Document:

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                                  CYGNUS, INC.

                           AMENDED 1991 EMPLOYEE STOCK

                                  PURCHASE PLAN

                     (AS AMENDED AND RESTATED MARCH 1, 2000)

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                                TABLE OF CONTENTS

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                                                                                                                PAGE

<S>                                                                                                             <C>
1.       Purpose.................................................................................................1

2.       Definitions.............................................................................................1

3.       Eligibility.............................................................................................3

4.       Offering Periods........................................................................................3

5.       Participation...........................................................................................3

6.       Payroll Deductions......................................................................................4

7.       Grant Of Purchase Right.................................................................................5

8.       Exercise Of Purchase Right..............................................................................5

9.       Delivery................................................................................................5

10.      Withdrawal; Termination Of Employment...................................................................5

11.      Interest................................................................................................6

12.      Stock...................................................................................................6

13.      Administration..........................................................................................6

14.      Designation Of Beneficiary..............................................................................6

15.      Transferability.........................................................................................7

16.      Use Of Funds............................................................................................7

17.      Reports.................................................................................................7

18.      Adjustments Upon Changes In Capitalization, Dissolution, Merger Or Asset Sale...........................7

19.      Amendment Or Termination................................................................................8

20.      Notices.................................................................................................9

21.      Conditions Upon Issuance Of Shares......................................................................9

22.      Term Of Plan............................................................................................9

23.      Automatic Transfer To Low Price Offering Period.........................................................9

24.      Execution...............................................................................................9
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                                      -i-
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                                  CYGNUS, INC.

                    AMENDED 1991 EMPLOYEE STOCK PURCHASE PLAN

                     (AS AMENDED AND RESTATED MARCH 1, 2000)

         The following constitutes the provisions of the Amended 1991 Employee
Stock Purchase Plan of Cygnus, Inc., as last amended and restated on March 1,
2000.

         1. PURPOSE. The purpose of the Plan is to provide Employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2. DEFINITIONS.

                  (a) "BOARD" shall mean the Board of Directors of the Company
or a Committee appointed by the Board pursuant to Section 13.

                  (b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

                  (c) "COMMON STOCK" shall mean the common stock of the Company.

                  (d) "COMPANY" shall mean Cygnus, Inc.

                  (e) "COMPENSATION" shall mean all base straight time gross
earnings, including bonuses, but excluding payments for overtime, shift premiums
and commissions, awards, and other compensation.

                  (f) "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

                  (g) "EMPLOYEE" shall mean any individual who is a regular
employee of the Company or a Designated Subsidiary for purposes of
tax-withholding under the Code. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company. Where the period
of leave exceeds 90 days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship will be
deemed to have terminated on the 91st day of such leave.

                  (h) "ENROLLMENT DATE" shall mean the first Trading Day of each
Offering Period.

                                       1.
<PAGE>

                  (i) "ENROLLMENT DATE PRICE" shall mean the Fair Market Value
of a share of Common Stock on the last Trading Day prior to the Enrollment Date.

                  (j) "EXERCISE DATE" shall mean the last Trading Day of each
Purchase Period.

                  (k) "FAIR MARKET VALUE" shall mean, as of any date, the value
of Common Stock determined as follows:

                           (1) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported), as quoted on such exchange (or the exchange with the greatest volume
of trading in Common Stock) or system on the day of such determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable, or;

                           (2) If the Common Stock is quoted on the NASDAQ
system (but not on the National Market System thereof) or is regularly quoted by
a recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and low asked prices for the
Common Stock on the day of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;

                           (3) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

                  (l) "OFFERING PERIOD" shall mean, subject to the discretion of
the Board pursuant to Section 4, a period of approximately twenty-four (24)
months, commencing on the first Trading Day on or after October 1 and
terminating on the last Trading Day in the September twenty-four (24) months
later, or commencing on the first Trading Day on or after April 1 and
terminating on the last Trading Day in the March twenty-four (24) months later.

                  (m) "PLAN" shall mean this Amended 1991 Employee Stock
Purchase Plan.

                  (n) "PARTICIPANT" shall mean an Employee who is participating
in the Plan.

                  (o) "PURCHASE PERIOD" shall mean the approximately six-month
period commencing after one Exercise Date and ending with the next following
Exercise Date, except that the first Purchase Period of any Offering Period
shall commence on the Enrollment Date and end with the next following Exercise
Date.

                  (p) "PURCHASE PRICE" shall mean an amount equal to a
designated percentage of the Enrollment Date Price or a designated percentage of
the Fair Market Value on the Exercise Date, whichever is lower. Each designated
percentage shall be 85% unless determined otherwise by the Board with respect to
any Offering Period, but shall in no event be less than 85%.

                                       2.
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                  (q) "RESERVES" shall mean the number of shares of Common Stock
covered by each purchase right under the Plan which have not yet been exercised
and the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under purchase right.

                  (r) "SUBSIDIARY" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

                  (s) "TRADING DAY" shall mean a day on which national stock
exchanges and the National Association of Securities Dealers Automated Quotation
(NASDAQ) System are open for trading.

         3. ELIGIBILITY.

                  (a) Any Employee, as defined in Section 2(g), who shall be
employed by the Company or a Designated Subsidiary on a given Enrollment Date
shall be eligible to participate in the Plan.

                  (b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted a purchase right under the Plan
(i) if, immediately after the grant, such Employee (or any other person whose
stock would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own stock and/or hold outstanding purchase rights to purchase stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Subsidiary of the Company, or
(ii) which permits his or her rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the
fair market value of the shares at the time such purchase right is granted) for
each calendar year in which such purchase right is outstanding at any time.

         4. OFFERING PERIODS. The Plan shall be implemented by consecutive and
overlapping Offering Periods. The Board shall have the power to change the
duration of Offering Periods with respect to future offerings without
shareholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
Absent action by the Board, each Offering Period shall be for a period of
approximately twenty-four months (24) and new Offering Periods shall commence on
the first Trading Day of April and October of each year. No Offering Period
shall exceed twenty-four (24) months in length.

         5. PARTICIPATION.

                  (a) An eligible Employee may become a Participant in the Plan
by completing a subscription agreement authorizing payroll deductions in the
form provided by the Company and filing it with the Company's payroll office
prior to the applicable Enrollment Date.

                                       3.
<PAGE>

                  (b) Payroll deductions for a Participant shall commence on the
first payroll period following the Enrollment Date and shall end on the last
payroll period in the Offering Period, unless sooner terminated by the
Participant as provided in Section 10.

         6. PAYROLL DEDUCTIONS.

                  (a) At the time a Participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%) of
the Compensation which he or she receives on each pay day during the Offering
Period, and the aggregate of such payroll deductions during the Offering Period
shall not exceed fifteen percent (15%) of the Participant's Compensation during
said Offering Period.

                  (b) All payroll deductions made for a Participant shall be
credited to his or her account under the Plan and will be withheld in whole
percentages only. A Participant may not make any additional payments into such
account.

                  (c) A Participant may discontinue his or her participation in
the Plan as provided in Section 10, or may increase or decrease the rate of his
or her payroll deductions during the current Purchase Period by filing with the
Company a new subscription agreement authorizing such a change in the payroll
deduction rate. A reduction to a 0% rate of contribution shall be treated as a
withdrawal from the Plan effective with the following Purchase Period unless
such rate is increased prior to the following Purchase Period. The change in
rate shall be effective with the first full payroll period following such
advance notice period as the Company shall specify. A Participant's subscription
agreement shall remain in effect for successive Purchase Periods and Offering
Periods unless terminated as provided in Section 10. The Board shall be
authorized to limit the number of participation rate changes during any Offering
Period. A Participant may at any time elect to have his or her participation
agreement become irrevocable for such period of time as he or she may designate.

                  (d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
Participant's payroll deductions may be decreased to 0% at such time during any
Purchase Period which is scheduled to end during the current calendar year (the
"Current Purchase Period") that the aggregate of all payroll deductions which
were previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. The Company may
provide either (i) that payroll deductions shall recommence at the rate provided
in such Participant's subscription agreement at the beginning of the first
Purchase Period which is scheduled to end in the following calendar year, unless
terminated by the Participant as provided in Section 10, or (ii) that
participation shall recommence only upon filing a new enrollment form following
such waiting period as the Company shall specify.

