Document:

<PAGE>

                                                                  Exhibit 10(45)

                          REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement is made and entered into as of March 31, 2000
(this "Agreement"), by and among Virtual Communities, Inc., a Delaware
corporation (the "Company"), and Intercoastal Financial Services, Corp., a
Florida corporation (the "Placement Advisor").

The Company and the Placement Advisor hereby agree as follows:

Definitions.

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

"Advice" shall have the meaning set forth in Section 3(m).

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

"Blackout Period" shall have the meaning set forth in Section 3(n).

"Board" shall have the meaning set forth in Section 3(n).

"Business Day" means any day except Saturday, Sunday and any day which shall be
a legal holiday or a day on which banking institutions in the state of New York
generally are authorized or required by law or other government actions to
close.

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the Company's Common Stock, par value $.01 per share.

"Effectiveness Date" means with respect to the Registration Statement the
earlier of the 90th day following the Closing Date and the date which is within
five (5) days of the date on which the Commission informs the Company that the
Commission (i) will not review the Registration Statement or (ii) that the
Company may request the acceleration of the effectiveness of the Registration
Statement.

"Effectiveness Period" shall have the meaning set forth in Section 2.

"Event" shall have the meaning set forth in Section 7(e).

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

"Filing Date" means the date the Registration Statement is filed which date
shall be the 30th day following the date of filing of the registration statement
covering all of the registrable securities of the Purchasers.

"Holder" or "Holders" means the holder or holders, as the case may be, from time
to time of Registrable Securities including, including without limitation, the
Placement Advisor and its assignees.

"Indemnified Party" shall have the meaning set forth in Section 5(c).

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

"Losses" shall have the meaning set forth in Section 5(a).

"Nasdaq" shall mean the Nasdaq SmallCap Market.

"Person" means an individual or a corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

"Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
<PAGE>

Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.

"Registrable Securities" means (i) the shares of Common Stock issuable upon
exercise of the Warrants (the "Warrant Shares") and upon any stock split, stock
dividend, recapitalization or similar event with respect to such or Warrant
Shares, and (ii) any other dividend or other distribution with respect to,
conversion or exchange of, or in replacement of, Registrable Securities;
provided, however, that Registrable Securities shall include (but not be limited
to) a number of shares of Common Stock equal to no less than 100% of the maximum
number of shares of Common Stock which would be issuable upon exercise of the
Warrants, assuming such exercise occurred on the Closing Date or the Filing
Date, whichever date would result in the greater number of Registrable
Securities. Notwithstanding anything herein contained to the contrary, such
registered shares of Common Stock shall be allocated among the Holders pro rata
based on the total number of Registrable Securities issued or issuable as of
each date that a Registration Statement, as amended, relating to the resale of
the Registrable Securities is declared effective by the Commission.
Notwithstanding anything contained herein to the contrary, if the actual number
of shares of Common Stock issuable upon exercise of the Warrants exceeds 100% of
the number of shares of Common Stock issuable upon exercise of the Warrants
based upon a computation as at the Closing Date or the Filing Date, the term
"Registrable Securities" shall be deemed to include such additional shares of
Common Stock.

"Registration Statement" means the registration statement and any additional
registration statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

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

"Special Counsel" means any special counsel to the Holders, for which the
Holders will be reimbursed by the Company pursuant to Section 4 hereof.

"Warrants" means the callable warrants to purchase shares of Common Stock issued
to the Placement Advisor in connection with the Purchase Agreement, and any
other warrants of like tenor issued in substitution or exchange thereof.
Capitalized terms used and not otherwise defined herein shall have the meanings
given such terms in the Common Stock and Warrants Purchase Agreement, dated as
of the date hereof (the "Purchase Agreement"), by and among the Company and the
investors a party thereto (the "Purchasers").

Registration. On or prior to the Filing Date the Company shall prepare and file
     with the Commission a "shelf" Registration Statement covering all
     Registrable Securities for an offering to be made on a continuous basis
     pursuant to Rule 415. The Registration Statement shall be on Form SB-2
     (except if the Company is not then eligible to register for resale the
     Registrable Securities on Form SB-2, in which case such registration shall
     be on another appropriate form in accordance herewith). The Company shall
     (i) not permit any securities other than the Registrable Securities to be
     included in the Registration Statement and those securities on Schedule
     7(c) hereto, (ii) use its best efforts to cause the Registration Statement
     to be declared effective under the Securities Act (including filing with
     the Commission a request for acceleration of effectiveness in accordance
     with Rule 12dl-2 promulgated under the Exchange Act within five (5)
     Business Days of the date that the Company is notified (orally or in
     writing,
<PAGE>

     whichever is earlier) by the Commission that a Registration Statement will
     not be "reviewed," or not be subject to further review) as soon as possible
     after the filing thereof, but in any event prior to the Effectiveness Date,
     and to keep such Registration Statement continuously effective under the
     Securities Act until such date as is the earlier of (x) the date when all
     Registrable Securities covered by such Registration Statement have been
     sold or (y) the date on which the Registrable Securities may be sold
     without any restriction pursuant to Rule 144(k) as determined by the
     counsel to the Company pursuant to a written opinion letter, addressed to
     the Company's transfer agent to such effect (the "Effectiveness Period").
     If an additional Registration Statement is required, for any reason, to be
     filed because the actual number of shares of Warrant Shares exceeds the
     number of shares of Common Stock initially registered in respect of the
     Warrant Shares based upon the computation on the Closing Date, the Company
     shall have twenty (20) Business Days to file such additional Registration
     Statement, and the Company shall use its best efforts to cause such
     additional Registration Statement to be declared effective by the
     Commission as soon as possible, but in no event later than thirty (30) days
     after filing.

Registration Procedures.

In connection with the Company's registration obligations hereunder, the Company
shall:

     Y.   Prepare and file with the Commission on or prior to the Filing Date, a
          Registration Statement on Form SB-2 (or if the Company is not then
          eligible to register for resale the Registrable Securities on Form
          SB-2 such registration shall be on another appropriate form in
          accordance herewith) in accordance with the method or methods of
          distribution thereof as specified by the Holders (except if otherwise
          directed by the Holders), and cause the Registration Statement to
          become effective and remain effective as provided herein; provided,
          however, that not less than five (5) Business Days prior to the filing
          of the Registration Statement or any related Prospectus or any
          amendment or supplement thereto (including any document that would be
          incorporated therein by reference), the Company shall (i) furnish to
          the Holders and any Special Counsel, copies of all such documents
          proposed to be filed, which documents (other than those incorporated
          by reference) will be subject to the review of such Holders and such
          Special Counsel, and (ii) at the request of any Holder cause its
          officers and directors, counsel and independent certified public
          accountants to respond to such inquiries as shall be necessary, in the
          reasonable opinion of counsel to such Holders, to conduct a reasonable
          investigation within the meaning of the Securities Act. The Company
          shall not file the Registration Statement or any such Prospectus or
          any amendments or supplements thereto to which the Holders of a
          majority of the Registrable Securities or any Special Counsel shall
          reasonably object in writing within three (3) Business Days of their
          receipt thereof.

     Z.   1. Prepare and file with the Commission such amendments, including
          post-effective amendments, to the Registration Statement as may be
          necessary to keep the Registration Statement continuously effective as
          to the applicable Registrable Securities for the Effectiveness Period
          and prepare and file with the Commission such additional Registration
          Statements in order to register for resale under the Securities Act
          all of the Registrable Securities; (ii) cause the related Prospectus
          to be amended or supplemented by any required Prospectus supplement,
          and as so supplemented or amended to be filed pursuant to Rule 424 (or
          any similar provisions then in force) promulgated under the Securities
          Act; (iii) respond as promptly as possible to any comments received
          from the Commission with respect to the Registration Statement or any
          amendment thereto and as promptly as possible provide the Holders true
          and complete copies of all correspondence from and to the Commission
          relating to the Registration Statement; and (iv) comply in all
          material respects with the provisions of the Securities Act and the
          Exchange Act with respect to the disposition of all Registrable
          Securities covered by the Registration Statement during the applicable
          period in accordance with the intended
<PAGE>

          methods of disposition by the Holders thereof set forth in the
          Registration Statement as so amended or in such Prospectus as so
          supplemented.

     AA.  Notify the Holders of Registrable Securities to be sold and any
          Special Counsel as promptly as possible (and, in the case of (i)(A)
          below, not less than five (5) Business Days prior to such filing) and
          (if requested by any such Person) confirm such notice in writing no
          later than one (1) Business Day following the day (i)(A) when a
          Prospectus or any Prospectus supplement or post-effective amendment to
          the Registration Statement is proposed to be filed; (B) when the
          Commission notifies the Company whether there will be a "review" of
          such Registration Statement and whenever the Commission comments in
          writing on such Registration Statement and (C) with respect to the
          Registration Statement or any post-effective amendment, when the same
          has become effective; (ii) of any request by the Commission or any
          other Federal or state governmental authority for amendments or
          supplements to the Registration Statement or Prospectus or for
          additional information; (iii) of the issuance by the Commission of any
          stop order suspending the effectiveness of the Registration Statement
          covering any or all of the Registrable Securities or the initiation of
          any Proceedings for that purpose; (iv) if at any time any of the
          representations and warranties of the Company contained in any
          agreement contemplated hereby ceases to be true and correct in all
          material respects; (v) of the receipt by the Company of any
          notification with respect to the suspension of the qualification or
          exemption from qualification of any of the Registrable Securities for
          sale in any jurisdiction, or the initiation or threatening of any
          Proceeding for such purpose; and (vi) of the occurrence of any event
          that makes any statement made in the Registration Statement or
          Prospectus or any document incorporated or deemed to be incorporated
          therein by reference untrue in any material respect or that requires
          any revisions to the Registration Statement, Prospectus or other
          documents so that, in the case of the Registration Statement or the
          Prospectus, as the case may be, it will not contain any untrue
          statement of a material fact or omit to state any material fact
          required to be stated therein or necessary to make the statements
          therein, in the light of the circumstances under which they were made,
          not misleading.

The Company shall promptly furnish to Special Counsel, without charge, (i) any
correspondence from the Commission or the Commission's staff to the Company or
its representatives relating to any Registration Statement and (ii) promptly
after the same is prepared and filed with the Commission, a copy of any written
response to the correspondence received from the Commission.

