Document:

Exhibit 10.3

                                Form of Guaranty

                                                               November 11, 2004

ROSENTHAL & ROSENTHAL, INC.
1370 BROADWAY
NEW YORK, NY  10018

In order to induce you to enter into a Financing Agreement, with Alliance
Distributors Holding, Inc. (hereinafter referred to as the "Client"), effective
as of November 11, 2004 ( the "Financing Agreement") and/or to continue under or
to refrain at this time from terminating your present arrangement with the
Client, and in consideration of your so doing, the undersigned and each of them
if more than one hereby represent and warrant to you that each and every
receivable referred to or defined in said Financing Agreement and in which the
Client has granted you a security interest will represent a bona fide existing
obligation of a customer of the Client and owing to the Client and arising out
of and acquired by the Client in the ordinary course of its business and which
will be due and owing to the Client without any defense, offset or counterclaim
that was in existence and, after due inquiry, known to the Client prior to the
shipment of goods or rendering of service giving rise to the receivable and
without any dispute, whether as to price, terms, quality or otherwise, arising
from defects in goods, or non-compliance with purchase orders, that was known to
the Client prior the shipment of goods or rendering of services giving rise to
the receivable; that all remittances received by the Client on account of
receivables will be held by the Client as your property; and that the Client
will immediately deliver, to you, the identical checks, monies or other forms of
payment received and that Client will not breach any warranty, covenant or
representation contained Section 6.8 of the Financing Agreement other than a
breach arising solely from the assertion by a customer obligated on a receivable
of a defense, offset or counterclaim that was not (i) in existence or (ii) after
due inquiry, known to the Client, prior to the shipment of the goods or
rendering of service giving rise to the receivable.

The undersigned and each of them further represent and warrant that all goods,
merchandise and warehouse receipts, if any, from time to time consigned to or
pledged with you by the Client shall be properly and correctly designated as to
description, quantity, quality and unit value in each schedule, warehouse
receipt and consignment relating to the same tendered to you by the client; and
that the same shall actually be, at the time of such tender, at the location
described in such schedules and consignments.

The undersigned and each of them hereby waive notice of acceptance hereof and of
all notices of any kind to which they may be entitled and further waive notice
of and hereby consent to any agreement or arrangements whatever with the client
or anyone else including, without being limited to, agreements and arrangements
for payment, extension, subordination, composition, arrangement, compromise,
discharge or release of the whole or any part of any indebtedness or for the
change or surrender of any and all such goods, merchandise and warehouse
receipts, and same shall in no way impair the undersigned's liability hereunder.
The undersigned and each of them waive the benefits of any provision of the
Bankruptcy Code and of any similar or other legislation as now or hereafter
enacted, amended or added to, which may extend the time for payment of, or
impair any of the obligations of the undersigned hereunder. This agreement shall
continue in full force and effect until actual receipt by you from the
undersigned of written notice of cancellation, but such cancellation shall be
applicable only to transactions having their inception thereafter and in no way
shall affect the continuing liability of those of the undersigned who do not
give you such notice.

The undersigned will, at all reasonable times, and at your request, assist you
in the collection and liquidation of the receivables.

The undersigned further agrees that in the event of any breach of the warranties
and representations herein contained, the undersigned shall be jointly and
severally liable to Rosenthal for any loss or damage suffered by Rosenthal as a
result of such breach, and for costs, expense and reasonable attorney's fees.
<PAGE>

This agreement shall be binding upon the heirs, personal representatives,
successors and assigns of each of the undersigned and the benefits thereof shall
extend to and include the successors and assigns of Rosenthal. The death of any
of the undersigned shall not release his estate from any liability accruing
prior to death. This agreement shall be construed and governed by the laws of
the state of New York. Words used herein shall have the same meaning as the
words used in said Financing Agreement and any supplements and/or amendments
thereto.

This agreement supersedes the Guaranties executed in your favor by the
undersigned Jay Gelman and Andre Muller, dated December 9, 2003.

DATED: November 15, 2004

WITNESS:
        -------------------------------     -----------------------------------
                                            Jay Gelman

                                            Address:
                                                    ----------------------------
                                            SS#:
                                                --------------------------------

WITNESS:
        -------------------------------     -----------------------------------
                                            Andre Muller

                                            Address:
                                                    ----------------------------
                                            SS#:
                                                --------------------------------Exhibit 10.4

                          REGISTRATION RIGHTS AGREEMENT

            This  REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement") is entered
into as of November 11, 2004, by and between Essential  Reality,  Inc., a Nevada
corporation  (the  "Company"),  and  Rosenthal  &  Rosenthal,  Inc.,  a New York
corporation ("Rosenthal").

                                    RECITALS

            WHEREAS,  on the date  hereof,  the Company is issuing a Warrant (as
hereinafter defined) to purchase shares of its common stock, par value $.001 per
share (the "Common Stock"), to Rosenthal; and

            WHEREAS, in connection with the issuance of the Warrant, the Company
has agreed,  on the terms and conditions set forth herein, to register shares of
Common Stock as set forth below.

