Document:

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

                This Registration Rights Agreement (this "Agreement")
is made and entered into as of May 28, 2004, by and among DDS Technologies USA,
Inc., a Nevada corporation (the "Company"), and the investors signatory
hereto (each a "Purchaser" and collectively, the "Purchasers").

                This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").

                The Company and the Purchasers hereby agree as follows:

        1.         Definitions. Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

"Effectiveness Date" means,
                        with respect to the Registration Statement required to
                        be filed hereunder, the earlier of (a) the 150th
                        calendar day following the Closing Date and (b) the
                        fifth Trading Day following the date on which the
                        Company is notified by the Commission that the
                        Registration Statement will not be reviewed or is no
                        longer subject to further review and comments.

                        "Effectiveness Period" shall
                        have the meaning set forth in Section 2(a).

                        "Filing Date" means, with
                        respect to the Registration Statement required to be
                        filed hereunder, the 60th calendar day following the
                        Closing Date.

                        "Holder" or "Holders"
                        means the holder or holders, as the case may be, from
                        time to time of Registrable Securities.

                        "Indemnified Party" shall have
                        the meaning set forth in Section 5(c).

                        "Indemnifying Party" shall
                        have the meaning set forth in Section 5(c).

                        "Losses" shall have the
                        meaning set forth in Section 5(a).

                        "Proceeding" means an action,
                        claim, suit, investigation or proceeding (including,
                        without limitation, an investigation or partial
                        proceeding, such as a deposition), whether commenced or
                        threatened.

                        "Prospectus" means the
                        prospectus included in the Registration Statement
                        (including, without limitation, a prospectus that
                        includes any information previously omitted from a
                        prospectus filed as part of an effective registration
                        statement in reliance upon Rule 430A promulgated under
                        the Securities Act), as amended or supplemented by any
                        prospectus supplement, with respect to the terms of the
                        offering of any portion of the Registrable Securities
                        covered by the Registration Statement, and all other
                        amendments and supplements to the Prospectus, including
                        post-effective amendments, and all material incorporated
                        by reference or deemed to be incorporated by reference
                        in such Prospectus.

                        "Registrable Securities" means
                        the Shares and the Warrant Shares, together with any
                        shares of Common Stock issued or issuable upon any stock
                        split, dividend or other distribution, recapitalization
                        or similar event with respect to the foregoing or in
                        connection with any anti-dilution provisions in the
                        Warrant.

                        "Registration Statement" means
                        the registration statements required to be filed
                        hereunder, including (in each case) the Prospectus,
                        amendments and supplements to the registration statement
                        or Prospectus, including pre- and post-effective
                        amendments, all exhibits thereto, and all material
                        incorporated by reference or deemed to be incorporated
                        by reference in the registration statement.

                        "Rule 415" means Rule 415
                        promulgated by the Commission pursuant to the Securities
                        Act, as such Rule may be amended from time to time, or
                        any similar rule or regulation hereafter adopted by the
                        Commission having substantially the same effect as such
                        Rule.

                        "Rule 424" means Rule 424
                        promulgated by the Commission pursuant to the Securities
                        Act, as such Rule may be amended from time to time, or
                        any similar rule or regulation hereafter adopted by the
                        Commission having substantially the same effect as such
                        Rule.

                        "Securities Act" means the
                        Securities Act of 1933, as amended.

            

            2.     Registration. (a) On or prior to the Filing Date,
the Company shall prepare and file with the Commission the Registration
Statement covering the resale of all of the Registrable Securities for an
offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement required hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3, in
which case the Registration shall be on another appropriate form in accordance
herewith). The Registration Statement required hereunder shall contain (except
if otherwise directed by the Holders) the "Plan of Distribution" attached
hereto as Annex A. The Company shall cause the Registration Statement to
become effective and remain effective as provided herein. The Company shall use
its commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not later than the Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date which is two
years after the Closing Date or such later date when all Registrable Securities
covered by the Registration Statement (a) have been sold pursuant to the
Registration Statement or an exemption from the registration requirements of the
Securities Act or (b) may be sold without volume restrictions pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer agent
and the affected Holders (the "Effectiveness Period").

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                            (b) If a Registration Statement is not filed on or prior to
sixty days after the date of this Agreement; then in addition to any other
rights the Holders may have hereunder or under applicable law, the Company shall
pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 2.5% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any Registrable Securities then held by
such Holder, such payment to be made within seven days after such 60th day from
the date of this Agreement.

                            (c) If a Registration Statement is not declared effective on
or prior to 150 days after the date of this Agreement; then in addition to any
other rights the Holders may have hereunder or under applicable law, the Company
shall pay to each Holder, until the Registration Statement is declared
effective, an amount in cash, as liquidated damages and not as a penalty, equal
to 2.0% monthly of the aggregate purchase price paid by such Holder pursuant to
the Purchase Agreement for any Registrable Securities then held by such Holder.
The first of any such payments shall be made within seven days after the date
that is 150 days after the date of this Agreement, and any subsequent payments
shall be made within 7 days after the end of each month thereafter, with a
prorated payment due, if applicable, within 7 days after the date of
effectiveness if effectiveness shall occur on a date less than one month after
the end of the previous month as to which payment was due; provided, however,
that the total of payments under Section 2(b) and 2(c) hereof shall not exceed
10.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities then held by such Holder. 

            3.     Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:

        (a)     Not less than three Trading Days,
                        which shall not be included in the calculation of time
                        period for the purposes of the Company's obligations
                        under this Agreement or under the Purchase Agreement,
                        prior to the filing of the Registration Statement or any
                        related Prospectus or any amendment or supplement
                        thereto, the Company shall, (i) furnish to the Holders
                        copies of all such documents proposed to be filed
                        (including documents incorporated or deemed incorporated
                        by reference to the extent requested by such Person)
                        which documents will be subject to the review of such
                        Holders, and (ii) cause its officers and directors,
                        counsel and independent certified public accountants to
                        respond to such inquiries as shall be necessary, in the
                        reasonable opinion of respective counsel to conduct a
                        reasonable investigation within the meaning of the
                        Securities Act. The Company shall not file the
                        Registration Statement or any such Prospectus or any
                        amendments or supplements thereto to which the Holders
                        of a majority of the Registrable Securities shall
                        reasonably object in good faith.

