Document:

EXHIBIT 10.3
                                                                       EXHIBIT C
                                                                          TO
                                                                       PURCHASE
                                                                       AGREEMENT

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION  RIGHTS  AGREEMENT,  dated as of October 16,
2003 (this "Agreement"), by and between KNIGHTSBRIDGE FINE WINES, INC., a Nevada
corporation  (the  "Company"),  and GRYPHON MASTER FUND, L.P., a Bermuda limited
partnership ("Gryphon").

                              W I T N E S S E T H:

                  WHEREAS,  in  connection  with the  Purchase  Agreement  (such
capitalized  term  and all  other  capitalized  terms  used  herein  having  the
respective meanings provided herein),  the Company has agreed to provide certain
registration rights under the 1933 Act and applicable state securities laws with
respect  to the  Registrable  Securities  issuable  to Gryphon  pursuant  to the
Purchase Agreement;

                  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
Purchasers hereby agree as follows:

                  1.   DEFINITIONS.

                  (a)  As  used  in  this  Agreement,   the  terms  "Agreement",
"Company"  and "Gryphon"  shall have the  respective  meanings  assigned to such
terms in the introductory paragraph of this Agreement.

                  (b) All the  agreements or  instruments  herein  defined shall
mean  such  agreements  or  instruments  as the same  may  from  time to time be
supplemented  or amended or the terms  thereof  waived or modified to the extent
permitted by, and in accordance with, the terms thereof and of this Agreement.

                  (c) The  following  terms  shall have the  following  meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

                  "Additional Registrable Securities" means any shares of Common
         Stock  which  are  included   within  the   definition  of  Registrable
         Securities  but  not  included  in  any  Registration  Statement  filed
         pursuant to Section 2(a)(i) below.

                  "Allowed  Delay"  shall have the  meaning  provided in Section
2(c)(ii).

<PAGE>

                  "Approved  Market" shall have the meaning  provided in Section
2(c)(i).

                  "Availability  Date"  shall  have  the  meanings  provided  in
Section 3(l).

                  "Blackout  Period" shall have the meaning  provided in Section
2(c)(i).

                  "Common  Stock"  means the Common  Stock,  par value $.001 per
share, of the Company.

                  "Conversion  Price"  shall have the  meaning  provided  in the
Note.

                  "Initial Registrable Securities Amount" shall have the meaning
provided in Section 2(a)(i).

                  "1934  Act"  means the  Securities  Exchange  Act of 1934,  as
         amended, and the rules and regulations promulgated thereunder.

                  "1933 Act" means the Securities  Act of 1933, as amended,  and
         the rules and regulations promulgated thereunder.

                  "NASD" means the National Association of Securities Dealers,
         Inc.

                  "Prospectus" means the prospectus included in any Registration
         Statement,  as amended or  supplemented  by any prospectus  supplement,
         with  respect  to the  terms  of the  offering  of any  portion  of the
         Registrable  Securities or Additional Registrable Securities covered by
         such Registration Statement and by all other amendments and supplements
         to the prospectus, including post-effective amendments and all material
         incorporated by reference in such prospectus.

                  "Purchase Agreement" means the Purchase Agreement, dated as of
         October 16, 2003, by and between the Company and Gryphon.

                  "Purchasers"  means Gryphon and each subsequent  holder of the
         Note,  the Warrant,  Registrable  Securities or Additional  Registrable
         Securities, or any portion thereof.

                  "register,"   "registered"  and  "registration"   refer  to  a
         registration  made by preparing and filing a registration  statement or
         similar  document in compliance  with the 1933 Act (as defined  below),
         and the declaration or ordering of effectiveness  of such  registration
         statement or document by the SEC.

                  "Registrable  Securities" means (i) the Underlying Shares, the
         Warrant  Shares  and the  shares  of Common  Stock or other  securities
         issued or issuable to each  Purchaser or its  permitted  transferee  or
         designee  (a) upon  conversion  of the Note  and upon  exercise  of the
         Warrant, or (b) upon any distribution with respect to, any exchange for
         or any  replacement  of  the  Note  or the  Warrant,  or (c)  upon  any
         conversion, exercise or exchange of any securities issued in connection
         with any such  distribution,  exchange or replacement;  (ii) securities

                                      -2-
<PAGE>

         issued   or   issuable   upon  any   stock   split,   stock   dividend,
         recapitalization or similar event with respect to such shares of Common
         Stock;  and (iii)  any other  security  issued as a  dividend  or other
         distribution  with respect to, in exchange for, or in  replacement  of,
         the securities referred to in the preceding clauses.

                  "Registration Date" shall have the meaning provided in Section
2(c)(i).

                  "Registration  Period"  shall  have the  meaning  provided  in
Section 3(a).

                  "Registration Statement" shall mean any registration statement
         of the  Company  filed under the 1933 Act that covers the resale of any
         of the  Registrable  Securities  or Additional  Registrable  Securities
         pursuant  to  the   provisions  of  this   Agreement,   amendments  and
         supplements to such Registration  Statement,  including  post-effective
         amendments,  all exhibits and all material incorporated by reference in
         such Registration Statement.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "Underlying  Shares" means the shares of Common Stock issuable
         upon conversion of, or otherwise in respect of, the Note.

                  "Warrant  Shares"  means the shares of Common  Stock  issuable
         upon exercise of, or otherwise in respect of, the Warrant.

                  (d)  Capitalized  terms used herein but not otherwise  defined
herein shall have the respective meanings assigned to such terms in the Purchase
Agreement.

                  2. REGISTRATION.

                  (A) REGISTRATION STATEMENTS.

                  (I) REGISTRABLE SECURITIES.  Promptly following the Closing of
the purchase and sale of the Note and the Warrant  contemplated  by the Purchase
Agreement on the Closing Date (but, subject to Section 2(a)(iii),  no later than
sixty (60) days after the Closing Date), the Company shall prepare and file with
the SEC one  Registration  Statement  on Form S-3  (or,  if Form S-3 is not then
available  to the  Company,  on such form of  registration  statement as is then
available to effect a  registration  for resale of the  Registrable  Securities,
subject to the  Purchaser's  consent),  covering  the resale of the  Registrable
Securities  in an amount at least  equal to the sum of (1) 125% of the number of
Underlying  Shares that would be issuable  upon  conversion  of the Note in full
plus (2) 100% of the number of shares of Common Stock  issuable upon exercise of
the Warrant in full for cash, in each case in the preceding clauses (1) and (2),
determined without regard to any restrictions on beneficial  ownership contained
in the Note,  the  Warrant  or the  Purchase  Agreement  (such sum the  "Initial
Registrable  Securities Amount").  Such Registration Statement also shall cover,
to the extent allowable under the 1933 Act and the rules promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with

                                      -3-
<PAGE>

respect  to the  Registrable  Securities.  In  the  Registration  Statement  the
Purchaser  shall  be  identified  as a  selling  securityholder  and  not  as an
underwriter.  No  securities  other  than the  Registrable  Securities  shall be
included in the Registration Statement without the consent of the Purchaser. The
Registration  Statement  (and each  amendment or  supplement  thereto)  shall be
provided in accordance  with Section 3(c) to the Purchaser and its counsel prior
to its filing or other submission. If at any time the number of shares of Common
Stock included in a Registration  Statement  required to be filed as provided in
this Section 2(a) and remaining unsold thereunder shall be insufficient to cover
the resale of  Registrable  Securities in an amount at least equal to the sum of
(x)  125% of the  number  of  Underlying  Shares  that  would be  issuable  upon
conversion in full of the Note,  plus (y) 100% of the number of shares of Common
Stock issuable upon exercise of the Warrant outstanding at such time in full for
cash,  in each case in the  preceding  clauses  (x) and (y)  determined  without
regard to any  restrictions on beneficial  ownership  contained in the Note, the
Warrant or the Purchase  Agreement,  then  promptly,  but in no event later than
sixty (60) days after such  insufficiency  shall occur,  the Company  shall file
with the SEC an  additional  Registration  Statement on Form S-3  covering  such
number of shares of Common  Stock as shall be  sufficient  to cover such amount.
Except as set  forth  above,  the  requirements  with  respect  to a  subsequent
Registration  Statement  shall be the same as those  applicable  to the  initial
Registration Statement.

                  (II) ADDITIONAL REGISTRABLE  SECURITIES.  At any time and from
time to time,  promptly following the written demand of the Purchaser  following
the issuance of any Additional Registrable  Securities,  and in any event within
sixty (60) days following  such demand,  the Company shall prepare and file with
the SEC either a new Registration  Statement or a post-effective  amendment to a
previously filed Registration  Statement, to the extent permitted under the 1933
Act, on Form S-3 (or, if Form S-3 is not then available to the Company,  on such
form of registration statement as is then available to effect a registration for
resale of the  Additional  Registrable  Securities)  covering  the resale of the
Additional Registrable Securities in an amount equal to the number of Additional
Registrable  Securities.  Such  Registration  Statement also shall cover, to the
extent  allowable  under  the  1933  Act and the  rules  promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Additional  Registrable  Securities.  The Registration  Statement
(and each amendment or supplement  thereto) shall be provided in accordance with
Section  3(c) to the  Purchaser  and its  counsel  prior to its  filing or other
submission.

                  (III)  If  the  Company  proposes  to  file  with  the  SEC  a
registration  statement  (other than on Form S-8) relating to  securities  other
than the Registrable Securities or Additional Registrable Securities, then on or
before the date the Company files such other registration statement with the SEC
the Company shall file the  Registration  Statement  required by Section 2(a)(i)
with the SEC. In any such case,  the Company shall not request  acceleration  of
effectiveness  of  such  other  registration   statement  unless  simultaneously
therewith the Company requests acceleration of effectiveness of the Registration
Statement to the same date and time as so requested for such other  registration
statement.

                                      -4-
<PAGE>

                  (B)  EXPENSES.  The Company will pay all  expenses  associated
with each registration, including the Purchaser's reasonable expenses (including
reasonable  attorneys  fees) in connection with the  registration  but excluding
discounts,  commissions, fees of underwriters,  selling brokers, dealer managers
or similar securities industry professionals.

                  (C) EFFECTIVENESS.

