Document:

EXHIBT 4.2

                          21ST CENTURY HOLDING COMPANY

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY
ARE RESTRICTED AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY, IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.

Dated as of _________, 2003                                    No. W-

                          21ST CENTURY HOLDING COMPANY

              (INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA)

          REDEEMABLE WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
          -------------------------------------------------------------

         FOR VALUE RECEIVED, 21st Century Holding Company, a Florida corporation
(the "Company"), hereby certifies that ______________________, his (her/its)
successors and assigns (the "Holder"), is the owner of such number of warrants
(the "Warrants") as set forth in Section 1 hereof. Each Warrant initially
entitles the Holder, subject to the provisions hereof, to purchase from the
Company at any time and from time to time on and after the date hereof until
5:00 p.m. Florida local time on the Expiration Date (as described in Section 3
herein), one-half fully paid and non-assessable share of Common Stock (as
defined below) at the Exercise Price per share of Common Stock (as described in
Section 2 herein) on the terms and conditions hereinafter set forth.

         The term "Common Stock" means the Common Stock, par value $0.01 per
share, of the Company as constituted on the date hereof (the "Base Date"). The
number of shares of Common Stock to be received upon the exercise of this
warrant certificate may be adjusted from time to time as hereinafter set forth.
The shares of Common Stock deliverable upon such exercise, and as adjusted from
time to time, are hereinafter referred to as "Warrant Shares." The term "Other
Securities" means any other equity or debt securities that may be issued by the
Company in addition thereto or in substitution for the Warrant Shares. The term
"Company" means and includes the corporation named above as well as any
immediate successor corporation resulting from a reorganization.

         Upon receipt by the Company of documentation reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this warrant certificate,
and (in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this warrant
certificate, if mutilated, the Company shall execute and deliver a new warrant
certificate of like tenor and date. Any such new warrant certificate executed
and delivered shall constitute an additional contractual obligation on the part
of the Company, whether or not this warrant certificate so lost, stolen,
destroyed or mutilated shall be at any time enforceable by anyone.

         The Holder agrees with the Company that this warrant certificate is
issued, and all the rights hereunder shall be held subject to, all of the
conditions, limitations and provisions set forth herein.

         1. NUMBER OF WARRANTS. The Holder is the owner of a number of warrants
equal to two times the quotient of the aggregate principal amount of the 6%
Senior Subordinated Notes the Holder has purchased pursuant to the terms of the
Unit Purchase Agreement (as hereinafter defined) and the Exercise Price.

<PAGE>

         2. EXERCISE PRICE. The Exercise Price shall equal 115% of the
weighted-average volume price for the Common Stock on Nasdaq as reported by
Bloomberg Financial Markets ("Bloomberg") for the 60 consecutive trading days
after the date of the Closing as set forth in the Unit Purchase Agreement;
provided, however, that in no event shall the Exercise Price be greater than
$25.00 per share nor lower than $15.00 per share. No later than 15 business days
after the expiration date of the 60-day period set forth above, the Company
shall mail a notice to the Holder, first class, postage prepaid, at such
Holder's latest address as shall appear on the records of the Company or the
Company's Warrant Agent (as hereinafter defined), if any, setting forth the
Exercise Price and the number of Warrants determined in accordance with Sections
1 and 2 hereof.

         3. EXERCISE OF WARRANT. This warrant certificate may be exercised in
whole or in part, at any time, or from time to time during the period commencing
on the date hereof and expiring three years after the date hereof (the
"Expiration Date"). The Warrants must be exercised so as to purchase one full
Warrant Share.