            NOW THEREFORE,  in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

            SECTION 1.  Definitions.  As used in this  Agreement,  the following
terms shall have the following meanings:

            "Affiliate"  means, with respect to any specified person,  any other
person  directly or indirectly  controlling  or controlled by or under direct or
indirect  common  control with such specified  person.  For the purposes of this
definition, "control," when used with respect to any specified person, means the
power to  direct  the  management  and  policies  of such  person,  directly  or
indirectly,  whether through the ownership of voting securities,  by contract or
otherwise;   and  the  terms   "controlling"   and  "controlled"  have  meanings
correlative to the foregoing.

            "Agreement" has the meaning set forth in the first paragraph of this
Agreement.

            "Business  Day" means any day that is not a Saturday  or Sunday or a
day on which banks are  required or  permitted  to be closed in the State of New
York.

            "Common  Stock" has the  meaning  set forth in the  Recitals to this
Agreement.

            "Company"  has the meaning set forth in the first  paragraph of this
Agreement.

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

            "Hold Back Period" has the meaning set forth in Section 4 hereof.
<PAGE>

            "Interruption  Period"  has the  meaning  set forth in Section  5(k)
hereof.

            "person" means any  individual,  sole  proprietorship,  partnership,
joint  venture,  trust,  incorporated  organization,  association,  corporation,
institution,  public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise,  including, without limitation, any
instrumentality, division, agency, body or department thereof).

            "Piggyback  Registration"  has the meaning set forth in Section 3(a)
hereof.

            "Prospectus"  means  the  prospectus  included  in any  Registration
Statement (including a prospectus that discloses information  previously omitted
from a  prospectus  filed  as part of an  effective  registration  statement  in
reliance  upon  Rule  430A),  as  amended  or  supplemented  by  any  prospectus
supplement,  with  respect to the terms of the  offering  of any  portion of the
Registrable  Shares  covered  by  such  Registration  Statement  and  all  other
amendments and  supplements  to any such  prospectus,  including  post-effective
amendments,  and  all  material  incorporated  by  reference  or  deemed  to  be
incorporated by reference in such prospectus.

            "Registrable  Shares"  means (i) shares of Common Stock  issuable or
issued upon  exercise of the Warrant and (ii) any shares of Common  Stock issued
or issuable with respect to the shares of Common Stock referred to in clause (i)
above upon any stock split, stock dividend,  recapitalization  or similar event;
provided,  however,  that  shares  of Common  Stock  shall  only be  registrable
pursuant to this  Agreement  if and so long as they have not been (i) sold to or
through a broker or dealer or underwriter in a public  distribution  or a public
securities  transaction,   or  (ii)  sold  in  a  transaction  exempt  from  the
registration  and prospectus  delivery  requirements of the Securities Act under
Section 4(1) thereof so that all transfer  restrictions and restrictive  legends
with respect to such shares of Common Stock are removed upon the consummation of
such sale and the Company and the seller and  purchaser of such shares of Common
Stock shall have  received an opinion of counsel for the seller,  which shall be
in form and content  reasonably  satisfactory  to the Company and the seller and
purchaser and their respective counsel, to the effect that such shares of Common
Stock in the hands of the purchaser are freely transferable  without restriction
or registration under the Securities Act in any public or private transaction.

            "Registration"  means  registration  under the  Securities Act of an
offering of Registrable Shares pursuant to a Piggyback Registration.

            "Registration  Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the  provisions  of this  Agreement,  including the related  Prospectus,  all
amendments and supplements to such  registration  statement,  including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference  or  deemed  to be  incorporated  by  reference  in such  registration
statement.

            "Rosenthal" has the meaning set forth in the first paragraph of this
Agreement.

            "SEC" means the Securities and Exchange Commission.

                                       2
<PAGE>

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

            "underwritten   registration  or  underwritten   offering"  means  a
registration  under the  Securities  Act in which  securities of the Company are
sold to an underwriter for reoffering to the public.

            "Warrant"  means the warrant to purchase  Common Stock,  dated as of
the date hereof, issued by the Company to Rosenthal.

            [SECTION 2. INTENTIONALLY OMITTED]

            SECTION 3. Piggyback Registration. (a) Right to Piggyback. If at any
time the Company proposes to file a registration  statement under the Securities
Act with  respect to a public  offering  of  securities  of the same type as the
Registrable Shares for its own account (other than a registration  statement (i)
on Form S-8 or any successor form thereto,  (ii) filed solely in connection with
a dividend  reinvestment  plan or employee  benefit  plan  covering  officers or
directors of the Company or its Affiliates or (iii) on Form S-4 or any successor
form thereto,  in connection  with a merger,  acquisition  or similar  corporate
transaction)  or for the account of any holder of securities of the same type as
the  Registrable  Shares,  then the Company  shall give  written  notice of such
proposed  filing to  Rosenthal  at least 30 days before the  anticipated  filing
date.  Such notice shall offer Rosenthal the opportunity to register such amount
of Registrable Shares as it may request (a "Piggyback Registration"). Subject to
Section  3(b)  hereof,   the  Company  shall  include  in  each  such  Piggyback
Registration  all  Registrable  Shares  with  respect to which the  Company  has
received written requests for inclusion  therein within 20 days after notice has
been given to  Rosenthal.  Rosenthal  shall be  permitted to withdraw all or any
portion of its  Registrable  Shares  from a Piggyback  Registration  at any time
prior to the effective date of such Piggyback Registration.

