Document:

Exhibit 10.4 - Esxrow Instruction
                                                                        ANNEX II
                                                                              TO
                                                   SECURITIES PURCHASE AGREEMENT

                            JOINT ESCROW INSTRUCTIONS

Dated as of the date of the
Securities Purchase Agreement to
Which These Joint Escrow
Instructions Are Attached

Krieger & Prager llp
39 Broadway, Suite 1440
New York, New York 10006

Attention:  Samuel M. Krieger, Esq.

Dear Mr. Krieger:

     These Joint  Escrow  Instructions  are attached as Annex II to that certain
Securities  Purchase  Agreement of even date herewith (the "Agreement")  between
Satellite Enterprises Corp., a Nevada corporation (the "Company") and the one or
more Buyers named therein (each,  a "Buyer").  Reference is also made to Annex V
to the Agreement  ("Annex V").  Capitalized  terms used herein and not otherwise
defined herein shall have the respective meanings provided in the Agreement.

     As  escrow  agent  for  both  the  Company  and  each  of the  Buyers,  you
(hereafter,  the "Escrow Agent") are hereby  authorized and directed to hold the
documents and funds  (together with any interest  thereon,  the "Escrow  Funds")
delivered  to the  Escrow  Agent  pursuant  to the  terms  of the  Agreement  in
accordance with the following instructions:

     1. (a) The Escrow  Agent  shall,  as  promptly as  practicable,  notify the
Company  orally or in writing of receipt of the Purchase Price for the Purchased
Shares and Warrants (collectively, the "Purchased Securities") from or on behalf
of each  Buyer and  notify  the Buyer  orally or in  writing  of  receipt of the
Certificates.1 As promptly as practicable upon the Escrow Agent's receipt of the
relevant Purchase Price from the Buyers and, from the Company,  the Certificates
and opinion of counsel of the Company  (or,  with  respect to any one or more of
them, receipt of notice,  whether oral or in written form, from the Company or a
Buyer that the  respective  conditions  precedent  to the purchase and sale have
been satisfied or waived) (collectively,  the "Release Conditions"),  the Escrow
Agent shall release, as contemplated below and after reduction by the amounts

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1 Delivery and release of the Stock Certificates is subject to the provisions of
the Agreement, including, without limitation, the provisions of Annex V.

                                        1
<PAGE>

referred to below in this  Section 1, the  relevant  Escrow Funds to or upon the
order of the Company, and shall release the relevant Certificates to the Buyer.

     (b) The term "Finder's Compensation" means (i) a cash amount (the "Finder's
Fee") equal to (x) an aggregate of thirteen and 43/1000  percent  (13.043%;  the
"Finder's  Fee  Percentage)  of the Total  Purchase  Price,2 less (y) the sum of
$17,500,  and (ii) warrants (the  "Finder's  Warrants"),  which the Company will
issue to the  Finder  or its  designees,  to  purchase  an  aggregate  number of
1,000,000 shares.  The Finder's Warrants shall have an initial exercise price of
US$0.50  (subject to  adjustment  for capital  events  subsequent to the Closing
Date), an expiration date of approximately  five years from the relevant Closing
Date,  cashless exercise rights similar to those provided in the Warrants issued
to Buyers,  piggy-back registration rights and such other terms otherwise agreed
upon by the Company and the Finder.  The Finder's Warrants shall be delivered to
the Escrow Agent together with the relevant  Certificates  and shall be released
to the  Finder  or its  designees  upon  the  release  of  the  relevant  Escrow
Properties.

     (c) The term  "Escrow  Agent  Fee"  means  the  amount  of  $25,000,  which
represents  the legal and escrow fees payable to the Escrow Agent in  connection
with the  preparation of the  Transaction  Agreements and acting as escrow agent
under these Joint  Escrow  Instructions.  The term does not include the Investor
Counsel  Registration  Statement  Review Fee (as  defined  below) or any amounts
payable to the Escrow Agent pursuant to any other  provisions of the Transaction
Agreements  or pursuant to the terms of these Joint  Escrow  Instructions  other
than this Section 1. Prior to the Closing Date,  the Company has paid the Escrow
Agent the  non-refundable  amount of $7,500.00,  which amount will be applied to
the Escrow Agent Fee.

     (d) Subject to the  provisions of Section 1(h) hereof,  on the Closing Date
and on the date when certain occurrences described below occur, the Escrow Agent
shall release Escrow Property and distribute it in accordance with the following
instructions:

          (I) On the Closing Date, the Escrow Agent shall:

          (i)  release,  to or upon the order of the  Finder,  on account of the
               Finder's  Compensation,  (x) a cash  amount,  on  account  of the
               Finder's Fee, equal to (1) the amount equal to the Total Purchase
               Price,  less the Total Purchase Price Reserve (as defined below),
               multiplied  by (2)  the  Finder's  Fee  Percentage,  and  (y) the
               Finder's Warrants;

          (ii) release,  to or upon the order of the  Escrow  Agent,  the Escrow
               Agent Fees (less the  $7,500.00 of the Escrow Agent Fee which was
               previously advanced);

          (iii)release,  to or upon the order of Company  Counsel (as defined in
               the Registration  Rights Agreement),  an amount equal to $25,000,
               on  account  of the  total  $50,000  fee  (the  "Company  Counsel
               Registration  Fee")  payable by the Company  pursuant to an April
               28, 2004 legal retainer agreement with Company Counsel;

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2 Consisting of (i) a fee of ten percent (10%) of the Total Purchase Price,  and
(ii) a  non-accountable  expense allowance of three and 43/1000 percent (3.043%)
of the Total Purchase Price.