     BB.  Use its best efforts to avoid the issuance of, or, if issued, obtain
          the withdrawal of, (i) any order suspending the effectiveness of the
          Registration Statement or (ii) any suspension of the qualification (or
          exemption from qualification) of any of the Registrable Securities for
          sale in any jurisdiction, at the earliest practicable moment.

     CC.  If requested by the Holders of a majority in interest of the
          Registrable Securities, (i) promptly incorporate in a Prospectus
          supplement or post-effective amendment to the Registration Statement
          such information as the Company reasonably agrees should be included
          therein and (ii) make all required filings of such Prospectus
          supplement or such post-effective amendment as soon as practicable
          after the Company has received notification of the matters to be
          incorporated in such Prospectus supplement or post-effective
          amendment.
<PAGE>

     DD.  Furnish to each Holder and any Special Counsel, without charge, at
          least one conformed copy of each Registration Statement and each
          amendment thereto, including financial statements and schedules, all
          documents incorporated or deemed to be incorporated therein by
          reference, and all exhibits to the extent requested by such Person
          (including those previously furnished or incorporated by reference)
          promptly after the filing of such documents with the Commission.

     EE.  Promptly deliver to each Holder and any Special Counsel, without
          charge, as many copies of the Registration Statement, Prospectus or
          Prospectuses (including each form of prospectus) and each amendment or
          supplement thereto as such Persons may reasonably request; and the
          Company hereby consents to the use of such Prospectus and each
          amendment or supplement thereto by each of the selling Holders in
          connection with the offering and sale of the Registrable Securities
          covered by such Prospectus and any amendment or supplement thereto.

     FF.  Prior to any public offering of Registrable Securities, use its best
          efforts to register or qualify or cooperate with the selling Holders
          and any Special Counsel in connection with the registration or
          qualification (or exemption from such registration or qualification)
          of such Registrable Securities for offer and sale under the securities
          or Blue Sky laws of such jurisdictions within the United States as any
          Holder requests in writing, to keep each such registration or
          qualification (or exemption therefrom) effective during the
          Effectiveness Period and to do any and all other acts or things
          necessary or advisable to enable the disposition in such jurisdictions
          of the Registrable Securities covered by a Registration Statement;
          provided, however, that the Company shall not be required to qualify
          generally to do business in any jurisdiction where it is not then so
          qualified or to take any action that would subject it to general
          service of process in any such jurisdiction where it is not then so
          subject or subject the Company to any material tax in any such
          jurisdiction where it is not then so subject.

     GG.  Cooperate with the Holders to facilitate the timely preparation and
          delivery of certificates representing Registrable Securities to be
          sold pursuant to a Registration Statement, which certificates shall be
          free of all restrictive legends, and to enable such Registrable
          Securities to be in such denominations and registered in such names as
          any Holder may request at least two (2) Business Days prior to any
          sale of Registrable Securities.

     HH.  Upon the occurrence of any event contemplated by Section 3(c)(vi), as
          promptly as possible, prepare a supplement or amendment, including a
          post-effective amendment, to the Registration Statement or a
          supplement to the related Prospectus or any document incorporated or
          deemed to be incorporated therein by reference, and file any other
          required document so that, as thereafter delivered, neither the
          Registration Statement nor such Prospectus will contain an untrue
          statement of a material fact or omit to state a material fact required
          to be stated therein or necessary to make the statements therein, in
          the light of the circumstances under which they were made, not
          misleading.

     II.  Use its best efforts to cause all Registrable Securities relating to
          such Registration Statement to be listed on Nasdaq and any other
          securities exchange, quotation system, market or over-the-counter
          bulletin board, if any, on which similar securities issued by the
          Company are then listed as and when required pursuant to the Purchase
          Agreement.
<PAGE>

     JJ.  Comply in all material respects with all applicable rules and
          regulations of the Commission and make generally available to its
          security holders earning statements satisfying the provisions of
          Section 11(a) of the Securities Act and Rule 158 not later than
          forty-five (45) days after the end of any twelve (12)-month period (or
          ninety (90) days after the end of any twelve (12)-month period if such
          period is a fiscal year) commencing on the first day of the first
          fiscal quarter of the Company after the effective date of the
          Registration Statement, which statement shall conform to the
          requirements of Rule 158.

     KK.  Require each selling Holder to furnish to the Company information
          regarding such Holder and the distribution of such Registrable
          Securities as is required by law to be disclosed in the Registration
          Statement, and the Company may exclude from such registration the
          Registrable Securities of any such Holder who fails to furnish such
          information within a reasonable time prior to the filing of each
          Registration Statement, supplemented Prospectus and/or amended
          Registration Statement.

If the Registration Statement refers to any Holder by name or otherwise as the
holder of any securities of the Company, then such Holder shall have the right
to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

Each Holder covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received copies of the
Prospectus as then amended or supplemented as contemplated in Section 3(g) and
notice from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c) and
(ii) it and its officers, directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to them in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

Each Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement contemplated
by Section 3(j), or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

     LL.  If (i) there is material non-public information regarding the Company
          which the Company's Board of Directors (the "Board") ----- reasonably
          determines not to be in the Company's best interest to disclose and
          which the Company is not otherwise required to disclose, or (ii) there
          is a significant business opportunity (including, but not limited to,
          the acquisition or disposition of assets (other than in the ordinary
          course of business) or any merger, consolidation, tender offer or
          other similar transaction) available to the Company which the Board
          reasonably determines not to be in the Company's best interest to
          disclose and which the Company would be required to disclose under the
          Registration Statement, then the Company may suspend effectiveness of
          a registration statement and suspend the sale of Registrable
          Securities under a Registration Statement for a period not to exceed
          twenty (20) consecutive days, provided that the Company
<PAGE>

          may not suspend its obligation under this Section 3(n) for more than
          forty-five (45) days in the aggregate during any twelve (12) month
          period (each, a "Blackout Period"); provided, however, that no such
          suspension shall be permitted for consecutive twenty (20) day periods,
          arising out of the same set of facts, circumstances or transactions.

     MM.  Within two (2) business days after the Registration Statement which
          includes the Registrable Securities is ordered effective by the
          Commission, the Company shall deliver, and shall cause legal counsel
          for the Company to deliver, to the transfer agent for such Registrable
          Securities (with copies to the Holders whose Registrable Securities
          are included in such Registration Statement) confirmation that the
          Registration Statement has been declared effective by the Commission
          in the form attached hereto as Exhibit A.

Registration Expenses

All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation the following: (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the Nasdaq and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission, and (C) in compliance with
state securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $25,000 (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

Indemnification

     NN.  Indemnification by the Company. The Company shall, notwithstanding any
          termination of this Agreement, indemnify and hold harmless each
          Holder, the officers, directors, agents, brokers (including brokers
          who offer and sell Registrable Securities as principal as a result of
          a pledge or any failure to perform under a margin call of Common
          Stock), investment advisors and employees of each of them, each Person
          who controls any such Holder (within the meaning of Section 15 of the
          Securities Act or Section 20 of the
<PAGE>

          Exchange Act) and the officers, directors, agents and employees of
          each such controlling Person, and the respective successors, assigns,
          estate and personal representatives of each of the foregoing, to the
          fullest extent permitted by applicable law, from and against any and
          all claims, losses, damages, liabilities, penalties, judgments, costs
          (including, without limitation, costs of investigation) and expenses
          (including, without limitation, attorneys' fees and expenses)
          (collectively, "Losses"), as incurred, arising out of or relating to
          any untrue or alleged untrue statement of a material fact contained in
          the Registration Statement, any Prospectus or any form of prospectus
          or in any amendment or supplement thereto or in any preliminary
          prospectus, or arising out of or relating to any omission or alleged
          omission of a material fact required to be stated therein or necessary
          to make the statements therein (in the case of any Prospectus or form
          of prospectus or supplement thereto, in the light of the circumstances
          under which they were made) not misleading, except to the extent, but
          only to the extent, that such untrue statements or omissions are based
          solely upon information regarding such Holder furnished in writing to
          the Company by such Holder expressly for use therein, which
          information was reasonably relied on by the Company for use therein or
          to the extent that such information relates to such Holder or such
          Holder's proposed method of distribution of Registrable Securities and
          was reviewed and expressly approved in writing by such Holder
          expressly for use in the Registration Statement, such Prospectus or
          such form of Prospectus or in any amendment or supplement thereto. The
          Company shall notify the Holders promptly of the institution, threat
          or assertion of any Proceeding of which the Company is aware in
          connection with the transactions contemplated by this Agreement. Such
          indemnity shall remain in full force and effect regardless of any
          investigation made by or on behalf of an Indemnified Party (as defined
          in Section 5(c) hereof) and shall survive the transfer of the
          Registrable Securities by the Holders.

     OO.  Indemnification by Holders. Each Holder shall, severally and not
          jointly, indemnify and hold harmless the Company, the directors,
          officers, agents and employees, each Person who controls the Company
          (within the meaning of Section 15 of the Securities Act and Section 20
          of the Exchange Act), and the directors, officers, agents or employees
          of such controlling Persons, and the respective successors, assigns,
          estate and personal representatives of each of the foregoing, to the
          fullest extent permitted by applicable law, from and against all
          Losses, as incurred, arising solely out of or based solely upon any
          untrue statement of a material fact contained in the Registration
          Statement, any Prospectus, or any form of prospectus, or arising
          solely out of or based solely upon any omission of a material fact
          required to be stated therein or necessary to make the statements
          therein (in the case of any Prospectus or form of prospectus or
          supplement thereto, in the light of the circumstances under which they
          were made) not misleading, to the extent, but only to the extent, that
          such untrue statement or omission is contained in or omitted from any
          information so furnished in writing by such Holder to the Company
          specifically for inclusion in the Registration Statement or such
          Prospectus and that such information was reasonably relied upon by the
          Company for use in the Registration Statement, such Prospectus or such
          form of prospectus or to the extent that such information relates to
          such Holder or such Holder's proposed method of distribution of
          Registrable Securities and was reviewed and expressly approved in
          writing by such Holder expressly for use in the Registration
          Statement, such Prospectus or such form of Prospectus Supplement.
          Notwithstanding anything to the contrary contained herein, the Holder
          shall be liable under this Section 5(b) for only that amount
<PAGE>

          as does not exceed the net proceeds to such Holder as a result of the
          sale of Registrable Securities pursuant to such Registration
          Statement.

