Document:

EXHIBIT B

                            INVESTOR RIGHTS AGREEMENT

     This Investor Rights Agreement (this  "AGREEMENT") is made and entered into
as of June ___, 2005 among Secured Services,  Inc., a Delaware  corporation (the
"COMPANY"),  and the  purchasers  signatory  hereto  (each such  purchaser  is a
"PURCHASER" and collectively, the "PURCHASERS").

     This  Agreement is made pursuant to the Merger  Agreement,  dated as of the
date  hereof  among  the  Company,  Chameleon  Communications  Technology,  Inc.
("CHAMELEON") and Secured Mobile,  Inc., a Delaware corporation and wholly owned
subsidiary of the Company (the "MERGER 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 MERGER  AGREEMENT SHALL HAVE THE MEANINGS GIVEN SUCH TERMS IN THE
MERGER AGREEMENT. As used in this Agreement,  the following terms shall have the
following meanings:

               "ACTUAL  MINIMUM"  means,  as of any date, the maximum  aggregate
          number of shares of Common Stock then issued or  potentially  issuable
          in the future  pursuant to the  Transaction  Documents,  including any
          Underlying  Shares issuable upon exercise or conversion in full of all
          Warrants and shares of Preferred  Stock,  ignoring any  conversion  or
          exercise  limits set forth  therein,  and assuming that any previously
          unconverted  shares  of  Preferred  Stock  are held  until  the  third
          anniversary  of the Closing Date and all  dividends are paid in shares
          of Common Stock until such third anniversary.

               "ADVICE" shall have the meaning set forth in Section 8(c).

               "BUYER  PREFERRED  STOCK"  means the shares of Series B Preferred
          Stock of the Company issued pursuant to the Merger Agreement.

               "BUYER  WARRANT  STOCK"  means the  shares of Series B  Preferred
          Stock of the  Company  issued or issuable  upon  exercise of the Buyer
          Warrants issued pursuant to the Merger Agreement.

               "CERTIFICATE OF  DESIGNATION"  means the Secured  Services,  Inc.
          Certificate of Designation of  Preferences,  Rights and Limitations of
          Series B 7.5% Convertible Preferred Stock dated as of the date hereof.

               "COMMON STOCK" means the common stock of the Company.

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               "EFFECTIVENESS   DATE"   means,   with  respect  to  the  initial
          Registration  Statement  required  to be filed  hereunder,  the  120th
          calendar day following the date hereof (the 150th  calendar day in the
          case of a "regulatory  review" by the Commission) and, with respect to
          any additional  Registration Statements which may be required pursuant
          to Section  3(c),  the 120th  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).

               "EVENT" shall have the meaning set forth in Section 2(b).

               "EVENT DATE" shall have the meaning set forth in Section 2(b).

               "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 30th 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
          6(c).

               "INDEMNIFYING  PARTY" shall have the meaning set forth in Section
          6(c).

               "LOSSES" shall have the meaning set forth in Section 6(a).

               "MERGER"  means the  merger of  Chameleon  with and into  Secured
          Mobile,  Inc., a Delaware  corporation and wholly owned  subsidiary of
          the Company, as set forth in the Merger Agreement.

               "PLAN OF  DISTRIBUTION"  shall  have  the  meaning  set  forth in
          Section 2(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.

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               "REGISTRABLE  SECURITIES" means, as of the date in question,  (i)
          all of the shares of Common Stock issuable upon  conversion in full of
          the shares of Buyer Preferred Stock and Buyer Warrant Stock,  (ii) all
          shares  issuable as  dividends  on the  Preferred  Stock  assuming all
          dividend payments are made in shares of Common Stock and the Preferred
          Stock is held for at least 3 years, (iii) all Warrant Shares, (iv) any
          securities issued or issuable upon any stock split,  dividend or other
          distribution,  recapitalization  or similar  event with respect to the
          foregoing,  (v) any additional  shares issuable in connection with any
          anti-dilution provisions associated with the Preferred Stock and Buyer
          Warrants (in each case,  without  giving effect to any  limitations on
          conversion set forth in the  Certificate of Designation or limitations
          on exercise set forth in the Buyer  Warrants) and (vi) shares issuable
          in lieu of cash  payments of  liquidated  damages  pursuant to Section
          2(b).

               "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.

               "SELLING  SHAREHOLDER  QUESTIONNAIRE"  shall have the meaning set
          forth in Section 3(a).

