Document:

SECURITIES PURCHASE AGREEMENT

        SECURITIES  PURCHASE  AGREEMENT (the  "Agreement"),  dated as of May 26,
2000,  by  and  among  Saf T  Lok  Incorporated,  a  Florida  corporation,  with
headquarters located at 1101 Northpoint Parkway,  West Palm Beach, Florida 33407
(the  "Company"),  and the investor  listed on the  Schedule of Buyers  attached
hereto (individually, a "Buyer" or collectively "Buyers").

         WHEREAS:

         A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration pursuant
to Section 4(2) and/or Regulation D of the Securities Act of 1933, as amended
(the "1933 Act"),

        B.  The  Company  is  offering  for sale to the  Buyer  6%  Subordinated
Convertible  Debentures (the "Debentures") of the Company,  due on May 26, 2002,
and offered in denominations  of $25,000 up to an aggregate  principal amount of
$875,000.  The  terms of the  Debentures,  including  the  terms  on  which  the
Debentures  may be converted  into the common  stock of the  Company,  $0.01 par
value,  are set forth in the Debenture,  in  substantially  the form attached as
Exhibit "A" hereto.

         C. The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, an aggregate principal amount of up to $875,000 of Debentures
in the respective amounts set forth opposite each Buyer's name on the Schedule
of Buyers;

        D.  Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration  Rights Agreement
substantially  in the form  attached  hereto as Exhibit  "B" (the  "Registration
Rights  Agreement")  pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws;

        NOW THEREFORE, the Company and the Buyer hereby agree as follows:

         1.       PURCHASE AND SALE OF DEBENTURES.
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                a.  Purchase  of  Debentures.  Subject to the  satisfaction  (or
         waiver) of the  conditions  set forth in  Sections  6 and 7 below,  the
         Company  shall  issue  and  sell to the  Buyers  and the  Buyers  shall
         purchase  from the Company an  aggregate  principal  amount of not more
         than $875,000 Debentures,  in the respective amounts set forth opposite
         each Buyer's name on the Schedule of Buyers (the "Closing").

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                b. Closing Date.  The date and time of the Closing (the "Closing
         Date")  shall be 10:00 a.m.  Eastern  Standard  Time,  within  five (5)
         business days  following the date hereof,  subject to  notification  of
         satisfaction  (or waiver) of the conditions to the Closing set forth in
         Sections 6 and 7 below (or such later date as is mutually  agreed to by
         the Company and the Buyer). The Closing shall occur on the Closing Date
         at the  offices  of Sims Moss  Kline & Davis LLP,  400  Northpark  Town
         Center, Suite 310, 1000 Abernathy Road, N.E., Atlanta, Georgia 30328.

                c. Form of Payment.  On the Closing  Date,  (i) the Escrow Agent
         shall pay the purchase  price to the Company for the  Debentures  to be
         issued  and sold to such  Buyer at the  Closing,  by wire  transfer  of
         immediately  available funds in accordance  with the Company's  written
         wire  instructions,  and (ii) the Company  shall deliver to each Buyer,
         certificates  representing  such  Debentures  which  such Buyer is then
         purchasing (as indicated  opposite such Buyer's name on the Schedule of
         Buyers),  duly executed on behalf of the Company and  registered in the
         name of such Buyer or its designee (the "Certificates").

         2.     BUYER'S REPRESENTATIONS AND WARRANTEES.
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                Each Buyer  represents  and warrants with respect to only itself
         that:

                a.  Investment   Purpose.   Such  Buyer  (i)  is  acquiring  the
         Debentures and, (ii) upon conversion of the Debentures will acquire the
         Conversion  Shares then  issuable,  for its own account for  investment
         only and not with a view towards, or for resale in connection with, the
         public  sale  or  distribution   thereof,   except  pursuant  to  sales
         registered or exempted under the 1933 Act; provided,  however,  that by
         making the  representations  herein,  such Buyer does not agree to hold
         any  Debentures or Conversion  Shares for any minimum or other specific
         term and  reserves  the right to dispose of  Debentures  or  Conversion
         Shares at any time in  accordance  with or pursuant  to a  registration
         statement or an exemption under the 1933 Act.

                b. Accredited Investor/Tax Status. Such Buyer is an "accredited
         investor" as that term is defined in Rule 501(a)(3) of Regulation D
         ("Regulation D") as promulgated by the United States Securities and
         Exchange Commission (the "SEC").

                c. Reliance on Exemptions. Such Buyer understands that the
         Debentures and Conversion Shares are being offered and sold to it in
         reliance on specific exemptions from the registration requirements of
         United States federal and state securities laws and that the Company is
         relying in part upon the truth and accuracy of, and such Buyer's
         compliance with, the representations, warranties, agreements,
         acknowledgments and understandings of such Buyer set forth herein in
         order to determine the availability of such exemptions and the
         eligibility of such Buyer to acquire such securities.

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                d. Information.  Such Buyer and its advisors,  if any, have been
         furnished  with all  appropriate  materials  relating to the  business,
         finances and  operations of the Company and  materials  relating to the
         offer and sale of the Debentures and Conversion  Shares which have been
         requested by such Buyer. Such Buyer and its advisors, if any, have been
         afforded the opportunity to ask questions of the Company.  Neither such
         inquiries nor any other due diligence  investigations conducted by such
         Buyer or its  advisors,  if any, or its  representatives  shall modify,
         amend  or  affect  such  Buyer's   right  to  rely  on  the   Company's
         representations and warranties contained in Section 3 below. Such Buyer
         understands  that its  investment in the  Debentures and the Conversion
         Shares  involves a high  degree of risk.  Such  Buyer has  sought  such
         accounting, legal and tax advice as it has considered necessary to make
         an informed  investment decision with respect to its acquisition of the
         Debentures and the Conversion Shares.

                e. No Governmental Review. Such Buyer understands that no United
         States federal or state agency or any other  government or governmental
         agency has passed on or made any  recommendation  or endorsement of the
         Debentures,  the Conversion  Shares,  or the fairness or suitability of
         the investment in the Debentures  and the Conversion  Shares,  nor have
         such authorities  passed upon or endorsed the merits of the offering of
         the Debentures, and the Conversion Shares.

                f.  Transfer or Resale.  Such Buyer  understands  that except as
         provided in the Registration  Rights Agreement:  (i) the Debentures and
         the Conversion  Shares have not been and are not being registered under
         the 1933 Act or any state  securities  laws, and may not be offered for
         sale, sold,  assigned or transferred unless such sale,  assignment,  or
         transfer is approved  (unless to an affiliate  or successor  entity) by
         the Company and (a) subsequently registered thereunder,  (b) such Buyer
         shall  have  delivered  to the  Company an  opinion  of  counsel,  in a
         generally  acceptable  form,  to the effect that such  securities to be
         sold,  assigned or  transferred  may be sold,  assigned or  transferred
         pursuant  to an  exemption  from such  registration,  or (c) such Buyer
         provides the Company with reasonable assurance that such securities can
         be sold, assigned or transferred pursuant to Rule 144 promulgated under
         the  1933  Act (or a  successor  rule  thereto);  (ii) any sale of such
         securities made in reliance on Rule 144 promulgated  under the 1933 Act
         (or a  successor  rule  thereto)  ("Rule  144")  may be  made  only  in
         accordance  with the terms of Rule 144 and further,  if Rule 144 is not
         applicable,  any resale of such securities under circumstances in which
         the seller (or the person  through whom the sale is made) may be deemed
         to be an  underwriter  (as that  term is  defined  in the 1933 Act) may
         require  compliance with some other exemption under the 1933 Act or the
         rules and  regulations  of the SEC  thereunder;  and (iii)  neither the
         Company nor any other person is under any  obligation  to register such
         securities under the 1933 Act or any state securities laws or to comply
         with the terms and conditions of any exemption thereunder.

                g. Legends. Such Buyer understands that the certificates or
         other instruments representing the Debentures, until such time as the
         sale of the Conversion Shares have been registered under the 1933 Act
         as contemplated by the Registration Rights Agreement, and the stock

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         certificates representing the Conversion Shares, shall bear a
         restrictive legend in substantially the following form (and a
         stop-transfer order may be placed against transfer of such stock
         certificates):

                THE  SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN
                REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR
                APPLICABLE STATE SECURITIES LAWS INCLUDING,  BUT NOT LIMITED TO,
                O.C.G.A.  ss.10-5-9(13).  THE SECURITIES  HAVE BEEN ACQUIRED FOR
                INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
                ASSIGNED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT
                FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
                OR APPLICABLE  STATE  SECURITIES LAWS, OR AN OPINION OF COUNSEL,
                IN  A  GENERALLY  ACCEPTABLE  FORM,  THAT  REGISTRATION  IS  NOT
                REQUIRED UNDER SAID ACT OR APPLICABLE  STATE  SECURITIES LAWS OR
                UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

         The legend set forth above shall be removed and the Company shall issue
         a certificate  without such legend to the holder of the  Debentures and
         the Conversion Shares,  upon which it is stamped,  if, unless otherwise
         required by applicable  securities laws, (i) the sale of the Conversion
         Shares is registered under the 1933 Act, (ii) in connection with a sale
         transaction,  such  holder  provides  the  Company  with an  opinion of
         counsel,  reasonably  satisfactory to the Company, to the effect that a
         public  sale,   assignment  or  transfer  of  the  Debentures  and  the
         Conversion Shares may be made without  registration under the 1933 Act,
         or (iii) such holder  provides the Company with  reasonable  assurances
         that the  Debentures or the  Conversion  Shares can be sold pursuant to
         Rule  144  without  any  restriction  as to the  number  of  securities
         acquired as of a particular date that can then be immediately sold.

                In  addition  to the  foregoing,  to the extent  that the Holder
         receives a certificate for Conversion  Shares that does not contain the
         foregoing  legend,  such holder  understands  that,  (A) the Conversion
         Shares may be sold only by means of a current prospectus or pursuant to
         an applicable  exemption from  registration  under the 1933 Act, (B) in
         connection  with a prospectus  sale, such holder is required to deliver
         to the  purchaser  a  current  prospectus  at the time of resale of the
         Conversion Shares and (C) in that event, such holder is responsible for
         determining  that any such prospectus is current at the time of resale.
         The Company  undertakes to promptly notify the Holder in writing in the
         event that facts and circumstances cause the prospectus to no longer be
         current  and shall  indemnify  and hold the  Holder  harmless  from any
         costs, losses, or damages,  including  reasonable  attorney's fees that
         the Holder may suffer by reason of the Company  failing to provide such
         prompt notice. Holder hereby indemnifies and holds the Company harmless
         from any costs,  losses or  damages,  including  reasonable  attorneys'
         fees,  that the  Company  may suffer by reason of  holder's  failure to
         comply with the provisions of this paragraph.

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                h. Authorization,  Enforcement. This Agreement has been duly and
         validly authorized,  executed and delivered on behalf of such Buyer and
         is  a  valid  and  binding  agreement  of  such  Buyer  enforceable  in
         accordance  with  its  terms,  subject  as  enforceability  to  general
         principles  of  equity  and  to  applicable   bankruptcy,   insolvency,
         reorganization, moratorium, liquidation and other similar laws relating
         to, or affecting  generally,  the enforcement of applicable  creditors'
         rights and remedies.

                i. Residency. Such Buyer is a resident of that state and country
         specified in its address on the Schedule of Buyers.