     PP.  Conduct of Indemnification Proceedings. If any Proceeding shall be
          brought or asserted against any Person entitled to indemnity hereunder
          (an "Indemnified Party"), such Indemnified Party promptly shall notify
          the Person from whom indemnity is sought (the "Indemnifying Party) in
          writing, and the Indemnifying Party shall assume the defense thereof,
          including the employment of counsel reasonably satisfactory to the
          Indemnified Party and the payment of all fees and expenses incurred in
          connection with defense thereof; provided, that the failure of any
          Indemnified Party to give such notice shall not relieve the
          Indemnifying Party of its obligations or liabilities pursuant to this
          Agreement, except (and only) to the extent that it shall be finally
          determined by a court of competent jurisdiction (which determination
          is not subject to appeal or further review) that such failure shall
          have proximately and materially adversely prejudiced the Indemnifying
          Party.

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding. All fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten (10) Business Days of written notice thereof to
the Indemnifying Party (regardless of whether it is ultimately determined that
an Indemnified Party is not entitled to indemnification hereunder; provided,
that the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).

     QQ.  Contribution. If a claim for indemnification under Section 5(a) or
          5(b) is unavailable to an Indemnified Party because of a failure or
          refusal of a governmental authority to enforce such indemnification in
          accordance with its terms (by reason of public policy or otherwise),
          then each Indemnifying Party, in lieu of indemnifying such Indemnified
          Party, shall contribute to the amount paid or payable by such
          Indemnified Party as a result of such Losses, in such proportion as is
          appropriate to reflect the relative fault of the Indemnifying Party
          and Indemnified Party in connection with the actions,
<PAGE>

          statements or omissions that resulted in such Losses as well as any
          other relevant equitable considerations. The relative fault of such
          Indemnifying Party and Indemnified Party shall be determined by
          reference to, among other things, whether any action in question,
          including any untrue or alleged untrue statement of a material fact or
          omission or alleged omission of a material fact, has been taken or
          made by, or relates to information supplied by, such Indemnifying,
          Party or Indemnified Party, and the parties' relative intent,
          knowledge, access to information and opportunity to correct or prevent
          such action, statement or omission. The amount paid or payable by a
          party as a result of any Losses shall be deemed to include, subject to
          the limitations set forth in Section 5(c), any reasonable attorneys'
          or other reasonable fees or expenses incurred by such party in
          connection with any Proceeding to the extent such party would have
          been indemnified for such fees or expenses if the indemnification
          provided for in this Section was available to such party in accordance
          with its terms. Notwithstanding anything to the contrary contained
          herein, the Holder shall be liable or required to contribute under
          this Section 5(c) for only that amount as does not exceed the net
          proceeds to such Holder as a result of the sale of Registrable
          Securities pursuant to such Registration Statement.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties

Rule 144.

As long as any Holder owns Warrants or Warrant Shares, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act and to
promptly furnish the Holders with true and complete copies of all such filings.
As long as any Holder owns Warrants or Warrant Shares, if the Company is not
required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act,
it will prepare and furnish to the Holders and make publicly available in
accordance with Rule 144(c) promulgated under the Securities Act annual and
quarterly financial statements, together with a discussion and analysis of such
financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Person to sell Conversion Shares and Warrant
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including providing any legal opinions of counsel to the Company referred to in
the Purchase Agreement. Upon the request of any Holder, the Company shall
deliver to such Holder a written certification of a duly authorized officer as
to whether it has complied with such requirements.

Miscellaneous.

     RR.  Remedies. In the event of a breach by the Company or by a Holder, of
          any of their obligations under this Agreement, each Holder or the
          Company, as the case may be, in
<PAGE>

          addition to being entitled to exercise all rights granted by law and
          under this Agreement, including recovery of damages, will be entitled
          to specific performance of its rights under this Agreement. The
          Company and each Holder agree that monetary damages would not provide
          adequate compensation for any losses incurred by reason of a breach by
          it of any of the provisions of this Agreement and hereby further
          agrees that, in the event of any action for specific performance in
          respect of such breach, it shall waive the defense that a remedy at
          law would be adequate.

     SS.  No Inconsistent Agreements. Neither the Company nor any of its
          subsidiaries has, as of the date hereof entered into and currently in
          effect, nor shall the Company or any of its subsidiaries, on or after
          the date of this Agreement, enter into any agreement with respect to
          its securities that is inconsistent with the rights granted to the
          Holders in this Agreement or otherwise conflicts with the provisions
          hereof. Neither the Company nor any of its subsidiaries has previously
          entered into any agreement currently in effect granting any
          registration rights with respect to any of its securities to any
          Person, except as set forth on Schedule 7(c) hereto. Without limiting
          the generality of the foregoing, without the written consent of the
          Holders of a majority of the then outstanding Registrable Securities,
          the Company shall not grant to any Person the right to request the
          Company to register any securities of the Company under the Securities
          Act unless the rights so granted are subject in all respects to the
          prior rights in full of the Holders set forth herein, and are not
          otherwise in conflict with the provisions of this Agreement.

     TT.  No Piggyback on Registrations. Neither the Company nor any of its
          security holders (other than the Holders in such capacity pursuant
          hereto and the security holders listed on Schedule 7(c) hereto) may
          include securities of the Company in the Registration Statement, and
          the Company shall not after the date hereof enter into any agreement
          providing such right to any of its security holders, unless the right
          so granted is subject in all respects to the prior rights in full of
          the Holders set forth herein, and is not otherwise in conflict with
          the provisions of this Agreement.

     UU.  Piggy-Back Registrations. If at any time when there is not an
          effective Registration Statement covering Warrant Shares, the Company
          shall determine to prepare and file with the Commission a registration
          statement relating to an offering for its own account or the account
          of others under the Securities Act of any of its equity securities,
          other than on Form S-4 or Form S-8 (each as promulgated under the
          Securities Act) or its then equivalents relating to equity securities
          to be issued solely in connection with any acquisition of any entity
          or business or equity securities issuable in connection with stock
          option or other employee benefit plans, the Company shall send to each
          holder of Registrable Securities written notice of such determination
          and, if within thirty (30) days after receipt of such notice, any such
          holder shall so request in writing (which request shall specify the
          Registrable Securities intended to be disposed of by the Holders), the
          Company will cause the registration under the Securities Act of all
          Registrable Securities which the Company has been so requested to
          register by the holder, to the extent requisite to permit the
          disposition of the Registrable Securities so to be registered,
          provided that if at any time after giving written notice of its
          intention to register any securities and prior to the effective date
          of the registration statement filed in connection with such
          registration, the Company shall determine for any reason not to
          register or to delay registration of such securities, the Company may,
          at its election, give written notice of such determination to such
          holder and, thereupon, (i) in the case
<PAGE>

          of a determination not to register, shall be relieved of its
          obligation to register any Registrable Securities in connection with
          such registration (but not from its obligation to pay expenses in
          accordance with Section 4 hereof), and (ii) in the case of a
          determination to delay registering, shall be permitted to delay
          registering any Registrable Securities being registered pursuant to
          this Section 7(d) for the same period as the delay in registering such
          other securities. The Company shall include in such registration
          statement all or any part of such Registrable Securities such holder
          requests to be registered; provided, however, that the Company shall
          not be required to register any Registrable Securities pursuant to
          this Section 7(d) that are eligible for sale pursuant to Rule 144(k)
          of the Securities Act. In the case of an underwritten public offering,
          if the managing underwriter(s) or underwriter(s) should reasonably
          object to the inclusion of the Registrable Securities in such
          registration statement, then if the Company after consultation with
          the managing underwriter should reasonably determine that the
          inclusion of such Registrable Securities, would materially adversely
          affect the offering contemplated in such registration statement, and
          based on such determination recommends inclusion in such registration
          statement of fewer or none of the Registrable Securities of the
          Holders, then (x) the number of Registrable Securities of the Holders
          included in such registration statement shall be reduced pro-rata
          among such Holders (based upon the number of Registrable Securities
          requested to be included in the registration), if the Company after
          consultation with the underwriter(s) recommends the inclusion of fewer
          Registrable Securities, or (y) none of the Registrable Securities of
          the Holders shall be included in such registration statement, if the
          Company after consultation with the underwriter(s) recommends the
          inclusion of none of such Registrable Securities; provided, however,
          that if securities are being offered for the account of other persons
          or entities as well as the Company, such reduction shall not represent
          a greater fraction of the number of Registrable Securities intended to
          be offered by the Holders than the fraction of similar reductions
          imposed on such other persons or entities (other than the Company).

     VV.  Intentionally Omitted.

     WW.  Specific Enforcement, Consent to Jurisdiction.

          1.   The Company and the Holders acknowledge and agree that
               irreparable damage would occur in the event that any of the
               provisions of this Registration Rights Agreement or the Purchase
               Agreement were not performed in accordance with their specific
               terms or were otherwise breached. It is accordingly agreed that
               the parties shall be entitled to an injunction or injunctions to
               prevent or cure breaches of the provisions of this Registration
               Rights Agreement or the Purchase Agreement and to enforce
               specifically the terms and provisions hereof or thereof, this
               being in addition to any other remedy to which any of them may be
               entitled by law or equity.

          2.   Each of the Company and the Placement Advisor (i) hereby
               irrevocably submits to the jurisdiction of the United States
               District Court for the Southern District of New York and the
               courts of the State of New York located in New York county for
               the purposes of any suit, action or
<PAGE>

               proceeding arising out of or relating to this Agreement or the
               Purchase Agreement and (ii) hereby waives, and agrees not to
               assert in any such suit, action or proceeding, any claim that it
               is not personally subject to the jurisdiction of such court, that
               the suit, action or proceeding is brought in an inconvenient
               forum or that the venue of the suit, action or proceeding is
               improper. Each of the Company and the Placement Advisor consents
               to process being served in any such suit, action or proceeding by
               mailing a copy thereof to such party at the address in effect for
               notices to it under this Agreement and agrees that such service
               shall constitute good and sufficient service of process and
               notice thereof. Nothing in this Section 7(f) shall affect or
               limit any right to serve process in any other manner permitted by
               law.