                  (i) The  Company  shall  use its  best  efforts  to have  each
Registration  Statement  declared  effective as soon as practicable  after it is
filed with the SEC. If (A) the Company fails to file with the SEC a Registration
Statement  on or before the date by which the  Company is  required  to file the
Registration  Statement pursuant to Section 2(a)(i) above, (B) the Company fails
to file with the SEC the Registration  Statement covering Additional Registrable
Securities within sixty (60) days following demand of the Purchaser  relating to
the  Additional   Registrable   Securities  to  be  covered  thereby,   (C)  the
Registration Statement covering Registrable Securities is not declared effective
by the SEC within one hundred and twenty (120) days  following the Closing Date,
or the Registration  Statement covering Additional Registrable Securities is not
declared effective by the SEC within one hundred and twenty (120) days following
demand of the Purchaser relating to the Additional  Registrable Securities to be
covered  thereby  (each,  a  "Registration  Date"),  (D)  after  a  Registration
Statement has been declared  effective by the SEC, sales cannot be made pursuant
to such Registration  Statement for any reason (including  without limitation by
reason of a stop  order,  or the  Company's  failure to update the  Registration
Statement) but except as excused  pursuant to subparagraph  (ii) below,  (E) the
Common Stock generally or the Registrable  Securities (or Additional Registrable
Securities after issuance) specifically are not listed or included for quotation
on the OTC  Bulletin  Board,  the Nasdaq,  the Nasdaq Small Cap, the NYSE or the
AMEX (each an "Approved Market"), or trading of the Common Stock is suspended or
halted on the Approved Market which at the time constitutes the principal market
for the Common Stock, or (F) the Company fails,  refuses or is otherwise  unable
timely to issue Underlying  Shares upon conversion of the Note or Warrant Shares
upon  exercise of the Warrant in  accordance  with the terms of the Note and the
Warrant, or certificates  therefor as required under the Transaction  Documents,
then the Company  will make  payments  to the  Purchaser  as partial  liquidated
damages for the minimum  amount of damages to the  Purchaser by reason  thereof,
and not as a penalty,  at the rate of (1) one percent (1%) of the purchase price
of the Note and the  Warrant  paid by the  Purchaser  pursuant  to the  Purchase
Agreement for the first thirty (30) day period,  and (2) two percent (2%) of the
purchase price of the Note and the Warrant paid by the Purchaser pursuant to the
Purchase Agreement for the each thirty (30) day period thereafter (pro rated for
any period less than thirty (30) days),  following the Registration  Date during
which any of the events described in clause (A), (B), (C), (D), (E) or (F) above
occurs and is continuing (the "Blackout Period"). Each such payment shall be due
and  payable  within five (5) days after the end of each  calendar  month of the
Blackout Period until the termination of the Blackout Period and within five (5)
days after such termination.  Such payments shall be in partial  compensation to
the Purchaser,  and shall not constitute the  Purchaser's  exclusive  remedy for
such events.  The Blackout  Period  shall  terminate  upon (v) the filing of the
applicable  Registration Statement in the case of clauses (A) and (B) above; (w)

                                      -5-
<PAGE>

the  effectiveness  of the  applicable  Registration  Statement  in the  case of
clauses (C) and (D) above; (x) listing or inclusion and/or trading of the Common
Stock on an  Approved  Market,  as the case may be,  in the case of  clause  (E)
above;  (y)  delivery of such shares or  certificates  in the case of clause (F)
above;  and (z) in the case of the events described in clauses (C) or (D) above,
the earlier  termination of the Registration  Period (as defined in Section 3(a)
below).  The amounts  payable as liquidated  damages  pursuant to this paragraph
shall be payable, at the option of the Purchaser,  in lawful money of the United
States or in shares of Common Stock  valued for this  purpose at the  Conversion
Price.  Amounts  payable as liquidated  damages  hereunder  shall cease when the
Purchaser  no longer  holds the Note,  the Warrant,  Registrable  Securities  or
Additional Registrable Securities.

                  (ii) For not more than five (5)  consecutive  Trading  Days or
for a total of not more than twenty (20) Trading Days in any consecutive  twelve
(12) month period,  the Company may delay the disclosure of material  non-public
information  concerning the Company, by terminating or suspending  effectiveness
of any  registration  contemplated  by this  Section,  the  disclosure  of which
information at the time is not, in the good faith opinion of the Company, in the
best  interests of the Company or would be unduly  detrimental  to the Company's
affairs (an "Allowed  Delay");  provided,  that the Company  shall  promptly (a)
notify the  Purchaser in writing of the  existence of (but in no event,  without
the prior written  consent of the Purchaser,  shall the Company  disclose to the
Purchaser  any of the  facts or  circumstances  regarding)  material  non-public
information  giving rise to an Allowed  Delay,  and (b) advise the  Purchaser in
writing to cease all sales under the Registration Statement until the end of the
Allowed Delay.

                  (D)  UNDERWRITTEN  OFFERING.  If any  offering  pursuant  to a
Registration  Statement pursuant to Section 2(a) hereof involves an underwritten
offering,  the Purchaser shall have the right to select an investment banker and
manager to administer the offering,  which investment banker or manager shall be
reasonably satisfactory to the Company.

                  3. COMPANY OBLIGATIONS.  The Company will use its best efforts
to  effect  the  registration  of  the  Registrable  Securities  and  Additional
Registrable Securities in accordance with the terms hereof, and pursuant thereto
the Company will, as expeditiously as possible:

                  (a) use its best efforts to cause such Registration  Statement
to become  effective  and to remain  continuously  effective  for a period  (the
"Registration  Period") that will  terminate upon the earlier of (i) the date on
which all Registrable  Securities or Additional Registrable Securities have been
sold (and the Note and the Warrant no longer remain outstanding),  (ii) the date
on which all Registrable Securities or Additional Registrable Securities, as the
case may be, may be sold  pursuant  to Rule  144(k) (and the Note and Warrant no
longer  remain  outstanding),  and (iii) the second  anniversary  of the Closing
Date;

                  (b)   prepare   and  file   with  the  SEC  such   amendments,
post-effective   amendments  and  prospectus  supplements  to  the  Registration
Statement  and the  Prospectus  as may be  necessary  to keep  the  Registration

                                      -6-
<PAGE>

Statement  effective for the period specified in Section 3(a) and to comply with
the provisions of the 1933 Act and the 1934 Act with respect to the distribution
of all Registrable  Securities and Additional Registrable  Securities;  provided
that, at a time  reasonably  prior to the filing of a Registration  Statement or
Prospectus,  or any amendments or supplements  thereto, the Company will furnish
to the Purchaser copies of all documents  proposed to be filed,  which documents
will be subject to the comments of the Purchaser  provided  reasonably  promptly
after receipt of such documents;

                  (c) permit counsel  designated by the Purchaser to review each
Registration Statement and Prospectus and all amendments and supplements thereto
no fewer than seven (7) Business  Days (or as many  Business Days as possible if
SEC rules do not allow such time for such review) prior to their filing with the
SEC and not file any document to which such counsel reasonably objects;

                  (d)  furnish  to the  Purchaser  and  its  legal  counsel  (i)
promptly  after the same is prepared  and publicly  distributed,  filed with the
SEC, or received by the Company, one copy of any Registration  Statement and any
amendment thereto, each preliminary prospectus and Prospectus and each amendment
or supplement thereto, and each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the  staff of the SEC,  in each case  relating  to such  Registration  Statement
(other than any portion of any thereof which contains  information for which the
Company has sought confidential treatment),  and (ii) such number of copies of a
Prospectus,   including  a  preliminary  prospectus,   and  all  amendments  and
supplements  thereto and such other  documents as the Purchaser  may  reasonably
request in order to facilitate the disposition of the Registrable Securities and
Additional Registrable Securities owned by the Purchaser;

                  (e) in the event the Purchaser  selects an underwriter 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
underwriter of such offering;

                  (f) if required by the  underwriter,  or if the  Purchaser  is
described in the  Registration  Statement as an  underwriter,  the Company shall
furnish, on the effective date of the Registration  Statement,  on the date that
Registrable Securities or Additional Registrable Securities, as applicable,  are
delivered  to  an  underwriter,   if  any,  for  sale  in  connection  with  the
Registration Statement and at periodic intervals thereafter from time to time on
request,  (i) an opinion,  dated as of such date, from independent legal 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  underwriter and the Purchaser,  and (ii) 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 underwriter
and the Purchaser;

                                      -7-
<PAGE>

                  (g) to  prevent  the  issuance  of any  stop  order  or  other
suspension of effectiveness and, if such order is issued,  obtain the withdrawal
of any such order at the earliest possible moment;

                  (h)  furnish  to the  Purchaser  at least  five  copies of the
Registration  Statement  and any  post-effective  amendment  thereto,  including
financial statements and schedules by air mail or reputable courier within three
(3) Business Days after the effective date thereof;

                  (i) prior to any public offering of Registrable  Securities or
Additional Registrable  Securities,  use its best efforts to register or qualify
or  cooperate  with  the  Purchaser  and its  counsel  in  connection  with  the
registration  or  qualification  of the  Registrable  Securities  or  Additional
Registrable Securities,  as applicable,  for offer and sale under the securities
or blue sky laws of such jurisdictions requested by the Purchaser and do any and
all other  reasonable  acts or  things  necessary  or  advisable  to enable  the
distribution in such  jurisdictions of the Registrable  Securities or Additional
Registrable Securities covered by the Registration Statement;

                  (j) cause all Registrable Securities or Additional Registrable
Securities  covered by a Registration  Statement to be listed on each securities
exchange,  interdealer  quotation  system  or  other  market  on  which  similar
securities issued by the Company are then listed;

                  (k)  immediately  notify  the  Purchaser  at any  time  when a
Prospectus  relating to the  Registrable  Securities or  Additional  Registrable
Securities is required to be delivered  under the 1933 Act, upon discovery that,
or upon the happening of any event as a result of which, the Prospectus included
in such Registration  Statement, as then in effect, includes an untrue statement
of a material  fact or omits to state any  material  fact  required to be stated
therein  or  necessary  to make  the  statements  therein,  in the  light of the
circumstances  under which made, not misleading,  and at the request of any such
holder,  promptly  prepare  and furnish to such  holder a  reasonable  number of
copies of a supplement to or an amendment of such Prospectus as may be necessary
so  that,  as  thereafter  delivered  to  the  purchasers  of  such  Registrable
Securities or Additional Registrable Securities, as applicable,  such Prospectus
shall not  include an untrue  statement  of a  material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and

                  (l)  otherwise  to  comply  with  all  applicable   rules  and
regulations  of the SEC  under the 1933 Act and the 1934  Act,  take such  other
actions as may be reasonably  necessary to facilitate  the  registration  of the
Registrable  Securities and Additional  Registrable  Securities,  if applicable,
hereunder;  and make  available to its security  holders,  as soon as reasonably
practicable,  but not later than the  Availability  Date, an earnings  statement
covering a period of at least twelve months,  beginning after the effective date
of each  Registration  Statement,  which  earnings  statement  shall satisfy the
provisions of Section 11(a) of the 1933 Act (for the purpose of this  subsection
3(l),  "Availability  Date" means the 45th day  following  the end of the fourth
fiscal quarter  following the fiscal quarter that includes the effective date of

                                      -8-
<PAGE>

such Registration  Statement,  except that, if such fourth fiscal quarter is the
last quarter of the Company's  fiscal year,  "Availability  Date" means the 90th
day after the end of such fourth fiscal quarter).

                  4. DUE DILIGENCE REVIEW;  INFORMATION.  The Company shall make
available,  during  normal  business  hours,  for  inspection  and review by the
Purchaser,  advisors to and representatives of the Purchaser (who may or may not
be  affiliated  with the  Purchaser  and who are  reasonably  acceptable  to the
Company),  and any underwriter  participating in any disposition of Common Stock
on behalf of the Purchaser pursuant to the Registration  Statement or amendments
or supplements thereto or any blue sky, NASD, or other filing, all financial and
other  records,  all SEC Filings and other  filings  with the SEC, and all other
corporate documents and properties of the Company as may be reasonably necessary
for the  purpose  of  establishing  a due  diligence  defense  under  applicable
securities  laws and such other  reasonable  purposes,  and cause the  Company's
officers,  directors and employees,  within a reasonable time period,  to supply
all  such  information  reasonably  requested  by  the  Purchaser  or  any  such
representative,  advisor or  underwriter  in connection  with such  Registration
Statement (including, without limitation, in response to all questions and other
inquiries  reasonably made or submitted by any of them),  prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling the  Purchaser and such  representatives,  advisors and
underwriters and their  respective  accountants and attorneys to conduct initial
and ongoing due  diligence  with  respect to the Company and the accuracy of the
Registration Statement.

                  The above to the contrary  notwithstanding,  the Company shall
not disclose material nonpublic information to the Purchaser,  or to advisors to
or  representatives  of the  Purchaser,  unless  prior  to  disclosure  of  such
information the Company  identifies such information as being material nonpublic
information and provides the Purchaser,  such advisors and representatives  with
the  opportunity  to  accept  or  refuse  to  accept  such  material   nonpublic
information  for review.  The Company  may, as a  condition  to  disclosing  any
material nonpublic information  hereunder,  require the Purchaser's advisors and
representatives  to  enter  into  a  confidentiality   agreement  (including  an
agreement with such advisors and  representatives  prohibiting them from trading
in Common Stock during such period of time as they are in possession of material
nonpublic  information) in form  reasonably  satisfactory to the Company and the
Purchaser.  Nothing  herein  shall  require  the  Company to  disclose  material
nonpublic information to the Purchaser or its advisors or representatives.