                                (b)     (i) Prepare and file with the
                        Commission such amendments, including post-effective
                        amendments, to the Registration Statement and the
                        Prospectus used in connection therewith as may be
                        necessary to keep the Registration Statement
                        continuously effective as to the applicable Registrable
                        Securities for the Effectiveness Period; (ii) cause the
                        related Prospectus to be amended or supplemented by any
                        required Prospectus supplement, and as so supplemented
                        or amended to be filed pursuant to Rule 424; (iii)
                        respond as promptly as reasonably possible, and in any
                        event within 15 Trading Days, to any comments received
                        from the Commission with respect to the Registration
                        Statement or any amendment thereto and, as promptly as
                        reasonably possible, upon request, provide the Holders
                        true and complete copies of all correspondence from and
                        to the Commission relating to the Registration
                        Statement; and (iv) comply in all material respects with
                        the provisions of the Securities Act and the Exchange
                        Act with respect to the disposition of all Registrable
                        Securities covered by the Registration Statement during
                        the applicable period in accordance with the intended
                        methods of disposition by the Holders thereof set forth
                        in the Registration Statement as so amended or in such
                        Prospectus as so supplemented.

                        -3-

                                (c)     Notify the Holders of Registrable
                        Securities to be sold as promptly as reasonably possible
                        (and, in the case of (i)(A) below, not less than two
                        Trading Days prior to such filing) and (if requested by
                        any such Person) confirm such notice in writing promptly
                        following the day (i)(A) when a Prospectus or any
                        Prospectus supplement or post-effective amendment to the
                        Registration Statement is proposed to be filed; (B) when
                        the Commission notifies the Company whether there will
                        be a "review" of the Registration Statement and whenever
                        the Commission comments in writing on the Registration
                        Statement (the Company shall upon request provide true
                        and complete copies thereof and all written responses
                        thereto to each of the Holders); and (C) with respect to
                        the Registration Statement or any post-effective
                        amendment, when the same has become effective; (ii) of
                        any request by the Commission or any other Federal or
                        state governmental authority during the period of
                        effectiveness of the Registration Statement for
                        amendments or supplements to the Registration Statement
                        or Prospectus or for additional information; (iii) of
                        the issuance by the Commission or any other federal or
                        state governmental authority of any stop order
                        suspending the effectiveness of the Registration
                        Statement covering any or all of the Registrable
                        Securities or the initiation of any Proceedings for that
                        purpose; (iv) of the receipt by the Company of any
                        notification with respect to the suspension of the
                        qualification or exemption from qualification of any of
                        the Registrable Securities for sale in any jurisdiction,
                        or the initiation or threatening of any Proceeding for
                        such purpose; and (v) of the occurrence of any event or
                        passage of time that makes the financial statements
                        included in the Registration Statement ineligible for
                        inclusion therein or any statement made in the
                        Registration Statement or Prospectus or any document
                        incorporated or deemed to be incorporated therein by
                        reference untrue in any material respect or that
                        requires any revisions to the Registration Statement,
                        Prospectus or other documents so that, in the case of
                        the Registration Statement or the Prospectus, as the
                        case may be, it will not contain any 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, in light of the circumstances under
                        which they were made, not misleading.

                                (d)     Use its commercially reasonable
                        efforts to avoid the issuance of, or, if issued, obtain
                        the withdrawal of (i) any order suspending the
                        effectiveness of the Registration Statement, or (ii) any
                        suspension of the qualification (or exemption from
                        qualification) of any of the Registrable Securities for
                        sale in any jurisdiction, at the earliest practicable
                        moment.

                                (e)     Furnish to each Holder, without
                        charge, at least one conformed copy of the Registration
                        Statement and each amendment thereto, including
                        financial statements and schedules, all documents
                        incorporated or deemed to be incorporated therein by
                        reference to the extent requested by such Person, and
                        all exhibits to the extent requested by such Person
                        (including those previously furnished or incorporated by
                        reference) promptly after the filing of such documents
                        with the Commission.

                        -4-

                                (f)     Promptly deliver to each Holder,
                        without charge, as many copies of the Prospectus or
                        Prospectuses (including each form of prospectus) and
                        each amendment or supplement thereto as such Persons may
                        reasonably request in connection with resales by the
                        Holder of Registrable Securities. The Company hereby
                        consents to the use of such Prospectus and each
                        amendment or supplement thereto by each of the selling
                        Holders in connection with the offering and sale of the
                        Registrable Securities covered by such Prospectus and
                        any amendment or supplement thereto, except after the
                        giving on any notice pursuant to Section 3(c).

                                (g)     Prior to any resale of Registrable Securities by a Holder, use its commercially
                        reasonable efforts to register or qualify or cooperate
                        with the selling Holders in connection with the
                        registration or qualification (or exemption from the
                        Registration or qualification) of such Registrable
                        Securities for the resale by the Holder under the
                        securities or Blue Sky laws of such jurisdictions within
                        the United States as any Holder reasonably requests in
                        writing, to keep each the Registration or qualification
                        (or exemption therefrom) effective during the
                        Effectiveness Period and to do any and all other acts or
                        things reasonably necessary to enable the disposition in
                        such jurisdictions of the Registrable Securities covered
                        by the Registration Statement; provided, that the
                        Company shall not be required to qualify generally to do
                        business in any jurisdiction where it is not then so
                        qualified, subject the Company to any material tax in
                        any such jurisdiction where it is not then so subject or
                        file a general consent to service of process in any such
                        jurisdiction.

                                (h)     If requested by the Holders,
                        cooperate with the Holders to facilitate the timely
                        preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee
                        pursuant to the Registration Statement, which
                        certificates shall be free, to the extent permitted by
                        the Purchase Agreement, of all restrictive legends, and
                        to enable such Registrable Securities to be in such
                        denominations and registered in such names as any such
                        Holders may request.

                                (i)     Upon the occurrence of any event
                        contemplated by Section 3(c)(v), as promptly as
                        reasonably possible, prepare a supplement or amendment,
                        including a post-effective amendment, to the
                        Registration Statement or a supplement to the related
                        Prospectus or any document incorporated or deemed to be
                        incorporated therein by reference, and file any other
                        required document so that, as thereafter delivered,
                        neither the Registration Statement nor such Prospectus
                        will contain 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, in
                        light of the circumstances under which they were made,
                        not misleading.

                                (j)     Comply with all applicable rules
                        and regulations of the Commission.

                        -5-

                                (k)     The Company may require each
                        selling Holder to furnish to the Company a certified
                        statement as to the number of shares of Common Stock
                        beneficially owned by such Holder and, if required by
                        the Commission, the person thereof that has voting and dispositive control over the Shares. Each Holder agrees
                        to reasonably cooperate with the Company in the
                        preparation of the Registration Statement and response
                        by the Company to any comments by the Commission.

