Document:

Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

                  This SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as
of May 7,  2002 is  entered  into by and  among  Altair  International  Inc.,  a
corporation  incorporated  under  the  laws of the  Province  of  Ontario,  with
headquarters  located at 1725 Sheridan  Avenue,  Suite 140, Cody,  Wyoming 82414
(the  "Company"),  and the  investors  listed  on  Schedule  1  attached  hereto
(individually, a "Buyer" and collectively, the "Buyers").

                                    WHEREAS:

                  A. The Company  and the Buyers are  executing  and  delivering
this  Agreement in reliance  upon the  exemption  from  securities  registration
afforded by Rule 506 of  Regulation D  ("Regulation  D") as  promulgated  by the
United  States  Securities  and  Exchange   Commission  (the  "SEC")  under  the
Securities Act of 1933, as amended (the "1933 Act");

                  B. The  Company  desires  to sell  and the  Buyers  desire  to
purchase, upon the terms and conditions stated in this Agreement, that number of
shares of the  Company's  common  stock,  no par value (the "Common  Stock") and
warrants,  in  substantially  the same form  attached  hereto as  Exhibit A (the
"Warrants")   to  acquire   shares  of  Company   Common  Stock  (as  exercised,
collectively,  the  "Warrant  Shares"),  all as set forth on Schedule 1 attached
hereto; and

                  C.  Contemporaneously  with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement   substantially  in  the  form  attached  hereto  as  Exhibit  B  (the
"Registration  Rights  Agreement")  pursuant  to which the Company has agreed to
provide  certain  registration  rights  under  the  1933 Act and the  rules  and
regulations promulgated thereunder, and applicable state securities laws.

                  NOW  THEREFORE,  the  Company and the Buyers  hereby  agree as
follows:

1.       PURCHASE AND SALE OF COMMON STOCK AND WARRANTS.
         ----------------------------------------------

         a.  Purchase  of Common  Stock and  Warrants.  In  connection  with the
offering (the "Offering") by the Company of the Common Stock and Warrants to the
Buyers,  and subject to the satisfaction (or waiver) of the conditions set forth
in Sections 6 and 7 below,  the  Company  shall issue and sell to each Buyer and
each Buyer severally  agrees to purchase from the Company the respective  number
of shares of Common  Stock set forth  opposite  such Buyer's name on Schedule 1,
along with Warrants to acquire the respective number of Warrant Shares set forth
opposite such Buyer's name on Schedule 1 (the "Closing"). The aggregate purchase
price  (the  "Purchase  Price") of the  shares of Common  Stock and the  related
Warrants at the Closing shall be One Million Dollars ($1,000,000).

         b. Closing Date. The date and time of the Closing (the "Closing  Date")
shall be 10:00 a.m.  Central Time,  within three (3) business days following the
date  hereof,  subject  to  notification  of  satisfaction  (or  waiver)  of the
conditions  to the  Closing  set forth in  Sections 6 and 7 below (or such later

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date as is mutually agreed to by the Company and the Buyers).  The Closing shall
occur on the Closing Date at the offices of Sidley Austin Brown & Wood, Bank One
Plaza, 10 South Dearborn Street, Chicago, Illinois 60603, or at such other place
as shall be agreed  upon by the Company and  Buyers,  it being  understood  that
presence in person at the Closing is not required so long as Closing  deliveries
are made by courier service, fax or otherwise as appropriate.

         c.  Form  of  Payment.   On  the  Closing  Date,  (i)  subject  to  the
satisfaction  (or waiver) of the conditions  set forth in Section 7 below,  each
Buyer shall pay its portion of the Purchase Price to the Company, for the Common
Stock and Warrants to be issued and sold to such Buyer at the  Closing,  by wire
transfer of immediately available funds in accordance with the Company's written
wire transfer instructions,  and (ii) subject to the satisfaction (or waiver) of
the  conditions  set forth in Section 6 below and after the Company has received
the Purchase  Price from the Buyers,  the Company  shall  deliver to Buyer stock
certificates  (in the  denominations  as such Buyer shall  request) (the "Common
Stock  Certificates")  representing  such  number of the shares of Common  Stock
which such Buyer is then purchasing (as indicated  opposite such Buyer's name on
Schedule  1) along with the  Warrants  such Buyer is  purchasing  (as  indicated
opposite such Buyer's name on Schedule 1) hereunder,  duly executed on behalf of
the Company and registered in the name of such Buyer or its designee.

2.       BUYER'S REPRESENTATIONS AND WARRANTIES.
         --------------------------------------

                  Each Buyer represents and warrants with respect to only itself
that:

         a.  Investment  Purpose.  Such Buyer is acquiring  the Common Stock and
Warrants  (the Common  Stock and  Warrants may also be referred to herein as the
"Securities"),  for its own  account  for  investment  only  and not with a view
towards,  or for resale in  connection  with,  the public  sale or  distribution
thereof;  provided,  however,  that by making the  representations  herein, such
Buyer  does not agree to hold any of the  Securities  for any  minimum  or other
specific term and reserves the right to dispose of the Securities at any time in
accordance  with or pursuant to a registration  statement or an exemption  under
the 1933 Act.

         b. Accredited Investor Status.  Such Buyer is an "accredited  investor"
as that term is defined in Rule 501(a) of Regulation D.

         c. Reliance on Exemptions.  Such Buyer  understands that the Securities
are being  offered and sold to it in reliance  on specific  exemptions  from the
registration requirements of United States federal and state securities laws and
that the  Company is relying  in part upon the truth and  accuracy  of, and such
Buyer's   compliance   with,  the   representations,   warranties,   agreements,
acknowledgments  and  understandings  of such Buyer set forth herein in order to
determine the  availability of such exemptions and the eligibility of such Buyer
to acquire such Securities.

         d.  Information.  Such  Buyer  and  its  advisors,  if any,  have  been
furnished with all materials  relating to the business,  finances and operations
of the Company and  materials  relating to the offer and sale of the  Securities
which have been  requested by such Buyer.  Such Buyer and its advisors,  if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence  investigations conducted by such Buyer or
its advisors,  if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's  representations and warranties contained

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in Section 3 below. Such Buyer understands that its investment in the Securities
involves a high degree of risk. Such Buyer has sought such accounting, legal and
tax  advice  as it has  considered  necessary  to  make an  informed  investment
decision with respect to its acquisition of the Securities.

         e. No Governmental Review. Such Buyer understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or  endorsement  of the Securities or the
fairness  or  suitability  of the  investment  in the  Securities  nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Securities.

         f. Transfer or Resale.  Such Buyer understands that: (i) the Securities
have not been and, except as provided in the Registration Rights Agreement,  are
not being  registered  under the 1933 Act or any state  securities laws, and may
not be offered for sale, sold,  assigned or transferred  unless (A) subsequently
registered  thereunder,  (B) such Buyer shall have  delivered  to the Company an
opinion of counsel,  in a  generally  acceptable  form,  to the effect that such
Securities  to be  sold,  assigned  or  transferred  may be  sold,  assigned  or
transferred  pursuant to an exemption from such  registration  or (C) such Buyer
provides the Company with reasonable assurance that such Securities can be sold,
assigned or transferred  pursuant to Rule 144 promulgated under the 1933 Act (or
a successor rule thereto) ("Rule 144"); and (ii) any sale of the Securities made
in  reliance on Rule 144 may be made only in  accordance  with the terms of Rule
144 and  further,  and if Buyer  intends to utilize Rule 144 but Rule 144 is not
applicable to such resale,  any resale of the Securities under  circumstances in
which Buyer (or the person through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder.

         g. Legends.  Such Buyer understands that the Common Stock  Certificates
and certificates or other instruments  representing the Warrants and, until such
time as the sale of the Common Stock and the Warrant Shares have been registered
under the 1933 Act as contemplated by the  Registration  Rights  Agreement,  the
Common Stock Certificates and stock certificates representing the Warrant Shares
except as set forth below,  shall bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of such
stock certificates):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE "1933  ACT"),  OR
         APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
         INVESTMENT  AND MAY NOT BE  OFFERED  FOR  SALE,  SOLD,  TRANSFERRED  OR
         ASSIGNED (1) IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION STATEMENT FOR
         THE SECURITIES  UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS,
         OR (2)  IN  THE  ABSENCE  OF AN  OPINION  OF  COUNSEL,  IN A  GENERALLY
         ACCEPTABLE  FORM, THAT  REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT
         OR (3) UNLESS SOLD,  TRANSFERRED OR ASSIGNED PURSUANT TO RULE 144 UNDER
         SAID ACT.

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The legend  set forth  above  shall be removed  and the  Company  shall  issue a
certificate without such legend to the holder of the Securities upon which it is
stamped,  if,  unless  otherwise  required by state  securities  laws,  (i) such
Securities  are registered for sale under the 1933 Act and the holder has agreed
to  comply  with  the  prospectus  delivery  requirements  of  the  1933  Act in
connection with any offer or sale of such Securities,  (ii) in connection with a
sale  transaction,  such holder provides the Company with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale,  assignment or
transfer of the Securities may be made without  registration  under the 1933 Act
or (iii) such holder  provides the Company with  reasonable  assurances that the
Securities  can be sold pursuant to Rule 144 without any  restriction  as to the
number  of  securities  acquired  as of a  particular  date  that  can  then  be
immediately sold.

         h.  Validity;  Enforcement.  This  Agreement  has been duly and validly
authorized,  executed  and  delivered on behalf of such Buyer and is a valid and
binding  agreement of such Buyer  enforceable  against such Buyer in  accordance
with its terms, subject as to enforceability to general principles of equity and
to applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation
and other similar laws relating to, or affecting  generally,  the enforcement of
applicable creditors' rights and remedies.

         i.  Residency.  Such Buyer is a resident of that country and state,  if
applicable, specified in its address on Schedule 1.

         j. Legends. Such Buyer understands that, for a period of 120 days after
the Closing  Date,  the Common Stock  Certificates,  the  certificates  or other
instruments  representing the Warrants,  and the  certificates  representing the
Warrant Shares shall bear a restrictive  legend in  substantially  the following
form (and a  stop-transfer  order may be placed against  transfers of such stock
certificates in violation of the terms of such restrictive legend):

         THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE MAY NOT BE OFFERED FOR
         SALE,  SOLD,  TRANSFERRED  OR ASSIGNED TO ANY  RESIDENT OF CANADA ON OR
         BEFORE SEPTEMBER 10, 2002.

The Company  agrees to cause such legend to be  removed,  and the Company  shall
issue a  certificate  without such legend to the holder of the  Securities  upon
which  it is  stamped,  (i) at the  request  of the  holder  at any  time  after
September 10, 2002 and (ii) in connection with a sale  transaction to a resident
of Canada, if such holder provides the Company with an opinion of counsel,  in a
generally  acceptable  form,  to the effect that a public  sale,  assignment  or
transfer of the  Securities  may be made without  registration  under  governing
Canadian securities laws.

