Document:

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                                                                     EXHIBIT 4.3

                                     WARRANT

          THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
          OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
          ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
          SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
          ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
          REQUIRED.

                      ADVANCED TECHNOLOGY INDUSTRIES, INC.

                          COMMON STOCK PURCHASE WARRANT

     1. Issuance; Certain Definitions. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by ADVANCED
TECHNOLOGY INDUSTRIES, INC., a Delaware corporation (the "Company"), [ ] or
registered assigns (the "Holder") is hereby granted the right to purchase at any
time during the period (the "Exercise Period") from the date hereof until 5:00
P.M., New York City time, on the second anniversary of the Effective Date (the
"Expiration Date"), [ ] fully paid and nonassessable shares of the Company's
Common Stock (the "Common Stock"), at an exercise price per share (the "Exercise
Price") of $0.07 per share, as such price may be adjusted as provided herein.

     This Warrant is being issued pursuant to the terms of the Securities
Purchase Agreement, dated of even date (the "Securities Purchase Agreement"), to
which the Company and the Holder (or the Holder's predecessor in interest) are
parties. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Securities Purchase Agreement.

     2. Exercise of Warrants.

          2.1 General.

          (a) This Warrant is exercisable in whole or in part at any time during
the Exercise Period. Such exercise shall be effectuated by submitting to the
Company (either by delivery to the Company or by facsimile transmission as
provided in Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
this paragraph and by delivering to the Company this Warrant Certificate,
together with appropriate payment of the Exercise Price for the shares of Common
Stock purchased (the date all such deliveries are completed, the "Exercise

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Date"); provided that the Holder will only be able to exercise this Warrant if
such exercise is exempt from the registration requirements of the Act, as
defined below, (and the Company has received such information as the Company may
reasonable request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Act). The Notice of Exercise shall be executed by the Holder
of this Warrant and shall indicate the number of shares then being purchased
pursuant to such exercise. Upon surrender of this Warrant Certificate, together
with appropriate payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased. This Warrant shall expire and be of
no force or effect from and after the Expiration Date.

          (b) The Holder shall be deemed to be the holder of the shares issuable
to it in accordance with the provisions of this Section 2.1 on the Exercise
Date.

          (c) The Holder shall pay the Exercise Price in cash; provided that in
the event that the Registration Statement is not effective on any Exercise Date
subsequent to the one year anniversary of the date hereof (other than during a
Permitted Suspension Period), then the Holder may pay the Exercise Price with
respect to the shares of Common Stock set forth in the Notice of Exercise
delivered in connection with such Exercise Date, pursuant to a cashless exercise
by surrendering this Warrant to the Company together with a notice of cashless
exercise, in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:

                    X = Y (A-B)/A
    where:
                    X = the number of Warrant Shares to be issued to the Holder.

                    Y = the number of Warrant Shares with respect to which this
                    Warrant is being exercised.

                    A = the average of the closing sale prices of the Common
                    Stock for the five (5) Trading Days immediately prior to
                    (but not including) the Exercise Date.

                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have been commenced, on the
issue date. If the Registration Statement has been declared effective on or
before the one year anniversary of the date hereof, and is effective on any
Exercise Date subsequent to the one year anniversary of the date hereof (other
than during a Permitted Suspension Period), the Holder shall not have a right of
cashless exercise, but shall pay the Exercise Price in cash as set forth in
subsection 9(a) above.

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          (d) If the Average Price is equal to or greater than $0.50 during any
period of twenty (20) consecutive Trading Day and the Closing Price is equal to
or greater than $0.50 for a least ten (10) Trading Days during such period, then
on the fifteenth (15th) Trading Day following the end of such period, and
delivery of written notice thereof from Company to Holder, the Exercise Price
shall be adjusted to $0.25 (the "Adjusted Exercise Price"), as such price may be
adjusted as provided herein. For purposes of this Section 2.1(d), (i) Average
Price shall be the average closing bid prices of the Common Stock during the
applicable period, as reported by the Reporting Service, or, in the event the
Common Stock is listed on a stock exchange or traded on NASDAQ, the Average
Price shall be such closing prices on such exchange or NASDAQ, as reported in
the Wall Street Journal and (ii) Closing Bid Price shall be the closing bid
price of the Common Stock on the applicable date, as reported by the Reporting
Service, or, in the event the Common Stock is listed on a stock exchange or
traded on NASDAQ, the Closing Bid Price shall be such closing price on such
exchange or NASDAQ, as reported in the Wall Street Journal.

          2.2 Limitation on Exercise. Notwithstanding the provisions of this
Warrant, the Securities Purchase Agreement or of the other Transaction
Agreements, in no event (except (i) as specifically provided in this Warrant as
an exception to this provision, (ii) while there is outstanding a tender offer
for any or all of the shares of the Common Stock, or (iii) at the Holder's
option, on at least sixty-five (65) days' advance written notice from the
Holder) shall the Holder be entitled to exercise this Warrant, or shall the
Company have the obligation to issue shares upon such exercise of all or any
portion of this Warrant to the extent that, after such exercise the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its
Affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised portion of the Warrants or other
rights to purchase Common Stock or through the ownership of the unconverted
portion of the Debentures or other convertible securities), and (2) the number
of shares of Common Stock issuable upon the exercise of the Warrants with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its Affiliates of more than 4.99% of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an Affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.

