EXHIBIT 4.4

                                                                  EXECUTION COPY

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                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                        ALLOU HEALTH & BEAUTY CARE, INC.

                                       AND

                           THE PURCHASERS NAMED HEREIN

                                  JULY 25, 2000

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                          REGISTRATION RIGHTS AGREEMENT

         This Registration  Rights Agreement  ("Agreement") by and between Allou
Health & Beauty Care, Inc., a Delaware corporation  ("Company"),  RFE Investment
Partners  VI,  L.P.,  a  Delaware  limited  partnership  ("RFE"),  and the other
Purchasers named herein from time to time (together with RFE, the  "Purchasers")
is made as of July 25, 2000.

         WHEREAS,  pursuant to that certain Senior Subordinated Note and Warrant
Purchase  Agreement  dated as of the date  hereof by and between the Company and
RFE (as  amended,  restated  or  otherwise  in  effect  from  time to time,  the
"Purchase Agreement"), RFE has purchased a Class A Common Stock Purchase Warrant
dated as of the date hereof  convertible into shares of the Class A Common Stock
of the Company, $.001 par value, according to the terms and conditions set forth
in the Purchase Agreement and in the Warrant; and

         WHEREAS,   pursuant  to  the  Purchase  Agreement,   RFE  may  purchase
additional  Warrant(s)  at a Second RFE  Closing  (as  defined  therein)  and an
additional  investor  may also  purchase a Warrant at a  Subsequent  Closing (as
defined therein); and

         WHEREAS,  pursuant  to the Senior  Subordinated  Note(s)  issued by the
Company  pursuant to the Purchase  Agreement (the  "Notes"),  the holders of the
Note(s) may, at the Company's option,  receive shares of Class A Common Stock in
lieu of interest payments ("Payment-In-Kind Stock" or "PIK Stock") under certain
circumstances as set forth in the Note; and

         WHEREAS, it is a condition to the obligations of RFE under the Purchase
Agreement that the parties hereto execute this Agreement.

         NOW,   THEREFORE,   incorporating   the   foregoing   recitals  and  in
consideration of the promises and covenants herein contained, and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Purchasers and the Company agree as follows:

                                    SECTION I

                  RESTRICTIONS ON TRANSFER: REGISTRATION RIGHTS

         1.1      Certain Definitions.  As used in this Agreement:

         "Commission" means the Securities and Exchange  Commission or any other
federal agency at the time administering the Securities Act.

         "Common  Stock" means  collectively:  (i) the Class A Common Stock,  as
authorized  on the date of this  Agreement,  (ii) the  Company's  Class B Common
Stock,  par value $.001 per share,  as authorized on the date hereof,  (iii) any
other common stock of any class or classes (however  designated) of the Company,
authorized on or after the date hereof, and (iv) any other securities into which
or for which any

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of the  securities  described in (i),  (ii),  or (iii) above may be converted or
exchanged pursuant to a plan of recapitalization,  reorganization,  merger, sale
of assets or otherwise.

         "Exchange Act" means the  Securities  Exchange Act of 1934, as amended,
or  any  similar  successor  federal  statute  and  the  rules  and  regulations
promulgated thereunder, all as the same shall be in effect from time to time.

         "Holder" means any Purchaser who holds  Registrable  Securities and any
holder of Registrable  Securities to whom the  registration  rights conferred by
this Agreement have been transferred pursuant to Section 3.2 hereof.

         "Qualified Public Offering" means the closing of the first underwritten
offering after the date hereof by the Company or any of its Subsidiaries (or any
successor  entity)  of its  equity  securities  to  the  public  pursuant  to an
effective  registration  statement under the Securities  Act,  provided that (a)
such  registration  statement covers the offer and sale of Common Stock of which
the aggregate net proceeds  attributable to sales for the account of the Company
or any of its  Subsidiaries  exceed  $25,000,000  and (b) such  Common  Stock is
listed for trading on any of the New York Stock  Exchange,  the  American  Stock
Exchange or the NASDAQ National Market.

         The  terms  "register",  "registered"  and  "registration"  refer  to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance with the Securities Act (and any  posteffective  amendments  filed or
required to be filed),  and the declaration or ordering of the  effectiveness of
such registration statement.

         "Registrable  Securities" means any Common Stock (i) issued or issuable
upon conversion of the Warrants, (ii) any PIK Stock, (iii) any Common Stock held
by the  Purchasers  however  acquired  or (iv)  issued  as a  dividend  or other
distribution with respect to, or in exchange for or in replacement of the shares
referenced in (i), (ii) or (iii) above; provided, however, that such shares will
cease to be Registrable  Securities  when they are sold or saleable  pursuant to
Rule 144 or otherwise sold to the public;  provided further,  however, that with
respect to holders of at least 2% of the outstanding Common Stock (or securities
convertible into Common Stock),  such shares will remain Registrable  Securities
(and will be entitled to exercise rights associated with Registrable  Securities
hereunder) until such shares are actually sold pursuant to Rule 144 or otherwise
sold to the public.

         "Registration  Expenses" means all expenses  incurred by the Company in
complying  with Sections 1.2, 1.3 and 1.4  including,  without  limitation,  all
registration,  qualification and filing fees,  printing  expenses,  escrow fees,
fees and disbursements of counsel for the Company and for the Holders,  blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the  Company  which  shall be paid in any  event by the  Company).  Registration
Expenses  do  not  include  Selling  Expenses  or  other  compensation  paid  to
underwriters  or other  agents or brokers to effect the sale or the fees of more
than one counsel for the Holders.