               "TRADING  DAY" means a day on which the Common Stock is traded on
          a Trading Market.

               "TRADING  MARKET"  means the  following  markets or  exchanges on
          which the Common  Stock is listed or quoted for trading on the date in
          question: the Nasdaq SmallCap Market, the American Stock Exchange, the
          New  York  Stock  Exchange,  the  Nasdaq  National  Market  or the OTC
          Bulletin Board.

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               "TRANSACTION   DOCUMENTS"   means  this  Agreement,   the  Merger
          Agreement,  the  Stockholder  Representation  Statement  and  Transfer
          Restriction   Agreement   by  and  among  the   Company   and  certain
          stockholders  of Chameleon,  the  Certificate of Designation and other
          ancillary agreements relating to the Merger.

        2. SHELF REGISTRATION

          (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 (except if 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 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 best  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 telephonically request effectiveness
of a  Registration  Statement  as of 5:00 pm Eastern  Time on a Trading Day. The
Company shall immediately  notify the Holders via facsimile of the effectiveness
of  the  Registration  Statement  on the  same  Trading  Day  that  the  Company
telephonically  confirms  effectiveness with the Commission,  which shall be the
date requested for  effectiveness  of the  Registration  Statement.  The Company
shall,  by 9:30 am Eastern Time on the Trading Day after the Effective  Date (as
defined in the Merger  Agreement),  file a Form 424(b)(5)  with the  Commission.
Failure to so notify the Holder within 1 Trading Day of such notification  shall
be deemed an Event under Section 2(b).

          (b) If: (i) a  Registration  Statement is not filed on or prior to its
Filing Date (if the Company files a Registration Statement without affording the
Holders the reasonable opportunity to review and comment on the same as required
by Section 3(a),  the Company shall not be deemed to have  satisfied this clause
(i)),  or (ii) 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 (iii) 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 10  calendar  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  (iv)  a
Registration  Statement  filed or required to be filed hereunder is not declared
effective  by the  Commission  by its  Effectiveness  Date,  or  (v)  after  the
Effectiveness  Date, a  Registration  Statement  ceases for any reason to remain

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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 10 consecutive  calendar days
but no more than an  aggregate of 15 calendar  days during any  12-month  period
(which need not be  consecutive  Trading Days) (any such failure or breach being
referred  to as an "EVENT",  and for  purposes of clause (i) or (iv) the date on
which such Event  occurs,  or for purposes of clause (ii) the date on which such
five  Trading Day period is  exceeded,  or for purposes of clause (iii) the date
which such 10 calendar day period is exceeded, or for purposes of clause (v) the
date on which such 10 or 15 calendar  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 Merger  Agreement for any Registrable  Securities
then held by such  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 daily
pro-rata basis for any portion of a month prior to the cure of an Event.

        3. REGISTRATION PROCEDURES

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

          (a) Not less  than  two  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 object in good faith,
provided  that,  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.

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<PAGE>

          (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.

          (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 (a "DEFERRAL  NOTICE")) 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;  (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

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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;  and (vi) the  occurrence  or  existence  of any pending
corporate  development  with respect to the Company that the Company  reasonably
believes  (after  consideration  by the Company's  disclosure  committee) may be
material and that, in the determination of the Company, makes it not in the best
interest  of the Company to allow  continued  availability  of the  Registration
Statement or  Prospectus;  provided that any and all of such  information  shall
remain  confidential  to each Holder until such  information  otherwise  becomes
public,  unless  disclosure by a Holder is required by law;  PROVIDED,  FURTHER,
notwithstanding  each Holder's agreement to keep such information  confidential,
the Holders  make no  acknowledgement  that any such  information  is  material,
non-public information.

          (e) Use its best  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.

          (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 of any notice pursuant to Section 3(d).

          (h) 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.

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          (i) 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.

          (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 Merger  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.

          (k) Upon the occurrence of any event  contemplated  by this Section 3,
as promptly as reasonably possible under the circumstances, 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,  subject to the  provisions  of the last  sentence of this  Section
3(k).  The Company  shall be entitled to exercise  its right under  Section 3(d)
with respect to clauses  3(d)(v) and 3(d)(vi) 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.

          (l)  Comply  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;  PROVIDED that no individual suspension
period shall  exceed 30 days and there shall be no more than 3 such  suspensions
in any 12 month period.