         3 .      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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                  The  Company  represents  and  warrants  to each of the Buyers
         that:

                  a.  Organization  and  Qualification.   The  Company  and  its
         subsidiaries  are  corporations  duly organized and validly existing in
         good  standing  under the laws of the  jurisdiction  in which  they are
         incorporated,  and  have the  requisite  corporate  power to own  their
         properties and to carry on their business as now being conducted.  Each
         of the  Company and its  subsidiaries  is duly  qualified  as a foreign
         corporation   to  do  business  and  is  in  good   standing  in  every
         jurisdiction in which the nature of the business  conducted by it makes
         such qualification necessary,  except to the extent that the failure to
         be so  qualified  or be in good  standing  would  not  have a  material
         adverse effect on the Company and its subsidiaries taken as a whole.

                  b.   Authorization,   Enforcement,   Compliance   with   Other
         Instruments.  (i) The Company  has the  requisite  corporate  power and
         authority to enter into and perform this  Agreement,  the  Registration
         Rights  Agreement  and  any  related  agreements,   and  to  issue  the
         Debentures,  the Conversion Shares, in accordance with the terms hereof
         and thereof,  (ii) the  execution and delivery of this  Agreement,  the
         Registration Rights Agreement and any related agreements by the Company
         and the consummation by it of the transactions  contemplated hereby and
         thereby,  including  without  limitation the issuance of the Debentures
         and the  reservation  for issuance  and the issuance of the  Conversion
         Shares  issuable upon  conversion or exercise  thereof,  have been duly
         authorized by the Company's  Board of Directors and no further  consent
         or authorization is required by the Company,  its Board of Directors or
         its  stockholders,   (iii)  this  Agreement,  the  Registration  Rights
         Agreement,  and any  related  agreements  have been duly  executed  and
         delivered by the Company,  and (iv) this  Agreement,  the  Registration
         Rights Agreement,  and any related agreements  constitute the valid and
         binding  obligations of the Company  enforceable against the Company in
         accordance  with  their  terms,  except as such  enforceability  may be
         limited  by  general  principles  of equity or  applicable  bankruptcy,
         insolvency,  reorganization,  moratorium,  liquidation  or similar laws
         relating to, or affecting  generally,  the  enforcement  of  creditors'
         rights and remedies.

                  c.  Capitalization.  As of the  date  hereof,  the  authorized
         capital stock of the Company  consists of  30,000,000  shares of Common
         Stock,  par value $0.01 per share,  zero shares of Preferred  Stock and

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         $125,000 in principal amount of 6% Convertible Debentures,  of which as
         of the date hereof 15,565,178 shares of Common Stock and zero shares of
         Series  Preferred  Stock  were  issued  and  outstanding.  All of  such
         outstanding  shares  have been  validly  issued  and are fully paid and
         nonassessable.  Except  as  disclosed  in  this  Agreement  or the  SEC
         Documents (as defined  herein),  no shares of Common Stock or preferred
         stock are subject to preemptive  rights or any other similar  rights or
         any liens or encumbrances suffered or permitted by the Company.  Except
         as  disclosed  in this  Agreement  or the  SEC  Documents  (as  defined
         herein),  as of the effective date of this Agreement,  (i) there are no
         outstanding options,  warrants, scrip, rights to subscribe to, calls or
         commitments of any character  whatsoever  relating to, or securities or
         rights  convertible into, any shares of capital stock of the Company or
         any of its subsidiaries, or contracts,  commitments,  understandings or
         arrangements by which the Company or any of its  subsidiaries is or may
         become bound to issue additional shares of capital stock of the Company
         or any of its  subsidiaries  or  options,  warrants,  scrip,  rights to
         subscribe to, calls or commitments of any character whatsoever relating
         to, or securities  or rights  convertible  into,  any shares of capital
         stock of the  Company  or any of its  subsidiaries,  (ii)  there are no
         outstanding  debt  securities  and  (iii)  except  as set  forth in the
         Company's SEC Documents,  there are no agreements or arrangements under
         which the Company or any of its  subsidiaries  is obligated to register
         the sale of any of their  securities  under  the 1933 Act  (except  the
         Registration Rights Agreement).  However,  the Company has approved the
         grant of an option to Steven  Peskoff  to  purchase  250,000  shares of
         common  stock of the Company  which grant is subject to a release  from
         Friedman  Billings and Ramsey.  There are no securities or  instruments
         containing  anti-dilution or similar  provisions that will be triggered
         by the issuance of the Debentures or the Conversion Shares as described
         in this  Agreement.  The  Company has  furnished  to the Buyer true and
         correct  copies  of the  Company's  Certificate  of  Incorporation,  as
         amended  and as in  effect  on the date  hereof  (the  "Certificate  of
         Incorporation"),  and the Company's  By-laws,  as in effect on the date
         hereof (the  "By-laws"),  and the terms of all  securities  convertible
         into or  exercisable  for Common Stock and the  material  rights of the
         holders thereof in respect thereto.

                  d. Issuance of Securities.  The Debentures are duly authorized
         and, upon issuance in  accordance  with the terms hereof,  shall be (i)
         validly issued, fully paid and nonassessable,  are free from all taxes,
         liens and charges with respect to the issue thereof and are entitled to
         the rights and preferences set forth in the Debentures.  The Conversion
         Shares  issuable  upon  conversion  of the  Debentures  have  been duly
         authorized  and reserved for issuance.  Upon  conversion or exercise in
         accordance with the Debentures,  the Conversion  Shares will be validly
         issued, fully paid and nonassessable and free from all taxes, liens and
         charges  with  respect to the issue  thereof,  with the  holders  being
         entitled to all rights accorded to a holder of Common Stock.

                  e. No Conflicts. Except as disclosed in the SEC Documents, the
         execution,  delivery and  performance  of this Agreement by the Company
         and the  consummation by the Company of the  transactions  contemplated
         hereby  will  not (i)  result  in a  violation  of the  Certificate  of
         Incorporation  or By-laws or (ii) conflict with or constitute a default
         (or an event which with notice or lapse of time or both would  become a
         default) under, or give to others any rights of termination, amendment,

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         acceleration or cancellation of, any material  agreement,  indenture or
         instrument to which the Company or any of its  subsidiaries is a party,
         or result in a violation of any law, rule, regulation,  order, judgment
         or decree (including  federal and state securities laws and regulations
         and the rules and  regulations  of the principal  market or exchange on
         which the Common Stock is traded or listed)  applicable  to the Company
         or any of its  subsidiaries  or by which any  property  or asset of the
         Company or any of its  subsidiaries  is bound or affected.  Neither the
         Company  nor its  subsidiaries  is in  violation  of any  term of or in
         default  under its  Certificate  of  Incorporation  or By-laws or their
         organizational  charter  or  by-laws,  respectively,  or  any  material
         contract, agreement,  mortgage,  indebtedness,  indenture,  instrument,
         judgment, decree or order or any statute, rule or regulation applicable
         to the Company or its subsidiaries. The business of the Company and its
         subsidiaries  is not being  conducted,  and shall not be  conducted  in
         violation of any law, ordinance, regulation of any governmental entity.
         Except as  specifically  contemplated by this Agreement and as required
         under the 1933 Act and any  applicable  state  securities  laws, to the
         best of the Company's knowledge,  the Company is not required to obtain
         any  consent,  authorization  or  order  of,  or  make  any  filing  or
         registration with, any court or governmental  agency in order for it to
         execute,   deliver  or  perform  any  of  its   obligations   under  or
         contemplated by this Agreement and the Registration Rights Agreement in
         accordance   with  the  terms   hereof  or   thereof.   All   consents,
         authorizations,  orders, filings and registrations which the Company is
         required  to  obtain  pursuant  to the  preceding  sentence  have  been
         obtained or effected  on or prior to the date  hereof.  The Company and
         its subsidiaries are unaware of any facts or circumstances  which might
         give rise to any of the foregoing.

                  f. SEC Documents: Financial Statements. Since January 1, 1997,
         the Company had filed all reports,  schedules,  forms,  statements  and
         other documents required to be filed by it with the SEC pursuant to the
         reporting  requirements  of the  Securities  Exchange  Act of 1934,  as
         amended (the "1934 Act") (all of the foregoing  filed prior to the date
         hereof and all exhibits included therein and being hereinafter referred
         to as the "SEC Documents").  The SEC Documents complied in all material
         respects  with  the  requirements  of the 1934  Act and the  rules  and
         regulations  of the SEC  promulgated  thereunder  applicable to the SEC
         Documents,  and none of the SEC Documents,  at the time they were filed
         with the SEC,  contained  any untrue  statement  of a material  fact or
         omitted  to state a  material  fact  required  to be stated  therein or
         necessary  in  order to make the  statements  therein,  in light of the
         circumstances  under which they were made, not misleading.  As of their
         respective  dates, the financial  statements of the Company included in
         the SEC  Documents  complied as to form in all material  respects  with
         applicable   accounting   requirements  and  the  published  rules  and
         regulations of the SEC with respect thereto.  Such financial statements
         have been prepared in accordance  with  generally  accepted  accounting
         principles,  consistently applied,  during the periods involved (except
         (i) as may be otherwise  indicated in such financial  statements or the
         notes thereto, or (ii) in the case of unaudited interim statements,  to
         the extent they may exclude  footnotes  or may be  condensed or summary
         statements)  and fairly present in all material  respects the financial

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         position of the Company as of the dates  thereof and the results of its
         operations and cash flows for the periods then ended  (subject,  in the
         case of unaudited statements, to normal year-end audit adjustments). No
         other information  provided by or on behalf of the Company to the Buyer
         which  is  not  included  in  the  SEC  Documents,  including,  without
         limitation  information  referred to in Section 2(d) of this Agreement,
         contains any untrue  statement of a material fact or omits to state any
         material fact necessary in order to make the statements therein, in the
         light  of the  circumstance  under  which  they are or were  made,  not
         misleading.

                  g. Absence of Certain  Changes.  The Company has not taken any
         steps,  and does  not  currently  expect  to take  any  steps,  to seek
         protection  pursuant to any  bankruptcy law nor does the Company or its
         subsidiaries have any knowledge or reason to believe that its creditors
         intend to initiate involuntary bankruptcy proceedings.

                  h.  Absence  of  Litigation.  Except  as set  forth in the SEC
         Documents,   there  is  no  action,   suit,   proceeding,   inquiry  or
         investigation before or by any court, public board,  government agency,
         self-regulatory  organization  or body pending or, to the  knowledge of
         the Company or any of its subsidiaries, threatened against or affecting
         the  Company,  the Common Stock or any of the  Company's  subsidiaries,
         wherein an  unfavorable  decision,  ruling or finding  would (i) have a
         material  adverse effect on the transactions  contemplated  hereby (ii)
         adversely affect the validity or enforceability of, or the authority or
         ability of the Company to perform its obligations under, this Agreement
         or any  of the  documents  contemplated  herein  or  (iii),  except  as
         expressly  set  forth in the SEC  Documents,  have a  material  adverse
         effect on the business, operations,  properties, financial condition or
         results of  operation  of the Company and its  subsidiaries  taken as a
         whole.

                  i.  No  Undisclosed  Events,   Liabilities,   Developments  or
         Circumstances.  No known event, liability,  development or circumstance
         has occurred or exists,  or is contemplated  to occur,  with respect to
         the  Company  or  its  subsidiaries  or  their   respective   business,
         properties,  prospects,  operations or financial condition, which could
         be material  but which is not  disclosed  in an SEC Document or has not
         been publicly announced or disclosed in writing to the Buyer.

                  j. No General Solicitation. Neither the Company, nor any of
         its affiliates, nor any person acting on its or their behalf, has
         engaged in any form of general solicitation or general advertising
         (within the meaning of Regulation D under the 1933 Act) in connection
         with the offer or sale of the Debentures or the Conversion Shares.

                  k. No Integrated Offering. Neither the Company, nor any of its
         affiliates,  nor any person acting on its or their behalf has, directly
         or  indirectly,  made any offers or sales of any  security or solicited
         any offers to buy any security,  under circumstances that would require
         registration of the Debentures or the Conversion  Shares under the 1933
         Act or cause this offering of Debentures or the Conversion Shares to be
         integrated with prior offerings by the Company for purposes of the 1933
         Act or any applicable stockholder approval provisions.

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                  l. Employee Relations. Neither the Company nor any of its
         subsidiaries is involved in any labor dispute nor, to the knowledge of
         the Company or any of its subsidiaries, is any such dispute threatened.
         None of the Company's or its subsidiaries' employees is a member of a
         union and the Company and its subsidiaries believe that their relations
         with their employees are good.

                  m. Intellectual  Property Rights. To the best of the Company's
         knowledge,  the Company and its  subsidiaries  own or possess  adequate
         rights or licenses to use all trademarks,  trade names,  service marks,
         service mark  registrations,  service  names,  patents,  patent rights,
         copyrights,     inventions,    licenses,    approvals,     governmental
         authorizations,  trade  secrets and rights  necessary to conduct  their
         respective businesses as now conducted.  Except as set forth in the SEC
         Documents,  none of the  Company's  trademarks,  trade  names,  service
         marks,  service mark  registrations,  service  names,  patents,  patent
         rights,  copyrights,   inventions,   licenses,  approvals,   government
         authorizations,  trade secrets or other  intellectual  property  rights
         have expired or  terminated,  or are expected to expire or terminate in
         the near  future.  The  Company  and its  subsidiaries  do not have any
         knowledge of any  infringement  by the Company or its  subsidiaries  of
         trademark,  trade name  rights,  patents,  patent  rights,  copyrights,
         inventions,  licenses,  service  names,  service  marks,  service  mark
         registrations,  trade secret or other similar  rights of others,  or of
         any such development of similar or identical trade secrets or technical
         information  by others and,  except as disclosed in the SEC  Documents,
         there is no claim,  action or proceeding being made or brought against,
         or to the Company's knowledge, being threatened against, the Company or
         its  subsidiaries  regarding  trademark,  trade name,  patents,  patent
         rights,  invention,  copyright,  license, service names, service marks,
         service mark registrations, trade secret or other infringement; and the
         Company and its  subsidiaries are unaware of any facts or circumstances
         which  might give rise to any of the  foregoing.  The  Company  and its
         subsidiaries  have taken  reasonable  security  measures to protect the
         secrecy,  confidentiality  and  value  of  all  of  their  intellectual
         properties.

                  n. Environmental Laws. To the best of the Company's knowledge,
         the Company and its subsidiaries are (i) in compliance with any and all
         applicable  foreign,  federal,  state  and local  laws and  regulations
         relating to the protection of human health and safety,  the environment
         or hazardous or toxic substances or wastes,  pollutants or contaminants
         ("Environmental  Laws"),  (ii) have  received all permits,  licenses or
         other approvals required of them under applicable Environmental Laws to
         conduct their  respective  businesses and (iii) are in compliance  with
         all terms and conditions of any such permit, license or approval.

                  o. Title. The Company and its subsidiaries have good and
         marketable title in fee simple to all real property and good and
         marketable title to all personal property owned by them which is
         material to the business of the Company and its subsidiaries, in each
         case free and clear of all liens, encumbrances and defects except such
         as are disclosed in the SEC Documents or such as do not materially and
         adversely affect the value of such property and do not interfere with
         the use made and proposed to be made of such property by the Company
         and its subsidiaries.