            (b) Priority on Piggyback  Registrations.  The Company  shall permit
Rosenthal  to  include  all  such  Registrable  Shares  on the  same  terms  and
conditions as any similar  securities,  if any, of the Company included therein.
Notwithstanding  the  foregoing,  if the Company or the managing  underwriter or
underwriters participating in such offering advise Rosenthal in writing that the
total  amount  of  securities   requested  to  be  included  in  such  Piggyback
Registration  exceeds  the  amount  which can be sold in (or during the time of)
such  offering  without  delaying or  jeopardizing  the success of the  offering
(including the price per share of the securities to be sold), then the amount of
securities  to be offered  for the  account of  Rosenthal  and other  holders of
securities who have piggyback  registration rights with respect thereto shall be
reduced (to zero if necessary)  pro rata on the basis of the number or amount of
Common Stock (or the equivalent) requested to be registered by Rosenthal or each
such holder participating in such offering.

            SECTION 4. Holdback  Agreement.  (a) If (i) the Company shall file a
registration  statement  (other  than in  connection  with the  registration  of
securities  issuable  pursuant to an employee  stock option,  stock  purchase or
similar plan or pursuant to a merger,  exchange  offer or a  transaction  of the
type  specified  in Rule 145(a)  under the  Securities  Act) with respect to the
Common  Stock  or  similar   securities  or  securities   convertible  into,  or
exchangeable or exercisable  for, such securities and (ii) with reasonable prior
notice,  the Company (in the case of a  nonunderwritten  public  offering by the

                                       3
<PAGE>

Company pursuant to such  registration  statement)  advises Rosenthal in writing
that a public  sale or  distribution  of  Registrable  Shares  would  materially
adversely affect such offering,  or the managing underwriter or underwriters (in
the case of an  underwritten  public  offering by the  Company  pursuant to such
registration  statement)  advises  the  Company  in  writing  (in which case the
Company shall notify Rosenthal with a copy of such underwriter's  notice) that a
public sale or distribution  of Registrable  Shares would  materially  adversely
impact such offering,  then Rosenthal shall, to the extent not inconsistent with
applicable  law,  refrain  from  effecting  any public sale or  distribution  of
Registrable  Shares during the ten (10) days prior to the effective date of such
registration  statement  and until the earliest of (A) the  abandonment  of such
offering,  (B) 180 days after the effective date of such registration  statement
(in the  case of an  underwritten  offering)  and  (C) if  such  offering  is an
underwritten  offering,  the  termination in whole or in part of any "hold back"
period  obtained by the  underwriter or  underwriters  in such offering from the
Company in  connection  therewith  (each  such  period,  a "Hold Back  Period");
provided,  that Rosenthal  shall be under no such  obligation  unless each other
beneficial  owner (as defined in Rule 13d-3 under the Exchange  Act) of at least
5% of the Company's Common Stock and each director and executive  officer of the
Company  also  agrees  to  refrain  from  effecting  any  such  public  sale  or
distribution.

            (b) The Company shall not (i) offer, pledge, sell, contract to sell,
sell any option or  contract  to  purchase,  purchase  any option or contract to
sell,  grant any option,  right or warrant to purchase or otherwise  transfer or
dispose  of,  directly  or  indirectly,  any  shares of Common  Stock or similar
securities or securities  convertible  into, or exchangeable or exercisable for,
such securities or (ii) enter into any swap or other  arrangement that transfers
all or a portion of the economic  consequences  associates with the ownership of
any Common  Stock or similar  securities  or  securities  convertible  into,  or
exchangeable or exercisable  for, such securities  (regardless of whether any of
the  transactions  described  in  clause  (i) or  (ii) is to be  settled  by the
delivery of Common Stock or other securities, in cash or otherwise) for a period
of 180 days after the  effective  date of any Demand  Registration  without  the
prior written consent of Rosenthal.  Notwithstanding the foregoing,  during such
period (x) the Company may grant stock options  pursuant to the Company's  stock
option  plans and (y) the  Company  may issue  shares of Common  Stock  upon the
exercise  of an option or warrant or the  conversion  of a security  outstanding
prior to such effective date or issued pursuant to such plans.

            SECTION  5.   Registration   Procedures.   In  connection  with  the
registration  obligations  of the  Company  pursuant to and in  accordance  with
Section 3 hereof (and  subject to Section 3 hereof),  the Company  shall use its
reasonable  best efforts to effect such  registration to permit the sale of such
Registrable  Shares  in  accordance  with the  intended  method  or  methods  of
disposition  thereof, and pursuant thereto the Company shall as expeditiously as
possible (but subject to Section 3 hereof):

            (a) prepare and file with the SEC a  Registration  Statement for the
sale of the Registrable  Shares on any form for which the Company then qualifies
or which  counsel for the Company  shall deem  appropriate  in  accordance  with
Rosenthal's  intended  method or methods of  distribution  thereof,  and use its
reasonable best efforts to cause such Registration Statement to become effective
and remain effective as provided herein;

