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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.

                          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 3.5
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 February 8, 2005, among the Company
and the purchasers signatory thereto.

      Section 2. Exercise.

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            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  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), 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 Debentures 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  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.

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(1) 50% of the Warrants shall have an Exercise Price equal to $1.55,  and 50% of
the Warrants shall have an Exercise Price equal $1.87.

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            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).

                  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  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.

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                  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 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.

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                  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.

      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 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.

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            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,  until the date that the  Company
      obtains  Shareholder  Approval and such approval is deemed effective,  the
      Exercise Price shall not be adjusted pursuant to this Section 3(b) to less
      than $____(2), 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 this 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 shall be made whenever any such  distribution is made and shall
      become effective immediately after the record date mentioned above.

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(2)   100% of the Closing  Price  immediately  prior to the date of the Purchase
      Agreement.

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            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 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

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

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            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 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.

                                       9
<PAGE>

      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 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.

                                       10
<PAGE>

                  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,  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.

                                       11
<PAGE>

            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.

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

                                       12
<PAGE>

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

Dated:  February 8, 2005

                                RCG COMPANIES INCORPORATED

                                By:__________________________________________
                                   Name:
                                   Title:

                                       13
<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 4.5

                          REGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into as of  February  8,  2005,  among RCG  Companies  Incorporated,  a Delaware
corporation  (the  "Company"),  and the purchasers  signatory  hereto (each such
purchaser is a  "Purchaser"  and, all such  purchasers  are,  collectively,  the
"Purchasers").

            This  Agreement  is  made  pursuant  to  the   Securities   Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").

            The Company and the Purchasers hereby agree as follows:

      1. Definitions

            CAPITALIZED  TERMS USED AND NOT  OTHERWISE  DEFINED  HEREIN THAT ARE
DEFINED IN THE PURCHASE  AGREEMENT  SHALL HAVE THE MEANINGS  GIVEN SUCH TERMS IN
THE PURCHASE  AGREEMENT.  As used in this  Agreement,  the following terms shall
have the following meanings:

            "Effectiveness Date" means, with respect to the initial Registration
      Statement required to be filed hereunder, the 120th calendar day following
      the  date  hereof  and,  with  respect  to  any  additional   Registration
      Statements  which may be  required  pursuant  to  Section  3(c),  the 90th
      calendar  day  following  the date on which the Company  first  knows,  or
      reasonably should have known, that such additional  Registration Statement
      is  required  hereunder;  provided,  however,  in the event the Company is
      notified by the Commission that one of the above  Registration  Statements
      will not be  reviewed  or is no  longer  subject  to  further  review  and
      comments,  the Effectiveness Date as to such Registration  Statement shall
      be the fifth  Trading  Day  following  the date on which the Company is so
      notified if such date precedes the dates required above.

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

            "Filing  Date"  means,  with  respect  to the  initial  Registration
      Statement  required  hereunder,  the 45th  calendar day following the date
      hereof and, with respect to any additional  Registration  Statements which
      may be required  pursuant to Section 3(c), the 15th day following the date
      on which the Company  first knows,  or  reasonably  should have known that
      such additional Registration Statement is required hereunder.

            "Holder" or "Holders"  means the holder or holders,  as the case may
      be, from time to time of Registrable Securities.

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

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

                                       1
<PAGE>

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

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

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

            "Registrable Securities" means (i) all of the shares of Common Stock
      issuable  upon  conversion  in full of the  Debentures,  (ii) all  Warrant
      Shares,  (iii) any  securities  issued or issuable  upon any stock  split,
      dividend or other  distribution,  recapitalization  or similar  event with
      respect  to the  foregoing  and (iv) any  additional  shares  issuable  in
      connection  with any  anti-dilution  provisions  in the  Debentures or the
      Warrants  (in each  case,  without  giving  effect to any  limitations  on
      conversion set forth in the Debenture or limitations on exercise set forth
      in the Warrant).

            "Registration  Statement" means the registration statements required
      to  be  filed  hereunder  and  any  additional   registration   statements
      contemplated  by Section 3(c),  including  (in each case) the  Prospectus,
      amendments and supplements to such  registration  statement or Prospectus,
      including pre- and post-effective  amendments,  all exhibits thereto,  and
      all material  incorporated  by reference or deemed to be  incorporated  by
      reference in such registration statement.

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

            "Rule 424" means Rule 424 promulgated by the Commission  pursuant to
      the Securities  Act, as such Rule may be amended from time to time, or any
      similar rule or  regulation  hereafter  adopted by the  Commission  having
      substantially the same purpose and effect as such Rule.

