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EXHIBIT 4.3

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS  EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO THE  TRANSFEROR
REASONABLY  ACCEPTABLE  TO THE COMPANY TO SUCH  EFFECT,  THE  SUBSTANCE OF WHICH
SHALL  BE  REASONABLY  ACCEPTABLE  TO THE  COMPANY.  THESE  SECURITIES  AND  THE
SECURITIES  ISSUABLE  UPON  EXERCISE  OF  THESE  SECURITIES  MAY BE  PLEDGED  IN
CONNECTION  WITH A BONA  FIDE  MARGIN  ACCOUNT  OR OTHER  LOAN  SECURED  BY SUCH
SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                           RCG COMPANIES INCORPORATED

                  THIS COMMON STOCK PURCHASE  WARRANT (the "Warrant")  certifies
that, for value received,  _____________ (the "Holder"),  is entitled,  upon the
terms and subject to the limitations on exercise and the conditions  hereinafter
set forth,  at any time on or after the 181st day following the date hereof (the
"Initial  Exercise  Date") and on or prior to the close of business on the three
year anniversary of the Initial Exercise Date (the  "Termination  Date") but not
thereafter,  to subscribe for and purchase from RCG  Companies  Incorporated,  a
Delaware corporation (the "Company"), up to ______ shares (the "Warrant Shares")
of Common Stock, par value $0.04 per share, of the Company (the "Common Stock").
The Exercise Period shall be extended for the number of Trading Days during such
period in which (x)  trading in the Common  Stock is  suspended  by any  Trading
Market,  or (y) following the Effective Date, the Registration  Statement is not
effective or the prospectus  included in the  Registration  Statement may not be
used by the Purchasers for the resale of the Warrant Shares.  The purchase price
of one share of Common Stock under this  Warrant  shall be equal to the Exercise
Price, as defined under Section 2(b).

         Section  1.  Definitions.  Capitalized  terms  used  and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "Purchase  Agreement"),  dated September 13, 2004, among
the Company and the purchasers signatory thereto.

         Section 2.   Exercise.

         a) Exercise of Warrant.  Exercise of the purchase rights represented by
this  Warrant may be made at any time or times on or after the Initial  Exercise

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Date and on or before the Termination  Date by delivery to the Company of a duly
executed  facsimile  copy of the Notice of Exercise Form annexed hereto (or such
other  office or agency of the Company as it may  designate by notice in writing
to the registered Holder at the address of such Holder appearing on the books of
the Company);  provided,  however, within 5 Trading Days of the date said Notice
of Exercise is delivered to the Company,  the Holder shall have surrendered this
Warrant  to the  Company  and the  Company  shall have  received  payment of the
aggregate  Exercise  Price of the shares  thereby  purchased by wire transfer or
cashier's check drawn on a United States bank.

         b) Exercise  Price.  The  exercise  price of each share of Common Stock
under  this  Warrant  shall be  $1.20,  subject  to  adjustment  hereunder  (the
"Exercise Price").

         c)  Cashless  Exercise.  If at any time after one year from the date of
issuance  of  this  Warrant  there  is  no  effective   Registration   Statement
registering  the resale of the Warrant  Shares by the Holder,  then this Warrant
may also be  exercised  at such time by means of a "cashless  exercise" in which
the Holder shall be entitled to receive a certificate  for the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

         (A)  =   the VWAP on the Trading Day immediately  preceding the date of
                  such election;

         (B)  =   the Exercise Price of this Warrant, as adjusted; and

         (X)  =   the number of Warrant Shares issuable upon exercise of this

                  Warrant in accordance  with the terms of this Warrant by means
                  of a cash exercise rather than a cashless exercise.

         d)  Holder's  Restrictions.  The  Holder  shall  not have the  right to
exercise any portion of this Warrant,  pursuant to Section 2(c) or otherwise, to
the extent that after giving effect to such issuance after exercise,  the Holder
(together with the Holder's  affiliates),  as set forth on the applicable Notice
of Exercise,  would  beneficially own in excess of 4.99% of the number of shares
of the  Common  Stock  outstanding  immediately  after  giving  effect  to  such
issuance. For purposes of the foregoing sentence, the number of shares of Common
Stock  beneficially  owned by the Holder and its  affiliates  shall  include the
number of shares of Common  Stock  issuable  upon  exercise of this Warrant with
respect to which the  determination  of such  sentence is being made,  but shall
exclude the number of shares of Common  Stock  which would be issuable  upon (A)
exercise of the  remaining,  nonexercised  portion of this Warrant  beneficially
owned by the Holder or any of its  affiliates  and (B) exercise or conversion of
the unexercised or nonconverted  portion of any other  securities of the Company
(including,  without limitation,  any other Preferred Stock or Warrants) subject
to a limitation on conversion or exercise analogous to the limitation  contained
herein beneficially owned by the Holder or any of its affiliates.  Except as set
forth in the preceding sentence,  for purposes of this Section 2(d),  beneficial
ownership  shall be calculated in accordance  with Section 13(d) of the Exchange
Act, it being  acknowledged  by Holder that the Company is not  representing  to
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and Holder is solely  responsible for any schedules  required to be filed in

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accordance  therewith.  To the  extent  that the  limitation  contained  in this
Section 2(d) applies,  the  determination of whether this Warrant is exercisable
(in relation to other  securities owned by the Holder) and of which a portion of
this Warrant is exercisable shall be in the sole discretion of such Holder,  and
the  submission  of a Notice of  Exercise  shall be  deemed to be such  Holder's
determination  of whether  this  Warrant is  exercisable  (in  relation to other
securities  owned  by such  Holder)  and of which  portion  of this  Warrant  is
exercisable,  in each case subject to such aggregate percentage limitation,  and
the Company  shall have no  obligation to verify or confirm the accuracy of such
determination.  For purposes of this Section 2(d), in determining  the number of
outstanding  shares  of  Common  Stock,  the  Holder  may rely on the  number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form  10-Q  or  Form  10-K,  as  the  case  may  be,  (y) a more  recent  public
announcement  by the Company or (z) any other  written  notice by the Company or
the Company's  Transfer Agent setting forth the number of shares of Common Stock
outstanding.  Upon the written or oral request of the Holder,  the Company shall
within two Trading Days  confirm  orally and in writing to the Holder the number
of  shares  of  Common  Stock  then  outstanding.  In any  case,  the  number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by the  Holder  or its  affiliates  since  the date as of which  such  number of
outstanding shares of Common Stock was reported.

         e) Mechanics of Exercise.

                  i. Authorization of Warrant Shares. The Company covenants that
         all  Warrant  Shares  which  may be  issued  upon the  exercise  of the
         purchase rights  represented by this Warrant will, upon exercise of the
         purchase  rights  represented  by this  Warrant,  be  duly  authorized,
         validly issued,  fully paid and  nonassessable and free from all taxes,
         liens and charges in respect of the issue thereof  (other than taxes in
         respect of any transfer occurring  contemporaneously  with such issue).
         The   Company   covenants   that  during  the  period  the  Warrant  is
         outstanding,  it will reserve from its authorized  and unissued  Common
         Stock a sufficient  number of shares to provide for the issuance of the
         Warrant  Shares upon the  exercise of any  purchase  rights  under this
         Warrant.  The  Company  further  covenants  that its  issuance  of this
         Warrant shall constitute full authority to its officers who are charged
         with the duty of executing stock  certificates to execute and issue the
         necessary  certificates for the Warrant Shares upon the exercise of the
         purchase  rights  under this  Warrant.  The Company  will take all such
         reasonable  action  as may be  necessary  to assure  that such  Warrant
         Shares  may be issued  as  provided  herein  without  violation  of any
         applicable law or  regulation,  or of any  requirements  of the Trading
         Market upon which the Common Stock may be listed.

                  ii.  Delivery of  Certificates  Upon Exercise.  If there is an
         effective  Registration  Statement,  certificates  for shares purchased
         hereunder  shall be transmitted by the transfer agent of the Company to

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         the Holder by crediting the account of the Holder's  designated  broker
         with the Depository Trust Company through its Deposit  Withdrawal Agent
         Commission  ("DWAC")  system within 3 Trading Days from the delivery to
         the Company of the Notice of Exercise  Form,  surrender of this Warrant
         and  payment  of  the  aggregate  Exercise  Price  as set  forth  above
         ("Warrant Share Delivery  Date").  This Warrant shall be deemed to have
         been  exercised  on the date the  Exercise  Price  is  received  by the
         Company.  The Warrant  Shares shall be deemed to have been issued,  and
         Holder or any other person so  designated  to be named therein shall be
         deemed  to have  become a  holder  of  record  of such  shares  for all
         purposes,  as of the date the Warrant has been  exercised by payment to
         the Company of the Exercise  Price and all taxes required to be paid by
         the Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance
         of such shares, have been paid.

                  iii.  Delivery of New Warrants Upon Exercise.  If this Warrant
         shall have been exercised in part,  the Company  shall,  at the time of
         delivery  of  the  certificate  or  certificates  representing  Warrant
         Shares, deliver to Holder a new Warrant evidencing the rights of Holder
         to purchase the unpurchased  Warrant Shares called for by this Warrant,
         which new Warrant  shall in all other  respects be identical  with this
         Warrant.

