Units under the New York  Securities Law
and applicable  federal  securities laws, which filings and  qualifications,  if
required,  will be  accomplished  in a timely  manner so as to comply  with such
qualification or exemption from qualification requirements.

     2.19 Nasdaq Listing  Compliance.  The Company's  Common Stock is registered
pursuant to Section  12(g) of the Exchange Act and is listed on the Nasdaq Small
Cap Market and the  Company has taken no action  designed  to, or likely to have
the effect of,  terminating  the  registration  of the  Common  Stock  under the
Exchange  Act or  de-listing  the Common Stock from the Nasdaq Small Cap Market,
nor has the Company received,  nor has it any reason to believe it will receive,
any  notification   that  the  Commission  or  Nasdaq,   Inc.  is  contemplating
terminating such registration or listing.

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     2.20  Reporting  Status.  The  Company  has  filed in a timely  manner  all
documents  that the Company was  required to file under the  Exchange Act during
the 12 months  preceding the date of this Agreement and such documents  complied
as to form in all material  respects with the  Commission's  requirements  as of
their respective  filing dates, and the information  contained therein as of the
date thereof did 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 light of the circumstances  under which they were made not
misleading.

     2.21 Compliance with Nasdaq Requirements. The Company shall comply with all
requirements of Nasdaq, Inc. with respect to the issuance of the Units.

     2.22  Eligibility  to File Form S-3. The Company is  currently  eligible to
register  the resale of common stock in a secondary  offering on a  registration
statement on Form S-3 under the Securities Act.

     3. Representations and Warranties of the Purchasers.

     The Purchasers, jointly and severally, represent and warrant to the Company
as follows:

     3.1. Status.

     If the Purchasers  are a corporation  or other entity,  each Purchaser is a
corporation  or  other  entity  duly  organized,  validly  existing  and in good
standing under the laws of the jurisdiction of its organization  with full power
and  authority  to  execute,  deliver and  perform  its  obligations  under this
Agreement.  If the  Purchasers  are an  individual,  the  Purchasers  have legal
capacity to execute,  deliver  and  perform  his or her  obligations  under this
Agreement.

     3.2 Authority for Agreements.

     The  Purchasers  have the power and  authority  to execute and deliver this
Agreement and to carry out its obligations  hereunder.  The execution,  delivery
and performance by the Purchasers of this Agreement and the  consummation of the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
action on the part of the Purchasers and this  Agreement  constitutes  the valid
and  legally  binding  obligation  of the  Purchasers,  enforceable  against the
Purchasers  in accordance  with its terms,  except as the same may be limited by
bankruptcy,  insolvency,  reorganization or other laws affecting the enforcement
of  creditors'  rights  generally  now or hereafter in effect and subject to the
application of equitable principles and the availability of equitable remedies.

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<PAGE>

     3.3. No Conflicts.

     The  execution,  delivery and  performance  of this Agreement and the other
instruments  and  agreements  to be  executed,  delivered  and  performed by the
Purchasers pursuant hereto and the consummation of the transactions contemplated
hereby and  thereby by the  Purchasers  do not and will not with or without  the
giving of notice or the  passage of time or both,  violate or  conflict  with or
result in a breach or  termination  of any provision of, or constitute a default
under, the Certificate of Incorporation or the By-Laws of the Purchasers (if the
Purchasers  are a  corporation),  any other  organizational  instrument  (if the
Purchasers are a legal entity other than a corporation) or any order,  judgment,
decree, statute, regulation, contract, agreement or any other restriction of any
kind or  description  to  which  the  Purchasers  are a party  or by  which  the
Purchasers may be bound.

     3.4. Investor Representations and Acknowledgments.

     (a) The Purchasers are acquiring the Units and underlying  common stock for
the Purchasers' own accounts for investment only and not as nominee or agent and
not with a view to, or for sale in connection  with, a distribution of the Units
or its  components  and with no  present  intention  of  selling,  transferring,
granting a participation in or otherwise  distributing,  the Units or underlying
common stock,  all within the meaning of the Securities Act of 1933, as amended,
and  the  rules  and  regulations  thereunder  (the  "Securities  Act")  and any
applicable state, securities or blue-sky laws.