                  5. OBLIGATIONS OF THE PURCHASER.

                  (a) The Purchaser shall furnish in writing to the Company such
information   regarding  itself,   the  Registrable   Securities  or  Additional
Registrable  Securities,  as applicable,  held by it and the intended  method of
disposition of the Registrable Securities or Additional Registrable  Securities,
as  applicable,  held by it, as shall be  required by the 1933 Act to effect the
registration   of  such   Registrable   Securities  or  Additional   Registrable
Securities,  as applicable,  and shall execute such documents in connection with
such  registration  as the Company  may  reasonably  request.  At least ten (10)
Business  Days prior to the first  anticipated  filing date of any  Registration

                                      -9-
<PAGE>

Statement  (or such shorter  period as may be agreed to by the  Purchaser),  the
Company shall notify the Purchaser of the information the Company  requires from
the  Purchaser  if  the   Purchaser's   Registrable   Securities  or  Additional
Registrable Securities are to be included in the Registration Statement.

                  (b)  The  Purchaser,  by its  acceptance  of  the  Registrable
Securities and Additional  Registrable  Securities,  if any, agrees to cooperate
with the Company as reasonably  requested by the Company in connection  with the
preparation  and  filing  of a  Registration  Statement  hereunder,  unless  the
Purchaser  has notified the Company in writing of its election to exclude all of
its Registrable Securities or Additional Registrable Securities,  as applicable,
from the Registration Statement.

                  (c) If the  Purchaser  determines to engage the services of an
underwriter,  which  underwriter  is reasonably  acceptable to the Company,  the
Purchaser agrees to 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 managing underwriter of
such offering and take such other actions as are reasonably required in order to
expedite  or  facilitate  the  dispositions  of the  Registrable  Securities  or
Additional Registrable Securities, as applicable.

                  (d) The Purchaser agrees that, upon receipt of any notice from
the Company of the happening of any event rendering a Registration  Statement no
longer  effective or available  for use by the  Purchaser,  the  Purchaser  will
immediately  discontinue  disposition  of  Registrable  Securities or Additional
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable   Securities  or  Additional  Registrable   Securities,   until  the
Purchaser's  receipt of the  copies of the  supplemented  or amended  Prospectus
filed with the SEC and  declared  effective  and, if so directed by the Company,
the  Purchaser  shall  deliver to the Company (at the expense of the Company) or
destroy all copies in the Purchaser's  possession of the Prospectus covering the
Registrable  Securities or Additional  Registrable  Securities,  as  applicable,
current at the time of receipt of such notice.

                  (e)  The  Purchaser  may   participate   in  any  third  party
underwritten registration hereunder unless it (i) agrees to sell the Registrable
Securities or Additional  Registrable  Securities,  as applicable,  on the basis
provided in any  underwriting  arrangements  in usual and customary form entered
into by the Purchaser, (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  and any
expenses in excess of those payable by the Company pursuant to the terms of this
Agreement.

                  6. INDEMNIFICATION.

                  (A)   INDEMNIFICATION  BY  COMPANY.   The  Company  agrees  to
indemnify  and hold  harmless,  to the  fullest  extent  permitted  by law,  the
Purchaser,  each investment advisor and investment  sub-advisor of the Purchaser

                                      -10-
<PAGE>

and  each  of  their  respective  officers,  directors,  partners,  members  and
employees and each person who controls the Purchaser  (within the meaning of the
1933 Act) against all losses, claims,  damages,  liabilities,  costs (including,
without  limitation,  reasonable  attorney's  fees) and expenses imposed on such
person caused by (i) any untrue or alleged  untrue  statement of a material fact
contained  in  any  Registration   Statement,   Prospectus  or  any  preliminary
prospectus  or any  amendment or  supplement  thereto or any omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements  therein not misleading,  except insofar as the
same are based upon any  information  furnished in writing to the Company by the
Purchaser,  expressly  for use therein,  or (ii) any violation by the Company of
any federal,  state or common law, rule or regulation  applicable to the Company
in connection  with any  Registration  Statement,  Prospectus or any preliminary
prospectus,  or any  amendment or  supplement  thereto,  and shall  reimburse in
accordance with  subparagraph (c) below,  each of the foregoing  persons for any
legal  and  any  other   expenses   reasonably   incurred  in  connection   with
investigating  or  defending  any such claims.  The  foregoing is subject to the
condition  that,  insofar  as the  foregoing  indemnities  relate to any  untrue
statement,  alleged untrue  statement,  omission or alleged omission made in any
preliminary  prospectus  or  Prospectus  that is  eliminated  or remedied in any
Prospectus or amendment or supplement thereto,  the above indemnity  obligations
of the Company shall not inure to the benefit of any indemnified party if a copy
of such  corrected  Prospectus  or  amendment  or  supplement  thereto  had been
provided to such indemnified party and was not sent or given by such indemnified
party at or prior to the time such action was required of such indemnified party
by the 1933 Act and if delivery of such  Prospectus  or amendment or  supplement
thereto would have eliminated (or been a sufficient defense to) any liability of
such  indemnified  party with respect to such  statement or omission.  Indemnity
under this Section 6(a) shall remain in full force and effect  regardless of any
investigation  made by or on behalf of any  indemnified  party and shall survive
the  transfer  of  the   Registrable   Securities  and  Additional   Registrable
Securities.

                  (B)  INDEMNIFICATION  BY  PURCHASER.  In  connection  with any
registration pursuant to the terms of this Agreement, the Purchaser will furnish
to the  Company  in  writing  such  information  as  required  by the  1933  Act
concerning  the  Purchaser or the  proposed  manner of  distribution  for use in
connection with any Registration Statement or Prospectus and agrees to indemnify
and hold  harmless,  to the fullest  extent  permitted by law, the Company,  its
directors,  officers,  and each  person who  controls  the  Company  (within the
meaning of the 1933 Act) against any losses,  claims,  damages,  liabilities and
expense  (including  reasonable  attorney's  fees)  resulting  from  any  untrue
statement of a material  fact or any omission of a material  fact required to be
stated in the Registration  Statement or Prospectus or preliminary prospectus or
amendment or supplement  thereto or necessary to make the statements therein not
misleading,  to the extent, but only to the extent that such untrue statement or
omission is contained in any information  furnished in writing by such Purchaser
to the Company  specifically  for  inclusion in such  Registration  Statement or
Prospectus  or amendment or  supplement  thereto and that such  information  was
substantially  relied upon by the  Company in  preparation  of the  Registration
Statement or  Prospectus or any  amendment or  supplement  thereto.  In no event
shall the liability of the Purchaser be greater in amount than the dollar amount

                                      -11-
<PAGE>

of the proceeds (net of the cost of the  Registrable  Securities  and Additional
Registrable  Securities  sold and all  expenses  paid by the  Purchaser  and not
reimbursed  by the  Company  and the amount of any  damages  the  Purchaser  has
otherwise  been required to pay by reason of such untrue  statement or omission)
received  by the  Purchaser  upon  the  sale of the  Registrable  Securities  or
Additional  Registrable Securities included in the Registration Statement giving
rise to such indemnification obligation.

                  (C)  CONDUCT  OF  INDEMNIFICATION   PROCEEDINGS.   Any  person
entitled  to  indemnification  hereunder  shall  (i) give  prompt  notice to the
indemnifying party of any claim with respect to which it seeks  indemnification,
(ii)  permit  such  indemnifying  party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party, and (iii) by notice to
the indemnifying party,  require the indemnifying party to assume the defense of
such  claim with  counsel  reasonably  satisfactory  to the  indemnified  party;
provided,  however, that any person entitled to indemnification  hereunder shall
have the right to employ  separate  counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the expense of
such  person  unless (a) the  indemnifying  party has agreed to pay such fees or
expenses,  or (b) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably  satisfactory to such person, or (c)
in the reasonable judgment of any such person,  based upon written advice of its
counsel,  a conflict of interest exists between such person and the indemnifying
party with  respect to such claims (in which case,  if the person  notifies  the
indemnifying party in writing that such person elects to employ separate counsel
at the expense of the indemnifying  party, the indemnifying party shall not have
the right to assume the  defense of such  claim on behalf of such  person);  and
provided,  however,  further,  that the failure of any indemnified party to give
notice as  provided  herein  shall not  relieve  the  indemnifying  party of its
obligations  hereunder,  except to the extent  that such  failure to give notice
shall materially  adversely affect the indemnifying  party in the defense of any
such claim or litigation.  It is understood  that the  indemnifying  party shall
not, in connection with any proceeding in the same  jurisdiction,  be liable for
fees or expenses of more than one separate firm of attorneys at any time for all
such indemnified parties. No indemnifying party will, except with the consent of
each  indemnified  party,  consent  to entry of any  judgment  or enter into any
settlement that does not include as an unconditional  term thereof the giving by
the  claimant  or  plaintiff  to such  indemnified  party of a release  from all
liability in respect of such claim or litigation.

                  (D)  CONTRIBUTION.  If  for  any  reason  the  indemnification
provided  for in the  preceding  paragraphs  (a)  and (b) is  unavailable  to an
indemnified  party or insufficient to hold it harmless,  other than as expressly
specified  therein,  then the indemnifying  party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such  proportion as is appropriate to reflect the relative fault
of the  indemnified  party  and the  indemnifying  party,  as well as any  other
relevant   equitable   considerations.    No   person   guilty   of   fraudulent
misrepresentation  within the meaning of Section  11(f) of the 1933 Act shall be
entitled  to  contribution  from  any  person  not  guilty  of  such  fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of

                                      -12-
<PAGE>

Registrable Securities or Additional Registrable Securities be greater in amount
than the  dollar  amount  of the  proceeds  (net of the cost of the  Registrable
Securities or Additional  Registrable  Securities  sold and all expenses paid by
such holder and not reimbursed by the Company and the amount of any damages such
holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged  omission)  received by it upon the sale
of the Registrable  Securities or Additional  Registrable Securities giving rise
to such contribution obligation.

                  7. MISCELLANEOUS.

                  (A) AMENDMENTS AND WAIVERS. This Agreement may be amended only
by a writing signed by the Company and the  Purchaser.  The Company may take any
action  herein  prohibited,  or omit to perform  any act herein  required  to be
performed by it, only if the Company shall have obtained the written  consent to
such  amendment,  action or omission to act, of the Purchasers  affected by such
amendment,  action or omission to act who hold, directly or indirectly, at least
80% of the Registrable  Securities and Additional Registrable Securities held by
all Purchaser.

                  (B) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.

                  (C) ASSIGNMENTS AND TRANSFERS BY PURCHASER. This Agreement and
the rights  and  obligations  of the  Purchaser  hereunder  may be  assigned  or
transferred in whole to any transferee or assignee of the Note, the Warrant, the
Registrable  Securities or the Additional  Registrable  Securities or in part to
any transferee or assignee of any portion thereof, except as otherwise set forth
herein.  The Purchaser may make such assignment or transfer to any transferee or
assignee of the Note, the Warrant, the Registrable  Securities or the Additional
Registrable  Securities;  provided,  that (i) such  transfer  is made  expressly
subject to this  Agreement and the  transferee  agrees in writing to be bound by
the terms and conditions  hereof,  and (ii) the Company is provided with written
notice of such assignment.