3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
         ---------------------------------------------

         The Company  represents and warrants to each of the Buyers that, except
as set forth in the disclosure  schedule  delivered by the Company to the Buyers
in connection herewith (the "Disclosure Schedule"):

         a. Organization and  Qualification.  The Company and its "Subsidiaries"
(which for  purposes of this  Agreement  means any entity in which the  Company,
directly or indirectly,  owns a controlling position of capital stock or holds a
controlling  position of an equity or similar  interest) are  corporations  duly
organized  and  validly  existing  in  good  standing  under  the  laws  of  the
jurisdiction in which they are  incorporated,  and have the requisite  corporate

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power and  authorization  to own their properties and to carry on their business
as now  being  conducted.  Each  of the  Company  and its  Subsidiaries  is duly
qualified as a foreign  corporation  to do business  and is in good  standing in
every  jurisdiction  in which its  ownership  of  property  or the nature of the
business  conducted  by it makes  such  qualification  necessary,  except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement,  "Material Adverse Effect"
means  any  material  adverse  effect  on  the  business,   properties,  assets,
operations,  results or  operations,  financial  condition  or  prospects of the
Company and its  Subsidiaries,  if any, taken as a whole, or on the transactions
contemplated  hereby or by the agreements and  instruments to be entered into in
connection  herewith,  or on the  authority or ability of the Company to perform
its  obligations  under the  Transaction  Documents (as defined below in Section
3(b)).

         b.  Authorization;  Enforcement;  Validity.  (i)  The  Company  has the
requisite  corporate  power  and  authority  to  enter  into  and  perform  this
Agreement,  the Registration  Rights Agreement,  the Transfer Agent Instructions
(as  defined  in Section 5) and the  Warrants  and each of the other  agreements
entered  into  by  the  parties  hereto  in  connection  with  the  transactions
contemplated by this Agreement (collectively,  the "Transaction Documents"), and
to issue the  Securities in accordance  with the terms hereof and thereof,  (ii)
the execution and delivery of the  Transaction  Documents by the Company and the
consummation  by  it  of  the  transactions  contemplated  hereby  and  thereby,
including  without  limitation the issuance of the Common Stock and the Warrants
and the reservation for issuance and the issuance of the Warrant Shares issuable
upon exercise  thereof,  have been duly  authorized  by the  Company's  Board of
Directors and no further  consent or  authorization  is required by the Company,
its Board of Directors or its stockholders, (iii) the Transaction Documents have
been  duly  executed  and  delivered  by the  Company  and (iv) the  Transaction
Documents   constitute  the  valid  and  binding   obligations  of  the  Company
enforceable  against the Company in accordance with their terms,  except as such
enforceability  may be  limited by general  principles  of equity or  applicable
bankruptcy, insolvency, reorganization,  moratorium, liquidation or similar laws
relating to, or affecting  generally,  the enforcement of creditors'  rights and
remedies.

         c. Issuance of Securities. The Securities are duly authorized and, upon
issuance in accordance with the terms hereof, shall be (i) validly issued, fully
paid and  non-assessable  and (ii) free from all taxes,  liens and charges  with
respect to the issue thereof. 312,500 shares of Company common stock (subject to
adjustment  pursuant to the Company's  covenant set forth in Section 4(g) below)
have been duly  authorized  and  reserved  for  issuance  upon  exercise  of the
Warrants. Upon exercise in accordance with the Warrants, the Warrant Shares will
be validly issued,  fully paid and nonassessable and free from all taxes,  liens
and charges with respect to the issue  thereof,  with the holders being entitled
to all rights  accorded to a holder of common stock of the  Company.  Subject to
the accuracy of the  representations  and  warranties of the Buyer in Section 2,
the  issuance  by the  Company of the  Securities  is, and the  issuance  by the
Company of the Warrant Shares shall be, exempt from registration  under the 1933
Act.

         d.  No  Conflicts.  The  execution,  delivery  and  performance  of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
Company's  issuance of the  Securities  and the  reservation  for  issuance  and
issuance  of the  Warrant  Shares)  will not (i)  result in a  violation  of the

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Company's  Articles  of  Incorporation,  as amended and as in effect on the date
hereof (the "Articles of Incorporation")  or the Company's  By-laws,  as amended
and as in  effect on the date  hereof  (the  "By-laws")  or any  Certificate  of
Designations,  Preferences  and Rights of any  outstanding  series of  preferred
stock of the Company or (ii) conflict with, or constitute a default (or an event
which with  notice or lapse of time or both would  become a default)  under,  or
give  to  others  any  rights  of   termination,   amendment,   acceleration  or
cancellation  of, any material  agreement,  indenture or instrument to which the
Company or any of its  Subsidiaries  is a party, or result in a violation of any
law, rule,  regulation,  order,  judgment or decree (including federal and state
securities  laws and  regulations and the rules and regulations of the Principal
Market (as defined in Section 4(f) below))  applicable  to the Company or any of
its  Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.  Neither the Company nor its  Subsidiaries is
in violation of any term of or in default  under its Articles of  Incorporation,
any  Certificate  of  Designations,  Preferences  and Rights of any  outstanding
series of  preferred  stock of the  Company or  By-laws or their  organizational
charter or by-laws, respectively. Neither the Company or any of its Subsidiaries
is in  violation  or any term of or in default  under any  contract,  agreement,
mortgage, indebtedness,  indenture, instrument, judgment, decree or order or any
statute,  rule or  regulation  applicable  to the  Company or its  Subsidiaries,
except for possible conflicts, defaults,  terminations and amendments that would
not  have a  Material  Adverse  Effect.  The  business  of the  Company  and its
Subsidiaries is not being conducted, and shall not be conducted, in violation of
any law, ordinance,  regulation of any governmental entity,  except for possible
violations the sanctions for which either individually or in the aggregate would
not have a Material Adverse Effect.  Except as specifically  contemplated by the
Transaction  Documents and as required  under the 1933 Act and  governing  state
securities   laws,   the  Company  is  not   required  to  obtain  any  consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory  agency in order for it
to execute,  deliver or perform any of its obligations  under or contemplated by
the Transaction  Documents in accordance  with the terms hereof or thereof.  All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain prior to Closing pursuant to the preceding sentence have been
obtained  or  effected  on or prior  to the date  hereof.  The  Company  and its
Subsidiaries are unaware of any facts or circumstances  which might give rise to
any of the  foregoing.  Except  as set  forth in the  Disclosure  Schedule,  the
Company is not in violation of the listing  requirements of the Principal Market
(as defined in Section 4(f) below).

         e. SEC Documents;  Financial Statements. As of the Closing, the Company
has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC  pursuant to the  reporting  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "1934  Act")  (all of the
foregoing  filed prior to the date  hereof,  all exhibits  included  therein and
financial  statements  and  schedules  thereto,  all documents  incorporated  by

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reference  therein,  and  all  registration   statements  of  the  Company  (and
prospectuses  incorporated  therein) filed under the 1933 Act being  hereinafter
referred  to as the "SEC  Documents").  As of their  respective  dates,  the SEC
Documents  complied in all material  respects with the  requirements of the 1934
Act and the rules and regulations of the SEC promulgated  thereunder  applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC,  contained  any untrue  statement of a material fact or omitted to
state a material  fact  required to be stated  therein or  necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  As of their respective dates, the financial statements of
the Company  included in the SEC  Documents  complied as to form in all material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared  in  accordance   with  generally   accepted   accounting   principles,
consistently  applied,  during  the  periods  involved  (except  (i)  as  may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of  unaudited  interim  statements,  to the  extent  they  may  exclude
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  No other information  provided by the Company to the Buyers which
is not included in the SEC Documents contains any untrue statement of a material
fact or  omits  to  state  any  material  fact  necessary  in  order to make the
statements  therein,  in the light of the  circumstance  under which they are or
were made, not  misleading.  Neither the Company nor any of its  Subsidiaries or
any of their officers,  directors,  employees or agents have provided the Buyers
with any material, nonpublic information.

         f.  Absence of Certain  Changes.  Since the most  recent  filing by the
Company with the SEC, there has been no material  adverse change and no material
adverse  development  in  the  business,   properties,   operations,   financial
condition,   results  of   operations   or  prospects  of  the  Company  or  its
Subsidiaries. The Company has not taken any steps, and does not currently expect
to take any steps,  to seek  protection  pursuant to any bankruptcy law nor does
the Company or any of its  Subsidiaries  have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings.

         g.  Absence of  Litigation.  Except as set forth in the SEC  Documents,
there is no action, suit, proceeding,  inquiry or investigation before or by any
court,  public board,  government agency,  self-regulatory  organization or body
pending  or,  to the  knowledge  of  the  Company  or  any of its  Subsidiaries,
threatened  against or affecting the Company,  the Company's  common stock,  the
Common  Shares or any of the Company's  Subsidiaries  or any of the Company's or
the Company's Subsidiaries' officers or directors in their capacities as such.

         h.  Acknowledgment  Regarding  Buyers'  Purchase  of  Common  Stock and
Warrants.  The Company acknowledges and agrees that each of the Buyers is acting
solely in the capacity of arm's-length purchaser with respect to the Transaction
Documents  and the  transactions  contemplated  hereby and thereby.  The Company
further  acknowledges  that each Buyer is not acting as a  financial  advisor or
fiduciary  of the  Company  (or in any  similar  capacity)  with  respect to the
Transaction  Documents and the transactions  contemplated hereby and thereby and
any advice given by any of the Buyers or any of their respective representatives
or agents in connection  with the  Transaction  Documents  and the  transactions
contemplated hereby and thereby is merely incidental to such Buyer's purchase of
the Securities.  The Company further represents to each Buyer that the Company's
decision to enter into the  Transaction  Documents  has been based solely on the
independent evaluation by the Company and its representatives.