     3. Reservation of Shares. The Company hereby agrees that from the date
hereof to the Expiration Date there shall be reserved for issuance upon exercise
of this Warrant such number of shares of the Common Stock as shall be required
for issuance upon exercise of this Warrant (the "Warrant Shares").

     4. Mutilation or Loss of Warrant. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) receipt of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor and date and any such lost, stolen, destroyed or mutilated Warrant
shall thereupon become void.

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     5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.

     6. Protection Against Dilution and Other Adjustments.

          6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to Section 6.2, the Holder shall be entitled to purchase such
number of additional shares of Common Stock as will cause the total number of
shares of Common Stock the Holder is entitled to purchase pursuant to this
Warrant, multiplied by the adjusted Exercise Price per share, to equal the
dollar amount of the total number of shares of Common Stock Holder is entitled
to purchase before adjustment multiplied by the total Exercise Price before
adjustment.

          6.2 Capital Adjustments. If, at any time while this Warrant remains
outstanding, the Company effectuates a stock split or reverse stock split of the
Common Stock or issues a dividend on the Common Stock consisting of shares of
Common Stock, the Exercise Price, Adjusted Exercise Price and any other amounts
calculated as contemplated hereby shall be equitably adjusted to reflect such
action. By way of illustration, and not in limitation, of the foregoing, (i) if
the Company effectuates a 2:1 split of the Common Stock, thereafter, with
respect to any exercise for which the Company issues shares after the record
date of such split, the Exercise Price, Adjusted Exercise Price and any market
price from a date prior to such split which was used in the calculation of the
Average Price or Closing Bid Price shall be deemed to be one-half of what it had
been immediately prior to such split; (ii) if the Company effectuates a 1:10
reverse split of the Common Stock, thereafter, with respect to any exercise for
which the Company issues shares after the record date of such reverse split, the
Exercise Price, Adjusted Exercise Price and any market price from a date prior
to such split which was used in the calculation of the Average Price or Closing
Bid Price shall be deemed to be ten times what it had been calculated to be
immediately prior to such split; and (iii) if the Company declares a stock
dividend of one share of Common Stock for every 10 shares outstanding,
thereafter, with respect to any exercise for which the Company issues shares
after the record date of such dividend, the Exercise Price, Adjusted Exercise
Price and any market price from a date prior to such split which was used in the
calculation of the Average Price or Closing Bid Price shall be deemed to be such
amount multiplied by a fraction, of which the numerator is the number of shares
(10 in the example) for which a dividend share will be issued and the
denominator is such number of shares plus the dividend share(s) issuable or
issued thereon (11 in the example).

          6.3 Merger, Consolidation, Etc. If, for as long as this Warrant
remains outstanding, the Company enters into a merger (other than where the
Company is the surviving entity) or consolidation with another corporation or
other entity or a sale or transfer of all or substantially all of the assets of
the Company to another person (collectively, a "Sale"), and the holders of the
Common Stock are entitled to receive stock, securities or property in respect of

<PAGE>

or in exchange for Common Stock, then as a condition of such Sale, the Company
and any such successor, purchaser or transferee will agree that this Warrant may
thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of Common Stock into which this Warrant might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable.

          6.3 Adjustment for Spin Off. If, for any reason, prior to the exercise
of this Warrant in full, the Company spins off or otherwise divests itself of a
part of its business or operations or disposes all or a part of its assets in a
transaction (the "Spin Off") in which the Company does not receive compensation
for such business, operations or assets, but causes securities of another entity
(the "Spin Off Securities") to be issued to security holders of the Company,
then

          (a) the Company shall cause (i) to be reserved Spin Off Securities
     equal to the number thereof which would have been issued to the Holder had
     all of the Holder's unexercised Warrants outstanding on the record date
     (the "Record Date") for determining the amount and number of Spin Off
     Securities to be issued to security holders of the Company (the
     "Outstanding Warrants") been exercised as of the close of business on the
     Trading Day immediately before the Record Date (the "Reserved Spin Off
     Shares"), and (ii) to be issued to the Holder on the exercise of all or any
     of the Outstanding Warrants, such amount of the Reserved Spin Off Shares
     equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction, of
     which (I) the numerator is the amount of the Outstanding Warrants then
     being exercised, and (II) the denominator is the amount of the Outstanding
     Warrants; and

          (b) the Exercise Price on the Outstanding Warrants shall be adjusted
     immediately after consummation of the Spin Off by multiplying the Exercise
     Price by a fraction (if, but only if, such fraction is less than 1.0), the
     numerator of which is the average closing bid price of the Common Stock for
     the five (5) Trading Days immediately following the fifth Trading Day after
     the Record Date, and the denominator of which is the average Closing Bid
     Price of the Common Stock on the five (5) Trading Days immediately
     preceding the Record Date; and such adjusted Exercise Price shall be deemed
     to be the Exercise Price with respect to the Outstanding Warrants after the
     Record Date.