                  (D) ASSIGNMENTS  AND TRANSFERS BY THE COMPANY.  This Agreement
may not be  assigned by the Company  without  the prior  written  consent of the
Purchaser  but, in any case of any  successor-in-interest  to the Company or any
Person  other than the Company  who is an issuer of  Registrable  Securities  or
Additional Registrable Securities,  such  successor-in-interest or other issuer,
shall assume,  jointly and severally with the Company,  the rights and duties of
the Company hereunder,  in the event of a merger or consolidation of the Company
with or into another  corporation or the sale of all or substantially all of the
Company's assets (and it shall be a condition to any such merger,  consolidation
or sale that such  successor-in-interest  or other issuer  assume in writing all
obligations hereunder jointly and severally with the Company).

                  (E) BENEFITS OF THE  AGREEMENT.  The terms and  conditions  of
this Agreement  shall inure to the benefit of and be binding upon the respective
permitted  successors  and assigns of the  parties.  Nothing in this  Agreement,
express or implied,  is intended to confer upon any party other than the parties

                                      -13-
<PAGE>

hereto  or  their  respective  permitted  successors  and  assigns  any  rights,
remedies,  obligations,  or  liabilities  under or by reason of this  Agreement,
except as expressly provided in this Agreement.

                  (F)  COUNTERPARTS.  This  Agreement  may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

                  (G) TITLES AND  SUBTITLES.  The titles and  subtitles  used in
this  Agreement  are used for  convenience  only and are not to be considered in
construing or interpreting this Agreement.

                  (H) SEVERABILITY.  If one or more provisions of this Agreement
are held to be  unenforceable  under  applicable  law, such  provision  shall be
excluded  from  this  Agreement  and the  balance  of this  Agreement  shall  be
interpreted  as if such  provision  were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.

                  (I) FURTHER ASSURANCES.  The parties shall execute and deliver
all such further  instruments  and  documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.

                  (J)  ENTIRE  AGREEMENT.  This  Agreement,  together  with  the
Purchase Agreement, the Note and the Warrant and documents contemplated thereby,
is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive  statement of the agreement and  understanding of
the  parties  hereto in respect of the subject  matter  contained  herein.  This
Agreement,  together with the Purchase  Agreement,  the Note and the Warrant and
documents   contemplated   thereby,   supersedes   all  prior   agreements   and
understandings between the parties with respect to such subject matter.

                  (K) APPLICABLE  LAW;  JURISDICTION.  This  Agreement  shall be
governed by, and construed in accordance  with,  the laws of the State of Nevada
without  regard to principles of conflicts of law. The parties hereby agree that
all actions or proceedings  arising directly or indirectly from or in connection
with this Agreement  shall be litigated only in the United States District Court
for the Northern District of Texas located in Dallas County,  Dallas, Texas. The
parties consent and submit to the jurisdiction and venue of the foregoing courts
and consent  that any process or notice of motion or other  application  to said
court or a judge  thereof may be served  inside or outside the State of Texas or
the  Northern  District  of Texas (but with  respect to any party  hereto,  such
consent shall not be deemed a general  consent to  jurisdiction  and service for
any third parties) by registered mail, return receipt requested, directed to the
party  being  served at its address  provided  in or  pursuant  to the  Purchase
Agreement (and service so made shall be deemed complete three (3) days after the
same has been  posted as  aforesaid)  or by  personal  service  or in such other
manner as may be permissible  under the rules of said court.  The Company hereby
waives any right to a jury trial in connection  with any litigation  pursuant to
this Agreement.

                                      -14-
<PAGE>

                            [Signature Page Follows]

                                      -15-
<PAGE>

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

                              THE COMPANY:

                              KNIGHTSBRIDGE FINE WINES, INC.

                              By: /s/ Joel Shapiro
                                  ----------------
                              Name: Joel Shapiro
                              Title:     President & CEO

                              THE PURCHASER:

                              GRYPHON MASTER FUND, L.P.

                              By:  Gryphon Partners, L.P., its General Partner

                                     By:  Gryphon Management Partners, L.P.,
                                                its General Partner

                                       By:  Gryphon Advisors, LLC,
                                                its General Partner

                                       By:  ----------------------------------
                                            Warren W. Garden, Authorized Agent

                                      -16-EXHIBIT 10.4
                                                                       EXHIBIT B
                                                                          TO
                                                                       PURCHASE
                                                                       AGREEMENT

NEITHER THIS WARRANT NOR ISSUANCE OF THE  SECURITIES  ISSUABLE UPON THE EXERCISE
HEREOF TO THE HOLDER HAVE BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933 OR
QUALIFIED OR REGISTERED  UNDER STATE  SECURITIES OR BLUE SKY LAWS.  NEITHER THIS
WARRANT  NOR SUCH  SECURITIES  MAY BE SOLD OR  OTHERWISE  TRANSFERRED  EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933,  APPLICABLE STATE SECURITIES OR BLUE
SKY LAWS AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.

THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION 23.

No. W-1                             Right to Purchase  416,667  Shares of
                                    Common Stock of Knightsbridge Fine
                                    Wines, Inc.

                         KNIGHTSBRIDGE FINE WINES, INC.

                          COMMON STOCK PURCHASE WARRANT

                  KNIGHTSBRIDGE FINE WINES, INC., a Nevada  corporation,  hereby
certifies  that, for value  received,  GRYPHON  MASTER FUND,  L.P. or registered
assigns (the  "Holder"),  is entitled,  subject to the terms set forth below, to
purchase  from the  Company at any time or from time to time  before  5:00 p.m.,
Dallas,  Texas time, on the Expiration Date (such capitalized term and all other
capitalized  terms used herein having the respective  meanings provided herein),
416,667 fully paid and nonassessable  shares of Common Stock at a purchase price
per share equal to the Purchase Price. The number of such shares of Common Stock
and the Purchase Price are subject to adjustment as provided in this Warrant.

                  1. DEFINITIONS.

                  (a) As used in this Warrant,  the term "Holder" shall have the
meaning assigned to such term in the first paragraph of this Warrant.

                  (b) All the  agreements or  instruments  herein  defined shall
mean  such  agreements  or  instruments  as the same  may  from  time to time be

<PAGE>

supplemented  or amended or the terms  thereof  waived or modified to the extent
permitted by, and in accordance with, the terms thereof and of this Warrant.

                  (c) The  following  terms  shall have the  following  meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

                  "Affiliate"  means,  with  respect  to any  Person,  any other
         Person that directly, or indirectly through one or more intermediaries,
         controls,  is controlled by or is under common control with the subject
         Person.  For purposes of this definition,  "control"  (including,  with
         correlative  meaning,  the  terms  "controlled  by" and  "under  common
         control  with"),  as used with  respect to any  Person,  shall mean the
         possession, directly or indirectly, of the power to direct or cause the
         direction  of the  management  and  policies  of such  Person,  whether
         through the ownership of voting securities or by contract or otherwise.

                  "Aggregate  Purchase  Price" means at any time an amount equal
         to the product obtained by multiplying (x) the Purchase Price times (y)
         the  number of shares of Common  Stock for which  this  Warrant  may be
         exercised at such time.

                  "Aggregation  Parties"  shall  have the  meaning  provided  in
         Section 2(c).

                  "Board  of  Directors"  means the  Board of  Directors  of the
         Company.

                  "Business Day" means any day other than a Saturday,  Sunday or
         other  day  on  which  commercial  banks  in the  City  of  Dallas  are
         authorized or required by law or executive order to remain closed.

                  "Common Stock" includes the Company's  Common Stock, par value
         $.001 per share,  (and any purchase  rights  issued with respect to the
         Common Stock in the future) as authorized  on the date hereof,  and any
         other securities into which or for which the Common Stock (and any such
         rights  issued with  respect to the Common  Stock) may be  converted or
         exchanged  pursuant  to a  plan  of  recapitalization,  reorganization,
         merger,  sale of assets or  otherwise  and any stock (other than Common
         Stock) and other  securities  of the Company or any other  Person which
         the  Holder at any time shall be  entitled  to  receive,  or shall have
         received, on the exercise of this Warrant, in lieu of or in addition to
         Common Stock.

                  "Common  Stock   Equivalents"   means  any  warrant,   option,
         subscription  or purchase right with respect to shares of Common Stock,
         any security convertible into, exchangeable for, or otherwise entitling
         the holder  thereof to acquire,  shares of Common Stock or any warrant,
         option,  subscription  or  purchase  right  with  respect  to any  such
         convertible, exchangeable or other security.

                                      -2-
<PAGE>

                  "Company"  shall  include  Knightsbridge  Fine Wines,  Inc., a
         Nevada corporation, and any corporation that shall succeed to or assume
         the  obligations  of  Knightsbridge   Fine  Wines,  Inc.  hereunder  in
         accordance with the terms hereof.

                  "Current  Fair Market  Value"  means when used with respect to
         the Common  Stock as of a specified  date with respect to each share of
         Common  Stock,  the average of the closing  prices of the Common  Stock
         sold on all securities  exchanges  (including the Nasdaq and the Nasdaq
         SmallCap) on which the Common  Stock may at the time be listed,  or, if
         there have been no sales on any such  exchange on such day, the average
         of the highest bid and lowest asked prices on all such exchanges at the
         end of such day,  or, if on such day the Common Stock is not so listed,
         the average of the  representative  bid and asked prices  quoted in the
         Nasdaq System as of 4:00 p.m.,  New York City time,  or, if on such day
         the Common Stock is not quoted in the Nasdaq System, the average of the
         highest  bid  and  lowest  asked  price  on  such  day in the  domestic
         over-the-counter  market as reported by the National  Quotation Bureau,
         Incorporated,  or any similar successor organization, in each such case
         averaged over a period of ten Trading Days  consisting of the day as of
         which the Current Fair Market Value of Common Stock is being determined
         (or if such day is not a Trading  Day,  the Trading Day next  preceding
         such day) and the nine  consecutive  Trading Days prior to such day. If
         on the date for which Current Fair Market Value is to be determined the
         Common Stock is not listed on any securities  exchange or quoted in the
         Nasdaq System or the  over-the-counter  market, the Current Fair Market
         Value of Common  Stock shall be the  highest  price per share which the
         Company  could then  obtain  from a willing  buyer (not an  employee or
         director  of  the  Company  at  the  time  of   determination)   in  an
         arms'-length  transaction  for  shares  of  Common  Stock  sold  by the
         Company,  from  authorized but unissued  shares,  as determined in good
         faith by the Board of Directors.

                  "Expiration Date" means October 16, 2006.

                  "Gryphon" means  Gryphon Master Fund, L.P., a Bermuda  limited
partnership.

                  "Holder  Share  Notice"  shall have the  meaning  provided  in
Section 3(a).

                  "Issuance  Date" means the date of  original  issuance of this
Warrant or its predecessor instrument.

                  "Nasdaq" means the Nasdaq National Market.

                  "Nasdaq SmallCap" means the Nasdaq SmallCap Market.

                  "1934  Act"  means the  Securities  Exchange  Act of 1934,  as
amended.

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

                                      -3-
<PAGE>

                  "Note" means the 7.5%  Convertible Note due 2006 issued by the
         Company pursuant to the Purchase Agreement.

                  "Other  Securities"  means any stock (other than Common Stock)
         and other  securities  of the  Company  or any other  Person  which the
         Holder  at any time  shall  be  entitled  to  receive,  or  shall  have
         received, on the exercise of this Warrant, in lieu of or in addition to
         Common Stock, or which at any time shall be issuable or shall have been
         issued in  exchange  for or in  replacement  of  Common  Stock or Other
         Securities pursuant to Section 5.