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         i. No Undisclosed Events,  Liabilities,  Developments or Circumstances.
No event,  liability,  development or circumstance has occurred or exists, or is
contemplated to occur,  with respect to the Company or its Subsidiaries or their
respective business, properties,  prospects,  operations or financial condition,
that  would  be  required  to be  disclosed  by  the  Company  under  applicable
securities  laws on a registration  statement  filed with the SEC relating to an
issuance  and sale by the  Company  of its  common  stock and which has not been
publicly announced.

         j.  No  General  Solicitation.  Neither  the  Company,  nor  any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Securities.

         k.  No  Integrated  Offering.  Neither  the  Company,  nor  any  of its
affiliates,  nor any  person  acting on its or their  behalf  has,  directly  or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated  with prior  offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions,  including,  without limitation,
under the rules and regulations of any exchange or automated quotation system on
which any of the  securities of the Company are listed or  designated,  nor will
the  Company  or any of its  Subsidiaries  take any  action or steps  that would
require  registration  of any of the Securities  under the 1933 Act or cause the
offering of the Securities to be integrated with other offerings.

         l. Employee Relations.  Neither the Company nor any of its Subsidiaries
is involved in any union labor  dispute nor, to the  knowledge of the Company or
any of its Subsidiaries, is any such dispute threatened.

         m. Intellectual  Property Rights.  The Company and its Subsidiaries own
or possess  adequate  rights or licenses  to use all  trademarks,  trade  names,
service  marks,  service mark  registrations,  service  names,  patents,  patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  Except as set forth in the SEC Documents,  none of
the   Company's   trademarks,   trade  names,   service   marks,   service  mark
registrations,  service names, patents, patent rights,  copyrights,  inventions,
licenses,   approvals,   government  authorizations,   trade  secrets  or  other
intellectual  property  rights have  expired or  terminated,  or are expected to
expire or terminate  within two (2) years from the date of this  Agreement.  The
Company and its  Subsidiaries  do not have any knowledge of any  infringement by
the Company or its Subsidiaries of trademark, trade name rights, patents, patent
rights, copyrights,  inventions, licenses, service names, service marks, service
mark  registrations,  trade secret or other similar rights of others,  or of any
such development of similar or identical trade secrets or technical  information
by others  and the  Company  and its  Subsidiaries  are  unaware of any facts or
circumstances which might give rise to any of the foregoing. The Company and its
Subsidiaries  have taken  reasonable  security  measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

         n.  Environmental  Laws.  The Company and its  Subsidiaries  (i) are in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the

                                       8
<PAGE>

environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval.

o. Title. The Company and its Subsidiaries have good and marketable title to, or
a valid leasehold  interest in, all real property and personal  property that is
material to the business of the Company and its Subsidiaries,  in each case free
and clear of all liens, encumbrances and defects except such as are described in
the SEC Documents or the Disclosure Schedule or such as do not materially affect
the value of such property and do not  interfere  with the use made and proposed
to be made of such property by the Company and any of its Subsidiaries. Any real
property  and  facilities  held  under  lease  by  the  Company  and  any of its
Subsidiaries  are held by them under valid,  subsisting and  enforceable  leases
with such  exceptions as are not material and do not interfere with the use made
and proposed to be made of such  property  and  buildings by the Company and its
Subsidiaries.

         p. Insurance.  The Company and each of its  Subsidiaries are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged and the Company  does not have any reason to believe it will not be able
to renew its existing insurance coverage under  substantially  similar terms for
the next two (2) years.

         q. Regulatory  Permits.  The Company and its  Subsidiaries  possess all
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state or foreign  regulatory  authorities  necessary to conduct their respective
businesses,  and neither the Company nor any such  Subsidiary  has  received any
notice of  proceedings  relating to the revocation or  modification  of any such
certificate, authorization or permit.

         r. Tax Status.  The Company  and each of its  Subsidiaries  has made or
filed all  federal  and state  income  and all other tax  returns,  reports  and
declarations  required by any  jurisdiction  to which it is subject  (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provision  reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.

         s.  Transactions  With  Affiliates.  Except  as set  forth  in the  SEC
Documents  filed at least ten (10) days  prior to the date  hereof,  none of the
officers,  control  parties,  control  entities,  directors  or employees of the
Company is presently a party to any  transaction  with the Company or any of its
Subsidiaries  (other than for services as  employees,  officers and  directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Company,  any corporation,

                                       9
<PAGE>

partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

         t.  Eligibility.  The Company is  currently  eligible  to register  the
resale of the Common  Stock and Warrant  Shares on a  registration  statement on
Form S-3 under the 1933 Act.

         u. Dilutive Effect.  The Company  understands and acknowledges that the
number of Warrant Shares issuable upon exercise of the Warrants will increase in
certain  circumstances.  The Company further acknowledges that its obligation to
issue the Warrant  Shares upon exercise of the Warrants in accordance  with this
Agreement  and the  Warrants,  is absolute and  unconditional  regardless of the
dilutive effect that such issuance may have on the ownership  interests of other
stockholders of the Company.

         v. Placement  Agent. The Company has not engaged any placement agent in
connection with the sale of the Common Stock and Warrants.

4.       COVENANTS.

         a.  Best  Efforts.  Each  party  shall use its best  efforts  timely to
satisfy each of the  conditions  to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

         b.  Form D and  Blue  Sky.  The  Company  agrees  to file a Form D with
respect to the Securities as required  under  Regulation D and to provide a copy
thereof to each Buyer  promptly  after such  filing.  The Company  shall,  on or
before the  Closing  Date,  take such  action as the  Company  shall  reasonably
determine is  necessary  in order to obtain an  exemption  for or to qualify the
Securities  for sale to the Buyers at the  Closing  pursuant  to this  Agreement
under  applicable  securities  or "Blue  Sky" laws of the  states of the  United
States,  and shall provide evidence of any such action so taken to the Buyers on
or prior to the Closing  Date.  The  Company  shall make all filings and reports
relating  the  offer  and  sale  of the  Securities  required  under  applicable
securities or "Blue Sky" laws of the states of the United  States  following the
Closing Date.

         c.  Reporting  Status.  Until the  earlier of (i) the date which is one
year  after the date as of which the  Investors  (as that term is defined in the
Registration  Rights  Agreement)  may sell all of the Common  Stock and  Warrant
Shares without  restriction  pursuant to Rule 144(k)  promulgated under the 1933
Act (or  successor  thereto) or (ii) the date on which (A) the  Investors  shall
have sold all the Common  Stock and Warrant  Shares and (B) none of the Warrants
are  outstanding,  the Company shall file all reports  required to be filed with
the SEC pursuant to the 1934 Act, and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would otherwise permit such termination.

         d. Use of Proceeds.  The Company will use the proceeds from the sale of
the Common Stock and Warrants for working capital and capital expenditures.

         e. Right of First Refusal.  Subject to the exceptions  described below,
the Company and its Subsidiaries  shall not negotiate or contract with any party
for any equity financing (including any debt financing with an equity component)
or issue any equity  securities  of the Company or any  Subsidiary or securities

                                       10
<PAGE>

convertible or exchangeable  into or for equity securities of the Company or any
Subsidiary  (including  debt  securities  with an equity  component) in any form
("Future  Offerings")  during the period beginning on the date hereof and ending
on, and including,  the date which is three hundred  sixty-five (365) days after
the  Closing  Date,  unless it shall  have  first  delivered  to each Buyer or a
designee  appointed by such Buyer written notice (the "Future Offering  Notice")
describing  the proposed  Future  Offering,  including the terms and  conditions
thereof,  and  providing  each Buyer an option to purchase  up to its  Aggregate
Percentage  (as  defined  below) of the  securities  to be issued in such Future
Offering,  as of the date of  delivery  of the Future  Offering  Notice,  in the
Future Offering (the limitations  referred to in this sentence is referred to as
the  "Capital  Raising  Limitations").   For  purposes  of  this  Section  4(e),
"Aggregate  Percentage"  at any time with  respect  to any Buyer  shall mean the
percentage obtained by dividing (i) the aggregate number of the shares of Common
Stock initially issued at the Closing to such Buyer by (ii) the aggregate number
of the shares of Common  Stock sold to the Buyers by the  Company at the Closing
in connection with the Offering.  A Buyer can exercise its option to participate
in a Future Offering by delivering  written notice thereof to participate to the
Company within five (5) business days after receipt of a Future Offering Notice,
which notice shall state the quantity of securities  being offered in the Future
Offering that such Buyer will purchase, up to its Aggregate Percentage, and that
number of  securities  it is  willing  to  purchase  in excess of its  Aggregate
Percentage. In the event that one or more Buyers fail to elect to purchase up to
each such Buyer's Aggregate Percentage, then each Buyer which has indicated that
it is willing to  purchase a number of  securities  in such  Future  Offering in
excess of its  Aggregate  Percentage  shall be entitled to purchase its pro rata
portion  (determined in the same manner as described in the preceding  sentence)
of the  securities in the Future  Offering  which one or more of the Buyers have
not  elected  to  purchase.  In the  event  the  Buyers  fail to  elect to fully
participate in the Future Offering within the periods  described in this Section
4(e),  the  Company  shall  have  forty-five  (45) days  thereafter  to sell the
securities  of the Future  Offering  that the Buyers did not elect to  purchase,
upon terms and  conditions  no more  favorable  to the  purchasers  thereof than
specified in the Future Offering  Notice.  In the event the Company has not sold
such securities of the Future  Offering  within such 45 day period,  the Company
shall not thereafter  issue or sell such securities  without first offering such
securities  to the Buyers in the  manner  provided  in this  Section  4(e).  The
Capital Raising Limitations shall not apply to (i) a loan from a commercial bank
which does not have any  equity  feature,  (ii) any  transaction  involving  the
Company's   issuances  of  securities  (A)  as  consideration  in  a  merger  or
consolidation,  (B) as consideration for the acquisition of a business, product,
license or other  assets by the  Company,  (C)  pursuant to the terms of a joint
venture  or similar  arrangement,  or (D) as  payment  for bona fide  consulting
services, (iii) the issuance of common stock in a firm commitment,  underwritten
public  offering  in which the  underwriter  is an  investment  bank of national
reputation,  (iv) the issuance of securities  upon exercise or conversion of the
Company's options,  warrants or other convertible  securities  outstanding as of
the date  hereof,  (v) the  grant of  additional  options  or  warrants,  or the
issuance  of  additional  securities,  under  any  Company  stock  option  plan,
restricted  stock plan or stock  purchase  plan for the benefit of the Company's
employees,  directors  or  consultants.  The  Buyers  shall not be  required  to
participate  or  exercise  their  right  of  first  refusal  with  respect  to a
particular  Future  Offering in order to exercise  their right of first  refusal
with respect to later Future Offerings.