                  iv.  Rescission  Rights.  If the  Company  fails to cause  its
         transfer  agent to  transmit  to the Holder  through  the DWAC system a
         certificate or certificates representing the Warrant Shares pursuant to
         this Section  2(e)(iv) by the Warrant  Share  Delivery  Date,  then the
         Holder will have the right to rescind such exercise

                  v.  Buy-In  Compensation.  In  addition  to any  other  rights
         available  to the Holder,  if the Company  fails to cause its  transfer
         agent to transmit to the Holder  through the DWAC system a  certificate
         or certificates representing the Warrant Shares pursuant to an exercise
         on or before the Warrant Share  Delivery  Date,  and if after such date
         the Holder is  required  by its broker to  purchase  (in an open market
         transaction  or  otherwise)  shares  of  Common  Stock  to  deliver  in
         satisfaction  of a sale by the Holder of the Warrant  Shares  which the
         Holder anticipated receiving upon such exercise (a "Buy-In"),  then the
         Company shall (1) pay in cash to the Holder the amount by which (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the  shares of Common  Stock so  purchased  exceeds  (y) the amount
         obtained  by  multiplying  (A) the  number of Warrant  Shares  that the
         Company was  required to deliver to the Holder in  connection  with the
         exercise  at issue  times (B) the price at which the sell order  giving
         rise to such purchase obligation was executed, and (2) at the option of
         the Holder,  either reinstate the portion of the Warrant and equivalent
         number of Warrant  Shares for which such  exercise  was not  honored or

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         deliver to the  Holder the number of shares of Common  Stock that would
         have been issued had the Company timely  complied with its exercise and
         delivery  obligations  hereunder.  For example, if the Holder purchases
         Common Stock having a total purchase price of $11,000 to cover a Buy-In
         with respect to an attempted exercise of shares of Common Stock with an
         aggregate  sale  price  giving  rise to  such  purchase  obligation  of
         $10,000,  under clause (1) of the  immediately  preceding  sentence the
         Company  shall be required to pay the Holder  $1,000.  The Holder shall
         provide the Company  written notice  indicating the amounts  payable to
         the  Holder  in  respect  of  the  Buy-In,   together  with  applicable
         confirmations and other evidence  reasonably  requested by the Company.
         Nothing  herein  shall  limit a  Holder's  right to  pursue  any  other
         remedies  available  to it  hereunder,  at law or in equity  including,
         without limitation,  a decree of specific performance and/or injunctive
         relief  with  respect  to  the  Company's  failure  to  timely  deliver
         certificates  representing  shares of Common Stock upon exercise of the
         Warrant as required pursuant to the terms hereof.

                  vi. No Fractional  Shares or Scrip.  No  fractional  shares or
         scrip representing  fractional shares shall be issued upon the exercise
         of this  Warrant.  As to any  fraction  of a share which  Holder  would
         otherwise be entitled to purchase upon such exercise, the Company shall
         pay a cash  adjustment  in respect of such final  fraction in an amount
         equal to such fraction multiplied by the Exercise Price.

                  vii. Charges, Taxes and Expenses. Issuance of certificates for
         Warrant Shares shall be made without charge to the Holder for any issue
         or transfer tax or other incidental  expense in respect of the issuance
         of such  certificate,  all of which taxes and expenses shall be paid by
         the Company,  and such certificates  shall be issued in the name of the
         Holder  or in such  name or names  as may be  directed  by the  Holder;
         provided,  however,  that in the event  certificates for Warrant Shares
         are to be  issued in a name  other  than the name of the  Holder,  this
         Warrant when  surrendered  for  exercise  shall be  accompanied  by the
         Assignment  Form attached  hereto duly executed by the Holder;  and the
         Company  may  require,  as a  condition  thereto,  the payment of a sum
         sufficient to reimburse it for any transfer tax incidental thereto.

                  viii.  Closing  of  Books.  The  Company  will not  close  its
         stockholder  books or records in any manner  which  prevents the timely
         exercise of this Warrant, pursuant to the terms hereof.

         f) Call  Provision.  Subject to the provisions of this Section 2(f), if
after the Effective Date the VWAP for each of 20  consecutive  Trading Days (the
"Measurement  Price",  which  period  shall not have  commenced  until after the
Effective  Date) exceeds 200% of the then Exercise  Price (subject to adjustment
as set forth herein) (the  "Threshold  Price),  then the Company may, within ten
Trading Days of such period, call for cancellation of all or any portion of this

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Warrant for which a Notice of Exercise has not yet been delivered (such right, a
"Call").  To exercise  this right,  the  Company  must  deliver to the Holder an
irrevocable written notice (a "Call Notice"),  indicating therein the portion of
unexercised  portion  of this  Warrant  to which  such  notice  applies.  If the
conditions  set forth below for such Call are satisfied from the period from the
date of the Call Notice through and including the Call Date (as defined  below),
then any portion of this Warrant  subject to such Call Notice for which a Notice
of  Exercise  shall not have been  received  from and after the date of the Call
Notice will be cancelled at 6:30 p.m.  (New York City time) on the tenth Trading
Day after the date the Call  Notice is received  by the Holder  (such date,  the
"Call Date").  Any unexercised  portion of this Warrant to which the Call Notice
does not pertain will be unaffected by such Call Notice. In furtherance thereof,
the Company covenants and agrees that it will honor all Notices of Exercise with
respect to Warrant  Shares  subject to a Call Notice that are tendered  from the
time of delivery of the Call Notice  through  6:30 p.m.  (New York City time) on
the Call Date. The parties agree that any Notice of Exercise delivered following
a Call Notice shall first reduce to zero the number of Warrant Shares subject to
such Call Notice prior to reducing the remaining  Warrant  Shares  available for
purchase under this Warrant.  For example,  if (x) this Warrant then permits the
Holder to acquire 100 Warrant  Shares,  (y) a Call Notice pertains to 75 Warrant
Shares,  and (z)  prior to 6:30 p.m.  (New York City  time) on the Call Date the
Holder tenders a Notice of Exercise in respect of 50 Warrant Shares, then (1) on
the Call Date the right under this Warrant to acquire 25 Warrant  Shares will be
automatically  cancelled, (2) the Company, in the time and manner required under
this Warrant,  will have issued and delivered to the Holder 50 Warrant Shares in
respect  of the  exercises  following  receipt of the Call  Notice,  and (3) the
Holder may,  until the  Termination  Date,  exercise this Warrant for 25 Warrant
Shares  (subject to adjustment as herein provided and subject to subsequent Call
Notices).  Subject again to the provisions of this Section 3(e), the Company may
deliver  subsequent  Call  Notices for any portion of this Warrant for which the
Holder shall not have delivered a Notice of Exercise.  Notwithstanding  anything
to the  contrary set forth in this  Warrant,  the Company may not deliver a Call
Notice or require the  cancellation of this Warrant (and any Call Notice will be
void),  unless,  from the beginning of the 20  consecutive  Trading Days used to
determine  whether the Common Stock has achieved the Threshold Price through the
Call Date, the Equity  Conditions (as defined in the Certificate of Designation)
have  been met.  The  Company's  right to Call the  Warrant  shall be  exercised
ratably  among the  Purchasers  based on each  Purchaser's  initial  purchase of
Common Stock pursuant to the Purchase Agreement.

         Section 3. Certain Adjustments.

         a) Stock Dividends and Splits.  If the Company,  at any time while this
Warrant  is  outstanding:  (A)  pays  a  stock  dividend  or  otherwise  make  a
distribution or  distributions on shares of its Common Stock or any other equity
or equity equivalent  securities  payable in shares of Common Stock (which,  for
avoidance  of doubt,  shall not include any shares of Common Stock issued by the
Company pursuant to this Warrant),  (B) subdivides  outstanding shares of Common
Stock into a larger number of shares, (C) combines  (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (D) issues by  reclassification  of shares of the Common  Stock any shares of
capital  stock of the  Company,  then in each case the  Exercise  Price shall be

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multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding  treasury shares, if any) outstanding  before such event
and of which the  denominator  shall be the  number  of  shares of Common  Stock
outstanding  after such event and the number of  Warrant  Shares  issuable  upon
exercise of this Warrant shall be proportionately  adjusted. Any adjustment made
pursuant to this  Section  3(a) shall  become  effective  immediately  after the
record date for the  determination  of  stockholders  entitled  to receive  such
dividend  or  distribution  and shall  become  effective  immediately  after the
effective date in the case of a subdivision, combination or re-classification.

         b) Subsequent  Equity Sales. If the Company or any Subsidiary  thereof,
as applicable, at any time while this Warrant is outstanding,  shall sell, grant
any option to purchase,  sell or grant any right to reprice its  securities,  or
otherwise  dispose  of or issue any  Common  Stock or Common  Stock  Equivalents
entitling any Person to acquire  shares of Common Stock,  at an effective  price
per share less than the then Exercise  Price (such lower price,  the "Base Share
Price" and such  issuances  collectively,  a "Dilutive  Issuance"),  as adjusted
hereunder  (if the holder of the Common  Stock or Common  Stock  Equivalents  so
issued shall at any time,  whether by operation of purchase  price  adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to  warrants,  options or rights per share which is issued in  connection
with such  issuance,  be  entitled  to  receive  shares  of  Common  Stock at an
effective price per share which is less than the Exercise  Price,  such issuance
shall be deemed to have occurred for less than the Exercise  Price),  then,  the
Exercise  Price  shall be  reduced  to equal  the Base  Share  Price;  provided,
however,  in no event shall the  Exercise  Price be less than $1.00,  subject to
adjustment  for  reverse  and  forward  stock  splits,  stock  dividends,  stock
combinations and other similar transactions of the Common Stock that occur after
the date of the Purchase Agreement.  Such adjustment shall be made whenever such
Common Stock or Common Stock  Equivalents  are issued.  The Company shall notify
the Holder in  writing,  no later  than the second  Trading  Day  following  the
issuance  of any  Common  Stock or  Common  Stock  Equivalents  subject  to this
section,  indicating  therein the applicable  issuance  price,  or of applicable
reset price, exchange price, conversion price and other pricing terms.