      2. Shelf Registration

                                       2
<PAGE>

            (a) On or prior to each Filing Date,  the Company  shall prepare and
file with the Commission a "Shelf" Registration Statement covering the resale of
130% of the  Registrable  Securities  on such  Filing Date for an offering to be
made on a  continuous  basis  pursuant to Rule 415. The  Registration  Statement
shall be on Form S-3 (unless the  Company is not then  eligible to register  for
resale the Registrable  Securities on Form S-3, in which case such  registration
shall be on another  appropriate form in accordance  herewith) and shall contain
(unless  otherwise   directed  by  the  Holders)   substantially  the  "Plan  of
Distribution"  attached  hereto  as  Annex  A.  Subject  to the  terms  of  this
Agreement,  the  Company  shall use its  reasonable  best  efforts  to cause the
Registration  Statement to be declared  effective  under the  Securities  Act as
promptly as  possible  after the filing  thereof,  but in any event prior to the
applicable Effectiveness Date, and shall use its commercially reasonable efforts
to keep such Registration  Statement continuously effective under the Securities
Act until all Registrable Securities covered by such Registration Statement have
been sold or may be sold without volume restrictions  pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter to
such effect,  addressed and  acceptable to the Company's  transfer agent and the
affected Holders (the  "Effectiveness  Period").  The Company shall  immediately
notify  the  Holders  via  facsimile  or  email  of  the  effectiveness  of  the
Registration  Statement  within  one  Trading  Day  that  the  Company  receives
notification of the effectiveness from the Commission.  Failure to so notify the
Holder by facsimile or e-mail notice  within 1 Trading Day of such  notification
shall be deemed an Event under Section 2(b).

            (b) If: (i) the Company fails to file with the  Commission a request
for  acceleration in accordance  with Rule 461 promulgated  under the Securities
Act,  within five Trading Days of the date that the Company is notified  (orally
or in  writing,  whichever  is earlier) by the  Commission  that a  Registration
Statement  will not be  "reviewed,"  or not subject to further  review,  or (ii)
prior to its  Effectiveness  Date,  the  Company  fails to file a  pre-effective
amendment and otherwise respond in writing to comments made by the Commission in
respect of such Registration  Statement within 20 Trading Days after the receipt
of comments by or notice from the Commission  that such amendment is required in
order  for a  Registration  Statement  to be  declared  effective,  or  (iii)  a
Registration  Statement  filed or required to be filed hereunder is not declared
effective  by the  Commission  by its  Effectiveness  Date,  or (iv)  after  the
Effectiveness  Date, a  Registration  Statement  ceases for any reason to remain
continuously effective as to all Registrable Securities for which it is required
to be  effective,  or the Holders are not  permitted  to utilize the  Prospectus
therein to resell such  Registrable  Securities  for 15  consecutive  days or an
aggregate of 25 days during any 12-month  period (which need not be  consecutive
days) (any such  failure or breach  being  referred  to as an  "Event",  and for
purposes of clause (iii) the date on which such Event occurs, or for purposes of
clause (i) the date on which such five  Trading Day period is  exceeded,  or for
purposes of clause  (ii) the date which such 20 Trading Day period is  exceeded,
or for  purposes of clause  (iv) the date on which such 15 or 25 day period,  as
applicable,  is exceeded being referred to as "Event Date"), then in addition to
any other rights the Holders may have hereunder or under  applicable law on each
such Event Date and on each monthly  anniversary of each such Event Date (if the
applicable  Event shall not have been cured by such date)  until the  applicable
Event is  cured,  the  Company  shall pay to each  Holder an amount in cash,  as
partial liquidated damages and not as a penalty,  equal to 1.5% of the aggregate
purchase  price paid by such Holder  pursuant to the Purchase  Agreement for any
Registrable  Securities then held by the Holder. If the Company fails to pay any
partial  liquidated  damages  pursuant to this Section in full within seven days
after the date payable,  the Company will pay interest  thereon at a rate of 18%
per  annum  (or such  lesser  maximum  amount  that is  permitted  to be paid by
applicable  law) to the  Holder,  accruing  daily  from  the date  such  partial
liquidated  damages are due until such amounts,  plus all such interest thereon,
are paid in full. The partial  liquidated  damages  pursuant to the terms hereof
shall apply on a pro-rata  basis for any portion of a month prior to the cure of
an Event.