         "Rule 144" means Rule 144 promulgated  under the Securities Act, or any
similar successor rule, as the same is in effect from time to time.

         "Rule 145" means Rule 145 promulgated  under the Securities Act, or any
similar successor rule, as the same is in effect from time to time.

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         "Rule 415" means Rule 415 promulgated  under the Securities Act, or any
similar successor rule, as the same is in effect from time to time.

         "Securities  Act" means the Securities Act of 1933, as amended,  or any
similar  federal  statute  and  the  rules  and  regulations  of the  Commission
thereunder, as are in effect from time to time.

         "Selling   Expenses"   means  all   underwriting   discounts,   selling
commissions,  and stock  transfer  taxes  applicable to the sale of  Registrable
Securities.

         "Warrant"  means (i) the  warrants to purchase  shares of Common  Stock
(subject to adjustment)  issued  pursuant to the Purchase  Agreement  (including
Warrants issued at a Second RFE Closing or a Subsequent  Closing pursuant to the
terms of the Purchase  Agreement and Warrants  issued pursuant to Section 2.12.2
of the Purchase  Agreement),  and (ii) any equity  securities issued or issuable
directly  or  indirectly  with  respect to the  Warrants  in  connection  with a
recapitalization, merger, consolidation or other reorganization.

         "Warrant  Shares"  means any  shares of  capital  stock of the  Company
issued upon exercise of the Warrants.

         1.2      Registration at RFE's Request.
                  -----------------------------

                  (a) Request for Registration.  At any time commencing 180 days
after the consummation of a Qualified Public Offering,  RFE may request that the
Company effect an underwritten  registration,  qualification  or compliance with
respect to Registrable  Securities,  by sending a written notice of such request
("Request") to the Company, then the Company shall:

                           (i)  promptly  give  written  notice of the  proposed
         registration, qualification, or compliance to all other Holders; and

                           (ii) as soon as practicable,  use its reasonable best
         efforts  to effect  such  registration,  qualification,  or  compliance
         (including, without limitation, the execution of an undertaking to file
         posteffective  amendments,  appropriate  qualification under applicable
         blue sky or other state  securities  laws, and  appropriate  compliance
         with  applicable  regulations  issued under the  Securities Act and any
         other governmental requirements or regulations) pursuant to the Request
         and as would permit or facilitate the sale and  distribution  of all or
         such portion of such  Registrable  Securities  as are specified in such
         Request in  accordance  with Section 1.7 hereof,  together  with all or
         such portion of the  Registrable  Securities of any Holders  joining in
         such  request as are  specified  in a written  request  received by the
         Company  within 20 days after the date the Company  mails such  written
         notice.

Provided,  however, that the Company will not be obligated to take any action to
effect any such  registration,  qualification,  or  compliance  pursuant to this
Section 1.2:

                                    (A) In any jurisdiction in which the Company
                  would be required  to execute a general  consent to service of
                  process in  effecting  such  registration,  qualification,  or
                  compliance unless the Company is already subject to service in
                  such  jurisdiction  and  except  as  may  be  required  by the
                  Securities Act;

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                                    (B) After the Company has  effected two such
                  registrations  pursuant  to this  Section  1.2 which have been
                  declared or ordered effective; or

                                    (C)  If  the  Company  furnishes  to  RFE  a
                  certificate  signed  by the  Chief  Executive  Officer  of the
                  Company  stating that in the good faith  judgment of the Board
                  of Directors of the Company it would be seriously  detrimental
                  to  the  Company  or  its   shareholders  for  a  registration
                  statement to be filed in the near future  ("Deferral  Right"),
                  (provided,  however,  that the Company may not  exercise  this
                  Deferral  Right  more than once per  twelve-month  period)  in
                  which  case,  at  RFE's  option,  either:  (i)  the  Company's
                  obligation  to use its  reasonable  best  efforts to register,
                  qualify or comply  under this Section 1.2 will be deferred for
                  a period  not to exceed 90 days  from the date of  receipt  of
                  written request from RFE or (ii) RFE may rescind its Request.

         Subject to the  foregoing  clauses (A) through (C),  the Company  shall
file a registration  statement covering the Registrable  Securities so requested
to be registered as soon as practicable,  and in any event within 90 days, after
receipt of the Request from RFE.

                  (b)  Underwriting.  The right of any  Holder  to  registration
pursuant to this Section 1.2 is conditioned upon such Holder's  participation in
such underwriting and the inclusion of such Holder's  Registrable  Securities in
the underwriting to the extent requested and to the extent provided herein.

         The  Company  shall  (together  with all  Holders  selling  Registrable
Securities)  enter into an  underwriting  agreement in  customary  form with the
managing  underwriter  selected  for such  underwriting  by the  Company  (which
underwriter  must be reasonably  acceptable to RFE).  Notwithstanding  any other
provision  of this  Section  1.2,  if the  managing  underwriter  advises RFE in
writing that marketing  factors  require a limitation of the number of shares to
be underwritten,  then the Company shall so advise all Holders and the number of
shares of Registrable  Securities and other  securities  that may be included in
the registration and underwriting  shall be allocated,  FIRST, among all Holders
pro rata, in  proportion to the  respective  amounts of  Registrable  Securities
requested  to be  included by such  Holders in the  registration  statement  and
SECOND,  only if the  Holders  have been able to include  100% of the amounts of
Registrable  Securities  initially requested by such Holders, to the Company and
all other holders,  in proportion,  as nearly as practicable,  to the respective
amounts of  securities  of the Company  requested  to be  included  by them.  No
Registrable  Securities or other  securities  excluded from the  underwriting by
reason  of the  underwriter's  marketing  limitation  will be  included  in such
registration.  To facilitate  the  allocation  of shares in accordance  with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder or other holder to the nearest 100 shares.