         c) Pro Rata  Distributions.  If the  Company,  at any time prior to the
Termination  Date,  shall  distribute to all holders of Common Stock (and not to
Holders of the Warrants)  evidences of its  indebtedness  or assets or rights or
warrants to subscribe  for or purchase any security  other than the Common Stock
(which  shall be subject to Section  3(b)),  then in each such case the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect  immediately
prior to the record date fixed for  determination  of  stockholders  entitled to
receive such  distribution by a fraction of which the  denominator  shall be the
VWAP  determined  as of the  record  date  mentioned  above,  and of  which  the
numerator  shall be such VWAP on such  record  date less the then per share fair
market  value at such  record  date of the portion of such assets or evidence of
indebtedness so distributed  applicable to one  outstanding  share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments  shall be  described  in a statement  provided to the Holders of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment

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shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.

         d) Calculations. All calculations under this Section 3 shall be made to
the  nearest  cent or the  nearest  1/100th of a share,  as the case may be. For
purposes of this Section 3, the number of shares of Common Stock  outstanding as
of a given  date  shall be the sum of the  number  of  shares  of  Common  Stock
(excluding treasury shares, if any) outstanding.

         e) Notice to Holders.

                  i. Adjustment to Exercise  Price.  Whenever the Exercise Price
         is adjusted pursuant to this Section 3, the Company shall promptly mail
         to each Holder a notice  setting  forth the  Exercise  Price after such
         adjustment and setting forth a brief  statement of the facts  requiring
         such  adjustment.  If the  Company  issues a  variable  rate  security,
         despite the prohibition thereon in the Purchase Agreement,  the Company
         shall be deemed to have issued Common Stock or Common Stock Equivalents
         at the  lowest  possible  conversion  or  exercise  price at which such
         securities may be converted or exercised in the case of a Variable Rate
         Transaction (as defined in the Purchase Agreement).

                  ii.  Notice to Allow  Exercise  by Holder.  If (A) the Company
         shall  declare a  dividend  (or any other  distribution)  on the Common
         Stock;  (B) the  Company  shall  declare  a special  nonrecurring  cash
         dividend on or a redemption of the Common Stock;  (C) the Company shall
         authorize  the  granting to all holders of the Common  Stock  rights or
         warrants to subscribe  for or purchase  any shares of capital  stock of
         any class or of any rights; (D) the approval of any stockholders of the
         Company shall be required in connection  with any  reclassification  of
         the Common Stock, any consolidation or merger to which the Company is a
         party, any sale or transfer of all or  substantially  all of the assets
         of the Company,  of any compulsory  share  exchange  whereby the Common
         Stock is converted  into other  securities,  cash or property;  (E) the
         Company  shall  authorize  the  voluntary or  involuntary  dissolution,
         liquidation or winding up of the affairs of the Company;  then, in each
         case,  the  Company  shall cause to be mailed to the Holder at its last
         addresses as it shall appear upon the Warrant  Register of the Company,
         at least 20 calendar days prior to the  applicable  record or effective
         date  hereinafter  specified,  a notice stating (x) the date on which a
         record is to be taken for the purpose of such  dividend,  distribution,
         redemption,  rights or warrants, or if a record is not to be taken, the
         date as of which  the  holders  of the  Common  Stock of  record  to be
         entitled  to  such  dividend,  distributions,   redemption,  rights  or
         warrants  are  to  be   determined  or  (y)  the  date  on  which  such
         reclassification,   consolidation,  merger,  sale,  transfer  or  share
         exchange is expected to become  effective or close,  and the date as of
         which it is expected  that  holders of the Common Stock of record shall
         be  entitled  to  exchange   their  shares  of  the  Common  Stock  for

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         securities,    cash   or   other   property   deliverable   upon   such
         reclassification,   consolidation,  merger,  sale,  transfer  or  share
         exchange;  provided, that the failure to mail such notice or any defect
         therein or in the mailing  thereof shall not affect the validity of the
         corporate action required to be specified in such notice. The Holder is
         entitled to exercise this Warrant  during the 20-day period  commencing
         the date of such notice to the effective  date of the event  triggering
         such notice

         f)  Fundamental  Transaction.  If, at any time  while  this  Warrant is
outstanding,  (A) the Company effects any merger or consolidation of the Company
with or into another Person,  in which the Company is not the surviving  entity,
or the  Company's  then  existing  shareholders  will own  less  than 51% of the
surviving  entity,  (B) the Company effects any sale of all or substantially all
of its assets in one or a series of related  transactions,  (C) any tender offer
or  exchange  offer  (whether  by the  Company or another  Person) is  completed
pursuant to which  holders of Common  Stock are  permitted to tender or exchange
their shares for other securities,  cash or property, or (D) the Company effects
any  reclassification  of the  Common  Stock or any  compulsory  share  exchange
pursuant to which the Common Stock is  effectively  converted  into or exchanged
for  other  securities,  cash or  property  (in any such  case,  a  "Fundamental
Transaction"),  then, upon any subsequent conversion of this Warrant, the Holder
shall have the right to  receive,  for each  Warrant  Share that would have been
issuable upon such exercise absent such Fundamental  Transaction,  at the option
of the Holder, (a) upon exercise of this Warrant, the number of shares of Common
Stock of the successor or acquiring  corporation or of the Company, if it is the
surviving  corporation,  and  Alternate  Consideration  receivable  upon or as a
result  of  such  reorganization,  reclassification,  merger,  consolidation  or
disposition  of assets by a Holder of the  number of shares of Common  Stock for
which this Warrant is exercisable immediately prior to such event or (b) only in
the event the Company is acquired in an all cash acquisition,  cash equal to the
value of this Warrant as determined in accordance with the Black-Scholes  option
pricing  formula  (the  "Alternate  Consideration").  For  purposes  of any such
exercise,  the  determination  of the  Exercise  Price  shall  be  appropriately
adjusted  to apply  to such  Alternate  Consideration  based  on the  amount  of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental  Transaction,  and the Company shall  apportion  the Exercise  Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the  securities,  cash or property to be
received in a Fundamental  Transaction,  then the Holder shall be given the same
choice as to the Alternate  Consideration  it receives upon any exercise of this
Warrant  following  such  Fundamental  Transaction.  To the extent  necessary to
effectuate the foregoing  provisions,  any successor to the Company or surviving
entity in such Fundamental  Transaction  shall issue to the Holder a new warrant
consistent  with the foregoing  provisions  and evidencing the Holder's right to
exercise such warrant into Alternate Consideration upon the payment thereof. The
terms of any agreement  pursuant to which a Fundamental  Transaction is effected
shall include terms  requiring any such successor or surviving  entity to comply
with the provisions of this paragraph (f) and insuring that this Warrant (or any

                                       9
<PAGE>

such  replacement  security)  will be  similarly  adjusted  upon any  subsequent
transaction analogous to a Fundamental Transaction.

         g) Exempt  Issuance.  Notwithstanding  the foregoing,  no  adjustments,
Alternate  Consideration  nor notices  shall be made,  paid or issued under this
Section 3 in respect of an Exempt Issuance.

         h) Voluntary  Adjustment By Company. The Company may at any time during
the term of this Warrant  reduce the then current  Exercise  Price to any amount
and for any period of time deemed  appropriate  by the Board of Directors of the
Company.

         Section 4. Transfer of Warrant.

         a)   Transferability.   Subject  to  compliance   with  any  applicable
securities  laws and the  conditions  set forth in Sections 5(a) and 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and
all rights  hereunder are  transferable,  in whole or in part, upon surrender of
this Warrant at the  principal  office of the Company,  together  with a written
assignment  of this  Warrant  substantially  in the form  attached  hereto  duly
executed by the Holder or its agent or attorney and funds  sufficient to pay any
transfer  taxes payable upon the making of such  transfer.  Upon such  surrender
and, if required,  such  payment,  the Company  shall  execute and deliver a new
Warrant  or  Warrants  in the  name  of the  assignee  or  assignees  and in the
denomination or  denominations  specified in such instrument of assignment,  and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned,  and this Warrant shall  promptly be cancelled.  A Warrant,  if
properly assigned,  may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

         b) New  Warrants.  This  Warrant may be divided or combined  with other
Warrants  upon  presentation  hereof at the  aforesaid  office  of the  Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be issued,  signed by the Holder or its agent or attorney.
Subject  to  compliance  with  Section  4(a),  as to any  transfer  which may be
involved in such division or combination,  the Company shall execute and deliver
a new Warrant or Warrants in exchange  for the Warrant or Warrants to be divided
or combined in accordance with such notice.

         c) Warrant  Register.  The Company shall  register  this Warrant,  upon
records  to be  maintained  by  the  Company  for  that  purpose  (the  "Warrant
Register"),  in the name of the  record  Holder  hereof  from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise  hereof or any  distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

         d)  Transfer  Restrictions.  If, at the time of the  surrender  of this
Warrant in connection  with any transfer of this  Warrant,  the transfer of this
Warrant shall not be registered pursuant to an effective  registration statement
under the Securities Act and under applicable state securities or blue sky laws,
the Company may require,  as a condition of allowing  such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company

                                       10
<PAGE>

a written  opinion of counsel  (which  opinion  shall be in form,  substance and
scope  customary  for  opinions of counsel in  comparable  transactions)  to the
effect that such transfer may be made without  registration under the Securities
Act and under applicable state securities or blue sky laws, (ii) that the holder
or transferee  execute and deliver to the Company an  investment  letter in form
and  substance  acceptable  to the Company and (iii) that the  transferee  be an
"accredited investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a qualified  institutional  buyer
as defined in Rule 144A(a) under the Securities Act.

