REGISTRATION
      RIGHTS AGREEMENT

     


This
  Registration Rights Agreement (“Agreement”)
  is entered into as of December _, 2006 by and among U.S. Dry Cleaning Corporation,
  a Delaware corporation (the “Company”),
  and Craig M. Rankin, as agent for himself and the other Holders (the “Lead
  Investor”)
  of the Company’s Series A Convertible Debentures pursuant to that certain
  Subscription Agreement of even date herewith (the “Subscription
  Agreement”)
  and named in Exhibit A hereto.

     

    WHEREAS,
      in connection with the Company’s issuance of Series A Convertible Debenture
      pursuant to the Subscription Agreement, the Company has agreed to enter into
      this Registration Rights Agreement as a condition to the Closing
      thereunder;

     

    NOW
      THEREFORE, in consideration of the mutual agreements and covenants contained
      herein, the Company and the Lead Investor hereby agree as follows:

     

    1.  Definitions.
      As used
      herein:

     

    1.1  The
      term
“Holder”
means
      any person owning or having the right to acquire Registrable Shares or any
      assignee thereof in accordance with Section 2.8
      hereof.

     

    1.2  The
      terms
“register,”
      “registered,”
and
      “registration”
refer
      to a registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act (as defined below) and the applicable rules
      and regulations thereunder, and the declaration or ordering of the effectiveness
      of such registration statement.

     

    1.3  For
      the
      purposes hereof, the term “Registrable
      Shares”
means
      and includes (i) the shares of common stock of the Company issued or
      issuable upon conversion of the Series A Convertible Debenture (the
“Series
      A Debentures”),
      (ii)
      the common stock issued to the Holder of the Series A Debentures pursuant to
      the
      subscription of the Series A Debenture, and (iii) any common stock of the
      Company issued, or issuable upon the conversion or exercise of any warrant,
      right or other security which is issued, as a result of a stock split, dividend
      or other distribution with respect to or in exchange for or in replacement
      of
      the shares referenced in (i) above, excluding in all cases, however, any
      Registrable Shares sold by a person in a transaction in which his or her rights
      under Section 2
      are not
      assigned and that any particular shares of Common Stock shall cease to be
      Registrable Shares when: (i) a registration statement with respect to the
      sale of such securities shall have become effective under the Securities Act
      and
      such securities shall have been disposed of in accordance with such registration
      statement, (ii) they shall have been distributed to the public pursuant to
      Rule 144 (or any successor provision) under the Securities Act,
      (iii) they shall have been otherwise transferred, new certificates for them
      shall have been delivered by the Company and subsequent disposition of them
      shall not require registration or qualification of them under the Securities
      Act
      or any similar state law then in force, (iv) they shall have ceased to be
      outstanding, or (v) at such time as all of the Common Stock otherwise
      constituting Registrable Securities of such Holder may be sold within a three
      month period under Securities and Exchange Commission Rule 144.

     

    
      
        
        

      

      
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    1.4  The
      term
“Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    2.  Registration
      Rights.

     

    2.1  Filing.
      The
      Company will use its best efforts to file, on or before two hundred seventy
      days
      (270) following the closing of the initial sale of the Series A Debentures,
      a
      registration statement under the Securities Act covering the registration of
      the
      sale of the Registrable Securities by the Holders. The Holders shall fully
      cooperate with the Company in preparation of the registration statement and
      provide all necessary information regarding the Holders, the underwriters,
      the
      manner of distribution and other material information reasonably requested
      by
      the Company.

     

    2.2  Effectiveness.

     

    (a)  Following
      effectiveness of the registration statement, the Company will use its best
      efforts to maintain the effectiveness for up to three (3) months; provided,
      however, that such three-month period shall be extended for a period of time
      equal to the period the Holder refrains from selling any securities included
      in
      such registration at the request of an underwriter of common stock (or other
      securities) of the Company.

     

    (b)  The
      Company will from time to time amend or supplement such registration statement
      and the prospectus contained therein as and to the extent necessary to comply
      with the Securities Act and any applicable state securities statute or
      regulation.