     7. Transfer to Comply with the Securities Act; Registration Rights.

          7.1 Transfer. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Except for transfers to officers, employees and
Affiliates of the Holder, neither this Warrant nor any of the Warrant Shares or
any other security issued or issuable upon exercise of this Warrant may be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement under the Act relating to such security or an opinion of counsel
satisfactory to the Company that registration is not required under the Act.
Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.

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          7.2 Registration Rights. (a) The Holder shall have registration rights
with respect to the Warrant Shares as set forth in the Securities Purchase
Agreement and the Registration Rights Agreement. The Holder's rights under this
Section 7.2 shall expire at such time as the Holder can sell all of the Warrant
Shares held by such Holder under Rule 144 without volume or other restrictions
or limit.

     8. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two days after the date of deposit in the United States mails, as
follows:

           (i) if to the Company, to:

                   Advanced Technology Industries, Inc..
                   211 Madison Avenue, #28B
                   New York, New York 10016
                   Attn:  Allan Klepfisz
                   Tel:  (212) 532-2736
                   Fax: (212) 532-2904

           (ii) if to the Holder, to:

                   Brio Capital L.P.
                   10 E. 40th Street, 22nd Floor
                   New York, NY 10016
                   Tel: (646) 725-1245
                   Fax: (646) 390-2158

                   with a copy to:

                   Krieger & Prager LLP
                   39 Broadway
                   Suite 1440
                   New York, NY
                   Attn: Samuel M. Krieger, Esq.
                   Tel: (212) 363-2900
                   Fax: (212) 363-2999

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Any party may give notice in accordance with this Section to the other parties
designate to another address or person for receipt of notices hereunder.

     9. Supplements and Amendments; Whole Agreement. This Warrant may be amended
or supplemented only by an instrument in writing signed by the Holder and the
Company. This Warrant contains the full understanding of the Holder and the
Company with respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.

     10. Governing Law. This Warrant shall be deemed to be a contract made under
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. The Company and, by its acceptance of this Warrant, the Holder each
consents to the jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Warrant and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on FORUM NON CONVENIENS, to the
bringing of any such proceeding in such jurisdictions. To the extent determined
by such court, the Company shall reimburse the Holder for any reasonable legal
fees and disbursements incurred by the Holder in enforcement of or protection of
any of its rights under this Warrant.

     11. Jury Trial Waiver. The Company and, by its acceptance of this Warrant,
the Holder hereby waive a trial by jury in any action, proceeding or
counterclaim brought by either of the Parties hereto against the other in
respect of any matter arising out or in connection with this Warrant.

     12. Descriptive Headings. Descriptive headings of the several Sections of
this Warrant are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.

<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the 3rd day
of April, 2006.

                                    ADVANCED TECHNOLOGY INDUSTRIES, INC.

                                    By:________________________________________
                                    Title: President

<PAGE>

                          NOTICE OF EXERCISE OF WARRANT

     The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of __________________, ____, to
purchase ________ shares of the Common Stock of ADVANCED TECHNOLOGY INDUSTRIES,
INC., and tenders herewith payment in accordance with Section 1 of said Common
Stock Purchase Warrant.

_    CASH: $_____________________________  =  (Exercise Price x Exercise Shares)

           Payment is being made by:
                    _   enclosed check
                    _   wire transfer
                    _   other
_    CASHLESS EXERCISE

           Net number of Warrant Shares to be issued to Holder : _________*

           * based on: Current Market Value - (Exercise Price x Exercise Shares)
                       ---------------------------------------------------------
                                         Market Price of Common Stock
           where:
           Market Price of Common Stock ["MP"]         =        $_______________
           Current Market Value [MP x Exercise Shares] =        $_______________

     It is the intention of the Holder to comply with the provisions of Section
2.2 of the Warrant regarding certain limits on the Holder's right to exercise
thereunder.

     To the extent that, pursuant to the exercise effected hereby, the Holder
would have more shares than permitted under said Section, this notice should be
amended and revised, ab initio, to refer to the exercise which would result in
the issuance of shares consistent with such provision. Any exercise above such
amount is hereby deemed void and revoked.

     Please deliver the stock certificate to:

Dated:

[Name of Holder]

By:____________________________<PAGE>
                                                                     EXHIBIT 4.4

                          REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 30, 2006 (this
"Agreement"), is made by and among ADVANCED TECHNOLOGY INDUSTRIES, INC., a
Delaware corporation, with headquarters located at 211 Madison Avenue, #28B, New
York, New York 10016 (the "Company"), and the entity (other than the Company)
named on the signature page hereto (the "Investor").