            

            4.    
Registration Expenses. All fees and expenses
incident to the performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with the Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested by
the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.

            5.     Indemnification

        (a)     Indemnification by the Company.
                        The Company shall, notwithstanding any termination of
                        this Agreement, indemnify and hold harmless each Holder,
                        the officers, directors, agents and employees of each of
                        them, each Person who controls any such Holder (within
                        the meaning of Section 15 of the Securities Act or
                        Section 20 of the Exchange Act) and the officers,
                        directors, agents and employees of each such controlling
                        Person, to the fullest extent permitted by applicable
                        law, from and against any and all losses, claims,
                        damages, liabilities, costs (including, without
                        limitation, reasonable attorneys' fees) and expenses
                        (collectively, "Losses"), as incurred, to the
                        extent arising out of or relating to any untrue or
                        alleged untrue statement of a material fact contained in
                        the Registration Statement, any Prospectus or any form
                        of prospectus or in any amendment or supplement thereto
                        or in any preliminary prospectus, or arising out of or
                        relating to any omission or alleged omission of a
                        material fact required to be stated therein or necessary
                        to make the statements therein (in the case of any
                        Prospectus or form of prospectus or supplement thereto,
                        in light of the circumstances under which they were
                        made) not misleading, except to the extent, but only to
                        the extent, that (1) such untrue statements or omissions
                        are based solely upon information regarding such Holder
                        furnished in writing to the Company by such Holder
                        expressly for use therein, or to the extent that such
                        information relates to such Holder or such Holder's
                        proposed method of distribution of Registrable
                        Securities and was reviewed and expressly approved in
                        writing by such Holder expressly for use in the
                        Registration Statement, such Prospectus or such form of
                        Prospectus or in any amendment or supplement thereto (it
                        being understood that the Holder has approved Annex A
                        hereto for this purpose) or (2) in the case of an
                        occurrence of an event of the type specified in Section
                        3(c)(ii)-(v), the use by such Holder of an outdated or
                        defective Prospectus after the Company has notified such
                        Holder in writing that the Prospectus is outdated or
                        defective and prior to the receipt by such Holder of the
                        Advice contemplated in Section 6(d). The Company shall
                        notify the Holders promptly of the institution, threat
                        or assertion of any Proceeding of which the Company is
                        aware in connection with the transactions contemplated
                        by this Agreement.

                        -6-

                                (b)    
                        Indemnification by Holders.
                        Each Holder shall, severally and not jointly, indemnify
                        and hold harmless the Company, its directors, officers,
                        agents and employees, each Person who controls the
                        Company (within the meaning of Section 15 of the
                        Securities Act and Section 20 of the Exchange Act), and
                        the directors, officers, agents or employees of such
                        controlling Persons, to the fullest extent permitted by
                        applicable law, from and against all Losses, as
                        incurred, to the extent arising out of or based upon:
                        (x) such Holder's failure to comply with the prospectus
                        delivery requirements of the Securities Act or (y) any
                        untrue or alleged untrue statement of a material fact
                        contained in any Registration Statement, any Prospectus,
                        or any form of prospectus, or in any amendment or
                        supplement thereto or in any preliminary prospectus, or
                        arising out of or relating to any omission or alleged
                        omission of a material fact required to be stated
                        therein or necessary to make the statements therein not
                        misleading (i) to the extent, but only to the extent,
                        that such untrue statement or omission is contained in
                        any information so furnished in writing by such Holder
                        to the Company specifically for inclusion in the
                        Registration Statement or such Prospectus or (ii) to the
                        extent that (1) such untrue statements or omissions are
                        based solely upon information regarding such Holder
                        furnished in writing to the Company by such Holder
                        expressly for use therein, or to the extent that such
                        information relates to such Holder or such Holder's
                        proposed method of distribution of Registrable
                        Securities and was reviewed and expressly approved in
                        writing by such Holder expressly for use in the
                        Registration Statement (it being understood that the
                        Holder has approved Annex A hereto for this purpose),
                        such Prospectus or such form of Prospectus or in any
                        amendment or supplement thereto or (2) in the case of an
                        occurrence of an event of the type specified in Section
                        3(c)(ii)-(v), the use by such Holder of an outdated or
                        defective Prospectus after the Company has notified such
                        Holder in writing that the Prospectus is outdated or
                        defective and prior to the receipt by such Holder of the
                        Advice contemplated in Section 6(d). In no event shall
                        the liability of any selling Holder hereunder be greater
                        in amount than the dollar amount of the net proceeds
                        received by such Holder upon the sale of the Registrable
                        Securities giving rise to such indemnification
                        obligation.

                                (c)     Conduct of Indemnification
                        Proceedings. If any Proceeding shall be brought or
                        asserted against any Person entitled to indemnity
                        hereunder (an "Indemnified Party"), such
                        Indemnified Party shall promptly notify the Person from
                        whom indemnity is sought (the "Indemnifying Party")
                        in writing, and the Indemnifying Party shall have the
                        right to assume the defense thereof, including the
                        employment of counsel reasonably satisfactory to the
                        Indemnified Party and the payment of all fees and
                        expenses incurred in connection with defense thereof;
                        provided, that the failure of any Indemnified Party to
                        give such notice shall not relieve the Indemnifying
                        Party of its obligations or liabilities pursuant to this
                        Agreement, except (and only) to the extent that it shall
                        be finally determined by a court of competent
                        jurisdiction (which determination is not subject to
                        appeal or further review) that such failure shall have
                        prejudiced the Indemnifying Party.

                        -7-

                                An Indemnified Party shall have the
                        right to employ separate counsel in any such Proceeding
                        and to participate in the defense thereof, but the fees
                        and expenses of such counsel shall be at the expense of
                        such Indemnified Party or Parties unless: (1) the
                        Indemnifying Party has agreed in writing to pay such
                        fees and expenses; (2) the Indemnifying Party shall have
                        failed promptly to assume the defense of such Proceeding
                        and to employ counsel reasonably satisfactory to such
                        Indemnified Party in any such Proceeding; or (3) the
                        named parties to any such Proceeding (including any
                        impleaded parties) include both such Indemnified Party
                        and the Indemnifying Party, and such Indemnified Party
                        shall have been advised by counsel that a conflict of
                        interest is likely to exist if the same counsel were to
                        represent such Indemnified Party and the Indemnifying
                        Party (in which case, if such Indemnified Party notifies
                        the Indemnifying Party in writing that it elects to
                        employ separate counsel at the expense of the
                        Indemnifying Party, the Indemnifying Party shall not
                        have the right to assume the defense thereof and the
                        reasonable fees and expenses of one separate counsel
                        shall be at the expense of the Indemnifying Party). The
                        Indemnifying Party shall not be liable for any
                        settlement of any such Proceeding effected without its
                        written consent, which consent shall not be unreasonably
                        withheld. No Indemnifying Party shall, without the prior
                        written consent of the Indemnified Party, effect any
                        settlement of any pending Proceeding in respect of which
                        any Indemnified Party is a party, unless such settlement
                        includes an unconditional release of such Indemnified
                        Party from all liability on claims that are the subject
                        matter of such Proceeding.