     

    (c)  Each
      Holder selling Registrable Shares agrees that, upon receipt of any notice from
      Company of the happening of any event of the kind described in
      Section 2.6(c),
      such
      Holder will immediately discontinue disposition of Registrable Shares pursuant
      to the Registration Statement until such Holder’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 2.6(c),
      and, if
      so directed by Company, each such Holder will deliver to Company (at Company’s
      expense) all copies, other than permanent file copies then in such Holder’s
      possession, of the prospectus covering such Registrable Shares current at the
      time of receipt of such notice.

     

    
      
        
        

      

      
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      2.3  Indemnification.

    

    (a)  Indemnification
      of Holders.
      In the
      event that the Company registers any of the Registrable Shares under the
      Securities Act, the Company will indemnify and hold harmless each Holder and
      each underwriter of the Registrable Shares so registered (including any broker
      or dealer through which such shares may be sold) and each person, if any, who
      controls such Holder or any such underwriter within the meaning of
      Section 15 of the Securities Act from and against any and all losses,
      claims, damages, expenses or liabilities (or any action in respect thereof),
      joint or several, to which they or any of them become subject under the
      Securities Act or under any other statute or at common law or otherwise, and,
      except as hereinafter provided, will reimburse each such Holder, each such
      underwriter and each such controlling person, if any, for any legal or other
      expenses reasonably incurred by them or any of them, as such expenses are
      incurred, in connection with investigating or defending any actions whether
      or
      not resulting in any liability, insofar as such losses, claims, damages,
      expenses, liabilities or actions arise out of or are based upon (i) any
      untrue statement of a material fact contained in the registration statement,
      in
      any preliminary or amended preliminary prospectus or in the prospectus (or
      the
      registration statement or prospectus as from time to time amended or
      supplemented by the Company); (ii) any omission to state therein a material
      fact required to be stated therein or necessary in order to make the statements
      therein not misleading; or (iii) any violation by the Company of the
      Securities Act, the Securities Exchange Act of 1934, as amended (the
“Exchange
      Act”),
      a
      state securities law or any rule or regulation under the Securities Act, the
      Exchange Act or any state securities law; provided, however, that the indemnity
      contained in this Section 2.3(a)
      will not
      apply where such untrue statement or omission was made in such registration
      statement, preliminary or amended, preliminary prospectus or prospectus in
      reliance upon and in conformity with information furnished in writing to the
      Company in connection therewith by such Holder of Registrable Shares, any such
      underwriter or any such controlling person expressly for use therein or arises
      from such Holder’s breach of its obligations under this Agreement. Promptly
      after receipt by any Holder of Registrable Shares, any underwriter or any
      controlling person of notice of the commencement of any action in respect of
      which indemnity may be sought against the Company, such Holder of Registrable
      Shares, or such underwriter or such controlling person, as the case may be,
      will
      notify the Company in writing of the commencement thereof, and, subject to
      the
      provisions hereinafter stated, the Company shall assume the defense of such
      action (including the employment of counsel, who shall be counsel reasonably
      satisfactory to such Holder of Registrable Shares, such underwriter or such
      controlling person, as the case may be), and the payment of expenses insofar
      as
      such action shall relate to any liability in respect of which indemnity may
      be
      sought against the Company. Such Holder of Registrable Shares, any such
      underwriter or any such controlling person shall have the right to employ
      separate counsel in any such action and to participate in the defense thereof
      in
      the event the representation of such Holder, underwriter or controlling person
      by counsel retained by or on the behalf of the Company would be inappropriate
      due to conflicts of interest between any such person and any other party
      represented by such counsel in such proceeding or action, in which case the
      Company shall pay, as incurred, the reasonable fees and expenses of such
      separate counsel. The Company shall not be liable to indemnify any person under
      this Section 2.3(a)
      for any
      settlement of any such action effected without the Company’s consent (which
      consent shall not be unreasonably withheld). The Company shall not, except
      with
      the approval of each party being indemnified under this
      Section 2.3(a)
      (which
      approval will not be unreasonably withheld), consent to entry of any judgment
      or
      enter into any settlement that does not include as an unconditional term thereof
      the giving by the claimant or plaintiff to the parties being so indemnified
      of a
      release from all liability in respect to such claim or litigation.