                              W I T N E S S E T H:

     WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement, dated as of even date, between the Investor and the Company
(the "Securities Purchase Agreement"; capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Securities Purchase
Agreement), the Company has agreed to issue and sell to the Investor the
Debentures; and

     WHEREAS, the Debentures are convertible into shares of Common Stock (the
"Conversion Shares"; which term, for purposes of this Agreement, shall include
shares of Common Stock of the Company issuable in lieu of accrued interest
through the Maturity Date (as that term is defined in the Debentures)) upon the
terms and subject to the conditions contained in the Debentures; and

     WHEREAS, upon and subject to the terms of the Securities Purchase
Agreement, the Company has agreed to issue the Warrants to the Investor in
connection with the issuance of the Debentures, and the Warrants may be
exercised for the purchase of shares of Common Stock (the "Warrant Shares") upon
the terms and conditions of the Warrants; and

     WHEREAS, to induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities (as defined
below);

<PAGE>

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:

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

     (a) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.

     (b) "Held Shares Value" means, for shares of Common Stock acquired by the
Investor upon a conversion of a Debenture within the thirty (30) days preceding
the Restricted Sale Date, but not yet sold by the Investor, the principal amount
of the Debentures converted into such Conversion Shares; provided, however, that
if the Investor effected more than one such conversion during such thirty (30)
day period and sold less than all of such shares, the sold shares shall be
deemed to be derived first from the conversions in the sequence of such
conversions (that is, for example, until the number of shares from the first of
such conversions have been sold, all shares shall be deemed to be from the first
conversion; thereafter, from the second conversion until all such shares are
sold).

     (c) "Investor" means the Investor and any permitted transferee or assignee
who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 hereof and who holds Debentures, Warrants or Registrable
Securities.

     (d) "Payment Shares" means shares of Common Stock issued by the Company as
provided in Section 2(b) below.

     (e) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the business
and affairs of the Company or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a registration statement
at such time; in each case where such determination shall be accompanied by a
good faith determination by the Board of Directors of the Company that the
registration statement would be materially misleading absent the inclusion of
such information.

     (f) "Register," "Registered," and "Registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a continuous
basis ("Rule 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").

<PAGE>

     (g) "Registrable Securities" means, collectively, the Conversion Shares,
the Warrant Shares and the Payment Shares.

     (h) "Registration Statement" means a registration statement of the Company
under the Securities Act covering Registrable Securities on Form S-3, if the
Company is then eligible to file using such form, and if not eligible, on Form
S-2 or other appropriate form which shall include only the Registrable
Securities and the such other securities as may be permitted by Section 5(b)
hereof.

     (i) "Required Effective Date" means the relevant Initial Required Effective
Date or Increased Required Effective Date (as those terms are defined below).

     (j) "Required Filing Date" means May 15, 2006.

     (k) "Restricted Sale Date" means the first date, other than a date during a
Permitted Suspension Period (as defined below), on which the Investor is
restricted from making sales of Registrable Securities covered by any previously
effective Registration Statement.

     2. REGISTRATION.

     (A) MANDATORY REGISTRATION.

     (i) The Company shall prepare and file with the SEC, not later than the
Required Filing Date, either a Registration Statement or an amendment to an
existing Registration Statement, in either event registering for resale by the
Investor a sufficient number of shares of Common Stock for the Investor to sell
the Registrable Securities, but in no event less than the number of shares equal
to the sum of (x) two hundred and ten percent (210%) of the aggregate of the
number of shares into which the Debentures and all interest thereon through the
Maturity Date would be convertible at the time of filing of such Registration
Statement and any pre-effective amendment thereto (assuming for such purposes
that all Debentures had been issued, had been eligible to be converted, and had
been converted, into Conversion Shares in accordance with their terms, whether
or not such issuance, eligibility, accrual of interest or conversion had in fact
occurred as of such date) and (y) one hundred and ten percent (110%) of the
aggregate of the number of Warrant Shares which would be issuable on exercise of
the Warrants (assuming for such purposes that all Warrants had been issued, had
been eligible for exercise and had been exercised for Warrant Shares in
accordance with their terms, whether or not such issuance, eligibility or
exercise had in fact occurred as of such date). Unless otherwise specifically
agreed to in writing in advance by the Investor, the Registration Statement
shall state that, in accordance with Rule 416 and 457 under the Securities Act,
it also covers such indeterminate number of additional shares of Common Stock as
may become issuable upon conversion of the Debentures or exercise of the
Warrants to prevent dilution resulting from stock splits, or stock dividends.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (the "Initial Required Effective
Date") which is no later than the earlier of (Y) five (5) days after oral or
written notice by the SEC that it may be declared effective or (Z) July 21,
2006.