                                       11
<PAGE>

         f. Listing. The Company shall promptly secure the listing of all of the
Registrable  Securities  (as that term is  defined  in the  Registration  Rights
Agreement) upon each national securities exchange, automated quotation system or
bulletin board system,  if any, upon which shares of the Company's  common stock
are then listed (subject to official notice of issuance) and shall maintain,  so
long as any other shares of common stock shall be so listed, such listing of all
Registrable  Securities  from  time to time  issuable  under  the  terms  of the
Transaction   Documents.   The  Company  shall   maintain  the  Common   Stock's
authorization  for quotation on the Nasdaq  National  Market,  Nasdaq  Small-Cap
Market, The New York Stock Exchange, Inc. or The American Stock Exchange,  Inc.,
as  applicable  (the  "Principal  Market").  Neither  the Company nor any of its
Subsidiaries shall take any action which would be reasonably  expected to result
in the  delisting or  suspension of common stock of the Company on the Principal
Market.  The Company  shall  promptly,  and in no event later than the following
business  day,  provide to each Buyer copies of any notices it receives from the
Principal  Market  regarding  the continued  eligibility  of common stock of the
Company for listing on such automated  quotation system or securities  exchange.
The Company shall pay all fees and expenses in connection  with  satisfying  its
obligations under this Section 4(f).

         g.  Reservation of Shares.  The Company shall take all action necessary
to at all times have  authorized,  and reserved for the purpose of issuance,  no
less than 200% of the number of shares of common stock of the Company  needed to
provide  for the  issuance  of the shares of common  stock of the  Company  upon
exercise of all outstanding Warrants.

         h. Issuance of Warrant Shares. The issuance of the Warrant Shares shall
be duly authorized, and when issued in accordance with the Warrants, the Warrant
Shares will be validly  issued,  fully paid and  non-assessable  and free of all
taxes, liens, charges and preemptive rights with respect to the issue thereof.

         i. Limitation on Filing Registration Statements.  The Company shall not
file a registration statement (other than the Registration Statement (as defined
in the Registration  Rights Agreement) or a registration  statement on Form S-8)
covering  the sale or resale of shares of common  stock of the Company  with the
SEC during the period  beginning on the date hereof and ending on the date which
is ninety (90) days after the Registration Statement has been declared effective
by the SEC; provided, however, the foregoing shall not prohibit the Company from
registering  the re-sale of up to 285,000  shares of Common  Stock for  security
holders other than the Buyers under the Registration Statement.

         j. Independent  Auditors.  The Company shall,  until at least three (3)
years after the Closing Date, maintain as its independent auditors an accounting
firm authorized to practice before the SEC.

         k. Corporate Existence and Taxes. The Company shall, until at least the
later of (i) the date that is three (3) years after the Closing Date or (ii) the
exercise of all  Warrants  purchased  pursuant to this  Agreement,  maintain its
corporate  existence in good  standing  (provided,  however,  that the foregoing
covenant  shall  not  prevent  the  Company  from  entering  into any  merger or
corporate reorganization as long as the surviving entity in such transaction, if
not the Company, has common stock listed for trading on the Principal Market and
shall pay all its taxes when due except for taxes which the Company disputes).

                                       12
<PAGE>

         l.  Filing of Form 8-K.  On or before  the  third  (3rd)  business  day
following  the  Closing  Date,  the  Company  shall file a Form 8-K with the SEC
describing  the  terms  of the  transactions  contemplated  by  the  Transaction
Documents in the form required by the 1934 Act.

         m.  Transactions  With  Affiliates.  For a period  of one year from the
Closing Date, none of the officers, directors, or employees of the Company shall
be a party to any transaction with the Company or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer,  director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

         n.  Restrictions  on Sales of  Securities.  Each Buyer has not and will
not,  prior to the earlier of (i) ninety (90) days following the Closing Date or
(ii) the date that the  Registration  Statement (as defined in the  Registration
Rights Agreement) is first declared effective by the SEC (the "Effective Date"),
if then  prohibited by law or regulation,  sell,  dispose of or grant any rights
with respect to the Common  Stock or Warrant  Shares.  In  addition,  such Buyer
represents  that as of the date of this  Agreement  such Buyer does not have any
existing  short  position in the  Company's  common  stock that was entered into
subsequent to such Buyer obtaining  knowledge of the  transactions  contemplated
hereby nor has such Buyer  executed any  derivative  instruments  with any third
party,  which in either  case is  designed  to dispose  of the  Common  Stock or
Warrant  Shares  prior to the  earlier of (y)  ninety  (90) days  following  the
Closing Date or (z) the Effective Date.

         o.  Buy-In  Damages.  If the Company  fails to issue to the  applicable
Buyer a certificate, without the legend set forth in Section 2(g) hereof, by the
third (3rd)  trading day after the request  thereof by such Buyer,  and if after
such third (3rd) trading day such Buyer purchases (in an open market transaction
or otherwise)  shares of common stock of the Company to deliver in  satisfaction
of a sale by such Buyer of the shares that such Buyer anticipated receiving from
the Company,  then the Company  shall,  within three (3) trading days after such
Buyer's  request (i) pay cash to such Buyer in an amount equal to the excess (if
any) of such Buyer's total purchase price (including brokerage  commissions,  if
any) for the shares of common stock of the Company so purchased over the product
of (A) such number of shares of common stock times (B) the closing sale price of
the Company  common stock on the date of the event giving rise to the  Company's
obligation to deliver such certificate and (ii) promptly honor its obligation to
deliver to such Buyer the Common Stock Certificates.

5.       TRANSFER AGENT INSTRUCTIONS.
         ---------------------------

         The Company shall issue irrevocable  instructions to its transfer agent
(the "Transfer Agent"), and any subsequent transfer agent,  substantially in the
form  of  Exhibit  C  hereto  (the  "Transfer  Agent   Instructions")  to  issue
certificates, registered in the name of each Buyer or its respective nominee(s),
for the Warrant Shares,  as applicable in such amounts as specified from time to
time by each  Buyer to the  Company  upon  exercise  of the  Warrants.  Prior to

                                       13
<PAGE>

registration of the Common Stock and Warrant Shares under the 1933 Act, all such
certificates shall bear the restrictive legend specified in Section 2(g) of this
Agreement.  The Company  warrants  that no  instruction  other than the Transfer
Agent Instructions referred to in this Section 5, and stop transfer instructions
to give  effect to  Section  2(f)  hereof  will be given by the  Company  to its
Transfer Agent and that the Securities shall otherwise be freely transferable on
the books and  records  of the  Company as and to the  extent  provided  in this
Agreement and the Registration Rights Agreement. Nothing in this Section 5 shall
affect in any way each Buyer's  obligations  and agreements set forth in Section
2(g) to comply with all applicable  prospectus  delivery  requirements,  if any,
upon resale of the  Securities.  If a Buyer provides the Company with an opinion
of counsel,  in a generally  acceptable  form, to the effect that a public sale,
assignment or transfer of the  Securities or Warrant  Shares may be made without
registration  under  the  1933  Act or  the  Buyer  provides  the  Company  with
reasonable assurances that the Securities or Warrant Shares can be sold pursuant
to Rule 144 without any  restriction as to the number of securities  acquired as
of a particular date that can then be immediately sold, the Company shall permit
the  transfer,  and, in the case of the Warrant  Shares,  promptly  instruct its
Transfer  Agent  to  issue  one or more  certificates  in such  name and in such
denominations as specified by such Buyer and without any restrictive legend. The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable  harm to the  Buyers by  vitiating  the  intent  and  purpose of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Section 5 will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company of the  provisions of this Section 5, that the Buyers shall be entitled,
in addition  to all other  available  remedies,  to an order  and/or  injunction
restraining any breach and requiring  immediate  issuance and transfer,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
         ----------------------------------------------

                  The obligation of the Company  hereunder to issue and sell the
Common  Stock and  Warrants  to each  Buyer at the  Closing  is  subject  to the
satisfaction,  at  or  before  the  Closing  Date,  of  each  of  the  following
conditions,  provided that these  conditions  are for the Company's sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

         a. Such Buyer shall have  executed each of the  Transaction  Documents,
where appropriate,  to which it is a party and delivered the same to the Company
for the transactions contemplated by this Agreement;

         b. The  representations  and warranties of such Buyer shall be true and
correct in all material  respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and such Buyer shall have performed, satisfied and
complied in all material respects with the covenants,  agreements and conditions
required by this  Agreement to be performed,  satisfied or complied with by such
Buyer at or prior to the Closing Date; and

         c. Such Buyer shall have delivered to the Company such other  documents
relating to the  transactions  contemplated by this Agreement as the Company may
reasonable request.

                                       14
<PAGE>

7.       CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
         -------------------------------------------------

                  The obligation of each Buyer  hereunder to purchase the Common
Stock and Warrants at the Closing is subject to the  satisfaction,  at or before
the Closing  Date,  of each of the  following  conditions,  provided  that these
conditions  are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole  discretion  by providing  the Company  with prior  written
notice thereof:

         a. The Company shall have executed  each of the  Transaction  Documents
and delivered the same to the Buyers;

         b. The common stock of the Company shall be authorized for quotation on
the  Principal  Market and trading in common stock of the Company shall not have
been suspended by the SEC or the Principal Market;

         c. The  representations and warranties of the Company shall be true and
correct as of the date when made and as of the  Closing  Date as though  made at
that time (except for representations and warranties that speak as of a specific
date) and the Company  shall have  performed,  satisfied  and complied  with the
covenants, agreements and conditions required by the Transaction Documents to be
performed,  satisfied or complied with by the Company at or prior to the Closing
Date;

         d. The Company  shall have  delivered  to the Buyers the opinion of the
Company's outside legal counsel dated as of the Closing Date, in form, scope and
substance reasonably satisfactory to such Buyer and in substantially the form of
Exhibit D attached hereto;

         e. The Company  shall have  executed  and  delivered  to the Buyers the
Common Stock  Certificates  and Warrants  (in such  denominations  as such Buyer
shall  request) for the shares of Common Stock and Warrants  being  purchased by
such Buyer at the Closing;

         f. The Transfer  Agent  Instructions  shall have been  delivered to and
acknowledged  in  writing  by the  Transfer  Agent  and a copy  of the  executed
Transfer Agent Instructions shall have been delivered to the Buyers;

         g.  The  Company  shall  have  made  all  required  filings  under  all
applicable  federal  and state  securities  laws  necessary  to  consummate  the
issuance of the Securities  pursuant to this  Agreement in compliance  with such
laws;

         h. As of the Closing  Date,  the Company shall have reserved out of its
authorized  and unissued  common stock,  solely for the purpose of effecting the
exercise  of the  Warrants,  no less than 200% of the number of shares of common
stock of the Company  needed to provide for the issuance of the shares of common
stock of the Company upon exercise of all outstanding Warrants;

         i. The Company shall have delivered to the Buyers the following:

                                       15
<PAGE>

         i. A  certificate,  executed  by the  Chief  Executive  Officer  of the
Company,  dated as of the Closing Date,  confirming that the representations and
warranties  described  in Section 7(c) above are true and correct as of the date
when made and as of the  Closing  Date and as to such  other  matters  as may be
reasonably requested by such Buyer;

         ii.  The  Board  of  Directors  of  the  Company   shall  have  adopted
resolutions  consistent  with Section  3(b)(ii)  above and in a form  reasonably
acceptable to such Buyer;

         iii.  The  Company  shall have  delivered  to such Buyer a  certificate
evidencing  the  incorporation  and  good  standing  of  the  Company  and  each
Subsidiary in such  corporation's  jurisdiction of  incorporation  issued by the
Secretary  of  State or  other  appropriate  official  of such  jurisdiction  of
incorporation  as of a date within ten (10) days of the Closing Date;  provided,
however,  in light of the fact that the  employees  in the  relevant  government
office in the province of Ontario are presently on strike and will not issue any
such certificate,  the Company shall be permitted to deliver such certificate at
any  time  within  five  business  days of the  date  such  certificate  becomes
available.