         4. NOTICE OF EXERCISE. Exercise of the Warrants shall be effected in
any such case by presentation and surrender of this warrant certificate to the
Company at its principal office, at the office of its stock transfer agent or
any other warrant agent designated by the Company (the "Warrant Agent") if any,
with the Warrant Exercise Form, a form of which is attached hereto as Exhibit A,
duly executed and accompanied by payment (either in cash or by certified or
official bank check, payable to the order of the Company) of the Exercise Price
for the number of Warrant Shares specified in such form and instruments of
transfer, if appropriate, duly executed by the Holder or its duly authorized
attorney. If this warrant certificate should be exercised in part only, the
Company shall, upon surrender of this warrant certificate for cancellation,
execute and deliver a new warrant certificate evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this warrant certificate, together
with the Exercise Price, at its office, or by the Warrant Agent at its office,
in proper form for exercise, the Holder shall be deemed to be the Holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this warrant
certificate, but in no event shall the Company be responsible or liable for
income taxes or transfer taxes upon the issuance or transfer of the Warrants or
the Warrant Shares.

         5. REDEMPTION RIGHTS. The Warrants may be redeemed, in whole or in
part, at any time or from time to time, at the Company's sole option, commencing
a year from the date hereof at a redemption price of $0.01 per Warrant Shares;
provided, however, that before any such call for redemption of the Warrants the
weighted-average volume price for the Company's Common Stock quoted on the
Nasdaq National Market ("Nasdaq") shall have for 20 consecutive trading days
ending not more than 10 days prior to the notice of redemption been in excess of
150% of the Exercise Price, as such may be adjusted from time to time.
Redemption of the Warrants may only occur upon 30 days' prior written notice to
the Holder, such notice to include certification of the trading price of the
Company's Common Stock on Nasdaq as reported by Bloomberg. If the Company
exercises its right to redeem the Warrants, in whole or in part, it shall mail a
notice of redemption to the Holder, first class, postage prepaid, not later than
the 30th day before the date fixed for redemption, at such Holder's last address
as shall appear on the records of the Company or the Company's Warrant Agent, if
any. Any notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the Holder receives such notice.
The notice of redemption shall specify the redemption price, the date fixed for
redemption, the place where the warrant certificate shall be delivered and the
redemption price shall be paid, and that the right to exercise the Warrants
shall terminate at 5:00 p.m. Florida local time on the business day immediately
preceding the date fixed for redemption. The date fixed for the redemption of
the Warrants shall be the Redemption Date. Any right to exercise a Warrant shall
terminate at 5:00 p.m. Florida local time on the business day immediately
preceding the Redemption Date. On and after the Redemption Date, the Holder
shall have no further rights except to receive, upon surrender of a certificate
evidencing Warrants duly endorsed or accompanied by a written instrument or
instruments of redemption in form satisfactory to the Company, the redemption
price of $0.01, without interest, per Warrant Shares.

         6. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery upon exercise of this warrant certificate all shares of
Common Stock or other shares of capital stock of the Company (and Other
Securities) from time to time receivable upon exercise of this warrant
certificate. All such shares (and Other

<PAGE>

Securities) shall be duly authorized and, when issued upon such exercise, shall
be validly issued, fully paid and non-assessable and free of all preemptive
rights.

         7. FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of the Warrants, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share of Common Stock in lieu of each fraction of a share otherwise
called for upon any exercise of the Warrants, as determined by the Board of
Directors of the Company.

         8. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This warrant
certificate is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its Warrant
Agent, if any, for other warrant certificates of different denominations,
entitling the Holder to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Upon surrender of this warrant certificate
to the Company or at the office of its Warrant Agent, if any, with an
appropriate form of assignment duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
warrant certificate in the name of the assignee named in such instrument of
assignment and this warrant certificate shall promptly be canceled. This warrant
certificate may be divided or combined with other warrant certificates that
carry the same rights upon presentation hereof at the office of the Company or
at the office of its Warrant Agent, if any, together with a written notice
specifying the names and denominations in which new warrant certificates are to
be issued and signed by the Holder hereof.

         9. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
warrant certificate.