                                       3
<PAGE>

      3. Registration Procedures

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

            (a) Not less  than five  Trading  Days  prior to the  filing of each
Registration  Statement or any related Prospectus or any amendment or supplement
thereto  (including  any  document  that would be  incorporated  or deemed to be
incorporated  therein by  reference),  the  Company  shall,  (i) furnish to each
Holder copies of all such documents proposed to be filed, which documents (other
than those  incorporated  or deemed to be  incorporated  by  reference)  will be
subject  to the  review  of such  Holders,  and  (ii)  cause  its  officers  and
directors,  counsel and independent  certified public  accountants to respond to
such inquiries as shall be necessary,  in the  reasonable  opinion of respective
counsel  to  conduct  a  reasonable  investigation  within  the  meaning  of the
Securities  Act. The Company  shall not file the  Registration  Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders of
a majority of the  Registrable  Securities  shall  reasonably  and in good faith
object,  provided, the Company is notified of such objection in writing no later
than 5 Trading  Days after the  Holders  have been so  furnished  copies of such
documents.   Each   Holder   agrees  to  furnish  to  the  Company  a  completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "Selling
Shareholder  Questionnaire")  not less than two Trading Days prior to the Filing
Date or by the end of the fourth  Trading Day  following  the date on which such
Holder receives draft materials in accordance with this Section.

            (b) (i)  Prepare  and file  with  the  Commission  such  amendments,
including  post-effective  amendments,  to  a  Registration  Statement  and  the
Prospectus  used  in  connection  therewith  as  may  be  necessary  to  keep  a
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required  Prospectus  supplement
(subject to the terms of this  Agreement),  and as so supplemented or amended to
be filed pursuant to Rule 424; (iii) respond as promptly as reasonably  possible
to any comments  received  from the  Commission  with respect to a  Registration
Statement  or any  amendment  thereto  and as promptly  as  reasonably  possible
provide the Holders true and complete copies of all  correspondence  from and to
the  Commission  relating to a  Registration  Statement;  and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with  respect to the  disposition  of all  Registrable  Securities  covered by a
Registration  Statement during the applicable  period in accordance  (subject to
the terms of this  Agreement)  with the intended  methods of  disposition by the
Holders  thereof set forth in such  Registration  Statement  as so amended or in
such Prospectus as so supplemented.

                                        4
<PAGE>

            (c) If during the  Effectiveness  Period,  the number of Registrable
Securities  at any time exceeds 85% of the number of shares of Common Stock then
registered in a Registration  Statement,  then the Company shall file as soon as
reasonably  practicable but in any case prior to the applicable  Filing Date, an
additional Registration Statement covering the resale by the Holders of not less
than 130% of the number of such Registrable Securities.

            (d) Notify the Holders of  Registrable  Securities to be sold (which
notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an
instruction  to suspend the use of the  Prospectus  until the requisite  changes
have been made) as promptly as reasonably  possible  (and, in the case of (i)(A)
below,  not less than five Trading Days prior to such filing) and (if  requested
by any such Person) confirm such notice in writing no later than one Trading Day
following  the day (i)(A) when a  Prospectus  or any  Prospectus  supplement  or
post-effective  amendment to a  Registration  Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a "review" of
such Registration  Statement and whenever the Commission  comments in writing on
such Registration  Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders);  and (C) with
respect to a Registration  Statement or any post-effective  amendment,  when the
same has become  effective;  (ii) of any request by the  Commission or any other
Federal or state  governmental  authority  for  amendments or  supplements  to a
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission or any other federal or state governmental  authority
of any stop order  suspending  the  effectiveness  of a  Registration  Statement
covering  any or all of the  Registrable  Securities  or the  initiation  of any
Proceedings  for  that  purpose;  (iv)  of the  receipt  by the  Company  of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  and (v) of the  occurrence  of any event or passage of time that makes
the financial  statements  included in a Registration  Statement  ineligible for
inclusion  therein  or  any  statement  made  in  a  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material  respect or that  requires any  revisions to a
Registration Statement,  Prospectus or other documents so that, in the case of a
Registration  Statement  or the  Prospectus,  as the  case  may be,  it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

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

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

                                       5
<PAGE>

            (g) Promptly deliver to each Holder,  without charge, as many copies
of the Prospectus or  Prospectuses  (including each form of prospectus) and each
amendment  or  supplement  thereto as such  Persons  may  reasonably  request in
connection with resales by the Holder of Registrable Securities.  Subject to the
terms  of  this  Agreement,  the  Company  hereby  consents  to the  use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders in connection with the offering and sale of the  Registrable  Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving on any notice pursuant to Section 3(d).