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        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) fees and  disbursements  of one  counsel for the
Holders, not to exceed $10,000, (vi) Securities Act liability insurance,  if the
Company so desires  such  insurance,  and (vii) 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 or in this Section 4, any
legal fees or other costs of the Holders.

        5. RESERVATION AND LISTING OF SECURITIES.

          (a) The  Company  shall  maintain a reserve  from its duly  authorized
shares of Common Stock for  issuance  pursuant to the  Transaction  Documents in
such  amount as may be required  to fulfill  its  obligations  in full under the
Transaction Documents.

          (b) If, on any  date,  the  number of  authorized  but  unissued  (and
otherwise unreserved) shares of Common Stock is less than 130% of (i) the Actual
Minimum on such date, minus (ii) the number of shares of Common Stock previously
issued pursuant to the Transaction Documents, then the Board of Directors of the
Company  shall  use  commercially  reasonable  efforts  to amend  the  Company's
certificate  or articles of  incorporation  to increase the number of authorized
but unissued  shares of Common Stock to at least the Actual Minimum at such time
(minus the number of shares of Common Stock  previously  issued  pursuant to the
Transaction Documents),  as soon as possible and in any event not later than the
75th day after such date;  provided that the Company will not be required at any
time to  authorize a number of shares of Common  Stock  greater than the maximum
remaining  number of shares of Common Stock that could  possibly be issued after
such time pursuant to the Transaction Documents.

                                       9
<PAGE>

          (c) The  Company  shall,  if  applicable:  (i) in the time and  manner
required by the Trading  Market,  prepare and file with such  Trading  Market an
additional  shares  listing  application  covering  a number of shares of Common
Stock at least equal to the Actual Minimum on the date of such application, (ii)
take all steps necessary to cause such shares of Common Stock to be approved for
listing on the Trading Market as soon as possible  thereafter,  (iii) provide to
the Purchasers  evidence of such listing,  and (iv) maintain the listing of such
Common  Stock on any date at least  equal to the Actual  Minimum on such date on
such Trading Market or another Trading Market.

        6. 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,  brokers  (including  brokers  who offer and sell
Registrable  Securities  as  principal as a result of a pledge or any failure to
perform under a margin call of Common Stock),  investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the  Securities  Act or Section  20 of the  Exchange  Act) and the
officers,  directors,  agents and employees of 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, 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  8(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

                                       10
<PAGE>

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
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 8(c). 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 reasonably believe 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

                                       11
<PAGE>

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,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

          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 ten  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 the indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses,  then each  Indemnifying  Party shall contribute to the
amount  paid or payable by such  Indemnified  Party,  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 this  Agreement,  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  6(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 6(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, except in the case of fraud by
such Holder.

                                       12
<PAGE>

          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.

        7. PARTICIPATION IN FUTURE FINANCINGS.

          (a) Upon any  issuance  by the Company or any of its  Subsidiaries  of
Common Stock or Common Stock Equivalents (a "SUBSEQUENT FINANCING"), each holder
of the Series B  Preferred  Stock (a "SERIES B HOLDER")  shall have the right to
participate  in  the   Subsequent   Financing  up  to  such  Series  B  Holder's
Participation  Maximum (as defined  below).  "PARTICIPATION  MAXIMUM" shall mean
with  respect to a Series B Holder,  the  product of (a) the number of shares of
Common Stock or Common Stock  Equivalents  proposed to be issued,  times (b) the
quotient  of (1) the  number of shares of  Common  Stock  held by such  Series B
Holder  (assuming for this purpose the exercise and conversion of all securities
that are  exercisable  or  convertible  without the payment of  additional  cash
consideration), divided by (2) the aggregate number of shares of Common Stock of
the Company  outstanding  (assuming for this purpose the exercise and conversion
of all securities  that are  exercisable  or convertible  without the payment of
additional cash consideration).

          (b) At least 5 Trading  Days prior to the  closing  of the  Subsequent
Financing, the Company shall deliver to each Series B Holder a written notice of
its intention to effect a Subsequent Financing ("PRE-NOTICE"),  which Pre-Notice
shall  ask such  Series B Holder  if it wants  to  review  the  details  of such
financing (such additional notice, a "SUBSEQUENT  FINANCING  NOTICE").  Upon the
request of a Series B Holder,  and only upon a request by such  Series B Holder,
for a Subsequent Financing Notice, the Company shall promptly, but no later than
1 Trading Day after such request,  deliver a Subsequent Financing Notice to such
Series B Holder.  The Subsequent  Financing  Notice shall describe in reasonable
detail the proposed terms of such Subsequent  Financing,  the amount of proceeds
intended to be raised thereunder, the Person with whom such Subsequent Financing
is  proposed  to be  effected,  and  attached  to which shall be a term sheet or
similar document relating thereto.