                  (e) At the time the purchase right is exercised, in whole or
in part, or at the time some or all of the Company's Common Stock issued under
the Plan is disposed of, the Participant must make adequate provision for the
Company's federal, state, or other tax withholding

                                       4.
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obligations, if any, which arise upon the exercise of the purchase right or the
disposition of the Common Stock. At any time, the Company may, but will not be
obligated to, withhold from the Participant's compensation the amount necessary
for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or
benefit attributable to sale or early disposition of Common Stock by the
Employee.

         7. GRANT OF PURCHASE RIGHT. On the Enrollment Date of each Offering
Period, each eligible Employee participating in such Offering Period shall be
granted a purchase right to purchase on each Exercise Date during such Offering
Period (at the applicable Purchase Price) up to a number of shares of the
Company's Common Stock determined by dividing such Employee's payroll deductions
accumulated prior to such Exercise Date and retained in the Participant's
account as of the Exercise Date by the applicable Purchase Price; provided that
such purchase shall be subject to the limitations set forth in Section 3(b) and
12 hereof. Exercise of the purchase right shall occur as provided in Section 8,
unless the Participant has withdrawn pursuant to Section 10, and the purchase
right shall expire on the last day of the Offering Period.

         8. EXERCISE OF PURCHASE RIGHT. Unless a Participant withdraws from the
Plan as provided in Section 10 below, his or her purchase right for the purchase
of shares of Common Stock will be exercised automatically on each Exercise Date,
and the maximum number of full shares subject to the purchase right shall be
purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in his or her account. No fractional shares will
be purchased. Any payroll deductions accumulated in a Participant's account
which are not sufficient to purchase a full share shall be retained in the
Participant's account for the subsequent Purchase Period, subject to earlier
withdrawal by the Participant as provided in Section 10. During a Participant's
lifetime, a Participant's purchase right to purchase shares hereunder is
exercisable only by him or her.

         9. DELIVERY. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery of
purchased shares to a directed brokerage account. Certificates representing the
shares that were purchased by each Participant will remain with the brokerage
account until such time as the Participant (or beneficiary) requests that their
shares be transferred out of the brokerage account.

         10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

                  (a) A Participant may, subject to the terms of any irrevocable
participation agreement elected by the Participant, withdraw all but not less
than all the payroll deductions credited to his or her account and not yet used
to exercise his or her purchase right under the Plan at any time by giving
written notice to the Company in the form provided by the Company. All of the
Participant's payroll deductions credited to his or her account will be paid to
such Participant promptly after receipt of notice of withdrawal and such
Participant's purchase right for the Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will be
made during the Offering Period. If a Participant withdraws from an Offering
Period, payroll deductions will not resume at the beginning of the succeeding
Offering Period unless the Participant delivers to the Company a new
subscription agreement.

                                       5.
<PAGE>

                  (b) Upon a Participant's ceasing to be an Employee for any
reason or upon termination of a Participant's employment relationship (as
described in Section 2(g)), the payroll deductions credited to such
Participant's account during the Offering Period but not yet used to exercise
the purchase right will be returned to such Participant or, in the case of his
or her death, to the person or persons entitled thereto under Section 14, and
such Participant's purchase right will be automatically terminated. The Company
may reduce the amount returned to a Participant by the amount of any outstanding
debts that the Participant owes to either the Company or a Subsidiary.

         11. INTEREST. No interest shall accrue on the payroll deductions of a
Participant in the Plan.

         12. STOCK.

                  (a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 1,975,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 18. If on a given Exercise Date the number of shares with respect to
which purchase rights are to be exercised exceeds the number of shares then
available under the Plan, the Company shall make a pro rata allocation of the
shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.

                  (b) The Participant will have no interest or voting right in
shares covered by this purchase right until such purchase right has been
exercised.

                  (c) Shares to be delivered to a Participant under the Plan
will be registered in the name of the Participant or in the name of the
Participant and his or her spouse.

         13. ADMINISTRATION. The Plan shall be administered by the Board of the
Company or a committee of one or more members of the Board as appointed by the
Board. Committee members serve for the period of time specified by the Board of
Directors and can be removed from the committee by the Board at any time. The
Board or its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties.

         14.      DESIGNATION OF BENEFICIARY.

                  (a) A Participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of such Participant's death
subsequent to an Exercise Date on which the purchase right is exercised but
prior to delivery to such Participant of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant's account under the Plan in the event of such
Participant's death prior to exercise of the purchase right. If a Participant is
married and the designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective.

                                       6.
<PAGE>

                  (b) Such designation of beneficiary may be changed by the
Participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
Participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

         15. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of a purchase
right or to receive shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10.

         16. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         17. REPORTS. Individual accounts will be maintained for each
Participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

                  (a) CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the Reserves as well as the price per share
of Common Stock covered by each purchase right under the Plan which has not yet
been exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to a purchase right. The Board may, if it so determines in the exercise
of its sole discretion, make provision for adjusting the Reserves, as well as
the price per share of Common Stock covered by each outstanding purchase

                                       7.
<PAGE>

right, in the event the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares
of its outstanding Common Stock.

                  (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Periods will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.

                  (c) MERGER OR ASSET SALE. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each purchase right under the Plan
shall be assumed or an equivalent purchase right shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, to shorten the Offering Periods then in
progress by setting a new Exercise Date (the "New Exercise Date"). If the Board
shortens the Offering Periods then in progress in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
each Participant in writing, at least ten (10) days prior to the New Exercise
Date, that the Exercise Date for his purchase right has been changed to the New
Exercise Date and that his purchase right will be exercised automatically on the
New Exercise Date, unless prior to such date he has withdrawn from the Offering
Period as provided in Section 10. For purposes of this Section, a purchase right
granted under the Plan shall be deemed to be assumed or substituted if
accomplished in accordance with Section 424 of the Code.

         19. AMENDMENT OR TERMINATION.

                  (a) The Board of Directors of the Company may at any time and
for any reason terminate or amend the Plan. Except as provided in Section 18, no
such termination can affect purchase rights previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders. Except as provided in Section 18,
no amendment may make any change in any purchase right theretofore granted which
adversely affects the rights of any Participant. To the extent necessary to
comply with Rule 16b-3 or under Section 423 of the Code (or any successor rule
or provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.

                  (b) Without shareholder consent and without regard to whether
any Participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Purchase Periods and/or
Offering Periods (subject to Section 4), limit the frequency and/or number of
changes in the amount withheld during Purchase Periods and/or Offering Periods,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a Participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
Participant properly correspond with amounts withheld from the Participant's
Compensation,

                                       8.
<PAGE>

and establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent with
the Plan.

         20. NOTICES. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         21. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to a purchase right unless the exercise of such purchase right and the
issuance and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

         22. TERM OF PLAN. The Plan was originally effective on August 1, 1991.
The Plan shall continue in effect through July 31, 2011 unless sooner terminated
under Section 19.

         23. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. If the Fair Market
Value of the Common Stock on any Exercise Date in an Offering Period is lower
than the Enrollment Date Price of such Offering Period, then all Participants in
such Offering Period shall be automatically withdrawn from such Offering Period
immediately after the exercise of their purchase rights on such Exercise Date
and automatically reenrolled in the immediately following Offering Period as of
the first day thereof.

         24. EXECUTION. To record the adoption of this amended and restated Plan
by the Board, the Company has caused its duly authorized officer to sign below.

                                          CYGNUS, INC.