     (b) The  Purchasers are not a party or subject to or bound by any contract,
undertaking,  agreement  or  arrangement  with any person to sell,  transfer  or
pledge the Units or any part thereof to any person, and has no present intention
to enter into such a contract, undertaking, agreement or arrangement.

     (c) The Purchasers acknowledges to the Company that:

          (i) The  Company  has  advised  the  Purchasers  that  the  Units  and
     underlying  common stock have not been registered  under the Securities Act
     or under  the laws of any  state on the  basis  that the  issuance  thereof
     contemplated by this Agreement is exempt from such registration;

          (ii) The Company's  reliance on the availability of such exemption is,
     in part,  based  upon the  accuracy  and  truthfulness  of the  Purchasers'
     representations contained herein;

          (iii) The common stock  cannot be resold  without  registration  or an
     exemption under the Securities Act and such state securities laws, and that
     certificates  representing the common stock will bear a restrictive  legend
     to such effect;

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          (iv) The Purchasers  have evaluated the merits and risks of purchasing
     the Units,  and has such knowledge and experience in financial and business
     matters that the  Purchasers are capable of evaluating the merits and risks
     of such purchase,  is aware of and has  considered the financial  risks and
     financial hazards of purchasing the Units, and is able to bear the economic
     risk of purchasing the Units,  including the possibility of a complete loss
     with respect thereto;

          (v) The Purchasers have had access to such  information  regarding the
     business and finances of the Company,  including  without  limitation,  the
     Private Placement  Memorandum dated June 21, 2001 including  exhibits,  the
     Company's  unaudited  financial   statements  included  in  the  Memorandum
     delivered  by the Company to the  Purchasers,  and have been  provided  the
     opportunity to discuss with the Company's management the business,  affairs
     and financial  condition of the Company and such other matters with respect
     to the  Company  as would  concern  a  reasonable  person  considering  the
     transactions  contemplated  by this  Agreement  and/or  concerned  with the
     operation of the Company;

          (vi)  All the  information  which is set  forth  with  respect  to the
     Purchasers  in  the  Qualified  Purchasers  Questionnaire  executed  by the
     Purchasers, all of which are incorporated herein by this reference, and all
     of the  Purchasers'  representations  and  warranties  set forth herein are
     correct and  complete as of the date of this  Agreement,  shall be true and
     correct  as  of  the  closing  of  the  transaction  contemplated  by  this
     Agreement,  shall  survive such closing and if there should be any material
     change in such information prior to the sale to the Purchasers of the Units
     the  Purchasers  will   immediately   furnish  such  revised  or  corrected
     information to the Company; and

          (vii)   Additional   Representations   and  Warranties  of  Accredited
     Investors. The Purchasers, by initialing the applicable paragraph below (a)
     through (g) hereby  represents and warrants that the Purchasers are each an
     "Accredited  Investor",  because the Purchasers comes within one or more of
     the  enumerated  categories.  The  Purchasers  have  reviewed  the Investor
     Suitability  Standards  attached  as Annex A hereto and  confirms  it is an
     "Accredited  Investor" as indicated below. Place your initials in the space
     provided  in  the   beginning  of  each   applicable   paragraph,   thereby
     representing  and warranting as to the  applicability  to the Purchasers of
     the initialed paragraph or paragraphs:

          [ ] (a) any individual  Purchaser  whose net worth, or joint net worth
     with that person's spouse at the time of his purchase,  exceeds  $1,000,000
     (including any individual  participant of a Keogh Plan, IRA or IRA Rollover
     Purchaser);

          [ ] (b) any  individual  Purchaser  who had an  income  in  excess  of
     $200,000  in each of the two most  recent  years or joint  income with that
     person's  spouse  in  excess  of  $300,000  in each of those  years and who
     reasonably  expects  an income in  excess of the same  income  level in the
     current year (including any individual  participant of a Keogh Plan, IRA or
     IRA Rollover Purchaser);

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          [ ] (c) any  corporation  or  partnership  not formed for the specific
     purpose of making an investment  in the Units,  with total assets in excess
     of $5,000,000;