         iv. The Company shall have  delivered to such Buyer a certified copy of
the  Articles of  Incorporation  as  certified  by the  Ministry of Consumer and
Business Services of the Province of Ontario within ten (10) days of the Closing
Date;  provided,  however,  in  light of the fact  that  the  employees  in such
government  office  are  presently  on  strike  and  will  not  issue  any  such
certification, the Company shall be permitted to deliver such certificate at any
time within five business days of the date such certification becomes available;
and

         v.  The  Company  shall  have  delivered  to such  Buyer a  secretary's
certificate,  dated as the Closing Date, as to (A) the resolutions  described in
Section 7(i)(ii) above,  (B) the Articles of Incorporation  and (C) the By-laws,
each as in effect at the Closing.

         j. The Company shall have delivered to the Buyers such other  documents
relating to the  transactions  contemplated  by this Agreement as the Buyers may
reasonably request; and

         k.  Subject to  Section  10(l)  below,  at Closing  the  Company  shall
reimburse  the Buyers for the Buyers'  costs and  expenses  (in an amount not to
exceed  $2,500),  including  without  limitation  Buyers'  attorneys'  fees  and
expenses  incurred  by the Buyers  concerning  the due  diligence  review of the
contemplated  transactions and the Company,  and the negotiation and preparation
of  the  Transaction   Documents  and  the   consummation  of  the  transactions
contemplated thereby.

8.       INDEMNIFICATION.
         ---------------

         a. In  consideration  of each  Buyer's  execution  and  delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to
all of the Company's  other  obligations  under the Transaction  Documents,  the
Company shall defend,  protect,  indemnify and hold harmless each Buyer and each
other  holder  of the  Securities  and  all  of  their  stockholders,  officers,
directors,  employees and direct or indirect  investors and any of the foregoing

                                       16
<PAGE>

person's agents or other representatives (including,  without limitation,  those
retained in connection  with the  transactions  contemplated  by this Agreement)
(collectively,  the "Indemnitees") from and against any and all actions,  causes
of action,  suits,  claims,  losses,  costs,  penalties,  fees,  liabilities and
damages, and expenses in connection therewith  (irrespective of whether any such
Indemnitee  is a party to the  action  for which  indemnification  hereunder  is
sought),  and  including  reasonable  attorneys'  fees  and  disbursements  (the
"Indemnified  Liabilities"),  incurred  by any  Indemnitee  as a result  of,  or
arising  out of,  or  relating  to (a) any  misrepresentation  or  breach of any
representation  or warranty made by the Company in the Transaction  Documents or
any other certificate,  instrument or document  contemplated  hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction  Documents or any other  certificate,  instrument or document
contemplated  hereby or thereby,  (c) any cause of action, suit or claim brought
or made  against  such  Indemnitee  and  arising  out of or  resulting  from the
execution,  delivery, performance or enforcement of the Transaction Documents or
any other certificate,  instrument or document  contemplated  hereby or thereby,
(d) any transaction  financed or to be financed in whole or in part, directly or
indirectly,  with the  proceeds  of the  issuance of the  Securities  or (e) the
status of such Buyer or holder of the  Securities as an investor in the Company.
Notwithstanding  anything to the  contrary  herein,  the  Company  shall have no
obligation  under this  Section 8 with  respect to any  Indemnified  Liabilities
arising out of, or relating  to, any breach of any  representations,  warrant or
covenant  in any  Transaction  Document  by a  Buyer.  To the  extent  that  the
foregoing  undertaking by the Company may be unenforceable  for any reason,  the
Company shall make the maximum  contribution to the payment and  satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.

         b. In  consideration  of the  Company's  execution  and delivery of the
Transaction  Documents,  each Buyer shall  defend,  protect,  indemnify and hold
harmless  the  Company  and its  officers,  directors,  employees  and direct or
indirect   investors  and  any  of  the  foregoing   person's  agents  or  other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Company  Indemnitees") from and against any and all actions,  causes of action,
suits, claims,  losses,  costs,  penalties,  fees,  liabilities and damages, and
expenses in  connection  therewith  (irrespective  of whether  any such  Company
Indemnitee  is a party to the  action  for which  indemnification  hereunder  is
sought),  and  including  reasonable  attorneys'  fees  and  disbursements  (the
"Company  Indemnified  Liabilities"),  incurred by any Company  Indemnitee  as a
result of, or arising out of, or relating to (a) any misrepresentation or breach
of any  representation  or  warranty  made  by  such  Buyer  in the  Transaction
Documents or any other certificate,  instrument or document  contemplated hereby
or thereby or (b) any breach of any  covenant,  agreement or  obligation of such
Buyer  contained  in  the  Transaction   Documents  or  any  other  certificate,
instrument or document contemplated hereby or thereby.  Notwithstanding anything
to the contrary  herein,  Buyers shall have no  obligation  under this Section 8
with respect to any Company Indemnified  Liabilities arising out of, or relating
to, any breach of any  representations,  warrant or covenant in any  Transaction
Document by the Company.

9.       LIQUIDATED DAMAGES.
         ------------------

         The Company  agrees  that  Buyers  will  suffer  damages if the Company
violates any provision of or fails to fulfill any of its  obligations  or duties
pursuant  to the  Transaction  Documents,  other  than the  Registration  Rights
Agreement  or the  Warrants  (a "Company  Violation"),  and that it would not be

                                       17
<PAGE>

possible to ascertain the extent of such damages.  Accordingly,  in the event of
such Company  Violation,  the Company  hereby agrees to pay  liquidated  damages
("Liquidated  Damages") to each Buyer  following the  occurrence of such Company
Violation in an amount  determined by  multiplying  (i) one percent (1%) of such
Buyer's portion of the Purchase Price by (ii) the percentage derived by dividing
(A) the  actual  number  of days  elapsed  from  the last day of the date of the
Company  Violation or the prior 30-day period,  as  applicable,  to the day such
Company  Violation  has been  completely  cured by (B) 30,  in cash,  or at such
Buyer's option,  in the number of shares of common stock of the Company equal to
the quotient of (v) the dollar amount of the  Liquidated  Damages on the Payment
Date (as defined below) divided by (w) the closing bid price of the common stock
of the  Company  as of the  date of the  Company  Violation  (as  quoted  in the
Principal  Market or the market or exchange where the Company's  common stock is
then traded).  The Liquidated  Damages payable  pursuant hereto shall be payable
within five (5) business days from the end of the calendar  month  commencing on
the first calendar month in which the Company Violation occurs (each, a "Payment
Date").  In the event the Buyer elects to receive the Liquidated  Damages amount
in shares of common stock of the Company,  such shares shall also be  considered
Common  Stock  and  shall  have  the  registration   rights  set  forth  in  the
Registration Rights Agreement.

10.      GOVERNING LAW; MISCELLANEOUS.
         ----------------------------

         a. Governing Law;  Jurisdiction;  Jury Trial.  This Agreement  shall be
governed by and  construed in all respects by the internal  laws of the State of
Illinois  (except  for the  proper  application  of the  United  States  federal
securities laws),  without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois.  Each party hereby  irrevocably  submits to the non-exclusive
jurisdiction  of the state and  federal  courts  sitting in the City of Chicago.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

         b.  Counterparts.  This  Agreement  may be  executed  in  two  or  more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered to the other  party;  provided  that a facsimile  signature
shall be  considered  due  execution  and shall be  binding  upon the  signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

         c.  Headings.  The headings of this  Agreement are for  convenience  of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

         d. Severability. 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 in that
jurisdiction  or the  validity  or  enforceability  of  any  provision  of  this
Agreement in any other jurisdiction.

                                       18
<PAGE>

         e. Entire Agreement;  Amendments.  This Agreement  supersedes all other
prior  oral or  written  agreements  between  the  Buyers,  the  Company,  their
affiliates  and  persons  acting on their  behalf  with  respect to the  matters
discussed  herein,  and this  Agreement and the  instruments  referenced  herein
contain  the entire  understanding  of the parties  with  respect to the matters
covered  herein and therein  and,  except as  specifically  set forth  herein or
therein,  neither the Company nor any Buyer makes any representation,  warranty,
covenant or  undertaking  with  respect to such  matters.  No  provision of this
Agreement may be amended  other than by an  instrument in writing  signed by the
Company and holders of at least  two-thirds  (2/3) of the shares of Common Stock
held by the Buyers then outstanding, and no provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement is
sought.

         f.  Notices.  Any notices,  consents,  waivers or other  communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party); or (iii) one business day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

If to the Company:

                  Altair International Inc.
                  1725 Sheridan Avenue, Suite 140
                  Cody, Wyoming  82414
                  Telephone:        (307) 587-8245
                  Facsimile:        (307) 587-8357
                  Attention:        William P. Long, Chief Executive Officer

With a copy to:

                  Altair International Inc.
                  230 South Rock Blvd, Suite 21
                  Reno, Nevada  89502
                  Telephone:        (775) 837-1966
                  Facsimile:        (775) 857-1920
                  Attention:        Edward Dickinson, Chief Financial Officer

                  Stoel Rives LLP
                  201 South Main Street
                  Suite 1100

                  Telephone:         (801) 578-6908
                  Facsimile:         (801) 578-6999
                  Attention:         Bryan T. Allen, Esq.