                                        2
<PAGE>

          (iv) release,  to Krieger & Prager,  LLP, as security  interest  agent
               under the  Pledge  Agreement  ( as defined in Annex V), an amount
               (the "Reserved Escrow Funds") equal to following sums:

               (x)  an amount (the "Total  Purchase Price Reserve") equal to the
                    Total Purchase Price less $2,000,000.00,

               (y)  an  amount   equal  to   $25,000   (the   "Company   Counsel
                    Registration Fee Reserve"),  to be applied to the balance of
                    the Company Counsel  Registration  Fee, as described  below;
                    and

               (z)  an amount  (the  "Investor  Counsel  Registration  Statement
                    Review Fee") equal to $4,500,  to be applied to satisfaction
                    of the fees payable  pursuant to the  Company's  obligations
                    under Section 5 of the Registration Rights Agreement;

          (v)  release,  to or upon the order of GCH Capital, an amount equal to
               $150,000,  in payment of the consulting fees referred to in Annex
               V; and

          (vi) release  the  balance of the Escrow  Funds to the  Company (to be
               wired to an account in the Company's name).

     (II)  When  Investors'  Counsel  (as  defined  in the  Registration  Rights
Agreement)  provides  comments  to the  Company  on the  Company's  draft of the
Registration  Statement,  the Escrow  Agent will  release the  Investor  Counsel
Registration Statement Review Fee to the Investor's Counsel.

     (III) Upon "receipt of proof" of filing of the Registration  Statement with
the SEC in  proper  form  (which  "receipt  of  proof"  shall  be  based  on the
availability of such filed Registration  Statement on EDGAR3),  the Escrow Agent
shall:

          (i)  release,  out of the Company Counsel Registration Fee Reserve, to
               or upon the order of Company Counsel, an amount equal to $10,000,
               to be applied to the balance of the Company Counsel  Registration
               Fee;

          (ii) release,  to or upon the order of the  Finder,  on account of the
               Finder's  Fee, an amount equal to (x) (1) the amount equal to the
               Total Purchase Price Reserve, multiplied by (2) the Finder's Fee
               Percentage, less (y) $17,500;

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3 Company Counsel shall advise the Escrow Agent of such filing, which is subject
to confirmation  of such filing based on its  availability on the SEC website or
on 10kwizard.com or freeedgar.com.

                                        3
<PAGE>

          (iii)with  respect  to  any  Buyer  which,   prior  to  the  date  the
               Registration  Statement has filed,  has made a claim for Periodic
               Amounts,  if any, to be paid in cash, (x) if the Company has made
               an election under Section  2(b)(v)(A) of the Registration  Rights
               Agreement, release such amount to Company Counsel as contemplated
               by  that  section,  or (y) if  the  Company  has  not  made  such
               election,  the  amount of the  Periodic  Amount  due to each such
               Buyer, which payment shall be made by check; and

          (iv) release the balance of the Escrow  Funds  (other than the balance
               of the Company Counsel  Registration  Fee Reserve) to the Company
               (to be wired to an account in the Company's name).

     (IV)  Upon  "receipt  of  proof"  of  filing  of  each of the  first  three
amendments  to the  Registration  Statement  (after  the  initial  filing of the
Registration  Statement  referred to in the  preceding  part (III)),  the Escrow
Agent shall  release,  out of the remaining  Company  Counsel  Registration  Fee
Reserve,  to or upon the order of Company Counsel, an amount equal to $5,000, to
be applied to the balance of the Company Counsel Registration Fee.

     (V) Upon written  confirmation from Company Counsel that the Effective Date
has occurred,  the Escrow Agent shall  release,  to or upon the order of Company
Counsel,  the remaining balance, if any, of the Company Counsel Registration Fee
Reserve, to be applied to the balance of the Company Counsel Registration Fee.

     (e) If the relevant  Certificates  for the Closing  Date are not  deposited
with the  Escrow  Agent  within ten (10) days  after  receipt by the  Company of
notice of receipt  by the  Escrow  Agent of the  Purchase  Price  funds from the
Buyers,  the Escrow  Agent  shall  notify  the  Buyers  and each Buyer  shall be
entitled  to cancel the  purchase  and  demand  repayment  of the funds.  If the
Purchase Price funds are not deposited as cleared funds with the Escrow Agent by
the Closing  Date,  the Escrow  Agent  shall  notify the Company and the Company
shall be  entitled  to cancel the  purchase  and demand  return of the  relevant
Certificates deposited in escrow.

     (f)  Notwithstanding  the Escrow Agent's receipt of the Release  Conditions
with  respect to the  Closing  Date,  if the Company or the Buyer  notifies  the
Escrow  Agent  before  the  release of the  relevant  Escrow  Property  that the
conditions precedent to the obligations of the Company or the Buyer, as the case
may be, under the Agreement  with respect to the purchase and sale of Securities
to be effected  on such  Closing  Date were not  satisfied  or waived,  then the
Escrow  Agent  shall  return the  relevant  Escrow  Funds to the Buyer and shall
return such Certificates to the Company.

     (g) Prior to return of any Escrow Funds to a Buyer, the Buyer shall furnish
such tax reporting or other  information as shall be appropriate  for the Escrow
Agent to comply with applicable United States laws.