         Section 5. Miscellaneous.

         a) Title to  Warrant.  Prior to the  Termination  Date and  subject  to
compliance with applicable laws and Section 4 of this Warrant,  this Warrant and
all rights  hereunder  are  transferable,  in whole or in part, at the office or
agency of the  Company by the Holder in person or by duly  authorized  attorney,
upon surrender of this Warrant  together with the Assignment Form annexed hereto
properly  endorsed.  The transferee shall sign an investment  letter in form and
substance reasonably satisfactory to the Company.

         b) No Rights as  Shareholder  Until  Exercise.  This  Warrant  does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate  Exercise  Price (or by means of a cashless  exercise),
the  Warrant  Shares  so  purchased  shall be and be deemed to be issued to such
Holder as the record  owner of such  shares as of the close of  business  on the
later of the date of such surrender or payment.

         c) Loss,  Theft,  Destruction  or  Mutilation  of Warrant.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate.

         d) Saturdays,  Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         e) Authorized Shares.

                  The  Company  covenants  that during the period the Warrant is
         outstanding,  it will reserve from its authorized  and unissued  Common
         Stock a sufficient  number of shares to provide for the issuance of the
         Warrant  Shares upon the  exercise of any  purchase  rights  under this
         Warrant.  The  Company  further  covenants  that its  issuance  of this
         Warrant shall constitute full authority to its officers who are charged

                                       11
<PAGE>

         with the duty of executing stock  certificates to execute and issue the
         necessary  certificates for the Warrant Shares upon the exercise of the
         purchase  rights  under this  Warrant.  The Company  will take all such
         reasonable  action  as may be  necessary  to assure  that such  Warrant
         Shares  may be issued  as  provided  herein  without  violation  of any
         applicable law or  regulation,  or of any  requirements  of the Trading
         Market upon which the Common Stock may be listed.

                  Except  and to the  extent as waived  or  consented  to by the
         Holder,  the  Company  shall  not by  any  action,  including,  without
         limitation,  amending its certificate of  incorporation  or through any
         reorganization, transfer of assets, consolidation, merger, dissolution,
         issue or sale of securities  or any other  voluntary  action,  avoid or
         seek to avoid the observance or performance of any of the terms of this
         Warrant, but will at all times in good faith assist in the carrying out
         of all such  terms  and in the  taking  of all such  actions  as may be
         necessary or  appropriate  to protect the rights of Holder as set forth
         in this Warrant against impairment.  Without limiting the generality of
         the  foregoing,  the Company will (a) not increase the par value of any
         Warrant  Shares above the amount  payable  therefor  upon such exercise
         immediately  prior to such  increase  in par  value,  (b) take all such
         action as may be necessary or appropriate in order that the Company may
         validly and legally issue fully paid and  nonassessable  Warrant Shares
         upon the exercise of this Warrant, and (c) use commercially  reasonable
         efforts to obtain all such authorizations,  exemptions or consents from
         any  public  regulatory  body  having  jurisdiction  thereof  as may be
         necessary to enable the Company to perform its  obligations  under this
         Warrant.

                  Before  taking any action which would result in an  adjustment
         in the number of Warrant  Shares for which this Warrant is  exercisable
         or  in  the  Exercise   Price,   the  Company  shall  obtain  all  such
         authorizations or exemptions  thereof,  or consents thereto,  as may be
         necessary from any public regulatory body or bodies having jurisdiction
         thereof.

         f) Jurisdiction.  All questions concerning the construction,  validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

         g)  Restrictions.  The  Holder  acknowledges  that the  Warrant  Shares
acquired  upon the  exercise  of this  Warrant,  if not  registered,  will  have
restrictions upon resale imposed by state and federal securities laws.

         h) Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right  hereunder on the part of Holder shall operate as a waiver
of such  right or  otherwise  prejudice  Holder's  rights,  powers or  remedies,
notwithstanding  the fact that all rights hereunder terminate on the Termination
Date. If the Company  willfully and knowingly fails to comply with any provision
of this  Warrant,  which  results in any  material  damages to the  Holder,  the
Company  shall pay to Holder such  amounts as shall be  sufficient  to cover any
costs and expenses  including,  but not limited to, reasonable  attorneys' fees,

                                       12
<PAGE>

including those of appellate  proceedings,  incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights,  powers
or remedies hereunder.

         i) Notices. Any notice, request or other document required or permitted
to be given or  delivered  to the Holder by the Company  shall be  delivered  in
accordance with the notice provisions of the Purchase Agreement.

         j) Limitation of Liability.  No provision hereof, in the absence of any
affirmative  action by Holder to  exercise  this  Warrant  or  purchase  Warrant
Shares, and no enumeration  herein of the rights or privileges of Holder,  shall
give rise to any liability of Holder for the purchase  price of any Common Stock
or as a stockholder  of the Company,  whether such  liability is asserted by the
Company or by creditors of the Company.

         k)  Remedies.  Holder,  in addition to being  entitled to exercise  all
rights  granted by law,  including  recovery  of  damages,  will be  entitled to
specific  performance of its rights under this Warrant.  The Company agrees that
monetary  damages  would not be adequate  compensation  for any loss incurred by
reason of a breach by it of the  provisions of this Warrant and hereby agrees to
waive the defense in any action for  specific  performance  that a remedy at law
would be adequate.

         l) Successors and Assigns.  Subject to applicable securities laws, this
Warrant  and the rights and  obligations  evidenced  hereby  shall  inure to the
benefit of and be binding upon the  successors of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

         m) Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.

         n)  Severability.  Wherever  possible,  each  provision of this Warrant
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable  law, but if any  provision of this Warrant shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

         o) Headings.  The headings used in this Warrant are for the convenience
of  reference  only and shall  not,  for any  purpose,  be deemed a part of this
Warrant.

                              ********************

                                       13
<PAGE>

         IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  September __, 2004

                                        RCG COMPANIES INCORPORATED

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

                                       14
<PAGE>

                               NOTICE OF EXERCISE

To:  RCG Companies Incorporated

         (1) The undersigned  hereby elects to purchase  ________ Warrant Shares
of the Company  pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders  herewith payment of the exercise price in full,  together
with all applicable transfer taxes, if any.

         (2) Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the  cancellation  of such number of Warrant  Shares as is
                  necessary,  in  accordance  with  the  formula  set  forth  in
                  subsection  2(c), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares  purchasable  pursuant to the
                  cashless exercise procedure set forth in subsection 2(c).

         (3)  Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

         (4) Accredited Investor. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

                                       [PURCHASER]

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

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

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

         FOR VALUE  RECEIVED,  the  foregoing  Warrant and all rights  evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

__________________________________________________________________.

__________________________________________________________________

                                                 Dated:  ______________, _______

                  Holder's Signature: ________________________

                  Holder's Address:   ________________________

                                      ________________________

Signature Guaranteed:  _______________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.EXHIBIT 4.4

NEITHER THESE  SECURITIES  NOR THE  SECURITIES  INTO WHICH THESE  SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS  EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO THE  TRANSFEROR
REASONABLY  ACCEPTABLE  TO THE COMPANY TO SUCH  EFFECT,  THE  SUBSTANCE OF WHICH
SHALL  BE  REASONABLY  ACCEPTABLE  TO THE  COMPANY.  THESE  SECURITIES  AND  THE
SECURITIES  ISSUABLE  UPON  EXERCISE  OF  THESE  SECURITIES  MAY BE  PLEDGED  IN
CONNECTION  WITH A BONA  FIDE  MARGIN  ACCOUNT  OR OTHER  LOAN  SECURED  BY SUCH
SECURITIES.

                           ADDITIONAL INVESTMENT RIGHT

                To Purchase __________ Shares of Common Stock of

                           RCG COMPANIES INCORPORATED

                  THIS ADDITIONAL  INVESTMENT RIGHT (the "Additional  Investment
Right")  certifies that, for value received,  _____________  (the "Holder"),  is
entitled,  upon the terms and subject to the  limitations  on  exercise  and the
conditions  hereinafter  set forth,  at any time on or after the 181st day after
the date hereof (the  "Initial  Exercise  Date") and on or prior to the close of
business  on the  earlier  of (a) the  later  of (i) the  181st  day  after  the
Effective  Date and (ii) the 181st day after the Initial  Exercise  Date and (b)
the 2nd year anniversary of the date of the Purchase Agreement (the "Termination
Date" and the period from the Initial  Exercise Date until the Termination  Date
shall  be the  "Exercise  Period")  but not  thereafter,  to  subscribe  for and
purchase  from  RCG  Companies   Incorporated,   a  Delaware   corporation  (the
"Company"),  up to  ______________  shares  (the  "Additional  Investment  Right
Shares") of Common Stock, par value $0.04 per share, of the Company (the "Common
Stock").  The  Exercise  Period shall be extended for the number of Trading Days
during such period in which (x) trading in the Common  Stock is suspended by any
Trading Market, or (y) following the Effective Date, the Registration  Statement
is not effective or the prospectus  included in the  Registration  Statement may
not be used by the Purchasers for the resale of the Additional  Investment Right
Shares.  The purchase  price of one share of Common Stock under this  Additional
Investment  Right shall be equal to the Exercise Price, as defined under Section
2(b).