     

    
      
        
        

      

      
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    (b)  Indemnification
      of Company.
      In the
      event that the Company registers any of the Registrable Shares under the
      Securities Act, each Holder of the Registrable Shares so registered will
      indemnify and hold harmless the Company, each of its directors, each of its
      officers who have signed the registration statement, each underwriter of the
      Registrable Shares so registered (including any broker or dealer through which
      any of such shares may be sold) and each person, if any, who controls the
      Company within the meaning of Section 15 of the Securities Act and all
      other Holders and their respective officers, directors and controlling persons
      from and against any and all losses, claims, damages, expenses or liabilities
      (or any action in respect thereof), joint or several, to which they or any
      of
      them may become subject under the Securities Act or under any other statute
      or
      at common law or otherwise, and, except as hereinafter provided, will reimburse
      the Company and each such director, officer, underwriter or controlling person
      for any legal or other expenses reasonably incurred by them or any of them,
      as
      such expenses are incurred, in connection with investigating or defending any
      actions whether or not resulting in any liability, insofar as such losses,
      claims, damages, expenses, liabilities or actions arise out of or are based
      upon
      any untrue statement of a material fact contained in the registration statement,
      in any preliminary or amended preliminary prospectus or in the prospectus (or
      the registration statement or prospectus as from time to time amended or
      supplemented) or arise out of or are based upon the omission to state therein
      a
      material fact required to be stated therein or necessary in order to make the
      statements therein not misleading, but only insofar as any such statement or
      omission was made in reliance upon and in conformity with information furnished
      in writing to the Company in connection therewith by such Holder, expressly
      for
      use therein; provided, however, that such Holder’s obligations hereunder shall
      be limited to an amount equal to the proceeds to such Holder of the Registrable
      Shares sold in such registration. Promptly after receipt of notice of the
      commencement of any action in respect of which indemnity may be sought against
      such Holder of Registrable Shares, the Company will notify such Holder of
      Registrable Shares in writing of the commencement thereof, and such Holder
      of
      Registrable Shares shall, subject to the provisions hereinafter stated, assume
      the defense of such action (including the employment of counsel, who shall
      be
      counsel reasonably satisfactory to the Company) and the payment of expenses
      insofar as such action shall relate to the liability in respect of which
      indemnity may be sought against such Holder of Registrable Shares. The Company
      and each such director, officer, underwriter or controlling person shall have
      the right to employ separate counsel in any such action and to participate
      in
      the defense thereof in the event the representation of the Company, any of
      its
      officers or directors or any underwriter or controlling person by counsel
      retained by or on the behalf of such Holder would be inappropriate due to
      conflicts of interest between any such person and any other party represented
      by
      such counsel in such proceeding or action, in which case such Holder shall
      pay,
      as incurred, the reasonable fees and expenses of such separate counsel. Such
      Holder shall not be liable to indemnify any person for any settlement of any
      such action effected without such Holder’s consent (which consent shall not be
      unreasonably withheld). Such Holder shall not, except with the approval of
      the
      person being indemnified (which approval shall not be unreasonably withheld),
      consent to entry of any judgment or enter into any settlement that does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to the party being so indemnified of a release from all liability in respect
      to
      such claim or litigation.

     

    
      
        
        

      

      
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    2.4  Contribution.
      If the
      indemnification provided for in Section 2.3
      is held
      by a court of competent jurisdiction to be unavailable to an indemnified party
      with respect to any loss, liability, claim, damage, or expense referred to
      therein, then the indemnifying party, in lieu of indemnifying such indemnified
      party hereunder, shall contribute to the amount paid or payable by such
      indemnified party as a result of such loss, liability, claim, damage, or expense
      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 that resulted in such loss,
      liability, claim, damage, or expense 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,
      whether the untrue statement of a material fact or the 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.