          (c) Any Series B Holder  desiring to  participate  in such  Subsequent
Financing must provide written notice to the Company by not later than 5:30 p.m.
(New York City time) on the fifth  Trading Day after all of the Series B Holders
have received the Pre-Notice  that the Series B Holder is willing to participate
in the Subsequent Financing,  the amount of the Series B Holder's participation,
and that the Series B Holder has such funds ready,  willing,  and  available for
investment on the terms set forth in the  Subsequent  Financing  Notice.  If the
Company  receives no notice  from a Series B Holder as of such 5th Trading  Day,
such Series B Holder  shall be deemed to have  notified the Company that it does
not elect to participate.

          (d) If by 5:30  p.m.  (New York City  time) on the fifth  Trading  Day
after all of the Series B Holders have received the Pre-Notice, notifications by
the Series B Holders  of their  willingness  to  participate  in the  Subsequent
Financing (or to cause their  designees to  participate)  is, in the  aggregate,
less than the total  amount of the  Subsequent  Financing,  then the Company may
effect the remaining  portion of such  Subsequent  Financing on the terms and to
the Persons set forth in the Subsequent Financing Notice.

                                       13
<PAGE>

          (e) If by 5:30  p.m.  (New York City  time) on the fifth  Trading  Day
after all of the Series B Holders  have  received  the  Pre-Notice,  the Company
receives  responses  to a  Subsequent  Financing  Notice  from  Series B Holders
seeking to purchase more than the aggregate amount of the Participation Maximum,
each such Series B Holder  shall have the right to  purchase  the greater of (a)
their Pro Rata Portion (as defined below) of the  Participation  Maximum and (b)
the difference  between the  Participation  Maximum and the aggregate  amount of
participation by all other Series B Holders.  "PRO RATA PORTION" is the ratio of
(x) the amount of Buyer Preferred Stock issued pursuant to the Merger  Agreement
to a Series B Holder  participating  under this  Section 7(e) and (y) the sum of
the  aggregate  amount of Buyer  Preferred  Stock issued  pursuant to the Merger
Agreement to all Series B Holders participating under this Section 7(e).

          (f) The  Company  must  provide  the  Series  B  Holder  with a second
Subsequent  Financing Notice, and the Series B Holders will again have the right
of participation set forth above in this Section 7, if the Subsequent  Financing
subject to the initial  Subsequent  Financing  Notice is not consummated for any
reason  on the terms set forth in such  Subsequent  Financing  Notice  within 60
Trading Days after the date of the initial Subsequent Financing Notice.

          (g)  Notwithstanding  the  foregoing,  this Section shall not apply in
respect of an Exempt Issuance (as defined in the Certificate of Designation).

        8. 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) 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.

          (c) 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 best 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).

                                       14
<PAGE>

          (d) 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  fifteen 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 8(d)
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.

          (e)  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.

          (f) 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 Merger Agreement.

          (g) 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,  which consent shall not be  unreasonably  withheld,  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 Merger
Agreement.

          (h) 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  8(h)
attached hereto,  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.

                                       15
<PAGE>

          (i) 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.

          (j)  GOVERNING  LAW.  All  questions   concerning  the   construction,
validity,  enforcement and  interpretation of this Agreement shall be determined
with the provisions of the Merger Agreement.

          (k) CUMULATIVE  REMEDIES.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

          (l) 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.

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

          (n)  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.

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

                                       16
<PAGE>

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

                                   SECURED SERVICES, INC.

                                   By:__________________________________________
                                      Name:
                                      Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       17
<PAGE>

                      [HOLDER'S SIGNATURE PAGE TO SSVC IRA]

Name of Holder: _______________________________________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: __________________________
Name of Authorized Signatory: _________________________________________
Title of Authorized Signatory: ________________________________________

                           [SIGNATURE PAGES CONTINUE]

                                       18
<PAGE>

                                  SCHEDULE 8(H)

                                       19
<PAGE>

                                     ANNEX A

                              PLAN OF DISTRIBUTION

     Each Selling  Stockholder (the "SELLING  STOCKHOLDERS") of the common stock
("COMMON  STOCK")  of  Secured  Services,  Inc.,  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.