         Section  1.  Definitions.  Capitalized  terms  used  and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "Purchase  Agreement"),  dated September 13, 2004, among
the Company and the purchasers signatory thereto.

<PAGE>

         Section 2.   Exercise.

         a) Exercise of Additional  Investment  Right.  Exercise of the purchase
rights  represented by this Additional  Investment Right may be made at any time
or times on or after the Initial  Exercise Date and on or before the Termination
Date by delivery to the Company of a duly executed  facsimile copy of the Notice
of Exercise  Form annexed  hereto (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the address
of such Holder appearing on the books of the Company); provided, however, within
5 Trading  Days of the date said Notice of Exercise is delivered to the Company,
the Holder  shall  have  surrendered  this  Additional  Investment  Right to the
Company and the Company  shall have received  payment of the aggregate  Exercise
Price of the shares thereby  purchased by wire transfer or cashier's check drawn
on a United States bank.

         b) Exercise  Price.  The  exercise  price of each share of Common Stock
under this  Additional  Investment  Right shall be $1.03,  subject to adjustment
hereunder (the "Exercise Price").

         c) Intentionally omitted.

         d)  Holder's  Restrictions.  The  Holder  shall  not have the  right to
exercise any portion of this Additional  Investment  Right,  pursuant to Section
2(c) or otherwise, to the extent that after giving effect to such issuance after
exercise,  the Holder (together with the Holder's  affiliates),  as set forth on
the applicable Notice of Exercise,  would beneficially own in excess of 4.99% of
the number of shares of the Common Stock  outstanding  immediately  after giving
effect to such issuance.  For purposes of the foregoing sentence,  the number of
shares of Common Stock beneficially owned by the Holder and its affiliates shall
include  the number of shares of Common  Stock  issuable  upon  exercise of this
Additional  Investment  Right with  respect to which the  determination  of such
sentence is being made,  but shall  exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, nonexercised portion
of this Additional  Investment Right  beneficially owned by the Holder or any of
its affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company  (including,  without limitation,
any  other  Preferred  Stock  or  Additional  Investment  Rights)  subject  to a
limitation  on  conversion  or exercise  analogous to the  limitation  contained
herein beneficially owned by the Holder or any of its affiliates.  Except as set
forth in the preceding sentence,  for purposes of this Section 2(d),  beneficial
ownership  shall be calculated in accordance  with Section 13(d) of the Exchange
Act, it being  acknowledged  by Holder that the Company is not  representing  to
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and Holder is solely  responsible for any schedules  required to be filed in
accordance  therewith.  To the  extent  that the  limitation  contained  in this
Section 2(d) applies,  the  determination of whether this Additional  Investment
Right is exercisable (in relation to other  securities  owned by the Holder) and
of which a portion of this Additional  Investment Right is exercisable  shall be
in the sole  discretion  of such  Holder,  and the  submission  of a  Notice  of
Exercise  shall be deemed to be such  Holder's  determination  of  whether  this

                                       2
<PAGE>

Additional  Investment  Right is  exercisable  (in relation to other  securities
owned by such Holder) and of which portion of this Additional  Investment  Right
is exercisable,  in each case subject to such aggregate  percentage  limitation,
and the Company  shall have no  obligation  to verify or confirm the accuracy of
such determination. For purposes of this Section 2(d), in determining the number
of  outstanding  shares of Common  Stock,  the  Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form  10-Q  or  Form  10-K,  as  the  case  may  be,  (y) a more  recent  public
announcement  by the Company or (z) any other  written  notice by the Company or
the Company's  Transfer Agent setting forth the number of shares of Common Stock
outstanding.  Upon the written or oral request of the Holder,  the Company shall
within two Trading Days  confirm  orally and in writing to the Holder the number
of  shares  of  Common  Stock  then  outstanding.  In any  case,  the  number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the  conversion  or  exercise  of  securities  of the  Company,  including  this
Additional  Investment  Right, by the Holder or its affiliates since the date as
of which such number of outstanding shares of Common Stock was reported.

         e) Mechanics of Exercise.

                  i.  Authorization of Additional  Investment Right Shares.  The
         Company covenants that all Additional Investment Right Shares which may
         be issued upon the exercise of the purchase rights  represented by this
         Additional  Investment Right will, upon exercise of the purchase rights
         represented by this Additional  Investment  Right, be duly  authorized,
         validly issued,  fully paid and  nonassessable and free from all taxes,
         liens and charges in respect of the issue thereof  (other than taxes in
         respect of any transfer occurring  contemporaneously  with such issue).
         The Company covenants that during the period the Additional  Investment
         Right is outstanding,  it will reserve from its authorized and unissued
         Common Stock a sufficient  number of shares to provide for the issuance
         of the  Additional  Investment  Right  Shares upon the  exercise of any
         purchase rights under this  Additional  Investment  Right.  The Company
         further covenants that its issuance of this Additional Investment Right
         shall  constitute  full  authority to its officers who are charged with
         the duty of  executing  stock  certificates  to  execute  and issue the
         necessary  certificates for the Additional Investment Right Shares upon
         the exercise of the purchase  rights under this  Additional  Investment
         Right.  The  Company  will  take all such  reasonable  action as may be
         necessary to assure that such Additional Investment Right Shares may be
         issued as provided  herein  without  violation of any applicable law or
         regulation, or of any requirements of the Trading Market upon which the
         Common Stock may be listed.

                  ii.  Delivery of  Certificates  Upon Exercise.  If there is an
         effective  Registration  Statement,  certificates  for shares purchased
         hereunder  shall be transmitted by the transfer agent of the Company to
         the Holder by crediting the account of the Holder's  designated  broker
         with the Depository Trust Company through its Deposit  Withdrawal Agent

                                       3
<PAGE>

         Commission  ("DWAC")  system within 3 Trading Days from the delivery to
         the  Company  of  the  Notice  of  Exercise  Form,  surrender  of  this
         Additional Investment Right and payment of the aggregate Exercise Price
         as set forth above ("Additional Investment Right Share Delivery Date").
         This Additional Investment Right shall be deemed to have been exercised
         on the  date  the  Exercise  Price  is  received  by the  Company.  The
         Additional Investment Right Shares shall be deemed to have been issued,
         and Holder or any other person so  designated to be named therein shall
         be deemed to have  become a holder  of  record of such  shares  for all
         purposes,  as of the  date the  Additional  Investment  Right  has been
         exercised by payment to the Company of the Exercise Price and all taxes
         required  to be  paid  by the  Holder,  if  any,  pursuant  to  Section
         2(e)(vii) prior to the issuance of such shares, have been paid.

                  iii.  Delivery  of  New  Additional   Investment  Rights  Upon
         Exercise. If this Additional Investment Right shall have been exercised
         in part, the Company shall,  at the time of delivery of the certificate
         or  certificates   representing  Additional  Investment  Right  Shares,
         deliver to Holder a new  Additional  Investment  Right  evidencing  the
         rights of Holder to  purchase  the  unpurchased  Additional  Investment
         Right Shares called for by this Additional  Investment Right, which new
         Additional  Investment  Right shall in all other  respects be identical
         with this Additional Investment Right.

                  iv.  Rescission  Rights.  If the  Company  fails to cause  its
         transfer  agent to  transmit  to the Holder  through  the DWAC system a
         certificate or  certificates  representing  the  Additional  Investment
         Right  Shares  pursuant  to this  Section  2(e)(iv)  by the  Additional
         Investment  Right Share  Delivery  Date,  then the Holder will have the
         right to rescind such exercise

                  v.  Buy-In  Compensation.  In  addition  to any  other  rights
         available  to the Holder,  if the Company  fails to cause its  transfer
         agent to transmit to the Holder  through the DWAC system a  certificate
         or certificates  representing  the Additional  Investment  Right Shares
         pursuant to an exercise on or before the  Additional  Investment  Right
         Share  Delivery  Date, and if after such date the Holder is required by
         its broker to purchase  (in an open market  transaction  or  otherwise)
         shares of Common  Stock to  deliver  in  satisfaction  of a sale by the
         Holder of the  Additional  Investment  Right  Shares  which the  Holder
         anticipated receiving upon such exercise (a "Buy-In"), then the Company
         shall  (1)  pay in cash to the  Holder  the  amount  by  which  (x) the
         Holder's total purchase price (including brokerage commissions, if any)
         for the  shares of Common  Stock so  purchased  exceeds  (y) the amount
         obtained by multiplying (A) the number of Additional  Investment  Right
         Shares  that the  Company  was  required  to  deliver  to the Holder in
         connection  with the exercise at issue times (B) the price at which the
         sell order giving rise to such purchase  obligation  was executed,  and
         (2) at the option of the Holder,  either  reinstate  the portion of the