     XX.  Amendments and Waivers. The provisions of this Agreement, including
          the provisions of this sentence, may not be amended, modified or
          supplemented, and waivers or consents to departures from the
          provisions hereof may not be given, unless the same shall be in
          writing and signed by the Company and each of the Holders.
          Notwithstanding the foregoing, a waiver or consent to depart from the
          provisions hereof with respect to a matter that relates exclusively to
          the rights of Holders and that does not directly or indirectly affect
          the rights of other Holders may be given by Holders of at least a
          majority of the Registrable Securities to which such waiver or consent
          relates; provided, however, that the provisions of this sentence may
          not be amended, modified, or supplemented except in accordance with
          the provisions of the immediately preceding sentence.

     YY.  Notices. Any and all notices or other communications or deliveries
          required or permitted to be provided hereunder shall be in writing and
          shall be deemed given and effective on the earlier of (i) the date of
          transmission, if such notice or communication is delivered via
          facsimile at the facsimile telephone number specified for notice prior
          to 5:00 p.m., eastern standard time, on a Business Day, (ii) the
          Business Day after the date of transmission, if such notice or
          communication is delivered via facsimile at the facsimile telephone
          number specified for notice later than 5:00 p.m., eastern standard
          time, on any date and earlier than 11:59 p.m., eastern time, on such
          date, (iii) the Business Day following the date of mailing, if sent by
          nationally recognized overnight courier service or (iv) actual receipt
          by the party to whom such notice is required to be given. The
          addresses for such communications shall be

with respect to the Holder:       Intercoastal Financial Services Corp.
                                  760 U.S. Highway One
                                  Suite 206
                                  N. Palm Beach, Florida  33408
                                  Telephone No.: (561) 776-8172
                                  Facsimile No.: (561) 776-1091

with respect to the Company:      Virtual Communities, Inc.
                                  589 8th Avenue, 7th Floor
                                  New York, New York  10018
                                  Attention: Avi Moskowitz
                                  Facsimile no.: (212) 214-0550
<PAGE>

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to any Holder shall be sent to the address set
forth above, if applicable. Copies of notices to the Company shall be sent to
Wuersch & Gering LLP, 11 Hanover Square, 21st Floor, New York, New York 10005,
Attention: Travis Gering, Esq., Facsimile no.: (212) 509-9559. Copies of notices
to the Holders shall be sent to Parker Chapin LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174, Attention: Christopher S. Auguste,
Esq., Facsimile no.: (212) 704-6288.

     ZZ.  Successors and Assigns. This Agreement shall be binding upon and inure
          to the benefit of the parties and their successors and permitted
          assigns and shall inure to the benefit of each Holder and its
          successors and assigns. The Company may not assign this Agreement or
          any of its rights or obligations hereunder without the prior written
          consent of each Holder. The Placement Advisor may assign its rights
          hereunder in the manner and to the Persons as permitted under the
          Purchase Agreement.

     AAA. Assignment of Registration Rights. The rights of each Holder
          hereunder, including the right to have the Company register for resale
          Registrable Securities in accordance with the terms of this Agreement,
          shall be automatically assignable by each Holder to any transferee of
          such Holder of all or a portion of the shares of Registrable
          Securities if: (i) the Holder agrees in writing with the transferee or
          assignee to assign such rights, and a copy of such agreement is
          furnished to the Company within a reasonable time after such
          assignment, (ii) the Company is, within a reasonable time after such
          transfer or assignment, furnished with written notice of (a) the name
          and address of such transferee or assignee, and (b) the securities
          with respect to which such registration rights are being transferred
          or assigned, (iii) following such transfer or assignment the further
          disposition of such securities by the transferee or assignees is
          restricted under the Securities Act and applicable state securities
          laws, (iv) at or before the time the Company receives the written
          notice contemplated by clause (ii) of this Section, the transferee or
          assignee agrees in writing with the Company to be bound by all of the
          provisions of this Agreement, and (v) such transfer shall have been
          made in accordance with the applicable requirements of the Purchase
          Agreement. In addition, each Holder shall have the right to assign its
          rights hereunder to any other Person with the prior written consent of
          the Company, which consent shall not be unreasonably withheld. The
          rights to assignment shall apply to the Holders (and to subsequent)
          successors and assigns.

     BBB. Counterparts. This Agreement may be executed in any number of
          counterparts, each of which when so executed shall be deemed to be an
          original and, all of which taken together shall constitute one and the
          same Agreement. In the event that any signature is delivered by
          facsimile transmission, such signature shall create a valid binding
          obligation of the party executing (or on whose behalf such signature
          is executed) the same with the same force and effect as if such
          facsimile signature were the original thereof.

     CCC. Governing Law. This Agreement shall be governed by and construed in
          accordance with the laws of the State of New York, without regard to
          principles of conflicts of law thereof. This Agreement shall not be
          interpreted or construed with any presumption against the party
          causing this Agreement to be drafted.
<PAGE>

     DDD. Cumulative Remedies. The remedies provided herein are cumulative and
          not exclusive of any remedies provided by law.

     EEE. Severability. If any term, provision, covenant or restriction of this
          Agreement is held to be invalid, illegal, void or unenforceable in any
          respect, the remainder of the terms, provisions, covenants and
          restrictions set forth herein shall remain in full force and effect
          and shall in no way be affected, impaired or invalidated, and the
          parties hereto shall use their reasonable efforts to find and employ
          an alternative means to achieve the same or substantially the same
          result as that contemplated by such term, provision, covenant or
          restriction. It is hereby stipulated and declared to be the intention
          of the parties that they would have executed the remaining terms,
          provisions, covenants and restrictions without including any of such
          that may be hereafter declared invalid, illegal, void or
          unenforceable.

     FFF. Headings. The headings herein are for convenience only, do not
          constitute a part of this Agreement and shall not be deemed to limit
          or affect any of the provisions hereof.

     GGG. Shares Held by the Company and its Affiliates. Whenever the consent or
          approval of Holders of a specified percentage of Registrable
          Securities is required hereunder, Registrable Securities held by the
          Company or its Affiliates (other than any Holder or transferees or
          successors or assigns thereof if such Holder is deemed to be an
          Affiliate solely by reason of its holdings of such Registrable
          Securities) shall not be counted in determining whether such consent
          or approval was given by the Holders of such required percentage and
          shall not be counted as outstanding.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.

                                    VIRTUAL COMMUNITIES, INC.

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

                                    INTERCOASTAL FINANCIAL SERVICES, CORP.

                                     By:
                                        ----------------------------------------
                                                                         Name:
                                                                         Title:
<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[TRANSFER AGENT]
[ADDRESS]

Attn:  _____________
Re:      Virtual Communities, Inc.

Ladies and Gentlemen:

     We are counsel to Virtual Communities, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Common Stock and Warrants Purchase Agreement (the "Purchase Agreement"), dated
as of March 31, 2000, by and among the Company and the investors a party thereto
in connection with which the Company issued to Intercoastal Financial Services,
Corp. (the "Holder") warrants (the "Warrants") to purchase shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"). The
Company has entered into a Registration Rights Agreement with the Holder (the
"Registration Rights Agreement"), dated as of March 31, 2000, pursuant to which
the Company agreed, among other things, to register the Registrable Securities
(as defined in the Registration Rights Agreement), including the shares of
Common Stock issuable upon exercise of the Warrants, under the Securities Act of
1933, as amended (the "1933 Act"). In connection with the Company's obligations
under the Registration Rights Agreement, on ________________, 2000, the Company
filed a Registration Statement on Form ___ (File No. 333-________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the resale of the Registrable Securities which names each of
the present Holders as a selling stockholder thereunder.

     In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of the Registration Statement.

                                         Very truly yours,

                                         By:

cc:      [LIST NAMES OF HOLDERS]<PAGE>

                                                                  Exhibit 10(46)

                          REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement is made and entered into as of March 31, 2000
(this "Agreement"), by and among Virtual Communities, Inc., a Delaware
corporation (the "Company"), and each of the Purchasers listed on Schedule A
attached hereto. Each of the Purchasers listed on Schedule A attached hereto is
referred to herein as a "Purchaser" and are collectively referred to herein as
the "Purchasers." This Agreement is being entered into pursuant to the Common
Stock and Warrants Purchase Agreement, dated as of the date hereof, by and among
the Company and the Purchasers (the "Purchase Agreement").

The Company and the Purchasers hereby agree as follows:

Definitions.

Capitalized terms used and not otherwise defined herein shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:

"Advice" shall have the meaning set forth in Section 3(m).

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

"Blackout Period" shall have the meaning set forth in Section 3(n).

"Board" shall have the meaning set forth in Section 3(n).

"Business Day" means any day except Saturday, Sunday and any day which shall be
a legal holiday or a day on which banking institutions in the state of New York
generally are authorized or required by law or other government actions to
close.

"Commission" means the Securities and Exchange Commission.

"Common Stock" means the Company's Common Stock, par value $.01 per share.

"Effectiveness Date" means with respect to the Registration Statement the
earlier of the 90th day following the Closing Date and the date which is within
five (5) days of the date on which the Commission informs the Company that the
Commission (i) will not review the Registration Statement or (ii) that the
Company may request the acceleration of the effectiveness of the Registration
Statement.

"Effectiveness Period" shall have the meaning set forth in Section 2.

"Event" shall have the meaning set forth in Section 7(e).

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

"Filing Date" means the date the Registration Statement is filed which date
shall be the 45th day following the date the Closing Date.

"Holder" or "Holders" means the holder or holders, as the case may be, from time
to time of Registrable Securities including, including without limitation, the
Purchasers and their assignees.

"Indemnified Party" shall have the meaning set forth in Section 5(c).

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

"Liquidated Damages" shall have the meaning set forth in Section 7(e).

"Losses" shall have the meaning set forth in Section 5(a).

"Nasdaq" shall mean the Nasdaq SmallCap Market.

"Person" means an individual or a corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
<PAGE>

"Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.