If to a Buyer, to it at the address and facsimile number set forth on Schedule 1
with copies to such  Buyer's  representatives  as set forth on Schedule 1, or at

                                       19
<PAGE>

such other address and/or facsimile number and/or to the attention of such other
person as the  recipient  party has  specified  by written  notice given to each
other party five (5) days prior to the effectiveness of such change.

         g.  Successors and Assigns.  This  Agreement  shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Common Stock.  The Company shall not assign this
Agreement  or any rights or  obligations  hereunder  without  the prior  written
consent of holders of at least  two-thirds  (2/3) of the shares of Common  Stock
held by the  Buyers.  A Buyer may  assign  some or all of its  rights  hereunder
without the consent of the Company to the extent that such  assignment  complies
with  governing  state and  federal  securities  laws (and does not  affect  the
exemption under which the Common Stock and Warrants are to be issued), provided,
however,  that any  such  assignment  shall  not  release  such  Buyer  from its
obligations  hereunder  unless such obligations are assumed by such assignee and
the Company has consented to such assignment and assumption.

         h. No Third Party  Beneficiaries.  This  Agreement  is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

         i. Survival.  Unless this Agreement is terminated  under Section 10(l),
the   agreements  and  covenants  set  forth  in  Sections  4,  5  and  10,  the
indemnification  provisions  set forth in Section 8 and the  liquidated  damages
provisions set forth in Section 9 shall survive the Closing. Each Buyer shall be
responsible  only  for  its  own  representations,  warranties,  agreements  and
covenants hereunder.

         j.  Publicity.  The  Company  and each  Buyer  shall  have the right to
approve before  issuance any press releases or any other public  statements with
respect to the transactions  contemplated hereby;  provided,  however,  that the
Company shall be entitled,  without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions as is
required  by  applicable  law and  regulations  (although  each  Buyer  shall be
consulted  by the  Company in  connection  with any such press  release or other
public  disclosure  prior  to its  release  and  shall be  provided  with a copy
thereof).

         k. Further Assurances.  Each party shall do and perform, or cause to be
done and  performed,  all such  further acts and things,  and shall  execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  party may  reasonably  request  in order to carry out the  intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

         l.  Termination.  In the event that the Closing shall not have occurred
with  respect  to a Buyer on or  before  three (3)  business  days from the date
hereof due to the  Company's or such Buyer's  failure to satisfy the  conditions
set forth in  Sections 6 and 7 above (and the  nonbreaching  party's  failure to
waive such  unsatisfied  condition(s)),  the  nonbreaching  party shall have the
option to terminate this  Agreement with respect to such breaching  party at the
close of  business  on such  date  without  liability  of any party to any other
party; provided,  however, that if this Agreement is terminated pursuant to this
Section 10(l),  the Company shall remain obligated to reimburse the nonbreaching
Buyers for the expenses described in Section 7(k) above.

                                       20
<PAGE>

         m. No Strict Construction.  The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

         n. Remedies.  Each Buyer and each holder of the  Securities  shall have
all rights and remedies set forth in the  Transaction  Documents  and all rights
and  remedies  which such  holders have been granted at any time under any other
agreement  or contract  and all of the rights  which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights  specifically  (without  posting a bond or other
security),  to recover  damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.

         o. Payment Set Aside. To the extent that the Company makes a payment or
payments to the Buyers hereunder or pursuant to the Transaction Documents or the
Buyers  enforce or exercise  their  rights  hereunder  or  thereunder,  and such
payment or payments or the proceeds of such  enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside,  recovered from, disgorged by or are required to be refunded,  repaid
or otherwise  restored to the Company,  a trustee,  receiver or any other person
under any law  (including,  without  limitation,  any  bankruptcy  law, state or
federal law, common law or equitable cause of action), then to the extent of any
such  restoration  the  obligation  or part  thereof  originally  intended to be
satisfied  shall be revived  and  continued  in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

                                   * * * * * *

                                       21
<PAGE>

                  IN WITNESS  WHEREOF,  the Buyers and the  Company  have caused
this  Securities  Purchase  Agreement  to be duly  executed as of the date first
written above.

COMPANY:

ALTAIR INTERNATIONAL INC.

By:         /s/ William P. Long
    ----------------------------
Name:           William P. Long
Title:          CEO

BUYERS:

CRANSHIRE CAPITAL, L.P.

By:      Downsview Capital, Inc.,
         the General Partner

By:      /s/ Mitchell P. Kopin
    ----------------------------
Name:        Mitchell P. Kopin
Title:       President

IRON EQUITY FUND LP

By:      Iron Partners L.L.C.
         the General Partner

By:      /s/ Richar Lakin
    ----------------------------------
Name:        Richard Lakin
Title:       G.P. for Iron Equity Fund

                                       22
<PAGE>

<TABLE>
<CAPTION>

                           SCHEDULE 1: LIST OF BUYERS

---------------------------------------------------------------------------------------------------------------------------
         Buyer              Contact Information       Purchase       Number of       Number of      Legal Representative
                                                        Price       Common Stock      Warrant
                                                                       Shares         Shares
---------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>               <C>             <C>         <C>
Cranshire Capital, L.P.  c/o Downsview Capital,     $750,000          937,500         234,375     Sidley Austin Brown &
                         Inc.                                                                     Wood
                         666 Dundee Rd., Ste. 1901                                                Bank One Plaza
                         Northbrook, IL  60062                                                    10 S. Dearborn St.
                         Attn: Mitchell P. Kopin                                                  Chicago, IL  60603
                         (p)847/562-9030                                                          Attn: Noah N. Popp
                         (f)847/562-9031                                                          (p)312/853-7099
                                                                                                  (f)312/853-7036
---------------------------------------------------------------------------------------------------------------------------
Iron Equity Fund LP      One Northfield Plaza       $250,000          312,500         78,125
                         Suite 111
                         Northfield, IL  60093
                         Attn: Rich Lakin

                         (p)847/501-3511
---------------------------------------------------------------------------------------------------------------------------
TOTAL:                                              $1,000,000       1,250,000        312,500
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       23
<PAGE>

                                    EXHIBITS

Exhibit A         Form of Warrant

Exhibit B         Form of Registration Rights Agreement

Exhibit C         Form of Transfer Agent Instructions

Exhibit D         Form of Company Counsel Opinion

                                       24Exhibit 10.2
                          REGISTRATION RIGHTS AGREEMENT

                  This REGISTRATION RIGHTS AGREEMENT (this  "Agreement"),  dated
as of May 7, 2002,  is entered  into by and among Altair  International  Inc., a
corporation  incorporated  under  the  laws of the  Province  of  Ontario,  with
headquarters  located at 1725 Sheridan  Avenue,  Suite 140, Cody,  Wyoming 82414
(the "Company"),  and the undersigned  buyers (each, a "Buyer" and collectively,
the "Buyers").

                                    WHEREAS:

A. In connection with the Securities Purchase Agreement by and among the parties
dated as of May 7, 2002 (the "Securities Purchase  Agreement"),  the Company has
agreed,  upon the terms and subject to the conditions of the Securities Purchase
Agreement,  (i) to issue and sell to the Buyers shares of the  Company's  common
stock,  no par  value  (the  "Common  Stock")  and (ii) to issue  Warrants  (the
"Warrants")  which will be  exercisable  to purchase  Company  Common Stock (the
"Warrant Shares"); and

B. To  induce  the  Buyers  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 "1933 Act"), and
applicable state securities laws.

                  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
Buyers hereby agree as follows:

1.       DEFINITIONS.
         -----------

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

a. "Investor"  means a Buyer, any transferee or assignee thereof to whom a Buyer
assigns its rights  under this  Agreement  and who agrees to become bound by the
provisions of this Agreement in accordance with Section 10 and any transferee or
assignee  thereof to whom a transferee or assignee assigns its rights under this
Agreement and who agrees to become bound by the  provisions of this Agreement in
accordance with Section 10.

b. "Person" means a corporation,  a limited liability company, an association, a
partnership,  an  organization,  a business,  an individual,  a governmental  or
political subdivision thereof or a governmental agency.

c. "Register," "registered," and "registration" refer to a registration effected
by preparing and filing one or more  Registration  Statements (as defined below)
in  compliance  with the 1933 Act and pursuant to Rule 415 under the 1933 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(s)  by  the  United  States   Securities  and  Exchange
Commission (the "SEC").

                                       1
<PAGE>

d.  "Registrable  Securities"  means the Common  Stock  purchased  by the Buyers
pursuant to the Securities  Purchase  Agreement and the Warrant Shares issued or
issuable upon exercise of the Warrants and any shares of capital stock issued or
issuable  with  respect to such Common  Stock,  Warrants or Warrant  Shares as a
result  of  any  stock  split,  stock  dividend,   recapitalization,   exchange,
anti-dilution rights,  liquidated damages payment or similar event or otherwise,
without regard to any limitation on the exercise of the Warrants.

e. "Registration  Statement" means a registration statement of the Company filed
pursuant to Rule 415 under the 1933 Act.

Capitalized  terms used herein and not otherwise  defined  herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

2.       REGISTRATION.
         ------------

a.  Mandatory  Registration.   The  Company  shall  prepare,  and,  as  soon  as
practicable,  but in no event later than sixty (60) calendar days after the date
hereof,  file with the SEC a Registration  Statement or Registration  Statements
(as is necessary) on Form S-3 (or if such form is  unavailable,  such other form
as is available for registration)  covering the resale of all of the Registrable
Securities.  The initial  Registration  Statement prepared pursuant hereto shall
register for resale at least that number of shares of Company Common Stock equal
to the product of (x) 1.25 and (y) the number of  Registrable  Securities  as of
the date immediately preceding the date the Registration  Statement is initially
filed with the SEC,  subject to  adjustment  as  provided in Section  3(b).  The
Company shall use its best efforts to have the Registration  Statement  declared
effective  by the SEC as soon as  practicable,  but in no event  later  than one
hundred twenty (120) calendar days after the date hereof.

b.  Piggy-Back  Registrations.  If at any time  prior to the  expiration  of the
Registration  Period (as defined in Section  3(a)) the Company  proposes to file
with  the SEC a  Registration  Statement  relating  to an  offering  for its own
account  or the  account of others  under the 1933 Act of any of its  securities
(other than on Form S-4 or Form S-8 (or their equivalents at such time) relating
to  securities to be issued solely in  connection  with any  acquisition  of any
entity or business or equity securities issuable in connection with stock option
or other  employee  benefit  plans),  the Company  shall  promptly  send to each
Investor  written  notice  of the  Company's  intention  to file a  Registration
Statement and of such  Investor's  rights under this Section 2(b) and, if within
twenty (20) days after receipt of such notice, such Investor shall so request in
writing,  the Company  shall include in such  Registration  Statement all or any
part of the  Registrable  Securities  such Investor  requests to be  registered,
subject  to the  priorities  set  forth  in  Section  2(b)  below.  No  right to
registration  of  Registrable  Securities  under  this  Section  2(b)  shall  be

                                       2
<PAGE>

construed to limit any registration required under Section 2(a). The obligations
of the  Company  under  this  Section  2(b) may be waived by the  Buyers.  If an
offering in connection with which an Investor is entitled to registration  under
this  Section  2(b)  is an  underwritten  offering,  then  each  Investor  whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed by the Company,  offer and sell such Registrable  Securities in
an underwritten offering using the same underwriter or underwriters and, subject
to the provisions of this  Agreement,  on the same terms and conditions as other
shares of Company  common stock  included in such  underwritten  offering.  If a
registration  pursuant  to this  Section  2(b) is to be an  underwritten  public
offering and the managing  underwriter(s)  advise the Company in writing that in
their  reasonable good faith opinion,  marketing or other factors dictate that a
limitation on the number of shares of Company common stock which may be included
in the  Registration  Statement  is necessary to  facilitate  and not  adversely
affect  the  proposed   offering,   then  the  Company  shall  include  in  such
registration: (1) first, all securities the Company proposes to sell for its own
account;  (2)  second,  up to the  full  number  of  securities  proposed  to be
registered for the account of the holders of securities entitled to inclusion of
their securities in the Registration  Statement by reason of demand registration
rights;  and  (3)  third,  the  securities  requested  to be  registered  by the
Investors  and other  holders  of  securities  entitled  to  participate  in the
registration,  as of the date  hereof,  drawn  from  them pro rata  based on the
number each has requested to be included in such registration.