     (h) Reference is made to Annex V and to the terms defined  therein.  If the
Stock  Certificates  and the Issue Date Opinion are not delivered by the Company
to the Escrow Agent by the Final Issue Date, the Escrow Agent, in its capacity

                                        4
<PAGE>

as the Security  Interest  Agent,  shall return to the Buyer the amount equal to
(i) the Escrow  Balance  (as  defined  below),  multiplied  by (ii) the  Buyer's
Allocable  Share.  The term  "Escrow  Balance"  means  the sum of (i) the  Total
Purchase  Price  Reserve,  and (ii) if,  but only if,  there are no  Transferred
Shares, the sum of (x) the Company Counsel Registration Fee and (y) the Investor
Counsel Registration Statement Review Fee. (If there are any Transferred Shares,
the Company  Counsel  Registration  Fee and the  Investor  Counsel  Registration
Statement  Review Fee shall be applied as contemplated by paragraph  (d)(I)(iii)
of this Section 1, without regard to the provisions of this Section 1(h),  Annex
V or the Pledge  Agreement.)  The  Company  hereby  grants the Buyers a security
interest in the Reserved Escrow Funds to secure the Company's Obligations to the
Buyers,  and in  furtherance  thereof,  the  Company  is  executing  the  Pledge
Agreement attached as Exhibit 1 to said Annex V.

          (i)  The Escrow Agent shall  deposit all funds  received  hereunder in
               the Escrow  Agent's  attorney  escrow  account at The Bank of New
               York or at such  other  bank  at  which  the  Escrow  Agent  then
               maintains  other escrow  accounts;  the  interest  earned on such
               account shall be deemed the property of the party  depositing the
               funds in escrow.

     2. The Escrow Agent's duties hereunder may be altered, amended, modified or
revoked only by a writing signed by the party to be charged therewith.

     3. The Escrow Agent shall be  obligated  only for the  performance  of such
duties as are  specifically set forth herein and may rely and shall be protected
in relying or refraining  from acting on any instrument  reasonably  believed by
the  Escrow  Agent to be genuine  and to have been  signed or  presented  by the
proper party or parties. The Escrow Agent shall not be personally liable for any
act the Escrow  Agent may do or omit to do  hereunder  as the Escrow Agent while
acting in good faith,  and any act done or omitted by the Escrow Agent  pursuant
to the  advice  of the  Escrow  Agent's  attorneys-at-law  shall  be  conclusive
evidence of such good faith.

     4. The Escrow Agent is hereby expressly authorized to disregard any and all
warnings  given  by  any  of the  parties  hereto  or by  any  other  person  or
corporation,  excepting  only  orders or  process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order,  judgment
or decree,  the Escrow Agent shall not be liable to any of the parties hereto or
to any  other  person,  firm or  corporation  by  reason  of such  decree  being
subsequently reversed,  modified,  annulled, set aside, vacated or found to have
been entered without jurisdiction.

     5. The Escrow  Agent  shall not be liable in any  respect on account of the
identity,  authorities  or rights of the  parties  executing  or  delivering  or
purporting  to execute or  deliver  the  Agreement  or any  documents  or papers
deposited or called for hereunder.

     6. The Escrow  Agent shall be  entitled  to employ  such legal  counsel and
other experts as the Escrow Agent may deem  necessary to advise the Escrow Agent
properly in connection with the Escrow Agent's duties  hereunder,  may rely upon
the advice of such  counsel,  and may pay such counsel  reasonable  compensation
therefor.  The Escrow Agent has acted as legal counsel for the Buyers and/or the
Finder and/or their respective affiliates, and may continue to act as legal

                                        5
<PAGE>

counsel for any one or more of such parties, from time to time,  notwithstanding
its duties as the Escrow  Agent  hereunder.  The Company  consents to the Escrow
Agent  acting in such  capacity  as legal  counsel for a Buyer or the Finder and
waives any claim that such  representation  represents a conflict of interest on
the part of the Escrow Agent.  The Company and each Buyer  understands  that the
Buyer and the Escrow Agent are relying explicitly on the foregoing  provision in
entering into these Joint Escrow Instructions.

     7. The Escrow  Agent's  responsibilities  as escrow agent  hereunder  shall
terminate if the Escrow Agent shall resign by written  notice to the Company and
the Buyer. In the event of any such resignation, the Buyer and the Company shall
appoint a successor Escrow Agent.

     8. If the Escrow Agent reasonably  requires other or further instruments in
connection  with these  Joint  Escrow  Instructions  or  obligations  in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

     9. It is  understood  and agreed that should any dispute arise with respect
to the delivery and/or  ownership or right of possession of the documents or the
Escrow Funds held by the Escrow Agent hereunder,  the Escrow Agent is authorized
and directed in the Escrow  Agent's sole  discretion (1) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the Escrow Funds until such disputes shall have been settled either by mutual
written  agreement  of the  parties  concerned  or by a final  order,  decree or
judgment  of a court of  competent  jurisdiction  after the time for  appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty  whatsoever to institute or defend any such  proceedings  or (2) to deliver
the Escrow Funds and any other  property and documents  held by the Escrow Agent
hereunder  to  a  state  or  federal  court  having  competent   subject  matter
jurisdiction  and located in the State and City of New York in  accordance  with
the applicable procedure therefor.

