Document:

Ex. 10.4
                     PRIVATE EQUITY LINE OF CREDIT AGREEMENT

                                     BETWEEN

                          PRIMA CAPITAL GROWTH FUND LLC

                                       AND

                          HAND BRAND DISTRIBUTION, INC.

                          DATED AS OF JANUARY 16, 2002

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     This PRIVATE EQUITY LINE OF CREDIT AGREEMENT is entered into as of the 16th
day of January,  2002 (this  "Agreement"),  by and between Prima Capital  Growth
Fund LLC, a New York limited liability corporation ("Investor"),  and Hand Brand
Distribution,  Inc., a corporation  organized and existing under the laws of the
State of Florida (the "Company").

     WHEREAS,  the  parties  desire  that,  upon the  terms and  subject  to the
conditions  contained herein,  the Company shall issue and sell to the Investor,
from time to time as provided  herein,  and the  Investor  shall  purchase up to
$30,000,000 of the Common Stock (as defined below).

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

     Section 1.1 "Average Daily Price" shall be the price based on the VWAP.

     Section  1.2 "Bid Price"  shall mean the closing bid price (as  reported by
Bloomberg, L.P.) of the Common Stock on the Principal Market.

     Section 1.3 "Capital  Shares" shall mean the Common Stock and any shares of
any other class of common stock whether now or hereafter authorized,  having the
right to participate in the distribution of earnings and assets of the Company.

     Section 1.4 "Closing" shall mean one of the closings of a purchase and sale
of the Common Stock pursuant to Section 2.1.

     Section  1.5  "Closing  Date"  shall  mean,  with  respect to a Closing the
twelfth (12th) Trading Day following the Optional  Purchase Date related to such
Closing with respect to the first ten Trading Days of the Valuation Period,  and
the first Trading Day  following the Valuation  Period with respect to the final
ten Trading  Days of the  Valuation  Period,  provided  all  conditions  to such
Closing have been  satisfied on or before such Trading Days.  There shall be two
Closing Dates for each Optional Purchase Notice.

     Section 1.6 "Commitment  Amount" shall mean the $30,000,000 up to which the
Investor  has agreed to provide to the Company in order to  purchase  Put Shares
pursuant to the terms and conditions of this Agreement.

     Section 1.7  "Commitment  Period"  shall mean the period  commencing on the
earlier  to occur of (i) the  Effective  Date or (ii) such  earlier  date as the
Company and the  Investor  may  mutually  agree in writing,  and expiring on the
earliest to occur of (x) the date on which the Investor shall have purchased Put
Shares   pursuant  to  this  Agreement  for  an  aggregate   Purchase  Price  of
$30,000,000,  (y) the date this Agreement is terminated pursuant to Section 2.5,
or (z) the date occurring  thirty-six  (36) months from the date of commencement
of the Commitment Period.

     Section 1.8 "Common Stock" shall mean the Company's common stock, $.002 par
value per share.

     Section 1.9 "Common Stock  Equivalents"  shall mean any securities that are
convertible  into or exchangeable  for Common Stock or any warrants,  options or
other rights to subscribe for or purchase  Common Stock or any such  convertible
or exchangeable securities.

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     Section 1.10 "Condition Satisfaction Date"- See Section 7.2.

     Section 1.11 "Damages" shall mean any loss, claim, damage, liability, costs
and expenses  (including,  without  limitation,  reasonable  attorneys' fees and
disbursements and costs and expenses of expert witnesses and investigation).

     Section  1.12  "Effective  Date" shall mean the date on which the SEC first
declares   effective  a  Registration   Statement   registering  resale  of  the
Registrable Securities as set forth in Section 7.2(a).

     Section 1.13 "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and the regulations promulgated thereunder.

     Section 1.14 "Finder" - See Section 13.4.

     Section 1.15 "Finder's Fee" - See Section 13.4.

     Section  1.16 "Floor  Price" shall mean the lowest price per share at which
the Company will issue Put Shares, as may be determined from time to time by the
Company and designated in an Optional Purchase Notice.

     Section 1.17  "Investment  Amount" shall mean the dollar amount (within the
range  specified  in Section 2.2) to be invested by the Investor to purchase Put
Shares with respect to any Optional  Purchase  Notice as notified by the Company
to the Investor in accordance with Section 2.2 hereof.

     Section 1.18 "Legend" - See Section 9.1.

     Section  1.19  "Material  Adverse  Effect"  shall  mean any  effect  on the
business,  operations,  properties,  prospects,  or  financial  condition of the
Company  that is material  and adverse to the Company and its  subsidiaries  and
affiliates, taken as a whole, and/or any condition,  circumstance,  or situation
that would  prohibit or otherwise  interfere  with the ability of the Company to
enter into and perform its  obligations  under any of (a) this Agreement and (b)
the Registration Rights Agreement in any material respect.

     Section  1.20  "Maximum  Put  Amount"  shall mean the least of (i)  fifteen
percent  (15%) of the Average  Daily Prices for each of the twenty  Trading Days
immediately  preceding  the Optional  Purchase  Date  multiplied by the reported
daily trading volume of the Common Stock on the Principal  Market for the twenty
Trading Days immediately  preceding the Optional Purchase Date, (ii) the maximum
amount of Common Stock that may be issued  without the approval of the Company's
Shareholders  according to the rules and regulations of the Principal Market, or
(iii) the amount specified in Section 7.2(j).

     Section 1.21  "Minimum Put Amount"  shall mean $100,000 to the Investor for
each Optional Purchase Notice.

     Section  1.22 "NASD"  shall mean the  National  Association  of  Securities
Dealers, Inc.

     Section 1.23 "Optional Purchase Date" shall mean the Trading Day during the
Commitment  Period that an Optional  Purchase Notice to sell Common Stock to the
Investor is deemed delivered pursuant to Section 2.2(b) hereof.

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     Section 1.24 "Optional  Purchase Notice" shall mean a written notice to the
Investor setting forth the Investment Amount that the Company intends to sell to
the Investor.

     Section 1.25  "Outstanding"  when used with  reference to Common  Shares or
Capital Shares (collectively the "Shares"),  shall mean, at any date as of which
the  number of such  Shares is to be  determined,  all  issued  and  outstanding
Shares,  and shall  include all such Shares  issuable in respect of  outstanding
scrip or any  certificates  representing  fractional  interests  in such Shares;
provided,  however,  that  "Outstanding"  shall  not mean any such  Shares  then
directly or indirectly owned or held by or for the account of the Company.

     Section  1.26  "Person"  shall  mean  an  individual,   a  corporation,   a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision or an agency or instrumentality thereof.

     Section 1.27 "Principal  Market" shall mean the Nasdaq National Market, the
Nasdaq Small-Cap Market,  the OTC Bulletin Board, the American Stock Exchange or
the New York Stock  Exchange,  whichever  is at the time the  principal  trading
exchange or market for the Common Stock. As of the date of this  Agreement,  the
OTC Bulletin Board Market is the Principal Market.

     Section 1.28 INTENTIONALLY LEFT BLANK.

     Section  1.29  "Purchase  Price" as used in this  Agreement  shall mean the
following: For each Trading Day during a Valuation Period (or such other date on
which  the  Purchase  Price is  calculated  in  accordance  with the  terms  and
conditions of this Agreement) the Purchase Price shall be 87.5% of the VWAP.

     Section 1.30 "Put" shall mean each occasion the Company  elects to exercise
its right to tender an  Optional  Purchase  Notice  requiring  the  Investor  to
purchase a  discretionary  amount as  determined by the Company of the Company's
Common Stock, subject to the terms of this Agreement, which tender must be given
to the Investor.

     Section 1.31 "Put  Shares"  shall mean all shares of Common Stock issued or
issuable pursuant to a Put that has occurred or may occur in accordance with the
terms and conditions of this Agreement.

     Section 1.32 "Registrable Securities" shall mean the Put Shares and Warrant
Shares until the Registration  Statement has been declared  effective by the SEC
and all Put Shares and  Warrant  Shares  have been  disposed  of pursuant to the
Registration Statement.

     Section  1.33  "Registration  Rights  Agreement"  shall mean the  agreement
regarding  the  filing  of the  Registration  Statement  for the  resale  of the
Registrable Securities,  entered into between the Company and the Investor as of
the Subscription Date.

     Section 1.34 "Registration  Statement" shall mean a registration  statement
on Form S-1 or Form SB-2 (if use of such forms are then available to the Company
pursuant to the rules of the SEC and, if not, on such other form  promulgated by
the SEC for which the Company then  qualifies  and which form shall be available
for the resale of the  Registrable  Securities  to be  registered  thereunder in
accordance  with the  provisions of this Agreement and the  Registration  Rights
Agreement,  and in accordance  with the intended  method of distribution of such
securities),  for  the  registration  of  the  resale  by  the  Investor  of the
Registrable Securities under the Securities Act.

     Section 1.35 "Regulation D" shall mean Regulation D of the Securities Act.

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     Section 1.36 "SEC" shall mean the Securities and Exchange Commission.

     Section 1.37 "Section 4(2)" shall mean Section 4(2) of the Securities Act.

     Section 1.38 "Securities  Act" shall mean the United States  Securities Act
of 1933, as amended, and the regulations promulgated thereunder.

     Section 1.39 "SEC Documents" shall mean the Company's latest Form 10-KSB as
of the time in  question,  all Forms  10-QSB and 8-K filed  thereafter,  and the
Proxy Statement for its latest fiscal year as of the time in question until such
time the Company no longer has an obligation to maintain the  effectiveness of a
Registration Statement as set forth in the Registration Rights Agreement.

     Section  1.40  "Subscription  Date"  shall  mean  the  date on  which  this
Agreement is executed and delivered by the parties hereto.

     Section 1.41 "Trading  Cushion"  shall mean, at any time, the mandatory ten
(10) Trading Days after the most recent Closing Date.

     Section  1.42  "Trading  Day" shall mean any day during  which the New York
Stock Exchange shall be open for business.

     Section 1.43 "Valuation  Event" shall mean an event in which the Company at
any time during a Valuation Period takes any of the following actions:

               (a) subdivides or combines its Common Stock;

               (b) pays a  dividend  in its  Capital  Stock or makes  any  other
          distribution of its Capital Shares;

               (c) issues any  additional  Capital Shares  ("Additional  Capital
          Shares"),  otherwise than as provided in the foregoing Subsections (a)
          and (b) above,  at a price per share less, or for other  consideration
          lower,  than the Bid Price in effect on the  Trading  Day  immediately
          prior to such issuance, or without consideration;

               (d) issues any warrants, options or other rights to subscribe for
          or purchase any Additional  Capital Shares and the price per share for
          which Additional Capital Shares may at any time thereafter be issuable
          pursuant to such warrants,  options or other rights shall be less than
          the Bid Price in effect immediately prior to such issuance;

               (e) issues any securities  convertible  into or exchangeable  for
          Capital Shares and the  consideration  per share for which  Additional
          Capital Shares may at any time thereafter be issuable  pursuant to the
          terms of such  convertible or  exchangeable  securities  shall be less
          than the Bid Price in effect immediately prior to such issuance;

               (f)  makes  a   distribution   of  its  assets  or  evidences  of
          indebtedness  to the  holders of its  Capital  Shares as a dividend in
          liquidation or by way of return of capital or other than as a dividend
          payable out of earnings or surplus  legally  available  for  dividends
          under  applicable  law or any  distribution  to such  holders  made in
          respect  of the  sale  of all or  substantially  all of the  Company's
          assets  (other  than  under  the  circumstances  provided  for  in the
          foregoing subsections (a) through (e); or

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               (g) takes any action affecting the number of Outstanding  Capital
          Shares,  other  than  an  action  described  in any  of the  foregoing
          Subsections (a) through (f) hereof, inclusive, which in the opinion of
          the Company's Board of Directors, determined in good faith, would have
          a  materially  adverse  effect upon the rights of the  Investor at the
          time of a Put or Closing Date.

Upon each occurrence of any one or more of the foregoing  Valuation Events,  the
Purchase Price and number of Put Shares to be issued shall be adjusted to offset
the dilutive effect of such one or more Valuation Events.

     Section  1.44  "Valuation  Period"  shall  mean the  period of twenty  (20)
Trading Days during which the Purchase  Price of the Common Stock is determined,
which  period  shall be with  respect  to the  Purchase  Prices on any  Optional
Purchase  Date,  the twenty  (20)  Trading  Days  following  the day on which an
Optional Purchase Notice is deemed to be delivered.

     Section 1.45 "VWAP" shall mean the daily volume  weighted  average price of
the Common Stock on the Principal  Market as reported by Bloomberg,  L.P.  using
the AQR function.

     Section 1.46 "Warrant" shall mean the common stock purchase warrants of the
Company  described in Section 13.1, a form of which is annexed hereto as Exhibit
E. Each Warrant  shall  evidence the right of the holder to purchase one Warrant
Share.

     Section 1.47 "Warrant Recipient" - See Section 13.1.

     Section 1.48  "Warrant  Shares"  shall mean the Common Stock  issuable upon
exercise of a Warrant.

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

     Section  2.1  Puts.   Upon  the  terms  and  conditions  set  forth  herein
(including,  without  limitation,  the provisions of Article III hereof), on any
Optional  Purchase  Date the  Company may  exercise a Put by the  delivery of an
Optional  Purchase  Notice.  Optional  Purchase Notices must be delivered to the
Investor for such Investment  Amount. The number of Put Shares that the Investor
shall receive  pursuant to such Put shall be determined by dividing the relevant
portions of the Investment  Amount specified in the Optional  Purchase Notice by
the  corresponding  Purchase  Prices for each  Trading Day during the  Valuation
Period.

     Section 2.2  Mechanics.

               (a) Optional  Purchase Notice.  At any time during the Commitment
Period,  the Company may deliver an Optional  Purchase  Notice to the  Investor,
subject to the  conditions  set forth in Section  7.2;  provided,  however,  the
aggregate Investment Amount for each Put for the Investor,  as designated by the
Company in the applicable  Optional  Purchase Notices shall be neither less than
the Minimum Put Amount to the Investor nor more than the Maximum Put Amount. The
Optional  Purchase  Notice shall state the  commencement  date of the  Valuation
Period which may not be prior to the delivery of the Optional  Purchase  Notice.
The Optional  Purchase  Notice must also state (i) the maximum  amount of Common
Stock  that may be  issued  pursuant  to  Section  1.20,  (ii)  support  for the
calculation  thereof,

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(iii) the amount of Common Stock  outstanding on the Optional Purchase Date, and
(iv) the number of shares of Common Stock  available  for resale by the Investor
pursuant to the Registration Statement.

               (b) Date of  Delivery of Optional  Purchase  Notice.  An Optional
Purchase Notice shall be deemed  delivered on (i) the Trading Day it is received
by facsimile  or  otherwise by the Investor if such notice is received  prior to
12:00 noon New York time, or (ii) the immediately  succeeding  Trading Day if it
is  received  by  facsimile  or  otherwise  after  12:00 noon New York time on a
Trading  Day or at any time on a day which is not a  Trading  Day.  No  Optional
Purchase Notice may be deemed delivered on a day that is not a Trading Day.

               (c)  Determination  of Put Shares  Issuable.  The Purchase  Price
shall be based on the Average  Daily Price on each  separate  Trading Day during
the Valuation  Period.  The number of Put Shares to be purchased by the Investor
shall be determined on a daily basis during each Valuation Period and settled on
each Closing Date. Five percent (5%) of the Investment  Amount will be allocated
to each  Trading Day during the  Valuation  Period.  The  portion of  Investment
Amount  for which Put  Shares  may be issued  for each  Trading  Day  during the
Valuation Period will equal five percent (5%) of the Investment Amount.

               (d) Maximum Optional Purchase Notices/Amount.  The Company has no
obligation to make any puts under the agreement but if they choose to do so then
there shall be a maximum of  thirty-six  (36)  Optional  Purchase  Notices given
during the term of this  Agreement.  Subject to the terms and conditions of this
Agreement,  the  Company  shall have the right to issue each  Optional  Purchase
Notice for an  Investment  Amount up to the Maximum Put Amount.  The Company may
not issue an Optional  Purchase  Notice in connection  with any amount of shares
which would  exceed the amount  permitted to be issued  without  approval of the
Company's  shareholders,  if such approval is required  pursuant to the rules of
the Principal Market.