                                All reasonable fees and expenses of
                        the Indemnified Party (including reasonable fees and
                        expenses to the extent incurred in connection with
                        investigating or preparing to defend such Proceeding in
                        a manner not inconsistent with this Section) shall be
                        paid to the Indemnified Party, as incurred, within ten
                        Trading Days of written notice thereof to the
                        Indemnifying Party; provided, that the
                        Indemnified Party shall promptly reimburse the
                        Indemnifying Party for that portion of such fees and
                        expenses applicable to such actions for which such
                        Indemnified Party is not entitled to indemnification
                        hereunder, determined based upon the relative faults of
                        the parties.

                                (d)     Contribution. If a claim
                        for indemnification under Section 5(a) or 5(b) is
                        unavailable to an Indemnified Party (by reason of public
                        policy or otherwise), then each Indemnifying Party, in
                        lieu of indemnifying such Indemnified Party, shall
                        contribute to the amount paid or payable by such
                        Indemnified Party as a result of such Losses, in such
                        proportion as is appropriate to reflect the relative
                        fault of the Indemnifying Party and Indemnified Party in
                        connection with the actions, statements or omissions
                        that resulted in such Losses as well as any other
                        relevant equitable considerations. The relative fault of
                        such Indemnifying Party and Indemnified Party shall be
                        determined by reference to, among other things, whether
                        any action in question, including any untrue or alleged
                        untrue statement of a material fact or omission or
                        alleged omission of a material fact, has been taken or
                        made by, or relates to information supplied by, such
                        Indemnifying Party or Indemnified Party, and the
                        parties' relative intent, knowledge, access to
                        information and opportunity to correct or prevent such
                        action, statement or omission. The amount paid or
                        payable by a party as a result of any Losses shall be
                        deemed to include, subject to the limitations set forth
                        in Section 5(c), any reasonable attorneys' or other
                        reasonable fees or expenses incurred by such party in
                        connection with any Proceeding to the extent such party
                        would have been indemnified for such fees or expenses if
                        the indemnification provided for in this Section was
                        available to such party in accordance with its terms.

                        -8-

                                The parties hereto agree that it
                        would not be just and equitable if contribution pursuant
                        to this Section 5(d) were determined by pro rata
                        allocation or by any other method of allocation that
                        does not take into account the equitable considerations
                        referred to in the immediately preceding paragraph.
                        Notwithstanding the provisions of this Section 5(d), no
                        Holder shall be required to contribute, in the
                        aggregate, any amount in excess of the amount by which
                        the proceeds actually received by such Holder from the
                        sale of the Registrable Securities subject to the
                        Proceeding exceeds the amount of any damages that such
                        Holder has otherwise been required to pay by reason of
                        such untrue or alleged untrue statement or omission or
                        alleged omission, except in the case of fraud by such
                        Holder. The indemnity and contribution agreements
                        contained in this Section are in addition to any
                        liability that the Indemnifying Parties may have to the
                        Indemnified Parties.

            

            6.    
Miscellaneous

        (a)     Remedies. In the event of
                        a breach by the Company or by a Holder, of any of their
                        obligations under this Agreement, each Holder or the
                        Company, as the case may be, in addition to being
                        entitled to exercise all rights granted by law and under
                        this Agreement, including recovery of damages, will be
                        entitled to specific performance of its rights under
                        this Agreement. The Company and each Holder agree that
                        monetary damages would not provide adequate compensation
                        for any losses incurred by reason of a breach by it of
                        any of the provisions of this Agreement and hereby
                        further agrees that, in the event of any action for
                        specific performance in respect of such breach, it shall
                        waive the defense that a remedy at law would be
                        adequate.

                                (b)     No Piggyback on Registrations.
                        Except as set forth on Schedule 6(b), neither the
                        Company nor any of its security holders (other than the
                        Holders in such capacity pursuant hereto) may include
                        securities of the Company in a Registration Statement
                        other than the Registrable Securities, and the Company
                        shall not after the date hereof enter into any agreement
                        providing any such right to any of its security holders.
                        Except as set forth in the SEC Reports, no Person has
                        any right to cause the Company to effect the
                        registration under the Securities Act of any securities
                        of the Company. The Company shall not file any other
                        registration statement until after the Effective Date.

                                (c)     Compliance. Each Holder
                        covenants and agrees that it will comply with the
                        prospectus delivery requirements of the Securities Act
                        as applicable to it in connection with sales of
                        Registrable Securities pursuant to the Registration
                        Statement.

                        -9-

                                (d)    
                        Discontinued Disposition.
                        Each Holder agrees by its acquisition of such
                        Registrable Securities that, upon receipt of a notice
                        from the Company of the occurrence of any event of the
                        kind described in Section 3(c), such Holder will
                        forthwith discontinue disposition of such Registrable
                        Securities under the Registration Statement until such
                        Holder's receipt of the copies of the supplemented
                        Prospectus and/or amended Registration Statement or
                        until it is advised in writing (the "Advice") by
                        the Company that the use of the applicable Prospectus
                        may be resumed, and, in either case, has received copies
                        of any additional or supplemental filings that are
                        incorporated or deemed to be incorporated by reference
                        in such Prospectus or Registration Statement. The
                        Company may provide appropriate stop orders to enforce
                        the provisions of this paragraph.