     10. The Company and the Buyer agree  jointly and severally to indemnify and
hold  harmless the Escrow Agent from any and all claims,  liabilities,  costs or
expenses in any way arising from or relating to the duties or performance of the
Escrow Agent hereunder other than any such claim, liability,  cost or expense to
the extent  the same  shall (a) have been tax  obligations  in  connection  with
Escrow Agent's fee hereunder, or (b) have been determined by final, unappealable
judgment of a court of competent  jurisdiction  to have  resulted from the gross
negligence or willful misconduct of the Escrow Agent, or (c) be a liability,  or
arise from liability, to either the Company or the Buyer.

     11. Any notice  required or  permitted  hereunder  shall be given in manner
provided in the Section headed  "NOTICES" in the  Agreement,  the terms of which
are incorporated herein by reference.

     12. By signing these Joint Escrow Instructions,  the Escrow Agent becomes a
party hereto only for the purpose of these Joint Escrow Instructions; the Escrow
Agent does not become a party to the  Agreement.  The Company and the Buyer have
become  parties  hereto by their  execution  and delivery of the  Agreement,  as
provided therein.

                                        6
<PAGE>

     13. This  instrument  shall be binding upon and inure to the benefit of the
parties hereto, and their respective  successors and permitted assigns and shall
be  governed  by the laws of the  State of New York  without  giving  effect  to
principles  governing the conflicts of laws. A facsimile  transmission  of these
instructions  signed  by the  Escrow  Agent  shall be legal and  binding  on all
parties hereto.

     14.  The  parties  hereto  hereby  waive  a trial  by  jury in any  action,
proceeding or  counterclaim  brought by either of the parties hereto against the
other in respect of any matter arising out of or in connection  with these Joint
Escrow Instructions.

     15. The  rights  and  obligations  of any party  hereto are not  assignable
without the written  consent of the other  parties  hereto.  These Joint  Escrow
Instructions constitute the entire agreement amongst the parties with respect to
the subject matter hereof.

     16. The Company agrees that the Finder is a third party  beneficiary of the
provisions of the Section 1 with respect to the Finder's  Compensation  and that
such  provisions can not be amended or revoked without the prior written consent
of the Finder.

ACCEPTED BY ESCROW AGENT:
KRIEGER & PRAGER llp

By:
   ------------------------------------
Date:
     ----------------------------------

                                        7
<PAGE>Exhibit 10.5 - Registration Rights Agreement
                                                                        ANNEX IV
                                                                              TO
                                                   SECURITIES PURCHASE AGREEMENT

                          REGISTRATION RIGHTS AGREEMENT

     THIS  REGISTRATION  RIGHTS  AGREEMENT,  dated  as of  May  19,  2004  (this
"Agreement"),  is made by and  between  SATELLITE  ENTERPRISES  CORP.,  a Nevada
corporation  with  headquarters  located at 205 Church  Street,  Suite 340,  New
Haven,  Connecticut 06510 (the "Company"),  and each entity named on a signature
page  hereto  (each,  an "Initial  Investor")  (each  agreement  with an Initial
Investor being deemed a separate and independent  agreement  between the Company
and such Initial  Investor,  except that each Initial Investor  acknowledges and
consents  to the  rights  granted  to each  other  Initial  Investor  under such
agreement).

                              W I T N E S S E T H:

     WHEREAS,  upon the terms and subject to the  conditions  of the  Securities
Purchase  Agreement,  dated as of May 19, 2004, between the Initial Investor and
the  Company  (the  "Securities  Purchase  Agreement";   capitalized  terms  not
otherwise  defined  herein  shall  have  the  meanings  ascribed  to them in the
Securities Purchase Agreement),  the Company has agreed to issue and sell to the
Initial Investors the Purchased Shares and the Warrants; and

     WHEREAS,  the  Warrant  Shares  may be  issued  upon  the  exercise  of the
Warrants; and

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

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

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

     "Company  Counsel" means Sichenzia Ross Friedman Ference LLP, or such other
reputable law firm as may be retained by the Company from time to time.

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

                                        1
<PAGE>

     "Held Shares  Value"  means,  the amount equal to (i) the number  shares of
Purchased  Shares  still held by the  Holder,  multiplied  by (ii) the Per Share
Purchase Price.

     "Investor"  means the Initial  Investor  and any  permitted  transferee  or
assignee  who agrees to become  bound by the  provisions  of this  Agreement  in
accordance  with Section 9 hereof and who holds  Purchased  Shares,  Warrants or
Warrant Shares.

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

     "Permitted   Suspension   Period"  means  up  to  two  periods  during  any
consecutive  12-month period during which the Holder's right to sell Registrable
Securities  under  the  Registration  Statement  is  suspended,  each  of  which
suspension  period  shall  neither  (i) be for more  than ten (10) days nor (ii)
begin  less than ten (10)  business  days  after  the last day of the  preceding
suspension  (whether  or not such  last  day was  during  or  after a  Permitted
Suspension Period).

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

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

     "Registrable  Securities"  means,  collectively,  the Purchased Shares, the
Warrant  Shares,  the Additional  Shares,  the Payment Shares and, to the extent
purchased prior to the filing of the Registration Statement, the Option Shares.

     "Registration  Statement"  means a  registration  statement  of the Company
under the  Securities Act covering  Registrable  Securities on Form SB-2, if the
Company is then eligible to file using such form,  and if not eligible,  on Form
S-1 or other appropriate form.

     "Required Effective Date" means, initially,  the Initial Required Effective
Date or the  Increased  Required  Effective  Date (as those  terms  are  defined
below), as the case may be.