               (e) Trading Halt  Limitations and Blackouts.  The Investor is not
required to purchase Put Shares for any Trading Day during which  trading of the
Common  Stock is  suspended  or halted  for  three or more  hours or for any day
during  which any of the events  described  in Section  6.8 has  occurred  or is
continuing.  In such case,  five percent (5%) of the Investment  Amount shall be
withdrawn from the Investment Amount for each such Trading Day.

               (f) Floor Price.  On each such date during the  Valuation  Period
that the  Purchase  Price of the Common Stock is less than the Floor Price ("Low
Price Day"),  (i) the Investment  Amount  specified in the applicable Put Notice
shall be reduced by one-twentieth  (1/20th), and (ii) the Company shall not sell
and the Investor  shall not  purchase Put Shares equal to such  reduction in the
Investment  Amount  for such Low Price  Day and the  Valuation  Period  shall be
extended  for each  such Low  Price Day as if such Low Price Day were not in the
Valuation  Period.  However,  the Valuation Period may not be extended more than
six  Trading  Days  corresponding  to six Low Price  Days,  in  relation to each
Optional Purchase Notice.

     Section 2.3  Closings.  On each  Closing  Date for a Put the Company  shall
deliver to the Investor or to escrow one or more certificates, at the Investor's
option,  representing the Put Shares to be purchased by the Investor pursuant to
Section 2.1 herein,  after the  Optional  Purchase  Date and on or prior to such
Closing  Date,  registered  in the name of the  Investor  or, at the  Investor's
option,  deposit such  certificate(s) into such account or accounts belonging to
the Investor  designated by the Investor.  If the Company is qualified to do so,
delivery of Put Shares shall, at the Investor's election,  be made by electronic
transfer.  The Investor shall deliver to escrow the Investment  Amount specified
in the Optional Purchase Notice by wire transfer of immediately  available funds
to an  account  designated  by the  Company on or before the  Closing  Date.  In
addition,  on or prior to the Closing Date, each of the

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Company and the Investor shall deliver all documents,  instruments  and writings
required to be delivered or  reasonably  requested by either of them pursuant to
this  Agreement in order to implement and effect the  transactions  contemplated
herein.  Payment of funds to the Company and delivery of the certificates to the
Investor  shall  occur out of escrow in  accordance  with the  escrow  agreement
referred to in Section 7.2(p) following (x) the Company's deposit into escrow of
the certificates representing the Put Shares and (y) the Investor's deposit into
escrow of the  Investment  Amount;  provided,  however,  that to the  extent the
Company has not paid the fees,  expenses  and  disbursements  of the  Investor's
counsel in accordance  with Section 13.1, the amount of such fees,  expenses and
disbursements  shall be paid in  immediately  available  funds  drawn out of the
deposited funds, at the direction of the Investor, to Investor's counsel with no
reduction  in the number of Put Shares  issuable to the Investor on such Closing
Date.

     Section 2.4   Liquidated Damages.  In  the  event  the  Company  issues  an
Optional Purchase Notice but fails or refuses to deliver Put Shares on a Closing
Date, the Company will pay the Investor,  as liquidated damages for such failure
to deliver, and not as a penalty, five percent (5%) of the applicable Investment
Amount for each seven (7) day period, or part thereof following such failure, in
cash,  until such Put Shares  have been  delivered.  The Escrow  Agent  shall be
directed to pay such  liquidated  damages to the Investor out of the  Investment
Amount delivered by the Investor to the Escrow Agent.

     Section 2.5  Termination  of Investment  Obligation.  The  obligation of an
Investor to purchase shares of Common Stock, unless waived by an Investor, shall
terminate permanently (including with respect to a Closing Date that has not yet
occurred)  in the event that (i) there  shall  occur any stop trade order by the
SEC or Principal  Market or  suspension by the SEC of the  effectiveness  of the
Registration  Statement  for a  consecutive  five day calendar  period or for an
aggregate  of twenty (20)  Trading Days during the  Commitment  Period,  for any
reason,  or (ii)  the  Company  shall  at any  time  fail  to  comply  with  the
requirements of Article VI hereof,  without regard to any cure period or written
notice to cure which may be permitted or required.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

     The Investor represents and warrants to the Company that:

     Section 3.1 Intent.  The Investor is entering  into this  Agreement for its
own account and the Investor has no present arrangement  (whether or not legally
binding)  at any time to sell the  Common  Stock to or  through  any  person  or
entity;  provided,  however,  that by making  the  representations  herein,  the
Investor  does not  agree to hold the  Common  Stock  for any  minimum  or other
specific  term and reserves the right to dispose of the Common Stock at any time
in  accordance  with  federal  and  state  securities  laws  applicable  to such
disposition.

     Section  3.2  Sophisticated  Investor.  The  Investor  is  a  sophisticated
Investor (as described in Rule  506(b)(2)(ii)  of Regulation D) or an accredited
Investor  (as  defined  in Rule 501 of  Regulation  D),  and  Investor  has such
experience  in business and  financial  matters that it is capable of evaluating
the merits and risks of an investment in Common Stock. The Investor acknowledges
that an investment in the Common Stock is speculative and involves a high degree
of risk.

     Section 3.3   Authority.  This  Agreement  has  been  duly  authorized  and
validly  executed  and  delivered  by the  Investor  and is a valid and  binding
agreement of the Investor  enforceable  against it in accordance with its terms,
subject to applicable  bankruptcy,  insolvency,  or similar laws relating to, or
affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application.

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     Section 3.4  Not an Affiliate. The Investor is not an officer, director or,
to Investor's good faith belief, an "affiliate" (as that term is defined in Rule
405 of the Securities Act) of the Company.

     Section  3.5  Absence of  Conflicts.  The  execution  and  delivery of this
Agreement and any other document or instrument executed in connection  herewith,
and the consummation of the transactions  contemplated  thereby,  and compliance
with the  requirements  thereof,  will not  violate any law,  rule,  regulation,
order, writ, judgment,  injunction,  decree or award binding on Investor, or, to
the Investor's knowledge, (a) violate any provision of any indenture, instrument
or agreement to which Investor is a party or is subject, or by which Investor or
any of its assets is bound,  (b) conflict with or constitute a material  default
thereunder, (c) result in the creation or imposition of any lien pursuant to the
terms of any such indenture,  instrument or agreement, or constitute a breach of
any  fiduciary  duty owed by  Investor  to any third  party,  or (d) require the
approval  of any  third-party  (which  has not been  obtained)  pursuant  to any
material contract,  agreement,  instrument,  relationship or legal obligation to
which  Investor  is  subject  or to  which  any of  its  assets,  operations  or
management may be subject.

     Section 3.6  Disclosure;  Access to Information.  Investor has received all
documents,  records,  books  and  other  information  pertaining  to  Investor's
investment in the Company that have been  requested by Investor.  The Company is
subject to the periodic reporting requirements of the Exchange Act, and Investor
has had access to copies of any such reports that have been requested by it.

     Section  3.7  Manner of Sale.  At no time was  Investor  presented  with or
solicited  by or through any leaflet,  public  promotional  meeting,  television
advertisement or any other form of general solicitation or advertising.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Investor that:

     Section 4.1  Organization of  the Company.  The Company  is  a corporation
duly  organized  and  existing in good  standing  under the laws of the State of
Florida and has all requisite  corporate  authority to own its properties and to
carry on its  business  as now being  conducted.  Except as set forth in the SEC
Documents,  the  Company  does not have any  subsidiaries.  The  Company is duly
qualified as a foreign  corporation  to do business  and is in good  standing in
every  jurisdiction  in which the nature of the  business  conducted or property
owned by it makes such  qualification  necessary,  other than those in which the
failure to so qualify would not have a Material Adverse Effect.

     Section 4.2  Authority.  (i) The Company has the requisite corporate  power
and authority to enter into and perform its obligations under this Agreement and
the  Registration  Rights  Agreement  and to  issue  the Put  Shares;  (ii)  the
execution,  issuance and delivery of this Agreement and the Registration  Rights
Agreement and the  consummation by it of the  transactions  contemplated  hereby
have been duly  authorized  by all  necessary  corporate  action  and no further
consent  or   authorization  of  the  Company  or  its  Board  of  Directors  or
stockholders is required;  and (iii) this Agreement and the Registration  Rights
Agreement  have been duly executed and  delivered by the Company and  constitute
valid and binding  obligations of the Company enforceable against the Company in
accordance  with their terms,  except as such  enforceability  may be limited by
applicable  bankruptcy,  insolvency,  or similar laws  relating to, or affecting
generally  the  enforcement  of,  creditors'  rights  and  remedies  or by other
equitable principles of general application.

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     Section 4.3  Capitalization.  The  authorized and outstanding capital stock
of the Company as of the Subscription  Date is set forth on Schedule 4.3 hereto.
Except as set forth in the SEC Documents or Schedule 4.3, as of the Subscription
Date,  there are no options,  warrants or rights to  subscribe  for  securities,
rights or obligations convertible into or exchangeable for, or giving any rights
to receive any Capital Shares.  All of the outstanding shares of Common Stock of
the Company have been duly and validly  authorized and issued and are fully paid
and nonassessable.

     Section 4.4  Common Stock.  As of the  commencement of and  throughout  the
Commitment Period, the Company will have registered its Common Stock pursuant to
Section  12(b) or 12(g) of the Exchange Act and be in full  compliance  with all
reporting requirements of the Exchange Act, and the Company will have maintained
all requirements for the continued listing or quotation of its Common Stock, and
such Common Stock is then listed or quoted on the Principal Market.

     Section 4.5  SEC Documents.  The Company has delivered or made available to
the Investor true and complete copies of the SEC Documents  (including,  without
limitation,  proxy information and solicitation materials).  The Company has not
provided to the Investor any information that, according to applicable law, rule
or regulation,  should have been disclosed  publicly prior to the date hereof by
the Company, but which has not been so disclosed.  As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Securities  Act or  the  Exchange  Act,  as the  case  may  be,  and  rules  and
regulations of the SEC promulgated thereunder and other federal, state and local
laws,  rules and regulations  applicable to such SEC Documents,  and none of the
SEC Documents  contained  any untrue  statement of a material fact or omitted to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  The financial  statements of the Company  described above
and/or included in the SEC Documents comply as to form in all material  respects
with applicable accounting  requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect thereto.  Such
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise  indicated in such  financial  statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include  footnotes or may be condensed or summary  statements)  and
fairly present in all material respects the financial position of the Company as
of the dates  thereof  and the  results  of  operations  and cash  flows for the
periods  then ended  (subject,  in the case of unaudited  statements,  to normal
year-end audit adjustments).

     Section 4.6  Valid Issuances.  If made  in accordanc  with  this Agreement,
the  sale by the  Company  of the  Put  Shares  and  Warrant  will  be  properly
accomplished  pursuant to Section 4(2), Regulation D and/or any applicable state
law. The sale by the Company of the Warrant  Shares,  if made in accordance with
the terms of the  Warrant,  will be  properly  accomplished  pursuant to Section
4(2),  Regulation D and any  applicable  state law. When issued,  the Put Shares
shall be duly and validly  issued,  fully paid, and  nonassessable.  Neither the
sales of the Put Shares  and  Warrant  Shares  pursuant  to,  nor the  Company's
performance of its obligations under, this Agreement or the Registration  Rights
Agreement  will (i) result in the creation or imposition of any liens,  charges,
claims or other  encumbrances  upon the Put  Shares or any of the  assets of the
Company, or (ii) entitle the holders of Outstanding Capital Shares to preemptive
or  other  rights  to  subscribe  to or  acquire  the  Capital  Shares  or other
securities of the Company.  The Put Shares and Warrant  Shares shall not subject
the  Investor  or  holder to  personal  liability  by  reason of the  possession
thereof.

     Section  4.7  No  General Solicitation  or  Advertising  in  Regard to this
Transaction.  Neither the Company nor any of its affiliates nor any  distributor
or any person acting on its or their  behalf,  if any, (i) has conducted or will
conduct  any  general  solicitation  (as  that  term is used in Rule  502(c)  of
Regulation  D) or general  advertising  with respect to any of the Put Shares or
Warrant  Shares,  or (ii) made any offers

                                       10

<PAGE>

or sales of any security or solicited  any offers to buy any security  under any
circumstances  that would require  registration of the sale of the Put Shares or
the Warrant Shares under the Securities Act.

     Section  4.8  Corporate  Documents.  The  Company  has  furnished  or  made
available to the Investor true and correct  copies of the Company's  Articles of
Incorporation,  as amended and in effect on the date hereof (the "Certificate"),
and the  Company's  By-Laws,  as amended  and in effect on the date  hereof (the
"By-Laws").

     Section 4.9  No Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated  hereby,  including,  without  limitation,  the  issuance of Common
Stock,  Warrant and Warrant Shares do not and will not (i) result in a violation
of the Company's  Articles of Incorporation or By-Laws or (ii) conflict with, or
constitute  a default  (or an event  that  with  notice or lapse of time or both
would  become a default)  under,  or give to others  any rights of  termination,
amendment,  acceleration or cancellation of, any material agreement,  indenture,
instrument or any "lock-up" or similar  provision of any underwriting or similar
agreement to which the Company is a party, or (iii) result in a violation of any
federal,  state,  local or foreign law,  rule,  regulation,  order,  judgment or
decree (including federal and state securities laws and regulations)  applicable
to the  Company  or by which any  property  or asset of the  Company is bound or
affected  (except  for  such  conflicts,  defaults,  terminations,   amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have a Material  Adverse  Effect)  nor is the Company  otherwise  in
violation of,  conflict with or in default under any of the foregoing;  provided
that,  for  purposes  of the  Company's  representations  and  warranties  as to
violations of foreign law, rule or  regulation  referenced in clause (iv),  such
representations  and  warranties  are  made  only to the  best of the  Company's
knowledge  insofar as the execution,  delivery and performance of this Agreement
by the  Company  and  the  consummation  by  the  Company  of  the  transactions
contemplated  hereby are or may be affected by the status of the Investor  under
or pursuant to any such foreign  law,  rule or  regulation.  The business of the
Company is not being conducted in violation of any law,  ordinance or regulation
of any governmental entity, except for possible violations that either singly or
in the aggregate do not and will not have a Material Adverse Effect. The Company
is not required under federal,  state or local law, rule or regulation to obtain
any consent, authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to execute,  deliver or perform
any of its  obligations  under this Agreement or issue and sell the Common Stock
in accordance with the terms hereof other than any SEC, NASD,  Principal  Market
or state  securities  filings  that may be  required  to be made by the  Company
subsequent to any Closing, any registration statement that may be filed pursuant
hereto,  and any  shareholder  approval  required  by the  rules  applicable  to
companies whose common stock trades on the Principal Market.

     Section  4.10  No  Material  Adverse  Change.  Since  the  date of the most
recent financial  statements included in the SEC Documents,  no Material Adverse
Effect has occurred or exists with  respect to the Company,  except as disclosed
in the SEC Documents.

     Section 4.11  No Undisclosed Liabilities.  The Company  has no  liabilities
or obligations which are material, individually or in the aggregate, and are not
disclosed in the SEC Documents or otherwise publicly announced, other than those
incurred in the ordinary  course of the Company's  businesses  since the date of
the most recent  financial  statements  included in the SEC Documents and which,
individually  or in the aggregate,  do not or would not have a Material  Adverse
Effect on the Company.

     Section 4.12  No Undisclosed  Events or  Circumstances.  Since the  date of
the most recent financial statements included in the SEC Documents,  no event or
circumstance  has  occurred  or  exists  with  respect  to  the  Company  or its
businesses,  properties,  prospects,  operations or financial  condition,  that,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement prior to the date

                                       11

<PAGE>

hereof by the Company but which has not been so publicly  announced or disclosed
in the SEC Documents.

     Section 4.13  No Integrated  Offering.  Neither the Company, nor any of its
affiliates,  nor any  person  acting on its or their  behalf  has,  directly  or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  other than pursuant to this  Agreement,  under  circumstances
that would require registration of the Common Stock under the Securities Act.