          [ ] (d) any trust,  which is not formed  for the  specific  purpose of
     investing in the Units,  with total assets in excess of  $5,000,000,  whose
     purchase is directed by a sophisticated  person, as such term is defined in
     Rule 506(b) of Regulation D under the Securities Act;

          [ ] (e) any ERISA Plan if the  investment  decision  is made by a plan
     fiduciary,  as defined in section  3(21) of ERISA,  which is either a bank,
     insurance company, or registered  investment adviser, or the Plan has total
     assets in excess of $5,000,000;

          [ ] (f) any  entity in which all of the equity  owners are  Accredited
     Investors  under  paragraphs  (a),  (b) or (c)  above or any  other  entity
     meeting  required  "Accredited   Investor"  standards  under  Rule  501  of
     Regulation D under the Securities Act and applicable  State  securities law
     criteria;

          [ ] (g) other (please explain)

     4. Registration of Restricted Stock.

     4.1 Required Registration.

     (a) After 90 days from closing,  Purchaser can demand that the Company file
a registration  statement  covering its shares included in the Units ("Shares").
Within 14  business  days after  demand the  Company  shall  prepare  and file a
registration statement on Form S-3 under the Securities Act or other appropriate
Form in the event Form S-3 is not  available,  covering the Shares and shall use
commercially  reasonable efforts to cause such registration  statement to become
effective  as  expeditiously  as  possible  and to  remain  effective  until the
earliest  to occur of (i) the date the Shares  covered  thereby  have been sold,
(ii) the date by which all  Shares  covered  thereby  may be sold under Rule 144
without  restriction as to volume and own less than 1% of outstanding shares, or
(iii) the date which is the  36-month  anniversary  of the closing  date for the
Units.

     (b) Following the effectiveness of a registration  statement filed pursuant
to this section, the Company may, at any time, suspend the effectiveness of such
registration for up to thirty (30) days, as appropriate (a "Suspension Period"),
by giving  notice to the  Purchasers of Units,  if the board of directors  shall
have  reasonably  determined  in good faith  that the  Company  is  required  to
disclose any material corporate development which disclosure may have a Material
Adverse Effect on the Company.  Notwithstanding the foregoing,  no more than one
Suspension Period may occur during any twelve-month  period,  unless approved by
Purchasers.  The Company  shall use its best  efforts to limit the  duration and
number of any  Suspension  Periods.  The  Purchasers  of Units agree that,  upon


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receipt of any notice from the Company of a Suspension Period, the Purchasers of
Units  shall  forthwith  discontinue   disposition  of  Units  covered  by  such
registration  statement  or  prospectus  until the  Purchasers  of Units (i) are
advised in writing by the Company that the use of the applicable  prospectus may
be resumed,  (ii) have received copies of a supplemental or amended  prospectus,
if applicable,  and (iii) have received copies of any additional or supplemental
filings which are  incorporated  or deemed to be  incorporated by reference into
such prospectus.

     (c) If the registration  statement required to be filed pursuant to Section
4.1(a)  has not  been  filed by the  Company  with  the  Commission  by the 14th
business day following the demand date or has not been declared effective by the
Commission  within 50  calendar  days after the filing  date  (either  event,  a
"Registration Default"), then following such Registration Default and until such
Registration Default is cured by the Company filing such registration  statement
with the Commission and such registration  statement being declared effective by
the Commission (a "Registration  Cure"), the Company shall pay to each Purchaser
an amount (the "Default  Payment")  equal to the product of (x) one thirtieth of
one percent of the purchase  price of the shares  acquired by such  Purchaser on
the Closing Date,  multiplied by (y) the number of days which elapse between the
date of the  Registration  Default  and the date of the  Registration  Cure (the
"Registration  Default Period").  The Default Payment may be paid in either cash
or additional  shares of Common Stock,  such form of payment to be determined at
the election of the Company each 30 days during the Registration  Default Period
up to the 90th  day  following  the  date of the  demand  and  thereafter  to be
determined  at  the  election  of  the  Purchasers   each  30  days  during  the
Registration  Default Period,  with the number of additional  Shares  calculated
based upon the closing price of the  Company's  Common Stock on the Nasdaq Small
Cap Market on the  trading day  immediately  prior to the end of the period with
respect to which such Default  Payment  relates.  The Company and the Purchasers
agree that the damages resulting from a Registration  Default would be difficult
or impossible to determine and that the Default Payment  represents a reasonable
approximation of the anticipated damages. Accordingly, the Purchasers agree that
the receipt of the  Default  Payment  shall be  Purchasers'  sole and  exclusive
remedy under this Agreement or otherwise for a Registration  Default,  and in no
event shall the Company be liable for any lost profits, consequential,  special,
punitive  or  similar  damages,  no  matter  how  identified,  resulting  from a
Registration Default. Notwithstanding the foregoing, Purchaser shall be entitled
to exercise the right to seek specific performance of the Company's  obligations
under the Agreement.