         10. ANTI-DILUTION PROVISIONS.

                  10.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at
         any time subdivide its outstanding shares of Common Stock (or Other
         Securities at the time receivable upon the exercise of the Warrants) by
         recapitalization, reclassification or split-up thereof, or if the
         Company shall declare a stock dividend or distribute shares of Common
         Stock to its shareholders, the number of shares of Common Stock subject
         to this warrant certificate immediately prior to such subdivision shall
         be proportionately increased and the Exercise Price shall be
         proportionately decreased, and if the Company shall at any time combine
         the outstanding shares of Common Stock by recapitalization,
         reclassification or combination thereof, the number of shares of Common
         Stock or Other Securities subject to this warrant certificate
         immediately prior to such combination shall be proportionately
         decreased and the Exercise Price shall be proportionately increased.
         Any such adjustments pursuant to this Section 10.1 shall be effective
         at the close of business on the effective date of such subdivision or
         combination or if any adjustment is the result of a stock dividend or
         distribution then the effective date of such adjustment based thereon
         shall be the record date therefor.

                  10.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
         ETC. In the case of a reorganization of the Company after the Base
         Date, the Holder, upon the exercise thereof as provided in Section 1,
         at any time after the consummation of such reorganization, shall be
         entitled to receive, in lieu of the securities and property receivable
         upon the exercise of this warrant certificate prior to such
         consummation, the securities or property to which such Holder would
         have been entitled upon such consummation if such Holder had exercised
         this warrant certificate immediately prior thereto; in each such case,
         the terms of this warrant certificate shall be applicable to the
         securities or property receivable upon the exercise of this warrant
         certificate after such consummation.

                  10.3 ISSUANCES BELOW EXERCISE PRICE. Except in the case of the
         issuance of Common Stock issued (i) pursuant to any employee benefit
         plan of the Company now existing or to be implemented in the future,
         (ii) for consideration other than cash pursuant to a merger,
         consolidation, acquisition or similar business combination, (iii) in
         connection with any transaction referred to in, or contemplated by,
         this Section 10 hereof, (iv) pursuant to any equipment leasing or loan
         arrangement, or debt financing from a bank or similar financial or
         lending institution, (v) issued by the Company pursuant

<PAGE>

         to a registration statement filed under the Securities Act, or (v)
         issued in connection with strategic transactions involving the Company
         and other entities, including (a) joint ventures, manufacturing,
         marketing or distribution arrangements or (b) technology transfer or
         development arrangements, if the Company at any time while the Warrants
         are outstanding, shall issue shares of Common Stock at a price per
         share (an "Issuance Price") less than the Exercise Price (or in the
         case of an issuance of Common Stock in a private placement at less than
         80% of the Exercise Price), then the Exercise Price shall be multiplied
         by a fraction, the numerator of which shall be the number of shares of
         Common Stock outstanding immediately prior to the issuance of such
         Common Stock plus the number of shares of Common Stock which the price
         paid for such shares of Common Stock would purchase at the Exercise
         Price, and the denominator of which shall be the sum of the number of
         shares of Common Stock outstanding immediately prior to such issuance
         plus the number of shares of Common Stock so issued or issuable. Upon
         each adjustment of the Exercise Price pursuant to the provisions of
         this Section 10.2, the number of Warrant Shares issuable upon the
         exercise of each Warrant shall be adjusted by multiplying a number
         equal to the Exercise Price in effect immediately prior to such
         adjustment by the number of Warrant Shares issuable upon exercise of
         the Warrant immediately prior to such adjustment and dividing the
         product so obtained by the adjusted Exercise Price.

                  10.4 NOTICES OF RECORD DATE, ETC. In case:

                           (a) the Company shall take a record of the holders of
its Common Stock (or Other Securities at the time receivable upon the exercise
of the Warrants) for the purpose of entitling them to receive any dividend
(other than a cash dividend at the same rate as the rate of the last cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities, or to receive any other right; or

                           (b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any consolidation or
merger of the Company with or into another corporation; then, and in each such
case, the Company shall mail or cause to be mailed to the Holder at the time
outstanding a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification, consolidation or
merger is to take place, and the time, if any, is to be fixed, as to which the
holders of record of Common Stock (or such Other Securities at the time
receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such Other Securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation
or merger. Such notice shall be mailed at least 20 days prior to the date
therein specified and the Warrants may be exercised prior to said date during
the term of the Warrants.