     Section 4.14  Litigation and Other  Proceedings. Except as may be set forth
in the SEC  Documents,  there are no lawsuits or  proceedings  pending or to the
best  knowledge of the current  management and Board of Directors of the Company
threatened,  against the  Company,  nor has the Company  received any written or
oral notice of any such action, suit,  proceeding or investigation,  which might
have a Material  Adverse  Effect.  Except as set forth in the SEC Documents,  no
judgment,  order, writ,  injunction or decree or award has been issued by or, so
far  as is  known  by  the  Company,  requested  of  any  court,  arbitrator  or
governmental agency which might result in a Material Adverse Effect.

     Section 4.15  No  Misleading  or Untrue  Communication. The Company and any
Person   representing   the  Company,   in  connection  with  the   transactions
contemplated by this Agreement,  have not made, at any time, any oral or written
communication in connection with same, which contained any untrue statement of a
material fact or omitted to state any material  fact  necessary in order to make
the statements,  in the light of the  circumstances  under which they were made,
not misleading.

     Section  4.16  Material  Non-Public  Information.  The  Company  is  not in
possession of, nor has the Company or its agents disclosed to the Investor,  any
material  non-public  information  that  (i)  if  disclosed,   would,  or  could
reasonably  be expected to have,  an effect on the price of the Common  Stock or
(ii) according to applicable law, rule or regulation, should have been disclosed
publicly  by the  Company  prior to the date  hereof  but  which has not been so
disclosed.

                                    ARTICLE V

                            COVENANTS OF THE INVESTOR

     Section 5.1  Compliance  with Law. The Investor covenants for himself only,
that such Investor's  trading activities with respect to shares of the Company's
Common  Stock  will be in  compliance  with all  applicable  state  and  federal
securities laws, rules and regulations.

                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

     Section 6.1  Registration Rights.  The Company shall cause the Registration
Rights Agreement to remain in full force and effect and the Company shall comply
in all respects with the terms thereof.

     Section 6.2  Reservation  of Common  Stock.  As  of the  date  hereof,  the
Company  has  reserved  and the  Company  shall  continue  to  reserve  and keep
available at all times,  free of preemptive  rights,  shares of Common Stock for
the purpose of enabling the Company to satisfy any  obligation  to issue the Put
Shares; such amount of shares of Common Stock to be reserved shall be calculated
based  upon  the  minimum  Purchase  Price  therefor  under  the  terms  of this
Agreement.

     Section 6.3  Listing  of Common  Stock.  The  Company  shall  maintain  the
listing of the Common Stock on a Principal  Market,  and as soon as  practicable
(but in any event prior to the

                                       12

<PAGE>

commencement of the Commitment Period) to list the Put Shares and Warrant Shares
on the Principal  Market.  The Company  further shall, if the Company applies to
have the Common  Stock  traded on any other  Principal  Market,  include in such
application the Put Shares,  and shall take such other action as is necessary or
desirable  in the opinion of the Investor to cause the Common Stock to be listed
on such other Principal  Market as promptly as possible.  The Company shall take
all action  necessary to continue the listing and trading of its Common Stock on
a Principal Market (including,  without limitation,  maintaining  sufficient net
tangible  assets) and will comply in all respects with the Company's  reporting,
filing and other obligations under the bylaws or rules of such Principal Market.

     Section 6.4  Exchange Act Registration. The Company shall  cause its Common
Stock to continue to be registered  under Section 12(g) or 12(b) of the Exchange
Act, will comply in all respects with its reporting and filing obligations under
said Act,  and will not take any  action or file any  document  (whether  or not
permitted  by said Act or the rules  thereunder)  to  terminate  or suspend such
registration  or to terminate or suspend its  reporting  and filing  obligations
under said Act.  The Company  will take all action to  continue  the listing and
trading  of its Common  Stock on the  Principal  Market  and will  comply in all
respects with the Company's  reporting,  filing and other  obligations under the
bylaws or rules of the Principal Market.

     Section 6.5  Legends.  The  certificates  evidencing the Common Stock to be
sold by the Investor pursuant to Section 9.1 shall be free of legends.

     Section  6.6  Corporate  Existence.  The  Company   will  take   all  steps
necessary to preserve and continue the corporate existence of the Company.

     Section 6.7  Additional  SEC  Documents.  The Company  will  deliver to the
Investor, as and when the originals thereof are submitted to the SEC for filing,
copies of all SEC Documents so furnished or submitted to the SEC.

     Section 6.8  Blackout Period.  Subject to the requirements of Regulation FD
under the Exchange  Act, the Company will  immediately  notify the Investor upon
the  occurrence  of any of the  following  events in respect  of a  Registration
Statement  or  related  prospectus  in  respect of an  offering  of  Registrable
Securities;  (i) receipt of any request for additional information by the SEC or
any  other  federal  or  state  governmental  authority  during  the  period  of
effectiveness of the Registration Statement for amendments or supplements to the
Registration  Statement or related  prospectus;  (ii) the issuance by the SEC or
any other federal or state  governmental  authority of any stop order suspending
the  effectiveness  of  the  Registration  Statement  or the  initiation  of any
proceedings for that purpose;  (iii) receipt of any notification with respect to
the suspension of the  qualification  or exemption from  qualification of any of
the  Registrable  Securities for sale in any  jurisdiction  or the initiation or
threatening of any proceeding for such purpose;  (iv) the happening of any event
that  makes  any  statement  made  in such  Registration  Statement  or  related
prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any  material  respect or that  requires  the making of any
changes in the Registration Statement,  related prospectus or documents so that,
in the case of the  Registration  Statement,  it will  not  contain  any  untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary to make the statements  therein not misleading,  and
that in the case of the  related  prospectus,  it will not  contain  any  untrue
statement of a material  fact or omit to state any material  fact required to be
stated therein or necessary to make the statements  therein, in the light of the
circumstances under which they were made, not misleading;  and (v) the Company's
reasonable  determination  that a  post-effective  amendment to the Registration
Statement would be appropriate;  and the Company will promptly make available to
the Investor any such  supplement  or amendment to the related  prospectus.  The
Company  shall not deliver to the Investor any Optional  Purchase  Notice during
the continuation of any of the foregoing events.

                                       13

<PAGE>

     Section 6.9  Expectations Regarding  Optional Purchase Notices.  Within ten
(10) days after the commencement of each calendar quarter  occurring  subsequent
to the commencement of the Commitment  Period,  the Company undertakes to notify
the  Investor  as to its  reasonable  expectations  as to the  dollar  amount it
intends to raise during such calendar  quarter,  if any, through the issuance of
Optional Purchase Notices. Such notification shall constitute only the Company's
good  faith  estimate  and shall in no way  obligate  the  Company to raise such
amount,  or any  amount,  or  otherwise  limit its  ability to deliver  Optional
Purchase  Notices.  The failure by the Company to comply with this provision can
be  cured  by  the  Company's  notifying  the  Investor  at any  time  as to its
reasonable expectations with respect to the current calendar quarter.

     Section  6.10  Consolidation;  Merger.  The Company  shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another  entity (a  "Consolidation  Event")  unless the  resulting  successor or
acquiring  entity  (if  not the  Company)  assumes  by  written  instrument  the
obligation to deliver to the Investor such shares of stock and/or  securities as
the Investor is entitled to receive pursuant to this Agreement.

     Section  6.11  Issuance  of Put  Shares.  The sale and  issuance of the Put
Shares and Warrant  Shares shall be made in accordance  with the  provisions and
requirements of applicable state law.

                                   ARTICLE VII

                       CONDITIONS TO DELIVERY OF OPTIONAL
                   PURCHASE NOTICES AND CONDITIONS TO CLOSING

     Section 7.1 Conditions  Precedent to the Obligation of the Company to Issue
and Sell Common Stock. The obligation hereunder of the Company to issue and sell
the Put  Shares to the  Investor  incident  to each  Closing  is  subject to the
satisfaction,  at or before each such  Closing,  of each of the  conditions  set
forth below.

               (a) Accuracy of the Investor's Representation and Warranties. The
representations  and warranties of the Investor shall be true and correct in all
material  respects as of the date of this  Agreement  and as of the date of each
such Closing as though made at each such time.

               (b)  Performance  by  the  Investor.   The  Investor  shall  have
performed, satisfied and complied in all respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Closing.

     Section 7.2 Conditions  Precedent to the Right of the Company to Deliver an
Optional  Purchase  Notice and the  Obligation  of the  Investor to Purchase Put
Shares.  The right of the Company to deliver an Optional Purchase Notice and the
obligation  of the  Investor  hereunder  to  acquire  and pay for the Put Shares
incident  to a  Closing  is  subject  to the  satisfaction,  on (i) the  date of
delivery  of such  Optional  Purchase  Notice,  (ii)  for each  day  during  the
Valuation  Period;  and (iii) the  applicable  Closing  Date (each a  "Condition
Satisfaction Date"), of each of the following conditions:

               (a)  Registration  of the Common Stock with the SEC. As set forth
in the Registration Rights Agreement,  the Company shall have filed with the SEC
a  Registration  Statement  with  respect  to  the  resale  of  the  Registrable
Securities that shall have been declared effective by the SEC prior to the first
Optional  Purchase  Date,  but in no event  later than the date set forth in the
Registration  Rights  Agreement and shall have filed a prospectus  supplement on
the first trading day after each Closing Date.

                                       14

<PAGE>

               (b)  Effective  Registration  Statement.  As  set  forth  in  the
Registration Rights Agreement,  the Registration Statement shall have previously
become effective and shall remain effective on each Condition  Satisfaction Date
and (i) neither the Company nor the Investor shall have received notice that the
SEC has issued or intends to issue a stop order with respect to the Registration
Statement or that the SEC otherwise has suspended or withdrawn the effectiveness
of the Registration Statement,  either temporarily or permanently, or intends or
has  threatened to do so, and (ii) no other  suspension of the use or withdrawal
of the effectiveness of the Registration  Statement or related  prospectus shall
exist.

               (c) Accuracy of the Company's Representations and Warranties. The
representations  and  warranties of the Company shall be true and correct in all
material respects as of each Condition  Satisfaction Date as though made at each
such time (except for representations  and warranties  specifically made as of a
particular  date)  with  respect  to  all  periods,  and as to  all  events  and
circumstances occurring or existing to and including each Condition Satisfaction
Date,   except   for  any   conditions   which  have   temporarily   caused  any
representations  or  warranties  herein  to be  incorrect  and  which  have been
corrected with no continuing impairment to the Company or the Investor.

               (d) Performance by the Company. The Company shall have performed,
satisfied and complied in all material  respects with all covenants,  agreements
and conditions  required by this Agreement and the Registration Rights Agreement
to be  performed,  satisfied or complied with by the Company at or prior to each
Condition Satisfaction Date.

               (e) No Injunction. No statute, rule, regulation, executive order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits or directly and adversely affects any of the transactions contemplated
by this Agreement, and no proceeding shall have been commenced that may have the
effect  of   prohibiting  or  adversely   affecting  any  of  the   transactions
contemplated by this Agreement.

               (f) Adverse  Changes.  Since the date of filing of the  Company's
most recent SEC Document,  no event that had or is  reasonably  likely to have a
Material Adverse Effect has occurred.

               (g) No Suspension of Trading In or Delisting of Common Stock. The
trading of the Common  Stock  (including,  without  limitation,  the Put Shares)
shall not have been  suspended by the SEC, the Principal  Market or the NASD and
the Common Stock (including, without limitation, the Put Shares) shall have been
approved for listing or quotation on and shall not have been  delisted  from the
Principal  Market.  The  issuance of shares of Common  Stock with respect to the
applicable  Closing,  if  any,  shall  not  violate  the  shareholder   approval
requirements of the Principal Market.

               (h) Legal Opinions. The Company shall have caused to be delivered
to the  Investor,  within five (5)  Trading  Days of the  effective  date of the
Registration  Statement,  an opinion of the Company's independent counsel in the
form of Exhibit B hereto, addressed to the Investor;  provided, however, that in
the event that such an opinion cannot be delivered by the Company's  independent
counsel to the Investor,  the Company  shall  promptly  revise the  Registration
Statement  and shall not deliver an  Optional  Purchase  Notice.  If an Optional
Purchase Notice shall have been delivered in good faith without knowledge by the
Company that an opinion of independent  counsel cannot be delivered as required,
at the  option  of the  Investor,  either  the  applicable  Closing  Date  shall
automatically  be  postponed  for a period of up to five (5) Trading  Days until
such an opinion is delivered to the Investor, or such Closing shall otherwise be
canceled.  Liquidated  damages  determined  pursuant  to  Section  2.4  shall be
calculated  and payable on the Closing Date. The Company's  independent  counsel
shall also deliver to the

                                       15

<PAGE>

Investor,  upon  execution of this  Agreement,  an opinion in form and substance
reasonably  satisfactory  to  the  Investor  addressing,   among  other  things,
corporate matters and the exemption from  registration  under the Securities Act
of the  issuance of the  Registrable  Securities  by the Company to the Investor
under this Agreement.

               (i) Registration. No dispute between the Company and the Investor
shall exist  pursuant  to Section  8.2(c) as to the  adequacy of the  disclosure
contained in the Registration Statement.

               (j) LEFT INTENTIONALLY BLANK.

               (k) Cross  Default.  The  Company  shall not be in  default  of a
material term, covenant, warranty or undertaking of any other agreement to which
the Company and any Investor are parties, nor shall there have occurred an event
of default under any such other agreement.

               (l) No  Knowledge.  The Company  shall have no  knowledge  of any
event  more  likely  than not to have the effect of  causing  such  Registration
Statement to be suspended or otherwise  ineffective  (which event is more likely
than not to occur within the fifteen  Trading Days  following the Trading Day on
which such Notice is deemed delivered).

               (m) Trading Cushion. The Trading Cushion shall have elapsed since
the immediately preceding Optional Purchase Date and Closing Date.

               (n) Shareholder Vote. The issuance of shares of Common Stock with
respect to the applicable  Closing,  if any,  shall not violate the  shareholder
approval requirements of the Principal Market or the laws of any jurisdiction to
which the Company is subject.

               (o)  Escrow  Agreement.  If  requested  by  the  Company  or  any
Investor,  the parties hereto shall have entered into a mutually approved escrow
agreement for the Purchase Price due hereunder and the Company shall have agreed
to pay the fees and  expenses  of the Escrow  Agent and not be in default of any
such payments. A form of Escrow Agreement is annexed hereto as Exhibit E.

               (p) Voting  Restrictions.  The  Investor  shall not be subject to
voting or other restrictions arising under any applicable  "anti-takeover" laws,
rules or regulations.

               (q) Other.  On each  Condition  Satisfaction  Date,  the Investor
shall have received and been reasonably  satisfied with such other  certificates
and documents as shall have been  reasonably  requested by the Investor in order
for the Investor to confirm the Company's  satisfaction  of the  conditions  set
forth in this Section 7.2.  including,  without  limitation,  a  certificate  in
substantially  the form and  substance  of Exhibit C hereto,  executed in either
case by an  executive  officer of the  Company  and to the  effect  that all the
conditions to such Closing shall have been satisfied as at the date of each such
certificate.

                                  ARTICLE VIII

         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION

     Section 8.1  Due  Diligence  Review.  The Company shall make  available for
inspection and review by the Investor,  advisors to and  representatives  of the
Investor  (who  may or may  not be  affiliated  with  the  Investor  and who are
reasonably  acceptable to the Company),  any  underwriter  participating  in any
disposition of the Registrable  Securities on behalf of the Investor pursuant to
the  Registration

                                       16

<PAGE>

Statement, any such registration statement or amendment or supplement thereto or
any blue sky, NASD,  Principal Market, or other filing,  all financial and other
records,  all SEC  Documents  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 such review, and cause the Company's officers,  directors and
employees to supply all such information reasonably requested by the Investor 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 Investor 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.

     Section 8.2  Non-Disclosure of Non-Public Information.

               (a) The Company  represents and warrants that the Company and its
officers,  directors,  employees and agents have not  disclosed  any  non-public
information to the Investor or advisors to or  representatives  of the Investor.
The Company  covenants  and agrees that it shall  refrain from  disclosing,  and
shall  cause its  officers,  directors,  employees  and agents to  refrain  from
disclosing,   unless  prior  to  disclosure  of  such  information  the  Company
identifies  such  information as being  non-public  information and provides the
Investor,  such advisors and  representatives  with the opportunity to accept or
refuse to accept such non-public  information for review.  The Company may, as a
condition  to  disclosing  any  non-public  information  hereunder,  require the
Investor's   advisors  and  representatives  to  enter  into  a  confidentiality
agreement in form reasonably satisfactory to the Company and the Investor.