     4.2 Registration  Procedures.  When the Company effects the registration of
the Units under the  Securities  Act  pursuant  to Section  4.1(a)  hereof,  the
Company will, at its expense, as expeditiously as possible:

     (a) In accordance  with the Securities Act and the rules and regulations of
the Commission,  prepare and file in accordance  with Section  4.1(a),  with the
Commission  a  registration  statement  with  respect  to the Shares and use its
commercially  reasonable efforts to cause such registration  statement to become
and remain effective for the period described herein,  and prepare and file with


                                       10
<PAGE>

the Commission such amendments to such registration statement and supplements to
the prospectus  contained  therein as may be necessary to keep such registration
statement  effective  for  such  period  and  such  registration  statement  and
prospectus accurate and complete for such period;

     (b) Furnish to the Purchasers of Shares  participating in such registration
such  reasonable  number of copies of the  registration  statement,  preliminary
prospectus,  final  prospectus and such other  documents as such  Purchasers may
reasonably request in order to facilitate the public offering of the Shares;

     (c) Use its best efforts to register or qualify the Shares  covered by such
registration  statement  under  such state  securities  or blue sky laws of such
jurisdictions  as such  participating  Purchasers may reasonably  request within
twenty (20) days following the original filing of such  registration  statement,
except  that the  Company  shall not for any  purpose be  required  to execute a
general  consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction where it is not so qualified;

     (d) Notify the  Purchasers  participating  in such  registration,  promptly
after  it  shall  receive  notice  thereof,  of the  date  and  time  when  such
registration  statement  and each  post-effective  amendment  thereto has become
effective or a supplement to any prospectus  forming a part of such registration
statement has been filed;

     (e) Notify such  Purchasers  promptly of any request by the  Commission for
the amending or  supplementing of such  registration  statement or prospectus or
for additional information;

     (f) Prepare and file with the Commission,  promptly upon the request of any
such Purchasers, any amendments or supplements to such registration statement or
prospectus  which,  in the opinion of counsel for such  Purchasers,  is required
under the Securities Act or the rules and  regulations  thereunder in connection
with the distribution of the Shares by such Purchasers;

     (g) Cause to have  prepared and filed with the  Commission  such reports or
opinions  as  may  reasonably  be  requested  by  any   underwriter,   including
appropriate legal opinions and comfort letters, if applicable.

     (h) Prepare and promptly file with the Commission, and promptly notify such
Purchasers of the filing of, such amendments or supplements to such registration
statement  or  prospectus  as may be  necessary  to correct  any  statements  or
omissions  if, at the time when a  prospectus  relating  to such  securities  is
required to be delivered under the Securities Act, any event has occurred as the
result of which any such  prospectus  or any other  prospectus as then in effect
would  include  an  untrue  statement  of a  material  fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading; and

                                       11
<PAGE>

     (i) Advise  such  Purchasers,  promptly  after it shall  receive  notice or
obtain  knowledge  thereof,  of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the  issuance of any stop order or to obtain its  withdrawal  if such
stop order should be issued.

     4.3 Expenses. With respect to any registration effected pursuant to Section
4.1 hereof,  all fees, costs and expenses of and incidental to such registration
and the public  offering in connection  therewith shall be borne by the Company,
provided, however, that the Purchasers of Shares shall bear their own legal fees
in  excess  of  $5,000  in  the  aggregate  and  their  pro  rata  share  of any
underwriting discounts or commissions, if any.