            (h) If NASDR Rule 2710 requires any  broker-dealer  to make a filing
prior to  executing  a sale by a Holder,  make an Issuer  Filing with the NASDR,
Inc. Corporate Financing Department pursuant to NASDR Rule 2710(b)(10)(A)(i) and
respond  within  five  Trading  Days to any  comments  received  from  NASDR  in
connection therewith, and pay the filing fee required in connection therewith.

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

            (j) If  requested  by the  Holders,  cooperate  with the  Holders to
facilitate  the timely  preparation  and delivery of  certificates  representing
Registrable   Securities  to  be  delivered  to  a  transferee   pursuant  to  a
Registration  Statement,  which  certificates  shall  be  free,  to  the  extent
permitted by the Purchase Agreement,  of all restrictive  legends, and to enable
such Registrable  Securities to be in such  denominations and registered in such
names as any such Holders may request in compliance with applicable laws.

            (k) Upon the occurrence of any event contemplated by this Section 3,
as promptly as reasonably  possible under the circumstances  taking into account
the Company's good faith  assessment of any adverse  consequences to the Company
and its  stockholders  of the  premature  disclosure  of such  event,  prepare a
supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated  therein by reference,  and file any other required
document so that, as thereafter delivered,  neither a Registration Statement nor
such Prospectus  will contain an untrue  statement of a material fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.  If the Company  notifies the Holders in accordance with clauses
(ii)  through  (vi) of Section  3(d) above to suspend the use of any  Prospectus
until the requisite  changes to such Prospectus have been made, then the Holders
shall suspend use of such  Prospectus.  The Company will use its best efforts to
ensure  that  the  use of  the  Prospectus  may be  resumed  as  promptly  as is
practicable.  The Company  shall be  entitled  to exercise  its right under this
Section  3(j) to  suspend  the  availability  of a  Registration  Statement  and
Prospectus,  subject to the payment of partial  liquidated  damages  pursuant to
Section 2(b),  for a period not to exceed 60 days (which need not be consecutive
days) in any 12 month period.

                                       6
<PAGE>

            (l) Comply in all material  respects with all  applicable  rules and
regulations of the Commission.

            (m) The Company may require  each  selling  Holder to furnish to the
Company a  certified  statement  as to the  number  of  shares  of Common  Stock
beneficially owned by such Holder and, if required by the Commission, the person
thereof  that has voting and  dispositive  control  over the Shares.  During any
periods  that the  Company  is unable  to meet its  obligations  hereunder  with
respect to the  registration  of the Registrable  Securities  solely because any
Holder  fails to furnish  such  information  within  three  Trading  Days of the
Company's  request,  any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may  otherwise  occur solely
because of such delay  shall be  suspended  as to such Holder  only,  until such
information is delivered to the Company.

      4.  Registration   Expenses.   All  fees  and  expenses  incident  to  the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company  whether or not any  Registrable  Securities are sold pursuant to
the Registration  Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with the Trading  Market on which the Common  Stock is then
listed for trading,  (B) in compliance with applicable  state securities or Blue
Sky laws  reasonably  agreed to by the  Company in writing  (including,  without
limitation, fees and disbursements of counsel for the Company in connection with
Blue  Sky  qualifications  or  exemptions  of  the  Registrable  Securities  and
determination  of the eligibility of the  Registrable  Securities for investment
under the laws of such jurisdictions as requested by the Holders) and (C) if not
previously paid by the Company in connection with an Issuer Filing, with respect
to any filing  that may be  required  to be made by any broker  through  which a
Holder intends to make sales of  Registrable  Securities  with NASD  Regulation,
Inc.  pursuant to the NASD Rule 2710, so long as the broker is receiving no more
than a  customary  brokerage  commission  in  connection  with such  sale,  (ii)
printing  expenses   (including,   without  limitation,   expenses  of  printing
certificates  for  Registrable  Securities and of printing  prospectuses  if the
printing of prospectuses is reasonably requested by the holders of a majority of
the  Registrable  Securities  included  in  a  Registration  Statement),   (iii)
messenger,  telephone  and delivery  expenses,  (iv) fees and  disbursements  of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities  exchange  as  required  hereunder.  In no event shall the Company be
responsible  for any  broker or  similar  commissions  or,  except to the extent
provided for in the Transaction Documents,  any legal fees or other costs of the
Holders.