         If  any  Holder  or  other  holder  disapproves  of  the  terms  of the
underwriting,  such person may elect to withdraw  therefrom by written notice to
the Company, the managing underwriter and RFE. The Registrable Securities and/or
other  securities so withdrawn  shall also be withdrawn from  registration,  and
such Registrable  Securities and/or other securities shall not be transferred in
a public  distribution  prior  to 180  days  after  the  effective  date of such
registration,  or such  other  shorter  period of time as the  underwriters  may
require.  If  by  the  withdrawal  of  such  Registrable   Securities  or  other
securities, a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders who have included
Registrable  Securities  in the  registration  the right to  include  additional
Registrable  Securities  in the same  priority,  proportion  and manner  used in
determining the effect of the underwriter limitation in this Section 1.2(b).

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         If the managing  underwriter  has not limited the number of Registrable
Securities to be  underwritten,  the Company may include  securities for its own
account  or for the  account  of others  in such  registration  if the  managing
underwriter  so agrees and if the number of Registrable  Securities  which would
otherwise  have been included in such  registration  and  underwriting  will not
thereby be limited.

         1.3      Company Registration
                  --------------------

                  (a)  Notice  of  Registration.  If at any time or from time to
time,  (i)  the  Company  determines  to  register  an  offering  of  any of its
securities,  either for its own account or the  account of a security  holder or
holders,  other than (i) a  registration  relating  solely to  employee  benefit
plans,  or (ii) a registration  relating  solely to a Rule 145 transaction or on
Form S-4, or (iii) a registration on any registration  form that does not permit
secondary sales, the Company shall:

                           (i)  promptly  give to  each  Holder  written  notice
         thereof, and,

                           (ii)  include in such  registration  (and any related
         qualification  under  blue sky laws or  other  compliance),  and in any
         underwriting involved therein, all the Registrable Securities specified
         in a written  request by each Holder  received by the Company within 20
         days  after the  Company  mails  such  written  notice,  subject to the
         provisions below.

                  (b) Underwriting.  If the offering, to be effected pursuant to
this  Section 1.3 is to be an  underwritten  public  offering,  the right of any
Holder to  registration  pursuant to this  Section 1.3 is  conditioned  upon the
participation  by such Holder in such  underwriting  and the  inclusion  of such
Holder's  Registrable  Securities  in the  underwriting  to the extent  provided
herein.  Those parties  proposing to distribute  their  securities  through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing  underwriter  selected for such underwriting
by the Company. Notwithstanding any other provisions of this Section 1.3, if the
managing  underwriter  determines that marketing factors require a limitation of
the number of shares to be underwritten,  the managing underwriter may limit the
Registrable Securities to be included in such registration. The Company shall so
advise all Holders,  and the other holders distributing their securities through
such underwriting, and the number of shares of Registrable Securities, and other
securities that may be included in the registration  and  underwriting  shall be
allocated among the Company, the Holders and the other holders as follows: FIRST
to the  Company so as to permit  the  Company  to  include  all shares  that the
Company desires to sell;  SECOND to the Holders  pro-rata,  in proportion to the
respective  amount of  Registrable  Securities  requested to be included by such
Holders in the registration statement;  and THIRD, only if the Holders have been
able  to  include  100%  of the  amounts  of  Registrable  Securities  initially
requested by such  Holders,  to all other  holders in  proportion,  as nearly as
practicable,  to the  respective  amounts of  securities  entitled to  inclusion
(determined  with regard to any  requirement of a request to be included in such
registration) in such registration held by all such other holders. To facilitate
the allocation of shares in accordance with the above provisions, the Company or
the underwriter may round the number of shares allocated to any Holder, or other
holder to the nearest 100 shares.  If any Holder or other holder  disapproves of
the terms of any such  underwriting,  such  Holder or other  holder may elect to
withdraw   therefrom  by  written   notice  to  the  Company  and  the  managing
underwriter.  Any securities  excluded or withdrawn from such underwriting shall
be withdrawn from such  registration.  If by the withdrawal of such  Registrable
Securities or other securities,  a greater number of Registrable Securities held
by other Holders may be included in such  registration (up to the maximum of any
limitation  imposed by the

                                      -5-
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underwriters),  then the Company  shall  offer to all Holders who have  included
Registrable  Securities  in the  registration  the right to  include  additional
Registrable Securities in the same proportion and manner used in determining the
effect of the underwriter limitation in this Section 1.3(b).

                  (c) Right to Terminate Registration. The Company will have the
right to  terminate  or withdraw  any  registration  initiated  by it under this
Section 1.3 prior to the effectiveness of such  registration  whether or not any
Holder has elected to include securities in such registration.