     4.4 Indemnification.

     (a) The Company will  indemnify  and hold  harmless  each  Purchaser of the
Units which are included in a registration  statement pursuant to the provisions
of Section 4 hereof and any  underwriter  (as defined in the Securities Act) for
such Purchaser,  and any person who controls such Purchaser or such  underwriter
within the meaning of the Securities Act, and any officer,  director,  employee,
agent,  partner,  member or affiliate of such  Purchaser  (for  purposes of this
Section 4.4(a), the "Indemnified Parties"), from and against, and will reimburse
such  Purchaser  and each such  Indemnified  Party with  respect to, any and all
claims, actions,  demands, losses, damages,  liabilities,  costs and expenses to
which such Purchaser or any such Indemnified  Party may become subject under the
Securities Act or otherwise,  insofar as such claims, actions,  demands, losses,
damages,  liabilities,  costs or  expenses  arise out of or are  based  upon (i)
violation  of  securities  laws;  (ii) any untrue  statement  or alleged  untrue
statement of any material fact  contained in such  registration  statement,  any
prospectus  contained therein or any amendment or supplement  thereto,  or arise
out of or are based upon the  omission or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading,  or (iii) any breach of any  representation,  warranty,
agreement or covenant of the Company contained herein;  provided,  however, that
the  Company  will not be liable in any such  case to the  extent  that any such
claim, action, demand, loss, damage,  liability, cost or expense is caused by an
untrue  statement or alleged untrue statement or omission or alleged omission so
made in strict  conformity with information  furnished by such Purchaser or such
Indemnified Party in writing specifically for use in the preparation thereof.

     (b) Each  Purchaser  of the Units  which  are  included  in a  registration
pursuant to the  provisions of Section 4 hereof will indemnify and hold harmless
the Company,  and any Person who controls the Company  within the meaning of the
Securities  Act,  from and  against,  and will  reimburse  the  Company and such
controlling Persons with respect to, any and all losses,  damages,  liabilities,
costs or  expenses to which the  Company or such  controlling  Person may become
subject under the Securities Act or otherwise,  insofar as such losses, damages,
liabilities,  costs or  expenses  are  caused by any  untrue or  alleged  untrue
statement of any material fact  contained in such  registration  statement,  any
prospectus  contained  therein or any  amendment or supplement  thereto,  or are
caused by the omission or the alleged  omission to state therein a material fact
required to be stated  therein or necessary to make the statements  therein,  in


                                       12
<PAGE>

light of the circumstances in which they were made, not misleading, in each case
to the extent,  but only to the extent,  that such untrue  statement  or alleged
untrue  statement or omission or alleged omission was so made solely in reliance
upon  and in  strict  conformity  with  written  information  furnished  by such
Purchaser  specifically for use in the preparation thereof;  provided,  however,
that the liability of any  Purchaser of Units  pursuant to this  subsection  (b)
shall be limited to an amount not to exceed the net  proceeds  received  by such
Purchaser  pursuant  to the  registration  statement  which  gives  rise to such
obligation to indemnify.

     (c)  Promptly  after  receipt  by  a  party  indemnified  pursuant  to  the
provisions  of  paragraph  (a) or (b)  of  this  Section  4.4 of  notice  of the
commencement  of any  action  involving  the  subject  matter  of the  foregoing
indemnity  provisions,  such indemnified party will, if a claim thereof is to be
made against the indemnifying  party pursuant to the provisions of paragraph (a)
or (b),  notify the  indemnifying  party of the  commencement  thereof;  but the
omission  so to notify  the  indemnifying  party  will not  relieve  it from any
liability  which it may have to an indemnified  party  otherwise than under this
Section 4.4 and shall not relieve the  indemnifying  party from liability  under
this Section 4.4 unless such indemnifying party is materially prejudiced by such
omission.  In case such action is brought against any  indemnified  party and it
notifies the indemnifying  party of the commencement  thereof,  the indemnifying
party  shall have the right to  participate  in,  and, to the extent that it may
wish, jointly with any other indemnifying  party similarly  notified,  to assume
the defense thereof,  with counsel  reasonably  satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof,  the indemnifying  party will not
be liable to such indemnified party pursuant to the provisions of such paragraph
(a) or (b)  for  any  legal  or  other  expense  subsequently  incurred  by such
indemnified  party in connection  with the defense thereof other than reasonable
costs of investigation.  No indemnifying party shall be liable to an indemnified
party for any  settlement  of any  action or claim  without  the  consent of the
indemnifying  party. No indemnifying party will consent to entry of any judgment
or enter into any  settlement  which does not include as an  unconditional  term
thereof the giving by the claimant or plaintiff to such  indemnified  party of a
release  from all  liability  in  respect  to such  claim or  litigation  and no
settlement can have non-monetary remedies.