                  "Person"  means  an  individual,   corporation,   partnership,
         limited liability company,  trust, business trust,  association,  joint
         stock company,  joint venture,  pool,  syndicate,  sole proprietorship,
         unincorporated  organization,  governmental authority or any other form
         of entity not specifically listed herein.

                  "Purchase Agreement" means the Purchase Agreement, dated as of
         October 16, 2003, by and between the Company and Gryphon.

                  "Purchase  Price"  means  $2.40,   subject  to  adjustment  as
         provided in this Warrant.

                  "QIB" means a  "qualified  institutional  buyer" as defined in
         Rule 144A.

                  "Registration  Rights Agreement" means the Registration Rights
         Agreement, dated as of October 16, 2003, by and between the Company and
         Gryphon.

                  "Registration  Statement"  shall have the meaning  provided in
         the Registration Rights Agreement.

                  "Restricted  Ownership  Percentage"  shall  have  the  meaning
         provided in Section 2(c).

                  "Restricted Securities" means securities that are not eligible
         for  resale  pursuant  to  Rule  144(k)  under  the  1933  Act (or  any
         successor provision).

                  "Reorganization Event" means the occurrence of any one or more
         of the following events:

                           (i) any consolidation,  merger or similar transaction
                  of the Company or any  Subsidiary  with or into another entity
                  (other than a merger or consolidation  or similar  transaction
                  of  a   Subsidiary   into  the   Company  or  a   wholly-owned
                  Subsidiary);  or the sale or transfer of all or  substantially
                  all of the assets of the  Company  and the  Subsidiaries  in a
                  single transaction or a series of related transactions; or

                                      -4-
<PAGE>

                           (ii) the  occurrence of any  transaction  or event in
                  connection  with  which all or  substantially  all the  Common
                  Stock shall be exchanged for, converted into,  acquired for or
                  constitute the right to receive securities of any other Person
                  (whether   by   means   of  a   Tender   Offer,   liquidation,
                  consolidation,    merger,    share   exchange,    combination,
                  reclassification, recapitalization, or otherwise); or

                           (iii) the acquisition by a Person or group of Persons
                  acting  in  concert  as a  partnership,  limited  partnership,
                  syndicate or group, as a result of a tender or exchange offer,
                  open  market  purchases,  privately  negotiated  purchases  or
                  otherwise,  of  beneficial  ownership  of  securities  of  the
                  Company  representing 50% or more of the combined voting power
                  of the outstanding voting securities of the Company ordinarily
                  (and  apart from  rights  accruing  in special  circumstances)
                  having the right to vote in the election of directors.

                  "Rule 144A" means Rule 144A as promulgated under the 1933 Act.

                  "SEC" means the Securities and Exchange Commission.

                  "Subsidiary"  means any corporation or other entity of which a
         majority  of the  capital  stock or other  ownership  interests  having
         ordinary  voting power to elect a majority of the board of directors or
         other Persons  performing similar functions are at the time directly or
         indirectly owned by the Company.

                  "Tender  Offer" means a tender offer,  exchange offer or other
         offer by the Company to  repurchase  outstanding  shares of its capital
         stock.

                  "Trading  Day" means a day on  whichever  of the OTC  Bulletin
         Board,  any  national  securities  exchange,  the  Nasdaq or the Nasdaq
         SmallCap,  which then constitutes the principal  securities  market for
         the Common Stock, is open for general trading.

                  2. EXERCISE OF WARRANT.

                  (A)  EXERCISE.  This Warrant may be exercised by the Holder in
whole at any time or in part from time to time on or before the Expiration  Date
by (x) surrendering this Warrant to the Company,  (y) giving a subscription form
in the form of EXHIBIT 1 to this  Warrant  (duly  executed by the Holder) to the
Company,  and (z) making payment, in cash or by certified or official bank check
payable to the order of the Company, or by wire transfer of funds to the account
of the Company,  in any such case, in the amount obtained by multiplying (a) the
number of shares of Common Stock  designated  by the Holder in the  subscription
form by (b) the  Purchase  Price then in effect.  On any  partial  exercise  the
Company  will  forthwith  issue and deliver to or upon the order of the Holder a
new  Warrant  or  Warrants  of like  tenor,  in the name of the Holder or as the
Holder  (upon  payment  by the  Holder of any  applicable  transfer  taxes)  may
request,  providing  in the  aggregate  on the  face or  faces  thereof  for the

                                      -5-
<PAGE>

purchase  of the  number of shares of Common  Stock for which  such  Warrant  or
Warrants may still be exercised.  The  subscription  form may be  surrendered by
telephone line facsimile  transmission to such telephone  number for the Company
as shall have been specified in writing to the Holder by the Company;  provided,
however, that if the subscription form is given to the Company by telephone line
facsimile  transmission  the Holder shall send an original of such  subscription
form to the Company within ten Business Days after such  subscription form is so
given to the Company;  provided further,  however,  that any failure or delay on
the part of the Holder in giving such  original of any  subscription  form shall
not affect the validity or the date on which such  subscription form is so given
by telephone line facsimile transmission.

                  (B) NET  EXERCISE.  The  Holder  may  elect to  exercise  this
Warrant,  in whole at any time or in part from time to time, by receiving shares
of Common Stock equal to the net issuance  value (as  determined  below) of this
Warrant,  or any part hereof,  upon surrender of the  subscription  form annexed
hereto  (duly  executed by the Holder) to the Company  (followed by surrender of
this Warrant to the Company  within three  Trading Days after  surrender of such
subscription  form),  in which  event the  Company  shall  issue to the Holder a
number of shares of Common Stock computed using the following formula:

                               X = Y x (A - B)
                                   -----------
                                        A

where,

                  X =      the number of shares of Common Stock to be issued  to
                           the Holder

                  Y =      the number of shares of Common Stock as to which this
                           Warrant is to be exercised

                  A =      the  Current  Fair  Market  Value  of  one  share  of
                           Common  Stock  calculated  as of the last Trading Day
                           immediately preceding the exercise of this Warrant

                  B =      the Purchase Price

                  (C) 9.99% LIMITATION.

                  (1) Notwithstanding anything to the contrary contained herein,
the number of shares of Common  Stock that may be  acquired  by the Holder  upon
exercise pursuant to the terms hereof shall not exceed a number that, when added
to the total number of shares of Common Stock deemed  beneficially  owned by the
Holder (other than by virtue of the ownership of securities or rights to acquire
securities  (including  the Note and this Warrant) that have  limitations on the
Holder's  right to convert,  exercise or purchase  similar to the limitation set
forth  herein),  together  with all shares of Common Stock  deemed  beneficially
owned at such time  (other  than by virtue of the  ownership  of  securities  or
rights to acquire securities that have limitations on the right to

                                      -6-
<PAGE>

convert, exercise or purchase similar to the limitation set forth herein) by the
Holder's  Affiliates  (the  "Aggregation  Parties") that would be aggregated for
purposes of  determining  whether a group exists or for purposes of  determining
the Holder's beneficial  ownership,  in either such case for purposes of Section
13(d)  of the  1934  Act  and  Regulation  13D-G  thereunder,  would  result  in
beneficial  ownership  by the  Holder or such  group of more  than  9.99% of the
outstanding shares of the Common Stock (the "Restricted Ownership  Percentage").
The Holder  shall have the right (x) at any time and from time to time to reduce
its Restricted  Ownership  Percentage  immediately upon notice to the Company in
the event and only to the  extent  that  Section 16 of the 1934 Act or the rules
promulgated  thereunder (or any successor statute or rules) is changed to reduce
the beneficial  ownership  percentage  threshold thereunder from 10%, (y) at any
time and from time to time,  to increase  its  Restricted  Ownership  Percentage
immediately  in the event of the happening of any Change in Control  Transaction
(as defined in the Note), and (z) by written instrument delivered to the Company
to irrevocably  waive its rights under the immediately  preceding clause (y). If
at any time the limits in this Section 2(c) make this Warrant  unexercisable  in
whole or in part,  the  Company  shall not by reason  thereof be relieved of its
obligation  to issue  shares  of  Common  Stock at any time or from time to time
thereafter  as  shares of Common  Stock  may be issued in  compliance  with such
restrictions.

                  (2) For  purposes of this Section  2(c),  in  determining  the
number of outstanding  shares of Common Stock at any time the Holder may rely on
the  number  of  outstanding  shares  of Common  Stock as  reflected  in (A) the
Company's then most recent Form 10-Q,  Form 10-K or other public filing with the
SEC, as the case may be, (B) a public  announcement by the Company that is later
than any such filing  referred to in the preceding  clause (A), or (C) any other
notice by the Company or its transfer  agent  setting forth the number shares of
Common Stock  outstanding.  Upon the written or oral request of the Holder,  the
Company  shall  within one  Business  Day  confirm  orally and in writing to the
Holder the number of shares of Common Stock then  outstanding.  In any case, the
number of  outstanding  shares of Common Stock shall be determined  after giving
effect to the  conversion  or exercise of Common Stock  Equivalents,  including,
without  limitation,  the Note and the Warrant, by the Holder or its Aggregation
Parties,  in each such case  subsequent  to the date as of which such  number of
outstanding shares of Common Stock was reported.

                  3. DELIVERY OF STOCK CERTIFICATES,  ETC., ON EXERCISE.  (a) As
soon as  practicable  after the exercise of this Warrant and in any event within
five Trading Days  thereafter,  upon the terms and subject to the  conditions of
this  Warrant,  the Company at its expense  (including  the payment by it of any
applicable  issue or stamp  taxes)  will  cause to be  issued in the name of and
delivered  to the Holder,  or as the Holder  (upon  payment by the Holder of any
applicable  transfer taxes) may direct,  a certificate or  certificates  for the
number  of fully  paid and  nonassessable  shares  of  Common  Stock  (or  Other
Securities)  to which the Holder  shall be  entitled on such  exercise,  in such
denominations  as  may  be  requested  by  the  Holder,   which  certificate  or
certificates  shall be free of restrictive  and trading  legends  (except to the
extent permitted under Section 6.12 of the Purchase Agreement), plus, in lieu of
any fractional share to which the Holder would otherwise be entitled, cash equal
to such fraction multiplied by the  then Current Fair Market Value of  one  full