                                       4
<PAGE>

         Additional   Investment  Right  and  equivalent  number  of  Additional
         Investment  Right  Shares for which such  exercise  was not  honored or
         deliver to the  Holder the number of shares of Common  Stock that would
         have been issued had the Company timely  complied with its exercise and
         delivery  obligations  hereunder.  For example, if the Holder purchases
         Common Stock having a total purchase price of $11,000 to cover a Buy-In
         with respect to an attempted exercise of shares of Common Stock with an
         aggregate  sale  price  giving  rise to  such  purchase  obligation  of
         $10,000,  under clause (1) of the  immediately  preceding  sentence the
         Company  shall be required to pay the Holder  $1,000.  The Holder shall
         provide the Company  written notice  indicating the amounts  payable to
         the  Holder  in  respect  of  the  Buy-In,   together  with  applicable
         confirmations and other evidence  reasonably  requested by the Company.
         Nothing  herein  shall  limit a  Holder's  right to  pursue  any  other
         remedies  available  to it  hereunder,  at law or in equity  including,
         without limitation,  a decree of specific performance and/or injunctive
         relief  with  respect  to  the  Company's  failure  to  timely  deliver
         certificates  representing  shares of Common Stock upon exercise of the
         Additional Investment Right as required pursuant to the terms hereof.

                  vi. No Fractional  Shares or Scrip.  No  fractional  shares or
         scrip representing  fractional shares shall be issued upon the exercise
         of this  Additional  Investment  Right.  As to any  fraction of a share
         which  Holder  would  otherwise  be  entitled  to  purchase  upon  such
         exercise,  the Company  shall pay a cash  adjustment in respect of such
         final  fraction in an amount equal to such  fraction  multiplied by the
         Exercise Price.

                  vii. Charges, Taxes and Expenses. Issuance of certificates for
         Additional  Investment Right Shares shall be made without charge to the
         Holder for any issue or  transfer  tax or other  incidental  expense in
         respect of the  issuance  of such  certificate,  all of which taxes and
         expenses shall be paid by the Company,  and such certificates  shall be
         issued  in the name of the  Holder  or in such  name or names as may be
         directed  by  the  Holder;   provided,   however,  that  in  the  event
         certificates for Additional Investment Right Shares are to be issued in
         a name other than the name of the Holder,  this  Additional  Investment
         Right  when  surrendered  for  exercise  shall  be  accompanied  by the
         Assignment  Form attached  hereto duly executed by the Holder;  and the
         Company  may  require,  as a  condition  thereto,  the payment of a sum
         sufficient to reimburse it for any transfer tax incidental thereto.

                  viii.  Closing  of  Books.  The  Company  will not  close  its
         stockholder  books or records in any manner  which  prevents the timely
         exercise of this  Additional  Investment  Right,  pursuant to the terms
         hereof.

         f) Call  Provision.  Subject to the provisions of this Section 2(f), if
after the Effective Date the VWAP for each of 20  consecutive  Trading Days (the

                                       5
<PAGE>

"Measurement  Price",  which  period shall not have  commenced  until after such
anniversary  date) is greater than or equal to 160% of the then  Exercise  Price
(subject to adjustment as set forth herein) (the  "Threshold  Price"),  then the
Company  may, in its sole  discretion,  within ten Trading  Days of such period,
call for cancellation of all or any portion of this Additional  Investment Right
for  which a Notice  of  Exercise  has not yet been  delivered  (such  right,  a
"Call").  To exercise  this right,  the  Company  must  deliver to the Holder an
irrevocable written notice (a "Call Notice"),  indicating therein the portion of
unexercised  portion of this  Additional  Investment  Right to which such notice
applies.  If the conditions set forth below for such Call are satisfied from the
period from the date of the Call Notice  through and including the Call Date (as
defined below), then any portion of this Additional  Investment Right subject to
such Call  Notice for which a Notice of  Exercise  shall not have been  received
from and after the date of the Call Notice will be cancelled  at 6:30 p.m.  (New
York City  time) on the  tenth  Trading  Day  after the date the Call  Notice is
received by the Holder (such date, the "Call Date"). Any unexercised  portion of
this Additional  Investment Right to which the Call Notice does not pertain will
be unaffected by such Call Notice. In furtherance thereof, the Company covenants
and agrees that it will honor all Notices of Exercise with respect to Additional
Investment Right Shares subject to a Call Notice that are tendered from the time
of  delivery of the Call Notice  through  6:30 p.m.  (New York City time) on the
Call Date. The parties agree that any Notice of Exercise  delivered  following a
Call Notice shall first reduce to zero the number of Additional Investment Right
Shares  subject to such Call Notice prior to reducing the  remaining  Additional
Investment Right Shares available for purchase under this Additional  Investment
Right.  For example,  if (x) this Additional  Investment  Right then permits the
Holder to acquire 100  Additional  Investment  Right  Shares,  (y) a Call Notice
pertains to 75 Additional  Investment  Right Shares,  and (z) prior to 6:30 p.m.
(New York City time) on the Call Date the Holder tenders a Notice of Exercise in
respect of 50 Additional  Investment Right Shares, then (1) on the Call Date the
right under this Additional Investment Right to acquire 25 Additional Investment
Right Shares will be automatically  cancelled,  (2) the Company, in the time and
manner required under this  Additional  Investment  Right,  will have issued and
delivered to the Holder 50 Additional  Investment Right Shares in respect of the
exercises  following  receipt of the Call Notice,  and (3) the Holder may, until
the  Termination  Date,  exercise  this  Additional   Investment  Right  for  25
Additional Investment Right Shares (subject to adjustment as herein provided and
subject to subsequent  Call  Notices).  Subject again to the  provisions of this
Section 3(e), the Company may deliver subsequent Call Notices for any portion of
this Additional Investment Right for which the Holder shall not have delivered a
Notice of Exercise.  Notwithstanding  anything to the contrary set forth in this
Additional  Investment  Right,  the  Company  may not  deliver a Call  Notice or
require  the  cancellation  of this  Additional  Investment  Right (and any Call
Notice will be void),  unless,  from the beginning of the 20 consecutive Trading
Days used to determine whether the Common Stock has achieved the Threshold Price
through the Call Date, the Equity  Conditions have been met. The Company's right
to Call the  Additional  Investment  Right shall be exercised  ratably among the
Purchasers based on each  Purchaser's  initial purchase of Common Stock pursuant
to the Purchase Agreement.

                                       6
<PAGE>

         Section 3.   Certain Adjustments.

         a) Stock Dividends and Splits.  If the Company,  at any time while this
Additional  Investment  Right  is  outstanding:  (A)  pays a stock  dividend  or
otherwise make a distribution or  distributions on shares of its Common Stock or
any other  equity or equity  equivalent  securities  payable in shares of Common
Stock  (which,  for  avoidance of doubt,  shall not include any shares of Common
Stock issued by the Company pursuant to this Additional  Investment  Right), (B)
subdivides  outstanding  shares of Common Stock into a larger  number of shares,
(C) combines  (including  by way of reverse stock split)  outstanding  shares of
Common Stock into a smaller number of shares, or (D) issues by  reclassification
of shares of the Common Stock any shares of capital  stock of the Company,  then
in each case the Exercise  Price shall be  multiplied by a fraction of which the
numerator  shall be the  number of shares of Common  Stock  (excluding  treasury
shares, if any) outstanding before such event and of which the denominator shall
be the  number of shares of Common  Stock  outstanding  after such event and the
number of  Additional  Investment  Right Shares  issuable  upon exercise of this
Additional  Investment Right shall be proportionately  adjusted.  Any adjustment
made pursuant to this Section 3(a) shall become effective  immediately after the
record date for the  determination  of  stockholders  entitled  to receive  such
dividend  or  distribution  and shall  become  effective  immediately  after the
effective date in the case of a subdivision, combination or re-classification.

         b) Intentionally Omitted.

         c) Pro Rata  Distributions.  If the  Company,  at any time prior to the
Termination  Date,  shall  distribute to all holders of Common Stock (and not to
Holders of the Additional  Investment  Rights)  evidences of its indebtedness or
assets or rights or  Additional  Investment  Rights to subscribe for or purchase
any  security  other than the Common  Stock  (which  shall be subject to Section
3(b)),  then in  each  such  case  the  Exercise  Price  shall  be  adjusted  by
multiplying  the Exercise Price in effect  immediately  prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a  fraction  of which the  denominator  shall be the VWAP  determined  as of the
record date mentioned  above,  and of which the numerator  shall be such VWAP on
such record  date less the then per share fair market  value at such record date
of the  portion  of such  assets or  evidence  of  indebtedness  so  distributed
applicable  to one  outstanding  share of the Common Stock as  determined by the
Board of  Directors  in good  faith.  In either  case the  adjustments  shall be
described  in a  statement  provided  to the Holders of the portion of assets or
evidences of indebtedness so distributed or such subscription  rights applicable
to one share of Common Stock.  Such  adjustment  shall be made whenever any such
distribution  is made and shall become  effective  immediately  after the record
date mentioned above.

         d) Calculations. All calculations under this Section 3 shall be made to
the  nearest  cent or the  nearest  1/100th of a share,  as the case may be. For
purposes of this Section 3, the number of shares of Common Stock  outstanding as
of a given  date  shall be the sum of the  number  of  shares  of  Common  Stock
(excluding treasury shares, if any) outstanding.