"Registrable Securities" means (i) the shares of Common Stock (A) issued
pursuant to the Purchase Agreement (the "Common Shares") and (B) issuable upon
exercise of the Warrants (the "Warrant Shares") and upon any stock split, stock
dividend, recapitalization or similar event with respect to such Common Shares
or Warrant Shares, and (ii) any other dividend or other distribution with
respect to, conversion or exchange of, or in replacement of, Registrable
Securities; provided, however, that Registrable Securities shall include (but
not be limited to) a number of shares of Common Stock equal to no less than 100%
of the maximum number of shares of Common Stock which would be issuable pursuant
to the issuance of Common Shares pursuant to the Purchase Agreement and upon
exercise of the Warrants, assuming such exercise occurred on the Closing Date or
the Filing Date, whichever date would result in the greater number of
Registrable Securities. Notwithstanding anything herein contained to the
contrary, such registered shares of Common Stock shall be allocated among the
Holders pro rata based on the total number of Registrable Securities issued or
issuable as of each date that a Registration Statement, as amended, relating to
the resale of the Registrable Securities is declared effective by the
Commission. Notwithstanding anything contained herein to the contrary, if the
actual number of shares of Common Stock issuable upon exercise of the Warrants
exceeds 100% of the number of shares of Common Stock issuable (1) pursuant to
the issuance of the Common Shares pursuant to the Purchase Agreement and (2)
upon exercise of the Warrants based upon a computation as at the Closing Date or
the Filing Date, the term "Registrable Securities" shall be deemed to include
such additional shares of Common Stock.

"Registration Statement" means the registration statement and any additional
registration statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"Rule 158" means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

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

"Special Counsel" means any special counsel to the Holders, for which the
Holders will be reimbursed by the Company pursuant to Section 4.

"Warrants" means the A warrants and B warrants to purchase shares of Common
Stock issued in connection with the Purchase Agreement, and any other warrants
of like tenor issued in substitution or exchange thereof.

Registration. On or prior to the Filing Date the Company shall prepare and file
     with the Commission a "shelf" Registration Statement covering all
     Registrable Securities for an offering to be made on a continuous basis
     pursuant to Rule 415. The Registration Statement shall be on Form SB-2
     (except if the Company is not then eligible to register for resale the
     Registrable Securities on Form SB-2, in which case such registration shall
     be on another appropriate form in accordance herewith). The Company shall
     (i) not permit any securities other than the Registrable
<PAGE>

     Securities to be included in the Registration Statement and those
     securities on Schedule 7(c) hereto, (ii) use its best efforts to cause the
     Registration Statement to be declared effective under the Securities Act
     (including filing with the Commission a request for acceleration of
     effectiveness in accordance with Rule 12dl-2 promulgated under the Exchange
     Act within five (5) Business Days of the date that the Company is notified
     (orally or in writing, whichever is earlier) by the Commission that a
     Registration Statement will not be "reviewed," or not be subject to further
     review) as soon as possible after the filing thereof, but in any event
     prior to the Effectiveness Date, and to keep such Registration Statement
     continuously effective under the Securities Act until such date as is the
     earlier of (x) the date when all Registrable Securities covered by such
     Registration Statement have been sold or (y) the date on which the
     Registrable Securities may be sold without any restriction pursuant to Rule
     144(k) as determined by the counsel to the Company pursuant to a written
     opinion letter, addressed to the Company's transfer agent to such effect
     (the "Effectiveness Period"). If an additional Registration Statement is
     required, for any reason, to be filed because the actual number of shares
     of Common Shares and Warrant Shares exceeds the number of shares of Common
     Stock initially registered in respect of the Common Shares and the Warrant
     Shares based upon the computation on the Closing Date, the Company shall
     have twenty (20) Business Days to file such additional Registration
     Statement, and the Company shall use its best efforts to cause such
     additional Registration Statement to be declared effective by the
     Commission as soon as possible, but in no event later than thirty (30) days
     after filing.

Registration Procedures.

In connection with the Company's registration obligations hereunder, the Company
shall:

     HHH. Prepare and file with the Commission on or prior to the Filing Date, a
          Registration Statement on Form SB-2 (or if the Company is not then
          eligible to register for resale the Registrable Securities on Form
          SB-2 such registration shall be on another appropriate form in
          accordance herewith) in accordance with the method or methods of
          distribution thereof as specified by the Holders (except if otherwise
          directed by the Holders), and cause the Registration Statement to
          become effective and remain effective as provided herein; provided,
          however, that not less than five (5) Business Days prior to the filing
          of the Registration Statement or any related Prospectus or any
          amendment or supplement thereto (including any document that would be
          incorporated therein by reference), the Company shall (i) furnish to
          the Holders and any Special Counsel, copies of all such documents
          proposed to be filed, which documents (other than those incorporated
          by reference) will be subject to the review of such Holders and such
          Special Counsel, and (ii) at the request of any Holder cause its
          officers and directors, counsel and independent certified public
          accountants to respond to such inquiries as shall be necessary, in the
          reasonable opinion of counsel to such Holders, to conduct a reasonable
          investigation within the meaning of the Securities Act. The Company
          shall not file the Registration Statement or any such Prospectus or
          any amendments or supplements thereto to which the Holders of a
          majority of the Registrable Securities or any Special Counsel shall
          reasonably object in writing within three (3) Business Days of their
          receipt thereof.

     III. 1. Prepare and file with the Commission such amendments, including
          post-effective amendments, to the Registration Statement as may be
          necessary to keep the Registration Statement continuously effective as
          to the applicable Registrable Securities for the Effectiveness Period
          and prepare and file with the Commission such additional Registration
          Statements in order to register for resale under the Securities Act
          all of the Registrable Securities; (ii) cause the related Prospectus
          to be amended or supplemented by any required Prospectus supplement,
          and as so supplemented or amended to be filed pursuant to Rule 424 (or
          any similar provisions then in force) promulgated under the Securities
          Act; (iii) respond as promptly as possible to any comments received
          from the Commission with respect to the Registration Statement or any
          amendment thereto and as promptly as possible provide the Holders true
          and complete copies of all correspondence from and to the Commission
          relating to the Registration Statement; and
<PAGE>

          (iv) comply in all material respects with the provisions of the
          Securities Act and the Exchange Act with respect to the disposition of
          all Registrable Securities covered by the Registration Statement
          during the applicable period in accordance with the intended methods
          of disposition by the Holders thereof set forth in the Registration
          Statement as so amended or in such Prospectus as so supplemented.

     JJJ. Notify the Holders of Registrable Securities to be sold and any
          Special Counsel as promptly as possible (and, in the case of (i)(A)
          below, not less than five (5) Business Days prior to such filing) and
          (if requested by any such Person) confirm such notice in writing no
          later than one (1) Business Day following the day (i)(A) when a
          Prospectus or any Prospectus supplement or post-effective amendment to
          the Registration Statement is proposed to be filed; (B) when the
          Commission notifies the Company whether there will be a "review" of
          such Registration Statement and whenever the Commission comments in
          writing on such Registration Statement and (C) with respect to the
          Registration Statement or any post-effective amendment, when the same
          has become effective; (ii) of any request by the Commission or any
          other Federal or state governmental authority for amendments or
          supplements to the Registration Statement or Prospectus or for
          additional information; (iii) of the issuance by the Commission of any
          stop order suspending the effectiveness of the Registration Statement
          covering any or all of the Registrable Securities or the initiation of
          any Proceedings for that purpose; (iv) if at any time any of the
          representations and warranties of the Company contained in any
          agreement contemplated hereby ceases to be true and correct in all
          material respects; (v) of the receipt by the Company of any
          notification with respect to the suspension of the qualification or
          exemption from qualification of any of the Registrable Securities for
          sale in any jurisdiction, or the initiation or threatening of any
          Proceeding for such purpose; and (vi) of the occurrence of any event
          that makes any statement made in the Registration Statement or
          Prospectus or any document incorporated or deemed to be incorporated
          therein by reference untrue in any material respect or that requires
          any revisions to the Registration Statement, Prospectus or other
          documents so that, in the case of the Registration Statement or the
          Prospectus, as the case may be, it will not contain any untrue
          statement of a material fact or omit to state any material fact
          required to be stated therein or necessary to make the statements
          therein, in the light of the circumstances under which they were made,
          not misleading.

The Company shall promptly furnish to Special Counsel, without charge, (i) any
correspondence from the Commission or the Commission's staff to the Company or
its representatives relating to any Registration Statement and (ii) promptly
after the same is prepared and filed with the Commission, a copy of any written
response to the correspondence received from the Commission.

     KKK. Use its best efforts to avoid the issuance of, or, if issued, obtain
          the withdrawal of, (i) any order suspending the effectiveness of the
          Registration Statement or (ii) any suspension of the qualification (or
          exemption from qualification) of any of the Registrable Securities for
          sale in any jurisdiction, at the earliest practicable moment.

     LLL. If requested by the Holders of a majority in interest of the
          Registrable Securities, (i) promptly incorporate in a Prospectus
          supplement or post-effective amendment to the Registration Statement
          such information as the Company reasonably agrees should be included
          therein and (ii) make all required filings of such Prospectus
          supplement or such post-effective amendment as soon as practicable
          after the Company has received notification of the matters to be
          incorporated in such Prospectus supplement or post-effective
          amendment.
<PAGE>

     MMM. Furnish to each Holder and any Special Counsel, without charge, at
          least one conformed copy of each Registration Statement and each
          amendment thereto, including financial statements and schedules, all
          documents incorporated or deemed to be incorporated therein by
          reference, and all exhibits to the extent requested by such Person
          (including those previously furnished or incorporated by reference)
          promptly after the filing of such documents with the Commission.

     NNN. Promptly deliver to each Holder and any Special Counsel, without
          charge, as many copies of the Registration Statement, Prospectus or
          Prospectuses (including each form of prospectus) and each amendment or
          supplement thereto as such Persons may reasonably request; and the
          Company hereby consents to the use of such Prospectus and each
          amendment or supplement thereto by each of the selling Holders in
          connection with the offering and sale of the Registrable Securities
          covered by such Prospectus and any amendment or supplement thereto.

     OOO. Prior to any public offering of Registrable Securities, use its best
          efforts to register or qualify or cooperate with the selling Holders
          and any Special Counsel in connection with the registration or
          qualification (or exemption from such registration or qualification)
          of such Registrable Securities for offer and sale under the securities
          or Blue Sky laws of such jurisdictions within the United States as any
          Holder requests in writing, to keep each such registration or
          qualification (or exemption therefrom) effective during the
          Effectiveness Period and to do any and all other acts or things
          necessary or advisable to enable the disposition in such jurisdictions
          of the Registrable Securities covered by a Registration Statement;
          provided, however, that the Company shall not be required to qualify
          generally to do business in any jurisdiction where it is not then so
          qualified or to take any action that would subject it to general
          service of process in any such jurisdiction where it is not then so
          subject or subject the Company to any material tax in any such
          jurisdiction where it is not then so subject.