                  10.5 LIMITATION ON ANTI-DILUTION ADJUSTMENTS. Notwithstanding
         anything to the contrary contained herein, the Company shall not adjust
         the number of Warrant Shares as provided in this Section 10, if such
         adjustment would, either individually or together with one or more
         other adjustments or together with one or more issuances of Transaction
         Shares (as defined in the Unit Purchase Agreement dated as of
         ___________, 2003 (the "Unit Purchase Agreement") among the Company and
         the Purchasers named therein), cause the issuance of shares of Common
         Stock to exceed the number of shares that the Company could then issue
         under Section 4350(i) of the rules and regulations of Nasdaq (the
         "Nasdaq Rules") or any successor rule or regulation. Under Section
         4350(i) of the Nasdaq Rules, a company may not issue shares, and may
         not issue securities convertible into shares, where the shares issued
         could in the aggregate equal 20% or more of the voting power of the
         shares outstanding, without obtaining shareholder approval. The
         foregoing limitation shall only apply until such time as the Company
         obtains the requisite approval of its shareholders for the issuance of
         the Transaction Shares, as required by Section 4350(i) of the Nasdaq
         Rules or any successor rule or regulation. The Company covenants and
         agrees that it shall include a proposal for the approval of the
         issuance of the Transaction Shares in the Company's proxy statement for
         its 2004 annual meeting of shareholders, which the Company currently
         anticipates shall take place in June 2004. If, due to the foregoing
         limitation, the Company cannot adjust the Warrant Shares as provided in
         Section 10.3 above, then, subject to NASD approval, the Company agrees
         that the Exercise

<PAGE>

         Price hereof shall be reduced to equal the Issuance Price(s) of the
         shares of Common Stock that triggered the adjustment pursuant to
         Section 10.3.

         11. TRANSFER TO COMPLY WITH THE SECURITIES ACT. The Warrants and any
Warrant Shares or Other Securities may not be sold, transferred, pledged,
hypothecated or otherwise disposed of unless registered under the Securities Act
and any applicable state securities laws or pursuant to available exemptions
from such registration, provided that the transferor delivers to the Company an
opinion of counsel satisfactory to the Company confirming the availability of
such exemption.

         12. REGISTRATION RIGHTS. The Warrants and the Warrant Shares issuable
upon exercise of the Warrants shall be subject to certain registration rights as
provided in the registration rights agreement (the "Registration Rights
Agreement") among the Company and the initial holders of the Warrants. If the
Company fails to comply with the terms of the Registration Rights Agreement, the
Exercise Price shall be reduced by 10% for each full period of 30 consecutive
days of such non-compliance (and there shall be no pro rata reduction of the
Exercise Price if a period of non-compliance is not a full 30-day period).

         13. LEGEND. Unless the Warrant Shares or Other Securities have been
registered under the Securities Act, upon exercise of any of the Warrants and
the issuance of any of the Warrant Shares or Other Securities, all certificates
representing such securities shall bear on the face thereof substantially the
following legend:

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"), or under applicable state securities laws and may not
                  be sold, offered for sale, assigned, transferred or otherwise
                  disposed of, unless registered pursuant to the provisions of
                  the Act and any applicable state securities laws or unless an
                  opinion of counsel to the Company is obtained stating that
                  such disposition is in compliance with an available exemption
                  from such registration."

         14. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when sent by facsimile, delivered personally or within two
days after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice hereunder.

         15. APPLICABLE LAW. The Warrants are issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Florida, without giving effect to the choice of law rules thereof.