                                      -7-
<PAGE>

share of Common Stock,  together with any other stock or Other Securities or any
property (including cash, where applicable) to which the Holder is entitled upon
such exercise pursuant to Section 2 or otherwise. In lieu of delivering physical
certificates for the shares of Common Stock or (Other Securities)  issuable upon
any  exercise  of  this  Warrant,  provided  the  Company's  transfer  agent  is
participating in the Depository Trust Company ("DTC") Fast Automated  Securities
Transfer  ("FAST")  program,  upon request of the Holder,  the Company shall use
commercially  reasonable  efforts to cause its transfer agent  electronically to
transmit  such  shares of  Common  Stock (or  Other  Securities)  issuable  upon
conversion  to the Holder (or its  designee),  by  crediting  the account of the
Holder's  (or such  designee's)  broker with DTC through its Deposit  Withdrawal
Agent Commission system (provided that the same time periods herein as for stock
certificates   shall  apply).   The  Company  shall  pay  any  taxes  and  other
governmental  charges that may be imposed under the laws of the United States of
America or any political  subdivision or taxing authority  thereof or therein in
respect of the issue or delivery of shares of Common Stock (or Other Securities)
or payment of cash upon  exercise  of this  Warrant  (other  than  income  taxes
imposed on the Holder).  The Company shall not be required,  however, to pay any
tax or other charge  imposed in  connection  with any  transfer  involved in the
issue of any  certificate  for  shares  of Common  Stock  (or Other  Securities)
issuable  upon  exercise of this  Warrant or payment of cash to any Person other
than the Holder,  and in case of such  transfer or payment the Company shall not
be  required  to deliver any  certificate  for shares of Common  Stock (or Other
Securities) upon such exercise or pay any cash until such tax or charge has been
paid or it has been established to the Company's reasonable satisfaction that no
such tax or charge is due. If the Holder  notifies  the Company  that the Holder
has not received  such shares of Common Stock (or Other  Securities)  (a "Holder
Share  Notice") and the Company fails to deliver or cause to be delivered to the
Holder  such  shares of Common  Stock (or  Other  Securities)  pursuant  to this
Section  3(a) (free of any  restrictions  on transfer  or legends  except to the
extent  permitted  under  Section 6.12 of the Purchase  Agreement) in accordance
herewith,  within one  Trading  Day after the date the Holder  gives such Holder
Share Notice, then, in addition to any other liability the Company may have, the
Company shall pay to the Holder, in cash, an amount,  computed at the rate of 2%
per month of the  Current  Fair Market  Value of the shares of Common  Stock (or
Other  Securities)  not timely  delivered  by the  Company,  for the period such
failure  continues (the "Exercise Delay Payments"),  without  duplication of any
amount  payable to the Holder  pursuant to clause (F) of Section  2(c)(i) of the
Registration Rights Agreement, with each change in the Current Fair Market Value
during such period  being given  effect.  A Holder  Share Notice may be given by
telephone or e-mail to the Company's Chief Financial Officer or General Counsel.
Upon exercise of this Warrant as provided  herein,  the Company's  obligation to
issue and  deliver the  certificates  for Common  Stock  shall be  absolute  and
unconditional,  irrespective  of the  absence  of any  action  by the  Holder to
enforce the same,  any waiver or consent with respect to any  provision  hereof,
the  recovery  of any  judgment  against any Person or any action to enforce the
same,  any failure or delay in the  enforcement  of any other  obligation of the
Company to the Holder, or any setoff,  counterclaim,  recoupment,  limitation or
termination,  or any breach or alleged  breach by the Holder or any other Person
of any obligation to the Company or any violation or alleged violation of law by
the Holder or any other Person, and irrespective of any other circumstance which

                                      -8-
<PAGE>

might otherwise limit such obligation of the Company to the Holder in connection
with such exercise.

                  (b) If in any case the Company shall fail to issue and deliver
or cause to be delivered  the shares of Common Stock to the Holder in connection
with a  particular  exercise  of this  Warrant  within one Trading Day after the
Holder  gives a Holder  Share  Notice to the  Company,  in addition to any other
liabilities  the Company may have  hereunder and under  applicable  law, (A) the
Company  shall pay or  reimburse  the  Holder on  demand  for all  out-of-pocket
expenses,  including, without limitation,  reasonable fees and expenses of legal
counsel,  incurred by the Holder as a result of such failure; (B) if as a result
of such failure the Holder shall suffer any direct damages or  liabilities  from
such failure  (including,  without  limitation,  margin interest and the cost of
purchasing  securities  to cover a sale  (whether by the Holder or the  Holder's
securities  broker)  or  borrowing  of shares of Common  Stock by the Holder for
purposes of settling  any trade  involving a sale of shares of Common Stock made
by the Holder during the period beginning on the Issuance Date and ending on the
date the Company delivers or causes to be delivered to the Holder such shares of
Common  Stock),  then,  in addition to any amounts  payable  pursuant to Section
3(a),  the  Company  shall upon demand of the Holder pay to the Holder an amount
equal to the actual, direct,  demonstrable out-of-pocket damages and liabilities
suffered  by the  Holder by reason  thereof  which the Holder  documents  to the
reasonable satisfaction of the Company, and (C) the Holder may by written notice
(which  may be  given by mail,  courier,  personal  service  or  telephone  line
facsimile transmission) or oral notice (promptly confirmed in writing), given at
any time prior to delivery to the Holder of the shares of Common Stock  issuable
in connection  with such exercise of the Holder's  right,  rescind such exercise
and the  subscription  form  relating  thereto,  in which case the Holder  shall
thereafter be entitled to exercise that portion of this Warrant as to which such
exercise is so rescinded  and to exercise  its other  rights and  remedies  with
respect to such  failure  by the  Company.  Notwithstanding  the  foregoing  the
Company  shall not be  liable  to the  Holder  under  clauses  (A) or (B) of the
immediately  preceding  sentence  to the  extent the  failure of the  Company to
deliver or to cause to be  delivered  such shares of Common  Stock  results from
fire, flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
involving  facilities  of a common  carrier,  acts of God, or any similar  event
outside  the  control of the  Company  (it being  understood  that the action or
failure  to act of the  Company's  Transfer  Agent  shall not be deemed an event
outside  the control of the Company  except to the extent  resulting  from fire,
flood,  storm,  earthquake,  shipwreck,  strike,  war, acts of terrorism,  crash
involving  facilities  of a common  carrier,  acts of God, or any similar  event
outside the control of such Transfer  Agent or the  bankruptcy,  liquidation  or
reorganization of such Transfer Agent under any bankruptcy,  insolvency or other
similar  law).  The Holder  shall notify the Company in writing (or by telephone
conversation,  confirmed in writing) as promptly as  practicable  following  the
third Trading Day after the Holder  exercises this Warrant if the Holder becomes
aware that such  shares of Common  Stock so issuable  have not been  received as
provided  herein,  but any failure so to give such  notice  shall not affect the
Holder's rights under this Warrant or otherwise.

                                      -9-
<PAGE>

                  4.  ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK,  PROPERTY,  ETC.;
RECLASSIFICATION,  ETC. In case at any time or from time to time on or after the
Issuance  Date,  all holders of Common  Stock (or Other  Securities)  shall have
received,  or (on or after  the  record  date  fixed  for the  determination  of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor,

                  (a)  other or  additional  stock,  rights,  warrants  or other
         securities or property (other than cash) by way of dividend, or

                  (b) any cash (excluding  cash dividends  payable solely out of
         earnings or earned surplus of the Company), or

                  (c)  other or  additional  stock,  rights,  warrants  or other
         securities or property  (including cash) by way of spin-off,  split-up,
         reclassification,  recapitalization,  combination  of shares or similar
         corporate rearrangement,

other than (i) additional shares of Common Stock (or Other Securities) issued as
a stock  dividend  or in a  stock-split  (adjustments  in  respect  of which are
provided for in Section 6) and (ii) rights or warrants to  subscribe  for Common
Stock at less than the Current  Fair  Market  Value  (adjustments  in respect of
which are provided in Section 7), then and in each such case the Holder,  on the
exercise  hereof as  provided  in Section 2, shall be  entitled  to receive  the
amount of stock,  rights,  warrants and Other Securities and property (including
cash in the cases  referred to in  subdivisions  (b) and (c) of this  Section 4)
which the Holder would hold on the date of such  exercise if on the date of such
action  specified in the  preceding  clauses (a) through (c) (or the record date
therefor)  the  Holder  had been the holder of record of the number of shares of
Common Stock called for on the face of this Warrant and had  thereafter,  during
the period from the date  thereof to and  including  the date of such  exercise,
retained such shares and all such other or additional  stock,  rights,  warrants
and Other  Securities  and property  (including  cash in the case referred to in
subdivisions  (b)  and  (c) of this  Section  4)  receivable  by the  Holder  as
aforesaid during such period, giving effect to all adjustments called for during
such period by Section 5.

                  5.  EXERCISE  UPON A  REORGANIZATION  EVENT.  In  case  of any

Reorganization  Event  the  Company  shall,  as a  condition  precedent  to  the
consummation   of  the   transactions   constituting,   or  announced  as,  such
Reorganization  Event, cause effective  provisions to be made so that the Holder
shall have the right  thereafter,  by  exercising  this  Warrant (in lieu of the
shares  of  Common  Stock  of the  Company  and  Other  Securities  or  property
purchasable  and  receivable  upon  exercise  of the rights  represented  hereby
immediately prior to such Reorganization  Event) to purchase the kind and amount
of shares of stock and Other Securities and property (including cash) receivable
upon such  Reorganization  Event by a holder  of the  number of shares of Common
Stock that might have been received  upon  exercise of this Warrant  immediately
prior to such Reorganization  Event. Any such provision shall include provisions
for  adjustments  in respect of such  shares of stock and Other  Securities  and
property  that  shall  be as  nearly  equivalent  as may be  practicable  to the

                                      -10-
<PAGE>

adjustments provided for in this Warrant. The provisions of this Section 5 shall
apply to successive Reorganization Events.

                  6. ADJUSTMENT FOR CERTAIN EXTRAORDINARY EVENTS. If on or after
the Issuance  Date the Company shall (i) issue  additional  shares of the Common
Stock as a dividend or other  distribution  on  outstanding  Common Stock,  (ii)
subdivide or reclassify its outstanding shares of Common Stock, or (iii) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, in each such event, the Purchase Price shall,  simultaneously  with
the happening of such event,  be adjusted by  multiplying  the Purchase Price in
effect  immediately  prior to such event by a fraction,  the  numerator of which
shall be the number of shares of Common Stock  outstanding  immediately prior to
such event and the  denominator of which shall be the number of shares of Common
Stock  outstanding  immediately  after such  event,  and the product so obtained
shall thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted,  shall be  readjusted  in the same  manner upon the  happening  of any
successive  event or events described herein in this Section 6. The Holder shall
thereafter,  on the  exercise  hereof as  provided  in Section 2, be entitled to
receive  that number of shares of Common Stock  determined  by  multiplying  the
number of shares  of Common  Stock  which  would be  issuable  on such  exercise
immediately prior to such issuance,  subdivision or combination, as the case may
be, by a fraction of which (i) the  numerator  is the  Purchase  Price in effect
immediately  prior to such  issuance,  and (ii) the  denominator is the Purchase
Price in effect on the date of such exercise.

                  7.  ISSUANCE OF RIGHTS OR WARRANTS TO COMMON  STOCKHOLDERS  AT
LESS THAN  CURRENT  FAIR  MARKET  VALUE.  If the  Company  shall on or after the
Issuance Date issue rights or warrants to all holders of its outstanding  shares
of Common Stock  entitling  them to subscribe  for or purchase  shares of Common
Stock at a price per share less than the Current Fair Market Value on the record
date fixed for the determination of stockholders entitled to receive such rights
or warrants, then

                  (a) the  Purchase  Price  shall be  adjusted  so that the same
         shall equal the price  determined by multiplying  the Purchase Price in
         effect at the  opening of business on the day after such record date by
         a  fraction  of which the  numerator  shall be the  number of shares of
         Common Stock  outstanding  at the close of business on such record date
         plus the number of shares  which the  aggregate  offering  price of the
         total number of shares so offered  would  purchase at such Current Fair
         Market  Value,  and the  denominator  shall be the  number of shares of
         Common Stock  outstanding  on the close of business on such record date
         plus the total number of  additional  shares of Common Stock so offered
         for subscription or purchase; and

                  (b) the number of shares of Common  Stock which the Holder may
         thereafter  purchase  upon  exercise of this  Warrant at the opening of
         business  on the day after such  record  date shall be  increased  to a
         number  equal to the quotient  obtained by dividing  (x) the  Aggregate
         Purchase Price in effect  immediately  prior to such  adjustment in the

                                      -11-
<PAGE>

         Purchase  Price  pursuant  to clause  (a) of this  Section 7 by (y) the
         Purchase  Price in effect  immediately  after  such  adjustment  in the
         Purchase Price pursuant to clause (a) of this Section 7.