                                       9
<PAGE>

                  p.  Insurance.  The Company and each of its  subsidiaries  are
         insured by insurers of recognized financial responsibility against such
         losses  and risks and in such  amounts  as  management  of the  Company
         believes to be prudent and  customary  in the  businesses  in which the
         Company and its subsidiaries  are engaged.  Neither the Company nor any
         such  subsidiary  has been  refused any  insurance  coverage  sought or
         applied for and neither  the  Company nor any such  subsidiary  has any
         reason  to  believe  that it will  not be able to  renew  its  existing
         insurance  coverage  as and when  such  coverage  expires  or to obtain
         similar  coverage from similar insurers as may be necessary to continue
         its business at a cost that would not materially  and adversely  affect
         the  condition,  financial or otherwise,  or the earnings,  business or
         operations of the Company and its subsidiaries, taken as a whole.

                  q.  Regulatory  Permits.  The  Company  and  its  subsidiaries
         possess all  certificates,  authorizations  and  permits  issued by the
         appropriate federal,  state or foreign regulatory authorities necessary
         to conduct their respective businesses, and neither the Company nor any
         such subsidiary has received any notice of proceedings  relating to the
         revocation or modification of any such  certificate,  authorization  or
         permit.

                  r. Internal Accounting  Controls.  The Company and each of its
         subsidiaries   maintain  a  system  of  internal   accounting  controls
         sufficient to provide  reasonable  assurance that (i)  transactions are
         executed  in   accordance   with   management's   general  or  specific
         authorizations,  (ii)  transactions are recorded as necessary to permit
         preparation  of  financial  statements  in  conformity  with  generally
         accepted  accounting  principles and to maintain asset  accountability,
         (iii)  access  to  assets  is  permitted   only  in   accordance   with
         management's  general or specific  authorization  and (iv) the recorded
         accountability  for  assets is  compared  with the  existing  assets at
         reasonable  intervals and  appropriate  action is taken with respect to
         any differences.

                  s. No Materially Adverse  Contracts,  Etc. Except as disclosed
         in the SEC Documents,  neither the Company nor any of its  subsidiaries
         is subject to any charter, corporate or other legal restriction, or any
         judgment,  decree,  order,  rule or regulation which in the judgment of
         the  Company's  officers  has or is  expected  in the  future to have a
         material  adverse  effect  on  the  business,  properties,  operations,
         financial condition,  results of operations or prospects of the Company
         or its subsidiaries.  Except as disclosed in the SEC Documents, neither
         the Company nor any of its  subsidiaries  is a party to any contract or
         agreement  which in the  judgment of the  Company's  officers has or is
         expected to have a material adverse effect on the business, properties,
         operations,  financial condition, results of operations or prospects of
         the Company or its subsidiaries.

                  t. Tax Status.  The Company and each of its  subsidiaries  has
         made or filed all federal and state  income and all other tax  returns,
         reports and  declarations  required by any  jurisdiction to which it is
         subject (unless and only to the extent that the Company and each of its
         subsidiaries has set aside on its books provisions  reasonably adequate
         for the  payment of all unpaid and  unreported  taxes) and has paid all
         taxes and other governmental  assessments and charges that are material
         in amount,  shown or determined to be due on such returns,  reports and

                                       10
<PAGE>

         declarations,  except  those being  contested in good faith and has set
         aside on its books provision reasonably adequate for the payment of all
         taxes for  periods  subsequent  to the  periods to which such  returns,
         reports  or  declarations  apply.  There  are no  unpaid  taxes  in any
         material  amount  claimed  to be  due by the  taxing  authority  of any
         jurisdiction,  and the officers of the Company know of no basis for any
         such claim.

                  u.  Certain  Transactions.  Except  as  disclosed  in the  SEC
         Documents,  and except for arm's length transactions  pursuant to which
         the Company  makes  payments in the  ordinary  course of business  upon
         terms no less  favorable  than the  Company  could  obtain  from  third
         parties and other than the grant of stock options  disclosed in the SEC
         Documents, none of the officers, directors, or employees of the Company
         is presently a party to any  transaction  with the Company  (other than
         for services as  employees,  officers  and  directors),  including  any
         contract,  agreement or other arrangement  providing for the furnishing
         of services to or by, providing for rental of real or personal property
         to or from,  or  otherwise  requiring  payments to or from any officer,
         director or such  employee or, to the  knowledge  of the  Company,  any
         corporation,  partnership,  trust or other entity in which any officer,
         director,  or any such  employee  has a  substantial  interest or is an
         officer, director, trustee or partner.

                  v. Dilutive Effect.  The Company  understands and acknowledges
         that the number of Conversion  Shares  issuable upon  conversion of the
         Debentures will increase in certain circumstances.  The Company further
         acknowledges  that its  obligation  to  issue  Conversion  Shares  upon
         conversion of the Debentures in accordance  with this Agreement and the
         Debentures,  in each case, absolute and unconditional regardless of the
         dilutive effect that such issuance may have on the ownership  interests
         of other stockholders of the Company.

                  w.  Fees and  Rights  of First  Refusal.  The  Company  is not
         obligated to offer the securities offered hereunder on a right of first
         refusal  basis or otherwise  to any third  parties  including,  but not
         limited   to,   current  or  former   shareholders   of  the   Company,
         underwriters, brokers, agents, or other third parties.

                  4.       COVENANTS.

                  a. Best Efforts. Each party shall use its best efforts timely
         to satisfy each of the conditions to be satisfied by it as provided in
         Sections 6 and 7 of this Agreement.

                  b. Form D. The Company agrees to file a Form D with respect to
         the Debentures and the Conversion Shares as required under Regulation
         D.

                  c. Reporting  Status.  Until the earlier of (i) the date as of
         which the Investors (as that term is defined in the Registration Rights
         Agreement)  may sell all of the Conversion  Shares without  restriction
         pursuant to Rule 144(k)  promulgated  under the 1933 Act (or  successor
         thereto),  or (ii) the date on which (A) the Investors  shall have sold
         all  the  Conversion   Shares  and  (B)  none  of  the  Debentures  are
         outstanding  (the  "Registration  Period"),  the Company shall file all

                                       11
<PAGE>

         reports required to be filed with the SEC pursuant to the 1934 Act, and
         the Company  shall not  terminate  its status as an issuer  required to
         file  reports  under the 1934 Act even if the 1934 Act or the rules and
         regulations thereunder would otherwise permit such termination.

                  d. Use of Proceeds. The Company will use the proceeds from the
         sale of the Debentures for working capital and research and
         development.

                  e. [INTENTIONALLY LEFT BLANK.]

                  f.  Reservation  of Shares.  The Company shall take all action
         necessary to at all times have authorized, and reserved for the purpose
         of issuance,  no less than 100% of the number of shares of Common Stock
         needed to provide for the  issuance  of the  Conversion  Shares,  which
         could be  issued  at any time at the  Floor  Price  as  defined  in the
         Debentures.

                  g. Listings.  The Company shall promptly secure the listing of
         the  Conversion  Shares  upon  each  national  securities  exchange  or
         automated  quotation  system, if any, upon which shares of Common Stock
         are then  listed  (subject to official  notice of  issuance)  and shall
         maintain,  so long as any  other  shares of  Common  Stock  shall be so
         listed,  such  listing  of all  Conversion  Shares  from  time  to time
         issuable under the terms of this Agreement and the Registration  Rights
         Agreement.  The  Company  shall use its best  efforts to  maintain  the
         Common  Stock's  authorization  for  quotation  in the NASDAQ Small Cap
         Market.

                  h. Expenses. Each of the Company and the Buyer shall pay all
         costs and expenses incurred by such party in connection with the
         negotiation, investigation, preparation, execution and delivery of this
         Agreement and the Registration Rights Agreement.

                  i. [LEFT INTENTIONALLY BLANK]

                  j. Listing. [LEFT INTENTIONALLY BLANK]

                  k.  Corporate  Existence.  So  long as any  Debentures  remain
         outstanding,  the Company shall not directly or  indirectly  consummate
         any merger, reorganization,  restructuring,  consolidation, sale of all
         or substantially all of the Company's assets or any similar transaction
         or  related  transactions  (each  such  transaction,  a  "Sale  of  the
         Company")   except  if  the  surviving  or  successor  entity  in  such
         transaction   (i)  expressly   assumes,   in  writing,   the  Company's
         obligations hereunder and under the Registration Rights Agreement,  the
         Debentures  and any other  agreements and  instruments  entered into or
         delivered by the Company in connection  herewith and (ii) is a publicly
         traded  corporation whose Common Stock is listed for trading on the New
         York Stock  Exchange,  Inc.,  the American Stock Exchange or the NASDAQ
         National Market, NASDAQ SmallCap Market, or electric bulletin board.

                                       12
<PAGE>

                  l.  Shareholder  Approval.  The Company  covenants to promptly
         submit to its  shareholders at a  shareholder's  meeting a proposal for
         ratification of the issuance of the Debentures,  the Conversion Shares,
         if and as  required  by  the  rules  of  the  National  Association  of
         Securities Dealers,  Inc. ("NASD") and any other applicable law, rules,
         and regulations  applicable to the transaction.  The Company represents
         and warrants that  Affiliates  of the Company,  including the Company's
         officers and directors,  have  individually  agreed in writing in their
         capacity as  shareholders to vote their shares of Common Stock in favor
         of such a proposal at such meeting.

                  m. No Short Sales of the Common Stock.  So long as (i) a Buyer
         owns at least $100,000 of  Debentures,  (ii) the Company has not issued
         any publicly traded convertible  securities and (iii) the Issuer is not
         in material default under the terms of the Debentures, the Registration
         Rights Agreement,  this Agreement or any related agreement,  each Buyer
         shall not  directly  or  indirectly  engage in any short sales or third
         party  short  sales  of  the  Company's  Common  Stock  or  hold a "put
         equivalent  position"  with  respect to the Common Stock (as defined in
         Rule 16a-1 under the 1934 Act).  Notwithstanding  anything contained to
         the contrary in this section, in the event that the Company enters into
         a private placement transaction (other than in connection with employee
         benefit plans,  employee or consultant  compensation,  or in connection
         with mergers and  acquisitions)  which permits the investors  rights to
         engage in short sales of Common Stock,  the  restrictions  contained in
         this  section  shall be  automatically  modified to permit the Buyer to
         engage  in short  sales of Common  Stock  substantially  to the  extent
         permitted  by the  Company  with  respect  to  such  private  placement
         investors.