                                          By       /s/ John C Hodgman
                                            -----------------------------------

                                          Title    Chairman, President & CEO
                                                -------------------------------

                                       9.<PAGE>

                                   May__, 2000

KASHNER DAVIDSON SECURITIES CORPORATION
77 South Palm Avenue
Sarasota, Florida  34236

Ladies and Gentlemen:

     Training Devices International, Inc. (the "Company"), agrees to issue and
sell to you warrants (the "Warrants") to purchase the number of shares of common
stock, no par value per share (the "Common Stock"), of the Company set forth
herein, subject to the terms and conditions contained herein

     1. ISSUANCE OF WARRANTS; EXERCISE PRICE. The Warrants, which shall be in
the form attached hereto as Exhibit A, shall be issued to you concurrently with
the execution hereof in consideration of the payment by you to the Company of
the sum of Ten Dollars ($10.00), the receipt and sufficiency of which are hereby
acknowledged. The Warrant shall provide that you, or such other holder or
holders of the Warrants to whom transfer is authorized in accordance with the
terms of this Agreement, shall have the right to purchase an aggregate of
120,000 shares of Common Stock for an exercise price equal to [$8.40] per share
(the "Exercise Price"). The number, character and Exercise Price of such shares
of Common Stock are subject to adjustment as hereinafter provided, and the term
"Common Stock" shall mean, unless the context otherwise requires, the stock and
other securities and property receivable upon exercise of the Warrants. The term
"Exercise Price" shall mean, unless the context otherwise requires, the price
per share of the Common Stock purchasable under the Warrants as set forth in
this Section 1, as adjusted from time to time pursuant to Section 6.

     2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to
you and to each subsequent holder of Warrants and agrees that:

     (a) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the valid and binding obligation of the Company
enforceable in accordance with its terms; and neither the issuance of the
Warrants nor the issuance of the shares of Common Stock issuable upon exercise
of the Warrants will result in a breach or violation of any terms or provisions
of, or constitute a default under, any contract, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or the Articles of Incorporation or
Bylaws of the Company, or any law, order, rule, regulation or decree of any
government, governmental instrumentality or court, domestic or foreign, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company.

     (b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the sale and issuance of the
Warrants or the sale and issuance of the shares of Common Stock issuable upon
exercise of the Warrants, except such as have been obtained or may be required
under the Securities Act of 1933, as amended (the "Act"), and such as may be

<PAGE>

required under state securities or blue sky laws in connection with the issuance
of the Warrants and the shares of Common Stock issuable upon exercise of the
Warrants. Upon exercise of the Warrants by the holder thereof, the shares of
Common Stock with respect to which the Warrants are exercised will be validly
issued, fully paid, and non-assessable, and good and marketable title to such
shares of Common Stock shall be delivered to such holder free and clear of all
liens, encumbrances, equities, claims or preemptive or similar rights.

     (c) During the term of this Agreement, the Company shall make timely
filings of all periodic and other reports and forms and other materials required
(but only to the extent required) to be filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Act or the Securities Exchange Act
of 1934, as amended, and with any national securities exchange or quotation
system upon which any of the securities of the Company may be listed.

     3. NOTICES OF RECORD DATE; ETC. In the event of (i) any taking by the
Company of a record date with respect to the holders of any class of securities
of the Company for purposes of determining which of such holders are entitled to
dividends or other distributions (other than regular quarterly dividends), or
any right to subscribe for, purchase or otherwise acquire shares of stock of any
class or any other securities or property, or to receive any other right, (ii)
any capital reorganization of the Company, or reclassification or
recapitalization of capital stock of the Company or any transfer in one or more
related transactions of all or a majority of the assets or revenue or income
generating capacity of the Company to, or consolidation or merger of the Company
with or into, any other entity or person, or (iii) any voluntary or involuntary
dissolution or winding up of the Company, then and in each such event the
Company will mail or cause to be mailed to each holder of a Warrant at the time
outstanding a notice specifying, as the case may be, (A) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right; or (B) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, conveyance, dissolution,
liquidation or winding up is to take place and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or any other class of stock
or securities of the Company, or another issuer pursuant to Section 6,
receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such event. Any such notice shall be
deposited in the United States mail, postage prepaid, at least ten (10) days
prior to the date therein specified, and the holders(s) of the Warrant(s) may
exercise the Warrant(s) and participate in such event as a registered holder of
Common Stock, upon exercise of the Warrant(s) so held, within the ten (10) day
period from the date of mailing of such notice.

     4. NO IMPAIRMENT. The Company shall not, by amendment of its organizational
documents or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this
Agreement or of the Warrants, but will at all times in good faith take any and
all action as may be necessary in order to protect the rights of the holders of
the Warrants against impairment. Without limiting the generality of the
foregoing, the Company (a) will at all times reserve and keep available, solely
for issuance and delivery upon exercise of the Warrants, shares of Common Stock
issuable from time to time upon exercise of the Warrants, (b) will not increase
the par value of any shares of stock receivable upon exercise

                                       2
<PAGE>

of the Warrants above the amount payable in respect thereof upon such exercise,
and (c) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and non-assessable
stock upon the exercise of the Warrants, or any of them.

     5. EXERCISE OF WARRANTS. At any time and from time to time on and after the
first anniversary of the effective date of the Company's initial public offering
and expiring on the fifth anniversary of the effective date of the Company's
initial public offering of the Common Stock at 5:00 p.m., Sarasota, Florida
time, Warrants may be exercised as to all or any portion of the whole number of
shares of Common Stock covered by the Warrants by the holder thereof by
surrender of the Warrants, accompanied by a subscription for shares to be
purchased in the form attached hereto as Exhibit B and by a check payable to the
order of the Company in the amount required for purchase of the shares as to
which the Warrant is being exercised, delivered to the Company at its principal
office at 7367 S. Revere Parkway, Bldg. #2C, Denver, Colorado 80112, Attention:
President, or any substitute address where notice is to be given in accordance
with Section 12. Warrants may also be exercised from time to time, without any
payment required for the purchase of the shares as to which the Warrant is being
exercised, as to all or any portion of the number of shares of Common Stock
covered by the Warrant(s) by the holder thereof by surrender of the Warrants,
accompanied by a subscription for shares in the form attached as Exhibit C,
pursuant to which the holder thereof will be entitled to receive upon such
surrender of the Warrant(s) (and without any further payment) that number of
shares of Common Stock equal to the product of the number of shares of Common
Stock obtainable upon exercise of the Warrant(s) (or the portion thereof as to
which the exercise relates) multiplied by a fraction: (i) the numerator of which
shall be the difference between the then Current Value (as defined in this
Section 5 and Section 7(d)) of one full share of Common Stock on the date of
exercise and the Exercise Price, and (ii) the denominator of which shall be the
Current Value of one full share of Common Stock on the date of exercise. Upon
the exercise of a Warrant in whole or in part, the Company will within five (5)
days thereafter, at its expense (including the payment by the Company of any
applicable issue or transfer taxes), cause to be issued in the name of and
delivered to the Warrant holder a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock to which such holder is
entitled upon exercise of the Warrant. In the event such holder is entitled to a
fractional share, in lieu thereof such holder shall be paid a cash amount equal
to such fraction, multiplied by the Current Value of one full share of Common
Stock on the date of exercise. Certificates for shares of Common Stock issuable
by reason of the exercise of the Warrant or Warrants shall be dated and shall be
effective as of the date of the surrendering of the Warrant for exercise,
notwithstanding any delays in the actual execution, issuance or delivery of the
certificates for the shares so purchased. In the event a Warrant or Warrants is
exercised as to less than the aggregate amount of all shares of Common Stock
issuable upon exercise of all Warrants held by such person, the Company shall
issue a new Warrant to the holder of the Warrant so exercised covering the
aggregate number of shares of Common Stock as to which Warrants remain
unexercised.