         IN WITNESS WHEREOF, the Company has caused this warrant certificate to
be signed on its behalf, in its corporate name, by its duly authorized officer,
all as of the day and year first above written.

                                          21ST CENTURY HOLDING COMPANY,
                                          a Florida corporation

                                          By:_________________________________
                                               Name:__________________________
                                               Title:_________________________

<PAGE>

                                    EXHIBIT A

                              WARRANT EXERCISE FORM

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)

To 21st Century Holding Company:

         In accordance with the warrant certificate enclosed with this Warrant
Exercise Form, the undersigned hereby irrevocably elects to purchase________
shares of Common Stock, $0.01 par value per share ("Common Stock"), of 21st
Century Holding Company and, encloses herewith $__________ in cash, certified or
official bank check or checks, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Warrant Exercise Form relates, together with any applicable taxes payable
by the undersigned pursuant to the warrant certificate.

         The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of:

                                         PLEASE INSERT SOCIAL SECURITY OR
                                         TAX IDENTIFICATION NUMBER

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

--------------------------------------------------------------------------------
                         (Please print name and address)

         If the number of shares of Common Stock issuable upon this exercise
shall not be all of the shares of Common Stock that the undersigned is entitled
to purchase in accordance with the enclosed warrant certificate, the undersigned
requests that a new warrant certificate evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:

--------------------------------------------------------------------------------
                         (Please print name and address)

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

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

Dated:_________________________   ______________________________________________
                                  (Print name of holder)

                                  By:___________________________________________
                                  Name:_________________________________________
                                  Title:________________________________________
                                  (Signature  must  conform in all  respects to
                                  name of Holder as specified on the face of
                                  the Warrant)EXHIBIT 10.1

                                OPTION AGREEMENT
                                ----------------

                                                                    May 19, 2003

     OPTION AGREEMENT made as of the 19th day of May, 2003, between SLS
International, Inc., a Delaware corporation (the "Company"), and Steerpike
(Overseas) Ltd. ("Consultant").

     WHEREAS, the Company desires to grant to the Consultant options to purchase
shares of its common stock, $.001 par value per share, in consideration for
services provided and to be provided by Consultant pursuant to a letter
agreement between the Company and the Consultant dated as of May 19, 2003 (the
"Letter Agreement").

     WHEREAS, the Company and the Consultant each intends that the Options
granted herein shall be Non-Qualified Stock Options.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:

     1. GRANT OF OPTIONS. The Company hereby grants to Consultant options
("Options") to purchase shares of common stock of the Company commencing on the
date hereof ("Grant Date"). These Options permit you to purchase 1,000,000
shares of the Company's common stock, par value $.00l per share ("Shares"), at
the exercise price per share stated below ("Exercise Price").

     2. CHARACTER OF OPTIONS. These Options shall be considered Non-Qualified
Stock Options.

     3. EXERCISE PRICE. The Exercise Price of the Options is $0.25 per Share.

     4. PAYMENT OF EXERCISE PRICE. Options represented hereby may be exercised
in whole or in part by delivering to the Company payment of the Exercise Price
of the Options so exercised (i) in cash or (ii) to the extent permitted by
applicable law, by delivering a written direction to the Company that the Option
be exercised pursuant to a "cashless" exercise/sale procedure (pursuant to which
funds to pay for exercise of the Option are delivered to the Company by a broker
upon receipt of stock certificates from the Company) through a licensed broker
whereby the stock certificate or certificates for the shares of Common Stock for
which the Option is exercised will be delivered to such broker as the agent for
the Consultant exercising the Option and the broker will deliver to the Company
cash equal to the aggregate Exercise Price for the shares of Common Stock
purchased pursuant to the exercise of the Option plus the amount (if any) of
federal and other taxes that the Company, in its reasonable judgment, is
required to withhold with respect to the exercise of the Option. Exercise of
this Option to the extent above stated may be made in whole or in part at any
time and from time to time, subject to the limitations stated herein, except
that no fractional share will be issued pursuant to this Option.