<PAGE>

     (ii) If at any time (an "Increased Registered Shares Date") after a
Registration Statement has been filed with the SEC, the Investor determines that
the number of shares of Common Stock represented by the Registrable Shares,
issued or to be issued as contemplated by the Transaction Agreements, exceeds
the aggregate number of shares of Common Stock then registered or sought to be
registered in a Registration Statement which has not yet been declared
effective, the Company shall, upon the written request of the Investor, either

     (X) amend the relevant Registration Statement filed by the
     Company pursuant to the preceding provisions of this Section 2,
     if such Registration Statement has not been declared effective by
     the SEC at that time, to register, in the aggregate, at least the
     number of shares (the "Increased Shares Amount") equal to (A) the
     number of shares theretofore issued on conversion of the
     Debentures (including any interest paid on conversion by the
     issuance of Conversion Shares) , plus (B) the number of shares
     theretofore issued on exercise of the Warrants, plus (C) the sum
     of:

          (I) the number of shares into which the unconverted
          Debentures and all interest thereon through the Maturity
          Date would be convertible at the date of such filing
          (assuming for such purposes that all such Debentures had
          been issued, had been eligible to be converted, and had been
          converted, into Conversion Shares in accordance with their
          terms, whether or not such issuance eligibility, accrual of
          interest, or conversion had in fact occurred as of such
          date), and

          (II) the number of Warrant Shares which would be issuable on
          exercise of the unexercised Warrants (assuming for such
          purposes that all such Warrants had been issued, had been
          eligible for exercise and had been exercised for Warrant
          Shares in accordance with their terms, whether or not such
          issuance, eligibility or exercise had in fact occurred as of
          such date), or

     (Y) if such Registration Statement has been declared effective by
     the SEC at that time, file with the SEC an additional
     Registration Statement (an "Additional Registration Statement")
     to register the number of shares equal to the excess of the
     Increased Shares Amount over the aggregate number of shares of
     Common Stock already registered.

The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (each, an "Increased Required
Effective Date") which is no later than (q) with respect to a Registration
Statement under clause (X) of this subparagraph (ii), the Initial Required
Effective Date and (r) with respect to an Additional Registration Statement, the
earlier of (I) five (5) days after notice by the SEC that it may be declared
effective or (II) thirty (30) days after the Increased Registered Shares Date.

<PAGE>

     (B) PAYMENTS BY THE COMPANY.

     (i) If the Registration Statement covering the Registrable Securities is
not filed in proper form with the SEC by the Required Filing Date, the Company
will make payment to the Investor in such amounts and at such times as shall be
determined pursuant to this Section 2(b).

     (ii) If the Registration Statement covering the Registrable Securities is
not effective by the relevant Required Effective Date or if there is a
Restricted Sale Date, then the Company will make payments to the Investor in
such amounts and at such times as shall be determined pursuant to this Section
2(b).

     (iii) The amount (the "Periodic Amount") to be paid by the Company to the
Investor shall be determined as of each Computation Date (as defined below) and
such amount shall be equal to the Periodic Amount Percentage (as defined below)
of the Purchase Price for all Debentures held by the Investor for the period
from the date following the relevant Required Filing Date or the Required
Effective Date or a Restricted Sale Date, as the case may be, to the first
relevant Computation Date, and thereafter to each subsequent Computation Date.
The "Periodic Amount Percentage" means (A) one percent (1%) of the Purchase
Price of all Debentures for the first two Computation Dates after the relevant
Required Filing Date; and (B) two percent (2%) of the Purchase Price of all
Debentures to any Computation Date thereafter. Anything in the preceding
provisions of this paragraph (iii) to the contrary notwithstanding, after the
relevant Effective Date the Purchase Price shall be deemed to refer to the sum
of (X) the principal amount of all Debentures not yet converted and (Y) the Held
Shares Value. By way of illustration and not in limitation of the foregoing, if
the Registration Statement is filed on or before the Required Filing Date, but
is not declared effective by August 27, 2006, the Periodic Amount will aggregate
two percent (2%).

     (iv) Each Periodic Amount will be payable by the Company, except as
provided in the other provisions of subparagraph (v), in cash or other
immediately available funds to the Investor (1) on the day after the Required
Filing Date, the Required Effective Date or a Restricted Sale Date, as the case
may be, and (2) on the earlier of (A) each thirtieth day thereafter, (B) the
third business day after the date the Registration Statement is filed or is
declared effective, or (C) the third business day after the Registration
Statement has its restrictions removed after the relevant Effective Date, in
each case without requiring demand therefor by the Investor.

     (v) Notwithstanding the provisions of the immediately preceding
subparagraph (iv),

     (i) at the option of the Company, exercisable in its discretion
     on the date the Periodic Amount is due; provided, however, that
     the Company may exercise this discretion if, but only if the
     Registration Statement covering the Payment Shares is then
     effective; or

<PAGE>

     (ii) at the option of the Investor, exercisable in its sole and
     absolute discretion by written notice to the Company at any time
     before the Periodic Amount is paid,

all or a portion of the Periodic Amount shall be paid by the issuance of
additional shares of Common Stock to such Investor ("Payment Shares") in an
amount equal to the Periodic Amount being paid thereby divided by the then
applicable Conversion Price; provided, further that the Delivery Date for the
Payment Shares shall be three (3) business days after the date the Periodic
Amount is due (if the election is made by the Company) or after the Investor
gives the notice contemplated by clause (ii) of this subparagraph.