                                       7
<PAGE>

      5. Indemnification

            (a)   Indemnification   by   the   Company.   The   Company   shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Holder, the officers, directors, agents and employees of each of them, each
Person who  controls  any such  Holder  (within the meaning of Section 15 of the
Securities  Act or Section 20 of the Exchange Act) and the officers,  directors,
agents and  employees of each such  controlling  Person,  to the fullest  extent
permitted  by  applicable  law,  from and against  any and all  losses,  claims,
damages,   liabilities,   costs  (including,   without  limitation,   reasonable
attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out
of or  relating to any untrue or alleged  untrue  statement  of a material  fact
contained in a Registration Statement,  any Prospectus or any form of prospectus
or in any  amendment  or  supplement  thereto or in any  preliminary  prospectus
except if such  misstatement was cured in any final prospectus  delivered to the
Holders prior to the applicable distribution by the Holder, or arising out of or
relating to any omission or alleged  omission of a material  fact required to be
stated therein or necessary to make the  statements  therein (in the case of any
Prospectus  or form  of  prospectus  or  supplement  thereto,  in  light  of the
circumstances under which they were made) not misleading,  except to the extent,
but only to the extent,  that (i) such untrue  statements or omissions are based
solely  upon  information  regarding  such  Holder  furnished  in writing to the
Company by such Holder  expressly  for use  therein,  or to the extent that such
information  relates  to  such  Holder  or  such  Holder's  proposed  method  of
distribution of Registrable  Securities and was reviewed and expressly  approved
in writing by such Holder  expressly for use in a Registration  Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
(it being  understood  that the  Holder  has  approved  Annex A hereto  for this
purpose) or (ii) in the case of an occurrence of an event of the type  specified
in Section  3(d)(ii)-(vi),  the use by such Holder of an  outdated or  defective
Prospectus  after the  Company  has  notified  such  Holder in writing  that the
Prospectus  is outdated or defective  and prior to the receipt by such Holder of
the Advice  contemplated  in Section 6(d).  The Company shall notify the Holders
promptly of the institution,  threat or assertion of any Proceeding arising from
or in connection with the  transactions  contemplated by this Agreement of which
the Company is aware.

            (b) Indemnification by Holders. Each Holder shall, severally and not
jointly,  indemnify  and hold  harmless the Company,  its  directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by applicable  law,  from and against all Losses,  as
incurred,  to the extent  arising out of or based solely upon: (x) such Holder's
failure to comply with the prospectus  delivery  requirements  of the Securities
Act or (y) any untrue or alleged  untrue  statement of a material fact contained
in any Registration Statement, any Prospectus,  or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading (i) to the extent, but only to the extent, that such untrue statement
or omission is  contained  in any  information  so  furnished in writing by such
Holder to the Company specifically for inclusion in such Registration  Statement
or such  Prospectus  or (ii) to the extent  that (1) such untrue  statements  or
omissions are based solely upon  information  regarding such Holder furnished in
writing to the  Company by such  Holder  expressly  for use  therein,  or to the

                                       8
<PAGE>

extent that such  information  relates to such Holder or such Holder's  proposed
method of distribution of Registrable  Securities and was reviewed and expressly
approved  in  writing  by such  Holder  expressly  for  use in the  Registration
Statement (it being  understood  that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement  thereto or (2) in the case of an  occurrence of an event of the type
specified  in Section  3(d)(ii)-(vi),  the use by such  Holder of an outdated or
defective  Prospectus after the Company has notified such Holder in writing that
the  Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice  contemplated  in Section 6(d). In no event shall the liability of
any selling Holder  hereunder be greater in amount than the dollar amount of the
net proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

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

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

                                       9
<PAGE>

            Subject  to the terms of this  Agreement,  all  reasonable  fees and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent  incurred in connection  with  investigating  or preparing to defend such
Proceeding in a manner not inconsistent  with this Section) shall be paid to the
Indemnified  Party,  as incurred,  within fifteen Trading Days of written notice
thereof to the Indemnifying  Party;  provided,  that the Indemnified Party shall
promptly  reimburse  the  Indemnifying  Party for that  portion of such fees and
expenses  applicable  to such  actions for which such  Indemnified  Party is not
entitled to indemnification hereunder, determined based upon the relative faults
of the parties.

            (d) Contribution.  If a claim for indemnification under Section 5(a)
or 5(b) is unavailable  to an  Indemnified  Party (by reason of public policy or
otherwise),   then  each  Indemnifying  Party,  in  lieu  of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable  fees or  expenses  incurred  by such  party in  connection  with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.