<PAGE>

     5. TERM OF OPTIONS. The term of the Options granted herein shall be for a
term of up to five years commencing with the Grant Date. The Options shall
expire and no longer be exercisable at the end of such term.

     6. TRANSFER OF OPTIONS. The Options granted herein, and the Shares issuable
hereunder, shall be freely transferable, in whole or in part, and there are no
restrictions upon any transfer, sale, monetization, pledge, alienation or other
encumbrance with respect to either such Options or the Shares.

     7. ADJUSTMENTS. If the outstanding shares of the Company's common stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increase or decrease in such shares effected without
receipt of consideration by the Company, occurring after the date of this Option
Agreement, the number and kinds of shares subject to the outstanding Options
granted hereunder shall be adjusted proportionately and accordingly by the
Company. Any such adjustment in outstanding Options shall not change the
aggregate Exercise Price payable with respect to shares subject to the
unexercised portion of the Option outstanding but shall include a corresponding
proportionate adjustment in the Exercise Price per share.

     8. TERMINATION OF CONSULTANCY. If you voluntarily terminate the Letter
Agreement with the Company (unless such termination is due to the Company's
breach of the Letter Agreement or a result of any of the occurrences noted in
Article 4 of Exhibit A of the Letter Agreement) prior to July 31, 2005, or if
the Company terminates such Letter Agreement as a result of your material breach
of such agreement prior to July 31, 2005 (unless such termination is disputed by
you in good faith), or if so disputed, then upon resolution of such dispute, if
such resolution results in a termination of the Letter Agreement), you shall
forfeit Options to purchase a number of Shares in an amount equal to the lesser
of (a) all outstanding Options or (b) the Pro Rata Portion. The "Pro Rata
Portion" means the total number of Shares granted pursuant to this Option
Agreement (as adjusted pursuant to Section 7 above) multiplied by a fraction,
the numerator of which is the number of days from the date of termination of the
Letter Agreement through July 31, 2005 and the denominator of which is the
number of days from the date of delivery of this Option Agreement through July
31, 2005 (the contractual expiration of the Letter Agreement). The number of
Options required to be forfeited pursuant to this Section 8 shall no longer be
exercisable on the date of termination of the Letter Agreement.

     9. AMENDMENTS. The Company may not amend this Option Agreement without your
consent.

     10. WITHHOLDING TAXES. The Company may withhold from sums due or to become
due to you from the Company any amount necessary to satisfy its obligation to
withhold taxes incurred by reason of the disposition of the Shares acquired by
exercise

<PAGE>

of the Options in a disqualifying disposition (within the meaning of Section
421(b) of the Code), or may require you to reimburse the Company in such amount.

     11. REGISTRATION.

     (a) The Company agrees to:

                  (i) prepare and file with the Securities Exchange Commission
(the "Commission") by August 28, 2003 a registration statement on the
appropriate form with respect to the Shares and to use its best efforts to cause
such registration statement to become effective as promptly as practicable;

                  (ii) prepare and file with the Commission such amendments,
post-effective amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to (x) keep such
registration statement effective and (y) comply with the provisions of the
Securities Act, until the earlier of (A) such time as all of such Shares have
been disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement or (B) such
time as the Shares are eligible for resale pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Securities Act");

                  (iii) furnish to the Consultant without charge such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, such documents incorporated by reference in
such registration statement or prospectus, and such other documents, as the
Consultant may reasonably request;

                  (iv) use its reasonable best efforts to register or qualify
all Shares covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Consultant shall reasonably request and as
shall be appropriate considering the nature and size of the offering, and do any
and all other acts and things which may be necessary or advisable to enable the
Consultant to consummate the disposition in such jurisdiction of its Shares
covered by such registration statement; provided, however, that the Company
shall not for any such purpose be required to qualify generally to transact
business as a foreign corporation in any jurisdiction where it is not so
qualified or to consent to general service of process in any such jurisdiction,
unless the Company is already subject to service in such jurisdiction;