     (vi) The parties acknowledge that the damages which may be incurred by the
Investor if the Registration Statement is not filed by the Required Filing Date
or the Registration Statement has not been declared effective by a Required
Effective Date, including if the right to sell Registrable Securities under a
previously effective Registration Statement is suspended or the shares of the
Company's stock are not listed on the Principal Trading Market, may be difficult
to ascertain. The parties agree that the amounts payable pursuant to the
foregoing provisions of this Section 2(b) represent a reasonable estimate on the
part of the parties, as of the date of this Agreement, of the amount of such
damages.

     (vii) Notwithstanding the foregoing, the amounts payable by the Company
pursuant to this provision shall not be payable to the extent any delay in the
filing or effectiveness of the Registration Statement occurs because of an act
of, or a failure to act or to act timely by the Investor or its counsel.

     (viii) "Computation Date" means (A) the date which is the earlier of (1)
thirty (30) days after the Required Filing Date, any relevant Required Effective
Date or a Restricted Sale Date, as the case may be, or (2) the date after the
Required Filing Date, such Required Effective Date or Restricted Sale Date on
which the Registration Statement is filed (with respect to payments due as
contemplated by Section 2(b) hereof) or is declared effective or has its
restrictions removed or the shares of the Company's stock are listed on the
Principal Trading Market (with respect to payments due as contemplated by
Section 2(b)(ii) hereof), as the case may be, and (B) each date which is the
earlier of (1) thirty (30) days after the previous Computation Date or (2) the
date after the previous Computation Date on which the Registration Statement is
filed (with respect to payments due as contemplated by Section 2(b) hereof) or
is declared effective or has its restrictions removed or the shares of the
Company's stock are listed on the Principal Trading Market (with respect to
payments due as contemplated by Section 2(b)(ii) hereof), as the case may be.

     (ix) Notwithstanding anything herein to the contrary the remedy set forth
in this Section 2(b) shall be the sole remedy for the Investor if the
Registration Statement covering the Registrable Securities is not filed in
proper form with the SEC by the Required Filing Date or if the Registration
Statement covering the Registrable Securities is not effective by the relevant
Required Effective Date or if there is a Restricted Sale Date.

<PAGE>

     (C) PIGGYBACK REGISTRATION. If the Company at any time proposes to register
any of its securities under the Securities Act for sale to the public, whether
for its own account or for the account of other security holders or both, except
with respect to registration statements on Forms S-4 and S-8 or another form not
available for registering the Registrable Securities for sale to the public,
provided the Registrable Securities are not otherwise registered for resale
pursuant to an effective registration statement, each such time it will give at
least fifteen (15) days' prior written notice to the Investor of its intention
so to do. Upon the written request of the Investor, received by the Company
within ten (10) days after the giving of any such notice by the Company, to
register any of the Registrable Securities not previously registered, the
Company will cause such Registrable Securities as to which registration shall
have been so requested to be included with the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
required to permit the sale or other disposition of the Registrable Securities
so registered by the Investor.

     3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:

     (a) Prepare promptly, and file with the SEC by the Required Filing Date, a
Registration Statement with respect to not less than the number of Registrable
Securities provided in Section 2(a) above, and thereafter use its reasonable
best efforts to cause such Registration Statement relating to Registrable
Securities to become effective by the Required Effective Date and keep the
Registration Statement effective at all times, other than during Permitted
Suspension Periods, during the period (the "Registration Period") continuing
until the earlier of (i) the date when the Investor may sell all Registrable
Securities under Rule 144 without volume or other restrictions or limits or (ii)
the date the Investor no longer own any of the Registrable Securities, which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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 in which
they were made, not misleading;

     (b) Prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary to keep
the Registration Statement effective at all times during the Registration Period
(except during Permitted Suspension Periods), and, during the Registration
Period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

     (c) Permit a single firm of counsel designated by the Investor (which,
until further notice, shall be deemed to be Krieger & Prager LLP, Attn: Samuel
Krieger, Esq., which firm has requested to receive such notification; each, an
"Investor's Counsel") to review the Registration Statement and all amendments
and supplements thereto a reasonable period of time (but not less than three (3)
business days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects, unless the Company reasonably
determines that such document is required by law to be so filed;

<PAGE>

     (d) Notify the Investor and the Investor's Counsel and any managing
underwriters immediately (and, in the case of (i)(A) below, not less than three
(3) business days prior to such filing) and (if requested by any such person)
confirm such notice in writing no later than one (1) business day following the
day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed; (B) whenever
the SEC notifies the Company whether there will be a "review" of such
Registration Statement; (C) whenever the Company receives (or a representative
of the Company receives on its behalf) any oral or written comments from the SEC
in respect of a Registration Statement (copies or, in the case of oral comments,
summaries of such comments shall be promptly furnished by the Company to the
Investor); and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the SEC or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Registrable Securities or the initiation of any proceedings for that
purpose; (iv) if at any time any of the representations or warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose; and (vi) of the occurrence of any event that to the
best knowledge of the Company makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. In addition, the Company shall furnish the Investor's
Counsel with copies of all intended written responses to the comments
contemplated in clause (C) of this Section 3(d) not later than one (1) business
day in advance of the filing of such responses with the SEC so that the Investor
shall have the opportunity to comment thereon;