     For purposes of this section, Current Value is defined (i) in the case for
which a public market exists for the Common Stock at the time of such exercise,
according to Section 7(d), and (ii) in the case no public market exists at the
time of such exercise, at the Appraised Value. For the purposes of this
Agreement, "Appraised Value" is the value determined in accordance with the
following procedures. For a period of five (5) days after the date of an event
(a "Valuation

                                       3
<PAGE>

Event") requiring determination of Current Value at a time when no public market
exists for the Common Stock (the "Negotiation Period"), the Company and the
Warrant holder for whom the Appraised Value is to be determined agree to
negotiate in good faith to reach agreement upon the Appraised Value of the
securities or property at issue, as of the date of the Valuation Event, which
will be the fair market value of such securities or property, without premium
for control or discount for minority interests, illiquidity or restrictions on
transfer. In the event that the parties are unable to agree upon the Appraised
Value of such securities or other property by the end of the Negotiation Period,
then the Appraised Value of such securities or property will be determined for
purposes of this Agreement by a recognized appraisal or investment banking firm
mutually agreeable to the holders of the Warrants and the Company (the
"Appraiser"). If the holders of the Warrants and the Company cannot agree on an
Appraiser within two (2) business days after the end of the Negotiation Period,
the Company, on the one hand, and the holders of the Warrants, on the other
hand, will each select an Appraiser within ten (10) business days after the end
of the Negotiation Period and those two Appraisers will select within ten (10)
days after the end of the Negotiation Period an independent Appraiser to
determine the fair market value of such securities or property, without premium
for control or discount for minority interests. Such independent Appraiser will
be directed to determine fair market value of such securities or property as
soon as practicable, but in no event later than thirty (30) days from the date
of its selection. The determination by an Appraiser of the Appraised Value fair
market value will be conclusive and binding on all parties to this Agreement.
Appraised Value of each share of Common Stock at a time when (i) the Company is
not a reporting company under the Exchange Act and (ii) the Common Stock is not
traded in the organized securities markets, will, in all cases, be calculated by
determining the Appraised Value of the entire Company taken as a whole and
dividing that value by the number of shares of Common Stock then outstanding,
without premium for control or discount for minority interests, illiquidity or
restrictions on transfer. The costs of the Appraiser will be borne by the
Company. In no event will the Appraised Value of the Common Stock be less than
the per share consideration received or receivable with respect to the Common
Stock or securities or property of the same class in connection with a pending
transaction involving a sale, merger, recapitalization, reorganization,
consolidation, or share exchange, dissolution of the Company, sale or transfer
of all or a majority of its assets or revenue or income generating capacity. or
similar transaction.

     6. PROTECTION AGAINST DILUTION. The Exercise Price for the shares of Common
Stock and number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment from time to time as follows:

     (a) ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE. Upon each adjustment
of the Exercise Price pursuant to this SECTION 6, the holder of a Warrant shall
be entitled to purchase, at the Exercise Price in effect after such adjustment,
a number of Warrant Shares equal to the amount obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of such Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.

     (b) ADJUSTMENT OF PRICE UPON ISSUANCE OF COMMON STOCK. If and whenever
after the date hereof, the Company shall issue or sell any shares of Common
Stock for a consideration per share less than Current Value at the time of such
issue or sale, then forthwith upon such issue or sale, the Exercise Price shall
be reduced to the price (calculated to the nearest cent) determined

                                       4
<PAGE>

by multiplying the Exercise Price in effect immediately prior to the time of
such issue or sale by a fraction, the numerator of which shall be the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale multiplied by the Current Value immediately prior to such issue or sale
plus (B) the consideration received by the Company upon such issue or sale, and
the denominator of which shall be the product of (C) the total number of shares
of Common Stock outstanding immediately after such issue or sale, multiplied by
(D) the Current Value immediately prior to such issue or sale.

No adjustment of any Exercise Price, however, shall be made in an amount less
than 1% of the Exercise Price, but any such lesser adjustment shall be carried
forward and shall be made at the time of, and together with, the next subsequent
adjustment which together with any adjustments so carried forward shall amount
to at least 1% of the Exercise Price.

     (c) ADDITIONAL ADJUSTMENTS. For the purposes of SUBSECTION (b) of this
SECTION 6, the following clauses shall also be applicable:

          (i) ISSUANCE OF RIGHTS OR OPTIONS. In case at any time the Company
     shall grant (whether directly or by assumption in a merger in which the
     Company is the surviving Company or otherwise) any rights (other than the
     Warrants) to subscribe for or to purchase, or any options for the purchase
     of, Common Stock or any stock or securities convertible into or
     exchangeable for Common Stock (such convertible or exchangeable stock or
     securities being herein called "CONVERTIBLE SECURITIES") whether or not
     such rights or options or the right to convert or exchange any such
     Convertible Securities are immediately exercisable, and the price per share
     for which Common Stock is issuable upon the exercise of such rights or
     options or upon conversion or exchange of such Convertible Securities
     (determined as provided below) shall be less than 100% of the Current Value
     determined as of the date of granting such rights or options, then the
     total maximum number of shares of Common Stock issuable upon the exercise
     of such rights or options or upon conversion or exchange of the total
     maximum amount of such Convertible Securities issuable upon the exercise of
     such rights or options shall (as of the date of granting of such rights or
     options) be deemed to be outstanding and to have been issued for such price
     per share, and the Exercise Price shall be adjusted in accordance with
     SECTION 6(b). Except as provided in CLAUSE (III) of this SUBSECTION, no
     further adjustments of any Exercise Price shall be made upon the actual
     issue of such Common Stock or of such Convertible Securities upon exercise
     of such rights or options or upon the actual issue of such Common Stock
     upon conversion or exchange of such Convertible Securities. For the
     purposes of this CLAUSE (I), the price per share for which Common Stock is
     issuable upon the exercise of any such rights or options or upon conversion
     or exchange of any such Convertible Securities shall be determined by
     dividing (A) the total amount, if any, received or receivable by the
     Company as consideration for the granting of such rights or options, plus
     the minimum aggregate amount of additional consideration payable to the
     Company upon the exercise of all such rights or options, plus, in the case
     of such rights or options which relate to Convertible Securities, the
     minimum aggregate amount of additional consideration, if any, payable upon
     the issue or sale of such Convertible Securities and upon the conversion or
     exchange thereof, by (B) the total maximum number of shares of Common Stock

                                       5
<PAGE>

     issuable upon the exercise of such rights or options or upon conversion or
     exchange of all such Convertible Securities issuable upon the exercise of
     such rights or options.

          (ii) ISSUANCE OF CONVERTIBLE SECURITIES. In case the Company shall
     issue (whether directly or by assumption in a merger in which the Company
     is the surviving Company or otherwise) or sell any Convertible Security,
     whether or not the rights to exchange or convert thereunder are immediately
     exercisable, and the price per share for which Common Stock is issuable
     upon conversion or exchange of such Convertible Securities (determined as
     provided below) shall be less than 100% of the Current Value, determined as
     of the date of such issue or sale of such Convertible Securities, as the
     case may be), then the total maximum number of shares of Common Stock
     issuable upon conversion or exchange of all such Convertible Securities
     shall (as of the date of the issue or sale of such Convertible Securities)
     be deemed to be outstanding and to have been issued for such price per
     share, and the Exercise Price shall be adjusted in accordance with SECTION
     6(b), provided that (A) except as provided in CLAUSE (iii) of this
     subsection, no further adjustments of any Exercise Price shall be made upon
     the actual issue of such Common Stock upon conversion or exchange of such
     Convertible Securities, and (B) if any such issue or sale of such
     Convertible Securities is made upon exercise of any rights to subscribe for
     or to purchase or any option to purchase any such Convertible Securities
     for which adjustments of any Exercise Price have been or are to be made
     pursuant to other provisions of this SUBSECTION (c), no further adjustment
     of any Exercise Price shall be made by reason of such issue or sale. For
     the purposes of this CLAUSE (ii), the price per share for which Common
     Stock is issuable upon conversion or exchange of Convertible Securities
     shall be determined by dividing (C) the total amount, if any, received or
     receivable by the Company as consideration for the issue or sale of such
     Convertible Securities, plus the minimum aggregate amount of additional
     consideration, if any, payable to the Company upon the conversion or
     exchange thereof, by (D) the total maximum number of shares of Common Stock
     issuable upon the conversion or exchange of all such Convertible
     Securities.