                                (e)     Piggy-Back Registrations.
                        If at any time during the Effectiveness Period there is
                        not an effective Registration Statement covering all of
                        the Registrable Securities and the Company shall
                        determine to prepare and file with the Commission a
                        registration statement relating to an offering for its
                        own account or the account of others under the
                        Securities Act of any of its equity securities, other
                        than on Form S-4 or Form S-8 (each as promulgated under
                        the Securities Act) or their then equivalents relating
                        to equity securities to be issued solely in connection
                        with any acquisition of any entity or business or equity
                        securities issuable in connection with the stock option
                        or other employee benefit plans, then the Company shall
                        send to each Holder a written notice of such
                        determination and, if within fifteen days after the date
                        of such notice, any such Holder shall so request in
                        writing, the Company shall include in such registration
                        statement all or any part of such Registrable Securities
                        such Holder requests to be registered, subject to
                        customary underwriter cutbacks applicable to all holders
                        of registration rights.

                                (f)     Amendments and Waivers.
                        The provisions of this Agreement, including the
                        provisions of this sentence, may not be amended,
                        modified or supplemented, and waivers or consents to
                        departures from the provisions hereof may not be given,
                        unless the same shall be in writing and signed by the
                        Company and each Holder of the then outstanding
                        Registrable Securities.

                        
                                (g)     Notices. Any and
                        all notices or other communications or deliveries
                        required or permitted to be provided hereunder shall be
                        in writing and shall be deemed given and effective on
                        the earliest of (i) the date of transmission, if such
                        notice or communication is delivered via facsimile at
                        the facsimile number provided for below prior to 6:30
                        p.m. (New York City time) on a Trading Day, (ii) the
                        Trading Day after the date of transmission, if such
                        notice or communication is delivered via facsimile at
                        the facsimile number provided for below later than 6:30
                        p.m. (New York City time) on any date and earlier than
                        11:59 p.m. (New York City time) on such date, (iii) the
                        Trading Day following the date of mailing, if sent by
                        nationally recognized overnight courier service, or (iv)
                        upon actual receipt by the party to whom such notice is
                        required to be given. The address for such notices and
                        communications shall be delivered and addressed as set
                        forth in the Purchase Agreement

                                (h)     Successors and Assigns.
                        This Agreement shall inure to the benefit of and be
                        binding upon the successors and permitted assigns of
                        each of the parties and shall inure to the benefit of
                        each Holder. Each Holder may assign their respective
                        rights hereunder in the manner and to the Persons as
                        permitted under the Purchase Agreement.

                        -10-

                                (i)     Execution and Counterparts.
                        This Agreement may be executed in any number of
                        counterparts, each of which when so executed shall be
                        deemed to be an original and, all of which taken
                        together shall constitute one and the same Agreement. In
                        the event that any signature is delivered by facsimile
                        transmission, such signature shall create a valid
                        binding obligation of the party executing (or on whose
                        behalf such signature is executed) the same with the
                        same force and effect as if such facsimile signature
                        were the original thereof.

                                (j)     Governing Law. All
                        questions concerning the construction, validity,
                        enforcement and interpretation of this Agreement shall
                        be governed by and construed and enforced in accordance
                        with the internal laws of the State of New York, without
                        regard to the principles of conflicts of law thereof.
                        Each party agrees that all legal proceedings concerning
                        the interpretations, enforcement and defense of the
                        transactions contemplated by this Agreement (whether
                        brought against a party hereto or its respective
                        affiliates, directors, officers, shareholders, employees
                        or agents) shall be commenced exclusively in the state
                        and federal courts sitting in the City of New York, New
                        York. Each party hereto hereby irrevocably submits to
                        the exclusive jurisdiction of the state and federal
                        courts sitting in the City of New York, New York for the
                        adjudication of any dispute hereunder or in connection
                        herewith or with any transaction contemplated hereby or
                        discussed herein (including with respect to the
                        enforcement of the any of this Agreement), and hereby
                        irrevocably waives, and agrees not to assert in any
                        suit, action or proceeding, any claim that it is not
                        personally subject to the jurisdiction of any such
                        court, that such suit, action or proceeding is improper.
                        Each party hereto hereby irrevocably waives personal
                        service of process and consents to process being served
                        in any such suit, action or proceeding by delivering a
                        copy thereof via overnight delivery (with evidence of
                        delivery) to such party at the address in effect for
                        notices to it under this Agreement and agrees that such
                        service shall constitute good and sufficient service of
                        process and notice thereof. Nothing contained herein
                        shall be deemed to limit in any way any right to serve
                        process in any manner permitted by law. Each party
                        hereto hereby irrevocably waives, to the fullest extent
                        permitted by applicable law, any and all right to trial
                        by jury in any legal proceeding arising out of or
                        relating to this Agreement or the transactions
                        contemplated hereby. If either party shall commence an
                        action or proceeding to enforce any provisions of this
                        Agreement, then the prevailing party in such action or
                        proceeding shall be reimbursed by the other party for
                        its attorneys fees and other costs and expenses incurred
                        with the investigation, preparation and prosecution of
                        such action or proceeding.

                                (k)     Cumulative Remedies. The
                        remedies provided herein are cumulative and not
                        exclusive of any remedies provided by law.

                                (l)     Severability. If any term,
                        provision, covenant or restriction of this Agreement is
                        held by a court of competent jurisdiction to be invalid,
                        illegal, void or unenforceable, the remainder of the
                        terms, provisions, covenants and restrictions set forth
                        herein shall remain in full force and effect and shall
                        in no way be affected, impaired or invalidated, and the
                        parties hereto shall use their commercially reasonable
                        efforts to find and employ an alternative means to
                        achieve the same or substantially the same result as
                        that contemplated by such term, provision, covenant or
                        restriction. It is hereby stipulated and declared to be
                        the intention of the parties that they would have
                        executed the remaining terms, provisions, covenants and
                        restrictions without including any of such that may be
                        hereafter declared invalid, illegal, void or
                        unenforceable.

                        -11-

                                (m)     Headings. The headings in
                        this Agreement are for convenience of reference only and
                        shall not limit or otherwise affect the meaning hereof.

                                (n)     Independent Nature of
                        Purchasers' Obligations and Rights. The obligations
                        of each Purchaser hereunder is several and not joint
                        with the obligations of any other Purchaser hereunder,
                        and no Purchaser shall be responsible in any way for the
                        performance of the obligations of any other Purchaser
                        hereunder. Nothing contained herein or in any other
                        agreement or document delivered at any closing, and no
                        action taken by any Purchaser pursuant hereto or
                        thereto, shall be deemed to constitute the Purchasers as
                        a partnership, an association, a joint venture or any
                        other kind of entity, or create a presumption that the
                        Purchasers are in any way acting in concert with respect
                        to such obligations or the transactions contemplated by
                        this Agreement. Each Purchaser shall be entitled to
                        protect and enforce its rights, including without
                        limitation the rights arising out of this Agreement, and
                        it shall not be necessary for any other Purchaser to be
                        joined as an additional party in any proceeding for such
                        purpose.