c.  Allocation of  Registrable  Securities.  The initial  number of  Registrable
Securities  included  in any  Registration  Statement  and each  increase in the
number of Registrable  Securities  included  therein shall be allocated pro rata
among the Investors based on the number of Registrable Securities held, or which
could be held, by each Investor at the time the Registration  Statement covering
such initial  number of Registrable  Securities or increase  thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Person's Registrable Securities,  each transferee shall be allocated
a pro rata  portion  of the then  remaining  number  of  Registrable  Securities
included  in such  Registration  Statement  for such  transferor.  Any shares of
Common Stock included in a Registration  Statement and which remain allocated to
any Person which ceases to hold any Registrable Securities shall be allocated to
the remaining Investors,  pro rata based on the number of Registrable Securities
then held by such Investors.

d. Legal Counsel.  Subject to Section 5 hereof,  each Buyer shall have the right
to select one legal counsel to review and oversee any offering  pursuant to this
Section 2 ("Legal Counsel").  The Company shall reasonably  cooperate with Legal
Counsel in performing the Company's obligations under this Agreement.

e.  Ineligibility  for Form S-3. In the event that Form S-3 is not available for
any  registration  of Registrable  Securities  hereunder,  the Company shall (i)
register the sale of the Registrable  Securities on another appropriate form and
(ii)  undertake to register the  Registrable  Securities  on Form S-3 as soon as
such  form  is  available,   provided  that  the  Company  shall   maintain  the
effectiveness of the Registration  Statement then in effect until such time as a
Registration  Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

f.  Rule  416.  The  Company  and  the  Investors  each  acknowledge  that  each
Registration  Statement  prepared  in  accordance  hereunder  shall  include  an
indeterminate  number of Registrable  Securities  pursuant to Rule 416 under the
1933 Act so as to cover any and all  Registrable  Securities  which  may  become
issuable (i) to prevent dilution resulting from stock splits, stock dividends or
similar   transactions   and  (ii)  if  permitted  by  law,  by  reason  of  the
anti-dilution  provisions contained in the Securities Purchase Agreement and the
Warrants  in  accordance  with the terms  thereof  (collectively,  the "Rule 416
Securities").  In this regard,  the Company agrees to use all reasonable efforts

                                       3
<PAGE>

to  ensure  that the  maximum  number  of  Registrable  Securities  which may be
registered  pursuant  to  Rule  416  under  the  1933  Act are  covered  by each
Registration  Statement and,  absent  guidance from the SEC or other  definitive
authority  to the  contrary,  the Company  shall use all  reasonable  efforts to
affirmatively  support and to not take any position adverse to the position that
each  Registration  Statement  filed  hereunder  covers  all  of  the  Rule  416
Securities.  If the Company  determines  that the  Registration  Statement filed
hereunder  does not  cover all of the Rule 416  Securities,  the  Company  shall
immediately  (i) provide to each  Investor  written  evidence  setting forth the
basis for the Company's position and the authority therefor and (ii) prepare and
file an amendment to such Registration Statement or a new Registration Statement
in accordance with Section 2(g).

g.  Sufficient  Number of Shares  Registered.  In the event the number of shares
available  under a  Registration  Statement  filed  pursuant to Section  2(a) is
insufficient  to  cover  all  of the  Registrable  Securities  or an  Investor's
allocated  portion of the Registrable  Securities  pursuant to Section 2(c), the
Company  shall  amend the  Registration  Statement,  or file a new  Registration
Statement (on the short form available therefor, if applicable),  or both, so as
to cover at least one hundred  twenty-five  percent  (125%) of such  Registrable
Securities in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity  therefor arises. The Company shall use it
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable  following the filing thereof.  For purposes of
the foregoing  provision,  the number of shares  available  under a Registration
Statement  shall  be  deemed  "insufficient  to  cover  all of  the  Registrable
Securities" if at any time the number of Registrable  Securities is greater than
the  quotient  determined  by dividing  (i) the number of shares of Common Stock
available  for  resale  under such  Registration  Statement  by (ii)  1.25.  For
purposes  of  the  calculation  set  forth  in  the  foregoing   sentence,   any
restrictions on the exercisability of the Warrants shall be disregarded and such
calculation  shall assume that the Warrants are then  exercisable into shares of
Common Stock.

3.       RELATED OBLIGATIONS.
         -------------------

                  Whenever  an  Investor  has  requested  that  any  Registrable
Securities be registered pursuant to Section 2(b) or at such time as the Company
is obligated to file a  Registration  Statement with the SEC pursuant to Section
2(a) or 2(g),  the Company will use its best efforts to effect the  registration
of the  Registrable  Securities  in  accordance  with  the  intended  method  of
disposition thereof and, pursuant thereto,  the Company shall have the following
obligations:

a.  Registration.  The Company  shall  promptly  prepare and file with the SEC a
Registration  Statement with respect to the Registrable  Securities (on or prior
to the sixtieth (60th)  calendar day after the date hereof for the  registration
of Registrable  Securities pursuant to Section 2(a)) and use its best efforts to
cause such  Registration  Statement  relating to the  Registrable  Securities to
become  effective  as soon as possible  after such filing (but in no event later
than one  hundred  twenty  (120)  calendar  days  after the date  hereof for the
registration of Registrable  Securities pursuant to Section 2(a)), and keep such
Registration  Statement  effective  pursuant  to Rule 415 at all times until the
earlier  of  (i)  the  date  as of  which  the  Investors  may  sell  all of the
Registrable  Securities without restriction  pursuant to Rule 144(k) promulgated
under  the 1933 Act (or  successor  thereto)  or (ii) the date on which  (A) the
Investors  shall have sold all the  Registrable  Securities  and (B) none of the
Warrants  is  outstanding  (the  "Registration   Period"),   which  Registration
Statement  (including  any amendments or  supplements  thereto and  prospectuses

                                       4
<PAGE>

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.  Amendments.  The Company shall prepare and file with the SEC such amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers thereof as set forth in such Registration Statement.

c. Legal  Counsel  Review.  The Company shall permit Legal Counsel to review and
comment upon a Registration Statement and all amendments and supplements thereto
at least  four (4) days  prior to their  filing  with the SEC,  and not file any
document in a form to which Legal Counsel reasonably objects.  The Company shall
not submit a request for  acceleration  of the  effectiveness  of a Registration
Statement or any amendment or supplement  thereto  without the prior approval of
Legal Counsel,  which consent shall not be  unreasonably  withheld.  The Company
shall furnish to Legal Counsel,  without charge, (i) any correspondence from the
SEC or the staff of the SEC to the  Company or its  representatives  relating to
any Registration  Statement,  (ii) promptly after the same is prepared and filed
with  the SEC,  one  copy of any  Registration  Statement  and any  amendment(s)
thereto,   including   financial   statements  and   schedules,   all  documents
incorporated   therein  by  reference  and  all  exhibits  and  (iii)  upon  the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto.

d.  Disclosure  Materials.  The Company  shall  furnish to each  Investor  whose
Registrable  Securities  are  included in any  Registration  Statement,  without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto,  including
financial  statements  and  schedules,  all  documents  incorporated  therein by
reference  and all exhibits,  (ii) upon the  effectiveness  of any  Registration
Statement,  ten (10)  copies of the  prospectus  included  in such  Registration
Statement and all  amendments and  supplements  thereto (or such other number of
copies as such Investor may reasonably  request) and (iii) such other documents,
including  copies of any preliminary or final  prospectus,  as such Investor may
reasonably  request from time to time in order to facilitate the  disposition of
the Registrable Securities owned by such Investor.

e. State  Securities  Laws.  The  Company  shall use  reasonable  efforts to (i)
register  and  qualify  the  Registrable  Securities  covered by a  Registration
Statement under such other  securities or "blue sky" laws of such  jurisdictions
in the United States as Legal Counsel or any Investor reasonably requests,  (ii)
prepare   and  file  in  those   jurisdictions,   such   amendments   (including
post-effective   amendments)   and   supplements  to  such   registrations   and
qualifications as may be necessary to maintain the effectiveness  thereof during
the  Registration  Period,  (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration  Period and (iv) take all other  actions  reasonably  necessary  or
advisable to qualify the Registrable  Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (x)  qualify  to do  business  in any

                                       5
<PAGE>

jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction or
(z) file a general consent to service of process in any such  jurisdiction.  The
Company  shall  promptly  notify  Legal  Counsel  and each  Investor  who  holds
Registrable  Securities of the receipt by the Company of any  notification  with
respect to the suspension of the  registration  or  qualification  of any of the
Registrable  Securities  for sale under the securities or "blue sky" laws of any
jurisdiction  in the  United  States  or its  receipt  of  actual  notice of the
initiation or threatening of any proceeding for such purpose.

f.  Underwriting  Agreement.  In the event  Investors who hold a majority of the
Registrable Securities being offered in the offering select underwriters for the
offering,  the Company  shall enter into and  perform its  obligations  under an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriters of such offering.

g. Notification.  As promptly as practicable after becoming aware of such event,
the Company  shall  notify  Legal  Counsel  and each  Investor in writing of the
happening  of any  event  as a result  of which  the  prospectus  included  in a
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material fact or omission 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 promptly  prepare a  supplement  or
amendment to such  Registration  Statement  to correct such untrue  statement or
omission,  and deliver ten (10) copies of such  supplement or amendment to Legal
Counsel and each  Investor (or such other  number of copies as Legal  Counsel or
such Investor may reasonably  request).  The Company shall also promptly  notify
Legal  Counsel  and  each  Investor  in  writing  (i) when a  prospectus  or any
prospectus  supplement or  post-effective  amendment has been filed,  and when a
Registration  Statement or any  post-effective  amendment  has become  effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by  facsimile  on the same day of such  effectiveness  and by overnight
mail),  (ii) of any  request  by the  SEC for  amendments  or  supplements  to a
Registration Statement or related prospectus or related information and (iii) of
the Company's  reasonable  determination  that a  post-effective  amendment to a
Registration Statement would be appropriate.

h. Stop-Order and Suspension.  The Company shall use its best efforts to prevent
the  issuance  of any stop  order  or other  suspension  of  effectiveness  of a
Registration  Statement,  or the suspension of the  qualification  of any of the
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible  moment and to notify Legal Counsel and each Investor who
holds  Registrable  Securities  being sold (and, in the event of an underwritten
offering,  the  managing  underwriters)  of the  issuance  of such order and the
resolution  thereof or its receipt of actual notice of the  initiation or threat
of any proceeding for such purpose.