     

    2.5  Exchange
      Act Registration.
      With a
      view to making available to the Holders the benefits of Rule 144
      promulgated under the Act and any other rule or regulation of the Securities
      Exchange Commission (the “SEC”)
      that
      may at any time permit a Holder to sell securities of the Company to the public
      without registration, the Company agrees to:

     

    (a)  make
      and
      keep public information available, as those terms are understood and defined
      in
      SEC Rule 144, at all times after ninety (90) days after the effective date
      of the first registration statement filed by the Company for the offering of
      its
      securities to the general public until termination of this
      Agreement;

     

    (b)  file
      on a
      timely basis with the Securities and Exchange Commission all information that
      the Commission may require under either of Section 13 or Section 15(d)
      of the Exchange Act and, so long as it is required to file such information,
      take all action that may be required as a condition to the availability of
      Rule 144 under the Securities Act (or any successor exemptive rule
      hereinafter in effect) with respect to the Company’s common stock;
      and

     

    (c)  furnish
      to any Holder forthwith upon request (i) a written statement by the Company
      as to its compliance with the reporting requirements of Rule 144,
      (ii) a copy of the most recent annual or quarterly report of the Company as
      filed with the Securities and Exchange Commission, and (iii) any other
      reports and documents that a Holder may reasonably request in order to avail
      itself of any rule or regulation of the Securities and Exchange Commission
      allowing a Holder to sell any such Registrable Shares without
      registration.

     

    
      
        
        

      

      
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    2.6  Further
      Obligations of the Company.
      Whenever the Company is required hereunder to register Registrable Shares,
      it
      agrees that it shall also do the following:

     

    (a)  Furnish
      to each selling Holder such copies of each preliminary and final prospectus
      and
      any other documents that such Holder may reasonably request to facilitate the
      public offering of its Registrable Shares;

     

    (b)  Use
      its
      best efforts to register or qualify the Registrable Shares to be registered
      pursuant to this Agreement under the applicable securities or “blue sky” laws of
      such jurisdictions as any selling Holder may reasonably request; provided,
      however, that the Company shall not be obligated to qualify to do business
      in
      any jurisdiction where it is not then so qualified or to take any action that
      would subject it to the service of process in suits other than those arising
      out
      of the offer or sale of the securities covered by the registration statement
      in
      any jurisdiction where it is not then so subject;

     

    (c)  Notify
      each Holder of Registrable Shares covered by such registration statement at
      any
      time when a prospectus relating thereto is required to be delivered under the
      Act of the happening of any event as a result of which the prospectus included
      in such registration statement, as then in effect, includes an untrue statement
      of a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading in the light
      of the circumstances then existing;

     

    (d)  Cause
      all
      such Registrable Shares registered hereunder to be listed on each securities
      exchange on which similar securities issued by the Company are then listed
      if
      such listing is then permitted under the rules of the exchange;

     

    (e)  Provide
      a
      transfer agent and registrar for all Registrable Shares registered pursuant
      hereunder and a CUSIP number for all such Registrable Shares, in each case
      not
      later than the effective date of such registration;

     

    (f)  In
      the
      event of any underwritten public offering, enter into and perform its
      obligations under an underwriting agreement, in usual and customary form, with
      the managing underwriter of such offering. Each Holder participating in such
      underwriting shall also enter into and perform its obligations under such an
      agreement;

     

    (g)  Furnish,
      at the request of any Holder requesting registration of Registrable Shares
      pursuant to this Section 2,
      on the
      date that such Registrable Shares are delivered to the underwriters for sale
      in
      connection with a registration pursuant to this Section 2,
      if such
      securities are being sold through underwriters, or, if such securities are
      not
      being sold through underwriters, on the date that the registration statement
      with respect to such securities becomes effective:

     

    (i)  an
      opinion, dated such date, of the counsel representing the Company for the
      purposes of such registration, in form and substance as is customarily given
      to
      underwriters in an underwritten public offering, addressed to the underwriters,
      if any, and to the Holders requesting registration of Registrable Shares;
      and