                        -12-

            

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

                                                                                                                        DDS TECHNOLOGIES USA, INC.

                                                                                                                         

                                                                                                                                                
                                                                                                                                                By: _____________________________________

                                                                                                                                                        Name:

       
                                                                                                                        Title:
                                                                                                            
                                                                                                
                                                                                    
                                                                        
                                                            
                                                
                                    
                        
            

(PURCHASERS' SIGNATURE PAGES TO FOLLOW)

 

(PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

                                                                                                [_____________________________]

                                                                                                
                                                                                                

                                                                                                By:__________________________

                                                                                                Name: 

                                                                                                Title: 

                                                                                                
                                                                                                [_____________________________]

                                                                                                
                                                                                                

                                                                                                By:__________________________

                                                                                                Name: 

                                                                                                Title: 

                                                                                                
                                                                                                [_____________________________]

                                                                                                
                                                                                                

                                                                                                By:__________________________

                                                                                                Name: 

                                                                                                Title: 

                                                                                                 

                                                                                    
                                                                        
                                                            
                                                
                                    
                        
            

(ADDITIONAL PURCHASER SIGNATURES FOLLOW)

 

ANNEX A

Plan of Distribution

                The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

	
                                                ordinary brokerage
                                                transactions and transactions in
                                                which the broker-dealer solicits
                                                purchasers;

                                                
	
                                                block trades in which the
                                                broker-dealer will attempt to
                                                sell the shares as agent but may
                                                position and resell a portion of
                                                the block as principal to
                                                facilitate the transaction;

                                                
	
                                                purchases by a broker-dealer
                                                as principal and resale by the
                                                broker-dealer for its account;

                                                
	
                                                an exchange distribution in
                                                accordance with the rules of the
                                                applicable exchange;

                                                
	
                                                privately negotiated
                                                transactions;

                                                
	
                                                settlement of short sales;

                                                
	
                                                broker-dealers may agree with
                                                the Selling Stockholders to sell
                                                a specified number of such
                                                shares at a stipulated price per
                                                share;

                                                
	
                                                a combination of any such
                                                methods of sale; and

                                                
	
                                                any other method permitted
                                                pursuant to applicable law.

                                    

            The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

            Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

            The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other successors in
interest as Selling Stockholders under this prospectus.

            The Selling Stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Selling Stockholders have informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

            The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.Exhibit 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS
SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

COMMON STOCK PURCHASE WARRANT

 

To Purchase __________ Shares of Common Stock of

DDS Technologies USA, Inc.

                THIS COMMON STOCK PURCHASE WARRANT (the "Warrant")
CERTIFIES that, for value received, _____________ (the "Holder"), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after May 28, 2004 (the "Initial
Exercise Date") and on or prior to the close of business on May 27, 2007
(the "Termination Date") but not thereafter, to subscribe for and
purchase from DDS Technologies USA, Inc., a corporation incorporated in the
State of Nevada (the "Company"), up to ____________ shares (the "Warrant
Shares") of Common Stock, par value $0.0001 per share, of the Company (the "Common
Stock"). The purchase price of one share of Common Stock (the "Exercise
Price") under this Warrant shall be $3.75, subject to adjustment
hereunder. The Exercise Price and the number of Warrant Shares for which the
Warrant is exercisable shall be subject to adjustment as provided herein. 
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Securities Purchase Agreement (the "Purchase
Agreement"), dated May 28, 2004, between the Company and the purchasers
signatory thereto.

1

        1.     Title to Warrant. Prior to the Termination Date and subject
to compliance with applicable laws and Section 7 of this Warrant, this Warrant
and all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

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

        3.     Exercise of Warrant. 

                (a)     Exercise of the purchase rights represented by this Warrant may be
made at any time or times on or after the Initial Exercise Date and on or before
the Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank or by means of
a cashless exercise pursuant to Section 3(d), the Holder shall be entitled to
receive a certificate for the number of Warrant Shares so purchased.
Certificates for shares purchased hereunder shall be delivered to the Holder
within three (3) Trading Days after the date on which this Warrant shall have
been exercised as aforesaid. This Warrant shall be deemed to have been exercised
and such certificate or certificates shall be deemed to have been issued, and
the Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the Warrant has been exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 prior to the issuance of such shares, have been paid. If the Company
fails to deliver to the Holder a certificate or certificates representing the
Warrant Shares pursuant to this Section 3(a) by the close of business on the
third Trading Day after the date of exercise, then the Holder will have the
right to rescind such exercise. In addition to any other rights available to the
Holder, if the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise by the
close of business on the eighth Trading Day after the date of exercise, and if
after such eighth Trading Day the Holder is required by its broker to purchase
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the Company
shall (1) pay in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.

2

                (b)     If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant. 

                (c)     The Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect to
such issuance after exercise, the Holder (together with the Holder's
Affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to such issuance.  For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without
limitation, any other Warrants) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 3(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act. For purposes of
this Section 3(c), in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock
as reflected in (x) the Company's most recent Form 10-Q or Form 10-K, as the
case may be, (y) a more recent public announcement by the Company or (z) any
other notice by the Company or the Company's Transfer Agent setting forth the
number of shares of Common Stock outstanding.  Upon the written or oral
request of the Holder, the Company shall within two Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then
outstanding.  In any case, the number of outstanding shares of Company
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 3(c) may be waived by
the Holder upon, at the election of the Holder, not less than 61 days' prior
notice to the Company, and the provisions of this Section 3(c) shall continue to
apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver).

3

                (d)     If, but only if, at any time after one year from the date of
issuance of this Warrant there is no effective Registration Statement
registering the resale of the Warrant Shares by the Holder, this Warrant may
also be exercised at such time by means of a "cashless exercise" in which the
Holder shall be entitled to receive a certificate for the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

                                                                        
                                                                                       
                                                                        (A) =
                                                                        the
                                                                        Closing
                                                                        Price on
                                                                        the
                                                                        Trading
                                                                        Day
                                                                        preceding
                                                                        the date
                                                                        of such
                                                                        election;

                                                                        
                                                                                       
                                                                        (B) =
                                                                        the
                                                                        Exercise
                                                                        Price of
                                                                        the
                                                                        Warrants,
                                                                        as
                                                                        adjusted;
                                                                        and 

                                                                        
                                                                                       
                                                                        (X) =
                                                                        the
                                                                        number
                                                                        of
                                                                        Warrant
                                                                        Shares
                                                                        issuable
                                                                        upon
                                                                        exercise
                                                                        of the
                                                                        Warrants
                                                                        in
                                                                        accordance
                                                                        with the
                                                                        terms of
                                                                        this
                                                                        Warrant.