          (iii) CHANGE IN OPTION PRICE OR CONVERSION RATE. If the purchase price
     provided for in any rights or options referred to in CLAUSE (i) above, or
     the additional consideration, if any, payable upon the conversion or
     exchange of Convertible Securities referred to in CLAUSE (i) or (ii) above,
     or the rate at which any Convertible Securities referred to in CLAUSE (i)
     or (ii) above are convertible into or exchangeable for Common Stock, shall
     change (other than under or by reason of provisions designed to protect
     against dilution), then the Exercise Price in effect at the time of such
     event shall forthwith be readjusted to the Exercise Price which would have
     been in effect at such time had such rights, options or Convertible
     Securities still outstanding provided for such changed purchase price,
     additional consideration or conversion rate, as the case may be, at the
     time initially granted, issued or sold; and on the expiration of any such
     option or right or the termination of any such right to convert or exchange
     such Convertible Securities, the Exercise Price then in effect hereunder
     shall forthwith be increased to the Exercise Price which would have been in
     effect at the time of such expiration or termination had such right, option
     or Convertible Security, to the extent outstanding immediately prior to
     such expiration or termination, never been issued, and the Common Stock
     issuable thereunder shall no longer be deemed to be outstanding. If the
     purchase price provided for in any

                                       6
<PAGE>

     such right or option referred to in CLAUSE (i) above or the rate at which
     any Convertible Securities referred to in CLAUSE (i) or (ii) above are
     convertible into or exchangeable for Common Stock, shall decrease at any
     time under or by reason of provisions with respect thereto designed to
     protect against dilution, then in case of delivery of Common Stock upon the
     exercise of any such right or option or upon conversion or exchange of any
     such Convertible Security, the Exercise Price then in effect hereunder
     shall forthwith be adjusted to such respective amount as would have
     obtained had such right, option or Convertible Security never been issued
     as to such Common Stock and had adjustments been made upon the issuance of
     the share of Common Stock delivered as aforesaid, but only if as a result
     of such adjustment the Exercise Price then in effect hereunder is thereby
     decreased.

          (iv) STOCK DIVIDENDS. In case the Company shall declare a dividend or
     make any other distribution upon any stock of the Company payable in Common
     Stock or Convertible Securities, any Common Stock or Convertible
     Securities, as the case may be, issuable in payment of such dividend or
     distribution shall be deemed to have been issued or sold without
     consideration and the Exercise Price shall be adjusted in accordance with
     SECTION 6(b).

          (v) CONSIDERATION FOR STOCK. In case any shares of Common Stock or
     Convertible Securities or any rights or options to purchase any such Common
     Stock or Convertible Securities shall be issued or sold for cash, the
     consideration received therefor shall be deemed to be the amount received
     by the Company therefor, without deduction therefrom of any expenses
     incurred or any underwriting commissions or concessions paid or allowed by
     the Company in connection therewith. In case any shares of Common Stock or
     Convertible Securities or any rights or options to purchase any such Common
     Stock or Convertible Securities shall be issued or sold for a consideration
     other than cash, the amount of the consideration other than cash received
     by the Company shall be deemed to be the fair value of such consideration
     as determined reasonably and in good faith by the board of directors of the
     Company, without deduction of any expenses incurred or any underwriting
     commissions or concessions paid or allowed by the Company in connection
     therewith. In case any shares of Common Stock or Convertible Securities or
     any rights or options to purchase such shares of Common Stock or
     Convertible Securities shall be issued in connection with any merger or
     consolidation in which the Company is the surviving corporation (other than
     any consolidation or merger in which the previously outstanding shares of
     Common Stock of the Company shall be changed into or exchanged for the
     stock or other securities of another corporation), the amount of
     consideration therefor shall be deemed to be the fair value as determined
     reasonably and in good faith by the board of directors of the Company or
     such portion of the assets and business of the non-surviving corporation as
     such board may reasonably and in good faith determine to be attributable to
     such shares of Common Stock, Convertible Securities, rights or options, as
     the case may be. In the event of any consolidation or merger of the Company
     in which the Company is not the surviving corporation or in which the
     previously outstanding shares of Common Stock of the Company shall be
     changed into or exchanged for the stock or other securities of another
     entity or in the event of any sale of all or substantially all of the
     assets of the Company for stock or other securities of any entity, the
     Company shall be deemed to

                                       7
<PAGE>

     have issued a number of shares of its Common Stock for stock or securities
     or other property of such entity computed on the basis of the actual
     exchange ratio on which the transaction was predicated and for a
     consideration equal to the fair market value on the date of such
     transaction of all such stock or securities or other property of such
     entity, and if any such calculation results in adjustment of the Exercise
     Price in accordance with SECTION 6(b), the determination of the number of
     shares of Common Stock issuable upon exercise of the Warrants immediately
     prior to such merger, consolidation or sale, for purposes of SECTION 6(f),
     shall be made after giving effect to such adjustment of the Exercise Price.

          (vi) RECORD DATE. In case the Company shall take a record of the
     holders of its Common Stock for the purpose of entitling them (A) to
     receive a dividend or other distribution payable in Common Stock or in
     Convertible Securities, or (B) to rights to subscribe for or to purchase,
     or any options for the purchase of, Common Stock or Convertible Securities,
     then such record date shall be deemed to be the date of the issue or sale
     of the shares of Common Stock deemed to have been issued or sold upon the
     declaration of such dividend or the making of such other distribution or
     the date of the granting of such right, as the case may be.

          (vii) TREASURY SHARES. The number of shares of Common Stock
     outstanding at any given time shall not include shares owned or held by or
     for the account of the Company, and the disposition of any such shares
     shall be considered an issue or sale of Common Stock for the purposes of
     this SECTION 6.

     (d) ADJUSTMENT FOR CERTAIN SPECIAL DIVIDENDS. In case the Company shall
declare a dividend upon the Common Stock payable otherwise than out of earnings
or earned surplus, determined in accordance with generally accepted accounting
principles, and otherwise than in Common Stock or Convertible Securities (such a
dividend, a "SPECIAL DIVIDEND"), the Exercise Price in effect immediately prior
to the declaration of such a Special Dividend shall be reduced by an amount
equal, in the case of a Special Dividend in cash, to the amount per share of the
Common Stock so declared as payable or, in the case of any other Special
Dividend, to the fair value per share of the Common Stock of the property so
declared as payable, as determined, reasonably and in good faith, by the board
of directors of the Company. For the purposes of determining whether a dividend
is a Special Dividend, a dividend other than in cash shall be considered payable
out of earnings or earned surplus (other than revaluation or paid-in surplus)
only to the extent that such earnings or earned surplus are charged an amount
equal to the fair value of such dividend as determined, reasonably and in good
faith, by the board of directors of the Company. Such reductions shall take
effect as of the date on which a record is taken for the purpose of such
dividend, or, if a record is not taken, the date as of which the holders of
Common Stock of record entitled to such dividend are determined.

     (e) SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at any
time subdivide the outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision shall
be proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased.

                                       8
<PAGE>

     (f) ADJUSTMENTS FOR CONSOLIDATION, MERGER, SALE OF ASSETS, REORGANIZATION.
ETC. In case the Company (i) consolidates with or merges into any other entity
and is not the continuing or surviving corporation of such consolidation or
merger, or (ii) permits any other entity to consolidate with or merge into the
Company and the Company is the continuing or surviving corporation but, in
connection with such consolidation or merger, the Common Stock is changed into
or exchanged for stock or other securities of any other corporation or cash or
any other assets, or (iii) transfers all or substantially all of its properties
and assets to any other entity, or (iv) effects a capital reorganization or
reclassification of the capital stock of the Company in such a way that holders
of Common Stock shall be entitled to receive stock, securities, cash or assets
with respect to or in exchange for Common Stock, then, and in each such case,
proper provision shall be made so that, upon the basis and upon the terms and in
the manner provided in this SUBSECTION (f), the holder of this Warrant
Certificate, upon the exercise of each Warrant at any time after the
consummation of such consolidation, merger, transfer, reorganization or
reclassification, shall be entitled to receive (at the aggregate Exercise Price
in effect for all Warrant Shares issuable upon such exercise immediately prior
to such consummation as adjusted to the time of such transaction), in lieu of
shares of Common Stock issuable upon such exercise prior to such consummation,
the stock and other securities, cash and assets to which such holder would have
been entitled upon such consummation if such holder had so exercised such
Warrant immediately prior thereto (subject to adjustments subsequent to such
corporate action as nearly equivalent as possible to the adjustments provided
for in this SECTION 6).

     (g) NOTICE OF ADJUSTMENT. Upon any adjustment of any Exercise Price, then
and in each such case the Company shall promptly deliver a notice to the
registered holder of the Warrants, which notice shall state the Current Value,
if any adjustment depends upon a determination of Current Value, and the
Exercise Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of each
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.