                                        2
<PAGE>

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

     2.   Registration.

     (a)  Mandatory Registration.

     (i)  The Company shall cause  Company  Counsel to prepare and file with the
          SEC,  as soon as  practicable  after the Initial  Closing  Date but no
          later  than  sixty  (60) days  after  the  Initial  Closing  Date (the
          "Required  Filing Date"),  a Registration  Statement  registering  for
          resale by the Investor a  sufficient  number of shares of Common Stock
          for  the  Initial  Investors  to  sell  the  Registrable   Securities.
          Notwithstanding   the   requirement   to  register   all   Registrable
          Securities,  the  Company's  obligation  to register  the  Registrable
          Securities  shall  initially be satisfied by the  registration  of the
          Initial  Number of Shares to Be  Registered  (as defined  below).  The
          "Initial  Number of Shares to Be  Registered" is a number of shares of
          Common  Stock  which is at least  equal to the sum of (x) one  hundred
          fifty percent (150%) of the sum of (i) the number of Purchased Shares,
          (ii) the number of Warrant  Shares  covered by the Warrants  (assuming
          for such  purposes  that all the Warrants  had been  issued,  had been
          eligible to be exercised  and had been  exercised  for the issuance of
          Warrant  Shares in  accordance  with their terms,  whether or not such
          issuance,  eligibility  or  exercise  had in fact  occurred as of such
          date)  and (y) one  hundred  percent  (100%)  of the  number of Option
          Shares, if any, purchased prior the initial filing of the Registration
          Statement.  Unless  otherwise  specifically  agreed to in  writing  in
          advance  by the  Initial  Investor  (including  as  provided  in  this
          Agreement),  the Registration Statement (W) shall include only (1) the
          Registrable  Securities,  (2)  the  shares  issuable  on  exercise  of
          warrants  issued to the  Finder in  connection  with the  transactions
          contemplated by the Transaction Agreements, and (3) such shares of the
          Company's  Common  Stock as set forth on Schedule  10 attached  hereto
          (whether  such  shares  are held by the  shareholders  listed  on said
          Schedule 10 or their respective transferees), and (X) shall also state
          that, in accordance with Rule 416 and 457 under the Securities Act, it
          also covers such  indeterminate  number of additional shares of Common
          Stock as may become issuable to prevent dilution  resulting from stock
          splits, or stock dividends.

     (ii) The Company and Company Counsel will use their reasonable best efforts
          to cause such  Registration  Statement  to be declared  effective on a
          date (the "Initial  Required  Effective  Date") which is no later than
          the  earlier of (Y) five (5) days after oral or written  notice by the
          SEC that it may be declared  effective or (Z) one hundred twenty (120)
          days after the Closing Date.

     (iii)If at any time (an "Increased  Registered Shares Date"), the number of
          shares of  Common  Stock  represented  by the  Registrable  Securities
          issued or to be issued as contemplated by the Transaction  Agreements,
          exceeds  ninety  percent  (90%) of the  aggregate  number of shares of
          Common  Stock  then  registered  or  sought  to  be  registered  in  a
          Registration Statement which has not yet been declared effective,  the
          Company shall either

               (X)  amend  the  relevant  Registration  Statement  filed  by the
               Company pursuant to the preceding provisions of this Section 2,

                                        3
<PAGE>

               if such Registration Statement has not been declared effective by
               the SEC at that time, to register the Increased  Number of Shares
               to Be Registered (as defined  below).  The  "Increased  Number of
               Shares to Be  Registered"  is a number of shares of Common  Stock
               which  is at  least  equal  to the sum of (I) one  hundred  fifty
               percent  (150%)  of the  sum  of (A)  the  Purchased  Shares  and
               Additional  Shares,  if  any,   previously  issued  or  currently
               issuable,  plus (B) the adjusted number of shares issued or still
               issuable the adjusted  number of shares issued or still  issuable
               upon  exercise of the Warrants  (assuming  for such purposes that
               all the Warrants,  including the  Additional  Warrants,  had been
               issued,  had been eligible to be exercised and had been exercised
               for the  issuance  of  Warrant  Shares in  accordance  with their
               terms, whether or not such issuance,  eligibility or exercise had
               in fact occurred as of such date),  plus (II) one hundred percent
               (100%) of the sum of (A) the  number of Payment  Shares,  if any,
               previously  issued or currently  issuable,  and (B) the number of
               Option Shares, if any,  purchased prior the initial filing of the
               Registration Statement, or

               (Y) if such Registration Statement has been declared effective by
               the  SEC  at  that  time,   file  with  the  SEC  an   additional
               Registration Statement (an "Additional  Registration  Statement")
               to  register  the  number  of shares  equal to the  excess of the
               Increased  Number  of  Shares to Be  Registered  plus any  Option
               Shares   purchased   prior  to  the  filing  of  the   Additional
               Registration  Statement and not  previously  registered  over the
               aggregate number of shares of Common Stock already registered.

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

     (b)  Payments by the Company.