               (b) The Company acknowledges and understands that the Investor is
entering  into this  Agreement  and the  Registration  Rights  Agreement  at the
request  of  the   Company  and  in  good  faith   reliance  on  the   Company's
representation  set forth in Section  4.16 that  neither it nor its agents  have
disclosed to the Investor any material non-public information.

               (c)  Nothing   herein  shall  require  the  Company  to  disclose
non-public  information to the Investor or its advisors or representatives,  and
the Company  represents that it does not disseminate  non-public  information to
any Investor who purchases stock in the Company in a public  offering,  to money
managers  or to  securities  analysts,  in  violation  of  Regulation  FD of the
Exchange Act  provided,  subject to its  compliance  with  Regulation  FD of the
Exchange Act, however, that notwithstanding anything herein to the contrary, the
Company  will,  as  hereinabove  provided,  immediately  notify the advisors and
representatives of the Investor and, if any,  underwriters,  of any event or the
existence of any  circumstance  (without any obligation to disclose the specific
event or  circumstance)  of  which it  becomes  aware,  constituting  non-public
information  (whether or not requested of the Company  specifically or generally
during the course of due diligence by such persons or entities),  which,  if not
disclosed in the prospectus  included in the Registration  Statement would cause
such  prospectus to include a material  misstatement  or to omit a material fact
required to be stated therein in order to make the statements, therein, in light
of the circumstances in which they were made, not misleading.  Nothing contained
in this  Section 8.2 shall be  construed  to mean that such  persons or entities
other than the Investor  (without the written  consent of the Investor  prior to
disclosure of such  information)  may not obtain  non-public  information in the
course  of  conducting  due  diligence  in  accordance  with  the  terms of this
Agreement  and nothing  herein shall  prevent any such persons or entities  from
notifying  the Company of their opinion that based on such due diligence by such
persons  or  entities,  that  the  Registration  Statement  contains  an  untrue
statement of a material  fact or omits a material  fact required to be stated in
the  Registration  Statement  or  necessary  to make  the  statements  contained
therein, in light of the circumstances in which they were made, not misleading.

                                       17

<PAGE>

     Section 8.3  Confidentiality.  The Company agrees that it will not publicly
or privately  disclose the identities of the Investor,  Warrant  Recipients,  or
Finders  unless  expressly  agreed to in writing by the  Investor  or  otherwise
required by law.

                                   ARTICLE IX

                                     LEGENDS

     Section 9.1 Legends.  Unless  otherwise  provided below,  each  certificate
representing   Registrable  Securities  will  bear  the  following  legend  (the
"Legend"):

               THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE HAVE NOT
               BEEN REGISTERED UNDER THE U.S.  SECURITIES ACT OF 1933,
               AS  AMENDED  (THE  "SECURITIES   ACT"),  OR  ANY  OTHER
               APPLICABLE  SECURITIES  LAWS AND HAVE  BEEN  ISSUED  IN
               RELIANCE  UPON  AN  EXEMPTION  FROM  THE   REGISTRATION
               REQUIREMENTS  OF THE  SECURITIES  ACT  AND  SUCH  OTHER
               SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST
               OR  PARTICIPATION   HEREIN  MAY  BE  REOFFERED,   SOLD,
               ASSIGNED,     TRANSFERRED,     PLEDGED,     ENCUMBERED,
               HYPOTHECATED OR OTHERWISE  DISPOSED OF, EXCEPT PURSUANT
               TO  AN  EFFECTIVE   REGISTRATION  STATEMENT  UNDER  THE
               SECURITIES  ACT OR  PURSUANT TO A  TRANSACTION  THAT IS
               EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.  THE
               HOLDER  OF  THIS  CERTIFICATE  IS  THE  BENEFICIARY  OF
               CERTAIN  OBLIGATIONS  OF THE  COMPANY  SET  FORTH  IN A
               PRIVATE  EQUITY  LINE OF CREDIT  AGREEMENT  AMONG  HAND
               BRAND DISTRIBUTION, INC. AND THE CERTAIN INVESTOR DATED
               JANUARY  --,  2002.  A  COPY  OF  THE  PORTION  OF  THE
               AFORESAID AGREEMENT  EVIDENCING SUCH OBLIGATIONS MAY BE
               OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES.

          Upon the execution and delivery hereof,  the Company is issuing to the
transfer  agent for its  Common  Stock  (and to any  substitute  or  replacement
transfer  agent for its Common Stock upon the Company's  appointment of any such
substitute or replacement transfer agent) instructions in substantially the form
of Exhibit D hereto.  Such instructions shall be irrevocable by the Company from
and after the date  hereof or from and after the  issuance  thereof  to any such
substitute  or  replacement  transfer  agent,  as the  case  may be,  except  as
otherwise  expressly  provided in the Registration  Rights Agreement.  It is the
intent and purpose of such  instructions,  as provided  therein,  to require the
transfer  agent  for  the  Common  Stock  from  time to time  upon  transfer  of
Registrable  Securities by the Investor to issue  certificates  evidencing  such
Registrable Securities free of the Legend during the following periods and under
the following  circumstances and without consultation by the transfer agent with
the  Company or its  counsel  and  without  the need for any  further  advice or
instruction or documentation to the transfer agent by or from the Company or its
counsel or the Investor:

               (a) at any time after the Effective  Date,  upon surrender of one
or more certificates evidencing Common Stock that bear the Legend, to the extent
accompanied by a notice  requesting the issuance of new certificates free of the
Legend to replace  those  surrendered,  or prior to issuance  of a  certificate;
provided that (i) the Registration  Statement shall then be effective;  (ii) the
Investor  confirms to the transfer agent that it has sold,  pledged or otherwise
transferred or agreed to sell,

                                       18

<PAGE>

pledge or otherwise  transfer such Common Stock in a bona fide  transaction to a
third party that is not an affiliate  of the Company;  and (iii) the Investor or
sales agent  confirms to the transfer agent that the Investor or sales agent has
complied with the prospectus delivery requirement; and

               (b) at any time upon any  surrender  of one or more  certificates
evidencing   Registrable   Securities  that  bear  the  Legend,  to  the  extent
accompanied by a notice  requesting the issuance of new certificates free of the
Legend to replace those surrendered and containing  representations that (i) the
Investor  is  permitted  to  dispose  of  such  Registrable  Securities  without
limitation  as to amount or manner of sale  pursuant  to Rule  144(k)  under the
Securities Act or (ii) the Investor has sold,  pledged or otherwise  transferred
or agreed to sell, pledge or otherwise transfer such Registrable Securities in a
manner  other  than  pursuant  to  an  effective  registration  statement,  to a
transferee  who  will  upon  such  transfer  be  entitled  to  freely  tradeable
securities. Any of the notices referred to above in this Section 9.1 may be sent
by facsimile to the Company's transfer agent.

     Section 9.2 No Other Legend or Stock Transfer Restrictions. No legend other
than the one  specified  in Section 9.1 has been or shall be placed on the share
certificates  representing  the  Common  Stock  and  no  instructions  or  "stop
transfers   orders,"  so  called,   "stock  transfer   restrictions,"  or  other
restrictions  have been or shall be given to the Company's  transfer  agent with
respect thereto other than as expressly set forth in this Article IX.

                                    ARTICLE X

                               CHOICE OF LAW/VENUE

     Section  10.1 Choice of  Law/Venue.  This  Agreement  and the  Registration
Rights  Agreement shall be governed by and construed in accordance with the laws
of the State of New York without  regard to principles of conflicts of laws. Any
action  brought by either party against the other  concerning  the  transactions
contemplated  by this Agreement or the  Registration  Rights  Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York. Both parties and the individuals executing this Agreement
and  other  agreements  on  behalf  of  the  Company  agree  to  submit  to  the
jurisdiction of such courts and waive trial by jury. The prevailing  party shall
be entitled to recover from the other party its reasonable  attorney's  fees and
costs.  In the event that any provision of this Agreement or any other agreement
delivered  in  connection   herewith  is  invalid  or  unenforceable  under  any
applicable  statute  or  rule  of law,  then  such  provision  shall  be  deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any such  provision  which
may prove invalid or  unenforceable  under any law shall not affect the validity
or enforceability of any other provision of any agreement.

                                   ARTICLE XI

              ASSIGNMENT; ENTIRE AGREEMENT, AMENDMENT; TERMINATION

     Section  11.1  Assignment.  Neither  this  Agreement  nor any rights of the
Investor or the Company  hereunder  may be assigned by either party to any other
person.

     Section 11.2  Termination.  This Agreement shall terminate twenty-four (24)
months after the commencement of the Commitment Period; provided,  however, that
the  provisions of Articles VI, VIII, IX, X, XI, XII, XIII and XIV shall survive
the termination of this Agreement.

     Section  11.3  Entire   Agreement,   Amendment.   This  Agreement  and  the
Registration Rights Agreement  constitute the full and entire  understanding and
agreement  between the parties with regard to

                                       19

<PAGE>

the subjects  hereof and  thereof,  and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as  specifically  set forth in this  Agreement  or therein.  Except as expressly
provided in this  Agreement,  neither this  Agreement nor any term hereof may be
amended,  waived,  discharged or terminated  other than by a written  instrument
signed by both parties hereto.

                                   ARTICLE XII

                            NOTICES; INDEMNIFICATION

     Section 12.1 Notices. All notices, demands, requests, consents,  approvals,
and other  communications  required or permitted  hereunder  shall be in writing
and, unless otherwise  specified herein,  shall be (i) personally  served,  (ii)
deposited  in the mail,  registered  or  certified,  return  receipt  requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice. Any notice or other  communication  required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,   with  accurate  confirmation   generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received),  or the first  business day following  such delivery (if delivered
other than on a business day during normal  business  hours where such notice is
to be received) or (b) on the second  business day following the date of mailing
by express courier service,  fully prepaid,  addressed to such address,  or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

     If to Hand Brand Distribution, Inc.:

     Hand Brand  Distribution,  Inc.
     9845 N.E. 2nd Avenue
     Miami Shores,  Florida  33138

     With a copy to (which communication shall not constitute notice):

     JOEL  BERNSTEIN,  ESQ.,  P.A.
     11900  Biscayne  Boulevard
     Suite 604
     Miami, Florida 33181
     Attn: Joel Bernstein
     Telecopier: (305) 892-0822

     If to the Investor:

     Prima Capital Growth Fund LLC
     676A 9th Avenue, Suite 259
     New York, NY 10036
     Telecopier: 561-241-7145

     with a copy to (which communication shall not constitute notice):

     Proskauer Rose, LLP

                                       20

<PAGE>

     2255 Glades Road, Suite 340W
     Boca Raton, FL 33431
     Attn: Gayle Coleman, Esq.
     Telecopier: (561) 241-7145

Either party hereto may from time to time change its address or facsimile number
for  notices  under this  Section  12.1 by giving at least ten (10) days'  prior
written  notice of such changed  address or facsimile  number to the other party
hereto.

     Section 12.2  Indemnification.

               (a) The  Company  agrees  to  indemnify  and  hold  harmless  the
Investor, its partners,  Affiliates,  officers,  directors,  employees, and duly
authorized  agents, and each Person or entity, if any, who controls the Investor
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange  Act,  together  with  the  Controlling  Persons  (as  defined  in  the
Registration  Rights Agreement) from and against any Damages,  joint or several,
and any  action  in  respect  thereof  to  which  the  Investor,  its  partners,
Affiliates,  officers, directors, employees, and duly authorized agents, and any
such Controlling  Person becomes subject to,  resulting from,  arising out of or
relating to any  misrepresentation,  breach of warranty or  nonfulfillment of or
failure  to  perform  any  covenant  or  agreement  on the  part of the  Company
contained in this Agreement in any event as such Damages are incurred.

               (b) The  Investor  agrees  to  indemnify  and hold  harmless  the
Company, its partners,  Affiliates,  officers,  directors,  employees,  and duly
authorized  agents, and each Person or entity, if any, who controls the Investor
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange  Act,  together  with  the  Controlling  Persons  (as  defined  in  the
Registration  Rights Agreement) from and against any Damages,  joint or several,
and  any  action  in  respect  thereof  to  which  the  Company,  its  partners,
Affiliates,  officers, directors, employees, and duly authorized agents, and any
such Controlling  Person becomes subject to,  resulting from,  arising out of or
relating to any  misrepresentation,  breach of warranty or  nonfulfillment of or
failure  to  perform  any  covenant  or  agreement  on the part of the  Investor
contained in this Agreement.

     Section 12.3  Method of  Asserting Indemnification  Claims.  All claims for
indemnification  by any Indemnified  Party (as defined below) under Section 12.2
will be asserted and resolved as follows:

               (a) In the event any  claim or  demand  in  respect  of which any
person  claiming  indemnification  under  any  provision  of  Section  12.2  (an
"Indemnified Party") might seek indemnity under Section 12.2 is asserted against
or sought to be collected from such Indemnified Party by a person other than the
Company,  the Investor or any affiliate of the Company (a "Third Party  Claim"),
the Indemnified Party shall deliver a written notification,  enclosing a copy of
all papers served, if any, and specifying the nature of and basis for such Third
Party Claim and for the Indemnified  Party's claim for  indemnification  that is
being  asserted  under any  provision  of Section  12.2  against any person (the
"Indemnifying  Party"),  together  with the  amount  or, if not then  reasonably
ascertainable,  the estimated  amount,  determined in good faith,  of such Third
Party Claim (a "Claim  Notice") with reasonable  promptness to the  Indemnifying
Party.  If the  Indemnified  Party  fails  to  provide  the  Claim  Notice  with
reasonable  promptness after the Indemnified Party receives notice of such Third
Party Claim,  the  Indemnifying  Party will not be  obligated  to indemnify  the
Indemnified  Party with respect to such Third Party Claim to the extent that the
Indemnifying  Party's ability to defend has been irreparably  prejudiced by such
failure  of the  Indemnified  Party.  The  Indemnifying  Party  will  notify the
Indemnified  Party as soon as  practicable  within the period ending thirty (30)
calendar  days  following  receipt by the  Indemnifying  Party of either a Claim
Notice or an Indemnity Notice (as defined below) (the "Dispute

                                       21

<PAGE>

Period") whether the Indemnifying  Party disputes its liability or the amount of
its  liability  to the  Indemnified  Party  under  Section  12.2 and whether the
Indemnifying  Party  desires,  at its  sole  cost and  expense,  to  defend  the
Indemnified Party against such Third Party Claim.

          1. If the Indemnifying Party notifies the Indemnified Party within the
Dispute  Period that the  Indemnifying  Party desires to defend the  Indemnified
Party with respect to the Third Party Claim  pursuant to this  Section  12.3(a),
then the  Indemnifying  Party  will  have  the  right to  defend,  with  counsel
reasonably  satisfactory to the Indemnified  Party, at the sole cost and expense
of  the  Indemnifying   Party,   such  Third  Party  Claim  by  all  appropriate
proceedings,  which proceedings will be vigorously and diligently  prosecuted by
the  Indemnifying  Party  to a  final  conclusion  or  will  be  settled  at the
discretion  of  the  Indemnifying  Party  (but  only  with  the  consent  of the
Indemnified  Party in the case of any  settlement  that  provides for any relief
which affects the Indemnified Party, other than the payment of monetary damages,
or that provides for the payment of monetary damages as to which the Indemnified
Party  will  not  be  indemnified  in  full  pursuant  to  Section  12.2).   The
Indemnifying  Party will have full  control  of such  defense  and  proceedings,
including any  compromise or settlement  thereof;  provided,  however,  that the
Indemnified Party may, at the sole cost and expense of the Indemnified Party, at
any time prior to the Indemnifying Party's delivery of the notice referred to in
the first sentence of this clause 1, file any motion,  answer or other pleadings
or take any other action that the Indemnified  Party  reasonably  believes to be
necessary or appropriate to protect its interests; and provided further, that if
requested by the  Indemnifying  Party,  the Indemnified  Party will, at the sole
cost and expense of the Indemnifying  Party,  provide reasonable  cooperation to
the Indemnifying Party in contesting any Third Party Claim that the Indemnifying
Party  elects to contest.  The  Indemnified  Party may  participate  in, but not
control,  any defense or settlement  of any Third Party Claim  controlled by the
Indemnifying  Party  pursuant  to this  clause 1, and except as  provided in the
preceding  sentence,  the Indemnified Party will bear its own costs and expenses
with  respect  to  such  participation.   Notwithstanding  the  foregoing,   the
Indemnified  Party may take over the control of the defense or  settlement  of a
Third Party Claim at any time if it  irrevocably  waives its right to  indemnity
under Section 12.2 with respect to such Third Party Claim.