     (h) OTHER NOTICES. In case at any time:

          (i) the Company shall offer for subscription pro rata to the holders
     of its Common Stock any additional shares of stock of any class or other
     rights;

          (ii) the Company shall authorize the distribution to all holders of
     its Common Stock of evidence of its indebtedness or assets (other than cash
     dividends or cash distributions payable out of earnings or earned surplus
     or dividends payable in Common Stock);

          (iii) there shall be any capital reorganization, reclassification of
     the capital stock of the Company, consolidation or merger of the Company
     with another entity (other than a subsidiary of the Company in which the
     Company is the surviving or continuing corporation and no change occurs in
     the Company's Common Stock), or sale of all or substantially all of its
     assets to, another entity;

          (iv) there shall be a voluntary or involuntary dissolution,
     liquidation, bankruptcy, assignment for the benefit of creditors, or
     winding up of the Company; or

                                       9
<PAGE>

          (v) the Company proposes to take any other action or an event occurs
     which would require an adjustment of the Exercise Price pursuant to
     SUBSECTION (i) of this SECTION 6 then, in any one or more of said cases,
     the Company shall give written notice, addressed to the holder of this
     Warrant Certificate at the address of such holder as shown on the books of
     the Company, of (1) the date on which the books of the Company shall close
     or a record shall be taken for such dividend, distribution or subscription
     rights, or (2) the date (or, if not then known, a reasonable approximation
     thereof by the Company) on which such reorganization, reclassification,
     consolidation, merger, sale, dissolution, liquidation, bankruptcy,
     assignment for the benefit of creditors, winding-up or other action or
     event, as the case may be, shall take place. Such notice shall also specify
     (or, if not then known, reasonably approximate) the date as of which the
     holders of Common Stock of record shall participate in such dividends,
     distribution or subscription rights, or shall be entitled to exchange their
     Common Stock for securities or other property deliverable upon such
     reorganization, reclassification, consolidation, merger, sale, dissolution,
     liquidation, bankruptcy, assignment for the benefit of creditors, winding
     up, or other action or event, as the case may be. Such written notice shall
     be given at least twenty days prior to the action in question and not less
     than twenty days prior to the record date or the date on which the
     Company's transfer books are closed in respect thereto.

     (i) CERTAIN EVENTS. If any event occurs as to which, in the reasonable
opinion of the Company, in good faith, the other provisions of this SECTION 6
are not strictly applicable but the lack of any adjustment would not in the
opinion of the Company fairly protect the purchase rights of the holder of this
Warrant Certificate in accordance with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect the purchase
rights of the holder of this Warrant Certificate in accordance with the basic
intent and principles of such provisions, then the Company shall appoint a firm
of independent certified public accountants (which may be the regular auditors
of the Company) of recognized national standing, which shall give their opinion
upon the adjustment, if any, on a basis consistent with the basic intent and
principles established in the other provisions of this SECTION 6, necessary to
preserve, without dilution, the exercise rights of the registered holder of this
Warrant Certificate. Upon receipt of such opinion, the Company shall forthwith
make the adjustments described therein.

     (j) EXEMPT ISSUANCES. Notwithstanding anything in this Warrant Certificate
to the contrary, no holder of this Warrant Certificate shall be entitled to any
adjustment, and no adjustments shall be made, in respect of the sale or issuance
of Common Stock, Convertible Securities or the granting of any rights to
subscribe for or to purchase Common Stock as follows:

          (i) Shares, or options or other rights to acquire Common Stock, issued
     to directors, officers, agents or employees of the Company or any of its
     incentives or compensation so long as they do not exceed ____ shares in the
     aggregate.

          (ii) Shares issued to satisfy currently outstanding options or other
     rights issued to directors, officers, agents or employees of the Company or
     its Affiliates as incentives or compensation;

                                       10
<PAGE>

          (iii) Any shares, options or other rights to acquire Common Stock
     issued to any lender and considered for purposes of the Company's financial
     statements as part of the interest or cost of funds for amounts borrowed by
     the Company or any of its Affiliates from the lender, provided such lender
     is not an affiliate of the Company; and

          (iv) Shares issued upon conversion or exercise of any warrants or
     options issued and outstanding on the date hereof in accordance with their
     current terms.

7.    REGISTRATION RIGHTS.

     (a) The Company agrees that upon written notice given to the Company at any
time on or after the first anniversary of the effective date of the public
offering of the Common Stock but before the fifth anniversary of the effective
date of the public offering, from the holder or holders of not less than
fifty-one percent (51%) of the shares issued and issuable upon exercise of the
Warrants, of a proposed distribution by such holder or holders of Common Stock
issued or issuable upon exercise of Warrants, the Company will, within
forty-five (45) days after receipt of such notice, promptly prepare, file and
diligently prosecute to effectiveness, an appropriate filing with the Commission
of a registration statement covering the proposed sale or distribution of all or
any part of such shares under the Securities Act of 1933, as amended (the
"Act"), and the appropriate registration statements or applications under the
securities laws of such states as such holders, in their discretion, shall
determine, and will use its reasonable best efforts to have such registration
and application (including both the registration under the Act and the
registration or application made under the various state securities laws)
declared effective as soon as practicable after the filing thereof and to remain
effective for such period that may be reasonably necessary to complete the
distribution of securities so registered or qualified. At least fifteen (15)
days prior to such filing, the Company shall give written notice of such
proposed filing to each registered holder of any Warrants at the holders'
addresses appearing on the records of the Company and to each registered holder
of Common Stock purchased from the exercise of any Warrants at such holder's
address appearing on the Company records, and shall offer to include in such
registration statement any proposed distribution of such Common Stock held or to
be held by each such registered holder; provided, however, that except as
provided in Section 7(e), the Company need not effect the registration of the
sale or distribution of Common Stock purchased upon exercise of Warrants more
than once. Except as provided below, all expenses, disbursements and fees
incident to the Company's performance of or compliance with this Section 7
(including fees and expenses of counsel for the Company, special auditing fees
specifically attributable to the sale by the selling holder or holders of Common
Stock, printing expenses (including all necessary copies of the registration
statement and prospectuses contained therein), registration and filing fees and
blue sky fees and expenses, and fees and charges of the Company's transfer agent
and registrar for services rendered in connection therewith) shall be borne by
the Company; provided, however, that the Company shall not be required to pay
for any expenses of any registration proceeding begun (in which case holders
shall bear such expenses), if the registration is withdrawn any time at the
request of the holder or holders of not less than fifty-one percent (51%) of the
shares issued and issuable upon exercise of the Warrants, unless such withdrawal
is due to the misconduct of the Company or due to an unforeseen material adverse
change in the business, properties, prospects or financial condition of the
Company occurring prior to the effectiveness of the registration statement, in
which case the

                                       11
<PAGE>

Company will continue to bear such expenses. All expenses, disbursement and fees
of the selling holder or holders unrelated to the registration, filing, listing
and compliance with securities and Blue Sky laws and all underwriting discounts
and commissions and transfer taxes shall be borne by the selling holder or
holders on a pro rata basis (unless selling holders agree to an allocation other
than pro rata). Pro rata shall for the purposes of this Section 7 be based upon
the number of shares sold. Notwithstanding the foregoing, the Company shall
reimburse the selling holder or holders the reasonable fees and expenses of one
counsel retained in connection with such registration by the holder or holders.

     (b) In connection with any registration under the Act and specified state
securities law pursuant to this Agreement, the Company will, without charge,
furnish each holder whose shares are registered thereunder with copies of the
registration statement and all amendments thereto and will, without charge,
supply each such holder with copies of any preliminary and final prospectus
included therein in such quantities as may be necessary for the purposes of such
proposed sale or distribution that the holder or holders may reasonably request.

     (c) In connection with any registration of shares pursuant to this Section
7, the holders whose shares are being registered shall furnish the Company with
such information concerning such holders and the proposed sale or distribution
as shall be required for use in the preparation of such registration statement
and applications.