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

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

     (iii)The amount  (the  "Periodic  Amount") to be paid by the Company to the
          Initial  Investor shall be determined as of each  Computation Date (as
          defined  below) and such amount shall be equal to the Periodic  Amount
          Percentage (as defined below) of the Purchase Price for all Purchased

                                        4
<PAGE>

          Shares for the period from the date  following  the relevant  Required
          Filing Date or the Required  Effective Date or a Restricted Sale Date,
          as the case may be, to the first  relevant  Computation  Date (each, a
          "First  Period"),  and thereafter to each subsequent  Computation Date
          (each, a "Subsequent Period").  The "Periodic Amount Percentage" means
          two percent (2%) of the Purchase Price for each such period.  Anything
          in the preceding  provisions of this  paragraph  (iii) to the contrary
          notwithstanding,  after the relevant Effective Date the Purchase Price
          shall  be  deemed  to  refer  to  the  Held  Shares  Value.  By way of
          illustration   and  not  in  limitation  of  the  foregoing,   if  the
          Registration Statement is filed on or before the Required Filing Date,
          but is not declared  effective until  seventy-five (75) days after the
          Initial  Required  Effective  Date, the Periodic Amount will aggregate
          six percent (6%) of the Purchase Price (2% for days 1-30,  plus 2% for
          days 31-60, plus 2% for days 61-75).

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

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

               (A) at the option of the Company,  exercisable  in its discretion
               on the date the Periodic Amount is due; provided,  however,  that
               the Company may  exercise  this  discretion  if, but only if, the
               Effective  Date is within one hundred eighty (180) days after the
               Closing Date and the Registration  Statement covering the Payment
               Shares is then effective1; or

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

          all or a portion of the Periodic  Amount shall be paid by the issuance
          of  additional  shares  of  Common  Stock  to the  Investor  ("Payment

--------
     1 If the Investor  requests  payment of any accrued  Periodic Amount on any
date which is earlier than one hundred  eighty (180) days after the Closing Date
but prior to the  Effective  Date,  and if,  prior to the payment  thereof,  the
Investor  does not elect to have such  payment  made in  shares as  provided  in
clause (B) of this  paragraph,  the Company  shall either pay such amount to the
Investor  or deposit  such  amount in escrow  with the  Company  Counsel  with a
statement that it will issue shares to the Investor  pursuant to this clause (A)
if the conditions  provided herein are met. If such amount is paid in escrow, it
shall be held until such date or the earlier issuance of shares pursuant to such
election in accordance with such terms. If the shares are not issued or issuable
by such date,  the Company  Counsel shall release the funds to the Investor.  If
the shares are duly issued to the Investor,  as confirmed by the  Investor,  the
funds held in escrow may be released to the Company.

                                        5
<PAGE>

          Shares") in an amount equal to the Periodic  Amount being paid thereby
          divided by the then  Applicable Per Share Purchase Price Per Share (as
          defined  below);  provided,  further  that the  delivery  date for the
          Payment  Shares  shall be three (3)  business  days after the date the
          Investor gives the notice contemplated by this subparagraph.  The term
          "Applicable Per Share Purchase Price" means the lower of the Per Share
          Purchase  Price or the Adjusted Per Share Purchase  Price,  if any (in
          each case  subject to  adjustment  in the same manner as the  Exercise
          Price of the Warrant is adjusted).

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

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

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

     (ix) Anything  in the  preceding  provisions  of this  Section  2(b) to the
          contrary notwithstanding,  if, but only if, the Registration Statement
          is declared  effective  within thirty (30) days  following the Initial
          Required Effective Date or five (5) Trading Days after oral or written
          notice  by the SEC that it may be  declared  effective,  whichever  is
          earlier,

               (A) the provisions of Section 2(b)(i) shall not apply; and

               (B) the  provisions  of Section  2(b)(ii)  shall not apply to the
               fact  that the  Registration  Statement  was  initially  declared
               effective after the Initial Required Effective Date;

                                        6
<PAGE>

          and the  Company  will  not have any  obligation  to pay any  Periodic
          Amount to the Investor with respect thereto;  provided,  however, that
          the  provisions  of Section  2(b)(ii)  shall  continue to apply to all
          other events described therein.

     (c)  Subsequent Registrations.  If, for any reason, the SEC does not permit
          the  registration  of  any  specific   component  of  the  Registrable
          Securities,  such excluded Registrable  Securities shall be registered
          by the Company at the earliest possible time thereafter.

     3.   Obligations of the Company. In connection with the registration of the
          Registrable Securities, the Company shall do each of the following:

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

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

     (c)  Permit a single firm of counsel  designated  by the Initial  Investors
          (which,  until further notice,  shall be deemed to be Krieger & Prager
          llp,  Attn:  Samuel M.  Krieger,  Esq.,  which firm has  requested  to
          receive such  notification;  each, an "Investor's  Counsel") to review
          the Registration  Statement and all amendments and supplements thereto
          a  reasonable  period of time (but not less  than  three (3)  business
          days) prior to their filing with the SEC, and not file any document in
          a form to which such counsel reasonably  objects  (provided,  however,
          that if  Company  Counsel  reasonably  asserts  that  the form of such
          document is legally  sufficient  for filing,  and  Investor's  Counsel
          continues to reasonably  object,  then Company  Counsel and Investor's
          Counsel will work in good faith to resolve any dispute for a period of
          ten (10)  business  days,  and the  Required  Filing  Date and Initial
          Required  Effective  Date will be extended  for a period  which is the
          shorter of (x) such ten (10) business day period or (y) one (1)

                                        7
<PAGE>

          business day after such dispute is resolved;  and,  provided  further,
          that if after such ten (10)  business day period,  if Company  Counsel
          and  Investor's   Counsel  have  not  resolved  any  pending  disputes
          regarding the form of such  document,  then the Company shall have the
          right to file such  document  notwithstanding  objection by Investor's
          Counsel);