         1.4 Form S-3  Registration.  The Company shall use its reasonable  best
efforts to qualify for, and remain  qualified for,  registration on Form S-3. So
long as and while the Company has qualified for the use of Form S-3, in addition
to the rights contained in the foregoing  provisions of this Section 1, RFE will
have the right to request  registration on Form S-3 at any time and from time to
time (all such  requests  must be in  writing  and state the number of shares of
Registrable Securities to be disposed of and the intended methods of disposition
of such shares).  In case the Company  receives from RFE a written  request that
the Company effect a registration  on Form S-3 and any related state  securities
qualification  or blue sky  compliance  with  respect  to such an  amount of the
Registrable Securities owned by RFE, the Company shall:

                  (a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and

                  (b) as soon as practicable, use its reasonable best efforts to
effect such registration and all such  qualifications  and compliances as may be
so requested and as would permit or facilitate the sale and  distribution of all
or such  portion  of  RFE's  Registrable  Securities  as are  specified  in such
request,  together with all or such portion of the Registrable Securities of any
other Holder or Holders  joining in such  request as are  specified in a written
request  given  within 20 days after  receipt of such  written  notice  from the
Company;  provided however that the Company shall not be obligated to effect any
such registration,  qualification,  or compliance  pursuant to this Section 1.4:
(1) if Form S-3 is not  available  for such  offering by  Holder(s);  (2) if the
Holders,  together  with the  holders  of any other  securities  of the  Company
entitled  to  inclusion  in  such  registration,  propose  to  sell  Registrable
Securities  and such  other  securities  (if any) at an  aggregate  price to the
public  (net  of any  underwriters'  discounts  or  commissions)  of  less  that
$250,000;  or (3) if the Company  shall  furnish to such  Holders a  certificate
signed by the President of the Company  stating that in the good faith  judgment
of the Board of Directors it would be  seriously  detrimental  to the Company or
its shareholders for a registration statement to be filed in the near future, in
which case the Company's  obligation to use its reasonable  efforts to register,
qualify or comply under this  Section 1.4 will be deferred,  for a period not to
exceed 90 days from the date of  receipt of written  request  from the  Holders,
provided that the Company may not exercise  this  deferral  right more than once
per twelve month period.

         Subject to the foregoing,  the Company shall effect such  registration,
qualification, or compliance (including, without limitation, the execution of an
undertaking to file post-effective  amendments,  appropriate qualification under
applicable blue sky or other state  securities  laws and appropriate  compliance
with  applicable  regulations  issued  under  the  Securities  Act and any other
governmental  requirements or regulations)  covering the Registrable  Securities
and other securities so requested to be registered as soon as practicable  after
receipt of the request from RFE.

         If the  registration to be effected  pursuant to this Section 1.4 is to
be an  underwritten  public  offering,  it shall be managed by an underwriter or
underwriters  selected by the Company and reasonably

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acceptable  to RFE.  In such  event,  the right of any  Holder  to  registration
pursuant to this Section 1.4 shall be conditioned upon the participation by such
Holder in such  underwriting and the inclusion of the Registrable  Securities of
such Holder in the underwriting to the extent provided  herein.  If the managing
underwriter so selected  determines that marketing  factors require a limitation
of the number of shares to be underwritten,  the managing  underwriter may limit
the  Registrable  Securities  held  by  such  Holders  to be  included  in  such
registration. The Company shall so advise such Holders, and the number of shares
of  Registrable  Securities  that may be included in the  registration  shall be
allocated  among the Holders  and other  holders as  follows:  FIRST,  among the
Holders  in  proportion  to the  respective  amounts of  Registrable  Securities
requested to be included by each of such Holders in the  registration  statement
and SECOND, only if the Holders have been able to include 100% of the amounts of
Registrable  Securities initially requested by such Holders, to other holders in
proportion, as nearly as practicable, to the amount of securities of the Company
requesting  to be  included  by  them  in  such  registration.  Any  Registrable
Securities or other securities that are so excluded from the underwriting  shall
be excluded  from the  registration.  As used  throughout  this Section the term
"Form  S-3"  shall be  deemed  to  include  any  equivalent  successor  form for
registration pursuant to the Act.

         1.5 Expenses of  Registration.  All Registration  Expenses  incurred in
connection  with the  registration,  qualification  or  compliance  pursuant  to
Sections 1.2, 1.3, and 1.4 will be borne by the Company; provided, however, that
in connection  with any  registration  of  securities,  the Company will only be
responsible  for the fees and costs of one counsel for all of the Holders;  and,
further,  provided,  that  if  the  Company  has  already  filed  one  Form  S-3
registration  during the calendar year pursuant to any Holder's request,  if the
Holders request a second Form S-3  registration  within that same calendar year,
the  Registration  Expenses  incurred  in  connection  with such second Form S-3
registration  will be borne pro rata by the  Holders up to a maximum of $10,000,
with the  increment  above  $10,000,  if any,  to be borne by the  Company.  All
Selling  Expenses  relating to  securities  so  registered  will be borne by the
holders  of such  securities  pro rata on the  basis of the  number of shares of
securities so  registered  on their behalf.  The Company will not be required to
pay for any expenses of any  registration  proceeding  begun pursuant to Section
1.2 or 1.4 if the registration request is subsequently  withdrawn at the request
of the Holders of a majority of the Registrable  Securities to be registered (in
which case all  Holders  withdrawing  the  request  shall  bear such  expenses),
unless,  in the case of a registration  under Section 1.2, RFE agrees to forfeit
its right to one registration under such Section.

         1.6 Lock-up. Each of the Holders hereby agrees not to offer, sell, make
any short sale of,  loan,  grant any option for the  purchase  of, or  otherwise
dispose of any of the  Company's  Common  Stock  held of record or  beneficially
owned by such person (other than those included in the registration)  during the
period of time not to exceed 180 days  determined  by the Board of  Directors of
the  Company  upon  advice  of its  managing  underwriter,  from and  after  the
effective date of the  registration  statement for a Qualified  Public Offering,
provided  that the  obligations  of the Holders under this Section 1.6 shall not
apply unless each officer and director of the Company,  each beneficial owner of
1% or more of each class of the Company's  Common Stock and each Holder is bound
by similar  restrictions.  Such restriction shall not apply to shares registered
in such  offering.  In order to enforce this  provision,  the Company may impose
stop-transfer  instructions  with  respect to such shares  until the end of such
period.  The  obligations  described  in this  Section  1.6 will not  apply to a
registration  relating solely to employee  benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future.