     (d) Notwithstanding the foregoing provisions of this Section 7, upon
receipt of such written notice from the holder or holders of not less than fifty
one percent (51%) of the shares issued and issuable upon exercise of the
Warrants requesting that the Company effect registration of the sale or
distribution of Common Stock as provided in Section 7(a) or upon election by
holders of Warrants or Common Stock to participate in a registration pursuant to
Section 7(e), the Company shall have the option, for a period of ten (10) days
thereafter, to purchase all or any such Warrants and all or any such shares of
Common Stock acquired pursuant to the exercise of the Warrants and held by
holders providing the request for registration under Section 7(a) and/or 7(e)
and held by any other holder of Warrants or shares issued and will exercise its
option if it so elects as follows:

          (i) as to such Warrants, at a price per Warrant equal to the
     difference between (A) the average of the means between the closing bid and
     asked prices of the Common Stock in the over-the-counter market for twenty
     (20) consecutive business days commencing thirty (30) business days before
     the date of receipt of such notice, (B) if the Common Stock is quoted on
     the Nasdaq SmallCap Market, at the average of the means of the daily
     closing bid and asked prices of the Common Stock for twenty (20)
     consecutive business days commencing thirty (30) business days before the
     date of such notice, or (C) if the Common Stock is listed on any national
     securities exchange or quoted on the Nasdaq National Market System, at the
     average of the daily closing prices of the Common Stock for twenty (20)
     consecutive business days commencing thirty (30) business days before the
     date of such notice and the Exercise Price of the Warrant at the time of
     receipt of such notice; and

          (ii) as to shares of Common Stock previously purchased pursuant to the
     exercise of Warrants, at a price per share equal to (A) the average of the
     means between

                                       12
<PAGE>

     the closing bid and asked prices of the Common Stock in the
     over-the-counter market for twenty (20) consecutive business days
     commencing thirty (30) business days before the date of such notice, (b) if
     the Common Stock is quoted on the Nasdaq SmallCap Market, at the average of
     the means of the daily closing bid and asked prices of the Common Stock for
     twenty (20) consecutive business days commencing thirty (30) business days
     before the date of such notice or (C) if the Common Stock is listed on any
     national securities exchange or the Nasdaq National Market System, at the
     average of the daily closing prices of the Common Stock for twenty (20)
     consecutive business days commencing thirty (30) business days before the
     date of such notice (such value of shares so determined in this Section
     7(d)(ii), as the case may be, is referred to herein as the "Current
     Value").

          (iii) If any time on or after the first anniversary of the date hereof
     but before the fifth anniversary of the date hereof the Company proposes to
     file a registration statement under the Act covering a proposed sale of
     shares of Common Stock, it shall give to each holder who then owns any
     Warrants or any shares of Common Stock acquired pursuant to the exercise of
     the Warrants notice of such proposed registration at least thirty (30) days
     prior to the filing of the registration statement and shall afford each
     such holder who then proposed to sell or distribute publicly any of the
     shares subject to the Warrants upon giving not less than ten (10) days
     notice prior to such filing, the opportunity to have such shares included
     in the securities registered under the registration statement. Except as
     provided below, all expenses, disbursements and fees incident to the
     Company's performance of or compliance with this Section 7 (including, but
     without limitation, fees and expenses of counsel, auditing fees, printing
     expenses, SEC filing fees and expenses, but excluding any underwriting
     discounts or commissions) incurred in connection with the registration by
     the Company of the sale of any shares for any such holder under this
     Section 7(e) shall be borne by the Company. All expenses, disbursement and
     fees of the selling holder or holders unrelated to the registration,
     filing, listing and compliance with securities and Blue Sky laws and all
     underwriting discounts and commissions and transfer taxes shall be borne by
     the selling holder or holders on a pro rata basis (unless selling holders
     agree to an allocation other than pro rata). Pro rata shall for the
     purposes of this Section 7 be based upon the number of shares sold.
     Notwithstanding the foregoing, the Company shall reimburse the selling
     holder or holders the reasonable fees and expenses of one counsel retained
     in connection with such registration by the holder or holders. This Section
     7(e) shall not apply to a filing of a registration statement by the Company
     on a form that does not permit the inclusion of shares being sold by the
     holders, including without limitation, Form S-4 and Form S-8. If the
     registration statement covered by this Section 7(e) is for an offering
     underwritten in whole or in part, the Company may, as a condition to
     inclusion in such offering, require that the above-described shares
     requested to be included in the registration statement be included in the
     underwriting on the same terms and conditions as securities otherwise being
     sold through the underwriters. If in the good faith judgment of the
     managing underwriter of any public offering inclusion of all of the
     above-described shares covered by a request for registration would reduce
     the number of shares to be offered by the Company or interfere with the
     successful marketing of the shares offered by the Company, the number of
     the above-described shares to be included in the public offering and the
     Registration Statement may be reduced pro rata (by a number of shares)

                                       13
<PAGE>

     among the holders requesting inclusion of the registration; provided,
     within six (6) months thereafter the Company shall register any such
     excluded shares pursuant to Section 7(a) above.

     (e) The registration rights stated in Section 7 shall not be applicable to
shares issuable or issued upon the exercise of warrants to a holder if the
holder can sell all of those shares so acquired and at one time under Rule 144
of the Securities and Exchange Commission immediately upon the exercise of the
Warrant or Warrants.

     (f) Anything in this Agreement to the contrary notwithstanding, the Company
shall be entitled to postpone for a period of time in its reasonable judgment,
but not to exceed 120 days (a "Blackout Period"), the filing of any registration
statement, and the preparation and/or filing of any prospectus or any amendments
or supplements to any registration statement or prospectus, if the Company
reasonably determines that any such filing or the offering of any shares would
(i) impede, delay or otherwise interfere with any financing, offer or sale of
securities, acquisition, corporate reorganization or other significant
transaction involving the Company or any of its subsidiaries, or (ii) require
disclosure of material information which, if disclosed at that time, would be
harmful to the interests of the Company and its shareholders; provided, however,
that, in the case of a Blackout Period pursuant to (ii) above, the blackout
period shall earlier terminate upon public disclosure by the Company or public
admissions by the Company of such material information. Upon notice by the
Company to the holders of such determination, each of the fact of any such
notice strictly confidential, (ii) promptly halt any offer, sale, trading or
transfer by of any of the shares for the duration of the Blackout period set
forth in such notice (or until earlier terminated in writing by the Company) and
(iii) promptly halt any use, publication, dissemination or distribution of any
registration statement with respect to any shares and any prospectus included
therein for the duration of the Blackout Period set forth in such notice (or
until earlier terminated in writing by the Company).

     8. INDEMNIFICATION; CONTRIBUTION.

     (a) The Company will indemnify and hold harmless each holder and each
affiliate thereof of Common Stock registered pursuant to this Agreement with the
Commission, or under any Blue Sky Law or regulation against any losses, claims,
damages, or liabilities, joint or several, to which such holder may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, registration statement, prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such holder and affiliate for any legal or other expenses reasonably incurred by
such holder in connection with investigating or defending any such action or
claim regardless of the negligence of any such holder or affiliate; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus, registration statement or prospectus, or any
such amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by any such holder expressly for
use therein.

                                       14
<PAGE>

     (b) Each holder of Common Stock registered pursuant to this Agreement will
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
registration statement or prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any preliminary prospectus, registration statement
or prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such holder
expressly for use therein.

     (c) Promptly after receipt by an indemnified party under Sections 8(a) or
(b) above of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
either such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability that it may otherwise have to any indemnified
party. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof the
indemnifying party shall be entitled to assume the defense thereof by notice in
writing to the indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under either of
such subsections for any legal expenses of other counsel or any other expense,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation incurred prior
to the assumption by the indemnifying party, unless such expenses have been
specifically authorized in writing by the indemnifying party, the indemnifying
party has failed to assume the defense and employ counsel, or the named parties
to any such action include both the indemnified party and the indemnifying
party, as appropriate, and such indemnified party has been advised by counsel
that the representation of such indemnified party and the indemnifying party by
the same counsel would be inappropriate due to actual or potential differing
interests between them, in each of which cases the fees of one counsel (together
with appropriate local counsel) for the indemnified party will be paid by the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of the settlement; provided, however, that
such consent or approval shall not unreasonably be withheld.

     (d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the holder or holders from this Agreement and from the offering of
the shares of Common Stock. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits

                                       15
<PAGE>

but also the relative fault of the Company and the holders in connection with
the statement or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault 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 the Company or the holder and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the holders agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the holders were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this subsection
(e). Except as provided in Section 8(c), the amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or liabilities (or
actions in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigation or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding any
provision in this Section 8(d) to the contrary, no holder shall be liable for
any amount, in the aggregate, in excess of the net proceeds to such holder from
the sale of such holder's shares (obtained upon exercise of Warrants) giving
rise to such losses, claims, damages or liabilities.