Such adjustment shall become effective immediately after the opening of business
on the day following  the record date fixed for  determination  of  stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered pursuant to such rights or warrants, upon the expiration
or  termination  of such  rights  or  warrants,  the  Purchase  Price  shall  be
readjusted  to the  Purchase  Price  which  would  then  be in  effect  had  the
adjustments  made upon the issuance of such rights or warrants  been made on the
basis of  delivery  of only the  number  of  shares  of  Common  Stock  actually
delivered  and the number of shares of Common  Stock for which this  Warrant may
thereafter be exercised shall be readjusted (subject to proportionate adjustment
for any intervening exercises of this Warrant) to the number which would then be
in effect had the adjustments  made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common  Stock
actually delivered. In the event that such rights or warrants are not so issued,
the Purchase  Price shall again be adjusted to be the Purchase Price which would
then be in  effect if such  record  date had not been  fixed  and the  number of
shares of Common Stock for which this Warrant may thereafter be exercised  shall
again be  adjusted  (subject to  proportionate  adjustment  for any  intervening
exercises  of this  Warrant)  to be the number  which would then be in effect if
such  record  date had not been  fixed.  In  determining  whether  any rights or
warrants  entitle the Holder to subscribe for or purchase shares of Common Stock
at less than such Current Fair Market Value,  and in  determining  the aggregate
offering price of such shares of Common Stock, there shall be taken into account
any  consideration  received  for such  rights  or  warrants,  the value of such
consideration, if other than cash, to be determined by the Board of Directors.

                  8. EFFECT OF RECLASSIFICATION,  CONSOLIDATION, MERGER OR SALE.
(a) If any of the following  events occur,  namely (i) any  reclassification  or
change of the  outstanding  shares of Common  Stock  (other than a change in par
value,  or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination),  (ii) any  consolidation,  merger,
statutory  exchange or combination of the Company with another  corporation as a
result of which  holders of Common  Stock shall be  entitled  to receive  stock,
other securities or other property or assets (including cash) with respect to or
in  exchange  for such  Common  Stock,  or (iii) any sale or  conveyance  of the
properties and assets of the Company as, or substantially as, an entirety to any
other  Person as a result of which  holders of Common Stock shall be entitled to
receive stock,  other  securities or other property or assets  (including  cash)
with respect to or in exchange  for such Common  Stock,  then the  Company,  the
successor  or  purchasing  Person  and each  Person who has agreed to issue such
stock or other  securities  or to transfer  such other  property or assets shall
execute and deliver to the Holder a written  agreement  providing  that (x) this
Warrant shall  thereafter  entitle the Holder to purchase the kind and amount of
shares of stock and other  securities  or  property or assets  (including  cash)
receivable upon such reclassification,  change, consolidation, merger, statutory
exchange,  combination,  sale or conveyance, by the holder of a number of shares
of Common  Stock  issuable  upon  exercise of this Warrant  (assuming,  for such
purposes,  a sufficient number of authorized shares of Common Stock available to

                                      -12-
<PAGE>

exercise  this  Warrant)  immediately  prior to such  reclassification,  change,
consolidation,  merger,  statutory  exchange,  combination,  sale or conveyance,
assuming such holder of Common Stock did not exercise  such  holder's  rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such reclassification,  change, consolidation, merger, statutory
exchange,  combination, sale or conveyance (provided that, if the kind or amount
of securities,  cash or other property  receivable  upon such  reclassification,
change,  consolidation,   merger,  statutory  exchange,   combination,  sale  or
conveyance  is not the same for each  share of Common  Stock in respect of which
such rights of election  shall not have been exercised  ("non-electing  share"),
then for the purposes of this Section 8 the kind and amount of securities,  cash
or other property receivable upon such reclassification,  change, consolidation,
merger,   statutory   exchange,   combination,   sale  or  conveyance  for  each
non-electing  share shall be deemed to be the kind and amount so receivable  per
share by a plurality of the  non-electing  shares),  (y) in the case of any such
successor or  purchasing  Person or any such Person who has agreed to issue such
stock or other  securities  or to transfer such other  property or assets,  upon
such consolidation, merger, statutory exchange, combination, sale or conveyance,
such  successor or purchasing  Person or any such Person who has agreed to issue
such stock or other  securities  or to  transfer  such other  property or assets
shall be jointly and severally  liable with the Company for the  performance  of
all of the Company's  obligations under this Warrant, the Purchase Agreement and
the Registration  Rights Agreement,  and (z) if registration or qualification is
required under the 1933 Act or applicable state law for the public resale by the
Holder of such shares of stock and Other Securities so issuable upon exercise of
this Warrant,  such  registration or  qualification  shall be completed prior to
such reclassification,  change, consolidation, merger, combination or sale. Such
written  agreement  shall  provide  for  adjustments  which  shall be as  nearly
equivalent  as may  be  practicable  to the  adjustments  provided  for in  this
Warrant. If, in the case of any such  reclassification,  change,  consolidation,
merger, statutory exchange,  combination, sale or conveyance, the stock or other
securities  or other  property  or assets  receivable  thereupon  by a holder of
shares of Common Stock includes shares of stock, other securities other property
or assets of a Person other than the Company or any such successor or purchasing
Person,  as the case may be, in such  reclassification,  change,  consolidation,
merger, statutory exchange,  combination,  sale or conveyance, then such written
agreement  shall also be executed by such other  Person and shall  contain  such
additional  provisions  to protect the  interests  of the Holder as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.

         (b) The above  provisions  of this Section 8 shall  similarly  apply to
successive reclassifications,  changes,  consolidations,  mergers, combinations,
sales and conveyances.

         (c) If this  Section 8 applies  to any event or  occurrence,  Section 5
shall not apply to such event or occurrence.

                  9. TAX  ADJUSTMENTS.  The Company may make such  reductions in
the Purchase  Price, in addition to those required by Sections 4, 5, 6 and 7, as
the Board of Directors considers to be advisable to avoid or diminish any income

                                      -13-
<PAGE>

tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or  distribution  of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

                  10.  MINIMUM  ADJUSTMENT.  (a) No  adjustment  in the Purchase
Price (and no related  adjustment  in the number of shares of Common Stock which
may  thereafter be purchased  upon  exercise of this Warrant)  shall be required
unless such  adjustment  would require an increase or decrease of at least 1% in
the Purchase Price;  provided,  however, that any adjustments which by reason of
this Section 10 are not  required to be made shall be carried  forward and taken
into account in any  subsequent  adjustment.  All such  calculations  under this
Warrant shall be made by the Company and shall be made to the nearest cent or to
the nearest one hundredth of a share, as the case may be.

                  (b) No  adjustment  need be made for a change in the par value
of the  Common  Stock or from par  value to no par value or from no par value to
par value.

                  11.  NOTICE OF  ADJUSTMENTS.  Whenever the  Purchase  Price is
adjusted as herein provided,  the Company shall promptly,  but in no event later
than five Trading Days thereafter, give a notice to the Holder setting forth the
Purchase  Price and number of shares of Common Stock which may be purchased upon
exercise  of this  Warrant  after  such  adjustment  and  setting  forth a brief
statement of the facts  requiring such adjustment but which such statement shall
not include any information which would be material  non-public  information for
purposes of the 1934 Act.  Failure to deliver  such notice  shall not affect the
legality or validity of any such adjustment.

                  12. FURTHER ASSURANCES.  The Company will take all action that
may be  necessary  or  appropriate  in order that the  Company  may  validly and
legally issue fully paid and nonassessable shares of stock, free from all taxes,
liens and charges with respect to the issue  thereof,  on the exercise of all or
any portion of this Warrant from time to time outstanding.

                  13. NOTICE TO HOLDER PRIOR TO CERTAIN  ACTIONS.  In case on or
after the Issuance Date:

                  (a) the  Company  shall  declare  a  dividend  (or  any  other
distribution) on its Common Stock (other than in cash out of retained earnings);
or

                  (b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any share of
any class or any other rights or warrants; or

                  (c)   the   Board   of   Directors    shall    authorize   any
reclassification of the Common Stock (other than a subdivision or combination of
its outstanding  Common Stock, or a change in par value, or from par value to no
par value, or from no par value to par value), or any consolidation or merger or
other business  combination  transaction to which the Company is a party and for

                                      -14-
<PAGE>

which approval of any  stockholders  of the Company is required,  or the sale or
transfer of all or substantially all of the assets of the Company; or

                  (d)  there  shall be  pending  the  voluntary  or  involuntary
dissolution, liquidation or winding-up of the Company;

the Company  shall give the Holder,  as promptly as possible but in any event at
least ten Trading Days prior to the applicable  date  hereinafter  specified,  a
notice  stating (x) the date on which a record is to be taken for the purpose of
such dividend,  distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend,  distribution or rights are to be determined,  or (y) the date
on  which  such   reclassification,   consolidation,   merger,   other  business
combination transaction, sale, transfer, dissolution,  liquidation or winding-up
is  expected  to  become  effective  or  occur,  and the  date as of which it is
expected  that  holders  of Common  Stock of record  who  shall be  entitled  to
exchange their Common Stock for securities or other  property  deliverable  upon
such  reclassification,   consolidation,   merger,  other  business  combination
transaction,  sale,  transfer,  dissolution,  liquidation or winding-up shall be
determined.  Such  notice  shall not  include  any  information  which  would be
material  non-public  information for purposes of the 1934 Act.  Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such dividend,  distribution,  reclassification,  consolidation,  merger,  sale,
transfer, dissolution, liquidation or winding-up. In the case of any such action
of which the Company gives such notice to the Holder or is required to give such
notice to the Holder,  the Holder shall be entitled to give a subscription  form
to  exercise  this  Warrant  in  whole  or in  part  that is  contingent  on the
completion of such action.

                  14.  RESERVATION  OF STOCK,  ETC.,  ISSUABLE  ON  EXERCISE  OF
WARRANTS.  The Company will at all times  reserve and keep  available out of its
authorized  but  unissued  shares of  capital  stock,  solely for  issuance  and
delivery  on the  exercise of this  Warrant,  a  sufficient  number of shares of
Common Stock (or Other  Securities)  to effect the full exercise of this Warrant
and the exercise,  conversion or exchange of all other Common Stock  Equivalents
from  time to time  outstanding  (or Other  Securities),  and if at any time the
number of authorized but unissued  shares of Common Stock (or Other  Securities)
shall not be sufficient  to effect such  exercise,  conversion or exchange,  the
Company  shall take such action as may be necessary  to increase its  authorized
but  unissued  shares of Common  Stock (or Other  Securities)  to such number as
shall be sufficient for such purposes.

                  15.  TRANSFER  OF  WARRANT.  This  Warrant  shall inure to the
benefit  of the  successors  to and  assigns of the  Holder.  The Holder may not
assign or transfer this Warrant to a Person who is a business  competitor of the
Company  without the  Company's  prior  written  consent,  which the Company may
withhold in its sole discretion. This Warrant and all rights hereunder, in whole
or in part, are  registrable at the office or agency of the Company  referred to
below by the Holder in Person or by his duly authorized attorney, upon surrender
of this Warrant properly endorsed  accompanied by an assignment form in the form
attached  to this  Warrant,  or  other  customary  form,  duly  executed  by the
transferring Holder.

                                      -15-
<PAGE>

                  16. REGISTER OF WARRANTS.  The Company shall maintain,  at the
principal  office of the Company (or such other  office as it may  designate  by
notice to the Holder), a register in which the Company shall record the name and
address of the Person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant.  The Company
shall  be  entitled  to treat  the  Person  in whose  name  this  Warrant  is so
registered as the sole and absolute owner of this Warrant for all purposes.

                  17. EXCHANGE OF WARRANT.  This Warrant is  exchangeable,  upon
the  surrender  hereof  by the  Holder at the  office  or agency of the  Company
referred  to in  Section  15,  for  one or  more  new  Warrants  of  like  tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares of Common Stock which may be subscribed  for and purchased  hereunder,
each of such new Warrants to represent  the right to subscribe  for and purchase
such number of shares as shall be  designated  by the Holder at the time of such
surrender.