                  1.7  Registration  Procedures.  If and whenever the Company is
required by the provisions of this Section 1 to use its reasonable  best efforts
to effect promptly the registration of Registrable Securities the Company shall:

                                      -7-
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                  (a)  Prepare  and file  with  the  Commission  a  registration
statement  with respect to such  Registrable  Securities  and use its reasonable
best efforts to cause such registration statement to become and remain effective
as provided herein.

                  (b) Prepare and file with the Commission  such  amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration  statement effective and
current and to comply with the  provisions of the Securities Act with respect to
the sale of or other disposition of all Registrable  Securities  covered by such
registration  statement,  including such  amendments  and  supplements as may be
necessary  to reflect the  intended  method of  disposition  of the  prospective
seller or sellers of such  Registrable  Securities  (but for no longer  than one
hundred eighty (180) days (excluding any period during which sales are suspended
pursuant  to  Section   1.7(d))   subsequent  to  the  effective  date  of  such
registration in the case of a registration statement on Form S-1 (or any similar
form of registration  statement  required to set forth  substantially  identical
information));  provided,  however, that (i) such period shall be extended for a
period of time  equal to the  period  the  underwriter  recommends  that all the
Holders refrain from selling the securities included in such registration due to
marketing  conditions or other  conditions  which adversely affect the offer and
sale of such securities; and (ii) in the case of any registration of Registrable
Securities  on Form S-3 which is  intended  to be  offered  on a  continuous  or
delayed  basis,  such  period  shall  be  extended,  if  necessary,  to keep the
registration  statement  effective for at least 180 days  (excluding  any period
during which sales are suspended pursuant to Section 1.7(d)), provided that Rule
415 permits an offering on a continuous or delayed basis,  and provided  further
that applicable  rules under the Securities Act governing the obligation to file
a post-effective  amendment permit, in lieu of filing a post-effective amendment
that (x) includes any prospectus  required by Section 10(a)(3) of the Securities
Act or (y)  reflects  facts or events  representing  a material  or  fundamental
change  in  the  information  set  forth  in  the  registration  statement,  the
incorporation by reference of information required to be included in (x) and (y)
above to be contained in periodic  reports filed pursuant to Section 13 or 15(d)
of the Exchange Act in the registration statement.

                  (c)  Furnish  to  each   prospective   seller  of  Registrable
Securities  such  number of  copies of a  prospectus,  including  a  preliminary
prospectus,  in conformity with the requirements of the Securities Act, and such
other  documents,  as such seller may reasonably  request in order to facilitate
the public  sale or other  disposition  of the  Registrable  Securities  of such
seller.

                  (d) Notify each seller of  Registrable  Securities  covered by
such registration  statement,  at any time when a prospectus relating thereto is
required to be delivered under the Securities 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,  and at the  request of any such  seller,  prepare and furnish to such
seller a reasonable  number of copies of a supplement to or an amendment of such
prospectus  as  may  be  necessary  so  that,  as  thereafter  delivered  to the
purchasers of such shares, such prospectus shall not include an 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 not misleading in the light
of the circumstances then existing.

                  (e) Cause all such Registrable  Securities registered pursuant
hereto to be listed on each securities exchange or approved for quotation on any
inter-dealer  quotation system on which similar securities issued by the Company
are then listed or quoted.

                                      -8-
<PAGE>

                  (f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
of all such  Registrable  Securities  in each case not later than the  effective
date of such registration.

                  (g) Otherwise use its  reasonable  best efforts to comply with
all applicable  rules and regulations of the  Commission,  and make available to
its security holders, as soon as reasonably  practicable,  an earnings statement
covering  the  period of at least  twelve  months,  but not more  than  eighteen
months,  beginning  with  the  first  month  after  the  effective  date  of the
registration statement, which earnings statement shall satisfy the provisions of
Section 1.1 (a) of the Securities Act.

                  (h)  In  connection  with  any  underwritten  public  offering
pursuant to a registration  statement  filed pursuant to Section 1.2, 1.3 or 1.4
hereof,  the  Company  will  enter  into an  underwriting  agreement  reasonably
necessary  to  effect  the  offer  and  sale  of  Common  Stock,  provided  such
underwriting agreement contains customary  underwriting  provisions and provided
further that, if the underwriter so requests,  the  underwriting  agreement will
contain customary contribution provisions.

                  (i) Each  seller of  Registrable  Securities  shall not (until
further  notice)  effect sales of shares covered by any  registration  statement
after receipt of  telegraphic,  facsimile or written  notice from the Company to
suspend  sales to  permit  the  Company  to  correct  or  update a  registration
statement or prospectus.

         1.8 No Other Registration Rights Agreements. The Company represents and
warrants that, except as set forth on Schedule 5.1.4 to the Purchase  Agreement,
it has not  entered  into  any  other  agreements  with  any  person  in any way
obligating the Company to provide registration for any of its securities.