          2. If the  Indemnifying  Party fails to notify the  Indemnified  Party
within the Dispute  Period  that the  Indemnifying  Party  desires to defend the
Third Party Claim  pursuant to Section  12.3(a),  or if the  Indemnifying  Party
gives such notice but fails to prosecute vigorously and diligently or settle the
Third  Party  Claim,  or if the  Indemnifying  Party  fails to give  any  notice
whatsoever  within the Dispute Period,  then the Indemnified Party will have the
right to defend,  at the sole cost and expense of the  Indemnifying  Party,  the
Third Party Claim by all  appropriate  proceedings,  which  proceedings  will be
prosecuted by the Indemnified  Party in a reasonable manner and in good faith or
will be settled at the discretion of the Indemnified  Party (with the consent of
the Indemnifying  Party, which consent will not be unreasonably  withheld).  The
Indemnified  Party  will have full  control  of such  defense  and  proceedings,
including any  compromise  or settlement  thereof;  provided,  however,  that if
requested by the Indemnified  Party,  the  Indemnifying  Party will, at the sole
cost and expense of the Indemnifying  Party,  provide reasonable  cooperation to
the Indemnified  Party and its counsel in contesting any Third Party Claim which
the Indemnified Party is contesting. Notwithstanding the foregoing provisions of
this clause 2, if the  Indemnifying  Party has  notified the  Indemnified  Party
within the Dispute Period that the Indemnifying  Party disputes its liability or
the amount of its liability  hereunder to the Indemnified  Party with respect to
such  Third  Party  Claim  and if such  dispute  is  resolved  in  favor  of the
Indemnifying  Party in the manner provided in clause 3 below,  the  Indemnifying
Party will not be  required to bear the costs and  expenses  of the  Indemnified
Party's  defense  pursuant  to  this  clause  2 or of the  Indemnifying  Party's
participation  therein at the Indemnified  Party's request,  and the Indemnified
Party will reimburse the Indemnifying Party in full for all reasonable costs and
expenses incurred by the Indemnifying  Party in connection with such litigation.
The  Indemnifying  Party may  participate  in, but not  control,  any defense or
settlement  controlled by the  Indemnified  Party pursuant to this clause 2, and
the Indemnifying Party will bear its own costs and expenses with respect to such
participation.

                                       22

<PAGE>

          3. If the  Indemnifying  Party notifies the Indemnified  Party that it
does not dispute its liability or the amount of its liability to the Indemnified
Party with  respect to the Third  Party  Claim  under  Section  12.2 or fails to
notify the Indemnified  Party within the Dispute Period whether the Indemnifying
Party  disputes its liability or the amount of its liability to the  Indemnified
Party with respect to such Third Party Claim,  the loss in the amount  specified
in the Claim Notice will be conclusively  deemed a liability of the Indemnifying
Party under Section 12.2 and the Indemnifying Party shall pay the amount of such
Loss to the  Indemnified  Party on demand.  In the event any  Indemnified  Party
should have a claim under Section 12.2 against the Indemnifying  Party that does
not involve a Third Party Claim,  the Indemnified  Party shall deliver a written
notification  of a claim for indemnity  under Section 12.2 specifying the nature
of and basis for such claim, together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such claim (an
"Indemnity  Notice") with reasonable  promptness to the Indemnifying  Party. The
failure by any Indemnified  Party to give the Indemnity  Notice shall not impair
such party's rights hereunder  except to the extent that the Indemnifying  Party
demonstrates  that  it  has  been  irreparably   prejudiced   thereby.   If  the
Indemnifying  Party notifies the Indemnified  Party that it does not dispute the
claim or the amount of the claim described in such Indemnity  Notice or fails to
notify the Indemnified  Party within the Dispute Period whether the Indemnifying
Party disputes the claim or the amount of the claim  described in such Indemnity
Notice,  the  Loss in the  amount  specified  in the  Indemnity  Notice  will be
conclusively deemed a liability of the Indemnifying Party under Section 12.2 and
the  Indemnifying  Party  shall pay the  amount of such Loss to the  Indemnified
Party on demand.

                                  ARTICLE XIII

                             FEES-EXPENSES-WARRANTS

     Section  13.1  Warrants.  The  Investor  (sometimes  referred  to herein as
"Warrant  Recipient")  shall  receive  600,000  Warrants.  A form of  Warrant is
annexed  hereto as Exhibit F. The  Purchase  Price (as  defined in the  Warrant)
shall be $1.00.  The Warrants will be exercisable  for five years from the Issue
Date (as defined in the  Warrant).  The  Investor  is granted  the  registration
rights  set forth in the  Registration  Rights  Agreement  with  respect  to the
Warrant  Shares.  The  Warrants  must  be  delivered  to  the  Investor  on  the
Subscription Date. All the  representations,  undertakings and covenants made by
the Company to or for the benefit of the Investor relating to the Put Shares and
to or for the  benefit of the holder of Put Shares are also made by the  Company
to and for the benefit of the Investor in relation to the Warrant Shares.

     Section  13.2  Timely  Delivery.  In the event any  Warrants are not timely
delivered, the Investor shall have no obligation to purchase Put Shares pursuant
to this Agreement.

     Section  13.3  Fees and  Expenses.  Each  of the  Company  and the Investor
agrees to pay its own expenses  incident to the  performance of its  obligations
hereunder,  except that the Company shall pay the fees, and reasonable  expenses
and  disbursements of the Investor's  counsel on or before the Subscription Date
as follows: Proskauer Rose LLP shall be paid $30,000.00.

     Section 13.4  Finders.  Each of the parties hereto  represents  that it has
had no dealings in connection  with this  transaction  with any finder or broker
who will demand  payment of any fee or  commission  from the Company or Investor
except as described on Schedule 13 (each a "Finder").  The Company agrees to pay
to the Finders the fee set forth on Schedule 13 ("Finder's  Fee").  The Finder's
Fee  shall  be  paid  out of the  escrow  account  established  for  deposit  of
Investment  Amounts,  if any,  but in any event not later than the Closing  Date
with respect to which Finder's Fees are payable. A default by the Company of the
Company's  obligations  to the  Finder  shall be  deemed  a  default  under  the
Agreement, and

                                       23

<PAGE>

shall terminate the Investor's  obligation to comply with any Optional  Purchase
Notices  provided  such  default is not due to a failure  by an escrow  agent to
comply with his obligations.  The Company on the one hand, and the Investor,  on
the other hand, agree to indemnify the other against and hold the other harmless
from any and all liabilities to any other persons claiming brokerage commissions
or  finder's  fees on account of  services  purported  to have been  rendered on
behalf  of the  indemnifying  party in  connection  with this  Agreement  or the
transactions contemplated hereby and arising out of such party's actions.

     Section 13.5  Commitment  Fee. The Company  agrees to pay, on or before the
Subscription Date, the aggregate amount of $300,000.00 ("Commitment Fee") to the
Investor.  In the event the Commitment Fee is not timely paid, then the Investor
shall have no obligation to purchase Put Shares pursuant to this Agreement.

                                   ARTICLE XIV

                                  MISCELLANEOUS

     Section  14.1  Counterparts.  This  Agreement  may be  executed in multiple
counterparts,  each of which may be executed by less than all of the parties and
shall be deemed to be an original  instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute  one and the same  instrument.  This  Agreement  may be  delivered by
telecopier  transmission  which such copy shall be deemed an  original  executed
Agreement.

     Section 14.2  Entire  Agreement.  This Agreement, the Exhibits hereto,  the
documents  delivered  in  connection  herewith,   and  the  Registration  Rights
Agreement  set forth the  entire  Agreement  and  understanding  of the  parties
relating  to  the  subject   matter   hereof  and   supersedes   all  prior  and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and  written  relating  to the subject  matter  hereof.  The terms and
conditions  of all Exhibits to this  Agreement are  incorporated  herein by this
reference  and shall  constitute  part of this  Agreement  as if fully set forth
herein.

     Section  14.3  Survival;  Severability.  The  representations,  warranties,
covenants  and  agreements  of the parties  hereto  shall  survive  each Closing
hereunder.  In the event  that any  provision  of this  Agreement  becomes or is
declared by a court of competent  jurisdiction to be illegal,  unenforceable  or
void,  this  Agreement  shall  continue  in full force and effect  without  said
provision; provided that such severability shall be ineffective if it materially
changes the economic benefit of this Agreement to any party.

     Section 14.4  Title 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.

     Section 14.5  Reporting  Entity for the Common Stock.  The reporting entity
relied  upon for the  determination  of the Bid Price,  VWAP,  trading  price or
trading  volume of the Common Stock on any given Trading Day for the purposes of
this Agreement shall be Bloomberg,  L.P. or any successor  thereto.  The written
mutual  consent of the Investor and the Company  shall be required to employ any
other reporting entity.

     Section  14.6   Remedies  for  Breach.   The   Company  and   the  Investor
acknowledges  that  the  other  party's  remedy  at law  for the  breach  of the
provisions provided in this Agreement is inadequate.  Therefore, the Company and
the Investor  agree that a breach or violation of this Agreement by the Company,
on the one hand,  and the  Investor,  on the other hand,  will entitle the other
party, as a matter of right, to an injunction or other equitable relief,  issued
by any court or arbitration panel of competent

                                       24

<PAGE>

jurisdiction,  restraining any further or continued  breach or violation of this
Agreement.  Such right to an injunction  will be cumulative  and in addition to,
and not in lieu of, any other remedies to which the Company and the Investor may
show themselves justly entitled.

     Section 14.7  Publicity.  Except as required by applicable law, neither the
Company nor the Investor  shall issue any press  release or  otherwise  make any
public  statement  or  announcement  with  respect  to  this  Agreement  or  the
transactions  contemplated hereby or the existence of this Agreement without the
prior  consent  of the other  party,  which  consent  shall not be  unreasonably
withheld or delayed.

     Section   14.8   Confidentiality.   Investor   agrees   to   maintain   the
confidentiality  of all information about the Company received from any officer,
employee  or  agent  of the  Company,  until  such  time  as  that  confidential
information is released to the public generally as contemplated by Regulation FD
of the Exchange Act other than as a result of any disclosure by Investor.

                                       25

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Private Equity Line
of  Credit  Agreement  to  be  executed  by  the  undersigned,   thereunto  duly
authorized, as of the date first set forth above.

                                    HAND BRAND DISTRIBUTION, INC.
                                    "Company"

                                        /s/
                                    By: ----------------------------------------

                                    PRIMA CAPITAL GROWTH FUND LLC
                                    "Investor"

                                    By: ----------------------------------------

                                       26

<PAGE>

                                    EXHIBIT B

              FORM OF OPINION OF THE COMPANY'S INDEPENDENT COUNSEL
                WITHIN 5 TRADING DAYS FOLLOWING EFFECTIVE DATE OF
                             REGISTRATION STATEMENT

TO: Prima Capita Growth Fund LLC

     We have acted as counsel to -----------------------------, a --------------
corporation  (the  "Company"),  in  connection  with the Private  Equity Line of
Credit Agreement  between the Company and you, dated as of  --------------------
(the "Line of Credit  Agreement"),  pursuant to which the Company  will issue to
you from time to time shares of Common  Stock,  $----------  par value (the "Put
Shares")  and the  Registration  Rights  Agreement  between you and the Company,
dated  ---------------  (the "Registration  Rights Agreement," and together with
the Line of Credit Agreement, the "Agreements"). This opinion is rendered to you
pursuant to Section 7.2(h) of the Line of Credit  Agreement.  Capitalized  terms
used without  definition in this opinion have the meanings  given to them in the
Line of Credit Agreement.

In  connection  with this  opinion,  we have  assumed  the  authenticity  of all
records,   documents,   and  instruments  submitted  to  us  as  originals,  the
genuineness of all  signatures,  the legal  capacity of natural  persons and the
conformity to the originals of all records, documents, and instruments submitted
to us as copies.  We have also assumed that there are no facts or  circumstances
relating to you that might prevent you from enforcing any of the rights to which
our opinion relates.  We have based our opinion upon our review of the following
records, documents and instruments:

     (a) The Articles of Incorporation  of the Company,  as amended to date (the
"Articles"),   certified  by  the  Secretary  of  State  [the   jurisdiction  of
incorporation] as of ---------------------- and certified to us by an officer of
the  Company  as being  complete  and in full force and effect as of the date of
this opinion;

     (b) The Bylaws of the Company  certified to us by an officer of the Company
as being  complete  and in full force and effect as of the date of this  opinion
(the "Bylaws");

     (c) Records  certified  to us by an officer of the Company as  constituting
all  records  of  proceedings  and  actions  of the Board of  Directors  and the
shareholders  of the Company  relating to the  transactions  contemplated by the
Agreement;

     (d) The Agreements;

     (e) A certificate related to the good standing of the Company issued by the
Secretary of State of the State of [the  jurisdiction  of  incorporation]  dated
-------------------;

     (f) A  Certificate  of the Chief  Executive  Officer  of the  Company as to
certain factual matters (the "Officer's Certificate");

     (g) The SEC Documents.

     With your consent, we have based our opinion expressed in paragraph 1 below
as to the good standing of the Company  solely upon the documents  enumerated in
(e) and (f) above.

                                       27

<PAGE>

     Where our opinion relates to our "knowledge,"  such knowledge is based upon
our  examination  of  the  records,  documents,  instruments,  and  certificates
enumerated or described above and the actual knowledge of attorneys in this firm
who are currently involved in substantive legal representation of the Company on
matters related to the Agreements.  With your consent,  we have not examined any
records  of any  court,  administrative  tribunal  or other  similar  entity  in
connection with our opinion  expressed in paragraph 2 of Part III below. We have
assumed,  for  purposes  of our  opinion,  to the effect that the Put Shares are
fully paid and that the  consideration  for such Put Shares  will be received by
the Company in accordance with the Line of Credit Agreement.

     We express no opinion as to any anti-fraud provisions of applicable federal
or state  securities  laws,  any tax,  anti-trust,  land  use,  export,  safety,
environmental or hazardous materials laws, rules or regulations.

     This opinion is limited to the federal laws of the United States of America
and the laws of the States of [jurisdiction of  incorporation]  and New York. We
disclaim  any  opinion as to the laws of any other  jurisdiction  and we further
disclaim any opinion as to any statute,  rule, regulation,  ordinance,  order or
other promulgation of any regional or local governmental body.

     Based upon the foregoing and our examination of such questions of law as we
have  deemed  necessary  or  appropriate  for the purpose of this  opinion,  and
subject to the limitations and qualifications expressed below, it is our opinion
that:

     1. The Company has been duly  incorporated  and is validly  existing and in
good standing under the laws of the State of [jurisdiction of incorporation] and
has all requisite power and authority to carry on its business and to own, lease
and operate its properties and assets as described in the SEC Documents.  To our
knowledge, the Company does not have any subsidiaries other than as set forth in
the SEC Documents.

     2. To our knowledge, except as described in the SEC Documents, there are no
claims, actions,  suits,  proceedings or investigations that are pending against
the Company or its properties,  or to our knowledge,  any officer or director of
the Company in his or her capacity as such, nor to our knowledge has the Company
received any written threat of any such claims, actions,  suits,  proceedings or
investigations.

     3. To our knowledge,  except as described in the Company's  representations
and warranties  contained in Article IV of the Line of Credit  Agreement,  there
are no  outstanding  options,  warrants,  calls or  commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any right to subscribe for or acquire, any shares of
Common Stock, or contracts, commitments, understanding, or arrangements by which
the Company is or may become bound to issue  additional  shares of Common Stock,
or securities or rights convertible or exchangeable into shares of Common Stock.