                                       20
<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 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.

                                       21
<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.

                                       22
<PAGE>

                                                                         ANNEX B

                             SECURED SERVICES, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

     The  undersigned  beneficial  owner of common stock,  par value $0.0001 per
share (the "COMMON STOCK"),  of Secured Services,  Inc., 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 Investor  Rights  Agreement,  dated as of June
___,  2005  (the  "INVESTOR  RIGHTS  AGREEMENT"),  among  the  Company  and  the
Purchasers  named therein.  A copy of the Investor 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 Investor 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.

                                       23
<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 Number of Registrable Securities beneficially owned:
            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

                                       24
<PAGE>

4.   BROKER-DEALER STATUS:

         (a)   Are you a broker-dealer?

                                     Yes [ ]      No [ ]

         (b)   If  "yes" to  Section  4(a),  did you  receive  your  Registrable
               Securities as compensation for investment banking services to the
               Company.

                                     Yes [ ]      No [ ]

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

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

                                     Yes [ ]      No [ ]

         (d)   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:

               _________________________________________________________________
               _________________________________________________________________

                                       25
<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:

                                       26EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT

               This Registration Rights Agreement (this "AGREEMENT") is made and
entered  into as of June 13,  2005  among  Secured  Services,  Inc.,  a Delaware
corporation  (the  "COMPANY"),  and the purchasers  signatory  hereto (each such
purchaser is a "PURCHASER" and 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:

                  "ADVICE" shall have the meaning set forth in Section 6(d).

                  "EFFECTIVENESS  DATE"  means,  with  respect  to  the  initial
         Registration  Statement  required  to be  filed  hereunder,  the  120th
         calendar day following  the date hereof (the 150th  calendar day in the
         case of a "regulatory  review" by the Commission)  and, with respect to
         any additional  Registration  Statements which may be required pursuant
         to Section 3(c), the 120th 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).

                  "EVENT" shall have the meaning set forth in Section 2(b).

                  "EVENT DATE" shall have the meaning set forth in Section 2(b).

                  "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 30th day following
         the date on which the Company first knows,  or  reasonably  should have
         known  that  such   additional   Registration   Statement  is  required
         hereunder.

                                       1
<PAGE>

                  "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).

                  "INDEMNIFYING  PARTY"  shall  have the  meaning  set  forth in
         Section 5(c).

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

                  "PLAN OF  DISTRIBUTION"  shall have the  meaning  set forth in
         Section 2(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  shares  issuable  as  interest  on  the  Debentures  assuming  all
         permissible  interest  payments  are made in shares of Common Stock and
         the Debentures are held until maturity,  (iii) all Warrant Shares, (iv)
         any  securities  issued or issuable  upon any stock split,  dividend or
         other  distribution,  recapitalization or similar event with respect to
         the foregoing,  (v) 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),
         (vi) shares  issuable in lieu of cash  payments of  liquidated  damages
         pursuant to Section 2(b).

                   "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.

                                       2
<PAGE>

                  "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.

                  "SELLING SHAREHOLDER QUESTIONNAIRE" shall have the meaning set
         forth in Section 3(a).

        2. SHELF REGISTRATION

               (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 (except if 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 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 best  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 telephonically request effectiveness
of a  Registration  Statement  as of 5:00 pm Eastern  Time on a Trading Day. The
Company shall immediately  notify the Holders via facsimile of the effectiveness
of  the  Registration  Statement  on the  same  Trading  Day  that  the  Company
telephonically  confirms  effectiveness with the Commission,  which shall be the
date requested for  effectiveness  of the  Registration  Statement.  The Company
shall,  by 9:30 am Eastern Time on the Trading Day after the Effective  Date (as
defined in the Purchase  Agreement),  file a Form 424(b)(5) with the Commission.
Failure to so notify the Holder within 1 Trading Day of such notification  shall
be deemed an Event under Section 2(b).