         5.       TRANSFER AGENT INSTRUCTIONS.

                  The  Company  shall  issue  irrevocable  instructions  to  its
transfer agent to issue certificates, registered in the name of the Buyer or its
respective  nominee(s),  for the Conversion  Shares in such amounts as specified
from time to time by the Buyer to the Company upon  conversion of the Debentures
(the "Irrevocable  Transfer Agent  Instructions").  Prior to registration of the
Conversion  Shares  under the 1933 Act,  all such  certificates  shall  bear the
restrictive  legend  specified  in Section 2(g) of this  Agreement.  The Company
warrants  that  no  instruction  other  than  the  Irrevocable   Transfer  Agent
Instructions  referred to in this Section 5, and stop transfer  instructions  to
give effect to Section 2(f) hereof (in the case of the Conversion Shares,  prior
to  registration of such shares under the 1933 Act) will be given by the Company
to its transfer agent and that the Conversion  Shares shall  otherwise be freely
transferable  on the books  and  records  of the  Company  as and to the  extent
provided in this Agreement or the Registration Rights Agreement. Nothing in this
Section 5 shall  affect in any way the  Buyer's  obligations  and  agreement  to
comply with all applicable  securities laws upon resale of the Debentures or the
Conversion Shares. If the Buyer provides the Company with an opinion of counsel,
reasonably satisfactory in form, and substance to the Company, that registration
of a resale by the Buyer of any of the  Debentures or the  Conversion  Shares is
not required under the 1933 Act, the Company shall permit the transfer,  and, in
the case of the Conversion Shares, promptly instruct its transfer agent to issue
one or more certificates in such name and in such  denominations as specified by
the  Buyer.  The  Company  acknowledges  that a breach by it of its  obligations

                                       13
<PAGE>

hereunder will cause  irreparable  harm to the Buyer by vitiating the intent and
purpose  of  the  transaction  contemplated  hereby.  Accordingly,  the  Company
acknowledges  that the remedy at law for a breach of its obligations  under this
Section 5 will be inadequate and agrees,  in the event of a breach or threatened
breach by the Company of the  provisions of this Section 5, that the Buyer shall
be  entitled,  in addition to all other  available  remedies,  to an  injunction
restraining any breach and requiring  immediate  issuance and transfer,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
                  ----------------------------------------------

                  The obligation of the Company  hereunder to issue and sell the
Debentures  to the Buyer at the  Closing is subject to the  satisfaction,  at or
before the Closing  Date,  of each of the  following  conditions,  provided that
these  conditions  are for the  Company's  sole benefit and may be waived by the
Company at any time in its sole discretion:

                  a. The Buyer shall have executed this Agreement and the
         Registration Rights Agreement and delivered the same to the Company.

                  b. The Buyer  shall have  delivered  to the  Escrow  Agent the
         Purchase Price for the Debentures  being  purchased by the Buyer at the
         Closing by wire transfer of immediately available funds pursuant to the
         wire instructions provided by the Company.

                  c. The  representations  and  warranties of the Buyer shall be
         true and correct in all material  respects as of the date when made and
         as of the  Closing  Date  as  though  made  at that  time  (except  for
         representations  and warranties that speak as of a specific date),  and
         the Buyer shall have performed,  satisfied and complied in all material
         respects with the covenants, agreements and conditions required by this
         Agreement to be  performed,  satisfied or complied with by the Buyer at
         or prior to the Closing Date.

         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
                  ------------------------------------------------

                  The  obligation  of  the  Buyer   hereunder  to  purchase  the
Debentures  at the  Closing  is subject  to the  satisfaction,  at or before the
Closing  Date,  of  each  of  the  following  conditions,  provided  that  these
conditions  are for the Buyer's  sole  benefit and may be waived by the Buyer at
any time in its sole discretion:

                  a. The Company shall have executed this Agreement and the
         Registration Rights Agreement, and delivered the same to the Buyer.

                  b. The Common Stock shall be authorized for quotation on the
         over-the-counter market, or the NASDAQ SmallCap Market , Inc., trading
         in the Common Stock shall not have been suspended for any reason.

                  c. The  representations and warranties of the Company shall be
         true and correct in all  material  respects  (except to the extent that
         any of such  representations  and warranties is already qualified as to
         materiality in Section 3 above, in which case, such representations and
         warranties shall be true and correct without further  qualification) as

                                       14
<PAGE>

         of the date when made and as of the Closing Date as though made at that
         time  (except for  representations  and  warranties  that speak as of a
         specific  date) and the Company  shall have  performed,  satisfied  and
         complied in all material  respects with the  covenants,  agreements and
         conditions  required by this  Agreement to be  performed,  satisfied or
         complied with by the Company at or prior to the Closing Date. The Buyer
         shall have  received a  certificate,  executed  by the Chief  Executive
         Officer of the Company,  dated as of the Closing Date, to the foregoing
         effect and as to such other matters as may be  reasonably  requested by
         the Buyer  including,  without  limitation  an update as of the Closing
         Date regarding the representation contained in Section 3(c) above.

                  d. The Buyer shall have  received the opinion of the Company's
         counsel  dated as of the Closing  Date,  in form,  scope and  substance
         reasonably  satisfactory to the Buyer and in substantially  the form of
         Exhibit "C" attached hereto.

                  e. The Company  shall have executed and delivered to the Buyer
         the Certificates (in such denominations as the Buyer shall request) for
         the Debentures being purchased by the Buyer at the Closing.

                  f. The Board of Directors of the Company shall have adopted
         the resolutions in substantially the form of Exhibit "D" attached
         hereto.

                  g. As of the Closing Date, the Company shall have reserved out
         of its authorized and unissued Common Stock,  solely for the purpose of
         effecting the  conversion of the  Debentures,  such number of shares of
         Common  Stock no less than 100% of the number of shares of Common Stock
         for which are issuable upon  conversion of all of the Debentures  which
         could be  issued  at any time at the  Floor  Price  as  defined  in the
         Debentures.

                  h. The Irrevocable  Transfer Agent  Instructions,  in form and
         substance  satisfactory to the Buyer,  shall have been delivered to and
         acknowledged in writing by the Company's transfer agent.

         8.       INDEMNIFICATION.
                  ---------------

                  a. In consideration  of the Buyer's  execution and delivery of
         this Agreement and acquiring the Debentures and the Conversion  Shares,
         hereunder  and in addition to all of the  Company's  other  obligations
         under this Agreement, the Company shall defend, protect,  indemnify and
         hold  harmless the Buyer and each other holder of the  Debentures,  the
         Conversion Shares, and all of their officers, directors,  employees and
         agents  (including,  without  limitation,  those retained in connection
         with the  transactions  contemplated by this Agreement)  (collectively,
         the  "Indemnitees")  from and  against any and all  actions,  causes of
         action, suits, claims, losses, costs, penalties,  fees, liabilities and
         damages, and expenses in connection therewith  (irrespective of whether
         any such Indemnitee is a party to the action for which  indemnification
         hereunder is sought),  and  including  reasonable  attorneys'  fees and
         disbursements   (the  "Indemnified   Liabilities"),   incurred  by  the

                                       15
<PAGE>

         Indemnitees  or any of them as a  result  of,  or  arising  out of,  or
         relating to (a) any  misrepresentation  or breach of any representation
         or warranty made by the Company in this  Agreement,  the  Debentures or
         the Registration Rights Agreement or any other certificate,  instrument
         or  document  contemplated  hereby or  thereby,  (b) any  breach of any
         covenant,  agreement  or  obligation  of the Company  contained in this
         Agreement,  the Debentures,  the Registration Rights Agreement,  or any
         other  certificate,  instrument  or  document  contemplated  hereby  or
         thereby,  or (c) any cause of  action,  suit or claim  brought  or made
         against  such  Indemnitee  by any  third  party and  arising  out of or
         resulting from the execution,  delivery,  performance or enforcement of
         this Agreement or any other instrument,  document or agreement executed
         pursuant hereto by any of the Indemnities,  any transaction financed or
         to be financed in whole or in part,  directly or  indirectly,  with the
         proceeds of the issuance of the  Debentures  or the status of the Buyer
         or holder of the Debentures,  the Conversion  Shares, as an investor in
         the  Company.  To the  extent  that the  foregoing  undertaking  by the
         Company may be unenforceable for any reason, the Company shall make the
         maximum  contribution  to the payment and  satisfaction  of each of the
         Indemnified Liabilities which is permissible under applicable law.

                  b. Each Buyer agrees to severally  and not jointly  indemnify,
         hold harmless and defend,  to the same extent and in the same manner as
         is set forth in Section 8a., the Company from Indemnified  Liabilities,
         in  each  case  to the  extent,  and  only  to the  extent,  that  such
         Indemnified  Liabilities  are incurred by the Company arising out of or
         relating  to a breach  by that  Buyer of (a) any  misrepresentation  or
         breach  of any  representation  or  warranty  made by the Buyer in this
         Agreement,  the Debentures or the Registration  Rights Agreement or any
         other  certificate,  instrument  or  document  contemplated  hereby  or
         thereby, (b) any breach of any covenant, agreement or obligation of the
         Buyer  contained in this  Agreement,  the Debentures  the  Registration
         Rights  Agreement,  or any other  certificate,  instrument  or document
         contemplated hereby or thereby,  provided,  further,  however, that the
         Investor shall be liable under this Section 8b. for only that amount of
         Indemnified  Liabilities  as does not exceed the proceeds to such Buyer
         as a  result  of the sale of  Registrable  Securities  pursuant  to the
         Registration Statement.

         9.       GOVERNING LAW: MISCELLANEOUS.
                  ----------------------------

                  a.  Governing  Law.  This  Agreement  shall be governed by and
         interpreted  in  accordance  with  the laws of the  State  of  Delaware
         without  regard  to  the  principles  of  conflict  of  laws.   Company
         acknowledges  that  upon  any  breach  of  Buyer's   conversion  rights
         hereunder,  Buyer's resulting injury may not be adequately  compensated
         by a remedy  at law.  Accordingly,  upon  such  breach,  Buyer,  at its
         election  and  without  limitation  of its  other  remedies,  shall  be
         entitled to pursue a claim for specific  performance of this Agreement,
         and Company hereby waives the right to assert any defense  thereto that
         Purchaser has an adequate remedy at law. The parties  expressly consent
         to the  jurisdiction  and venue of the Superior Court of Fulton County,
         Georgia and the United States District Court for the Northern  District
         of Georgia for the  adjudication of any civil action asserted  pursuant
         to this Paragraph.

                                       16
<PAGE>

                  b.  Acknowledgment  Regarding  Buyer's Purchase of Debentures.
         The parties  acknowledge  and agree that the Buyer is acting  solely in
         the  capacity  of an  arm's  length  purchaser  with  respect  to  this
         Agreement and the transactions contemplated hereby. The parties further
         acknowledge  that the Buyer is not  acting as a  financial  advisor  or
         fiduciary of the Company (or in any similar  capacity)  with respect to
         this Agreement and the transactions  contemplated hereby and any advice
         given by the Buyer or any of their respective representatives or agents
         in connection  with this  Agreement and the  transactions  contemplated
         hereby is merely  incidental to such Buyer's purchase of the Debentures
         or the Conversion Shares. The parties further  acknowledge to the Buyer
         that the Company's decision to enter into this Agreement has been based
         solely  on  the   independent   evaluation   by  the  Company  and  its
         representatives.

                  c. Counterparts. This Agreement may be executed in two or more
         identical  counterparts,  all of which shall be considered  one and the
         same agreement and shall become effective when  counterparts  have been
         signed by each party and delivered to the other party. In the event any
         signature page is delivered by facsimile transmission,  the party using
         such  means  of  delivery  shall  cause  four (4)  additional  original
         executed signature pages to be physically  delivered to the other party
         within five (5) days of the execution and delivery hereof.

                  d. Headings. The headings of this Agreement are for
         convenience of reference and shall not form part of, or affect the
         interpretation of, this Agreement.

                  e. Severability. If any provision of this Agreement shall be
         invalid or unenforceable in any jurisdiction, such invalidity or
         unenforceability shall not affect the validity or enforceability of the
         remainder of this Agreement in that jurisdiction or the validity or
         enforceability of any provision of this Agreement in any other
         jurisdiction.

                  f. Entire Agreement, Amendments. This Agreement supersedes all
         other prior oral or written  agreements between the Buyer, the Company,
         their affiliates and persons acting on their behalf with respect to the
         matters  discussed  herein,  and  this  Agreement  and the  instruments
         referenced herein contain the entire  understanding of the parties with
         respect to the  matters  covered  herein  and  therein  and,  except as
         specifically  set forth herein or therein,  neither the Company nor any
         Buyer makes any representation,  warranty, covenant or undertaking with
         respect to such matters.  No provision of this  Agreement may be waived
         or amended other than by an  instrument in writing  signed by the party
         to be charged with enforcement.

                  g.   Notices.   Any   notices   consents,   waivers  or  other
         communications  required  or  permitted  to be given under the terms of
         this  Agreement  must be in  writing  and will be  deemed  to have been
         delivered  (i) upon  receipt,  when  delivered  personally;  (ii)  upon
         receipt,  when  sent by  facsimile,  provided  a copy is mailed by U.S.
         certified mail,  return receipt  requested;  (iii) three (3) days after
         being sent by U.S.  certified mail, return receipt  requested,  or (iv)
         one  (I) day  after  deposit  with a  nationally  recognized  overnight
         delivery  service,  in each  case  properly  addressed  to the party to
         receive  the  same.  The  addresses  and  facsimile  numbers  for  such
         communications shall be:

                                       17
<PAGE>
         If to the Company:

                  1101 Northpoint Parkway
                  West Palm Beach, Florida  33407
                  Attention: Chief financial Officer

                  Telephone:        (561) 478-5625
                  Facsimile:        (561) 688-8784

         With a copy to:

                  Ruben & Aronson, LLC
                  3329 K Street, N.W. # 403
                  Washington, D.C.  20007
                  Attn: Robert L. Ruben, Esq.
                  Telephone:  (202) 965-3600
                  Facsimile:    (202) 965-3700

         If to the Transfer Agent:

                  Florida Atlantic Stock Transfer, Inc.
                  7130 Nob Hill Road
                  Tamarac, Florida  33321

                  Telephone:        (954) 726-4954
                  Facsimile:        (954) 726-6305

         If to the Buyer, to its address and facsimile number on the Schedule of
         Buyers, with copies to the Buyer's counsel as set forth on the Schedule
         of Buyers. Each party shall provide five (5) days' prior written notice
         to the other party of any change in address or facsimile number.

                  h.  Successors and Assigns.  This  Agreement  shall be binding
         upon and inure to the  benefit  of the  parties  and  their  respective
         successors and assigns.  The Company shall not assign this Agreement or
         any rights or obligations  hereunder  without the prior written consent
         of the Buyer.  The Buyer may assign its rights  hereunder  without  the
         consent of the Company,  provided,  however,  that any such  assignment
         shall not release the Buyer from its obligations  hereunder unless such
         obligations  are assumed by such assignee and the Company has consented
         to such assignment and assumption.

                  i. No Third Party Beneficiaries. This Agreement is intended
         for the benefit of the parties hereto and their respective permitted
         successors and assigns, and is not for the benefit of, nor may any
         provision hereof be enforced by, any other person.

                                       18
<PAGE>

                  j. Survival. Unless this Agreement is terminated under Section
         9(m), the  representations  and warranties of the Company and the Buyer
         contained in Sections 2 and 3, the  agreements  and covenants set forth
         in Sections  4, 5 and 9, the  indemnification  provisions  set forth in
         Section 8, shall  survive the Closing.  The Buyer shall be  responsible
         only for its own representations,  warranties, agreements and covenants
         hereunder.

                  k. Publicity. The Company and the Buyer shall have the right
         to approve before issuance any press releases or any other public
         statements with respect to the transactions contemplated hereby;
         provided, however, that the Company shall be entitled, without the
         prior approval of the Buyer, to make any press release or other public
         disclosure with respect to such transactions as is required by
         applicable law and regulations.

                  l. Further  Assurances.  Each party shall do and  perform,  or
         cause to be done and performed,  all such further acts and things,  and
         shall  execute  and deliver  all such other  agreements,  certificates,
         instruments and documents, as the other party may reasonably request in
         order to carry out the  intent  and  accomplish  the  purposes  of this
         Agreement and the consummation of the transactions contemplated hereby.

                  m. Termination. In the event that the Closing shall not have
         occurred with respect to the Buyer on or before five (5) business days
         from the date hereof due to the Company's or the Buyer's failure to
         satisfy the conditions set forth in Sections 6 and 7 above (and the
         nonbreaching party's failure to waive such unsatisfied condition(s)),
         the nonbreaching party shall have the option to terminate this
         Agreement with respect to such breaching party at the close of business
         on such date without liability of any party to any other party-
         provided, however, that if this Agreement is terminated pursuant to
         this Section 9(m), the Company shall remain obligated to reimburse the
         Buyer for the expenses described in Section 4(h) above.

                  n. Finder. The Company acknowledges that it has engaged J.P.
         Carey Securities, Inc. as placement agent in connection with the sale
         of the Debentures, which placement agent may have formally or
         informally engaged other agents on its behalf. The Company shall be
         responsible for the payment of any placement agent or brokers' fees
         (which includes cash and warrants to purchase Common Stock) relating to
         or arising out of the transactions contemplated hereby as described in
         the Placement Agency Agreement between the parties dated of even date
         herewith.

                  o. No Strict Construction. The language used in this Agreement
         will be deemed to be the language chosen by the parties to express
         their mutual intent, and no rules of strict construction will be
         applied against any party.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                       19
<PAGE>

         IN  WITNESS  WHEREOF,  the  Buyer  and the  Company  have  caused  this
Securities  Purchase  Agreement to be duly executed as of the date first written
above.

                                             "COMPANY"
                                             SAF T LOK INCORPORATED

                                             By:
                                             Name:______________________________
                                             Its: ______________________________

                                             "BUYER"

                                             ___________________________

                                             By: _______________________________
                                             Name: _____________________________
                                             Title: ____________________________

                                       20(Registration Rights Agreement)

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this  "Agreement"),  dated as of May 26,
2000,  by  and  among  Saf T  Lok  Incorporated,  a  Florida  corporation,  with
headquarters at 1101  Northpoint  Parkway,  West Palm Beach Florida,  33407 (the
"Company"), and the undersigned buyers (the "Buyers" ).

         WHEREAS:

         A. In connection  with the Securities  Purchase  Agreement by and among
the parties of even date herewith (the  "Securities  Purchase  Agreement"),  the
Company  has  agreed,  upon the  terms  and  subject  to the  conditions  of the
Securities Purchase Agreement,  to issue and sell to the Buyer's,  the Company's
6%  Subordinated  Convertible  Debenture  (the  "Debentures"),   which  will  be
convertible into shares of the Company's common stock, $0.01 par value per share
(the "Common Stock") (as converted,  the "Conversion Shares") in accordance with
the terms of the Debentures; and

         B. To induce the Buyers to execute and deliver the Securities  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder, or any similar successor statute (collectively, the "1933 Act"), and
applicable state securities laws:

        NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Buyers hereby agree as follows:

         1.       DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
meanings:

                  a.  "Investor"  means the Buyer and any transferee or assignee
         thereof to whom the Buyer  assigns its rights under this  Agreement and
         who  agrees to become  bound by the  provisions  of this  Agreement  in
         accordance with Section 9.

                  b. "Person" means a corporation,  a limited liability company,
         an  association,  a  partnership,  an  organization,   a  business,  an
         individual,  a  governmental  or  political  subdivision  thereof  or a
         governmental agency.

                  c. "Register,"  "registered,"  and  "registration"  refer to a
         registration  effected by preparing and filing one or more Registration
         Statements  in  compliance  with the 1933 Act and  pursuant to Rule 415

                                      B-1
<PAGE>

         under  the  1933  Act or any  successor  rule  providing  for  offering
         securities on a continuous  basis ("Rule 415"),  and the declaration or
         ordering of  effectiveness  of such  Registration  Statement(s)  by the
         United States Securities and Exchange Commission (the "SEC").

                  d. "Registrable Securities" means the Conversion Shares issued
         or issuable upon conversion of the Debentures and any shares of capital
         stock issued or issuable with respect to the  Conversion  Shares or the
         Debentures   as  a  result  of  any  stock   split,   stock   dividend,
         recapitalization, exchange, or similar event.

                  e. "Registration Statement" means a registration statement of
         the Company filed under the 1933 Act.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have the respective meanings set for the in the Securities Purchase Agreement.

         2.       REGISTRATION.

                  a. Mandatory  Registration.  The Company shall prepare and, on
         or prior to a date which is no more than ninety (90) days from the date
         that the Company has sold a total of  $875,000 in  principal  amount of
         Debentures  (the "Filing  Deadline"),  file with the SEC a Registration
         Statement or Registration Statements (as is necessary) on Form S-3 (or,
         if such form is unavailable for such a registration, on such other form
         as is available for such a registration, subject to the consent of each
         Buyer and the  provisions  of Section  2.e.,  which consent will not be
         unreasonably  withheld),  covering the resale of all of the Registrable
         Securities,  which  Registration  Statement(s)  shall  state  that,  in
         accordance  with  Rule  416  promulgated   under  the  1933  Act,  such
         Registration  Statement(s)  also  covers such  indeterminate  number of
         additional   shares  of  Common  Stock  as  may  become  issuable  upon
         conversion of the  Debentures  (i) to prevent  dilution  resulting from
         stock  splits,  stock  dividends  or similar  transactions  and (ii) by
         reason of changes in the  Conversion  Price or  Conversion  Rate of the
         Debentures  in accordance  with the terms  thereof.  Such  Registration
         Statement shall initially register for resale at least 1,023,750 shares
         of Common Stock for the Investors and others,  subject to adjustment as
         provided in Section  3.b.,  and  1,023,750  such  registered  shares of
         Common Stock shall be allocated  among the  Investors pro rata based on
         the total  number of  Registrable  Securities  issued or issuable as of
         each date that a Registration  Statement,  as amended,  relating to the
         resale of the Registrable  Securities is declared effective by the SEC.
         The  Company  shall  use its  best  efforts  to have  the  Registration
         Statement  declared  effective by the SEC within ninety (90) days after
         the Filing Deadline (the  "Registration  Deadline").  The Company shall
         permit the  registration  statement to become effective within ten (10)
         business  days after  receipt of a "no review"  notice from the SEC. In
         the event that the  Registration  Statement is not filed by the Company
         with the SEC by the Filing Deadline, then the Company shall be required
         to deliver to the Investors  within 10 calendar days of the end of each
         month in which the Company has not so filed a cash penalty of 2% of the
         principal  amount  of  Debentures  per  month  (pro-rated  for  partial
         months).

                                      B-2
<PAGE>

                  b.  Underwritten  Offering.  If  any  offering  pursuant  to a
         Registration   Statement   pursuant   to  Section   2(a)   involves  an
         underwritten  offering,  the Buyers  shall have the right to select one
         legal counsel and one  investment  banker or manager at the cost of the
         Company to administer their interest in the offering,  which investment
         banker or manager shall be reasonably satisfactory to the Company.

                  c.  Piggy-Back  Registrations.  If at any  time  prior  to the
         expiration of the Registration Period (as hereinafter defined) and at a
         time  when  there is  currently  no  effective  registration  statement
         covering the Regsitrable Securities,  the Company proposes to file with
         the SEC a  Registration  Statement  relating to an offering for its own
         account  or the  account  of  others  under  the 1933 Act of any of its
         securities  (other  than  on  Form  S-4  or  Form  S-8  or  their  then
         equivalents  relating to  securities  to be issued solely in connection
         with any  acquisition  of any entity or business  or equity  securities
         issuable in  connection  with stock  option or other  employee  benefit
         plans) the Company shall promptly send to each Investor who is entitled
         to  registration  rights under this Section 2(c) written  notice of the
         Company's  intention  to  file a  Registration  Statement  and of  such
         Investor's  rights under this Section 2(c) and, if within ten (10) days
         after  receipt  of such  notice,  such  Investor  shall so  request  in
         writing,  the Company shall include in such Registration  Statement all
         or any part of the Registrable  Securities such Investor requests to be
         registered,  subject to the priorities set forth in Section 2(d) below.
         No right to registration of Registrable  Securities  under this Section
         2(c)  shall be  construed  to limit  any  registration  required  under
         Section 2(a).  The  obligations  of the Company under this Section 2(c)
         may be  waived  by  Investors  holding a  majority  of the  Registrable
         Securities.  If an  offering  in  connection  with which an Investor is
         entitled to  registration  under this Section  2(c) is an  underwritten
         offering,  then each Investor whose Registrable Securities are included
         in such  Registration  Statement shall,  unless otherwise agreed by the
         Company,  offer and sell such Registrable Securities in an underwritten
         offering using the same underwriter or underwriters and, subject to the
         provisions of this Agreement, on the same terms and conditions as other
         shares of Common Stock included in such underwritten offering.

                  d.  Priority in Piggy-Back  Registration  Rights in connection
         with Registrations or Company Account. If the registration  referred to
         in  Section  2(c)  is to be an  underwritten  public  offering  for the
         account  of the  Company  and the  managing  underwriter(s)  advise the
         Company  in  writing,  that in their  reasonable  good  faith  opinion,
         marketing or other  factors  dictate that a limitation on the number of
         shares  of  Common  Stock  which may be  included  in the  Registration
         Statement is  necessary  to  facilitate  and not  adversely  affect the
         proposed offering, then the Company shall include in such registration:
         (1) first,  all  securities  the  Company  proposes to sell for its own
         account, (2) second, up to the full number of securities proposed to be
         registered  for the  account of the holders of  securities  entitled to
         inclusion of their securities in the  Registration  Statement by reason
         of demand registration  rights, and (3) third, the securities requested
         to be  registered  by the  Investors  and other  holders of  securities
         entitled to participate in the  registration,  drawn from them pro rata
         based  on  the  number  each  has  requested  to be  included  in  such
         registration.