                                       4
<PAGE>

            (b)  prepare  and  file  with  the SEC  such  amendments  (including
post-effective  amendments) to such Registration Statement, and such supplements
to the  related  Prospectus,  as  may  be  required  by  the  applicable  rules,
regulations  or  instructions  under the  Securities  Act during the  applicable
period in  accordance  with the  intended  methods of  disposition  specified by
Rosenthal of the Registrable Shares covered by such Registration Statement, make
generally  available  earnings  statements  satisfying the provisions of Section
11(a) of the  Securities  Act (provided that the Company shall be deemed to have
complied with this clause if it has complied with Rule 158 under the  Securities
Act), and cause the related  Prospectus as so  supplemented to be filed pursuant
to Rule 424 under the Securities Act;  provided,  however,  that before filing a
Registration  Statement or Prospectus,  or any amendments or supplements thereto
(other than  reports  required to be filed by it under the  Exchange  Act),  the
Company  shall  furnish to  Rosenthal  and its counsel  for review and  comment,
copies of all documents required to be filed;

            (c) notify Rosenthal promptly and (if requested) confirm such notice
in writing,  (i) when a  Registration  Statement or Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to such
Registration Statement or any post-effective amendment, when the same has become
effective,  (ii) of any request by the SEC for amendments or supplements to such
Registration  Statement or the related Prospectus or for additional  information
regarding  Rosenthal,  (iii)  of the  issuance  by the  SEC  of any  stop  order
suspending  the  effectiveness  of such  Registration  Statement  or the sale of
Registrable  Shares  thereunder or the  initiation of any  proceedings  for that
purpose,  (iv) of the receipt by the Company of any notification with respect to
the suspension of the  qualification  or exemption from  qualification of any of
the  Registrable  Shares  for  sale in any  jurisdiction  or the  initiation  or
threatening  of any  proceeding for such purpose and (v) of the happening of any
event that  requires the making of any changes in such  Registration  Statement,
Prospectus or documents  incorporated  or deemed to be  incorporated  therein by
reference so that they will not contain any untrue  statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading;

            (d) use its reasonable  best efforts to obtain the withdrawal of any
order  suspending  the  effectiveness  of such  Registration  Statement,  or the
lifting of any suspension of the  qualification or exemption from  qualification
of any Registrable Shares for sale in any jurisdiction in the United States;

            (e) furnish to  Rosenthal,  counsel for  Rosenthal and each managing
underwriter,  if any,  without charge,  one conformed copy of such  Registration
Statement,  as  declared  effective  by  the  SEC,  and of  each  post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports  incorporated or deemed to be  incorporated  therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus,  any amended preliminary  prospectus,  each final Prospectus and any
post-effective  amendment or supplement  thereto,  as Rosenthal  may  reasonably
request in order to facilitate  the  disposition  of the  Registrable  Shares of
Rosenthal  covered  by  such  Registration  Statement  in  conformity  with  the
requirements of the Securities Act;

            (f) prior to any public  offering of  Registrable  Shares covered by
such  Registration  Statement,  use its  reasonable  best efforts to register or
qualify such Registrable  Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as Rosenthal shall reasonably request in writing;
provided,  however,  that the  Company  shall in no event be required to qualify
generally  to do  business  as a  foreign  corporation  or as a  dealer  in  any
jurisdiction  where it is not at the time so  qualified  or to execute or file a
general consent to service of process in any such jurisdiction  where it has not
theretofore  done so or to take any  action  that  would  subject  it to general
service of process or  taxation  in any such  jurisdiction  where it is not then
subject;

                                       5
<PAGE>

            (g) upon the  occurrence  of any  event  contemplated  by  paragraph
5(c)(v)  above,  prepare  a  supplement  or  post-effective  amendment  to  such
Registration Statement or the related Prospectus or any document incorporated or
deemed to be  incorporated  therein  by  reference  and file any other  required
document so that,  as thereafter  delivered to the purchaser of the  Registrable
Shares  being  sold  thereunder,  such  Prospectus  will not  contain  an untrue
statement of a material  fact or omit to state any material  fact required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances under which they were made, not misleading;

            (h) use its best efforts to cause all Registrable  Shares covered by
such Registration Statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed or quoted and, if
listed on the Nasdaq Stock Market, use its best efforts to secure designation of
all such Registrable  Shares covered by such  registration  statement as "NASDAQ
Securities"  within the meaning of Rule 11Aa2-1  promulgated  under the Exchange
Act or,  failing  that,  to secure  Nasdaq Stock Market  authorization  for such
Registrable  Shares and,  without  limiting the generality of the foregoing,  to
arrange for at least two market  makers to register as such with respect to such
Registrable  Shares with the National  Association of Securities  Dealers,  Inc.
(the "NASD");

            (i) on or before the effective date of such Registration  Statement,
provide  the  transfer  agent of the  Company  for the  Registrable  Shares with
printed  certificates  for the Registrable  Shares covered by such  Registration
Statement,  which are in a form eligible for deposit with The  Depository  Trust
Company;