     (d) If the  indemnification  provided for in subsection  (a) or (b) of this
Section 4.4 is held by a court of competent  jurisdiction to be unavailable to a
party to be indemnified with respect to any claims,  actions,  demands,  losses,
damages,  liabilities,   costs  or  expenses  referred  to  therein,  then  each
indemnifying  party  under any such  subsection,  in lieu of  indemnifying  such
indemnified party thereunder,  hereby agrees to contribute to the amount paid or
payable by such indemnified party as a result of such claims, actions,  demands,
losses,  damages,  liabilities,  costs  or  expenses  in such  proportion  as is
appropriate to reflect the relative fault of the  indemnifying  party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions which resulted in such claims, actions,  demands,  losses, damages,
liabilities,  costs  or  expenses,  as  well  as any  other  relevant  equitable
considerations.  The  relative  fault  of  the  indemnifying  party  and  of the
indemnified  party shall be  determined  by reference  to,  among other  things,


                                       13
<PAGE>

whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied by the indemnifying  party or by the indemnified party and the parties'
relative intent, knowledge,  access to information and opportunity to correct or
prevent such statement or omission.  The amount any Purchaser of the Units shall
be obligated to contribute  pursuant to this  subsection (d) shall be limited to
an amount not to exceed the net proceeds received by such Purchaser  pursuant to
the registration statement which gives rise to such obligation to contribute. No
person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Securities  Act) shall be entitled to  contribution  hereunder from
any person who was not guilty of such fraudulent misrepresentation.

     4.5 Reporting Requirements Under the Exchange Act. The Company shall timely
file such  information,  documents and reports as the  Commission may require or
prescribe  under  Section 13 of the Exchange Act. The Company  acknowledges  and
agrees that the purposes of the  requirements  contained in this Section 4.5 are
to  enable  the  Purchaser  of the  Units  to  comply  with the  current  public
information  requirement  contained in paragraph (c) of Rule 144 should any such
Purchaser ever wish to dispose of any of the Shares without  registration  under
the  Securities  Act in reliance upon Rule 144 (or any other  similar  exemptive
provision).

     4.6  Stockholder  Information.  The Company may require  each  Purchaser of
Units to furnish the Company such information with respect to such Purchaser and
the  distribution  of its Shares as the Company may from time to time reasonably
request  in  writing  as  shall  be  required  by law or by  the  Commission  in
connection therewith.

     5. Further Assurances.

     At any time and from time to time after the date hereof,  each party shall,
without  further  consideration,  execute  and  deliver  to the other such other
instruments  or  documents  and shall take such  other  actions as the other may
reasonably request to carry out the transactions contemplated by this Agreement.

     6. Miscellaneous.

     Any party may waive  compliance by the other with any of the  provisions of
this Agreement. No waiver of any provision shall be construed as a waiver of any
other provision.  Any waiver must be in writing.  The headings contained in this
Agreement  are for  reference  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.  This Agreement may not be modified
or amended except in writing signed by both parties  hereto.  This Agreement may
be executed in several counterparts,  each of which shall be deemed an original,
and all of which shall  constitute one and the same  instrument.  This Agreement
shall be  governed  in all  respects,  including  validity,  interpretation  and
effect,  by the laws of the State of New York,  applicable to contracts made and
to be performed in New York.  This Agreement  shall be binding upon and inure to
the benefit of and be  enforceable  by the successors and assigns of the parties


                                       14
<PAGE>

hereto. This Agreement shall not be assignable by either party without the prior
written consent of the other, such consent not to be unreasonably  withheld. The
rights and obligations contained in this Agreement are solely for the benefit of
the  parties  hereto and are not  intended to benefit or be  enforceable  by any
other party, under the third party beneficiary doctrine or otherwise.