                                      B-3
<PAGE>

         3.       RELATED OBLIGATIONS.
                  -------------------

         Whenever an Investor has requested that any  Registrable  Securities be
registered  pursuant to Section 2(c) or at such time as the Company is obligated
to file a  Registration  Statement  with the SEC pursuant to Section  2(a),  the
Company will use its best efforts to effect the  registration of the Registrable
Securities in accordance  with the intended  method of disposition  thereof and,
pursuant thereto, the Company shall have the following obligations:

                  a.  The  Company  shall  keep  the  Registration  Statement(s)
         effective  pursuant  to Rule 415 at all times  until the earlier of (i)
         the  date as of which  the  Investors  may sell all of the  Registrable
         Securities  without  restriction  pursuant to Rule  144(k)  promulgated
         under the 1933 Act (or successor thereto) or (ii) the date on which (A)
         the Investors  shall have sold all the  Registrable  Securities and (B)
         none of the  Debentures is  outstanding  (the  "Registration  Period"),
         which   Registration   Statement(s)   (including   any   amendments  or
         supplements  thereto  and  prospectuses  contained  therein)  shall not
         contain  any untrue  statement  of a  material  fact or omit to state a
         material fact required to be stated  therein,  or necessary to make the
         statements  therein,  in light of the  circumstances in which they were
         made, not misleading.

                  b.  The  Company  shall  prepare  and  file  with the SEC such
         amendments (including post-effective amendments) and supplements to the
         Registration  Statement(s)  and the  prospectus(es)  used in connection
         with the  Registration  Statement(s),  which  prospectus(es)  are to be
         filed  pursuant to Rule 424  promulgated  under the 1933 Act, as may be
         necessary to keep the Registration  Statement(s) effective at all times
         during the Registration  Period,  and, during such period,  comply with
         the  provisions of the 1933 Act with respect to the  disposition of all
         Registrable  Securities  of the  Company  covered  by the  Registration
         Statement(s)  until  such  time as all of such  Registrable  Securities
         shall have been disposed of in accordance with the intended  methods of
         disposition  by the  seller  or  sellers  thereof  as set  forth in the
         Registration Statement(s).  In the event the number of shares available
         under a  Registration  Statement  filed  pursuant to this  Agreement is
         insufficient  in the reasonable  opinion of a majority of the Buyers to
         cover all of the  Registrable  Securities,  the Company shall  promptly
         amend the Registration  Statement, or file a new Registration Statement
         (on the short form available therefor,  if applicable),  or both, so as
         to cover all of the  Registrable  Securities,  in each case, as soon as
         practicable,  but in any  event  within  thirty  (30)  days  after  the
         necessity  therefor  arises  (based on the  market  price of the Common
         Stock and other relevant factors on which the Company reasonably elects
         to  rely).  The  Company  shall  use its best  efforts  to  cause  such
         amendment and/or new Registration Statement to become effective as soon
         as  practicable  following  the filing  thereof.  For  purposes  of the

                                      B-4
<PAGE>

         foregoing   provision,   the  number  of  shares   available   under  a
         Registration  Statement shall be deemed  "insufficient  to cover all of
         the  Registrable  Securities"  if at any time the number of Registrable
         Securities  issued or issuable  upon  conversion  of the  Debentures is
         greater  than the  quotient  determined  by dividing  (i) the number of
         shares of Common Stock  available  for resale  under such  Registration
         Statement  by  (ii)  1.0;  provided  that in the  case  of the  initial
         registration  of the Registrable  Securities  pursuant to Section 2(a),
         the Company shall be required to register at least 1,023,750  shares of
         Common  Stock for the  benefit of the  Investors.  For  purposes of the
         calculation set forth in the foregoing  sentence,  any  restrictions on
         the  convertibility  of the Debentures  shall be  disregarded  and such
         calculation  shall assume that the Debentures are then convertible into
         shares of Common Stock at the then prevailing  Conversion Rate together
         with accrued  interest which shall be payable in shares of Common Stock
         (as defined in the Debentures).

                  c. Upon  request,  the Company  shall furnish to each Investor
         whose   Registrable   Securities  are  included  in  the   Registration
         Statement(s)  and its legal counsel  without  charge (i) promptly after
         the same is  prepared  and filed  with the SEC at least one copy of the
         Registration  Statement and any amendment thereto,  including financial
         statements  and  schedules,   all  documents  incorporated  therein  by
         reference  and  all  exhibits,  the  prospectus(es)  included  in  such
         Registration  Statement(s) (including each preliminary prospectus) and,
         with regards to the Registration Statement, any correspondence by or on
         behalf  of the  Company  to the  SEC or the  staff  of the  SEC and any
         correspondence  from the SEC or the staff of the SEC to the  Company or
         its  representatives,  (ii) upon the  effectiveness of any Registration
         Statement,  three  (3)  copies  of  the  prospectus  included  in  such
         Registration  Statement and all amendments and supplements  thereto (or
         such other number of copies as such  Investor may  reasonably  request)
         and (iii) such other documents,  including any preliminary  prospectus,
         as such  Investor may  reasonably  request in order to  facilitate  the
         disposition of the Registrable Securities owned by such Investor.

                  d.  [INTENTIONALLY LEFT BLANK]

                  e.  In  the  event  Investors  who  hold  a  majority  of  the
         Registrable   Securities   being   offered  in  the   offering   select
         underwriters for the offering, the Company shall enter into and perform
         its obligations under an underwriting agreement, in usual and customary
         form,  including,  without  limitation,  customary  indemnification and
         contribution obligations, with the underwriters of such offering.

                  f.  [INTENTIONALLY LEFT BLANK]

                  g. The  Company  shall use its best  efforts  to  prevent  the
         issuance of any stop order or other  suspension of  effectiveness  of a
         Registration  Statement,  or the suspension of the qualification of any
         of  the   Registrable   Securities   for   sale  in  any   jurisdiction
         (acknowledging  that,  to date, no such  registrations  have been made)
         and, if such an order or suspension is issued, to obtain the withdrawal
         of such order or  suspension  at the  earliest  possible  moment and to
         notify each Investor who holds Registrable  Securities being sold (and,
         in the event of an underwritten offering, the managing underwriters) of
         the issuance of such order and the resolution thereof or its receipt of
         actual notice of the  initiation or threat of any  proceeding  for such
         purpose.

                  h. The Company  shall  permit  each  Investor a single firm of
         counsel  or such  other  counsel as  thereafter  designated  as selling
         stockholders'  counsel  by the  Investors  who hold a  majority  of the
         Registrable  Securities being sold at the Investor's expense, to review
         and comment upon the  Registration  Statement(s) and all amendments and

                                      B-5
<PAGE>

         supplements  thereto at least four (4) days prior to their  filing with
         the SEC,  provided that the name,  address and telephone number of such
         counsel  shall  have  previously  been  provided,  in  writing,  to the
         Company,  specifically  designating  such  counsel for purposes of this
         Section 3h.

                  i. At the request of the  Investors who hold a majority of the
         Registrable  Securities  being sold,  the Company  shall use their best
         efforts  to  furnish,  on the  date  that  Registrable  Securities  are
         delivered to an  underwriter,  if any, for sale in connection  with the
         Registration  Statement  (i) if required by an  underwriter,  a letter,
         dated  such  date,  from the  Company's  independent  certified  public
         accountants  in  form  and  substance  as  is   customarily   given  by
         independent   certified  public   accountants  to  underwriters  in  an
         underwritten public offering,  addressed to the underwriters,  and (ii)
         an opinion,  dated as of such date, of counsel representing the Company
         for  purposes  of such  Registration  Statement,  in  form,  scope  and
         substance as is customarily  given in an underwritten  public offering,
         addressed to the underwriters and the Investors.

                  j. The Company shall make  available for inspection by (i) any
         Investor,  (ii)  one  underwriter   participating  in  any  disposition
         pursuant to a Registration  Statement,  (iii) one firm of attorneys and
         one firm of accountants or other agents retained by the Investors,  and
         (iv) one firm of attorneys retained by such underwriter  (collectively,
         the  "Inspectors")  all  pertinent  financial  and other  records,  and
         pertinent   corporate   documents   and   properties   of  the  Company
         (collectively,  the "Records"), as shall be reasonably deemed necessary
         by  each  Inspector  to  enable  each  Inspector  to  exercise  its due
         diligence responsibility,  and cause the Company's officers,  directors
         and  employees  to  supply  all  information  which any  Inspector  may
         reasonably  request  for  purposes  of  such  due  diligence  provided,
         however,  that each Inspector shall hold in strict confidence and shall
         not make any disclosure (except to an Investor) or use of any Record or
         other  information  which the  Company  determines  in good faith to be
         confidential,   and  of  which  determination  the  Inspectors  are  so
         notified,  unless  (a) the  disclosure  of  such  Records  is  mutually
         determined  to be  necessary  to avoid or  correct  a  misstatement  or
         omission in any Registration  Statement or is otherwise  required under
         the 1933 Act, (b) the release of such Records is ordered  pursuant to a
         final, non-appealable subpoena or order from a court or government body
         of competent  jurisdiction,  or (c) the information in such Records has
         been made generally available to the public other than by disclosure in
         violation of this or any other agreement.  Each Investor agrees that it
         shall, upon learning that disclosure of such Records is sought in or by
         a court or governmental body of competent jurisdiction or through other
         means, give prompt notice to the Company and allow the Company,  at its
         expense,  to undertake  appropriate action to prevent disclosure of, or
         to obtain a protective order for, the Records deemed confidential.

                  k.  The  Company  shall  hold in  confidence  and not make any
         disclosure  of  information  concerning  an  Investor  provided  to the
         Company  unless (i)  disclosure  of such  information  is  necessary to
         comply with federal or state  securities  laws,  (ii) the disclosure of
         such  information  is necessary to avoid or correct a  misstatement  or
         omission  in any  Registration  Statement,  (iii) the  release  of such
         information  is  ordered   pursuant  to  a  subpoena  or  other  final,
         non-appealable  order from a court or  governmental  body of  competent

                                      B-6
<PAGE>

         jurisdiction,   or  (iv)  such  information  has  been  made  generally
         available to the public other than by  disclosure  in violation of this
         or any other agreement. The Company agrees that it shall, upon learning
         that disclosure of such information concerning an Investor is sought in
         or by a court or governmental body of competent jurisdiction or through
         other means, give prompt written notice to such Investor and allow such
         Investor, at the Investor's expense, to undertake appropriate action to
         prevent  disclosure  of,  or to obtain a  protective  order  for,  such
         information.

                  l. The Company shall use its best efforts  either to (i) cause
         all the Registrable  Securities covered by a Registration  Statement to
         be listed on each national  securities  exchange on which securities of
         the same class or series issued by the Company are then listed, if any,
         if the listing of such  Registrable  Securities is then permitted under
         the rules of such exchange, (ii) if, despite the Company's best efforts
         to satisfy the  preceding  clause (i), the Company is  unsuccessful  in
         satisfying  the  preceding  clause  (i),  if at  any  time  during  the
         Registration Period the Company is able to satisfy the relevant listing
         criteria,  to secure the inclusion for quotation on the Nasdaq SmallCap
         Market  for  such  Registrable  Securities  or,  (ii) if,  despite  the
         Company's  best  efforts to satisfy  the  preceding  clause  (ii),  the
         Company is  unsuccessful  in satisfying  the preceding  clause (ii), to
         secure the inclusion for quotation on the  over-the-counter  market for
         such  Registrable  Securities,  and, without limiting the generality of
         the foregoing,  in the case of clause (ii) or (iii),  to arrange for at
         least two market  makers to register with the National  Association  of
         Securities  Dealers,  Inc.  ("NASD")  as  such  with  respect  to  such
         Registrable Securities.  The Company shall pay all fees and expenses in
         connection with satisfying its obligation under this Section 3(l).

                  m. The Company  shall  cooperate  with the  Investors who hold
         Registrable Securities being offered and, to the extent applicable, any
         managing underwriter, to facilitate the timely preparation and delivery
         of certificates (not bearing any restrictive  legend)  representing the
         Registrable  Securities  to  be  offered  pursuant  to  a  Registration
         Statement and enable such  certificates to be in such  denominations or
         amounts, as the case may be, as the managing  underwriter,  if any, or,
         if there is no managing  underwriter,  a majority of the  Investors may
         reasonably  request  and  registered  in  such  names  as the  managing
         underwriter,  if any, or the Investors may request.  Not later than the
         date on which any  Registration  Statement  registering  the  resale of
         Registrable Securities is declared effective, the Company shall deliver
         to its  transfer  agent  instructions,  accompanied  by any  reasonably
         required  opinion of counsel,  that permit  resales of the  Registrable
         Securities, without legend, in a timely fashion that complies with then
         mandated  securities  settlement  procedures  for  regular  way  market
         transactions.

                  n.  The  Company  shall  take  all  other  reasonable  actions
         necessary to expedite and  facilitate  disposition  by the Investors of
         Registrable Securities pursuant to a Registration Statement.

                  o. The Company shall use the services of a transfer  agent and
         registrar  for all  such  Registrable  Securities  not  later  than the
         effective date of such Registration Statement.