               (b) If: (i) a Registration  Statement is not filed on or prior to
its Filing Date (if the Company files a Registration Statement without affording
the  Holders  the  opportunity  to review and comment on the same as required by
Section  3(a),  the Company  shall not be deemed to have  satisfied  this clause
(i)),  or (ii) 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 (iii) 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 10  calendar  days  after the  receipt  of
comments by or notice from the  Commission  that such  amendment  is required in
order  for a  Registration

                                       3
<PAGE>

Statement to be declared  effective,  or (iv) a Registration  Statement filed or
required to be filed  hereunder is not declared  effective by the  Commission by
its  Effectiveness  Date, or (v) 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 10 consecutive  calendar days but no more than an aggregate of 15
calendar days during any 12-month period (which need not be consecutive  Trading
Days) (any such  failure or breach  being  referred  to as an  "EVENT",  and for
purposes  of clause  (i) or (iv) the date on which  such  Event  occurs,  or for
purposes  of clause  (ii) the date on which  such  five  Trading  Day  period is
exceeded,  or for  purposes of clause  (iii) the date which such 10 calendar day
period is  exceeded,  or for purposes of clause (v) the date on which such 10 or
15 calendar 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 such 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 daily  pro-rata  basis for any portion of a
month prior to the cure of an Event.

        3. REGISTRATION PROCEDURES

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

               (a) Not less than two  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 object in good faith,
provided  that,  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.

                                       4
<PAGE>

               (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.

               (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;  (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

                                       5
<PAGE>

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;  and (vi) the  occurrence  or  existence  of any pending
corporate  development with respect to the Company that the Company believes may
be material and that, in the  determination of the Company,  makes it not in the
best interest of the Company to allow continued availability of the Registration
Statement or  Prospectus;  provided that any and all of such  information  shall
remain  confidential  to each Holder until such  information  otherwise  becomes
public,  unless  disclosure by a Holder is required by law;  PROVIDED,  FURTHER,
notwithstanding  each Holder's agreement to keep such information  confidential,
the Holders  make no  acknowledgement  that any such  information  is  material,
non-public information.

               (e) Use its best 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.

               (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) 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

                                       6
<PAGE>

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.

               (i) 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.

               (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.

               (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.

               (l)  Comply  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.

                                       7
<PAGE>

        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.

        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,  brokers (including brokers who
offer and sell  Registrable  Securities  as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each of them,  each Person who controls any such Holder (within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act) and the officers,  directors, agents and employees of 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,  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

                                       8
<PAGE>

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
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

                                       9
<PAGE>

"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 reasonably  believe 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,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.

               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 ten  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 the  indemnification  under Section 5(a) or
5(b)  is  unavailable  to an  Indemnified  Party  or  insufficient  to  hold  an
Indemnified Party harmless for any Losses,  then each  Indemnifying  Party shall
contribute  to the amount  paid or payable by such  Indemnified  Party,  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

                                       10
<PAGE>

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 this Agreement,
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, except in the case of fraud by
such Holder.

               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.

        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  6(B)  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.

                                       11
<PAGE>

               (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 best 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  fifteen 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.

               (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

                                       12
<PAGE>

benefit of each  Holder.  The Company  may not assign its rights or  obligations
hereunder without the prior written consent of all of the Holders, which consent
shall  not  be  unreasonably  withheld,  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  6(I),
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.

               (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

                                       13
<PAGE>

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.

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

                                       14
<PAGE>

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

SECURED SERVICES, INC.

                                   By:__________________________________________
                                      Name:
                                      Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       15
<PAGE>

                      [HOLDER'S SIGNATURE PAGE TO SSVC RRA]

Name of Holder: __________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________

                           [SIGNATURE PAGES CONTINUE]

                                       16
<PAGE>

                                     ANNEX A

                              PLAN OF DISTRIBUTION

         Each Selling  Stockholder  (the "SELLING  STOCKHOLDERS")  of the common
stock ("COMMON STOCK") of Secured  Services,  Inc., 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.

                                       17
<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 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.

                                       19
<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.

                                       19
<PAGE>

                                                                         ANNEX B

                             SECURED SERVICES, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

         The undersigned beneficial owner of common stock, par value $0.0001 per
share (the "COMMON STOCK"),  of Secured Services,  Inc., 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 June
13,  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.

                                       20
<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 Number of Registrable Securities beneficially owned:

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

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

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

                                       21
<PAGE>

4.  BROKER-DEALER STATUS:

         (a) Are you a broker-dealer?

                                     Yes [ ]  No [ ]

         (b)      If "yes" to Section  4(a),  did you receive  your  Registrable
                  Securities as compensation for investment  banking services to
                  the Company.

                                     Yes [ ]  No [ ]

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

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

                                     Yes [ ]  No [ ]

         (d)      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:

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

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

                                       22
<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:

                                       23

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