                  (v) use its reasonable best efforts to cause all Shares
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers thereof
to consummate the disposition of such Shares in accordance with the intended
method or methods of disposition thereof;

<PAGE>

                  (vi) promptly notify the Consultant, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing, and at the request of the Consultant prepare
and furnish to the Consultant a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statement therein not misleading in
the light of the circumstances then existing, and as promptly as practicable,
prepare and furnish to the Consultant a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;

                  (vii) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission until the earlier of (A)
such time as all of such Shares have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement or (B) such time as the Shares are eligible for
resale pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act");

                  (viii) use its reasonable best efforts to list such securities
on each securities exchange on which the Common Stock of the Company is then
listed (including the NASDAQ Stock Market), or, if such securities are not
already so listed, on any national securities exchange (including the NASDAQ
Stock Market), and, if necessary, provide a transfer agent and registrar for
such Shares not later than the effective date of such registration statement;

                  (ix) use its reasonable best efforts to provide a transfer
agent and registrar for such Shares not later than the effective date of such
registration statement; and

                  (x) use its reasonable best efforts to prevent the issuance
and obtain the lifting of a stop-order by the Commission.

     (b) the Company will pay all expenses in connection with the above
registration.

     (c) in connection with the preparation and filing of the registration
statement registering Shares under the Securities Act, the Company will permit
the Consultant to participate in the preparation of the sections of any such
registration statement related to the Consultant.

<PAGE>

     (d) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 10 that the Consultant shall furnish to
the Company such information regarding itself, the Shares held by it, and the
intended method of disposition of such securities as shall be required in
connection with the action to be taken by the Company; provided that, if the
Company has not requested all information it requires in connection with its
obligations under Section 11(a)(i) on or before August 18, 2003, and the Company
breaches such obligations, such condition precedent shall be deemed to have been
fulfilled and the Company shall be deemed to be in breach of this Agreement.

     (e) To the extent permitted by law, the Company will indemnify and hold
harmless the Consultant, the partners, shareholders, managers, officers and
directors of the Consultant, and each person, if any, who controls the
Consultant within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based on any untrue or alleged untrue statement of any material fact contained
in such registration statement, including, without limitation, any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or arise out of any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration; and will
reimburse the Consultant, such underwriter, or controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action, provided,
however, that the indemnity agreement contained in this Section 11(e) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or delayed), nor shall the
Company be liable in any such case with respect to any such Consultant or
underwriter for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with an instrument
duly executed by such Consultant, underwriter or controlling person and stated
to be specifically for use in connection with such registration.

     (f) To the extent permitted by law, the Consultant requesting or joining in
a registration will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, and any underwriter for the Company (within the meaning of the Securities
Act) against any losses, claims, damages or liabilities to which the Company or
any such director, officer, controlling person or underwriter may become
subject, under the Securities Act or otherwise, insofar as such

<PAGE>

losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary prospectus or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by the Consultant under an instrument duly executed by the Consultant
and stated to be specifically for use in connection with such registration; and
will reimburse the Company or any such director, officer, controlling person or
underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 11(f) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Consultant (which consent shall not be unreasonably withheld
or delayed) and provided further that the Consultant shall have no liability
under this Section 11(f) in excess of the net proceeds actually received by the
Consultant in the relevant public offering.

     11. Governing Law. This Agreement shall be construed and enforced in
accordance with the law of the State of Delaware, without giving effect to the
conflict of law principles thereof.

     12. Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.

<PAGE>

     13. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision in any
other jurisdiction.

                                           SLS INTERNATIONAL, INC.

                                           _________________________
                                           By:  John Gott, President

                                           STEERPIKE (OVERSEAS) LTD.

                                           _________________________
                                           By:  ______________, ___________

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