                                                                        

                                                            
                                                
                                    
                        
            

        4.     No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

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

        6    . Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

        7.     Transfer, Division and Combination. 

                (a)     Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 1 and 7(e) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued. 

4

                (b)     This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

                (c)     The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.

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

                (e)     If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable
state securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant, as the
case may be, furnish to the Company a written opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the transferee be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act.

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

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

5

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

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

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

                (b)     Anti-Dilution Provisions. From the Initial Exercise Date
until the 30th day following the Effective Date, the Exercise Price
and the number of Warrant Shares issuable hereunder and for which this Warrant
is then exercisable pursuant to Section 1 hereof shall be subject to adjustment
from time to time as provided in this Section 11(b). In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a
cent, such Exercise Price shall be rounded up or down to the nearest cent.

	 	(i)	Adjustment of Exercise
                        Price. If and whenever the Company issues or sells,
                        or in accordance with Section 8(b) hereof is deemed to
                        have issued or sold, any shares of Common Stock for a
                        consideration per share less than the then Exercise
                        Price (such lower price, the "Base Share Price"
                        and such issuances collectively, a "Dilutive Issuance"),
                        then, the Exercise Price shall be reduced to equal the
                        Base Share Price, provided, that for purposes
                        hereof, all shares of Common Stock that are issuable
                        upon conversion, exercise or exchange of warrants,
                        options or convertible debentures or preferred stock
                        ("Capital Share Equivalents") shall be deemed
                        outstanding immediately after the issuance of such
                        Common Stock. Such adjustment shall be made whenever
                        such shares of Common Stock or Capital Share Equivalents
                        are issued.

6

	 	(ii)	Effect on
                        Exercise Price of Certain Events. For purposes of
                        determining the adjusted Exercise Price under Section
                        11(b) hereof, the following will be applicable:
	 	 	 	 
	 	 	(A)	Issuance of Rights or Options. If
                        the Company in any manner issues or grants any warrants,
                        rights or options, whether or not immediately
                        exercisable, to subscribe for or to purchase Common
                        Stock or other securities exercisable, convertible into
                        or exchangeable for Common Stock ("Convertible
                        Securities") (such warrants, rights and options to
                        purchase Common Stock or Convertible Securities are
                        hereinafter referred to as "Options") and the
                        effective price per share for which Common Stock is
                        issuable upon the exercise of such Options is less than
                        the Exercise Price ("Below Base Price Options"),
                        then the maximum total number of shares of Common Stock
                        issuable upon the exercise of all such Below Base Price
                        Options (assuming full exercise, conversion or exchange
                        of Convertible Securities, if applicable) will, as of
                        the date of the issuance or grant of such Below Base
                        Price Options, be deemed to be outstanding and to have
                        been issued and sold by the Company for such price per
                        share and the maximum consideration payable to the
                        Company upon such exercise (assuming full exercise,
                        conversion or exchange of Convertible Securities, if
                        applicable) will be deemed to have been received by the
                        Company. For purposes of the preceding sentence, the
                        "effective price per share for which Common Stock is
                        issuable upon the exercise of such Below Base Price
                        Options" is determined by dividing (i) the total amount,
                        if any, received or receivable by the Company as
                        consideration for the issuance or granting of all such
                        Below Base Price Options, plus the minimum aggregate
                        amount of additional consideration, if any, payable to
                        the Company upon the exercise of all such Below Base
                        Price Options, plus, in the case of Convertible
                        Securities issuable upon the exercise of such Below Base
                        Price Options, the minimum aggregate amount of
                        additional consideration payable upon the exercise,
                        conversion or exchange thereof at the time such
                        Convertible Securities first become exercisable,
                        convertible or exchangeable, by (ii) the maximum total
                        number of shares of Common Stock issuable upon the
                        exercise of all such Below Base Price Options (assuming
                        full conversion of Convertible Securities, if
                        applicable). No further adjustment to the Exercise Price
                        will be made upon the actual issuance of such Common
                        Stock upon the exercise of such Below Base Price Options
                        or upon the exercise, conversion or exchange of
                        Convertible Securities issuable upon exercise of such
                        Below Base Price Options. 

7

	 	 	(B)	Issuance of Convertible Securities.
                        If the Company in any manner issues or sells any
                        Convertible Securities, whether or not immediately
                        convertible (other than where the same are issuable upon
                        the exercise of Options) and the effective price per
                        share for which Common Stock is issuable upon such
                        exercise, conversion or exchange is less than the
                        Exercise Price, then the maximum total number of shares
                        of Common Stock issuable upon the exercise, conversion
                        or exchange of all such Convertible Securities will, as
                        of the date of the issuance of such Convertible
                        Securities, be deemed to be outstanding and to have been
                        issued and sold by the Company for such price per share
                        and the maximum consideration payable to the Company
                        upon such exercise (assuming full exercise, conversion
                        or exchange of Convertible Securities, if applicable)
                        will be deemed to have been received by the Company. For
                        the purposes of the preceding sentence, the "effective
                        price per share for which Common Stock is issuable upon
                        such exercise, conversion or exchange" is determined by
                        dividing (i) the total amount, if any, received or
                        receivable by the Company as consideration for the
                        issuance or sale of all such Convertible Securities,
                        plus the minimum aggregate amount of additional
                        consideration, if any, payable to the Company upon the
                        exercise, conversion or exchange thereof at the time
                        such Convertible Securities first become exercisable,
                        convertible or exchangeable, by (ii) the maximum total
                        number of shares of Common Stock issuable upon the
                        exercise, conversion or exchange of all such Convertible
                        Securities. No further adjustment to the Exercise Price
                        will be made upon the actual issuance of such Common
                        Stock upon exercise, conversion or exchange of such
                        Convertible Securities.
	 	 	 	 