                                      B-7
<PAGE>

                  p.  Subject  to the  reasonable  approval  of  counsel  to the
         Company, if requested by the managing  underwriter or a majority of the
         Investors,  the Company shall  immediately  incorporate in a prospectus
         supplement or post-effective amendment such information as the managing
         underwriter  and the  majority of  Investors  agree  should be included
         therein   relating  to  the  sale  and   distribution   of  Registrable
         Securities, including, without limitation,  information with respect to
         the number of Registrable  Securities being sold to such  underwriters,
         the purchase  price being paid therefor by such  underwriters  and with
         respect  to any  other  terms  of the  underwritten  (or  best  efforts
         underwritten) offering of the Registrable Securities to be sold in such
         offering;  make all required  filings of such prospectus  supplement or
         post-effective  amendment  as soon as  notified  of the  matters  to be
         incorporated in such prospectus supplement or post-effective amendment;
         and  supplement  or make  amendments to any  Registration  Statement if
         requested  by a  shareholder  or any  underwriter  of such  Registrable
         Securities.

                  q. The  Company  shall  use its  best  efforts  to  cause  the
         Registrable Securities covered by the applicable Registration Statement
         to be registered with or approved by such other  governmental  agencies
         or  authorities  as may be necessary to consummate  the  disposition of
         such Registrable Securities.

                  r. The Company shall  otherwise use its best efforts to comply
         with all applicable rules and regulations of the SEC in connection with
         any registration hereunder.

         4.       OBLIGATIONS OF THE INVESTORS.
                  ----------------------------

                  a. At least fourteen (14) days prior to the first  anticipated
         filing date of the Registration  Statement,  or any amendments thereto,
         the Company  shall notify each  Investor in writing of the  information
         the Company requires from each such Investor if such Investor elects to
         have any of such  Investor's  Registrable  Securities  included  in the
         Registration  Statement.  It  shall  be a  condition  precedent  to the
         obligations  of the Company to complete  the  registration  pursuant to
         this  Agreement  with  respect  to  the  Registrable  Securities  of  a
         particular  Investor  that such  Investor  shall furnish to the Company
         such information  regarding itself, the Registrable  Securities held by
         it and the intended method of disposition of the Registrable Securities
         held by it as shall be reasonably  required to effect the  registration
         of such  Registrable  Securities  and shall  execute such  documents in
         connection  with  such  registration  as  the  Company  may  reasonably
         request.  An investor's failure to respond to the Company's request for
         information  prior to the  specified  filing  date of the  Registration
         Statement  shall toll the Company's  obligations  under Section 2 as to
         that Investor.

                  b.  Each  Investor  by  such  Investor's   acceptance  of  the
         Registrable   Securities  agrees  to  cooperate  with  the  Company  as
         reasonably  requested by the Company in connection with the preparation
         and filing of the  Registration  Statement(s)  hereunder,  unless  such
         Investor  has  notified  the  Company  in  writing  of such  Investor's
         election to exclude all of such Investor's  Registrable Securities from
         the Registration Statement.

                                      B-8
<PAGE>

                  c.  In  the  event   Investors   holding  a  majority  of  the
         Registrable   Securities  being  registered  determine  to  engage  the
         services  of an  underwriter,  each  Investor  agrees to enter into and
         perform such Investor's obligations under an underwriting agreement, in
         usual and customary  form,  including,  without  limitation,  customary
         indemnification  and  contribution   obligations,   with  the  managing
         underwriter  of such  offering  and  take  such  other  actions  as are
         reasonably  required in order to expedite or facilitate the disposition
         of the  Registrable  Securities,  unless  such  Investor  notifies  the
         Company in writing of such  Investor's  election to exclude all of such
         Investor's Registrable Securities from the Registration Statement(s).

                  d. Each Investor  agrees that, upon receipt of any notice from
         the  Company of the  happening  of any event of the kind  described  in
         Section  3(g)  or the  first  sentence  of  3(f),  such  Investor  will
         immediately  discontinue disposition of Registrable Securities pursuant
         to the Registration  Statement(s) covering such Registrable  Securities
         until such  Investor's  receipt of the  copies of the  supplemented  or
         amended  prospectus  contemplated by Section 3(g) or the first sentence
         of 3(f) and, if so directed by the Company, such Investor shall deliver
         to the Company (at the expense of the Company) or destroy all copies in
         such Investor's possession, of the prospectus covering such Registrable
         Securities current at the time of receipt of such notice.

                  e.  No   Investor   may   participate   in  any   underwritten
         registration  hereunder  unless such  Investor  (i) agrees to sell such
         Investor's   Registrable  Securities  on  the  basis  provided  in  any
         underwriting  arrangements approved by the Investors entitled hereunder
         to  approve  such   arrangements,   (ii)  completes  and  executes  all
         questionnaires,   powers   of   attorney,   indemnities,   underwriting
         agreements and other documents  reasonably  required under the terms of
         such  underwriting  arrangements,  and (iii) agrees to pay its pro rata
         share of all underwriting discounts and commissions.

                  f.  Investor has been advised as to provisions of Regulation M
         and agrees that  Investors  disposition of the  Registrable  Securities
         will be made in a manner so as not to violate Regulation M.

         5.       EXPENSES OF REGISTRATION.
                  ------------------------

         All  reasonable  expenses,   other  than  underwriting   discounts  and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company, shall be paid by the Company.
The fees and disbursements of counsel for the Investors and the Inspectors shall
be borne by each Investor.

         6.       INDEMNIFICATION

         In the event any Registrable  Securities are included in a Registration
Statement under this Agreement:

                                      B-9
<PAGE>

                  a. To the fullest  extent  permitted by law, the Company will,
         and hereby does, indemnify,  hold harmless and defend each Investor who
         holds such Registrable Securities, the directors,  officers,  partners,
         employees,  agents and each  Person,  if any, who controls any Investor
         within the meaning of the 1933 Act or the  Securities  Exchange  Act of
         1934, as amended (the "1934 Act"),  and any  underwriter (as defined in
         the 1933 Act) for the Investors, and the directors and officers of, and
         each Person,  if any, who  controls,  any such  underwriter  within the
         meaning  of the  1933  Act or  the  1934  Act  (each,  an  "Indemnified
         Person"), against any losses, claims, damages, liabilities,  judgments,
         fines,  penalties,  charges,  costs,  attorneys' fees,  amounts paid in
         settlement  or  expenses,  joint or several,  (collectively,  "Claims")
         incurred in  investigating,  preparing or defending any action,  claim,
         suit,  inquiry,  proceeding,  investigation  or appeal  taken  from the
         foregoing  by or before any court or  governmental,  administrative  or
         other  regulatory   agency,   body  or  the  SEC,  whether  pending  or
         threatened,  whether or not an  indemnified  party is or may be a party
         thereto  ("Indemnified  Damages"),  to  which  any of them  may  become
         subject  insofar as such  Claims (or  actions or  proceedings,  whether
         commenced or threatened,  in respect thereof) arise out of or are based
         upon:  (i) any  untrue  statement  or  alleged  untrue  statement  of a
         material  fact  in  a  Registration  Statement  or  any  post-effective
         amendment  thereto  or in  any  filing  made  in  connection  with  the
         qualification  of the offering under the securities or other "blue sky"
         laws of any  jurisdiction in which  Registrable  Securities are offered
         ("Blue Sky  Filing"),  or the  omission or alleged  omission to state a
         material  fact  required to be stated  therein or necessary to make the
         statements  therein,  in light of the  circumstances  under  which  the
         statements therein were made, not misleading, (ii) any untrue statement
         or  alleged  untrue  statement  of a  material  fact  contained  in any
         preliminary  prospectus  if used  prior to the  effective  date of such
         Registration  Statement,  or  contained  in the  final  prospectus  (as
         amended or supplemented,  if the Company files any amendment thereof or
         supplement thereto with the SEC) or the omission or alleged omission to
         state therein any material fact necessary to make the  statements  made
         therein,  in light of the  circumstances  under  which  the  statements
         therein were made,  not  misleading,  or (iii) any violation or alleged
         violation  of the Company of the 1933 Act, the 1934 Act, any other law,
         including, without limitation, any state securities law, or any rule or
         regulation  thereunder relating to the offer or sale of the Registrable
         Securities  pursuant to a  Registration  Statement  (the matters in the
         foregoing clauses (i) through (iii) being, collectively, "Violations").
         Subject to the  restrictions  set forth in Section 6(d) with respect to
         the number of legal counsel,  the Company shall reimburse the Investors
         and each such  underwriter  or  controlling  person,  promptly  as such
         expenses are  incurred  and are due and payable,  for any legal fees or
         other  reasonable   expenses   incurred  by  them  in  connection  with
         investigating or defending any such Claim.  Notwithstanding anything to
         the contrary contained herein, the indemnification  agreement contained
         in this Section 6(a):  (i) shall not apply to a Claim arising out of or
         based upon a Violation  which occurs in reliance upon and in conformity
         with information furnished in writing to the Company by any Indemnified
         Person or underwriter for such Indemnified  Person expressly for use in
         connection  with the preparation of the  Registration  Statement or any
         such amendment  thereof or supplement  thereto,  if such prospectus was
         timely made  available by the Company  pursuant to Section  3(c);  (ii)
         with  respect  to any  preliminary  prospectus,  shall not inure to the
         benefit  of any such  person  from whom the person  asserting  any such
         Claim purchased the Registrable Securities that are the subject thereof
         (or to the benefit of any person controlling such person) if the untrue
         statement  or mission of material  fact  contained  in the  preliminary
         prospectus  was  corrected  in  the  prospectus,  as  then  amended  or
         supplemented,  if such  prospectus  was timely  made  available  by the
         Company  pursuant  to  Section  3(c),  and the  Indemnified  Person was
         promptly  advised in writing not to use the incorrect  prospectus prior
         to the use giving  rise to a  violation  and such  Indemnified  Person,
         notwithstanding  such advice,  used it; (iii) shall not be available to
         the extent such Claim is based on a failure of the  Investor to deliver

                                      B-10
<PAGE>

         or to  cause to be  delivered  the  prospectus  made  available  by the
         Company and (iv) shall not apply to amounts paid in  settlement  of any
         Claim if such settlement is effected  without the prior written consent
         of the Company, which consent shall not be unreasonably withheld.  Such
         indemnity  shall  remain in full  force and  effect  regardless  of any
         investigation  made by or on behalf of the Indemnified Person and shall
         survive the transfer of the  Registrable  Securities  by the  Investors
         pursuant to Section 9.

                  b. In connection with any  Registration  Statement in which an
         Investor is  participating,  each such Investor agrees to severally and
         not jointly indemnify, hold harmless and defend, to the same extent and
         in the same manner as is set forth in Section 6(a),  the Company,  each
         of its  directors,  each of its  officers  who signs  the  Registration
         Statement,  each Person,  if any,  who controls the Company  within the
         meaning of the 1933 Act or the 1934 Act (collectively and together with
         an Indemnified  Person, an "Indemnified  Party"),  against any Claim or
         Indemnified Damages to which any of them may become subject,  under the
         1933  Act,  the  1934  Act or  otherwise,  insofar  as  such  Claim  or
         Indemnified  Damages arise out of or are based upon any  Violation,  in
         each case to the extent,  and only to the extent,  that such  Violation
         occurs in reliance  upon and in  conformity  with  written  information
         furnished  to  the  Company  by  such  Investor  expressly  for  use in
         connection with such  Registration  Statement;  and, subject to Section
         6(d),  such  Investor  will  reimburse  any  legal  or  other  expenses
         reasonably  incurred  by  them  in  connection  with  investigating  or
         defending  any  such  Claim;  provided,  however,  that  the  indemnity
         agreement  contained in this Section 6(b) and Section 7 shall not apply
         to  amounts  paid in  settlement  of any  Claim if such  settlement  is
         effected  without the prior  written  consent of such  Investor,  which
         consent shall not be unreasonably withheld; provided, further, however,
         that the Investor shall be liable under this Section 6(b) for only that
         amount  of a Claim  or  Indemnified  Damages  as does  not  exceed  the
         proceeds  to such  Investor  as a  result  of the  sale of  Registrable
         Securities  pursuant to such  Registration  Statement.  Such  indemnity
         shall remain in full force and effect  regardless of any  investigation
         made by or on behalf of such  Indemnified  Party and shall  survive the
         transfer of the  Registrable  Securities by the  Investors  pursuant to
         Section 9.  Notwithstanding  anything to the contrary contained herein,
         the  indemnification  agreement  contained  in this  Section  6(b) with
         respect to any preliminary prospectus shall not inure to the benefit of
         any Indemnified  Party if the untrue  statement or omission of material
         fact contained in the preliminary  prospectus was corrected on a timely
         basis in the prospectus, as then amended or supplemented.