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

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

     (f)  As promptly as practicable  after becoming aware thereof,  notify each
          Investor  of the  happening  of any  event of which  the  Company  has
          knowledge, as a result of which the prospectus included in the

                                        8
<PAGE>

          Registration   Statement,  as  then  in  effect,  includes  an  untrue
          statement  of a  material  fact or  omits  to  state a  material  fact
          required  to be stated  therein or  necessary  to make the  statements
          therein, in light of the circumstances under which they were made, not
          misleading,  and use its best efforts promptly to prepare a supplement
          or amendment to the Registration Statement or other appropriate filing
          with the SEC to correct such untrue statement or omission, and deliver
          a number of copies of such supplement or amendment to each Investor as
such Investor may reasonably request;

     (g)  As promptly as practicable  after becoming aware thereof,  notify each
          Investor who holds Registrable Securities being sold (or, in the event
          of  an  underwritten  offering,  the  managing  underwriters)  of  the
          issuance  by the SEC of a Notice  of  Effectiveness  or any  notice of
          effectiveness   or  any  stop  order  or  other   suspension   of  the
          effectiveness of the Registration  Statement at the earliest  possible
          time;

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

     (i)  Notwithstanding  the  foregoing,  if at any time or from  time to time
          after the date of  effectiveness of the  Registration  Statement,  the
          Company  notifies the Investors in writing that the  effectiveness  of
          the Registration Statement is suspended for any reason, whether due to
          a Potential Material Event or otherwise, the Investors shall not offer
          or sell any Registrable Securities, or engage in any other transaction
          involving or relating to the Registrable Securities,  from the time of
          the giving of such notice until such Investor  receives written notice
          from the  Company  that  such the  effectiveness  of the  Registration
          Statement has been restored,  whether  because the Potential  Material
          Event has been  disclosed to the public or it no longer  constitutes a
          Potential  Material Event or otherwise;  provided,  however,  that the
          Company  may not so suspend the right to such  holders of  Registrable
          Securities  during the periods the Registration  Statement is required
          to be in effect other than during a Permitted  Suspension  Period (and
          the applicable  provisions of Section 2(b) shall apply with respect to
          any such suspension other than during a Permitted Suspension Period);

     (j)  Use its reasonable efforts to secure and maintain the designation,  if
          and to the extent required or contemplated by the rules or regulations
          of the Principal  Trading Market,  of all the  Registrable  Securities
          covered by the Registration  Statement on the Principal Trading Market
          within  the  meaning of Rule  11Aa2-1 of the SEC under the  Securities
          Exchange  Act of  1934,  as  amended  (the  "Exchange  Act"),  and the
          quotation  of the  Registrable  Securities  on the  Principal  Trading
          Market;

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

     (l)  Cooperate  with the Investors who hold  Registrable  Securities  being
          offered  to  facilitate  the  timely   preparation   and  delivery  of
          certificates for the Registrable  Securities to be offered pursuant to
          the Registration Statement and enable such certificates for the

                                        9
<PAGE>

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

     (m)  Take all other reasonable  administrative steps and actions (including
          the  participation  of Company  counsel)  necessary  to  expedite  and
          facilitate  disposition by the Investor of the Registrable  Securities
          pursuant to the Registration  Statement;  provided,  however, that the
          foregoing does not require that the Company take any steps  whatsoever
          regarding  the  identification  or  selection  of a broker to sell the
          Registrable   Securities,   the   identification   of  buyers  of  the
          Registrable  Securities,  or the  negotiation of the sale terms of the
          Registrable Securities.

     4.   Obligations of the Investors.  In connection with the  registration of
          the  Registrable  Securities,  the Investors  shall have the following
          obligations:

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

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

     5.   Expenses  of  Registration.   All  reasonable   expenses  (other  than
          underwriting  discounts and  commissions of the Investor)  incurred in
          connection with registrations,  filings or qualifications  pursuant to
          Section  3,  but  including,  without  limitation,  all  registration,
          listing,  and qualifications  fees,  printers and accounting fees, the
          fees and  disbursements  of counsel for the Company  shall be borne by
          the Company. In addition, a fee for a single counsel for the Investors
          (as a group and not  individually)  equal to $4,500  for the review of
          the  initial  Registration  Statement  (and  pre-effective  amendments
          thereto) and $2,000 for the review of each post-effective amendment to
          a Registration Statement shall be borne by the Company.

                                       10
<PAGE>

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

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

                                       11
<PAGE>

          supplement thereto,  subject to such limitations and conditions as are
          applicable  to the  indemnification  provided  by the  Company to this
          Section  6.  Such  indemnity  shall  remain in full  force and  effect
          regardless  of  any  investigation   made  by  or  on  behalf  of  the
          Indemnified  Party and shall  survive the transfer of the  Registrable
          Securities by the Investors pursuant to Section 9.