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

                                       15
<PAGE>

                 EXECUTION PAGE FOR SUBSCRIPTION BY INDIVIDUALS
            (not applicable to subscriptions by entities, Individual
                Retirement Accounts, Keogh Plans or ERISA Plans)

TOTAL SUBSCRIPTION AMOUNT $______________________.
[ ]  INDIVIDUAL OWNER                     [ ] CUSTODIAN UNDER
     (One signature required below)           Uniform Gifts to Minors Act
[ ]  JOINT TENANTS WITH RIGHT                ___________________________________
     OF SURVIVORSHIP                         (Insert applicable state)
     (All tenants must sign below)        [ ] (Custodian must sign below)
[ ]  TENANTS IN COMMON                       COMMUNITY PROPERTY
     (All tenants must sign below)           (Both spouses in community property
                                             states must sign below)
Print information as it is to appear on the Company records.

-------------------------------------   ----------------------------------------
Name of Subscriber)                         (Social Security or Taxpayer ID No.)


-------------------------------------

-------------------------------------   ----------------------------------------
(Home Address)                          (Home Telephone)


-------------------------------------

-------------------------------------   ----------------------------------------
(Business Address)                       (Business Telephone)

-------------------------------------   ----------------------------------------
(Name of Co-Subscriber)                  (Social Security or Taxpayer ID No.)


-------------------------------------


-------------------------------------   ----------------------------------------
(Home Address)                          (Home Telephone)


-------------------------------------


-------------------------------------   ----------------------------------------
Business Address)                        (Business Telephone)

                                  SIGNATURE(S)
                                  ------------
Dated:______________, 2001.

(1) By:                                 (2)  By:
    -----------------------------------     ------------------------------------
    Signature of Authorized Signatory       Signature of Authorized Co-Signatory

   -----------------------------------     -------------------------------------
   Print Name of Signatory and Title,      Print Name of Co-Signatory and Title,
           if applicable                             if applicable

ACCEPTED AND AGREED:
NETWOLVES CORPORATION
By:                                         Dated:                 , 2001.
    -----------------------------------     ------------------------------------
      Name:
      Title:



                                       16
<PAGE>

                        (ACKNOWLEDGMENT FOR INDIVIDUALS)


STATE OF            :
                    :    s:
COUNTY OF           :



On this  _____________  day of ___________,  2001, before me, a notary public in
and   for   the    state   and    county    aforesaid,    personally    appeared
___________________________,  known to me to be the  person(s)  whose name(s) is
(are) subscribed to the foregoing  Subscription  Agreement and acknowledged that
he, she or they executed the same.



                                              ----------------------------------
                                                      Notary Public


                                       17
<PAGE>


                   EXECUTION PAGE FOR SUBSCRIPTION BY ENTITIES

TOTAL SUBSCRIPTION AMOUNT $_______________.

[ ] EMPLOYMENT BENEFIT PLAN OR TRUST (including pension plan, profit sharing
    plan, other defined contribution plan and SEP)
[ ] IRA, IRA ROLLOVER OR KEOGH PLAN
[ ] TRUST (other than employee benefit trust)
[ ] CORPORATION (Please include certified corporate resolution authorizing
    signature)
[ ] PARTNERSHIP
[ ] OTHER _____________________________

Print information as it is to appear on the Company records.