         1.9  Indemnification.  In the  event  any  Registrable  Securities  are
included in a registration statement under this Section 1:

                  (a)  The  Company  will  indemnify  each  Holder,  each of its
officers and  directors and partners,  and each person  controlling  such Holder
within the meaning of Section 15 of the Securities Act and each underwriter,  if
any, and each person who controls any underwriter  within the meaning of Section
15 of the  Securities  Act,  against all expenses,  claims,  losses,  damages or
liabilities  (or actions in respect  thereof),  including  any of the  foregoing
incurred in settlement of any litigation,  commenced or threatened,  arising out
of or based on any untrue statement (or alleged untrue  statement) of a material
fact contained, on the effective date thereof, in any registration statement, in
any prospectus  contained therein, or in any amendment or supplement thereto, or
based on any omission (or alleged  omission)  to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein (in
the case of a  prospectus,  in the light of the  circumstances  under which they
were  made) not  misleading,  or any  violation  by the  Company  of any rule or
regulation  promulgated  under the  Securities  Act applicable to the Company in
connection  with any such  registration,  qualification  or compliance,  and the
Company will reimburse each such Holder,  each of its officers and directors and
partners and each person controlling such Holder, each such underwriter and each
person who controls any such  underwriter,  for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim,  loss, damage,  liability or action,  provided that the Company will
not be liable in any such case to the extent that any such claim,  loss, damage,
liability  or  expense  arises  out of or is based on any  untrue  statement  or
omission or alleged untrue  statement or omission,  made in reliance upon and in
conformity

                                      -9-
<PAGE>

with written information  furnished to the Company by such Holder or underwriter
or their respective agents to be specifically for use therein.

                  (b) Each Holder will, if Registrable  Securities  held by such
Holder  are  included  in  the   securities  as  to  which  such   registration,
qualification  or compliance is being effected,  indemnify the Company,  each of
its directors and officers and its legal  counsel and  independent  accountants,
and each  underwriter,  if any, of the  Company's  securities  covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the  Securities  Act, and any other  Holders
against  all claims,  losses,  damages  and  liabilities  (or actions in respect
thereof),  including  any  of  the  foregoing  incurred  in  settlement  of  any
litigation  commenced  or  threatened,  arising  out of or based  on any  untrue
statement (or alleged  untrue  statement) of a material fact  contained,  on the
effective  date thereof,  in any such  registration  statement,  any  prospectus
contained  therein,  or any  omission (or alleged  omission) to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein (in the case of a prospectus,  in the light of the  circumstances  under
which they were made) not misleading,  and will reimburse the Company,  and such
directors,  officers, persons,  underwriters or control persons for any legal or
any other  expenses  reasonably  incurred in connection  with  investigating  or
defending any such claim, loss, damage, liability or action, in each case to the
extent,  but only to the extent,  that such untrue  statement (or alleged untrue
statement)  or  omission  (or  alleged  omission)  is made in such  registration
statement  or  prospectus  in  reliance  upon  and in  conformity  with  written
information  furnished  to the Company by such Holder or its agent and stated to
be specifically for use therein; provided, however, that the obligations of each
Holder hereunder shall be limited to an amount equal to the net proceeds to each
such Holder of Registrable Securities sold as contemplated herein.

                  (c) Each party entitled to indemnification  under this Section
1.9 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim or any
litigation  resulting  therefrom,  provided  that  counsel for the  Indemnifying
Party,  who shall  conduct  the  defense of such claim or  litigation,  shall be
approved by the  Indemnified  Party (whose  approval shall not  unreasonably  be
withheld),  and the  Indemnified  Party may  participate in such defense at such
party's expense,  and provided further that the failure of any Indemnified Party
to give notice as provided  herein shall not relieve the  Indemnifying  Party of
its  obligations  under  this  Section  1 to  the  extent  such  failure  is not
prejudicial.  No  Indemnifying  Party,  in the  defense  of any  such  claim  or
litigation, shall, except with the consent of each Indemnified Party, 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.  Notwithstanding  anything to the contrary contained in this Section
1.8(c),  the Indemnified Party shall have the right to employ its own counsel in
any action,  claim,  litigation,  proceeding or investigation,  and the fees and
expenses thereof shall be borne by the Indemnified Party, unless the Indemnified
Party  shall  have  reasonably  concluded  that  there may be one or more  legal
defenses  available  to it  which  are  different  from or  additional  to those
available to the Indemnifying  Party, in which case the Indemnifying Party shall
bear all of such  Indemnified  Party's  legal and other fees and expenses  which
arise in defense thereof.  Notwithstanding the foregoing, the Indemnifying Party
shall bear the fees and expenses of only one  additional  counsel to be retained
on behalf of the Indemnified  Parties.  In such event,  the  Indemnifying  Party
shall  not  have  the  right  to  direct  the  defense  of such  action,  claim,
litigation, proceeding or investigation on behalf of the Indemnified Party.

                                      -10-
<PAGE>

                  (d) If the indemnification provided for in this Section 1.9 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
herein,  then the  Indemnifying  Party, in lieu of indemnifying  the Indemnified
Party,  shall contribute to the amount paid or payable by such Indemnified Party
with respect to such loss, liability, claim, damage or expense in the proportion
that is appropriate to reflect the relative fault of the Indemnifying  Party and
the  Indemnified  Party 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 the  Indemnified  Party shall be  determined  by  reference  to, among other
things,  whether the untrue or alleged untrue  statement of 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.

                  (e)  Notwithstanding  the  foregoing,  to the extent  that the
provisions on  indemnification  and  contribution  contained in the underwriting
agreement  entered into in connection with the underwritten  public offering are
in conflict with the foregoing  provisions,  the provisions in the  underwriting
agreement shall control.