     (e) Furnish to the Investor and to Investor's Counsel (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received
by the Company, one (1) copy of the Registration Statement, each preliminary
prospectus and prospectus, and each amendment or supplement thereto, and (ii)
such number of copies of a prospectus, and all amendments and supplements
thereto and such other documents, as the Investor may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by the
Investor;

     (f) As promptly as practicable after becoming aware thereof, notify the
Investor of the happening of any event of which the Company has knowledge, as a
result of which the prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits 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, and, subject to Section 4(c), use its best efforts promptly to
prepare a supplement or amendment to the Registration Statement or other
appropriate filing with the SEC to correct such untrue statement or omission,
and deliver a number of copies of such supplement or amendment to the Investor
as the Investor may reasonably request;

<PAGE>

     (g) [intentionally omitted ]

     (h) Comply with Regulation FD or any similar rule or regulation regarding
the dissemination of information regarding the Company, and in furtherance of
the foregoing, and not in limitation thereof, not disclose to the Investor any
non-public material information regarding the Company;

     (i) Use its reasonable efforts to secure and maintain the designation of
all the Registrable Securities covered by the Registration Statement on the
Principal Trading Market and the quotation of the Registrable Securities on the
Principal Trading Market;

     (j) Provide a transfer agent ("Transfer Agent") and registrar, which may be
a single entity, for the Registrable Securities not later than the initial
Effective Date;

     (k) Cooperate with the Investor to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be offered pursuant
to the Registration Statement and enable such certificates for the Registrable
Securities to be in such denominations or amounts as the case may be, as the
Investor may reasonably request, and, within five (5) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the Transfer Agent for the Registrable
Securities (with copies to the Investor) an appropriate instruction and opinion
of such counsel, which shall include, without limitation, directions to the
Transfer Agent to issue certificates of Registrable Securities (including
certificates for Registrable Securities to be issued after the Effective Date
and replacement certificates for Registrable Securities previously issued)
without legends or other restrictions, subject to compliance with applicable
law, including, without limitation, prospectus delivery requirements; and

     (l) Take all other reasonable actions necessary to expedite and facilitate
disposition by the Investor of the Registrable Securities pursuant to the
Registration Statement.

     4. OBLIGATIONS OF THE INVESTOR. In connection with the registration of the
Registrable Securities, the Investor shall have the following obligations:

     (a) The Investor, by the Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless the Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement;

<PAGE>

     (b) The Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(d)(iii) or
3(f), above, the Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(d)(iii) or 3(f)
and, if so directed by the Company, the Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice;

     (c) Notwithstanding anything in this Agreement to the contrary, if at any
time or from time to time after the date of effectiveness of the Registration
Statement, the Company notifies the Investor in writing that the effectiveness
of the Registration Statement is suspended for any reason, whether due to a
Potential Material Event or otherwise, the Investor shall not offer or sell any
Registrable Securities, or engage in any other transaction involving or relating
to the Registrable Securities, from the time of the giving of such notice until
the Investor receives written notice from the Company that such the
effectiveness of the Registration Statement has been restored, whether because
the Potential Material Event has been disclosed to the public or it no longer
constitutes a Potential Material Event or otherwise; provided, however, that the
Company may not so suspend the right to such holder of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period (and the applicable provisions of
Section 2(b) shall apply with respect to any such suspension other than during a
Permitted Suspension Period) . The term "Permitted Suspension Period" means up
to two such suspension periods during any consecutive 12-month period, each of
which suspension period shall not either (i) be for more than ten (10) business
days or (ii) begin less than ten (10) business days after the last day of the
preceding suspension (whether or not such last day was during or after a
Permitted Suspension Period)

     5. EXPENSES OF REGISTRATION. (a) All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company.

     (b) Neither the Company nor any of its subsidiaries has, as of the date
hereof, nor shall the Company nor any of its subsidiaries, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company shall be entitled to
include all the shares required to be registered hereunder under any
registration rights agreement entered into after the date of this Agreement,
that is not inconsistent with the rights granted to the Holders in this
Agreement or that otherwise conflicts with the provisions hereof on a single
registration statement under the Securities Act.