________________________________  ________________________________________

(Name of Subscriber)              (Taxpayer ID Number)

________________________________  ________________________________________
                                  (Plan number, if applicable)

________________________________  ________________________________________
   (Address)                      (Telephone Number)

__________________________________________________________________________
Name and Taxpayer ID number of sponsor, if applicable

     The undersigned trustee, partner,  corporate officer or fiduciary certifies
that he or she has full power and authority from all beneficiaries,  partners or
shareholders of the entity named above to execute this Subscription Agreement on
behalf of the entity and to make the representations,  warranties and agreements
made  herein  on  their  behalf  and  that  investment  in the  Units  has  been
affirmatively  authorized by the  governing  board or body of such entity and is
not prohibited by law or the governing documents of the entity.



                                       18
<PAGE>

                                  SIGNATURE(S)

Dated: 7/10, 2001
By:/S/____________________________ By:__________________________________________
 Signature of Authorized Signatory Signature of Required Authorized Co-Signatory

 _________________________________ _____________________________________________
 Print Name of Signatory           Print Name of Required Co-Signatory

 _________________________________ _____________________________________________
 Print Name of Signatory           Print Title of Required Co-Signatory

ACCEPTED AND AGREED:
NETWOLVES CORPORATION
By:/S/                                   Dated: July 9, 2001
  Name:
  Title:


                                       19
<PAGE>


                          (ACKNOWLEDGMENT FOR ENTITIES)

STATE OF      :
              : ss:
COUNTY OF     :

     On this  ___________  day of  _______,  2001,  before  me  personally  came
_____________________  known to me, who, being by me duly sworn,  did depose and
say that he or she is the __________ of ___________________________________, the
entity  described in and which  executed the foregoing  Subscription  Agreement;
that is was so  affirmatively  authorized by the governing board or body of such
entity; and that he or she signed his or her name thereto by like order.


                                                Notary Public

<PAGE>
                                     Annex A

                         INVESTOR SUITABILITY STANDARDS

     A purchase of the Units involves a high degree of risk and is suitable only
for persons of  substantial  financial  means who have no need for  liquidity in
their  investments.  The offer,  offer for sale,  and sale of the securities are
intended to be exempt from the  registration  requirements of the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Regulation D promulgated
thereunder ("Regulation D"), and are intended to be exempt from the requirements
of applicable state securities laws.

     The  Units  are  being  offered  and sold  only to up to  thirty-five  (35)
"non-accredited  investors"  and to  "accredited  investors," as those terms are
defined in Regulation D.

     Regulation D defines an "accredited investor" as follows:

     (1) Any bank as defined in section  3(a)(2) of the  Securities  Act, or any
savings  and loan  association  or  other  institution  as  defined  in  section
3(a)(5)(A) of the  Securities  Act whether acting in its individual or fiduciary
capacity;  any  broker  or  dealer  registered  pursuant  to  Section  15 of the
Securities  Exchange Act of 1934;  any  insurance  company as defined in section
2(13) of the  Securities  Act;  any  investment  company  registered  under  the
Investment Company Act of 1940 or a business  development  company as defined in
section 2(a)(48) of that act; any Small Business  Investment Company licensed by
the U.S. Small Business  Administration under Section 301(c) or (d) of the Small
Business Investment act of 1958; any plan established and maintained by a state,
its political  subdivisions,  or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000;  any employee benefit plan within the meaning of
the Employee  Retirement Income Security Act of 1974 if the investment  decision
is made by a plan  fiduciary,  as defined in Section 3(21) of such act, which is
or either a bank, savings and loan association, insurance company, or registered
investment  adviser,  or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;

     (2)  Any  private  business  development  company  as  defined  in  Section
202(a)(22) of the Investment Advisers Act of 1940;

     (3) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation,  Massachusetts or similar business trust, or partnership, not
formed for the specific purpose or acquiring the securities offered,  with total
assets in excess of $5,000,000;

     (4) Any director,  executive  officer,  or general partner of the issuer of
the securities  being offered or sold, or any director,  executive  officer,  or
general partner of a general partner of that issuer;

     (5) Any natural person whose  individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds $1,000,000;

     (6) Any natural  person who had an individual  income in excess of $200,000
in each of the two most recent years or joint income with that  person's  spouse
in excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

     (7) Any trust with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated  person as described in Rule  506(b)(2)(ii)  of Regulation D;
and

     (8) Any entity in which all of the equity owners are accredited investors.