     4.  Subject to the accuracy of your  representations  in Article III of the
Line of Credit  Agreement  on the date hereof and on the date of issuance of any
Put Shares and Warrant  Shares,  and the statement in the Officer's  Certificate
that the Company has not  offered or sold,  and will not offer or sell,  any Put
Shares by means of  advertising  or public  solicitation,  the  issuance  of the
Warrant  Shares in  conformity  with the  terms of the Line of Credit  Agreement
constitutes transactions exempt from the registration  requirements of Section 5
of the  Securities  Act of 1933,  as  amended.  The Put Shares  and the  Warrant
Shares,  when  issued  in  compliance  with the  Line of  Credit  Agreement  and
Registration Rights Agreement,  will be duly authorized,  validly issued,  fully
paid,  and  non-assessable  and  free of  preemptive  rights  set  forth  in the
Articles,  Bylaws and any  agreement  filed as an exhibit to the SEC  Documents,

                                       28

<PAGE>

provided,  however,  that the Put  Shares and  Warrant  Shares may be subject to
restrictions  on transfer under state and federal  securities  laws, but only to
the extent set forth in the Line of Credit Agreement.

     5. The Company has the  requisite  corporate  power and  authority to enter
into and  perform  its  obligations  under the  Agreements  and to issue the Put
Shares.

     Each of the Agreements has been duly authorized,  executed and delivered by
the Company and the consummation by it of the transactions  contemplated thereby
has been duly  authorized  by all  necessary  corporate  action  and no  further
consent or  authorization of the Company's board of directors or shareholders is
required.  Each of the  Agreements  has been duly  executed and delivered on the
part of the  Company  and is a valid  and  binding  obligation  of the  Company,
enforceable  against the Company in accordance  with its terms,  subject,  as to
enforcement,  (i)  to  bankruptcy,  insolvency,   reorganization,   arrangement,
moratorium,  and other laws of general  applicability  relating to or  affecting
creditors'  rights,   (ii)  to  general  principles  of  equity,   whether  such
enforcement  is  considered  in a  proceeding  in equity or at law, and (iii) to
limitations  imposed by applicable law or public policy on the enforceability of
the indemnification provisions contained in the Agreements.

     6. The  execution,  delivery and  performance  of and  compliance  with the
respective  terms of each of the  Agreements,  and issuance of the Put Shares in
accordance with the Line of Credit Agreement,  will not violate any provision of
the Articles or Bylaws or any law applicable to the Company.

     7. The holders of the Common Stock will not be subject to the provisions of
the  States  of  [states  of   incorporation   and  principal  office  location]
anti-takeover statutes.

     In connection  with the  registration of the Put Shares and Warrant Shares,
we advised  the Company as to the  requirements  of the  Securities  Act and the
applicable  Rules and Regulations and rendered other legal advice and assistance
in the course of  preparation  of the  Registration  Statement  and  Prospectus,
including  review and  discussion of the contents  thereof.  On the basis of the
information that was developed in the course of the performance of such services
considered in light of our  understanding  of the Securities Act,  including the
requirements  of Forms S-1 and SB-2,  we have no reason to believe  that (i) the
Registration   Statement  (other  than  the  financial  statements  and  related
statements and schedules, as to which we express no belief), as of its Effective
Date,  contained any untrue statement of a material fact or omitted to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  therein  not  misleading,  or (ii) the  Prospectus  (other  than the
financial  statements  and  related  statements  and  schedules,  as to which we
express no belief),  as of the  Effective  Date of the  Registration  Statement,
contained  any  untrue  statement  of a  material  fact or  omitted to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The limitations  inherent in the  independent  verification of
factual matters and the character of determinations involved in the registration
process are such, however, that except as set forth in this opinion letter we do
not assume any responsibility for the accuracy,  completeness or fairness of the
statements contained in the Registration Statement or the Prospectus.

     Our opinions  expressed  above are  specifically  subject to the  following
limitations, exceptions, qualifications and assumptions:

     A. The effect of  bankruptcy,  insolvency,  reorganization,  moratorium and
other  similar laws relating to or affecting the relief of debtors or the rights
and remedies of creditors generally,  including,  without limitation, the effect
of statutory or other laws regarding  fraudulent  conveyances  and  preferential
transfers.

                                       29

<PAGE>

     B.  Limitations  imposed by state  law,  federal  law or general  equitable
principles upon the specific enforceability of any of the remedies, covenants or
other  provisions  of any  applicable  agreement  and upon the  availability  of
injunctive relief or other equitable remedies, regardless of whether enforcement
of any such agreement is considered in a proceeding in equity or at law.

     C. This  opinion  letter  is  governed  by,  and  shall be  interpreted  in
accordance  with,  the Legal Opinion Accord (the "Accord") of the ABA Section of
Business  Law  (1991).  As  a  consequence,   it  is  subject  to  a  number  of
qualifications,  exceptions,  definitions,  limitations  on  coverage  and other
limitations,  all as more  particularly  described in the Accord,  including the
General Qualifications and the Equitable Principles Limitation, and this opinion
letter should be read in conjunction therewith.

     This opinion is rendered as of the date first written above,  is solely for
your benefit in connection with the Agreement and may not be relied upon or used
by, circulated, quoted, or referred to nor may any copies hereof be delivered to
any other person without our prior written  consent.  We disclaim any obligation
to update this opinion letter or to advise you of facts,  circumstances,  events
or  developments  which  hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.

                                              Very truly yours,

                                       30

<PAGE>

                                    EXHIBIT C

                             COMPLIANCE CERTIFICATE

     The undersigned, --------------------------, hereby certifies, with respect
to the shares of Common  Stock of  ---------------------------  (the  "Company")
issuable in connection with the Optional Purchase Notice dated  ----------------
(the "Notice"),  delivered  pursuant to Article II of the Private Equity Line of
Credit  Agreement  dated  ----------------------------------,  by and  among the
Company and the Investor (the "Agreement"), as follows:

     1. The  undersigned is the duly elected  --------------------------  of the
Company.

     2. The  representations  and  warranties  of the  Company  set forth in the
Agreement are true and correct in all material respects as though made on and as
of the date hereof.

     3. The Company has performed,  in all material respects,  all covenants and
agreements  to be  performed  by the  Company  on or prior to the  Closing  Date
related  to the  Notice  and has  complied  in all  material  respects  with all
obligations and conditions contained in the Agreement.

     4.  The  amount  of  Common  Stock  remaining  registered  in an  effective
registration statement on behalf of the Investor as of this date is set forth on
the schedule hereto.

     The   undersigned   has  executed  this   Certificate   this  ----  day  of
--------------.

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

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

                                       31

<PAGE>

                                    EXHIBIT D

                         INSTRUCTIONS TO TRANSFER AGENT

[TRANSFER AGENT]

Dear Sirs:

     Reference  is made to the  Private  Equity  Line of Credit  Agreement  (the
"Agreement"),   dated  as  of  --------------------   among  the  Investor  (the
"Investor")  and   ---------------------   (the  "Company").   Pursuant  to  the
Agreement,  subject to the terms and conditions set forth in the Agreement,  the
Investor  has agreed to purchase  from the Company and the Company has agreed to
sell to the Investor from time to time during the term of the  Agreement  shares
of Common Stock of the Company,  $-------- par value (the "Common Stock").  As a
condition to the effectiveness of the Agreement, the Company has agreed to issue
to you, as the transfer agent for the Common Stock (the "Transfer Agent"), these
instructions  relating to the Common  Stock to be issued to the  Investor  (or a
permitted  assignee)  pursuant to the  Agreement.  All terms used herein and not
otherwise defined shall have the meaning set forth in the Agreement.

     1. ISSUANCE OF COMMON STOCK WITHOUT THE LEGEND

Pursuant to the Agreement,  the Company is required to prepare and file with the
Commission,  and  maintain the  effectiveness  of, a  registration  statement or
registration  statements  registering  the  resale  of the  Common  Stock  to be
acquired  by the  Investor  under the  Agreement.  The  Company  will advise the
Transfer  Agent  in  writing  of  the  effectiveness  of any  such  registration
statement promptly upon its being declared  effective.  The Transfer Agent shall
be entitled to rely on such advice and shall  assume that the  effectiveness  of
such  registration  statement  remains in effect  unless the  Transfer  Agent is
otherwise  advised  in  writing  by the  Company  and shall not be  required  to
independently   confirm  the  continued   effectiveness  of  such   registration
statement.  In the circumstances set forth in the following two paragraphs,  the
Transfer Agent shall deliver to the Investor  certificates  representing  Common
Stock not bearing the Legend without  requiring further advice or instruction or
additional  documentation from the Company or its counsel or the Investor or its
counsel or any other party (other than as described in such paragraphs).

     At any  time  after  the  effective  date  of the  applicable  registration
statement  (provided  that the Company has not informed  the  Transfer  Agent in
writing that such registration statement is not effective) upon any surrender of
one or more  certificates  evidencing Common Stock which bear the Legend, to the
extent  accompanied by a notice requesting the issuance of new certificates free
of the Legend to replace those surrendered,  the Transfer Agent shall deliver to
the  Investor  the  certificates  representing  the Common Stock not bearing the
Legend, in such names and denominations as the Investor shall request,  provided
that:

     (a) in connection with such event, the Investor (or its permitted assignee)
shall confirm in writing to the Transfer Agent that (i) the Investor confirms to
the transfer agent that it has sold, pledged or otherwise  transferred or agreed
to  sell,  pledge  or  otherwise  transfer  such  Common  Stock  in a bona  fide

                                       32

<PAGE>

transaction  to a transferee  that is not an affiliate of the Company;  and (ii)
the Investor  confirms to the transfer agent that the Investor has complied with
the prospectus delivery requirement;

     (b) the Investor (or its permitted  assignee)  shall  represent  that it is
permitted  to  dispose of such  securities  without  limitation  as to amount or
manner of sale pursuant to Rule 144(k) under the Securities Act; or

     (c) the  Investor,  its  permitted  assignee,  or either  of their  brokers
confirms  to the  transfer  agent that (i) the  Investor  has held the shares of
Common  Stock for at least one year,  (ii)  counting the shares  surrendered  as
being sold upon the date the unlegended  Certificates  would be delivered to the
Investor (or the Trading Day immediately following if such date is not a Trading
Day),  the Investor  will not have sold more than the greater of (a) one percent
(1%) of the total  number  of  outstanding  shares  of  Common  Stock or (b) the
average  weekly  trading volume of the Common Stock for the preceding four weeks
during the three  months  ending  upon such  delivery  date (or the  Trading Day
immediately following if such date is not a Trading Day), and (iii) the Investor
has complied with the manner of sale and notice  requirements  of Rule 144 under
the Securities Act.

     Any  advice,  notice or  instructions  to the  Transfer  Agent  required or
permitted to be given hereunder may be transmitted via facsimile to the Transfer
Agent's facsimile number of --------------------.

     2. MECHANICS OF DELIVERY OF CERTIFICATES REPRESENTING COMMON STOCK

          In connection with any Closing pursuant to which the Investor acquires
Common Stock under the Agreement,  the Transfer Agent shall deliver certificates
representing  Common  Stock  (with or without  the Legend,  as  appropriate)  as
promptly  as  practicable,  but in no event later than three (3)  business  days
after such Closing.

     3. FEES OF TRANSFER AGENT; INDEMNIFICATION

          The Company  agrees to pay the Transfer Agent for all fees incurred in
connection with these Irrevocable Instructions.  The Company agrees to indemnify
the Transfer Agent and its officers,  employees and agents,  against any losses,
claims,  damages or  liabilities,  joint or several,  to which it or they become
subject  based  upon the  performance  by the  Transfer  Agent of its  duties in
accordance with the Irrevocable Instructions.

                                       33

<PAGE>

     4. THIRD PARTY BENEFICIARY

          The  Company and the  Transfer  Agent  acknowledge  and agree that the
Investor is an express third party beneficiary of these Irrevocable Instructions
and shall be entitled to rely upon, and enforce, the provisions hereof.

                                       [THE COMPANY]

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

[TRANSFER AGENT]

By:-------------------------------

                                       34

<PAGE>

                                   SCHEDULE 13

FINDERS                                      CASH FINDERS FEE
None                                         None
TOTAL                                        None

                                       35Ex. 10.5

                          REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this "Agreement"),  dated as of January
16,  2002,  is made and  entered  into among Hand Brand  Distribution,  Inc.,  a
Florida  corporation (the  "Company"),  and Prima Capital Growth Fund LLC, a New
York limited liability corporation ("Investor").

     WHEREAS,  the Company  and the  Investor  have  entered  into that  certain
Private  Equity  Line of  Credit  Agreement,  dated as of the date  hereof  (the
"Investment Agreement"),  pursuant to which the Company will issue, from time to
time,  to the  Investor  up to  $30,000,000  worth of Common  Stock and  600,000
Warrants;

     WHEREAS,  pursuant to the terms of, and in partial  consideration  for, the
Investor's  agreement to enter into the  Investment  Agreement,  the Company has
agreed to provide the Investor with certain  registration rights with respect to
the Registrable Securities (as defined in the Investment Agreement);

     NOW,  THEREFORE,  in  consideration of the premises,  the  representations,
warranties,  covenants and  agreements  contained  herein and in the  Investment
Agreement,  and for other  good and  valuable  consideration,  the  receipt  and
sufficiency  of which is hereby  acknowledged,  intending  to be  legally  bound
hereby,  the parties hereto agree as follows  (capitalized terms used herein and
not defined  herein  shall have the meaning  ascribed to them in the  Investment
Agreement):

                                    ARTICLE I
                               REGISTRATION RIGHTS

     Section 1.1       FORM OF REGISTRATION STATEMENTS.

     (a) Filing of Registration  Statement.  Subject to the terms and conditions
of this Agreement,  the Company shall file with the SEC, within  forty-five (45)
days following the  Subscription  Date, a registration  statement on Form S-1 or
SB-2  under  the  Securities  Act  (the   "Registration   Statement")   for  the
registration of the resale by the Investor of Registrable Securities.

     (b) Effectiveness of the Registration Statement.  The Company shall use its
reasonable best efforts to have the Registration Statement declared effective by
the  SEC  by no  later  than  one  hundred  and  twenty  (120)  days  after  the
Subscription  Date and to insure  that the  Registration  Statement  remains  in
effect  throughout  the term of this  Agreement  as set  forth in  Section  4.2,
subject to the terms and conditions of this Agreement.

     (c) Failure to Obtain  Effectiveness  of  Registration  Statements.  In the
event  the  Company  fails  for any  reason to  obtain  the  effectiveness  of a
Registration  Statement within the time period set forth in Section 1.1(b),  the
Company shall pay to the Investor,  within three (3) Trading Days of the date by
which such Registration  Statement was required to have been declared effective,
$50,000.00  in  immediately  available  funds into an account  designated by the
Investor.  Such payments shall be made by wire transfer of immediately available
funds.

     (d)  Failure  to  Maintain   Effectiveness   of  Registration   Statements.
Subsequent to the initial  effectiveness  of a  Registration  Statement,  in the
event  the  Company  fails  to  maintain  the  effectiveness  of a  Registration
Statement  (or the  underlying  prospectus)  throughout  the period set forth in
Section 4.2,  and the  Investor  holds any  Registrable  Securities  at any time
during the period of such ineffectiveness (an "Ineffective Period"), the Company
shall  pay to  the  Investor,  in  immediately  available  funds  into  accounts
designated by the Investor, an amount equal to one percent (1%) of the aggregate
purchase price of such

<PAGE>

Registrable  Securities  which  are  issued  and  payable  to the  Investor  and
aggregate  Purchase  Price (as defined in the  Warrant)  of the  Warrant  Shares
(payable  proportionately  to the Investor of all of the Registrable  Securities
then  held by the  Investor  for  each  seven-calendar-day  period  (or  portion
thereof) of an  Ineffective  Period.  Such  payments  shall be made on the first
Trading Day after the earliest to occur of (i) the  expiration of the Commitment
Period,  (ii) the expiration of an Ineffective  Period,  (iii) the expiration of
the first  twenty-eight  calendar  days of an  Ineffective  Period  and (iv) the
expiration  of each  additional  twenty-eight  calendar-day  periods  during  an
Ineffective Period.