     PPP. Cooperate with the Holders to facilitate the timely preparation and
          delivery of certificates representing Registrable Securities to be
          sold pursuant to a Registration Statement, which certificates shall be
          free of all restrictive legends, and to enable such Registrable
          Securities to be in such denominations and registered in such names as
          any Holder may request at least two (2) Business Days prior to any
          sale of Registrable Securities.

     QQQ. Upon the occurrence of any event contemplated by Section 3(c)(vi), as
          promptly as possible, prepare a supplement or amendment, including a
          post-effective amendment, to the Registration Statement or a
          supplement to the related Prospectus or any document incorporated or
          deemed to be incorporated therein by reference, and file any other
          required document so that, as thereafter delivered, neither the
          Registration Statement nor such Prospectus will contain an untrue
          statement of a material fact or omit to state a material fact required
          to be stated therein or necessary to make the statements therein, in
          the light of the circumstances under which they were made, not
          misleading.

     RRR. Use its best efforts to cause all Registrable Securities relating to
          such Registration Statement to be listed on Nasdaq and any other
          securities exchange, quotation system, market or over-the-counter
          bulletin board, if any, on which similar securities issued by the
          Company are then listed as and when required pursuant to the Purchase
          Agreement.
<PAGE>

     SSS. Comply in all material respects with all applicable rules and
          regulations of the Commission and make generally available to its
          security holders earning statements satisfying the provisions of
          Section 11(a) of the Securities Act and Rule 158 not later than
          forty-five (45) days after the end of any twelve (12)-month period (or
          ninety (90) days after the end of any twelve (12)-month period if such
          period is a fiscal year) commencing on the first day of the first
          fiscal quarter of the Company after the effective date of the
          Registration Statement, which statement shall conform to the
          requirements of Rule 158.

     TTT. Require each selling Holder to furnish to the Company information
          regarding such Holder and the distribution of such Registrable
          Securities as is required by law to be disclosed in the Registration
          Statement, and the Company may exclude from such registration the
          Registrable Securities of any such Holder who fails to furnish such
          information within a reasonable time prior to the filing of each
          Registration Statement, supplemented Prospectus and/or amended
          Registration Statement.

If the Registration Statement refers to any Holder by name or otherwise as the
holder of any securities of the Company, then such Holder shall have the right
to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.

Each Holder covenants and agrees that (i) it will not sell any Registrable
Securities under the Registration Statement until it has received copies of the
Prospectus as then amended or supplemented as contemplated in Section 3(g) and
notice from the Company that such Registration Statement and any post-effective
amendments thereto have become effective as contemplated by Section 3(c) and
(ii) it and its officers, directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as applicable to them in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

Each Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement contemplated
by Section 3(j), or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

     UUU. If (i) there is material non-public information regarding the Company
          which the Company's Board of Directors (the "Board") reasonably
          determines not to be in the Company's best interest to disclose and
          which the Company is not otherwise required to disclose, or (ii) there
          is a significant business opportunity (including, but not limited to,
          the acquisition or disposition of assets (other than in the ordinary
          course of business) or any merger, consolidation, tender offer or
          other similar transaction) available to the Company which the Board
          reasonably determines not to be in the Company's best interest to
          disclose and which the Company would be required to disclose under the
          Registration Statement, then the Company may suspend effectiveness of
          a registration statement and suspend the sale of Registrable
          Securities under a Registration Statement for a period not to exceed
          twenty (20) consecutive days, provided that the Company
<PAGE>

          may not suspend its obligation under this Section 3(n) for more than
          forty-five (45) days in the aggregate during any twelve (12) month
          period (each, a "Blackout Period"); provided, however, that no such
          suspension shall be permitted for consecutive twenty (20) day periods,
          arising out of the same set of facts, circumstances or transactions.

     VVV. Within two (2) business days after the Registration Statement which
          includes the Registrable Securities is ordered effective by the
          Commission, the Company shall deliver, and shall cause legal counsel
          for the Company to deliver, to the transfer agent for such Registrable
          Securities (with copies to the Holders whose Registrable Securities
          are included in such Registration Statement) confirmation that the
          Registration Statement has been declared effective by the Commission
          in the form attached hereto as Exhibit A.

Registration Expenses

All fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation the following: (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the Nasdaq and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission, and (C) in compliance with
state securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $25,000 (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

Indemnification

     WWW. Indemnification by the Company. The Company shall, notwithstanding any
          termination of this Agreement, indemnify and hold harmless each
          Holder, the officers, directors, agents, brokers (including brokers
          who offer and sell Registrable Securities as principal as a result of
          a pledge or any failure to perform under a margin call of Common
          Stock), investment advisors and employees of each of them, each Person
          who controls any such Holder (within the meaning of Section 15 of the
          Securities Act or Section 20 of the Exchange Act) and the officers,
          directors, agents and employees of
<PAGE>

          each such controlling Person, and the respective successors, assigns,
          estate and personal representatives of each of the foregoing, to the
          fullest extent permitted by applicable law, from and against any and
          all claims, losses, damages, liabilities, penalties, judgments, costs
          (including, without limitation, costs of investigation) and expenses
          (including, without limitation, attorneys' fees and expenses)
          (collectively, "Losses"), as incurred, arising out of or relating to
          any untrue or alleged untrue statement of a material fact contained in
          the Registration Statement, any Prospectus or any form of prospectus
          or in any amendment or supplement thereto or in any preliminary
          prospectus, or arising out of or relating to any omission or alleged
          omission of a material fact required to be stated therein or necessary
          to make the statements therein (in the case of any Prospectus or form
          of prospectus or supplement thereto, in the light of the circumstances
          under which they were made) not misleading, except to the extent, but
          only to the extent, that such untrue statements or omissions are based
          solely upon information regarding such Holder furnished in writing to
          the Company by such Holder expressly for use therein, which
          information was reasonably relied on by the Company for use therein or
          to the extent that such information relates to such Holder or such
          Holder's proposed method of distribution of Registrable Securities and
          was reviewed and expressly approved in writing by such Holder
          expressly for use in the Registration Statement, such Prospectus or
          such form of Prospectus or in any amendment or supplement thereto. The
          Company shall notify the Holders promptly of the institution, threat
          or assertion of any Proceeding of which the Company is aware in
          connection with the transactions contemplated by this Agreement. Such
          indemnity shall remain in full force and effect regardless of any
          investigation made by or on behalf of an Indemnified Party (as defined
          in Section 5(c) hereof) and shall survive the transfer of the
          Registrable Securities by the Holders.

     XXX. Indemnification by Holders. Each Holder shall, severally and not
          jointly, indemnify and hold harmless the Company, the directors,
          officers, agents and employees, each Person who controls the Company
          (within the meaning of Section 15 of the Securities Act and Section 20
          of the Exchange Act), and the directors, officers, agents or employees
          of such controlling Persons, and the respective successors, assigns,
          estate and personal representatives of each of the foregoing, to the
          fullest extent permitted by applicable law, from and against all
          Losses, as incurred, arising solely out of or based solely upon any
          untrue statement of a material fact contained in the Registration
          Statement, any Prospectus, or any form of prospectus, or arising
          solely out of or based solely upon any omission of a material fact
          required to be stated therein or necessary to make the statements
          therein (in the case of any Prospectus or form of prospectus or
          supplement thereto, in the light of the circumstances under which they
          were made) not misleading, to the extent, but only to the extent, that
          such untrue statement or omission is contained in or omitted from any
          information so furnished in writing by such Holder to the Company
          specifically for inclusion in the Registration Statement or such
          Prospectus and that such information was reasonably relied upon by the
          Company for use in the Registration Statement, such Prospectus or such
          form of prospectus or to the extent that such information relates to
          such Holder or such Holder's proposed method of distribution of
          Registrable Securities and was reviewed and expressly approved in
          writing by such Holder expressly for use in the Registration
          Statement, such Prospectus or such form of Prospectus Supplement.
          Notwithstanding anything to the contrary contained herein, the Holder
          shall be liable under this Section 5(b) for only that amount
<PAGE>

          as does not exceed the net proceeds to such Holder as a result of the
          sale of Registrable Securities pursuant to such Registration
          Statement.

     YYY. Conduct of Indemnification Proceedings. If any Proceeding shall be
          brought or asserted against any Person entitled to indemnity hereunder
          (an "Indemnified Party"), such Indemnified Party promptly shall notify
          the Person from whom indemnity is sought (the "Indemnifying Party) in
          writing, and the Indemnifying Party shall assume the defense thereof,
          including the employment of counsel reasonably satisfactory to the
          Indemnified Party and the payment of all fees and expenses incurred in
          connection with defense thereof; provided, that the failure of any
          Indemnified Party to give such notice shall not relieve the
          Indemnifying Party of its obligations or liabilities pursuant to this
          Agreement, except (and only) to the extent that it shall be finally
          determined by a court of competent jurisdiction (which determination
          is not subject to appeal or further review) that such failure shall
          have proximately and materially adversely prejudiced the Indemnifying
          Party.

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

All fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

     ZZZ. Contribution. If a claim for indemnification under Section 5(a) or
          5(b) is unavailable to an Indemnified Party because of a failure or
          refusal of a governmental authority to enforce such indemnification in
          accordance with its terms (by reason of public policy or otherwise),
          then each Indemnifying Party, in lieu of indemnifying such Indemnified
          Party, shall contribute to the amount paid or payable by such
          Indemnified Party as a result of such Losses, in such proportion as is
          appropriate to reflect the relative fault of the Indemnifying Party
          and Indemnified Party in connection with the actions,
<PAGE>

          statements or omissions that resulted in such Losses as well as any
          other relevant equitable considerations. The relative fault of such
          Indemnifying Party and Indemnified Party shall be determined by
          reference to, among other things, whether any action in question,
          including any untrue or alleged untrue statement of a material fact or
          omission or alleged omission of a material fact, has been taken or
          made by, or relates to information supplied by, such Indemnifying,
          Party or Indemnified Party, and the parties' relative intent,
          knowledge, access to information and opportunity to correct or prevent
          such action, statement or omission. The amount paid or payable by a
          party as a result of any Losses shall be deemed to include, subject to
          the limitations set forth in Section 5(c), any reasonable attorneys'
          or other reasonable fees or expenses incurred by such party in
          connection with any Proceeding to the extent such party would have
          been indemnified for such fees or expenses if the indemnification
          provided for in this Section was available to such party in accordance
          with its terms. Notwithstanding anything to the contrary contained
          herein, the Holder shall be liable or required to contribute under
          this Section 5(c) for only that amount as does not exceed the net
          proceeds to such Holder as a result of the sale of Registrable
          Securities pursuant to such Registration Statement.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The indemnity and contribution
agreements contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties

Rule 144.