     6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:

<PAGE>

     (a) To the extent permitted by law, the Company will indemnify and hold
harmless the Investor, the directors, if any, of the Investor, the officers, if
any, of the Investor, and each Lender Control Person (each, an "Lender
Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post-effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively referred to as
"Violations"). Subject to clause (b) of this Section 6, the Company shall
reimburse the Investor, promptly as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to any Claim
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of such Lender Indemnified Party expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(b) hereof; (II) be available to the extent such Claim is
based on a failure of any Lender Indemnified Party to deliver or cause to be
delivered the prospectus made available by the Company or the amendment or
supplement thereto made available by the Company; (III) be available to the
extent such Claim is based on the delivery of a prospectus by any Lender
Indemnified Party after receiving notice from the Company under Section
3(d)(iii) or 3(f) or Section 4(c) hereof (other than a notice regarding the
effectiveness of the Registration Statement or any amendment or supplement
thereto), or (IV) apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. The Investor will
indemnify the Company and its officers, directors and agents and each Company
Control Person (each, an "Company Indemnified Party", and together with each
Lender Indemnified Party, each an "Indemnified Party") against any claims
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company, by or on behalf
of the Investor, expressly for use in connection with the preparation of the
Registration Statement or the amendment or supplement thereto, subject to such
limitations and conditions as are applicable to the indemnification provided by
the Company to this Section 6. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Party and shall survive the transfer of the Registrable Securities by the
Investor pursuant to Section 9.

<PAGE>

     (b) Promptly after receipt by an Indemnified Party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Party. In case any such action is
brought against any Indemnified Party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, assume the defense thereof, subject to the provisions
herein stated and after notice from the indemnifying party to such Indemnified
Party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such Indemnified Party under this Section 6 for any legal
or other reasonable out-of-pocket expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion. The Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and reasonable out-of-pocket expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the Indemnified Party provided such counsel is of the opinion that all defenses
available to the Indemnified Party can be maintained without prejudicing the
rights of the indemnifying party. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as such
expense, loss, damage or liability is incurred and is due and payable.

     7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
except where the seller has committed fraud (other than a fraud by reason of the
information included or omitted from the Registration Statement as to which the
Company has not given notice as contemplated under Section 3 hereof) or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

<PAGE>

     8. REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With a view to making
available to the Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investor to sell securities of the Company to the public
without Registration ("Rule 144"), for a period of two years after the date
hereof, the Company agrees to:

     (a) make and keep public information available, as those terms are
understood and defined in Rule 144;

     (b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and

     (c) furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) if not available on the SEC's EDGAR system, a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (iii) such other information as may be
reasonably requested to permit the Investor to sell such securities pursuant to
Rule 144 without Registration; and

     (d) at the request of the Investor, give its Transfer Agent instructions to
the effect that, upon the Transfer Agent's receipt from such Holder of

     (i) a certificate (a "Rule 144 Certificate") certifying (A) that
     the Investor's holding period (as determined in accordance with
     the provisions of Rule 144) for the shares of Registrable
     Securities which the Investor proposes to sell (the "Securities
     Being Sold") is not less than (1) year and (B) as to such other
     matters as may be appropriate in accordance with Rule 144 under
     the Securities Act, and

     (ii) an opinion of counsel acceptable to the Company for which
     purpose it is agreed that Investor's Counsel shall be deemed
     acceptable if not given by Ropes and Gray that, based on the Rule
     144 Certificate, Securities Being Sold may be sold pursuant to
     the provisions of Rule 144, even in the absence of an effective
     Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and
issue to the buyer(s) or transferee(s) thereof one or more stock certificates
representing the transferred Securities Being Sold without any restrictive
legend and without recording any restrictions on the transferability of such
shares on the Transfer Agent's books and records (except to the extent any such
legend or restriction results from facts other than the identity of the
Investor, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent reasonably requires any
additional documentation at the time of the transfer, the Company shall deliver
or cause to be delivered all such reasonable additional documentation as may be
necessary to effectuate the issuance of an unlegended certificate.

<PAGE>

     9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investor to any transferee of the Registrable
Securities (or all or any portion of any unconverted Debentures) only if the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, (b) the securities with respect to which such registration rights are
being transferred or assigned and (c) written evidence of the transferee's
assumption of the Investor's obligations under this Agreement.

     10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon the Investor
and the Company.

     11. MISCELLANEOUS.

     (a) A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

     (b) Notices required or permitted to be given hereunder shall be given in
the manner contemplated by the Securities Purchase Agreement, if to the Company
or to the Investor, to their respective address contemplated by the Securities
Purchase Agreement, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b).

     (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     (d) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York for contracts to be wholly performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on FORUM NON
COVENIENS, to the bringing of any such proceeding in such jurisdictions.

     (e) The Company and the Investor hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection with
this Agreement or any of the other Transaction Agreements.

<PAGE>

     (f) If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

     (g) Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

     (h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

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

     (j) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

     (k) Neither party shall be liable for consequential damages as a result of
any delay under this Agreement.

     (l) This Agreement (including to the extent relevant the provisions of
other Transaction Agreements) constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                    COMPANY:

                                    ADVANCED TECHNOLOGY  INDUSTRIES, INC.

                                    By:_________________________________
                                    Name:
                                    Title:

                                    INVESTOR:

                                           By:__________________________

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