     

    
      
        
        

      

      
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    (ii)  “comfort”
      letters signed by the Company’s independent public accountants who have examined
      and reported on the Company’s financial statements included in the registration
      statement, to the extent permitted by the standards of the American Institute
      of
      Certified Public Accountants, covering substantially the same matters with
      respect to the registration statement (and the prospectus included therein)
      and
      (in the case of the accountants’ comfort letters) with respect to events
      subsequent to the date of the financial statements, as are customarily covered
      in opinions of issuer’s counsel and in accountants’ comfort letters delivered to
      the underwriters in underwritten public offerings of securities, but only if
      and
      to the extent that the Company is required to deliver or cause the delivery
      of
      such opinion or comfort letters to the underwriters in an underwritten public
      offering of securities;

     

    (h)  Permit
      each selling Holder or his counsel or other representatives upon the receipt
      of
      commercially reasonable confidentiality agreements, to inspect and copy such
      corporate documents and records as may reasonably be requested by them;
      and

     

    (i)  Furnish
      to each selling Holder, upon request, a copy of all documents filed and all
      correspondence from or to the Securities and Exchange Commission in connection
      with any such offering unless confidential treatment of such information has
      been requested of the Securities and Exchange Commission.

     

    2.7  Expenses.
      The
      Company shall bear all costs and expenses of the registration, including, but
      not limited to, printing, legal and accounting expenses, Securities and Exchange
      Commission filing fees and “blue sky” fees and expenses; provided, however, that
      the Company shall have no obligation to pay or otherwise bear (i) any
      portion of the fees or disbursements of more than one counsel for the Holders
      in
      connection with the registration of their Registrable Shares, which in no event
      shall exceed a reasonable fee, (ii) any portion of the underwriter’s
      commissions or discounts attributable to the Registrable Shares being offered
      and sold by the Holders of Registrable Shares, or (iii) any of such
      expenses if the payment of such expenses by the Company is prohibited by the
      laws of a state in which such offering is qualified and only to the extent
      so
      prohibited.

     

    2.8  Transfer
      of Registration Rights.
      The
      registration rights of a Holder of Registrable Shares under this Agreement
      may
      be transferred as set forth below (provided (1) the transfer accompanies
      the transfer of Series A Preferred or Common Stock in the Company, (2) the
      transferee is bound by the terms of this Agreement and (3) the Company is
      given reasonable advance written notice prior to such transfer) to any other
      transferee of the Registrable Shares.

     

    2.9  Market
      Stand-Off Agreement.
      No
      Holder shall, to the extent requested by any managing underwriter of the
      Company, sell or otherwise transfer or dispose of (other than to donees who
      agree to be similarly bound) any Registrable Shares during a period (the
“Stand-Off
      Period”)
      beginning ten (10) days prior to and ending 120 days following the effective
      date of a registration statement of any direct offering of the Company under
      the
      Securities Act (or in each case such shorter period as the Company or managing
      underwriter may authorize), and except in each case, for securities sold as
      part
      of the offering covered by such registration statement in accordance with the
      provisions of this Agreement. In order to enforce the foregoing covenant, the
      Company may impose stock transfer restrictions with respect to the Registrable
      Shares of each Holder until the end of the Stand-Off Period. Notwithstanding
      the
      foregoing, the obligations described in this Section 2.9
      shall
      not apply to a registration relating solely to employee benefit plans on Form
      S-1 or Form S-8 or similar forms which may be promulgated in the future, or
      a
      registration relating solely to an SEC Rule 145 transaction on Form S-4 or
      similar forms which may be promulgated in the future.

     

    
      
        
        

      

      
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    2.10  Termination
      of Registration Rights.
      The
      obligations of the Company to register any Holder’s Registrable Shares pursuant
      to this Section 2
      shall
      terminate at such time as all of the Registrable Securities of such Holder
      may
      be sold within a three month period under Securities and Exchange Commission
      Rule 144.