            (j) make  available for  inspection by  Rosenthal,  any  underwriter
participating in any offering pursuant to such Registration  Statement,  and any
attorney,  accountant  or other agent  retained by Rosenthal or any  underwriter
(collectively,  the  "Inspectors"),  all  financial  and other records and other
information,  pertinent corporate documents and properties of any of the Company
and its subsidiaries and affiliates  (collectively,  the "Records"), as shall be
reasonably   necessary   to  enable  them  to  exercise   their  due   diligence
responsibilities;   provided,   however,  that  the  Records  that  the  Company
determines,  in good  faith,  to be  confidential  and  which  it  notifies  the
Inspectors in writing are  confidential  shall not be disclosed to any Inspector
unless such Inspector signs a confidentiality  agreement reasonably satisfactory
to the  Company  (which  shall  permit the  disclosure  of such  Records in such
Registration  Statement  or the  related  Prospectus  if  necessary  to avoid or
correct a material  misstatement in or material  omission from such Registration
Statement  or  Prospectus)  or either  (i) the  disclosure  of such  Records  is
necessary to avoid or correct a  misstatement  or omission in such  Registration
Statement or (ii) the release of such Records is ordered  pursuant to a subpoena
or  other  order  from a court  of  competent  jurisdiction;  provided  further,
however,  that (A) any decision regarding the disclosure of information pursuant
to  subclause  (i) shall be made only after  consultation  with  counsel for the
applicable  Inspectors  and the Company  and (B) with  respect to any release of
Records  pursuant to subclause (ii),  Rosenthal  agrees that it shall,  promptly
after  learning  that  disclosure  of such  Records is sought in a court  having
jurisdiction,  give notice to the Company so that the Company,  at the Company's
expense, may undertake appropriate action to prevent disclosure of such Records;
and

                                       6
<PAGE>

            (k) if such offering is an  underwritten  offering,  enter into such
agreements (including an underwriting  agreement in form, scope and substance as
is customary in underwritten  offerings) and take all such other appropriate and
reasonable actions requested by Rosenthal and the managing underwriters in order
to expedite or facilitate the  disposition of such  Registrable  Shares,  and in
such  connection,  (i) use its  reasonable  best  efforts to obtain  opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope  and  substance)   shall  be  reasonably   satisfactory  to  the  managing
underwriters  and counsel to Rosenthal),  addressed to the Rosenthal and each of
the underwriters as to the matters  customarily covered in opinions requested in
underwritten  offerings and such other matters as may be reasonably requested by
such  counsel and  underwriters,  (ii) use  commercially  reasonable  efforts to
obtain "cold comfort" letters and updates thereof from the independent certified
public  accountants  of the Company (and, if  necessary,  any other  independent
certified public accountants of any subsidiary of the Company or of any business
acquired by the Company for which  financial  statements and financial data are,
or are required to be,  included in the  Registration  Statement),  addressed to
Rosenthal  (unless such accountants  shall be prohibited from so addressing such
letters by applicable  standards of the accounting  profession)  and each of the
underwriters,  such letters to be in customary form and covering  matters of the
type   customarily   covered  in  "cold  comfort"  letters  in  connection  with
underwritten  offerings and (iii) if requested and if an underwriting  agreement
is entered into, provide  indemnification  provisions and procedures  reasonably
requested by such  underwriters.  The above shall be done at each closing  under
such  underwriting  or  similar  agreement,  or as and to  the  extent  required
thereunder.  The Company  may  require  Rosenthal  to furnish  such  information
regarding  Rosenthal and  Rosenthal's  intended  method of  disposition  of such
Registrable Shares as it may from time to time reasonably request in writing. If
any such information is not furnished  within a reasonable  period of time after
receipt of such  request,  the Company may exclude the  Rosenthal's  Registrable
Shares from such Registration Statement.  Rosenthal agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind  described
in Section  5(c)(ii),  5(c)(iii),  5(c)(iv) or 5(c)(v)  hereof,  Rosenthal shall
forthwith  discontinue  disposition  of any  Registrable  Shares covered by such
Registration  Statement or the related Prospectus until receipt of the copies of
the supplemented or amended  Prospectus  contemplated by Section 5(g) hereof, or
until  Rosenthal  is  advised  in  writing  by the  Company  that the use of the
applicable  Prospectus may be resumed, and has received copies of any amended or
supplemented  Prospectus  or any  additional or  supplemental  filings which are
incorporated,  or deemed to be  incorporated,  by reference  in such  Prospectus
(such period during which  disposition is  discontinued  being an  "Interruption
Period")  and, if  requested  by the  Company,  Rosenthal  shall  deliver to the
Company (at the expense of the Company) all copies then in its possession, other
than  permanent file copies then in  Rosenthal's  possession,  of the Prospectus
covering  such  Registrable  Shares  at the  time of  receipt  of such  request.
Rosenthal  further  agrees not to utilize any material other than the applicable
current preliminary  prospectus or Prospectus in connection with the offering of
such Registrable Shares.

            SECTION 6.  Registration  Expenses.  Whether or not any Registration
Statement is filed or becomes  effective,  the Company shall pay all costs, fees
and expenses  incident to the Company's  performance of or compliance  with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,

                                       7
<PAGE>

including reasonable fees and disbursements of counsel in connection  therewith,
(iii)  printing  expenses  (including  expenses  of  printing  certificates  for
Registrable Shares and of printing  prospectuses if the printing of prospectuses
is requested by Rosenthal or the managing underwriter,  if any), (iv) messenger,
telephone and delivery  expenses,  (v) fees and disbursements of counsel for the
Company,  (vi)  fees  and  disbursements  of all  independent  certified  public
accountants of the Company  (including  expenses of any "cold  comfort"  letters
required in connection  with this  Agreement) and all other persons  retained by
the  Company in  connection  with such  Registration  Statement,  (vii) fees and
disbursements  of one counsel,  other than the Company's  counsel,  representing
Rosenthal,  selected by Rosenthal, (viii) fees and disbursements of underwriters
customarily  paid by the  issuers or sellers  of  securities  and (ix) all other
costs,  fees and expenses  incident to the Company's  performance  or compliance
with this Agreement.  Notwithstanding the foregoing, any discounts,  commissions
or brokers' fees or fees of similar  securities  industry  professionals and any
transfer  taxes  relating  to the  disposition  of  the  Registrable  Shares  by
Rosenthal  will be payable by Rosenthal  and the Company will have no obligation
to pay any such amounts.