                                       7
<PAGE>

         e) Notice to Holders.

i.       Adjustment to Exercise  Price.  Whenever the Exercise Price is adjusted
         pursuant to this  Section 3, the Company  shall  promptly  mail to each
         Holder a notice setting forth the Exercise Price after such  adjustment
         and  setting  forth a  brief  statement  of the  facts  requiring  such
         adjustment.

                  ii.  Notice to Allow  Exercise  by Holder.  If (A) the Company
         shall  declare a  dividend  (or any other  distribution)  on the Common
         Stock;  (B) the  Company  shall  declare  a special  nonrecurring  cash
         dividend on or a redemption of the Common Stock;  (C) the Company shall
         authorize  the  granting to all holders of the Common  Stock  rights or
         Additional Investment Rights to subscribe for or purchase any shares of
         capital  stock of any class or of any rights;  (D) the  approval of any
         stockholders  of the Company shall be required in  connection  with any
         reclassification  of the Common Stock,  any  consolidation or merger to
         which  the  Company  is a  party,  any  sale  or  transfer  of  all  or
         substantially all of the assets of the Company, of any compulsory share
         exchange  whereby the Common Stock is converted into other  securities,
         cash or property;  (E) the Company  shall  authorize  the  voluntary or
         involuntary  dissolution,  liquidation  or winding up of the affairs of
         the Company;  then, in each case,  the Company shall cause to be mailed
         to the  Holder  at its  last  addresses  as it  shall  appear  upon the
         Additional  Investment  Right  Register  of the  Company,  at  least 20
         calendar  days  prior  to  the  applicable  record  or  effective  date
         hereinafter  specified, a notice stating (x) the date on which a record
         is  to be  taken  for  the  purpose  of  such  dividend,  distribution,
         redemption,  rights or Additional  Investment Rights, or if a record is
         not to be taken,  the date as of which the holders of the Common  Stock
         of record to be entitled to such dividend,  distributions,  redemption,
         rights or Additional  Investment Rights are to be determined or (y) the
         date on  which  such  reclassification,  consolidation,  merger,  sale,
         transfer or share  exchange is expected to become  effective  or close,
         and the date as of which it is  expected  that  holders  of the  Common
         Stock of record  shall be  entitled  to  exchange  their  shares of the
         Common Stock for securities,  cash or other property  deliverable  upon
         such reclassification,  consolidation,  merger, sale, transfer or share
         exchange;  provided, that the failure to mail such notice or any defect
         therein or in the mailing  thereof shall not affect the validity of the
         corporate action required to be specified in such notice. The Holder is
         entitled to exercise this Additional Investment Right during the 20-day
         period  commencing the date of such notice to the effective date of the
         event triggering such notice

         f)  Fundamental  Transaction.  If, at any time  while  this  Additional
Investment  Right  is  outstanding,  (A)  the  Company  effects  any  merger  or
consolidation  of the Company with or into another Person,  in which the Company
is not the surviving  entity,  or the Company's then existing  shareholders will
own less than 51% of the surviving  entity,  (B) the Company effects any sale of
all  or  substantially  all  of  its  assets  in  one  or a  series  of  related

                                       8
<PAGE>

transactions,  (C) any tender offer or exchange offer (whether by the Company or
another  Person) is  completed  pursuant  to which  holders of Common  Stock are
permitted  to tender or  exchange  their  shares for other  securities,  cash or
property, or (D) the Company effects any reclassification of the Common Stock or
any compulsory share exchange  pursuant to which the Common Stock is effectively
converted into or exchanged for other securities,  cash or property (in any such
case, a "Fundamental Transaction"), then, upon any subsequent conversion of this
Additional  Investment  Right,  the Holder shall have the right to receive,  for
each Additional  Investment  Right Share that would have been issuable upon such
exercise absent such Fundamental  Transaction,  at the option of the Holder, (a)
upon  exercise  of this  Additional  Investment  Right,  the number of shares of
Common Stock of the successor or acquiring  corporation or of the Company, if it
is the surviving corporation,  and Alternate Consideration receivable upon or as
a result of such  reorganization,  reclassification,  merger,  consolidation  or
disposition  of assets by a Holder of the  number of shares of Common  Stock for
which this Additional Investment Right is exercisable  immediately prior to such
event  or (b)  only  in  the  event  the  Company  is  acquired  in an all  cash
acquisition,  cash  equal to the value of this  Additional  Investment  Right as
determined in accordance  with the  Black-Scholes  option  pricing  formula (the
"Alternate Consideration"). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such  Fundamental  Transaction,  and the Company
shall  apportion  the  Exercise  Price among the  Alternate  Consideration  in a
reasonable manner  reflecting the relative value of any different  components of
the Alternate Consideration.  If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Additional Investment Right following such
Fundamental  Transaction.  To the extent  necessary to effectuate  the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction  shall  issue  to  the  Holder  a new  Additional  Investment  Right
consistent  with the foregoing  provisions  and evidencing the Holder's right to
exercise such Additional Investment Right into Alternate  Consideration upon the
payment  thereof.  The terms of any  agreement  pursuant to which a  Fundamental
Transaction  is effected  shall  include terms  requiring any such  successor or
surviving  entity  to  comply  with the  provisions  of this  paragraph  (f) and
insuring  that  this  Additional  Investment  Right  (or  any  such  replacement
security) will be similarly adjusted upon any subsequent  transaction  analogous
to a Fundamental Transaction.

         g) Exempt  Issuance.  Notwithstanding  the foregoing,  no  adjustments,
Alternate  Consideration  nor notices  shall be made,  paid or issued under this
Section 3 in respect of an Exempt Issuance.

         h) Voluntary  Adjustment By Company. The Company may at any time during
the term of this Additional  Investment  Right reduce the then current  Exercise
Price to any amount and for any period of time deemed  appropriate  by the Board
of Directors of the Company.

                                       9
<PAGE>

         Section 4.   Transfer of Additional Investment Right.

         a)   Transferability.   Subject  to  compliance   with  any  applicable
securities  laws and the  conditions  set forth in Sections 5(a) and 4(d) hereof
and to the provisions of Section 4.1 of the Purchase Agreement,  this Additional
Investment Right and all rights hereunder are transferable, in whole or in part,
upon surrender of this Additional  Investment  Right at the principal  office of
the Company,  together with a written  assignment of this Additional  Investment
Right  substantially  in the form attached hereto duly executed by the Holder or
its agent or attorney and funds  sufficient  to pay any transfer  taxes  payable
upon the making of such transfer.  Upon such  surrender  and, if required,  such
payment, the Company shall execute and deliver a new Additional Investment Right
or Additional  Investment Rights in the name of the assignee or assignees and in
the  denomination or  denominations  specified in such instrument of assignment,
and shall issue to the assignor a new Additional Investment Right evidencing the
portion of this Additional Investment Right not so assigned, and this Additional
Investment Right shall promptly be cancelled.  A Additional Investment Right, if
properly  assigned,  may be  exercised  by a new  holder  for  the  purchase  of
Additional  Investment  Right Shares without having a new Additional  Investment
Right issued.

         b) New Additional  Investment Rights. This Additional  Investment Right
may be  divided  or  combined  with  other  Additional  Investment  Rights  upon
presentation  hereof at the  aforesaid  office of the Company,  together  with a
written notice  specifying the names and  denominations  in which new Additional
Investment  Rights  are to be  issued,  signed  by the  Holder  or its  agent or
attorney.  Subject to compliance with Section 4(a), as to any transfer which may
be  involved in such  division or  combination,  the Company  shall  execute and
deliver a new Additional  Investment  Right or Additional  Investment  Rights in
exchange for the Additional  Investment Right or Additional Investment Rights to
be divided or combined in accordance with such notice.

         c) Additional  Investment  Right  Register.  The Company shall register
this Additional  Investment  Right, upon records to be maintained by the Company
for that purpose (the "Additional  Investment Right  Register"),  in the name of
the record Holder  hereof from time to time.  The Company may deem and treat the
registered  Holder of this  Additional  Investment  Right as the absolute  owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

         d)  Transfer  Restrictions.  If, at the time of the  surrender  of this
Additional  Investment  Right in connection with any transfer of this Additional
Investment Right, the transfer of this Additional  Investment Right shall not be
registered pursuant to an effective  registration statement under the Securities
Act and under  applicable  state  securities  or blue sky laws,  the Company may
require,  as a  condition  of  allowing  such  transfer  (i) that the  Holder or
transferee of this Additional  Investment  Right, as the case may be, furnish to
the  Company a written  opinion  of  counsel  (which  opinion  shall be in form,
substance   and  scope   customary   for  opinions  of  counsel  in   comparable
transactions) to the effect that such transfer may be made without  registration
under the Securities Act and under applicable state securities or blue sky laws,
(ii) that the  holder or  transferee  execute  and  deliver  to the  Company  an

                                       10
<PAGE>

investment letter in form and substance acceptable to the Company and (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a)(1), (a)(2),
(a)(3),  (a)(7),  or (a)(8)  promulgated under the Securities Act or a qualified
institutional buyer as defined in Rule 144A(a) under the Securities Act.