     

    3.  Assignability.
      Subject
      to the restrictions on transfer set forth in Section 2.8,
      this
      Agreement shall be binding upon and inure to the benefit of the respective
      heirs, successors and assigns of the parties hereto.

     

    4.  Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California; provided, however, that if any California law or laws
      require or permit the application of the laws of any other jurisdiction to
      this
      Agreement, such California law or laws shall be disregarded with the effect
      that
      the remaining laws of the State of California shall nonetheless
      apply.

     

    5.  Amendment.
      Any
      modification, amendment, or waiver of this Agreement or any provision hereof,
      either retroactively or prospectively, shall be in writing and executed by
      the
      Company and the Holders of not less than a majority of the Registrable Shares
      which shall be binding upon all of the parties hereto.

     

    6.  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one
      instrument.

     

    7.  Notice.
      Any
      notices and other communications required or permitted under this Agreement
      shall be effective if in writing and delivered personally or sent by telecopier,
      a well-recognized overnight courier service or registered or certified mail,
      postage prepaid, addressed as follows:

     

    
      	
            	If
              to the Lead Investor, to:	
              
                Craig
                  M. Rankin

              

            


    

    
      	
            	 	
              10250
                Constellation Blvd.

            


    

    
      	
            	 	
              Ste.
                1700

            


    

    
      	
            	 	
              Los
                Angeles, CA 90067

            


    

    
      	
            	 	
              Fax: (310)
                229-1244

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              If
                to the Company, to:

            	
              U.S.
                Dry Cleaning Corporation

            


    

    
      	
            	 	
              125
                E. Tahquitz Canyon, Suite 203

            


    

    
      	
            	 	
              Palm
                Springs, CA 92262

            


    

    
      	
            	 	
              Attn: Robbie
                Y. Lee

            


    

    
      	
            	 	
              Facsimile: (310)
                226-8553

            


    

    


    
      	
            	with
              a copy to:	
              Greenburg
                Traurig

            


    

    
      	
            	 	
              650
                Town Center Drive

            


    

    
      	
            	 	
              Suite
                1700

            


    

    
      	
            	 	
              Costa Mesa,
                CA 92626

            


    

    
      	
            	 	
              Attn:
                John J. Giovannone, Esq.

            


    

    
      	
            	
            	
              Facsimile:
                (714) 708-6501

            


    

     

    Unless
      otherwise specified herein, such notices or other communications shall be deemed
      effective (a)  on the date delivered, if delivered personally, (b) two
      business days after being sent, if sent by a well-recognized overnight courier
      service, (c) one business day after being sent, if sent by telecopier with
      confirmation of good transmission and receipt, and (d) three business days
      after being sent, if sent by registered or certified mail, postage prepaid.
      Each
      of the parties herewith shall be entitled to specify another address by giving
      notice as aforesaid to each of the other parties hereto.

     

    7.1  Severability.
      In case
      any provision of this Agreement shall be invalid, illegal, or unenforceable,
      it
      shall, to the extent practicable, be modified so as to make it valid, legal
      and
      enforceable and to retain as nearly as practicable the intent of the parties;
      and the validity, legality, and enforceability of the remaining provisions
      shall
      not in any way be affected or impaired thereby.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Registration Rights
      Agreement to be executed by their respective officers thereunto duly authorized,
      as of the date first above written.

    
      	 	 	 
	 	COMPANY:
	 	 
	 	U.S.
              Dry Cleaning Corporation,
              a
                Delaware corporation

            
	 
 	 
 	 
 
	 	By:  
	 	
              
                

              
Name:
	 	
              
                

              
Title: 
	 	
              
                

              

            


    

     

    
      	 	 
	 	 	LEAD INVESTOR:
	 
 	 
 	 
 
	 	
              
Name:
              Craig M. Rankin 
	 	 
	 	
              Address:
                10250 Constellation Blvd.

                           Ste
                1700

                               Los
                Angeles, CA 90067

            
	 	
              Fax:          
                (310) 229-1244

            


    

    


    
      
        
        

      

      
        9