     (e) The parties  hereto  acknowledge  and agree that the sums payable under
Sections  1(c)  or  1(d)  above  shall  constitute  liquidated  damages  and not
penalties.  The  parties  further  acknowledge  that (i) the  amount  of loss or
damages  likely  to be  incurred  is  incapable  or is  difficult  to  precisely
estimate,  (ii)  the  amounts  specified  in  such  Sections  bear a  reasonable
proportion and are not plainly or grossly  disproportionate to the probable loss
likely to be incurred in connection with any failure by the Company to obtain or
maintain the effectiveness of a Registration Statement, (iii) one of the reasons
for the parties reaching an agreement as to such amounts was the uncertainty and
cost of  litigation  regarding  the  question  of actual  damages,  and (iv) the
parties  are  sophisticated  business  parties  and  have  been  represented  by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

     Section  2.1  FILINGS;   INFORMATION.   The  Company  will  facilitate  the
registration  of such  Registrable  Securities in accordance with the Investor's
intended methods of disposition  thereof.  Without  limiting the foregoing,  the
Company in each such case will do the  following as  expeditiously  as possible,
but in no event later than the  deadline,  if any,  prescribed  therefor in this
Agreement:

     (a) The  Company  shall  prepare  and  file  with  the  SEC a  registration
statement  on Form S-1 or Form SB-2 (if use of such forms are then  available to
the  Company  pursuant  to the rules of the SEC and,  if not, on such other form
promulgated  by the SEC for which the Company then  qualifies  and which counsel
for the Company shall deem appropriate and which form shall be available for the
sale of the  Registrable  Securities to be  registered  thereunder in accordance
with the provisions of this Agreement and in accordance with the intended method
of distribution of such Registrable Securities);  use reasonable best efforts to
cause such filed Registration Statement to become and remain effective (pursuant
to Rule 415 under the Securities Act, if applicable, or otherwise);  prepare and
file with the SEC such amendments and supplements to such Registration Statement
and the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective during the term of this Agreement;  prepare and
file, within one day after each Closing Date, any prospectus supplement required
under the  Securities  Act; and comply with the provisions of the Securities Act
with respect to the  disposition of all Registrable  Securities  covered by such
Registration  Statement  during  such  period in  accordance  with the  intended
methods of disposition by the Investor set forth in such Registration Statement.

     (b) The Company  shall file all necessary  amendments  to the  Registration
Statement in order to effectuate the purpose of this Agreement.

     (c) If so requested by the managing underwriters, if any, or the holders of
a majority in aggregate amount of the Registrable  Securities being  registered,
the  Company  shall (i)  promptly  incorporate  in a  prospectus  supplement  or
post-effective amendment such information as the managing underwriters,  if any,
and such holders  agree should be included  therein,  and (ii) make all required
filings of such  prospectus  supplement or  post-effective

<PAGE>

amendment as soon as practicable after the Company has received  notification of
the matters to be incorporated in such prospectus  supplement or  post-effective
amendment; provided, however, that the Company shall not be required to take any
action pursuant to this Section 2.1(c)(ii) that would, in the opinion of counsel
for the Company, violate applicable law.

     (d) In connection with the filing of a Registration Statement,  the Company
shall enter into such agreements and take all such other  reasonable  actions in
connection  therewith  (including  those  reasonably  requested  by the managing
underwriters, if any, or the holders of a majority in aggregate principal amount
of the Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities,  and in such connection,  whether or
not  an  underwriting   agreement  is  entered  into  and  whether  or  not  the
registration is an underwritten registration,  (i) make such representations and
warranties to the holders of such Registrable  Securities and the  underwriters,
if any, with respect to the business of the Company  (including  with respect to
businesses  or  assets  acquired  or to be  acquired  by the  Company),  and the
Registration Statement, prospectus and documents, if any, incorporated or deemed
to be incorporated by reference  therein,  in each case, in form,  substance and
scope  as are  customarily  made by  issuers  to  underwriters  in  underwritten
offerings,  and confirm the same if and when requested;  (ii) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and
procedures  no  less  favorable  to the  selling  holders  of  such  Registrable
Securities  and the  underwriters,  if any, than those set forth herein (or such
other  provisions  and  procedures  acceptable  to the  holders of a majority in
aggregate   principal   amount  of  Registrable   Securities   covered  by  such
Registration Statement and the managing underwriters, if any); and (iii) deliver
such documents and certificates as may be reasonably requested by the holders of
a majority in aggregate  principal  amount of the Registrable  Securities  being
sold,  their  counsel and the  managing  underwriters,  if any, to evidence  the
continued  validity of their  representations  and  warranties  made pursuant to
clause  (i) above  and to  evidence  compliance  with any  customary  conditions
contained in the underwriting  agreement or other agreement  entered into by the
Company.

     (e)  Five  Trading  Days  prior  to  filing  a  Registration  Statement  or
prospectus,  or any amendment or supplement thereto (excluding amendments deemed
to result from the filing of documents  incorporated by reference therein),  the
Company  shall  deliver  to the seller of  Registrable  Securities  and  counsel
representing the seller of Registrable Securities, in accordance with the notice
provisions of Section 4.8, copies of such Registration  Statement as proposed to
be filed,  together with exhibits  thereto,  which  documents will be subject to
review by such  parties,  and  thereafter  deliver to the seller of  Registrable
Securities and its counsel,  in accordance with the notice provisions of Section
4.8, such number of copies of such  Registration  Statement,  each amendment and
supplement thereto (in each case including all exhibits thereto), the prospectus
included in such Registration Statement (including each preliminary  prospectus)
and  such  other  documents  or  information  as the  Investor  or  counsel  may
reasonably  request in order to facilitate the  disposition  of the  Registrable
Securities.

     (f) After the  filing of the  Registration  Statement,  the  Company  shall
promptly  notify the Investor of any stop order issued or  threatened by the SEC
in connection  therewith and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.

     (g) The Company  shall use its  reasonable  best efforts to (i) register or
qualify such Registrable Securities under such other securities or blue sky laws
of such  jurisdictions  in the United States as the Investor may  reasonably (in
light  of its  intended  plan of  distribution)  request,  and (ii)  cause  such
Registrable  Securities  to  be  registered  with  or  approved  by  such  other
governmental agencies or authorities in the United States as may be necessary by
virtue of the  business and  operations  of the Company and do any and all other
acts and things that may be  reasonably  necessary  or  advisable  to enable the
Investor to consummate the disposition of the Registrable  Securities;  provided
that the Company will not be required to qualify generally to do business in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
paragraph (g), subject itself to taxation in any such  jurisdiction,  or consent
or subject itself to general service of process in any such jurisdiction.

<PAGE>

     (h) The Company shall  immediately  notify the Investor upon the occurrence
of any of the following events in respect of a Registration Statement or related
prospectus in respect of an offering of Registrable  Securities:  (i) receipt of
any request for additional  information by the SEC or any other federal or state
governmental  authority  during the period of  effectiveness of the Registration
Statement for amendments or supplements to the Registration Statement or related
prospectus;  (ii)  the  issuance  by the  SEC  or any  other  federal  or  state
governmental  authority of any stop order  suspending the  effectiveness  of the
Registration  Statement or the initiation of any  proceedings  for that purpose;
(iii)  receipt  of  any  notification  with  respect  to the  suspension  of the
qualification  or  exemption  from  qualification  of  any  of  the  Registrable
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such  purpose;  (iv) the  happening  of any event that makes any
statement  made in the  Registration  Statement  or  related  prospectus  or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect  or that  requires  the  making of any  changes in the
Registration Statement,  related prospectus or documents so that, in the case of
the  Registration  Statement,  it will not  contain  any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements therein not misleading, and that in the case
of the  related  prospectus,  it will not  contain  any  untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made,  not  misleading;  and (v) the Company's  reasonable
determination  that a  post-effective  amendment to the  Registration  Statement
would be  appropriate;  and the Company  will  promptly  make  available  to the
Investor any such supplement or amendment to the related prospectus.

     (i) The Company shall enter into  customary  agreements and take such other
actions as are  reasonably  required  in order to  expedite  or  facilitate  the
disposition of such Registrable  Securities  (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).

     (j) The Company  shall make  available to the Investor (and will deliver to
Investor's  counsel),  subject to  restrictions  imposed  by the  United  States
federal  government  or any  agency or  instrumentality  thereof,  copies of all
correspondence between the SEC and the Company, its counsel or auditors and will
also make available for inspection by the Investor and any attorney,  accountant
or other professional retained by the Investor (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company  (collectively,  the "Records") as shall be reasonably  necessary to
enable  them to  exercise  their  due  diligence  responsibility,  and cause the
Company's officers and employees to supply all information  reasonably requested
by any Inspectors in connection with such Registration  Statement.  Records that
the Company determines,  in good faith, to be confidential and which it notifies
the Inspectors are confidential  shall not be disclosed by the Inspectors unless
(i)  the  disclosure  of such  Records  is  necessary  to  avoid  or  correct  a
misstatement or omission in such  Registration  Statement or (ii) the disclosure
or release of such Records is requested or required  pursuant to oral questions,
interrogatories,  requests for  information  or documents or a subpoena or other
order from a court of competent  jurisdiction  or other  process;  provided that
prior to any disclosure or release pursuant to clause (ii), the Inspectors shall
provide the Company  with prompt  notice of any such request or  requirement  so
that  the  Company  may seek an  appropriate  protective  order  or  waive  such
Inspectors' obligation not to disclose such Records; and, provided further, that
if  failing  the  entry of a  protective  order  or the  waiver  by the  Company
permitting  the  disclosure or release of such  Records,  the  Inspectors,  upon
advice of counsel,  are compelled to disclose such Records,  the  Inspectors may
disclose that portion of the Records  which  counsel has advised the  Inspectors
that the  Inspectors  are  compelled  to  disclose.  The  Investor  agrees  that
information obtained by it solely as a result of such inspections (not including
any  information  obtained  from a third  party who,  insofar as is known to the
Investor  after  reasonable  inquiry,  is not  prohibited  from  providing  such
information  by a  contractual,  legal or fiduciary

<PAGE>

obligation to the Company) shall be deemed confidential and shall not be used by
it as the basis for any market  transactions in the securities of the Company or
its Affiliates unless and until such information is made generally  available to
the public.  The  Investor  further  agrees  that it will,  upon  learning  that
disclosure of such Records is sought in a court of competent jurisdiction,  give
notice to the  Company  and allow the  Company,  at its  expense,  to  undertake
appropriate action to prevent disclosure of the Records deemed confidential.

     (k) The Company shall deliver,  in accordance with the notice provisions of
Section 4.8, to the Investor a signed counterpart, addressed to the Investor, of
(1) an opinion or opinions of counsel to the  Company,  in such form  reasonably
acceptable to the Investor,  and (2) to the extent required by law or reasonably
necessary  to  effect  a sale  of  Registrable  Securities  in  accordance  with
prevailing business practices at the time of any sale of Registrable  Securities
pursuant to a Registration  Statement,  a comfort letter or comfort letters from
the  Company's  independent  public  accountants,  each in  customary  form  and
covering  such  matters of the type  customarily  covered by opinions or comfort
letters, as the case may be, as the Investor therefore reasonably requests.

     (l) The  Company  shall  otherwise  comply  with all  applicable  rules and
regulations  of  the  SEC,  including,   without  limitation,   compliance  with
applicable reporting  requirements under the Exchange Act. (m) The Company shall
appoint a  transfer  agent and  registrar  for all such  Registrable  Securities
covered by such Registration Statement not later than the effective date of such
Registration Statement.

     (n) The Company may require the Investor to promptly  furnish in writing to
the Company such  information as may be legally required in connection with such
registration  including,  without  limitation,  all such  information  as may be
requested by the SEC or the National  Association  of  Securities  Dealers.  The
Investor  agrees to provide such  information  requested in connection with such
registration  within ten (10) business days after receiving such written request
and the  Company  shall  not be  responsible  for any  delays  in  obtaining  or
maintaining the effectiveness of the Registration  Statement  directly caused by
the Investor's failure to timely provide such information.

     Section 2.2  REGISTRATION  EXPENSES.  In connection with each  Registration
Statement,   the  Company  shall  pay  all  registration  expenses  incurred  in
connection  with the  registration  thereunder  (the  "Registration  Expenses"),
including, without limitation: (i) all registration, filing, securities exchange
listing and fees required by the National  Association  of  Securities  Dealers,
(ii) all  registration,  filing,  qualification  and other fees and  expenses of
compliance  with  securities  or blue sky laws  (including  reasonable  fees and
disbursements  of  counsel in  connection  with blue sky  qualifications  of the
Registrable  Securities),  (iii)  all word  processing,  duplicating,  printing,
messenger  and  delivery   expenses,   (iv)  the  Company's   internal  expenses
(including,  without  limitation,  all salaries and expenses of its officers and
employees  performing  legal or  accounting  duties),  (v) the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities,  (vi)
reasonable fees and  disbursements of counsel for the Company and customary fees
and  expenses  for  independent  certified  public  accountants  retained by the
Company  (including  the  expenses of any special  audits or comfort  letters or
costs associated with the delivery by independent  certified public  accountants
of such  special  audit(s) or comfort  letter(s)  requested  pursuant to Section
2.1(l) hereof),  (vii) the fees and expenses of any special experts  retained by
the Company in  connection  with such  registration,  (viii)  premiums and other
costs of policies of  insurance  against  liabilities  arising out of any public
offering of the Registrable  Securities being registered,  and (ix) any fees and
disbursements  of  underwriters  customarily  paid  by  issuers  or  sellers  of
securities,  but  excluding  underwriting  fees,  discounts,  transfer  taxes or
commissions,  if any, attributable to the sale of Registrable Securities,  which
shall be payable by each seller of Registrable

<PAGE>

Securities pro rata on the basis of the number of Registrable Securities of each
such seller that are included in a registration under this Agreement.

                                   ARTICLE III
                        INDEMNIFICATION AND CONTRIBUTION

     Section 3.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and  hold  harmless  each  seller  of  Registrable  Securities,   its  partners,
Affiliates,  officers, directors, employees and duly authorized agents, and each
Person or entity,  if any,  who controls  the seller of  Registrable  Securities
within the  meaning of  Section  15 of the  Securities  Act or Section 20 of the
Exchange  Act,  together  with the partners,  Affiliates,  officers,  directors,
employees  and duly  authorized  agents  of such  controlling  Person  or entity
(collectively,  the "Controlling  Persons"),  from and against any loss,  claim,
damage, liability, costs and expenses (including, without limitation, reasonable
attorneys' fees and  disbursements  and costs and expenses of investigating  and
defending any such claim) (collectively,  "Damages"),  joint or several, and any
action or  proceeding  in respect  thereof  to which the  seller of  Registrable
Securities, its partners,  Affiliates,  officers, directors,  employees and duly
authorized  agents, and any such Controlling Person may become subject under the
Securities Act or otherwise as incurred and, insofar as such Damages (or actions
or proceedings  in respect  thereof) arise out of, or are based upon, any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
Registration  Statement or prospectus relating to the Registrable  Securities or
any preliminary prospectus, or arises out of, or are based upon, 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  information  furnished in writing to the Company by the
seller of Registrable  Securities expressly for use therein, and shall reimburse
the  seller of  Registrable  Securities,  its  partners,  Affiliates,  officers,
directors,  employees  and duly  authorized  agents,  and each such  Controlling
Person for any legal and other  expenses  reasonably  incurred  by the seller of
Registrable Securities, its partners, Affiliates, officers, directors, employees
and duly authorized  agents,  or any such Controlling  Person,  as incurred,  in
investigating  or defending  or preparing to defend  against any such Damages or
actions or proceedings;  provided, however, that the Company shall not be liable
to the seller of  Registrable  Securities  to the extent  that any such  Damages
arise  out of or are based  upon an untrue  statement  or  omission  made in any
preliminary  prospectus if (A) the seller of  Registrable  Securities  failed to
send or deliver a copy of the final  prospectus  delivered by the Company to the
seller  of  Registrable  Securities  with or prior to the  delivery  of  written
confirmation  of the sale by the seller of Registrable  Securities to the Person
asserting the claim from which such Damages arise,  and (B) the final prospectus
would have corrected such untrue  statement or alleged untrue  statement or such
omission or alleged  omission,  or (C) such untrue statement or omission made in
any  prospectus  was  furnished  to  the  Company  by a  seller  of  Registrable
Securities  or  described  such  seller of  Registrable  Securities  in a manner
consistent  with   representations  made  by  any  Investor  in  the  Investment
Agreement.