As long as any Holder owns Common Shares, Warrants or Warrant Shares, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act and to promptly furnish the Holders with true and complete copies of all
such filings. As long as any Holder owns Common Shares, Warrants or Warrant
Shares, if the Company is not required to file reports pursuant to Section 13(a)
or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and
make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Person to sell Conversion Shares and Warrant Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including providing any legal opinions of
counsel to the Company referred to in the Purchase Agreement. Upon the request
of any Holder, the Company shall deliver to such Holder a written certification
of a duly authorized officer as to whether it has complied with such
requirements.

Miscellaneous.

      AAAA. Remedies. In the event of a breach by the Company or by a Holder, of
            any of their obligations under this Agreement, each Holder or the
            Company, as the case may be, in
<PAGE>

            addition to being entitled to exercise all rights granted by law and
            under this Agreement, including recovery of damages, will be
            entitled to specific performance of its rights under this Agreement.
            The Company and each Holder agree that monetary damages would not
            provide adequate compensation for any losses incurred by reason of a
            breach by it of any of the provisions of this Agreement and hereby
            further agrees that, in the event of any action for specific
            performance in respect of such breach, it shall waive the defense
            that a remedy at law would be adequate.

      BBBB. No Inconsistent Agreements. Neither the Company nor any of its
            subsidiaries has, as of the date hereof entered into and currently
            in effect, nor shall the Company or any of its subsidiaries, on or
            after the date of this Agreement, enter into any agreement with
            respect to its securities that is inconsistent with the rights
            granted to the Holders in this Agreement or otherwise conflicts with
            the provisions hereof. Neither the Company nor any of its
            subsidiaries has previously entered into any agreement currently in
            effect granting any registration rights with respect to any of its
            securities to any Person, except as set forth on Schedule 7(c)
            hereto. Without limiting the generality of the foregoing, without
            the written consent of the Holders of a majority of the then
            outstanding Registrable Securities, the Company shall not grant to
            any Person the right to request the Company to register any
            securities of the Company under the Securities Act unless the rights
            so granted are subject in all respects to the prior rights in full
            of the Holders set forth herein, and are not otherwise in conflict
            with the provisions of this Agreement.

      CCCC. No Piggyback on Registrations. Neither the Company nor any of its
            security holders (other than the Holders in such capacity pursuant
            hereto and the security holders listed on Schedule 7(c) hereto) may
            include securities of the Company in the Registration Statement, and
            the Company shall not after the date hereof enter into any agreement
            providing such right to any of its security holders, unless the
            right so granted is subject in all respects to the prior rights in
            full of the Holders set forth herein, and is not otherwise in
            conflict with the provisions of this Agreement.

      DDDD. Piggy-Back Registrations. If at any time when there is not an
            effective Registration Statement covering (i) Common Shares or (ii)
            Warrant Shares, the Company shall determine to prepare and file with
            the Commission a registration statement relating to an offering for
            its own account or the account of others under the Securities Act of
            any of its equity securities, other than on Form S-4 or Form S-8
            (each as promulgated under the Securities Act) or its then
            equivalents relating to equity securities to be issued solely in
            connection with any acquisition of any entity or business or equity
            securities issuable in connection with stock option or other
            employee benefit plans, the Company shall send to each holder of
            Registrable Securities written notice of such determination and, if
            within thirty (30) days after receipt of such notice, any such
            holder shall so request in writing (which request shall specify the
            Registrable Securities intended to be disposed of by the Holders),
            the Company will cause the registration under the Securities Act of
            all Registrable Securities which the Company has been so requested
            to register by the holder, to the extent requisite to permit the
            disposition of the Registrable Securities so to be registered,
            provided that if at any time after giving written notice of its
            intention to register any securities and prior to the effective date
            of the registration statement filed in connection with such
            registration, the Company shall determine for any reason not to
            register or to delay registration of such securities, the Company
            may, at its election, give written notice of such determination to
            such holder and, thereupon, (i) in the case of a determination not
            to register, shall be relieved of its obligation to register any
<PAGE>

            Registrable Securities in connection with such registration (but not
            from its obligation to pay expenses in accordance with Section 4
            hereof), and (ii) in the case of a determination to delay
            registering, shall be permitted to delay registering any Registrable
            Securities being registered pursuant to this Section 7(d) for the
            same period as the delay in registering such other securities. The
            Company shall include in such registration statement all or any part
            of such Registrable Securities such holder requests to be
            registered; provided, however, that the Company shall not be
            required to register any Registrable Securities pursuant to this
            Section 7(d) that are eligible for sale pursuant to Rule 144(k) of
            the Securities Act. In the case of an underwritten public offering,
            if the managing underwriter(s) or underwriter(s) should reasonably
            object to the inclusion of the Registrable Securities in such
            registration statement, then if the Company after consultation with
            the managing underwriter should reasonably determine that the
            inclusion of such Registrable Securities, would materially adversely
            affect the offering contemplated in such registration statement, and
            based on such determination recommends inclusion in such
            registration statement of fewer or none of the Registrable
            Securities of the Holders, then (x) the number of Registrable
            Securities of the Holders included in such registration statement
            shall be reduced pro-rata among such Holders (based upon the number
            of Registrable Securities requested to be included in the
            registration), if the Company after consultation with the
            underwriter(s) recommends the inclusion of fewer Registrable
            Securities, or (y) none of the Registrable Securities of the Holders
            shall be included in such registration statement, if the Company
            after consultation with the underwriter(s) recommends the inclusion
            of none of such Registrable Securities; provided, however, that if
            securities are being offered for the account of other persons or
            entities as well as the Company, such reduction shall not represent
            a greater fraction of the number of Registrable Securities intended
            to be offered by the Holders than the fraction of similar reductions
            imposed on such other persons or entities (other than the Company).

      EEEE. Failure to File Registration Statement and Other Events. The Company
            and the Holders agree that the Holders will suffer damages if the
            Registration Statement is not filed on or prior to the Filing Date
            and not declared effective by the Commission on or prior to the
            Effectiveness Date and maintained in the manner contemplated herein
            during the Effectiveness Period or if certain other events occur.
            The Company and the Holders further agree that it would not be
            feasible to ascertain the extent of such damages with precision.
            Accordingly, if (i) the Registration Statement is not filed on or
            prior to the Filing Date, or is not declared effective by the
            Commission on or prior to the Effectiveness Date (or in the event an
            additional Registration Statement is filed because the actual number
            of Common Shares and Common Stock into which the Warrants are
            exercisable exceeds the number of shares of Common Stock initially
            registered is not filed and declared effective within the time
            periods set forth in Section 2), or (ii) the Company fails to file
            with the Commission a request for acceleration in accordance with
            Rule 12dl-2 promulgated under the Exchange Act within five (5)
            Business Days of the date that the Company is notified (orally or in
            writing, whichever is earlier) by the Commission that a Registration
            Statement will not be "reviewed," or not subject to further review,
            or (iii) the Registration Statement is filed with and declared
            effective by the Commission but thereafter ceases to be effective as
            to all Registrable Securities at any time prior to the expiration of
            the Effectiveness Period, without being succeeded immediately by a
            subsequent Registration Statement filed with and declared effective
            by the Commission, or (iv) trading in the Common Stock shall be
            suspended or if the
<PAGE>

            Common Stock is delisted from Nasdaq for any reason for more than
            three (3) Business Days in the aggregate, or (v) the conversion
            rights of the Holders are suspended for any reason, including by the
            Company, or (vi) the Company breaches in a material respect any
            covenant or other material term or condition to this Agreement, the
            Certificate of Designation, the Purchase Agreement (other than a
            representation or warranty contained therein) or any other
            agreement, document, certificate or other instrument delivered in
            connection with the transactions contemplated hereby and thereby,
            and such breach continues for a period of thirty days after written
            notice thereof to the Company, or (vii) the Company has breached
            Section 3(n) of this Agreement (any such failure or breach being
            referred to as an "Event"), the Company shall pay as liquidated
            damages for such failure and not as a penalty (the "Liquidated
            Damages") to each Holder an amount equal to one percent (1%) of such
            Holder's pro rata share of the purchase price paid by all Holders
            for all shares of Common Shares purchased and then outstanding
            pursuant to the Purchase Agreement for the initial thirty (30) day
            period following the Event until the applicable Event has been
            cured, which amount shall be pro rated for any period less than
            thirty (30) days, and two percent (2%) of such Holder's pro rata
            share of the purchase price paid by all Holders for all shares of
            Common Shares purchased and then outstanding pursuant to the
            Purchase Agreement for each thirty (30) day period thereafter until
            the applicable Event has been cured, which shall be pro rated for
            any period less than thirty (30) days (the "Periodic Amount").
            Payments to be made pursuant to this Section 7(e) shall be due and
            payable immediately upon demand at the option of the Holders in
            cash. The parties agree that the Periodic Amount represents a
            reasonable estimate on the part of the parties, as of the date of
            this Agreement, of the amount of damages that may be incurred by the
            Holders if the Registration Statement is not filed on or prior to
            the Filing Date or has not been declared effective by the Commission
            on or prior to the Effectiveness Date and maintained in the manner
            contemplated herein during the Effectiveness Period or if any other
            Event as described herein has occurred.

      FFFF. Specific Enforcement, Consent to Jurisdiction.

            1.    The Company and the Holders acknowledge and agree that
                  irreparable damage would occur in the event that any of the
                  provisions of this Registration Rights Agreement or the
                  Purchase Agreement were not performed in accordance with their
                  specific terms or were otherwise breached. It is accordingly
                  agreed that the parties shall be entitled to an injunction or
                  injunctions to prevent or cure breaches of the provisions of
                  this Registration Rights Agreement or the Purchase Agreement
                  and to enforce specifically the terms and provisions hereof or
                  thereof, this being in addition to any other remedy to which
                  any of them may be entitled by law or equity.