         1.10  Information  by Holder.  The  holder or  holders  of  Registrable
Securities  included  in any  registration  shall  furnish to the  Company  such
information  regarding  such  person(s)  and the  distribution  proposed by such
person(s)  as the  Company  may  reasonably  request in writing  and as shall be
required  in  connection  with any  registration,  qualification  or  compliance
referred to in this Section 1.

         1.11 Rule 144 Reporting.  With a view to making  available the benefits
of certain rules and regulations of the Commission  which may at any time permit
the sale of the Registrable  Securities to the public without registration,  the
Company shall use its reasonable best efforts to:

                  (a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;

                  (b) File with the  Commission  in a timely  manner all reports
and other  documents  required of the Company under the  Securities  Act and the
Exchange Act; and

                  (c) Furnish to any Holder  promptly  upon  request,  a written
statement as to its compliance  with the reporting  requirements  of Rule 144 of
the  Securities  Act and the Exchange  Act, a copy of the most recent  annual or
quarterly  report of the Company,  and such other  reports and  documents of the
Company and other  information in the possession of or reasonably  obtainable by
the Company as a Holder may reasonably request in availing itself of any rule or
regulation  of the  Commission  allowing  a Holder  to sell any such  securities
without registration.

         1.12  Termination  of  Registration  Rights.  The rights of each Holder
under this  Section 1  terminate  on the tenth  anniversary  of the date of this
Agreement  or,  if  earlier,  the  date on  which  such  Holder  ceases  to hold
Registrable Securities or Warrants exercisable for Registrable Securities.

                                      -11-
<PAGE>

                                    SECTION 2

                            COVENANTS OF THE COMPANY

         The Company hereby covenants and agrees as follows:

         2.1  No  Conflicting  Agreements.   The  Company  will  not  grant  any
registration  rights to any third party which  conflict with, are superior to or
are pari passu with, the rights herein so long as any of the registration rights
in this Agreement remain in effect.

                                    SECTION 3

                                  MISCELLANEOUS

         3.1 Governing Law. This Agreement  shall be governed in all respects by
the laws of the State of New  York,  as  applied  to  agreements  among New York
residents entered into and to be performed entirely within New York.

         3.2      Jurisdiction and Venue.

                           (i) Each of the parties hereto hereby irrevocably and
         unconditionally submits, for himself, herself or itself and its, his or
         her property,  to the  nonexclusive  jurisdiction of any New York State
         court or federal court of the United  States of America  sitting in New
         York, New York and any appellate court from any thereof,  in any action
         or  proceeding  arising  out of or relating  to this  Agreement  or for
         recognition  or  enforcement  of any judgment,  and each of the parties
         hereto hereby irrevocably and unconditionally agrees that all claims in
         respect of any such action or proceeding may be heard and determined in
         any such New York State  court or, to the extent  permitted  by law, in
         any such federal court.  Each of the parties hereto agrees that a final
         judgment in any such action or proceeding  shall be conclusive  and may
         be enforced in other  jurisdictions  by suit on the  judgment or in any
         other manner provided by law.

                           (ii)  Each  of the  parties  hereto  irrevocably  and
         unconditionally  waives,  to the fullest  extent that he, she or it may
         legally and effectively do so, any objection that he, she or it may now
         or  hereafter  have to the  laying  of venue  of any  suit,  action  or
         proceeding  arising out of or relating to the Agreement in any New York
         State or  federal  court  sitting  in New York,  New York.  Each of the
         parties hereto  irrevocably  waives, to the fullest extent permitted by
         law, the defense of an  inconvenient  forum to the  maintenance of such
         action or proceeding in any such court.

                           (iii) Each of the  parties  further  agrees  that the
         mailing  of any  process  required  by any such court by  certified  or
         registered mail,  return receipt  requested,  to the address for notice
         herein  provided shall  constitute  valid and lawful service of process
         against him, her or it,  without the necessity for service by any other
         means provided by law.

         3.3 Waiver of Jury Trial.  NO PARTY TO THIS  AGREEMENT OR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT,  PROCEEDING,  COUNTERCLAIM OR ANY OTHER LITIGATION  PROCEDURE BASED
UPON OR ARISING  OUT OF THIS  AGREEMENT  OR ANY OF THE OTHER

                                      -12-
<PAGE>

AGREEMENTS  OR THE DEALINGS OR THE  RELATIONSHIP  BETWEEN THE PARTIES.  NO PARTY
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED,
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL  CANNOT OR HAS NOT BEEN WAIVED.  THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO,  AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER PARTY HAS IN ANY WAY
AGREED  WITH OR  REPRESENTED  TO THE OTHER  PARTY  THAT THE  PROVISIONS  OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

         3.4  Remedies.  The Holders are entitled to enforce  their rights under
this Agreement to recover  damages  (including  reasonable  attorneys'  fees and
costs,  whether incurred in litigation,  mediation,  arbitration,  bankruptcy or
administrative  proceedings or any appeals therefrom) by reason of any breach of
any  provision of this  Agreement  and to exercise all other rights  existing in
their  favor.  The  Company  and the Holders  agree and  acknowledge  that money
damages may not be an adequate  remedy for any breach of the  provisions of this
Agreement  and that any  Holder may in its or his sole  discretion  apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.