            SECTION  7.  Underwriting  Requirements.  (a)  In  the  case  of any
underwritten  offering pursuant to a Piggyback  Registration,  the Company shall
select the institution or institutions  that shall manage or lead such offering.
Rosenthal  shall not be  entitled to  participate  in an  underwritten  offering
unless and until  Rosenthal has entered into an  underwriting or other agreement
with such  institution  or  institutions  for such  offering in such form as the
Company and such institution or institutions shall determine.

            (b) Rosenthal, when participating in a Registration,  shall promptly
supply in writing such information as the Company or the underwriters reasonably
request.

            SECTION 8. Indemnification.  (a) Indemnification by the Company. The
Company shall,  without limitation as to time,  indemnify and hold harmless,  to
the fullest  extent  permitted by law,  Rosenthal,  the officers,  directors and
agents and employees of Rosenthal,  each person who controls  Rosenthal  (within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act) and the officers,  directors, agents and employees of each such controlling
person,  to the  fullest  extent  lawful,  from and  against any and all losses,
claims, damages,  liabilities,  judgment, costs (including,  without limitation,
costs of investigation, preparation and reasonable attorneys' fees) and expenses
(collectively,  "Losses"), as incurred,  arising out of or based upon any untrue
or alleged  untrue  statement of a material fact  contained in any  Registration
Statement or  Prospectus  or in any  amendment or  supplement  thereto or in any
preliminary prospectus,  or arising out of or based upon any omission or alleged
omission of 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
information  furnished  in writing to the  Company by or on behalf of  Rosenthal
expressly for use therein.

            (b)   Indemnification   by  Rosenthal.   In   connection   with  any
Registration  Statement in which  Rosenthal is  participating,  Rosenthal  shall
indemnify  and hold  harmless,  to the  fullest  extent  permitted  by law,  the
Company, its directors,  officers, agents or employees, each person who controls
the Company  (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act) and the directors, officers, agents or employees of such
controlling  persons,  from and against all Losses  arising out of or based upon
any untrue or alleged  untrue  statement  of a material  fact  contained in such
Registration  Statement or the related Prospectus or any amendment or supplement

                                       8
<PAGE>

thereto,  or any  preliminary  prospectus,  or arising  out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the  extent,  that such  untrue or alleged  untrue  statement  or omission or
alleged  omission is based upon any  information  furnished  in writing by or on
behalf  of  Rosenthal  to the  Company  expressly  for use in such  Registration
Statement or Prospectus.  Rosenthal's indemnity obligations under this Section 8
shall be limited to the total sales proceeds (net of all underwriting  discounts
and  commissions)   actually  received  by  Rosenthal  in  connection  with  the
applicable offering.

            (c) Conduct of Indemnification  Proceedings.  If any person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified party
shall give prompt  notice to the party from which such  indemnity is sought (the
"indemnifying party") of any claim or of the commencement of any proceeding with
respect to which such indemnified  party seeks  indemnification  or contribution
pursuant hereto;  provided,  however, that the delay or failure to so notify the
indemnifying  party shall not relieve the indemnifying party from any obligation
or  liability  except  to the  extent  that  the  indemnifying  party  has  been
prejudiced  by such delay or  failure.  The  indemnifying  party  shall have the
right,  exercisable by giving  written  notice to an indemnified  party promptly
after the receipt of written notice from such indemnified party of such claim or
proceeding,  to assume, at the indemnifying  party's expense, the defense of any
such  claim  or  proceeding,   with  counsel  reasonably  satisfactory  to  such
indemnified party;  provided,  however, that (i) an indemnified party shall have
the right to employ  separate  counsel  in any such claim or  proceeding  and to
participate  in the defense  thereof,  but the fees and expenses of such counsel
shall be at the expense of such indemnified  party unless:  (A) the indemnifying
party agrees to pay such fees and  expenses;  (B) the  indemnifying  party fails
promptly  to assume the defense of such claim or  proceeding  or fails to employ
counsel  reasonably  satisfactory  to such  indemnified  party; or (C) the named
parties  to any  proceeding  (including  impleaded  parties)  include  both such
indemnified  party and the indemnifying  party, and such indemnified party shall
have been  advised  by  counsel  that  there may be one or more  legal  defenses
available to it that are  inconsistent  with those available to the indemnifying
party or that a conflict of  interest is likely to exist among such  indemnified
party and any other  indemnified  parties (in which case the indemnifying  party
shall not have the right to assume the  defense of such action on behalf of such
indemnified party); and (ii) subject to clause (C) above, the indemnifying party
shall not, in  connection  with any one such claim or proceeding or separate but
substantially similar or related claims or proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances,  be liable for the
fees and expenses of more than one firm of attorneys  (together with appropriate
local counsel) at any time for all of the indemnified  parties,  or for fees and
expenses that are not reasonable.  Whether or not such defense is assumed by the
indemnifying party, such indemnified party shall not be subject to any liability
for any settlement made without its consent.  The  indemnifying  party shall not
consent to entry of any judgment or enter into any  settlement  unless (i) there
is no finding or admission  of any  violation of any rights of any person and no
effect on any other claims that may be made by or against the indemnified party,
(ii) the sole relief  provided is monetary  damages that are paid in full by the
indemnifying  party  and  (iii)  such  judgment  or  settlement  includes  as an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification hereunder.