                  18.  REPLACEMENT  OF  WARRANT.  On receipt  by the  Company of
evidence reasonably  satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and (a) in the case of loss,  theft or
destruction, of indemnity from the Holder reasonably satisfactory in form to the
Company (and without the requirement to post any bond or other security), or (b)
in the case of mutilation,  upon surrender and cancellation of this Warrant, the
Company  will  execute  and  deliver to the  Holder a new  Warrant of like tenor
without charge to the Holder.

                  19. WARRANT  AGENT.  The Company may, by written notice to the
Holder,  appoint the transfer  agent and  registrar  for the Common Stock as the
Company's agent for the purpose of issuing Common Stock (or Other Securities) on
the  exercise of this  Warrant  pursuant  to Section 2, and the Company  may, by
written  notice to the Holder,  appoint an agent  having an office in the United
States of America for the purpose of exchanging this Warrant pursuant to Section
17, and replacing this Warrant  pursuant to Section 18, or any of the foregoing,
and  thereafter any such exchange or  replacement,  as the case may be, shall be
made at such office by such agent.

                  20. REMEDIES.  The Company stipulates that the remedies at law
of the Holder in the event of any default or  threatened  default by the Company
in the  performance  of or compliance  with any of the terms of this Warrant are
not and will not be adequate,  and that such terms may be specifically  enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.

                  21. NO RIGHTS OR LIABILITIES  AS A  STOCKHOLDER.  This Warrant
shall  not  entitle  the  Holder  to any  voting  rights  or other  rights  as a
stockholder of the Company. Nothing contained in this Warrant shall be construed
as  conferring  upon the  Holder  the right to vote or to  consent or to receive
notice as a  stockholder  of the Company on any  matters or with  respect to any
rights  whatsoever  as a  stockholder  of the Company.  No dividends or interest

                                      -16-
<PAGE>

shall  be  payable  or  accrued  in  respect  of this  Warrant  or the  interest
represented  hereby  or the  Common  Stock  (or  Other  Securities)  purchasable
hereunder  until,  and only to the extent  that,  this  Warrant  shall have been
exercised in accordance with its terms.

                  22. NOTICES,  ETC. All notices and other  communications  from
the  Company to the Holder  shall be in writing  and  delivered  personally,  by
confirmed  facsimile,  by a nationally  recognized  overnight courier service or
mailed  by first  class  certified  mail,  postage  prepaid,  at such  facsimile
telephone number or address as may have been furnished to the Company in writing
by the Holder or at such facsimile telephone number or the address shown for the
Holder on the register of Warrants referred to in Section 16.

                  23.  TRANSFER  RESTRICTIONS.  This Warrant has not been and is
not  being  registered  under  the  provisions  of the  1933  Act  or any  state
securities laws and this Warrant may not be transferred  prior to the end of the
holding  period  applicable  to sales  hereof  under Rule 144(k)  unless (1) the
transferee  is an  "accredited  investor"  (as defined in Regulation D under the
1933 Act) or a QIB in a transfer that meets the  requirements  of Rule 144A, and
(2) the  Holder  shall have  delivered  to the  Company  an opinion of  counsel,
reasonably  satisfactory  in form,  scope and  substance to the Company,  to the
effect that this Warrant may be sold or transferred  without  registration under
the 1933 Act. Prior to any such transfer, such transferee shall have represented
in writing to the Company that such  transferee  has requested and received from
the Company all information  relating to the business,  properties,  operations,
condition  (financial  or other),  results of  operations  or  prospects  of the
Company deemed  relevant by such  transferee;  and that such transferee has been
afforded  the  opportunity  to ask  questions  of  the  Company  concerning  the
foregoing  and has had the  opportunity  to obtain and  review the  Registration
Statement and the prospectus related thereto, each as amended or supplemented to
the date of transfer to such transferee,  and the reports and other  information
concerning the Company which at the time of such transfer have been filed by the
Company  with the SEC  pursuant  to the 1934 Act and which are  incorporated  by
reference in such  prospectus as of the date of such transfer.  If such transfer
is  intended  to assign the rights and  obligations  of the Holder the  Purchase
Agreement and the Registration  Rights Agreement,  such transfer shall otherwise
be made in compliance with the applicable  provisions of the Purchase  Agreement
and the Registration Rights Agreement.

                  24. RULE 144A INFORMATION REQUIREMENT. Within the period prior
to the  expiration of the holding  period  applicable to sales hereof under Rule
144(k) under the 1933 Act (or any successor  provision),  the Company  covenants
and  agrees  that it shall,  during  any  period in which it is not  subject  to
Section 13 or 15(d)  under the 1934 Act,  make  available  to the Holder and the
holder of any shares of Common Stock issued upon  exercise of this Warrant which
continue to be Restricted Securities in connection with any sale thereof and any
prospective  purchaser of this Warrant from the Holder, the information required
pursuant  to Rule  144A(d)(4)  under the 1933 Act upon the request of the Holder
and it will take such further action as the Holder may reasonably  request,  all
to the  extent  required  from  time to time to enable  the  Holder to sell this
Warrant  without  registration  under the 1933 Act within the  limitation of the

                                      -17-
<PAGE>

exemption  provided by Rule 144A, as Rule 144A may be amended from time to time.
Upon the request of the Holder, the Company will deliver to the Holder a written
statement as to whether it has complied with such requirements.

                  25.  LEGEND.  The  provisions  of Section 6.12 of the Purchase
Agreement  and the related  definitions  of  capitalized  terms used therein and
defined in the Purchase Agreement are by this reference  incorporated  herein as
if set forth in full at this place.

                  26. AMENDMENT;  WAIVER.  This Warrant and any terms hereof may
be changed,  waived,  discharged or terminated  only by an instrument in writing
signed by the party against which enforcement of such change, waiver,  discharge
or termination is sought.

                  27.  MISCELLANEOUS.   This  Warrant  shall  be  construed  and
enforced in  accordance  with and governed by the internal  laws of the State of
Nevada.  The  Company  hereby  agrees that all  actions or  proceedings  arising
directly  or  indirectly  from or in  connection  with  this  Warrant  shall  be
litigated only in the United States District Court for the Northern  District of
Texas located in Dallas County,  Dallas, Texas. The Company consents and submits
to the  jurisdiction  and venue of the  foregoing  court and  consents  that any
process  or  notice  of motion  or other  application  to said  court or a judge
thereof  may be served  inside  or  outside  the State of Texas or the  Northern
District  of Texas (but such  consent  shall not be deemed a general  consent to
jurisdiction  and service  for any third  parties) by  registered  mail,  return
receipt  requested,  directed  to the  Company  at its  address  provided  in or
pursuant to the Purchase Agreement (and service so made shall be deemed complete
three (3) days  after  the same has been  posted as  aforesaid)  or by  personal
service or in such other  manner as may be  permissible  under the rules of said
court.  The Company  hereby waives any right to a jury trial in connection  with
any litigation pursuant to this Warrant.  The headings,  captions and footers in
this  Warrant  are for  purposes  of  reference  only,  and  shall  not limit or
otherwise affect any of the terms hereof. The invalidity or  unenforceability of
any provision  hereof shall in no way affect the validity or  enforceability  of
any other provision.

                  28.  ATTORNEYS' FEES. In any litigation,  arbitration or court
proceeding  between the Company and Holder relating hereto, the prevailing party
shall be entitled to attorneys'  fees and expenses and all costs of  proceedings
incurred in enforcing this Warrant.

                            [Signature Page Follows]

                                      -18-
<PAGE>

                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
duly executed on its behalf by one of its officers thereunto duly authorized.

Dated:  October 16, 2003                      KNIGHTSBRIDGE FINE WINES, INC.

                                              By: /s/ Joel Shapiro
                                                  ----------------
                                              Name:   Joel Shapiro
                                              Title:  President & CEO

                                      -19-
<PAGE>

                                   ASSIGNMENT

                  For value __________ hereby sell(s), assign(s) and transfer(s)
unto _________  (Please insert social security or other Taxpayer  Identification
Number of assignee:  _____________ ) the attached original,  executed Warrant to
purchase  _____________ share of Common Stock of Knightsbridge Fine Wines, Inc.,
a Nevada  corporation (the "Company"),  and hereby  irrevocably  constitutes and
appoints  ___________  attorney  to  transfer  the  Warrant  on the books of the
Company, with full power of substitution in the premises.

         In connection  with any transfer of the Warrant within the period prior
to the expiration of the holding  period  applicable to sales thereof under Rule
144(k) under the 1933 Act (or any successor  provision) (other than any transfer
pursuant to a registration  statement that has been declared effective under the
1933 Act), the undersigned confirms that such Warrant is being transferred:

         [   ]     To the Company or a subsidiary thereof; or

         [   ]     To a QIB pursuant to and in compliance with Rule 144A; or

         [   ]     To an  "accredited  investor"  (as defined in  Regulation D
                   under the 1933 Act) pursuant to and in compliance with the
                   1933 Act; or

         [   ]     Pursuant to and in compliance with Rule 144 under the 1933
                   Act;

and unless the box below is  checked,  the  undersigned  confirms  that,  to the
knowledge  of the  undersigned,  such  Warrant  is not being  transferred  to an
"affiliate" (as defined in Rule 144 under the 1933 Act) of the Company.

         [   ]     The transferee is an affiliate of the Company.

                  Capitalized  terms used in this  Assignment and not defined in
this Assignment shall have the respective meanings provided in the Warrant.

Dated:                              NAME:
       ---------------                    -----------------------------

                                          -----------------------------
                                                  Signature(s)

<PAGE>

                                                                       EXHIBIT 1

                              FORM OF SUBSCRIPTION

                         KNIGHTSBRIDGE FINE WINES, INC.

                   (To be signed only on exercise of Warrant)

TO:      Knightsbridge Fine Wines, Inc.
         65 Shrewsbury Road
         Livingston, New Jersey  07039

         Attention:  Chief Executive Officer

         Facsimile No.: (973) 597-1972

         1. The undersigned  Holder of the attached  original,  executed Warrant
hereby elects to exercise its purchase  right under such Warrant with respect to
shares (the "Exercise  Shares") of Common Stock,  as defined in the Warrant,  of
Knightsbridge Fine Wines, Inc., a Nevada corporation (the "Company").

         2. The undersigned Holder (check one):

         |_|      (a) elects to pay the Aggregate Purchase Price for such shares
                  of Common Stock (i) in lawful money of the United States or by
                  the  enclosed  certified  or  official  bank check  payable in
                  United  States  dollars  to the  order of the  Company  in the
                  amount of $ , or (ii) by wire  transfer of United States funds
                  to the  account  of the  Company  in the  amount  of $ , which
                  transfer  has been  made  before  or  simultaneously  with the
                  delivery  of  this  Form  of  Subscription   pursuant  to  the
                  instructions of the Company;

                  or

         |_|      (b) elects to receive  shares of Common  Stock  having a value
                  equal to the value of the  Warrant  calculated  in  accordance
                  with Section 2(b) of the Warrant.

         3. Please issue a stock  certificate or certificates  representing  the
appropriate  number of shares of Common Stock in the name of the  undersigned or
in such other name(s) as is specified below:

         Name:
                  ------------------------------------

         Address:

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

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

                                      1-1
<PAGE>

         Social Security or Tax Identification Number (if any):

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

Dated:
        ----------------               -----------------------------------------
                                       (Signature must conform to name of Holder
                                        as specified on the face of the Warrant)

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

                                       -----------------------------------------
                                                     (Address)

                                      1-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]