            The parties  hereto agree that it would not be just and equitable if
contribution  pursuant  to  this  Section  5(d)  were  determined  by  pro  rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds  actually  received  by such  Holder  from the sale of the  Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

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

                                       10
<PAGE>

      6. Miscellaneous

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

            (b) No Piggyback on  Registrations.  Except as set forth on Schedule
3.1(v) of the Purchase Agreement attached hereto, neither the Company nor any of
its security  holders (other than the Holders in such capacity  pursuant hereto)
may include  securities of the Company in the Registration  Statement other than
the Registrable  Securities.  The Company shall not file any other  registration
statements  until the  initial  Registration  Statement  required  hereunder  is
declared effective by the Commission,  provided that this Section 6(b) shall not
prohibit the Company from filing amendments to registration  statements  already
filed.

            (c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it  in  connection  with  sales  of  Registrable   Securities  pursuant  to  the
Registration Statement.

            (d) Discontinued Disposition.  Each Holder agrees by its acquisition
of such  Registrable  Securities that, upon receipt of a notice from the Company
of the  occurrence  of any event of the kind  described  in Section  3(d),  such
Holder will forthwith  discontinue  disposition of such  Registrable  Securities
under a Registration  Statement until such Holder's receipt of the copies of the
supplemented  Prospectus and/or amended Registration  Statement,  or until it is
advised in writing (the  "Advice") by the Company that the use of the applicable
Prospectus  may be resumed,  and, in either  case,  has  received  copies of any
additional  or  supplemental  filings  that are  incorporated  or  deemed  to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company will use its commercially  reasonable  efforts to ensure that the use of
the Prospectus may be resumed as promptly as it practicable.  The Company agrees
and  acknowledges  that any  periods  during  which the  Holder is  required  to
discontinue  the disposition of the  Registrable  Securities  hereunder shall be
subject to the provisions of Section 2(b).

            (e)   Piggy-Back   Registrations.   If  at  any  time   during   the
Effectiveness Period there is not an effective  Registration  Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the  Commission a registration  statement  relating to an offering for
its own account or the account of others under the  Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents  relating to equity  securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit  plans,  then the Company shall send to each Holder a written  notice of
such  determination  and, if within ten days after the date of such notice,  any
such Holder  shall so request in  writing,  the  Company  shall  include in such
registration  statement  all or any  part of such  Registrable  Securities  such
holder  requests to be  registered;  provided,  that,  the Company  shall not be
required to register any  Registrable  Securities  pursuant to this Section 6(e)
that are  eligible  for resale  pursuant  to Rule 144(k)  promulgated  under the
Securities  Act  or  that  are  the  subject  of a then  effective  Registration
Statement.

                                       11
<PAGE>

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

            (g)  Notices.  Any  and  all  notices  or  other  communications  or
deliveries  required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.

            (h)  Successors  and  Assigns.  This  Agreement  shall  inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
all of the Holders of the then-outstanding  Registrable Securities.  Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

            (i) No Inconsistent  Agreements.  Neither the Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its  subsidiaries,  on or  after  the  date of this  Agreement,  enter  into any
agreement  with  respect  to its  securities,  that  would  have the  effect  of
impairing  the rights  granted to the  Holders in this  Agreement  or  otherwise
conflicts with the provisions hereof.  Except as set forth on Schedule 3.1(v) of
the  Purchase  Agreement,  neither the Company nor any of its  subsidiaries  has
previously  entered into any  agreement  granting any  registration  rights with
respect to any of its  securities to any Person that have not been  satisfied in
full.

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

            (k)  Governing  Law.  All  questions  concerning  the  construction,
validity,  enforcement and  interpretation of this Agreement shall be determined
with the provisions of the Purchase Agreement.

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

                                       12
<PAGE>

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

            (n) Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (o)  Independent  Nature of Holders'  Obligations  and  Rights.  The
obligations  of each  Holder  hereunder  are  several  and not  joint  with  the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the  performance of the  obligations of any other Holder  hereunder.
Nothing contained herein or in any other agreement or document  delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto,  shall be
deemed to  constitute  the Holders as a  partnership,  an  association,  a joint
venture or any other kind of entity,  or create a  presumption  that the Holders
are in any way  acting  in  concert  with  respect  to such  obligations  or the
transactions  contemplated by this  Agreement.  Each Holder shall be entitled to
protect and enforce its rights,  including without limitation the rights arising
out of this Agreement,  and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

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

                                       13
<PAGE>

            IN WITNESS  WHEREOF,  the parties have  executed  this  Registration
Rights Agreement as of the date first written above.