                                       9
<PAGE>

            (d)  Contribution.  If the  indemnification  provided  for  in  this
Section 8 is unavailable to an indemnified party in respect of any Losses (other
than in accordance with its terms), then each applicable  indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or  payable  by such  indemnified  party as a  result  of such  Losses,  in such
proportion as is appropriate  to reflect the relative fault of the  indemnifying
party,  on the one hand,  and such  indemnified  party,  on the other  hand,  in
connection  with the  actions,  statements  or omissions  that  resulted in such
Losses as well as any other  relevant  equitable  considerations.  The  relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things, whether any
action in  question,  including  any  untrue  statement  of a  material  fact or
omission  or alleged  omission to state a material  fact,  has been taken by, or
relates to  information  supplied  by, such  indemnifying  party or  indemnified
party, and the parties'  relative intent,  knowledge,  access to information and
opportunity  to correct or prevent any such action,  statement or omission.  The
amount  paid or payable by a party as a result of any Losses  shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would not
be just and  equitable  if  contribution  pursuant  to this  Section  8(d)  were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable  considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 8(d), if the
indemnifying  party is Rosenthal,  Rosenthal shall not be required to contribute
any amount which is in excess of the amount by which the total  proceeds (net of
all underwriting  discounts and commissions) received by Rosenthal from the sale
of the Registrable  Shares sold by Rosenthal in the applicable  offering exceeds
the  amount of any  damages  that such  indemnifying  party has  otherwise  been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.  No person guilty of fraudulent  misrepresentation  (within
the  meaning of  Section  11(f) of the  Securities  Act)  shall be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

            SECTION 9. Granting of  Registration  Rights.  The Company shall not
grant any registration  rights inconsistent with those granted hereunder or that
give any security holder "demand" registration rights or a position with respect
to registration rights,  "cut-backs,"  "black-out" periods or otherwise that are
on a parity with or superior to Rosenthal's position as granted herein,  without
the consent of Rosenthal.

            SECTION  10.  Miscellaneous.  (a) Rules 144 and  144A.  The  Company
covenants  that it will file any  reports  required  to be filed by it under the
Securities  Act and the  Exchange  Act so as to  enable  Rosenthal  to sell  its
Registrable  Shares  without  registration  under the  Securities Act within the
limitation  of the  exemptions  provided  by (a)  Rules  144 and 144A  under the
Securities  Act, as each such Rule may be amended from time to time,  or (b) any
similar  rule or rules  hereafter  adopted  by the  SEC.  Upon  the  request  of
Rosenthal,  the Company will forthwith  deliver to Rosenthal a written statement
as to  whether  it has  complied  with  such  requirements.  The  Company  shall
cooperate with  Rosenthal in supplying such  information as may be necessary for
Rosenthal  to complete and file any  information  reporting  forms  presently or
hereafter required by the SEC as a condition to the availability of Rule 144.

                                       10
<PAGE>

            (b) The Company shall not,  directly or  indirectly,  enter into any
merger,  consolidation or  reorganization  in which the Company shall not be the
surviving  corporation  unless the surviving  corporation  shall,  prior to such
merger,  consolidation  or  reorganization,  agree  in  writing  to  assume  the
obligations of the Company under this Agreement, and for that purpose references
hereunder  to  "Registrable  Shares"  shall be deemed to  include  the shares of
common stock,  if any, or other  securities  that Rosenthal would be entitled to
receive in exchange  for Common Stock under any such  merger,  consolidation  or
reorganization;  provided,  however,  that,  to the  extent  Rosenthal  receives
securities  that are by their terms  convertible  into shares of common stock of
the  issuer  thereof,  then any such  shares  of common  stock as are  issued or
issuable upon conversion of said convertible securities shall be included within
the definition of "Registrable Shares."

            (c)  Termination.  This Agreement and the obligations of the Company
and Rosenthal  hereunder  (other than Section 8 hereof)  shall  terminate on the
first date on which no Registrable Shares remain outstanding.

            (d) Notices. All notices, demands, requests, or other communications
which may be or are  required to be given,  served,  or sent by any party to any
other party pursuant to this  Agreement  shall be in writing and shall be mailed
by first-class,  registered or certified mail, return receipt requested, postage
prepaid,  or transmitted by hand delivery  (including  delivery by courier),  or
facsimile transmission, addressed as follows:

                  (i) If to the Company:

                      Essential Reality, Inc.
                      15-15 132nd Street, College Point NY
                      Attention: Jay Gelman
                      Facsimile: ____________________

                      with a copy to:

                      Oscar Folger, Esq.
                      521 Fifth Avenue
                      New York NY

                  (ii) If to Rosenthal,  at its last known address  appearing on
the books of the Company maintained for such purpose.