	 	 	(C)	Change in Option Price or Conversion
                        Rate. If there is a change at any time in (i) the
                        amount of additional consideration payable to the
                        Company upon the exercise of any Options; (ii) the
                        amount of additional consideration, if any, payable to
                        the Company upon the exercise, conversion or exchange of
                        any Convertible Securities; or (iii) the rate at which
                        any Convertible Securities are convertible into or
                        exchangeable for Common Stock (in each such case, other
                        than under or by reason of provisions designed to
                        protect against dilution), the Exercise Price in effect
                        at the time of such change will be readjusted to the
                        Exercise Price which would have been in effect at such
                        time had such Options or Convertible Securities still
                        outstanding provided for such changed additional
                        consideration or changed conversion rate, as the case
                        may be, at the time initially granted, issued or sold.

8

	 	 	(D)	Calculation of Consideration Received.
                        If any Common Stock, Options or Convertible Securities
                        are issued, granted or sold for cash, the consideration
                        received therefor for purposes of this Warrant will be
                        the amount received by the Company therefor, before
                        deduction of reasonable commissions, underwriting
                        discounts or allowances or other reasonable expenses
                        paid or incurred by the Company in connection with such
                        issuance, grant or sale. In case any Common Stock,
                        Options or Convertible Securities are issued or sold for
                        a consideration part or all of which shall be other than
                        cash, the amount of the consideration other than cash
                        received by the Company will be the fair market value of
                        such consideration, except where such consideration
                        consists of securities, in which case the amount of
                        consideration received by the Company will be the fair
                        market value (closing bid price, if traded on any
                        market) thereof as of the date of receipt. In case any
                        Common Stock, Options or Convertible Securities are
                        issued in connection with any merger or consolidation in
                        which the Company is the surviving corporation, the
                        amount of consideration therefor will be deemed to be
                        the fair market value of such portion of the net assets
                        and business of the non-surviving corporation as is
                        attributable to such Common Stock, Options or
                        Convertible Securities, as the case may be. The fair
                        market value of any consideration other than cash or
                        securities will be determined in good faith by an
                        investment banker or other appropriate expert of
                        national reputation selected by the Company and
                        reasonably acceptable to the holder hereof, with the
                        costs of such appraisal to be borne by the Company.
	 	 	 	 
	 	 	(E)	Exceptions to Adjustment of Exercise
                        Price. Notwithstanding anything to the contrary
                        herein, this Section 11(b) shall not apply to the
                        following (1) the granting of options to employees,
                        officers and directors of the Company pursuant to any
                        stock option plan duly adopted by a majority of the
                        non-employee members of the Board of Directors of the
                        Company or a majority of the members of a committee of
                        non-employee directors established for such purpose, or
                        (2) the exercise of any security issued by the Company
                        in connection with the offer and sale of this Company's
                        securities pursuant to the Purchase Agreement, or (3)
                        the exercise of or conversion of any convertible
                        securities, options or warrants issued and outstanding
                        on the date hereof, provided such securities have not
                        been amended since the date hereof, or (4) acquisitions
                        or strategic investments, the primary purpose of which
                        is not to raise capital. (e) the one-time issuance of
                        Common Stock or Common Stock Equivalents for an
                        aggregate purchase price of up to [$10,000,000] less the
                        aggregate Subscription Amounts raised pursuant to the
                        Purchase Agreement.

9

	 	(iii)	Minimum Adjustment of
                        Exercise Price. No adjustment of the Exercise Price
                        shall be made in an amount of less than 1% of the
                        Exercise Price in effect at the time such adjustment is
                        otherwise required to be made, but any such lesser
                        adjustment shall be carried forward and shall be made at
                        the time and together with the next subsequent
                        adjustment which, together with any adjustments so
                        carried forward, shall amount to not less than 1% of
                        such Exercise Price. 

        12.     Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common
Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets. 

10

        13.     Voluntary Adjustment by the Company. The Company may at any
time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

        14.     Notice of Adjustment. Whenever the number of Warrant Shares
or number or kind of securities or other property purchasable upon the exercise
of this Warrant or the Exercise Price is adjusted, as herein provided, the
Company shall give notice thereof to the Holder, which notice shall state the
number of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

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

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

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

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

then, in any one or more of such cases, the Company shall give to Holder (i)
at least 10 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

11

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

                Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

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

        17.     Miscellaneous.

                (a)     Jurisdiction. This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law, principles or
rules.

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

12

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

                (d)     Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement;
provided upon any permitted assignment of this Warrant, the assignee shall
promptly provide the Company with its contact information.

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

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

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

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

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

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

********************

13

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

Dated: May ___, 2004

	 	
DDS TECHNOLOGIES USA, INC.

                        
	 	

                        
	 	By: 	
 

                        
	 	Name:

                        Title:

14

NOTICE OF EXERCISE

To:     DDS Technologies USA, Inc.

               
(1)    The undersigned hereby elects to purchase ________ Warrant
Shares of DDS Technologies USA, Inc. pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

               
(2)        Payment shall take the form of (check applicable box):

                                                                        
                                                                                                   
                                                                        [ ] in
                                                                        lawful
                                                                        money of
                                                                        the
                                                                        United
                                                                        States;
                                                                        or

                                                                        
                                                                                                   
                                                                        [ ] the
                                                                        cancellation
                                                                        of such
                                                                        number
                                                                        of
                                                                        Warrant
                                                                        Shares
                                                                        as is
                                                                        necessary,
                                                                        in
                                                                        accordance
                                                                        

                            with the
                                                                        formula
                                                                        set
                                                                        forth in
                                                                        subsection
                                                                        3(d), to
                                                                        exercise
                                                                        this
                                                                        Warrant
                                                                        with
                                                                        respect
                                                                        to 

                            the
                                                                        maximum
                                                                        number
                                                                        of
                                                                        Warrant
                                                                        Shares
                                                                        purchasable
                                                                        pursuant
                                                                        to the
                                                                        cashless
                                                                        exercise
                                                                        

                            procedure
                                                                        set
                                                                        forth in
                                                                        subsection
                                                                        3(d).

               
(3)      Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                            _______________________________

The Warrant Shares shall be delivered to the following:

                            _______________________________

                            _______________________________

                            _______________________________

                (4)     Accredited Investor. The undersigned is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.

	 	
[PURCHASER]

                        
	 	

                        
	 	
 

                        
	 	
By: ______________________________

                        
	 	 	
Name:

                        
	 	 	
Title:

                        
	 	

                        
	 	
Dated: ________________________

                        

 

 

 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

 

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

_______________________________________________ whose address
is

_______________________________________________________________.

 

 

_______________________________________________________________

                                                                                        Dated: ______________, _______

 

                                Holder's Signature: _____________________________

                                Holder's Address: _____________________________

                                                            _____________________________

 

Signature Guaranteed:
___________________________________________

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

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