                                        RCG COMPANIES INCORPORATED

                                        By: ____________________________________
                                            Name:
                                            Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       14
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO rcg RRA]

Name of Holder: _________________________________________________
Signature of Authorized Signatory of Holder: ____________________
Name of Authorized Signatory: ___________________________________
Title of Authorized Signatory: __________________________________

                           [SIGNATURE PAGES CONTINUE]

                                       15
<PAGE>

                              Plan of Distribution

      Each Selling Stockholder (the "Selling  Stockholders") of the common stock
("Common  Stock") of RCG Companies  Incorporated,  a Delaware  corporation  (the
"Company") and any of their pledgees,  assignees and successors-in-interest may,
from  time to time,  sell  any or all of their  shares  of  Common  Stock on the
Trading Market or any other stock exchange,  market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated  prices.  A  Selling  Stockholder  may  use  any  one or  more of the
following methods when selling shares:

      o     ordinary  brokerage  transactions  and  transactions  in  which  the
            broker-dealer solicits purchasers;

      o     block  trades in which the  broker-dealer  will  attempt to sell the
            shares as agent but may  position  and resell a portion of the block
            as principal to facilitate the transaction;

      o     purchases  by  a  broker-dealer  as  principal  and  resale  by  the
            broker-dealer for its account;

      o     an  exchange  distribution  in  accordance  with  the  rules  of the
            applicable exchange;

      o     privately negotiated transactions;

      o     settlement  of  short  sales  entered  into  after  the date of this
            prospectus;

      o     broker-dealers  may agree with the  Selling  Stockholders  to sell a
            specified number of such shares at a stipulated price per share;

      o     a combination of any such methods of sale;

      o     through  the  writing or  settlement  of  options  or other  hedging
            transactions, whether through an options exchange or otherwise; or

      o     any other method permitted pursuant to applicable law.

      The Selling  Stockholders  may also sell  shares  under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available,  rather
than under this prospectus.

      Broker-dealers  engaged by the Selling  Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated,  but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage  commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

                                       16
<PAGE>

      In connection with the sale of the Common Stock or interests therein,  the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
Common Stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of the Common  Stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the Common
Stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

      The  Selling  Stockholders  and any  broker~dealers  or  agents  that  are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker~dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. Each Selling  Stockholder has
informed  the  Company  that it does not have any written or oral  agreement  or
understanding,  directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).

      The Company is required to pay certain fees and  expenses  incurred by the
Company  incident to the  registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses,  claims,  damages and
liabilities, including liabilities under the Securities Act.

      Because Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities  Act, they will be subject to the prospectus  delivery
requirements of the Securities Act. In addition,  any securities covered by this
prospectus  which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather  than  under  this  prospectus.  Each  Selling
Stockholder  has advised us that they have not entered  into any written or oral
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in  connection  with the proposed sale of the resale shares by the
Selling Stockholders.

      We  agreed  to use  our  commercially  reasonable  efforts  to  keep  this
prospectus  effective  until the earlier of (i) the date on which the shares may
be resold by the Selling Stockholders without registration and without regard to
any volume  limitations by reason of Rule 144(e) under the Securities Act or any
other rule of similar  effect or (ii) all of the shares have been sold  pursuant
to the  prospectus  or Rule 144 under the  Securities  Act or any other  rule of
similar  effect.  The resale  shares  will be sold only  through  registered  or
licensed  brokers or dealers if required under applicable state securities laws.
In addition,  in certain  states,  the resale shares may not be sold unless they
have  been  registered  or  qualified  for  sale in the  applicable  state or an
exemption from the registration or qualification requirement is available and is
complied with.

                                       17
<PAGE>

      Under applicable rules and regulations  under the Exchange Act, any person
engaged in the distribution of the resale shares may not  simultaneously  engage
in market making activities with respect to the Common Stock for a period of two
business days prior to the commencement of the  distribution.  In addition,  the
Selling  Stockholders  will be subject to applicable  provisions of the Exchange
Act and the rules and regulations thereunder,  including Regulation M, which may
limit the timing of  purchases  and sales of shares of the  Common  Stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available  to the Selling  Stockholders  and have  informed  them of the need to
deliver a copy of this  prospectus to each  purchaser at or prior to the time of
the sale.