         3.5  Successors  and  Assigns,  Assignment  of  Rights.  The rights and
benefits of a Purchaser hereunder may be assigned to a transferee or assignee in
connection with transfer or assignment of any Warrants or Registrable Securities
owned by such  Purchaser  (a) to any  person  or entity  provided  that (i) such
transfer may be effected in accordance  with  applicable  securities  laws, (ii)
such  transferee  or assignee  acquires at least  100,000  Warrants or shares of
Registrable Securities, (iii) then such transferee or assignee is a mutual fund,
bank,  institutional  investor, or fund, investment  partnership or other entity
which  regularly  engages in the  purchase  or holding of  securities  which are
characterized  as "mezzanine  securities" or which are otherwise  similar to the
Notes and the Warrants (provided that this condition shall apply only so long as
an Event of  Default  has not  occurred  and is not  continuing),  and (iv) such
assignee or transferee executes a written instrument agreeing to be bound by the
terms and provisions of this  Agreement,  (b) to any person or entity which is a
majority-owned  subsidiary  of a Holder or controls,  is  controlled by or under
common control with the Holder,  (c) to a member of the Advisory Board of, or to
a member of, the Purchaser,  (d) to a constituent  partner of a Purchaser or the
estate of such a  constituent  partner or a  liquidating  trust for the  benefit
thereof or to any affiliated fund of a Purchaser, and (e) to a successor trustee
of a  Purchaser  in its  capacity as trustee.  Any such  transfer or  assignment
permitted  hereby  shall  inure to the  benefit  of,  and be binding  upon,  the
successors, assigns, heirs, executors and administrators of the parties hereto.

         3.6 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
full and entire  understanding  and agreement between the parties with regard to
the subjects hereof.  Neither this Agreement nor any term hereof may be amended,
waived,  discharged or terminated,  except by a written instrument signed by the
Company, the holders of a majority of the Registrable  Securities (computed on a
fully  diluted  basis   assuming   exercise  or  conversion  of  all  securities
exercisable  for or  convertible  into  Registrable  Securities,  including  the
Warrants,  including  RFE so long as it  holds  any  Registrable  Securities  or
Warrants) and any such  amendment,  waiver,  discharge or  termination  shall be
binding upon all the parties hereto, but in no event shall the obligation of any
party hereto be materially  increased,  except upon the written  consent of such
party. The addition of an additional Purchaser as a party to this Agreement at a
subsequent closing shall require the written consent of the Company and RFE, and
the execution of a signature page hereto by such Purchaser.

                                      -13-
<PAGE>

         3.7  Notices,  etc.  All notices and other  communications  required or
permitted  hereunder  shall be in writing  and shall be mailed by United  States
first-class mail, postage prepaid,  sent by facsimile or delivered personally by
hand or  nationally  recognized  courier  addressed  (a) if to a  Purchaser,  as
indicated on the list of Purchasers  attached to the Purchase  Agreement,  or at
such other address as such Purchaser or permitted  assignee shall have furnished
to the  Company  in  writing,  or (b) if to the  Company,  at  such  address  or
facsimile  number as the  Company  shall have  furnished  to each  Purchaser  in
writing. All such notices and other written communications shall be effective on
the date of facsimile transfer or delivery, or on the date delivery is refused.

         3.8 Delays or  Omissions.  No delay or omission to exercise  any right,
power or remedy accruing to any Purchaser (in any capacity hereunder),  upon any
breach or default of the  Company  under this  Agreement  shall  impair any such
right,  power or remedy of such  Purchaser  nor  shall it be  construed  to be a
waiver of any such breach or default,  or an acquiescence  therein,  or of or in
any similar  breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.  Any waiver, permit, consent or approval of
any kind or character on the part of any Purchaser  (in any capacity  hereunder)
of any breach or default  under this  Agreement or any waiver on the part of any
Purchaser of any  provisions  or conditions  of this  Agreement  must be made in
writing and shall be effective only to the extent specifically set forth in such
writing.  All  remedies,  either  under this  Agreement  or by law or  otherwise
afforded to any Purchaser, shall be cumulative and not alternative.

         3.9 Separability. In case any provision of the Agreement is found to be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.

         3.10  Titles  and   Subtitles.   The  titles  of  the   paragraphs  and
subparagraphs  of this  Agreement are for  convenience of reference only and are
not to be considered in construing or interpreting this Agreement.

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

         3.12  Aggregation Of Stock.  All shares of the  Registrable  Securities
held or acquired by affiliated  entities or persons shall be aggregated together
for the  purpose  of  determining  the  availability  of any  rights  under this
Agreement.

         3.13 No Third Party Beneficiaries.  Except as set forth in Section 1.9,
the  covenants  and  agreements  set forth herein are for the sole and exclusive
benefit of the parties  hereto and their  respective  successors and assigns and
such covenants and agreements shall not be construed as conferring,  and are not
intended to confer, any rights or benefits upon any other persons.

         3.14 Fees and Expenses.  The Company shall pay the reasonable  fees and
expenses  incurred in connection with the enforcement,  waiver,  modification or
amendment  of any  provision  hereof  or of any  related  agreement,  including,
without  limitation,  reasonable fees and  disbursements  of one counsel for the
Purchasers.  In connection  with any  proceeding  between the Purchasers and the
Company  with  respect to the  enforcement  of any rights and  benefits  arising
hereunder,  the  prevailing  party shall have its  reasonable  fees and expenses
paid.


                                      -14-
<PAGE>


         IN WITNESS WHEREOF,  the undersigned parties have caused this Agreement
to be duly executed and delivered as of the date first written above.

THE COMPANY:               ALLOU HEALTH & BEAUTY CARE, INC.



By:

                             Name: David Shamilzadeh
                             Title: President and Chief Financial Officer

RFE:                       RFE INVESTMENT PARTNERS VI, L.P.
                           By:  RFE Associates VI, LLC, its General Partner



                            By:
                               Name: Howard C. Landis
                               Title: Managing Member

                                      -15-