                  c. The Company shall be entitled to receive  indemnities  from
         underwriters,  selling brokers,  dealer managers and similar securities
         industry professionals  participating in any distribution,  to the same

                                      B-11
<PAGE>

         extent as provided above,  with respect to information  such persons so
         furnished  in  writing  expressly  for  inclusion  in the  Registration
         Statement.

                  d.  Promptly  after  receipt  by  an  Indemnified   Person  or
         Indemnified Party under this Section 6 of notice of the commencement of
         any  action  or  proceeding   (including  any  governmental  action  or
         proceeding)  involving a Claim such  Indemnified  Person or Indemnified
         Party  shall,  if a Claim in respect  thereof is to be made against any
         indemnifying  party under this Section 6,  deliver to the  indemnifying
         party  a  written  notice  of  the   commencement   thereof,   and  the
         indemnifying  party shall have the right to participate in, and, to the
         extent  the  indemnifying  party so  desires,  jointly  with any  other
         indemnifying party similarly noticed,  to assume control of the defense
         thereof with counsel mutually  satisfactory to the  indemnifying  party
         and the Indemnified  Person or the  Indemnified  Party, as the case may
         be; provided,  however, that an Indemnified Person or Indemnified Party
         shall  have  the  right to  retain  its own  counsel  with the fees and
         expenses to be paid by the  indemnifying  party,  if, in the reasonable
         opinion  of  counsel   retained   by  the   indemnifying   party,   the
         representation by such counsel of the Indemnified Person or Indemnified
         Party and the indemnifying  party would be inappropriate  due to actual
         or potential  differing  interests  between such Indemnified  Person or
         Indemnified  Party and any other party  represented  by such counsel in
         such  proceeding.  The Company shall pay  reasonable  fees for only one
         separate legal counsel for the Investors,  and such legal counsel shall
         be  selected  by the  Investors  holding a majority  in interest of the
         Registrable  Securities included in the Registration Statement to which
         the Claim relates.  The Indemnified  Party or Indemnified  Person shall
         cooperate  fully with the  indemnifying  party in  connection  with any
         negotiation or defense of any such action or claim by the  indemnifying
         party and  shall  furnish  to the  indemnifying  party all  information
         reasonably  available to the  Indemnified  Party or Indemnified  Person
         which  relates to such action or claim.  The  indemnifying  party shall
         keep the Indemnified Party or Indemnified  Person fully apprised at all
         times as to the status of the  defense or any  settlement  negotiations
         with respect  thereto.  No  indemnifying  party shall be liable for any
         settlement  of any action,  claim or  proceeding  effected  without its
         written consent,  provided,  however, that the indemnifying party shall
         not  unreasonably   withhold,   delay  or  condition  its  consent.  No
         indemnifying party shall,  without the consent of the Indemnified Party
         or Indemnified  Person,  consent to entry of any judgment or enter into
         any  settlement  or  other  compromise  which  does not  include  as an
         unconditional  term  thereof the giving by the claimant or plaintiff to
         such  Indemnified  Party or  Indemnified  Person of a release  from all
         liability   in  respect  to  such   claim  or   litigation.   Following
         indemnification as provided for hereunder, the indemnifying party shall
         be subrogated  to all rights of the  Indemnified  Party or  Indemnified
         Person  with  respect  to all  third  parties,  firms  or  corporations
         relating  to the matter for which  indemnification  has been made.  The
         failure to deliver  written notice to the  indemnifying  party within a
         reasonable  time of the  commencement  of any  such  action  shall  not
         relieve such  indemnifying  party of any  liability to the  Indemnified
         Person or Indemnified  Party under this Section 6, except to the extent
         that the indemnifying party is prejudiced in its ability to defend such
         action.

                                      B-12
<PAGE>

                  e. The  indemnification  required  by this  Section 6 shall be
         made by periodic  payments of the amount  thereof  during the course of
         the  investigation  or  defense,  as and when  bills  are  received  or
         Indemnified Damages are incurred.

                  f.  The  indemnity  agreements  contained  herein  shall be in
         addition to (i) any cause of action or similar right of the Indemnified
         Party or Indemnified  Person against the indemnifying  party or others,
         and (ii) any  liabilities  the  indemnifying  party may be  subject  to
         pursuant to the law.

         7.       CONTRIBUTION.

         To  the  extent  any   indemnification  by  an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under  circumstances where the maker would not
have been  liable for  indemnification  under the fault  standards  set forth in
Section  6; (ii) no  seller  of  Registrable  Securities  guilty  of  fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of fraudulent misrepresentation;  and (iii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

         8.       REPORTS UNDER THE 1934 ACT.
                  --------------------------

         With a view to making  available to the  Investors the benefits of Rule
144  promulgated  under the 1933 Act or any other  similar rule or regulation of
the SEC that may at any time  permit the  investors  to sell  securities  of the
Company to the public without registration ("Rule 144"), the Company agrees to:

                  a. make and keep public information available, as those terms
         are understood and defined in Rule 144;

                  b. file with the SEC in a timely  manner all reports and other
         documents  required of the Company  under the 1933 Act and the 1934 Act
         so long as the Company remains subject to such  requirements  (it being
         understood  that nothing  herein shall limit the Company's  obligations
         under Section 4(c) of the Securities Purchase Agreement) and the filing
         of such  reports and other  documents  is required  for the  applicable
         provisions of Rule 144; and

                  c.  furnish to each  Investor  so long as such  Investor  owns
         Registrable  Securities,  promptly upon written request,  (i) a written
         statement  by the  Company  that it has  complied  with  the  reporting
         requirements  of Rule 144(c )(1), (ii) a copy of the most recent annual
         or quarterly report of the Company and such other reports and documents
         so filed by the  Company,  and (iii) such other  information  as may be
         reasonably  requested to permit the  investors to sell such  securities
         pursuant to Rule 144 without registration.

                                      B-13
<PAGE>

         9.       ASSIGNMENT OF REGISTRATION RIGHTS.
                  ---------------------------------

         The rights to have the Company register Registrable Securities pursuant
to this  Agreement  shall be  automatically  assignable  by the Investors to any
transferee  of all or any  portion  of  Registrable  Securities  if the  Company
consents (except for such transfer to an affiliate or successor, which shall not
require any such  consent)  and:  (i) the  Investor  agrees in writing  with the
transferee  or assignee to assign such rights,  and a copy of such  agreement is
furnished to the Company within a reasonable  time after such  assignment;  (ii)
the Company is,  within a  reasonable  time after such  transfer or  assignment,
furnished with written notice of (a) the name and address of such  transferee or
assignee,  and (b) the securities with respect to which such registration rights
are being transferred or assigned;  (iii) immediately following such transfer or
assignment  the further  disposition  of such  securities  by the  transferee or
assignee is restricted  under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice  contemplated
by clause (ii) of this  sentence the  transferee  or assignee  agrees in writing
with the Company to be bound by all of the provisions contained herein; (v) such
transfer shall have been made in accordance with the applicable  requirements of
the Securities Purchase Agreement;  (vi) such transferee shall be an "accredited
investor" as that term is defined in Rule 501 of Regulation D promulgated  under
the 1933 Act; and (vii) in the event the  assignment  occurs  subsequent  to the
date  of  effectiveness  of the  Registration  Statement  required  to be  filed
pursuant to Section 2(a), the transferee  agrees to pay all reasonable  expenses
of  amending  or  supplementing  such  Registration  Statement  to reflect  such
assignment.

         10.      AMENDMENT OF REGISTRATION RIGHTS.
                  --------------------------------

         Provisions of this Agreement may be amended and the observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively  or  prospectively),  only with the written consent of the Company
and Investors who hold two-thirds of the Registrable  Securities.  Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each
Investor and the Company.

                                      B-14
<PAGE>

         11.      MISCELLANEOUS.
                  -------------

                  a. A person or entity is deemed to be a holder of  Registrable
         Securities   whenever  such  person  or  entity  owns  of  record  such
         Registrable   Securities.   If   the   Company   receives   conflicting
         instructions, notices or elections from two or more persons or entities
         with respect to the same Registrable Securities,  the Company shall act
         upon the basis of  instructions,  notice or election  received from the
         registered owner of such Registrable Securities.

                  b. Any  notices  consents,  waivers  or  other  communications
         required or  permitted  to be given  under the terms of this  Agreement
         must be in writing and will be deemed to have been  delivered  (i) upon
         receipt,  when delivered  personally;  (ii) upon receipt,  when sent by
         facsimile,  provided a copy is mailed by U.S.  certified  mail,  return
         receipt  requested;  (iii)  three  (3) days  after  being  sent by U.S.
         certified  mail,  return  receipt  requested,  or (d) one (1) day after
         deposit with a nationally  recognized  overnight  delivery service,  in
         each case  properly  addressed  to the party to receive  the same.  The
         addresses and facsimile numbers for such communications shall be:

         If to the Company:         1101 Northpoint Parkway
                                    West Palm Beach, Florida  33407
                                    Facsimile:  (561) 688-8784

         If to a Buyer,  to its address and facsimile  number on the Schedule of
Buyers,  with  copies to such  Buyer's  counsel as set forth on the  Schedule of
Buyers.  Each party shall  provide  five (5) days' prior  written  notice to the
other party of any change in address or facsimile number.

                  c.  Failure of any party to exercise any right or remedy under
         this Agreement or otherwise,  delay by a party in exercising such right
         or remedy, shall not operate as a waiver thereof.

                  d. This  Agreement  shall be  governed by and  interpreted  in
         accordance with the laws of the State of Delaware without regard to the
         principles  of conflict of laws.  If any  provision  of this  Agreement
         shall be invalid or unenforceable in any jurisdiction,  such invalidity
         or unenforceability  shall not affect the validity or enforceability of
         the remainder of this Agreement in that jurisdiction or the validity or
         enforceability  of  any  provision  of  this  Agreement  in  any  other
         jurisdiction.

                  e.  This  Agreement  and  the  Securities  Purchase  Agreement
         constitute the entire  agreement  among the parties hereto with respect
         to the subject  matter hereof and thereof.  There are no  restrictions,
         promises,  warranties  or  undertakings,  other than those set forth or
         referred  to herein and  therein.  This  Agreement  and the  Securities
         Purchase  Agreement  supersede all prior agreements and  understandings
         among the parties  hereto with respect to the subject matter hereof and
         thereof.

                                      B-15

<PAGE>

                  f. Subject to the  requirements  of Section 9, this  Agreement
         shall  inure to the benefit  and of and be binding  upon the  permitted
         successors and assigns of each of the parties hereto.

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

                  h. This  Agreement  may be executed  in two or more  identical
         counterparts,  each of which  shall be  deemed an  original  but all of
         which shall constitute one and the same agreement. This Agreement, once
         executed by a party,  may be  delivered  to the other  party  hereto by
         facsimile  transmission  of  a  copy  of  this  Agreement  bearing  the
         signature of the party so delivering this Agreement.

                  i. Each party  shall do and  perform,  or cause to be done and
         performed,  all such  further  acts and things,  and shall  execute and
         deliver  all  such  other  agreements,  certificates,  instruments  and
         documents,  as the other party may reasonably request in order to carry
         out the intent and  accomplish  the purposes of this  Agreement and the
         consummation of the transactions contemplated hereby.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                      B-16
<PAGE>

         IN WITNESS WHEREOF,  the parties have caused this  Registration  Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:                                    BUYERS:
-------                                     ------

SAF T LOK INCORPORATED                      ___________________________________

By: _____________________________           By: _______________________________
Name: ___________________________           Name: _____________________________
Its: ____________________________           Its: ______________________________

                                      B-17

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