                                       18
<PAGE>

                                                                         ANNEX B

                           RCG COMPANIES INCORPORATED

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

      The  undersigned  beneficial  owner of common  stock,  par value $0.04 per
share  (the  "Common  Stock"),  of  RCG  Companies   Incorporated,   a  Delaware
corporation (the "Company"), (the "Registrable Securities") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the  "Commission")  a  registration  statement  on Form S-3 (the  "Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities  Act"), of the Registrable  Securities,  in
accordance  with the terms of the  Registration  Rights  Agreement,  dated as of
February 8, 2005 (the "Registration  Rights  Agreement"),  among the Company and
the Purchasers  named therein.  A copy of the  Registration  Rights Agreement is
available  from the Company  upon  request at the address set forth  below.  All
capitalized  terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

      Certain   legal   consequences   arise  from  being  named  as  a  selling
securityholder  in  the  Registration  Statement  and  the  related  prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named  or not  being  named  as a  selling  securityholder  in the  Registration
Statement and the related prospectus.

                                     NOTICE

      The  undersigned  beneficial  owner  (the  "Selling   Securityholder")  of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise  specified under such Item 3)
in the Registration Statement.

                                       19
<PAGE>

      The undersigned  hereby provides the following  information to the Company
and represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.    NAME.

      (a)   Full Legal Name of Selling Securityholder

             ___________________________________________________________________

             ___________________________________________________________________

             ___________________________________________________________________

      (b)   Full Legal Name of Registered  Holder (if not the same as (a) above)
            through  which  Registrable  Securities  Listed  in Item 3 below are
            held:

             ___________________________________________________________________

             ___________________________________________________________________

             ___________________________________________________________________

      (c)   Full Legal Name of Natural  Control  Person  (which  means a natural
            person who directly or indirectly  alone or with others has power to
            vote or dispose of the securities covered by the questionnaire):

             ___________________________________________________________________

             ___________________________________________________________________

             ___________________________________________________________________

2.    ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Telephone: _____________________________________________________________________

Fax: ___________________________________________________________________________

Contact Person: ________________________________________________________________

3.    BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

      (a)   Type and Principal  Amount of  Registrable  Securities  beneficially
            owned:

             ___________________________________________________________________

             ___________________________________________________________________

             ___________________________________________________________________

                                       20
<PAGE>

4.    BROKER-DEALER STATUS:

      (a)   Are you a broker-dealer?

                                 Yes |_| No |_|

      Note: If yes, the  Commission's  staff has  indicated  that you should be
            identified as an underwriter in the Registration Statement.

      (b)   Are you an affiliate of a broker-dealer?

                                 Yes |_| No |_|

      (c)   If you are an affiliate of a broker-dealer,  do you certify that you
            bought  the  Registrable   Securities  in  the  ordinary  course  of
            business,  and  at  the  time  of the  purchase  of the  Registrable
            Securities to be resold,  you had no  agreements or  understandings,
            directly  or   indirectly,   with  any  person  to  distribute   the
            Registrable Securities?

                                 Yes |_| No |_|

      Note: If no,  the  Commission's  staff has  indicated  that you should be
            identified as an underwriter in the Registration Statement.

5. BENEFICIAL  OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
SECURITYHOLDER.

      Except  as set  forth  below in this  Item 5, the  undersigned  is not the
      beneficial or registered owner of any securities of the Company other than
      the Registrable Securities listed above in Item 3.

      (a)   Type  and  Amount  of  Other  Securities  beneficially  owned by the
            Selling Securityholder:

             ___________________________________________________________________

             ___________________________________________________________________

                                       21
<PAGE>

6.    RELATIONSHIPS WITH THE COMPANY:

      Except  as  set  forth  below,  neither  the  undersigned  nor  any of its
      affiliates,  officers, directors or principal equity holders (owners of 5%
      of more of the equity securities of the undersigned) has held any position
      or office or has had any other material  relationship with the Company (or
      its predecessors or affiliates) during the past three years.

      State any exceptions here:

      __________________________________________________________________________

      The undersigned  agrees to promptly notify the Company of any inaccuracies
or changes in the information  provided herein that may occur  subsequent to the
date hereof at any time while the Registration Statement remains effective.

      By signing  below,  the  undersigned  consents  to the  disclosure  of the
information  contained  herein  in its  answers  to  Items 1  through  6 and the
inclusion of such  information  in the  Registration  Statement  and the related
prospectus  and  any  amendments  or  supplements   thereto.   The   undersigned
understands  that  such  information  will  be  relied  upon by the  Company  in
connection with the preparation or amendment of the  Registration  Statement and
the related prospectus.

      IN WITNESS WHEREOF the  undersigned,  by authority duly given,  has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

Dated:  ___________________________    Beneficial Owner:________________________

                                           By: _________________________________
                                               Name:
                                               Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                       22

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