            2.    Each of the Company and the Purchasers (i) hereby irrevocably
                  submits to the jurisdiction of the United States District
                  Court for the Southern District of New York and the courts of
                  the State of New York located in New York county for the
                  purposes of any suit, action or proceeding arising out of or
                  relating to this Agreement or the Purchase Agreement and (ii)
                  hereby waives, and agrees not to assert in any such suit,
                  action or proceeding, any claim that it is not personally
                  subject to the jurisdiction of such court, that
<PAGE>

            the suit, action or proceeding is brought in an inconvenient forum
            or that the venue of the suit, action or proceeding is improper.
            Each of the Company and the Purchasers consents to process being
            served in any such suit, action or proceeding by mailing a copy
            thereof to such party at the address in effect for notices to it
            under this Agreement and agrees that such service shall constitute
            good and sufficient service of process and notice thereof. Nothing
            in this Section 7(f) shall affect or limit any right to serve
            process in any other manner permitted by law.

            GGGG. Amendments and Waivers. The provisions of this Agreement,
                  including the provisions of this sentence, may not be amended,
                  modified or supplemented, and waivers or consents to
                  departures from the provisions hereof may not be given, unless
                  the same shall be in writing and signed by the Company and
                  each of the Holders. Notwithstanding the foregoing, a waiver
                  or consent to depart from the provisions hereof with respect
                  to a matter that relates exclusively to the rights of Holders
                  and that does not directly or indirectly affect the rights of
                  other Holders may be given by Holders of at least a majority
                  of the Registrable Securities to which such waiver or consent
                  relates; provided, however, that the provisions of this
                  sentence may not be amended, modified, or supplemented except
                  in accordance with the provisions of the immediately preceding
                  sentence.

            HHHH. Notices. Any and all notices or other communications or
                  deliveries required or permitted to be provided hereunder
                  shall be in writing and shall be deemed given and effective on
                  the earlier of (i) the date of transmission, if such notice or
                  communication is delivered via facsimile at the facsimile
                  telephone number specified for notice prior to 5:00 p.m.,
                  eastern standard time, on a Business Day, (ii) the Business
                  Day after the date of transmission, if such notice or
                  communication is delivered via facsimile at the facsimile
                  telephone number specified for notice later than 5:00 p.m.,
                  eastern standard time, on any date and earlier than 11:59
                  p.m., eastern time, on such date, (iii) the Business Day
                  following the date of mailing, if sent by nationally
                  recognized overnight courier service or (iv) actual receipt by
                  the party to whom such notice is required to be given. The
                  addresses for such communications shall be with respect to
                  each Holder at its address set forth under its name on
                  Schedule A attached hereto, or with respect to the

                  Company, addressed to:

                  Virtual Communities, Inc.
                  589 8th Avenue, 7th Floor
                  New York, New York  10018
                  Attention: Avi Moskowitz
                  Facsimile no.: (212) 214-0550

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to any Holder shall be sent to the addresses
listed on Schedule A attached hereto, if applicable. Copies of notices to the
Company shall be sent to Wuersch & Gering LLP, 11 Hanover Square, 21st Floor,
New York, New York 10005, Attention: Travis Gering, Esq., Facsimile no.: (212)
509-9559. Copies of notices to the Holders shall be sent to (i) Parker Chapin
LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York 10174,
Attention: Christopher S. Auguste, Esq., Facsimile no.: (212) 704-6288.

      IIII. Successors and Assigns. This Agreement shall be binding upon and
            inure to the benefit of the parties and their successors and
            permitted assigns and shall inure to the benefit of each Holder and
            its successors and assigns. The Company may not assign this
<PAGE>

            Agreement or any of its rights or obligations hereunder without the
            prior written consent of each Holder. Each Purchaser may assign its
            rights hereunder in the manner and to the Persons as permitted under
            the Purchase Agreement.

      JJJJ. Assignment of Registration Rights. The rights of each Holder
            hereunder, including the right to have the Company register for
            resale Registrable Securities in accordance with the terms of this
            Agreement, shall be automatically assignable by each Holder to any
            transferee of such Holder of all or a portion of the shares of
            Registrable Securities if: (i) the Holder agrees in writing with the
            transferee or assignee to assign such rights, and a copy of such
            agreement is furnished to the Company within a reasonable time after
            such assignment, (ii) the Company is, within a reasonable time after
            such transfer or assignment, furnished with written notice of (a)
            the name and address of such transferee or assignee, and (b) the
            securities with respect to which such registration rights are being
            transferred or assigned, (iii) following such transfer or assignment
            the further disposition of such securities by the transferee or
            assignees is restricted under the Securities Act and applicable
            state securities laws, (iv) at or before the time the Company
            receives the written notice contemplated by clause (ii) of this
            Section, the transferee or assignee agrees in writing with the
            Company to be bound by all of the provisions of this Agreement, and
            (v) such transfer shall have been made in accordance with the
            applicable requirements of the Purchase Agreement. In addition, each
            Holder shall have the right to assign its rights hereunder to any
            other Person with the prior written consent of the Company, which
            consent shall not be unreasonably withheld. The rights to assignment
            shall apply to the Holders (and to subsequent) successors and
            assigns.

      KKKK. Counterparts. This Agreement may be executed in any number of
            counterparts, each of which when so executed shall be deemed to be
            an original and, all of which taken together shall constitute one
            and the same Agreement. In the event that any signature is delivered
            by facsimile transmission, such signature shall create a valid
            binding obligation of the party executing (or on whose behalf such
            signature is executed) the same with the same force and effect as if
            such facsimile signature were the original thereof.

      LLLL. Governing Law. This Agreement shall be governed by and construed in
            accordance with the laws of the State of New York, without regard to
            principles of conflicts of law thereof. This Agreement shall not be
            interpreted or construed with any presumption against the party
            causing this Agreement to be drafted.

      MMMM. Cumulative Remedies. The remedies provided herein are cumulative and
            not exclusive of any remedies provided by law.

      NNNN. Severability. If any term, provision, covenant or restriction of
            this Agreement is held to be invalid, illegal, void or unenforceable
            in any respect, the remainder of the terms, provisions, covenants
            and restrictions set forth herein shall remain in full force and
            effect and shall in no way be affected, impaired or invalidated, and
            the parties hereto shall use their reasonable efforts to find and
            employ an alternative means to achieve the same or substantially the
            same result as that contemplated by such term, provision, covenant
            or restriction. It is hereby stipulated and declared to be the
            intention of the parties that they would have executed the remaining
            terms, provisions, covenants and
<PAGE>

            restrictions without including any of such that may be hereafter
            declared invalid, illegal, void or unenforceable.

      OOOO. Headings. The headings herein are for convenience only, do not
            constitute a part of this Agreement and shall not be deemed to limit
            or affect any of the provisions hereof.

      PPPP. Shares Held by the Company and its Affiliates. Whenever the consent
            or approval of Holders of a specified percentage of Registrable
            Securities is required hereunder, Registrable Securities held by the
            Company or its Affiliates (other than any Holder or transferees or
            successors or assigns thereof if such Holder is deemed to be an
            Affiliate solely by reason of its holdings of such Registrable
            Securities) shall not be counted in determining whether such consent
            or approval was given by the Holders of such required percentage and
            shall not be counted as outstanding.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.

                                       VIRTUAL COMMUNITIES, INC.

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

                                       MAGELLAN INTERNATIONAL, LTD.

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

                                       ASPEN INTERNATIONAL, LTD.

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

                                       ACQUA WELLINGTON VALUE FUND, LTD.

                                       By:
                                          --------------------------------------
                                                 Name: Anthony L.M. Inder Rieden
                                                                         Title:

                                       THE CUTTYHUNK FUND LIMITED

                                       By:
                                          --------------------------------------
                                                                        Name:
                                                                         Title:
<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[TRANSFER AGENT]
[ADDRESS]
Attn:  _____________
Re:    Virtual Communities, Inc.

Ladies and Gentlemen:

      We are counsel to Virtual Communities, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with that certain
Common Stock and Warrants Purchase Agreement (the "Purchase Agreement"), dated
as of March 31, 2000, by and among the Company and the purchasers named therein
(collectively, the "Holders") pursuant to which the Company issued to the
Holders shares (the "Common Shares") of its Common Stock, par value $.01 per
share (the "Common Stock"), and issued warrants (the "Warrants") to purchase
shares of the Company's Common Stock. Pursuant to the Purchase Agreement, the
Company has also entered into a Registration Rights Agreement with the Holders
(the "Registration Rights Agreement"), dated as of March 31, 2000, pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
Common Shares and the shares of Common Stock issuable upon exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ________________, 2000, the Company filed a Registration Statement
on Form ___ (File No. 333-________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the resale of the
Registrable Securities which names each of the present Holders as a selling
stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of the Registration Statement.

                                       Very truly yours,

                                       By:

cc:      [LIST NAMES OF HOLDERS]
<PAGE>

                                SCHEDULE A to the
                          REGISTRATION RIGHTS AGREEMENT
                          FOR VIRTUAL COMMUNITIES, INC.

Names and Address of Purchasers

Magellan International, Ltd.
Charlotte House
Charlotte Street
Nassau, Bahamas
Tel. no.: 242-323-8884
Fax no.: 242-323-7918
Attn: Anthony L.M. Inder Rieden

Aspen International, Ltd.
Charlotte House
Charlotte Street
Nassau, Bahamas
Tel. no.: 242-323-8884
Fax no.: 242-323-7918
Attn: Anthony L.M. Inder Rieden

Acqua Wellington Value Fund Ltd.
c/o MeesPierson Fund Services
(Bahamas) Limited
Montague Sterling Centre
P.O. Box SS-6238
East Bay Street
Nassau, Bahamas
Tel. no.: 242-394-2700
Fax no.: 242-394-8348
Attn:  Anthony L.M. Inder Rieden

The Cuttyhunk Fund Limited
c/o Optima Fund Management
1285 Avenue of Americas
New York, NY 10019
Tel. no.: 212-484-3040
Fax no.: 212-484-3001
Attn:  Geoffrey Lewis
<PAGE>

                              SCHEDULE 7(c) to the
                          REGISTRATION RIGHTS AGREEMENT
                          FOR VIRTUAL COMMUNITIES, INC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]