     Section  3.2  INDEMNIFICATION  BY SELLER OF  REGISTRABLE  SECURITIES.  Each
Seller of  Registrable  Securities  agrees to  indemnify  and hold  harmless the
Company and each person,  if any, who controls the Company,  or entity,  if any,
who controls the Company  within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each officer of the Company who signs the
Registration  Statement,  the Company's  directors,  together with the partners,
Affiliates,  officers,  directors,  employees and duly authorized agents of such
controlling Person or entity (collectively, the "Controlling Persons"), from and
against any loss,  claim,  damage,  liability,  costs and  expenses  (including,
without limitation,  reasonable  attorneys' fees and disbursements and costs and
expenses  of  investigating   and  defending  any  such  claim)   (collectively,
"Damages"), joint or several, and any action or proceeding in respect thereof to
which the Company and Controlling Person may become subject under the Securities
Act or  otherwise  as  incurred  and,  insofar as such  Damages  (or  actions or
proceedings  in respect  thereof)  arise out of, or are based  upon,  any untrue
statement  or alleged  untrue  statement  of a material  fact

<PAGE>

contained  in  any  Registration   Statement  or  prospectus   relating  to  the
Registrable Securities or any preliminary  prospectus,  or arises out of, or are
based upon,  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,  only  insofar as the same are based upon  information  furnished in
writing to the Company by the seller of Registrable Securities expressly for use
therein,  and shall reimburse the Company and each such  Controlling  Person for
any legal and other  expenses  reasonably  incurred by the Company,  or any such
Controlling Person, in investigating or defending or preparing to defend against
any such Damages or actions or proceedings;  provided,  however, that the seller
of Registrable  Securities  shall be limited to the proportion of any such loss,
claim,  damage,  liability or expense which is equal to the proportion  that the
public  offering price of the  Registrable  Securities  sold by the seller under
such  Registration  Statement  bears to the total public  offering  price of all
securities offered  thereunder,  but not in any event to exceed the net proceeds
received by the seller of  Registrable  Securities  from the sale of Registrable
Securities covered by such registration statement.

     Section 3.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS.  Promptly after receipt
by any person or entity in respect of which  indemnity may be sought pursuant to
Section  3.1 or 3.2 (an  "Indemnified  Party")  of  notice  of any  claim or the
commencement of any action,  the Indemnified  Party shall, if a claim in respect
thereof is to be made against the person or entity  against whom such  indemnity
may be sought  (the  "Indemnifying  Party"),  notify the  Indemnifying  Party in
writing  of the  claim  or the  commencement  of such  action;  in the  event an
Indemnified Party shall fail to give such notice as provided in this Section 3.3
and the  Indemnifying  Party to whom  notice  was not given was  unaware  of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, the indemnification  provided for in Section
3.1 and 3.2 shall be reduced to the  extent of any  actual  prejudice  resulting
from such  failure  to so notify  the  Indemnifying  Party;  provided,  that the
failure to notify the Indemnifying Party shall not relieve it from any liability
that it may have to an  Indemnified  Party  otherwise  than under Section 3.1 or
3.2. If any such claim or action shall be brought against an Indemnified  Party,
and it shall notify the Indemnifying Party thereof, the Indemnifying Party shall
be entitled to participate therein,  and, to the extent that it wishes,  jointly
with any other  similarly  notified  Indemnifying  Party,  to assume the defense
thereof with counsel  reasonably  satisfactory to the Indemnified  Party.  After
notice from the Indemnifying  Party to the Indemnified  Party of its election to
assume the defense of such claim or action,  the Indemnifying Party shall not be
liable to the  Indemnified  Party for any legal or other  expenses  subsequently
incurred by the  Indemnified  Party in connection with the defense thereof other
than reasonable  costs of  investigation;  provided that the  Indemnified  Party
shall have the right to employ  separate  counsel to represent  the  Indemnified
Party and its controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the  Indemnified  Party
against the Indemnifying  Party, but the fees and expenses of such counsel shall
be for the account of such Indemnified  Party unless (i) the Indemnifying  Party
and the  Indemnified  Party shall have mutually  agreed to the retention of such
counsel or (ii) in the reasonable  judgment of the Company and such  Indemnified
Party, representation of both parties by the same counsel would be inappropriate
due to  actual  or  potential  conflicts  of  interest  between  them,  it being
understood,  however,  that the Indemnifying Party shall not, in connection with
any one such claim or action or separate  but  substantially  similar or related
claims or  actions  in the same  jurisdiction  arising  out of the same  general
allegations or  circumstances,  be liable for the fees and expenses of more than
one separate firm of attorneys  together with appropriate  local counsel) at any
time  for all  Indemnified  Parties,  or for  fees  and  expenses  that  are not
reasonable.  No Indemnifying  Party shall,  without the prior written consent of
the  Indemnified  Party,  effect  any  settlement  of any  claim or  pending  or
threatened proceeding in respect of which the Indemnified Party is or could have
been a party and indemnity could have been sought  hereunder by such Indemnified
Party,  unless  such  settlement  includes  an  unconditional  release  of  such
Indemnified  Party from all liability  arising out of such claim or  proceeding.
Whether or not the defense of any claim or action is assumed by the Indemnifying
Party,  such  Indemnifying  Party will not be subject to

<PAGE>

any liability for any  settlement  made without its consent,  which consent will
not be unreasonably withheld.

     Section  3.4  OTHER  INDEMNIFICATION.   Indemnification   similar  to  that
specified  in the  preceding  paragraphs  of this  Article  3 (with  appropriate
modifications)  shall be given by the  Company  and each  seller of  Registrable
Securities with respect to any required  registration or other  qualification of
securities  under any  federal or state law or  regulation  of any  governmental
authority  other than the  Securities  Act. The  provisions  of this Article III
shall be in addition to any other  rights to  indemnification,  contribution  or
other  remedies  which an  Indemnified  Party may have pursuant to law,  equity,
contract or otherwise.

     Section  3.5  CONTRIBUTION.  If the  indemnification  provided  for in this
Article III is unavailable to the Indemnified  Parties in respect of any Damages
referred to herein,  then the 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  Damages  between  the Company on the one
hand and the Investor on the other,  in such  proportion  as is  appropriate  to
reflect the relative fault of the Company and of the Investor in connection with
such  statements or omissions,  as well as other equitable  considerations.  The
relative  fault of the Company on the one hand and of the  Investor on the other
shall be determined  by reference to, among other things,  whether the untrue or
alleged untrue  statement of a material fact or the omission or alleged omission
to state a material fact relates to information  supplied by such party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  statement  or  omission.  The Company and the Investor
agree that it would not be just and equitable if  contribution  pursuant to this
Section 3.5 were  determined  by pro rata  allocation  or by any other method of
allocation that does not take into account the equitable considerations referred
to in the  immediately  preceding  paragraph.  The amount  paid or payable by an
Indemnified  Party as a result of the  Damages  referred  to in the  immediately
preceding  paragraph shall be deemed to include,  subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection  with  investigating  or defending any such action or claim.
Notwithstanding  the  provisions  of this Section 3.5, the Investor  shall in no
event be required to contribute  any amount in excess of the amount by which the
total price at which the  Registrable  Securities  of the seller of  Registrable
Securities were sold to the public (less underwriting discounts and commissions)
exceeds the amount of any damages which the Investor 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.

                                   ARTICLE IV
                                  MISCELLANEOUS

     Section 4.1 NO OUTSTANDING  REGISTRATION RIGHTS. The Company represents and
warrants to the seller of Registrable  Securities that there is not in effect on
the date hereof any  agreement  by the Company  pursuant to which any holders of
securities  of the  Company  have a right to cause the  Company to  register  or
qualify such  securities  under the Securities Act or any securities or blue sky
laws of any  jurisdiction  that  would  conflict  or be  inconsistent  with  any
provision of this Agreement or the  Investment  Agreement.  The Company  further
represents and warrants that upon issuance,  the Registrable Securities will not
have been issued or sold in violation of any  preemptive or other similar rights
of holders of any securities of the Company or any other person.

     Section  4.2 TERM.  The  registration  rights  provided  to the  holders of
Registrable  Securities hereunder shall terminate at such time as all Put Shares
and  Warrant  Shares (i) have been  disposed  of  pursuant  to the  Registration
Statement,  (ii) have  been  sold  under  circumstances  under  which all of the

<PAGE>

applicable conditions of Rule 144 (or any similar provision then in force) under
the Securities  Act ("Rule 144") are met, (iii) have been otherwise  transferred
to holders who may trade such shares  without  restriction  under the Securities
Act,  and the  Company  has  delivered a new  certificate  or other  evidence of
ownership for such securities not bearing a restrictive  legend,  or (iv) may be
sold without any time, volume or manner limitations  pursuant to Rule 144(k) (or
any similar provision then in effect) under the Securities Act in the opinion of
counsel to the Company,  which  counsel  shall be  reasonably  acceptable to the
holder of Registrable  Securities;  provided,  however,  that such  registration
rights  shall  not  terminate  sooner  than two years  following  the end of the
Commitment Period.  Notwithstanding the foregoing, paragraph (d) of Section 1.1,
Article III,  Section 4.8 and Section 4.9 shall survive the  termination of this
Agreement.

     Section 4.3 RULE 144. The Company  covenants  that it will file all reports
required to be filed by it under the  Securities  Act and the  Exchange  Act and
that it will take such further action as holders of  Registrable  Securities may
reasonably  request,  all to the extent required from time to time to enable the
seller  of  Registrable   Securities  to  sell  Registrable  Securities  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by (a) Rule 144, as such Rule may be amended from time to time,  or (b)
any similar rule or regulation  hereafter adopted by the SEC. If at any time the
Company is not required to file such reports,  it will,  upon the request of any
holder of Registrable  Securities,  make publicly available other information so
long as necessary to permit sales  pursuant to Rule 144. Upon the request of the
seller of  Registrable  Securities,  the Company  will  deliver to the seller of
Registrable  Securities a written  statement as to whether it has complied  with
such requirements.

     Section 4.4 CERTIFICATE.  The Company will, at its expense,  forthwith upon
the request of any holder of  Registrable  Securities,  deliver to such holder a
certificate,  signed by the Company's principal  financial officer,  stating (a)
the Company's name,  address and telephone number (including area code), (b) the
Company's  Internal  Revenue Service  identification  number,  (c) the Company's
Commission  file  number,  (d) the  number  of  shares  of each  class  of Stock
outstanding  as shown by the most recent  report or  statement  published by the
Company,  and (e) whether the Company has filed the reports required to be filed
under the  Exchange  Act for a period of at least  ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.

     Section 4.5 AMENDMENT AND MODIFICATION. Any provision of this Agreement may
be waived,  provided that such waiver is set forth in a writing  executed by the
parties to this  Agreement.  The  provisions  of this  Agreement,  including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable  Securities.  Notwithstanding the foregoing,
the  waiver of any  provision  hereof  with  respect  to a matter  that  relates
exclusively to the rights of holders of Registrable  Securities whose securities
are being sold  pursuant to a  Registration  Statement  and does not directly or
indirectly  affect the rights of other holders of Registrable  Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such  holders;  provided  that the  provisions  of this  sentence  may not be
amended,  modified or  supplemented  except in accordance with the provisions of
the immediately  preceding  sentence.  No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this  Agreement or any rights or  obligations  of
any person under or by reason of this Agreement.

     Section 4.6 SUCCESSORS AND ASSIGNS;  ENTIRE  AGREEMENT.  This Agreement and
all of the  provisions  hereof shall be binding upon and inure to the benefit of
the parties  hereto.  The Investor and Company may not assign their rights under
this Agreement. This Agreement, together with the Investment Agreement set forth
the entire  agreement  and  understanding  between the parties as to the

<PAGE>

subject  matter  hereof  and  merges  and  supersedes  all  prior   discussions,
agreements and understandings of any and every nature among them.

     Section 4.7 SEPARABILITY. In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent  jurisdiction,  the remainder of
this Agreement  shall not be affected  except to the extent  necessary to delete
such illegal,  invalid or  unenforceable  provision  unless that  provision held
invalid shall  substantially  impair the benefits of the  remaining  portions of
this Agreement.

     Section 4.8 NOTICES. All notices, demands, requests,  consents,  approvals,
and other communications required or permitted hereunder shall be in writing and
shall be (i)  personally  served,  (ii)  deposited  in the mail,  registered  or
certified,  return  receipt  requested,  postage  prepaid,  (iii)  delivered  by
reputable air courier service with charges prepaid,  or (iv) transmitted by hand
delivery,  telegram or facsimile,  addressed as set forth below or to such other
address as such party shall have specified most recently by written notice.  Any
notice or other communication  required or permitted to be given hereunder shall
be deemed  effective  (a) upon hand  delivery  or delivery  by  facsimile,  with
accurate  confirmation  generated by the transmitting  facsimile machine, at the
address or number designated below (if delivered on a business day during normal
business  hours where such notice is to be received),  or the first business day
following such delivery (if delivered other than on a business day during normal
business  hours  where  such  notice  is to be  received)  or (b) on the  second
business day following  the date of mailing by express  courier  service,  fully
prepaid,  addressed to such  address,  or upon actual  receipt of such  mailing,
whichever shall first occur. The addresses for such communications shall be:

         If to Hand Brand Distribution, Inc.:

                  Hand Brand Distribution, Inc.
                  9845 N.E. 2nd Avenue
                  Miami Shores, Florida 33138
                  Telecopier: _______________

         With a copy to (which communication shall not constitute notice):

                  JOEL BERNSTEIN, ESQ., P.A.
                  11900 Biscayne Boulevard
                  Suite 604
                  Miami, Florida 33181
                  Attn: Joel Bernstein
                  Telecopier: (305) 892-0822

         If to the Investor:

                  Prima Capital Growth Fund LLC
                  676A 9th Avenue, Suite 259
                  New York, NY 10036
                  Telecopier: 561-241-7145

<PAGE>

        And also a copy to (which communication shall not constitute notice):

                  Proskauer Rose, LLP
                  2255 Glades Road, Suite 340W
                  Boca Raton, FL 33431
                  Attn: Gayle Coleman, Esq.
                  Telecopier: (561) 241-7145

Either party hereto may from time to time change its address or facsimile number
for  notices  under this  Section  4.8 by giving at least ten (10)  days'  prior
written  notice of such changed  address or facsimile  number to the other party
hereto.

     Section 4.9  GOVERNING  LAW.  This  Agreement  shall be subject to the same
choice of law, venue and jurisdiction as the Investment  Agreement and construed
under the laws of the State of New York,  without  giving  effect to  provisions
regarding conflicts of law or choice of law.

     Section 4.10 HEADINGS.  The headings in this Agreement are for  convenience
of reference only and shall not constitute a part of this  Agreement,  nor shall
they affect their meaning, construction or effect.

     Section  4.11  COUNTERPARTS.  This  Agreement  may be  executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.

     Section 4.12 FURTHER  ASSURANCES.  Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions  and purposes of this  Agreement  and the  transactions  contemplated
hereby.

<PAGE>

     Section 4.13 REMEDIES.  In the event of a breach or a threatened  breach by
any party to this Agreement of its obligations  under this Agreement,  any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights  provided in this  Agreement and granted by law.
The parties agree that the  provisions of this Agreement  shall be  specifically
enforceable,  it being agreed by the parties  that the remedy at law,  including
monetary  damages,   for  breach  of  any  such  provision  will  be  inadequate
compensation  for any loss and that any defense or  objection  in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.

     IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed by the undersigned,  thereunto duly  authorized,  as of
the date first set forth above.

                                     HAND BRAND DISTRIBUTION, INC.
                                     "Company"

                                     By: /s/
                                         --------------------------------------

                                     PRIMA CAPITAL GROWTH FUND LLC
                                     "Investor"

                                     By: /s/
                                         --------------------------------------
                                         Manager

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