Each party may designate by notice in writing a new address to which any notice,
demand,  request or  communication  may thereafter be so given,  served or sent.
Each notice,  demand, request or communication shall be deemed to have been duly
given five business days after being deposited in the mail, postage prepaid,  if
mailed;  when delivered by hand, if personally  delivered;  or upon receipt,  if
sent by facsimile  (followed by a confirmation  copy sent by either overnight or
two (2) day courier).

            (e) Separability.  It is the desire and intent of the parties hereto
that  the  provisions  of this  Agreement  be  enforced  to the  fullest  extent
permissible  under the laws and public policies applied in each  jurisdiction in
which enforcement is sought.  Accordingly,  if any particular  provision of this
Agreement  shall be  adjudicated  by a court  of  competent  jurisdiction  to be
invalid,  prohibited or unenforceable for any reason, such provision, as to such
jurisdiction,   shall  be  ineffective,   without   invalidating  the  remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or  enforceability  of such provision in any
other jurisdiction.  Notwithstanding  the foregoing,  if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction,  it shall, as to such jurisdiction,  be so narrowly drawn, without
invalidating  the  remaining  provisions  of this  Agreement  or  affecting  the
validity or enforceability of such provision in any other jurisdiction.

                                       11
<PAGE>

            (f)  Assignment.  This Agreement  shall be binding upon and inure to
the  benefit  of the  parties  hereto  and  their  respective  heirs,  devisees,
legatees,  legal representatives,  successors and assigns.  Rosenthal may assign
its rights  hereunder,  in whole or in part,  to any  purchaser or transferee of
Registrable Shares; provided,  however, that such purchaser or transferee shall,
as a condition to the effectiveness of such assignment, be required to execute a
counterpart  to this  Agreement  agreeing to be treated as  Rosenthal is treated
hereunder, whereupon such purchaser or transferee shall have the benefits of and
shall be subject to the  restrictions  contained  in this  Agreement  as if such
purchaser or transferee was originally included in the definition of "Rosenthal"
and had originally been a party hereto.

            (g) Entire Agreement. This Agreement represents the entire agreement
of the parties and shall supersede any and all previous contracts,  arrangements
or understandings  between the parties hereto with respect to the subject matter
hereof.

            (h) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless the Company has obtained the written consent of Rosenthal.

            (i) Interpretation. The headings contained in this Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

            (j)  Counterparts.  This  Agreement  may be  executed in two or more
counterparts, all of which shall be one and the same agreement, and shall become
effective  when  counterparts  have  been  signed  by  each of the  parties  and
delivered to each other party.

            (k)  Governing  Law;  Consent  to  Jurisdiction  and  Venue.  In all
respects, including all matters of construction,  validity and performance, this
Agreement  and the  obligations  arising  hereunder  shall be  governed  by, and
construed  and enforced in  accordance  with,  the laws of the State of New York
applicable to contracts made and performed in such state,  without regard to the
principles  thereof  regarding  conflict of laws, and any applicable laws of the
United States of America. EACH OF THE COMPANY AND ROSENTHAL CONSENTS TO PERSONAL
JURISDICTION,  WAIVES ANY OBJECTION AS TO JURISDICTION OR VENUE,  AND AGREES NOT
TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE, IN THE CITY OF NEW
YORK,  STATE OF NEW YORK.  Service of process on the Company or Rosenthal in any
action arising out of or relating to this Agreement shall be effective if mailed
to such party in accordance  with the procedures and  requirements  set forth in
Section  10(d).  Nothing  herein  shall  preclude  Rosenthal or the Company from
bringing suit or taking other legal action in any other jurisdiction.

                                       12
<PAGE>

            (l)  Mutual  Waiver  of Jury  Trial.  BECAUSE  DISPUTES  ARISING  IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN  EXPERIENCED  AND EXPERT  PERSON AND THE PARTIES WISH  APPLICABLE
STATE AND FEDERAL LAWS TO APPLY  (RATHER THAN  ARBITRATION  RULES),  THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE,  TO ACHIEVE THE BEST  COMBINATION  OF THE  BENEFITS  OF THE  JUDICIAL
SYSTEM AND OF  ARBITRATION,  THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY  ACTION,  SUIT OR  PROCEEDING  BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT.

            (m) Calculation of Time Periods. Except as otherwise indicated,  all
periods of time  referred to herein  shall  include all  Saturdays,  Sundays and
holidays;  provided,  however,  that if the date to perform  the act or give any
notice with respect to this Agreement  shall fall on a day other than a Business
Day,  such act or notice may be timely  performed or given if performed or given
on the next succeeding Business Day.

                                       13
<PAGE>

            IN WITNESS WHEREOF,  the parties hereto have executed this Agreement
as of the date and year first written above.

                           Essential Reality, Inc.

                           By:
                              -----------------------------------------
                              Name:
                              Title:

                           ROSENTHAL & ROSENTHAL, INC.

                           By:
                              -----------------------------------------
                              Name:
                              Title:

                                       14

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