         Section 5.   Miscellaneous.

         a) Title to Additional  Investment Right. Prior to the Termination Date
and subject to compliance  with applicable laws and Section 4 of this Additional
Investment Right, this Additional  Investment Right and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder  in  person  or by  duly  authorized  attorney,  upon  surrender  of this
Additional  Investment  Right together with the  Assignment  Form annexed hereto
properly  endorsed.  The transferee shall sign an investment  letter in form and
substance reasonably satisfactory to the Company.

         b) No Rights as Shareholder Until Exercise.  This Additional Investment
Right does not  entitle  the Holder to any  voting  rights or other  rights as a
shareholder of the Company prior to the exercise  hereof.  Upon the surrender of
this  Additional  Investment  Right and the  payment of the  aggregate  Exercise
Price,  the  Additional  Investment  Right Shares so  purchased  shall be and be
deemed to be issued to such Holder as the record  owner of such shares as of the
close of business on the later of the date of such surrender or payment.

         c) Loss,  Theft,  Destruction  or Mutilation  of Additional  Investment
Right.  The  Company  covenants  that upon  receipt by the  Company of  evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
this  Additional  Investment  Right or any  stock  certificate  relating  to the
Additional  Investment Right Shares,  and in case of loss, theft or destruction,
of indemnity or security  reasonably  satisfactory to it (which,  in the case of
the Additional Investment Right, shall not include the posting of any bond), and
upon surrender and  cancellation  of such Additional  Investment  Right or stock
certificate,  if mutilated,  the Company will make and deliver a new  Additional
Investment  Right  or  stock  certificate  of like  tenor  and  dated as of such
cancellation, in lieu of such Additional Investment Right or stock certificate.

         d) Saturdays,  Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         e) Authorized Shares.

                  The Company  covenants  that during the period the  Additional
         Investment  Right is  outstanding,  it will reserve from its authorized
         and unissued Common Stock a sufficient  number of shares to provide for
         the  issuance  of the  Additional  Investment  Right  Shares  upon  the
         exercise of any purchase rights under this Additional Investment Right.
         The Company  further  covenants  that its  issuance of this  Additional
         Investment  Right shall  constitute  full authority to its officers who

                                       11
<PAGE>

         are charged with the duty of executing  stock  certificates  to execute
         and issue the  necessary  certificates  for the  Additional  Investment
         Right  Shares  upon the  exercise  of the  purchase  rights  under this
         Additional  Investment Right. The Company will take all such reasonable
         action as may be  necessary to assure that such  Additional  Investment
         Right Shares may be issued as provided herein without  violation of any
         applicable law or  regulation,  or of any  requirements  of the Trading
         Market upon which the Common Stock may be listed.

                  Except  and to the  extent as waived  or  consented  to by the
         Holder,  the  Company  shall  not by  any  action,  including,  without
         limitation,  amending its certificate of  incorporation  or through any
         reorganization, transfer of assets, consolidation, merger, dissolution,
         issue or sale of securities  or any other  voluntary  action,  avoid or
         seek to avoid the observance or performance of any of the terms of this
         Additional Investment Right, but will at all times in good faith assist
         in the  carrying  out of all such  terms and in the  taking of all such
         actions as may be  necessary  or  appropriate  to protect the rights of
         Holder  as set  forth  in  this  Additional  Investment  Right  against
         impairment.  Without  limiting the  generality  of the  foregoing,  the
         Company  will  (a)  not  increase  the  par  value  of  any  Additional
         Investment  Right Shares above the amount  payable  therefor  upon such
         exercise  immediately prior to such increase in par value, (b) take all
         such  action  as may be  necessary  or  appropriate  in order  that the
         Company  may validly  and  legally  issue fully paid and  nonassessable
         Additional Investment Right Shares upon the exercise of this Additional
         Investment Right, and (c) use commercially reasonable efforts to obtain
         all  such  authorizations,  exemptions  or  consents  from  any  public
         regulatory  body having  jurisdiction  thereof as may be  necessary  to
         enable the Company to perform  its  obligations  under this  Additional
         Investment Right.

                  Before  taking any action which would result in an  adjustment
         in the  number of  Additional  Investment  Right  Shares for which this
         Additional  Investment  Right is exercisable or in the Exercise  Price,
         the Company shall obtain all such authorizations or exemptions thereof,
         or consents  thereto,  as may be necessary  from any public  regulatory
         body or bodies having jurisdiction thereof.

         f) Jurisdiction.  All questions concerning the construction,  validity,
enforcement  and  interpretation  of this Additional  Investment  Right shall be
determined in accordance with the provisions of the Purchase Agreement.

         g) Restrictions. The Holder acknowledges that the Additional Investment
Right Shares acquired upon the exercise of this Additional  Investment Right, if
not registered,  will have restrictions upon resale imposed by state and federal
securities laws.

         h) Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right  hereunder on the part of Holder shall operate as a waiver
of such  right or  otherwise  prejudice  Holder's  rights,  powers or  remedies,
notwithstanding  the fact that all rights hereunder terminate on the Termination
Date. If the Company  willfully and knowingly fails to comply with any provision
of this Additional  Investment  Right,  which results in any material damages to

                                       12
<PAGE>

the Holder,  the Company shall pay to Holder such amounts as shall be sufficient
to cover  any costs and  expenses  including,  but not  limited  to,  reasonable
attorneys' fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise  enforcing any of its
rights, powers or remedies hereunder.

         i) Notices. Any notice, request or other document required or permitted
to be given or  delivered  to the Holder by the Company  shall be  delivered  in
accordance with the notice provisions of the Purchase Agreement.

         j) Limitation of Liability.  No provision hereof, in the absence of any
affirmative  action by Holder to exercise this  Additional  Investment  Right or
purchase  Additional  Investment Right Shares,  and no enumeration herein of the
rights or privileges  of Holder,  shall give rise to any liability of Holder for
the  purchase  price of any Common  Stock or as a  stockholder  of the  Company,
whether  such  liability  is  asserted  by the  Company or by  creditors  of the
Company.

         k)  Remedies.  Holder,  in addition to being  entitled to exercise  all
rights  granted by law,  including  recovery  of  damages,  will be  entitled to
specific  performance of its rights under this Additional  Investment Right. The
Company agrees that monetary damages would not be adequate  compensation for any
loss incurred by reason of a breach by it of the  provisions of this  Additional
Investment  Right and  hereby  agrees to waive the  defense  in any  action  for
specific performance that a remedy at law would be adequate.

         l) Successors and Assigns.  Subject to applicable securities laws, this
Additional  Investment  Right and the rights and  obligations  evidenced  hereby
shall inure to the benefit of and be binding upon the  successors of the Company
and the  successors  and  permitted  assigns of Holder.  The  provisions of this
Additional  Investment  Right are  intended to be for the benefit of all Holders
from time to time of this Additional  Investment  Right and shall be enforceable
by any such Holder or holder of Additional Investment Right Shares.

         m)  Amendment.  This  Additional  Investment  Right may be  modified or
amended or the provisions  hereof waived with the written consent of the Company
and the Holder.

         n) Severability.  Wherever possible,  each provision of this Additional
Investment  Right shall be  interpreted  in such manner as to be  effective  and
valid under  applicable law, but if any provision of this Additional  Investment
Right shall be  prohibited by or invalid under  applicable  law, such  provision
shall be  ineffective to the extent of such  prohibition or invalidity,  without
invalidating  the remainder of such  provisions  or the remaining  provisions of
this Additional Investment Right.

         o) Headings.  The headings used in this Additional Investment Right are
for the convenience of reference only and shall not, for any purpose,  be deemed
a part of this Additional Investment Right.

                              ********************

                                       13
<PAGE>

                  IN WITNESS  WHEREOF,  the Company  has caused this  Additional
Investment Right to be executed by its officer thereunto duly authorized.

Dated:  September  __, 2004

                                        RCG COMPANIES INCORPORATED

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

                                       14
<PAGE>

                               NOTICE OF EXERCISE

To:  RCG Companies Incorporated

         (1) The  undersigned  hereby  elects to  purchase  ________  Additional
Investment  Right  Shares of the Company  pursuant to the terms of the  attached
Additional  Investment  Right (only if exercised in full),  and tenders herewith
payment of the exercise  price in full,  together with all  applicable  transfer
taxes, if any.

         (2) Payment shall take the form of lawful money of the United States.

         (3)  Please  issue a  certificate  or  certificates  representing  said
Additional  Investment  Right Shares in the name of the  undersigned  or in such
other name as is specified below:

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

The Additional Investment Right Shares shall be delivered to the following:

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

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

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

         (4) Accredited Investor. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

                                            [PURCHASER]

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

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

<PAGE>

                                 ASSIGNMENT FORM

          (To assign the foregoing Additional Investment Right, execute
                   this form and supply required information.
       Do not use this form to exercise the Additional Investment Right.)

                  FOR VALUE RECEIVED,  the foregoing Additional Investment Right
and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

__________________________________________________________________.

__________________________________________________________________

                                                 Dated:  ______________, _______

                  Holder's Signature: ________________________

                  Holder's Address:   ________________________

                                      ________________________

Signature Guaranteed:  _______________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Additional  Investment Right,  without  alteration or
enlargement or any change whatsoever,  and must be guaranteed by a bank or trust
company.  Officers of  corporations  and those  acting in a  fiduciary  or other
representative  capacity  should file proper evidence of authority to assign the
foregoing Additional Investment Right.

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