     (e) The obligations of the Company under this Section 8 shall be in
addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any holder of Warrants within the meaning of the Act. The
obligations of the holders of Common Stock under this Section 8 shall be in
addition to any liability that such holders may otherwise have and shall
extend, upon the same terms and conditions to each person, if any, who
controls the Company within the meaning of the Act.

     9. STOCK EXCHANGE LISTING. In the event the Company lists its Common Stock
on any national securities exchange, the Company will, at its expense, also list
on such exchange, upon exercise of a Warrant, all shares of Common Stock
issuable pursuant to such Warrant.

     10. SPECIFIC PERFORMANCE. The Company stipulates that remedies at law, in
money damages, available to the holder of a Warrant, or of a holder of Common
Stock issued pursuant to exercise of a Warrant, in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Agreement are not and will not be adequate. Therefore, the
Company agrees that the terms of this Agreement may be specifically enforced by
a decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

     11. SUCCESSORS AND ASSIGNS; BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of you and the Company and their respective
successors and permitted assigns.

                                       16
<PAGE>

     12. NOTICES. Any notice hereunder shall be given by registered or certified
mail, if to the Company, at its principal office referred to in Section 5 and,
if to the holders, to their respective addresses shown in the Warrant ledger of
the Company, provided that any holder may at any time on three (3) days' written
notice to the Company designate or substitute another address where notice is to
be given and the Company may at any time on three (3) days' written notice to
the holders of the Warrants or shares issued upon exercise of the Warrants
designate or substitute another address where notice is to be given.. Notice
shall be deemed given and received after a certified or registered letter,
properly addressed with postage prepaid, is deposited in the U.S. mail.

     13. SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Agreement.

     14. ASSIGNMENT; REPLACEMENT OF WARRANTS. If the Warrant or Warrants are
assigned, in whole or in part, the Warrants shall be surrendered at the
principal office of the Company, and thereupon, in the case of a partial
assignment, a new Warrant shall be issued to the holder thereof covering the
number of shares not assigned, and the assignee shall be entitled to receive a
new Warrant covering the number of shares so assigned. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and appropriate bond or indemnification protection,
the Company shall issue a new Warrant of like tenor. Except as contemplated by
Section 7 of this Agreement, the Warrants will not be transferred, sold or
otherwise hypothecated by you or any other person and the Warrants will be
nontransferable, except to (i) one or more persons, each of which on the date of
transfer is an officer or partner of you; (ii) a partnership or partnerships,
the partners of which are you and one or more persons, each of whom on the date
of transfer is an officer to you; (iii) a successor to you in merger or
consolidation; (iv) a purchaser of all or substantially all of your assets; or
(v) a person that receives a Warrant upon death of a Holder pursuant to will,
trust, or the laws of intestate succession.

     15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma without giving effect to the
principles of choice of laws thereof.

     16. DEFINITION. All references to the word "you," and to "Kashner Davidson
Securities Corporation." in this Agreement shall be deemed to apply with equal
effect to any persons or entities to whom Warrants have been transferred in
accordance with the terms hereof, and, where appropriate, to any persons or
entities holding shares of Common Stock issuable upon exercise of Warrants.

     17. HEADINGS. The headings herein are for purposes of reference only and
shall not limit or otherwise affect the meaning of any of the provisions hereof.

                                    Very truly yours,

                                    TRAINING DEVICES INTERNATIONAL, INC.

                                       17
<PAGE>

                                     By:
                                        ----------------------------------
                                     Bruce S. Betschart, President

Accepted as of May _____, 2000.

KASHNER DAVIDSON SECURITIES CORPORATION

BY:
----------------------------------

                                       18
<PAGE>

                               WARRANT CERTIFICATE

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO THE ISSUER, THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

No. ______                                                    _______ Warrants

                          TRAINING DEVICES INCORPORATED
                          COMMON STOCK PURCHASE WARRANT

THIS IS TO CERTIFY thatKashner Davidson Securities Corporation or its assigns as
permitted in that certain Warrant Agreement (the "Warrant Agreement") dated
_____________ __, 2000, by and among the Company (as hereinafter defined) and
Kashner Davidson Securities Corporation is entitled to purchase at any time or
from time to time on or after the first anniversary of the effective date of the
Company's initial public offering (the "Effective Date") until 5:00 p.m.,
Sarasota, Florida time on the fifth anniversary of the Effective Date, an
aggregate of 120,000 shares of Common Stock without par value of Training
Devices International, Inc., a Colorado corporation (the "Company"), for an
exercise price per share as set forth in the Warrant Agreement referred to
herein. This Warrant is issued pursuant to the Warrant Agreement, and all rights
of the holder of this Warrant are further governed by, and subject to the terms
and provisions of such Warrant Agreement, copies of which are available upon
request to the Company. The holder of this Warrant and the shares issuable upon
the exercise hereof shall be entitled to the benefits, rights and privileges and
subject to the obligations, duties and liabilities provided in the Warrant
Agreement.

The issuance of this Warrant and the shares issuable upon the due and timely
exercise hereof have not been registered under the Securities Act of 1933, as
amended (the "Act"), or any similar state securities law or act, and, as such,
no public offering of either this Warrant of any of the shares of Common Stock
issuable upon exercise of this Warrant may be made other than under an exemption
under the Act or until the effectiveness of a registration statement under such
Act covering such offering. Transfer of this Warrant is restricted as provided
in Section 14 of the Warrant Agreement.

Subject to the provisions of the Act, of the Warrant Agreement and of this
Warrant, this Warrant and all rights hereunder are transferable, in whole or in
part, only to the extent expressly permitted in such documents and then only at
the principal office of the Company, Attention: President, by the holder hereof
or by a duly authorized attorney-in-fact, upon surrender of this Warrant duly
endorsed, together with the Assignment hereof duly endorsed. Until transfer
hereof on the books of the Company, the Company may treat the registered holder
as the owner hereof for all purposes.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and its
corporate seal to be hereunto affixed by its proper corporate officers thereunto
duly authorized.

                                          TRAINING DEVICES INTERNATIONAL, INC.

                                          By:
                                             ----------------------------------
                                               Bruce S. Betschart, President

                                       19
<PAGE>

               [NOT TO BE COMPLETED PRIOR TO EXERCISE OF WARRANTS]

                         NOTICE OF EXERCISE OF WARRANTS

     To:   Training Devices International, Inc.
           7367 S. Revere Parkway, Bldg. #2C
           Englewood, Colorado  80112-3931

     The undersigned hereby irrevocably elects to exercise ______ warrants
represented and evidenced by the within Certificate of Warrants for, and to
purchase thereunder ______ shares of Common Stock of Training Devices
International, Inc. provided for therein, and hereby delivers herewith
either: a certified check bank cashier's check, or wire transfer to a bank
specified by the Company, payable in United States Dollars to Training
Devices Incorporated in the aggregate amount of $______, which represents the
purchase price of such shares.

     The undersigned hereby certifies that it qualifies as an "accredited
investor" as that term is defined under Regulation D of the Securities Act of
1933, as amended, and any applicable successor regulation or rule. The
undersigned to provide any supporting documentation to substantiate this status
as Training Devices Incorporated may reasonably request.

     The undersigned further certifies that it is resident of the State of
_____________________ and that such State [ ] was [ ] was not (check one) the
state of the undersigned's residence at the time of the issuance of the
Warrants. (If "was not" in the foregoing statement was checked, the undersigned
shall deliver evidence of the compliance with the current resident state's "blue
sky" or state securities laws.)

     If said number of shares shall not be all the shares purchasable
thereunder, please issue a new Certificate for the balance remaining of the
Warrants exercisable under the within Certificate registered in the name of the
undersigned holder of the within Certificate as indicated below, and deliver to
the address set forth below.

      Dated:
            ------------------------

      Name of Holder:
                     ------------------------

      Address:
              -------------------------------

      Signature:
                --------------------------

   Note: The above signature must correspond with the name as written upon the
         face of the within Certificate in every particular, without alteration
         or any change whatsoever.

                                       20

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