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

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

                                       12
<PAGE>

information included or omitted from the Registration  Statement as to which the
Company  has not  given  notice as  contemplated  under  Section  3  hereof)  or
intentional  misconduct,  contribution  by any seller of Registrable  Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

     8.   Reports under  Securities  Act and Exchange Act. With a view to making
          available to Investor the benefits of Rule 144  promulgated  under the
          Securities Act or any other similar rule or regulation of the SEC that
          may at any time permit  Investor to sell  securities of the Company to
          the public without Registration ("Rule 144"), the Company agrees to:

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

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

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

     (d)  at the  request of any  Investor  holding  Registrable  Securities  (a
          "Holder"),  give its  Transfer  Agent  instructions  (supported  by an
          opinion of Company  counsel,  if required or requested by the Transfer
          Agent) to the effect that, upon the Transfer Agent's receipt from such
          Holder of

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

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

          the Transfer Agent is to effect the transfer of the  Securities  Being
          Sold and issue to the  buyer(s) or  transferee(s)  thereof one or more
          stock certificates  representing the transferred Securities Being Sold
          without any restrictive  legend and without recording any restrictions
          on the  transferability  of such shares on the Transfer  Agent's books
          and  records  (except  to the extent  any such  legend or  restriction
          results from facts other than the identity of the Holder, as the

                                       13
<PAGE>

          seller or transferor  thereof,  or the status,  including any relevant
          legends or  restrictions,  of the shares of the Securities  Being Sold
          while held by the Holder).  If the Transfer Agent reasonably  requires
          any additional  documentation at the time of the transfer, the Company
          shall deliver or cause to be delivered all such reasonable  additional
          documentation  as may be  necessary to  effectuate  the issuance of an
          unlegended certificate.

     9.   Assignment of the Registration  Rights. The rights to have the Company
          register  Registrable  Securities  pursuant to this Agreement shall be
          automatically  assigned  by  the  Investor  to any  transferee  of the
          Registrable   Securities  or  other   Securities   (such  transfer  or
          assignment  being  subject to the  provisions  of Section  4(a) of the
          Securities  Purchase  Agreement)  only if the  Company  is,  within  a
          reasonable  time after such  transfer or  assignment,  furnished  with
          written  notice  of (a) the name and  address  of such  transferee  or
          assignee   and  (b)  the   securities   with  respect  to  which  such
          registration rights are being transferred or assigned.

     10.  No Inconsistent  Agreements.  Except as and to the extent specifically
          set forth in Schedule 10 attached hereto,  neither the Company nor any
          of its subsidiaries has, as of the date hereof,  nor shall the Company
          nor any of its  subsidiaries,  on or after the date of this Agreement,
          enter into,  any  agreement  with  respect to its  securities  that is
          inconsistent  with the rights granted to the Holders in this Agreement
          or otherwise  conflicts with the provisions  hereof.  Except as and to
          the extent  specifically  set forth in Schedule  10  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.  Without  limiting the generality
          of the  foregoing,  without  the  written  consent of the Holders of a
          majority of the then outstanding Registrable  Securities,  the Company
          shall not grant to any  person  the right to  request  the  Company to
          register any securities of the Company under the Securities Act unless
          the rights so granted are subject in all  respects to the prior rights
          in full of the  Holders set forth  herein,  and are not  otherwise  in
          conflict or inconsistent with the provisions of this Agreement.

     11.  Amendment of Registration  Rights. Any provision of this Agreement may
          be amended and the observance  thereof may be waived (either generally
          or   in  a   particular   instance   and   either   retroactively   or
          prospectively),  only with the  written  consent  of the  Company  and
          Investors who hold a eighty (80%) percent  interest of the Registrable
          Securities (as calculated by the number of Purchased  Shares then held
          by the Investors). Any amendment or waiver effected in accordance with
          this Section 11 shall be binding upon each Investor and the Company.

     12.  Miscellaneous.

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

     (b)  Notices  required or permitted to be given hereunder shall be given in
          the manner contemplated by the Securities  Purchase Agreement,  (i) if
          to the Company or to the Initial Investor, to their respective address

                                       14
<PAGE>

          contemplated by the Securities Purchase Agreement,  and (ii) if to any
          other  Investor,  at such address as such Investor shall have provided
          in writing to the Company, or at such other address as each such party
          furnishes by notice given in accordance with this Section 12(b).

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

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

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

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

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

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

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

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

     (k)  The  Company  acknowledges  that any failure by the Company to perform
          its  obligations  under  Section  3(a)  hereof,  or any  delay in such
          performance  could  result in loss to the  Investors,  and the Company
          agrees that,  in addition to any other  liability the Company may have
          by reason of such failure or delay, the Company shall be liable for

                                       15
<PAGE>

          all direct  damages  caused by any such  failure or delay,  unless the
          same is the result of force majeure. Neither party shall be liable for
          consequential damages.

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       16
<PAGE>

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

                                            COMPANY:
                                            SATELLITE ENTERPRISES CORP.

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

                                            INITIAL INVESTOR:

                                            ------------------------------------
                                              [Print Name of Initial Investor]

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

                                       17
<PAGE>

                                   SCHEDULE 10

The shares issuable on exercise of the Warrants listed below and the Outstanding
Shares listed below may be included in the Registration Statement.

Warrants

The Company has issued the following warrants:

     Warrant,  dated November 26, 2003, to purchase  1,000,000  shares of Common
     Stock

     Warrant,  dated  December 1, 2003, to purchase  1,000,000  shares of Common
     Stock

Each of the above warrants contains piggy-back registration rights provisions.

Outstanding Shares

The following shareholders have registration rights with respect to their shares
of Common Stock:

     GCH Capital -- 1,000,000 shares issued on December 1, 2003

     Livingston Investments,  Ltd. -- -- 1,000,000 shares issued on November 20,
     2003

     The Morpheus Trust -- 2,000,000 shares issued on April 14, 2004

     Dojo Investments, Ltd. -- 3,000,000 issued on April 14, 2004

                                       18
<PAGE>

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