i.  Requested  Information.  At the request of any  Investor,  the Company shall
furnish to such Investor,  on the date of the  effectiveness of the Registration
Statement  and  thereafter  from time to time on such dates as an  Investor  may
reasonably request (i) if required by an underwriter, a letter, dated such date,
from  the  Company's  independent  certified  public  accountants  in  form  and

                                       6
<PAGE>

substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering,  addressed to the underwriters,
and (ii) if required by an  underwriter,  an opinion,  dated as of such date, of
counsel representing the Company for purposes of such Registration Statement, in
form,  scope and substance as is  customarily  given in an  underwritten  public
offering, addressed to the underwriters and the Investors.

j.  Inspection.  The Company  shall make  available  for  inspection  by (i) any
Investor,  (ii)  Legal  Counsel,  (iii)  any  underwriter  participating  in any
disposition pursuant to a Registration  Statement,  (iv) one firm of accountants
or other agents retained by the Investors and (v) one firm of attorneys retained
by such underwriters  (collectively,  the "Inspectors") all pertinent  financial
and other  records,  and pertinent  corporate  documents  and  properties of the
Company (collectively,  the "Records"),  as shall be reasonably deemed necessary
by each Inspector, and cause the Company's officers,  directors and employees to
supply all  information  which any Inspector may reasonably  request;  provided,
however,  that each Inspector shall hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the  Company  determines  in good faith to be  confidential,  and of which
determination the Inspectors are so notified,  unless (a) the disclosure of such
Records is  necessary  to avoid or correct a  misstatement  or  omission  in any
Registration  Statement  or is  otherwise  required  under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final,  non-appealable subpoena
or order from a court or government  body of competent  jurisdiction  or (c) the
information  in such  Records has been made  generally  available  to the public
other than by  disclosure  in violation of this or any other  agreement of which
the Inspector has knowledge.  Each Investor agrees that it shall,  upon learning
that disclosure of such Records is sought in or by a court or governmental  body
of competent  jurisdiction  or through  other means,  give prompt  notice to the
Company and allow the Company, at its expense,  to undertake  appropriate action
to prevent  disclosure  of, or to obtain a  protective  order for,  the  Records
deemed confidential.

k. Confidential  Information.  The Company shall hold in confidence and not make
any  disclosure of  information  concerning an Investor  provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or
state  securities  laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (iii)
the  release of such  information  is ordered  pursuant  to a subpoena  or other
final,  non-appealable  order  from a court or  governmental  body of  competent
jurisdiction or (iv) such  information has been made generally  available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

l. Listing.  The Company shall use its best efforts  either to (i) cause all the
Registrable  Securities covered by a Registration Statement to be listed on each
securities  exchange on which  securities  of the same class or series issued by
the  Company  are  then  listed,  if any,  if the  listing  of such  Registrable
Securities  is then  permitted  under the rules of such  exchange or (ii) secure
designation  and  quotation  of all the  Registrable  Securities  covered by the
Registration  Statement on the Nasdaq National Market System or, if, despite the
Company's best efforts to satisfy the preceding  clause (i) or (ii), the Company
is  unsuccessful  in satisfying the preceding  clause (i) or (ii), to secure the
inclusion  for  quotation  on The Nasdaq  SmallCap  Market for such  Registrable
Securities and, without limiting the generality of the foregoing, to arrange for

                                       7
<PAGE>

at least  two  market  makers  to  register  with the  National  Association  of
Securities  Dealers,  Inc. as such with respect to such Registrable  Securities.
The Company shall pay all fees and expenses in connection  with  satisfying  its
obligation under this Section 3(l).

m.  Certificates.  The  Company  shall  cooperate  with the  Investors  who hold
Registrable  Securities  being offered to facilitate the timely  preparation and
delivery of certificates (not bearing any restrictive  legend)  representing the
Registrable  Securities to be offered  pursuant to a Registration  Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the Investors may reasonably  request and registered in such names as the
Investors may request.

n. Transfer  Agent.  The Company shall provide a transfer agent and registrar of
all such  Registrable  Securities  not  later  than the  effective  date of such
Registration Statement.

o.  Underwriter  Requests.  If  requested  by the  managing  underwriters  or an
Investor,  the  Company  shall:  (i)  immediately  incorporate  in a  prospectus
supplement  or  post-effective   amendment  such  information  as  the  managing
underwriters  and the Investors agree should be included therein relating to the
sale and distribution of Registrable Securities,  including, without limitation,
information  with respect to the number of Registrable  Securities being sold to
such  underwriters,  the purchase price being paid therefor by such underwriters
and any other terms of the underwritten (or best efforts underwritten)  offering
of the  Registrable  Securities  to be sold  in such  offering;  (ii)  make  all
required filings of such prospectus  supplement or  post-effective  amendment as
soon as notified of the matters to be incorporated in such prospectus supplement
or  post-effective  amendment;  and (iii)  supplement or make  amendments to any
Registration  Statement if requested by an Investor or any  underwriter  of such
Registrable Securities.

p. Best Efforts. The Company shall use its best efforts to cause the Registrable
Securities  covered by the  applicable  Registration  Statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

q.  Compliance  With Laws.  The Company shall  otherwise use its best efforts to
comply with all applicable  rules and  regulations of the SEC in connection with
any  registration  hereunder  and the Company shall use its best efforts to file
with the SEC in a timely  manner  all  reports  and  documents  required  of the
Company under the 1933 Act and the 1934 Act (as defined in Section 6(a)).

r. Confirmation.  Within two (2) business days after the Registration  Statement
which includes the Registrable  Securities is ordered  effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the  transfer  agent  for such  Registrable  Securities  (with  copies to the

                                       8
<PAGE>

Investors  whose  Registrable  Securities  are  included  in  such  Registration
Statement)  confirmation  that the  Registration  Statement  has  been  declared
effective by the SEC in the form attached hereto as Exhibit A.

s. Disposition. The Company shall take all other reasonable actions necessary to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

t.  Limitation  on  Registration  Statement.  Notwithstanding  anything  to  the
contrary contained in this Agreement,  the Registration Statement shall register
only the Registrable Securities and up to an additional 285,000 shares of Common
Stock on behalf of existing security holders of the Company.

4.       OBLIGATIONS OF THE INVESTORS.
         ----------------------------

a. At least  seven (7) days prior to the first  anticipated  filing  date of the
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor if such Investor elects
to  have  any  of  such  Investor's  Registrable  Securities  included  in  such
Registration  Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable  Securities of a particular Investor that such Investor shall
furnish to the Company such  information  regarding  itself and the  Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably request.

b. 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 any  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 such Registration Statement.

c. In the event any Investor  elects to  participate in an  underwritten  public
offering  pursuant  to  Section 2, each such  Investor  agrees to enter into and
perform such Investor's  obligations under an underwriting  agreement,  in usual
and customary form, including, without limitation, customary indemnification and
contribution  obligations,  with the managing  underwriter  of such offering and
take such other  actions as are  reasonably  required  in order to  expedite  or
facilitate the disposition of the Registrable Securities.

5.       EXPENSES OF REGISTRATION.
         ------------------------

                  All reasonable expenses, other than underwriting discounts and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees  and   disbursements   of  counsel  for  the  Company  (but  not  fees  and
disbursements of Legal Counsel) shall be paid by the Company.

                                       9
<PAGE>

6.       INDEMNIFICATION.
         ---------------

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

a. To the fullest  extent  permitted by law, the Company will,  and hereby does,
indemnify,  hold  harmless and defend each  Investor who holds such  Registrable
Securities,   the   directors,    officers,    partners,    employees,   agents,
representatives  of, and each Person,  if any, who controls any Investor  within
the meaning of the 1933 Act or the  Securities  Exchange Act of 1934, as amended
(the  "1934  Act"),  and any  underwriter  (as  defined in the 1933 Act) for the
Investors,  and the  directors  and officers  of, and each  Person,  if any, who
controls,  any such  underwriter  within the meaning of the 1933 Act or the 1934
Act (each,  an  "Indemnified  Person"),  against  any losses,  claims,  damages,
liabilities,  judgments,  fines,  penalties,  charges,  costs,  attorneys' fees,
amounts  paid  in  settlement  or  expenses,  joint  or  several  (collectively,
"Indemnified  Damages"),  incurred in investigating,  preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing  by or  before  any  court or  governmental,  administrative  or other
regulatory  agency,  body or the SEC, whether pending or threatened,  whether or
not an Indemnified Person is or may be a party thereto (collectively, "Claims"),
to which any of them may become  subject  insofar as such  Claims (or actions or
proceedings,  whether commenced or threatened,  in respect thereof) arise out of
or are based upon:  (i) any untrue  statement or alleged  untrue  statement of a
material  fact  in a  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged  omission  to state 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 any
preliminary  prospectus if used prior to the effective date of such Registration
Statement, or 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,  (iii) any violation or alleged
violation  by the  Company  of the  1933  Act,  the 1934  Act,  any  other  law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  thereunder  relating  to  the  offer  or  sale  of  the  Registrable
Securities  pursuant to a Registration  Statement or (iv) any material violation
of this Agreement (the matters in the foregoing  clauses (i) through (iv) being,
collectively,  "Violations"). The Company shall reimburse the Investors and each
such underwriter or controlling  person,  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):  (i) shall not apply to a Claim by an
Indemnified  Person  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 such Indemnified  Person or underwriter for such  Indemnified  Person
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(d);
(ii) with respect to any preliminary prospectus,  shall not inure to the benefit
of any such Person from whom the Person  asserting any such Claim  purchased the
Registrable  Securities  that are the subject  thereof (or to the benefit of any
Person  controlling such Person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus, as
then amended or  supplemented,  if such  prospectus was timely made available by
the Company  pursuant to Section 3(d), and the  Indemnified  Person was promptly
advised in writing not to use the incorrect  prospectus  prior to the use giving
rise to a violation and such Indemnified  Person,  notwithstanding  such advice,
used it;  (iii)  shall not be  available  to the extent such Claim is based on a
failure of the  Investor to deliver or to cause to be delivered  the  prospectus

                                       10
<PAGE>

made available by the Company,  if such  prospectus was timely made available by
the Company  pursuant to Section  3(d);  (iv) shall not 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;  and
(v) shall not apply to the extent  such  Claim is based  upon the  failure of an
Investor to comply with governing  laws and  regulations.  Such indemnity  shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf  of  the  Indemnified  Person  and  shall  survive  the  transfer  of the
Registrable Securities by the Investors pursuant to Section 10.

b. In  connection  with any  Registration  Statement  in which  an  Investor  is
participating, each such Investor agrees to severally and not jointly indemnify,
hold  harmless  and defend,  to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors,  each of its officers
who signs the  Registration  Statement,  each  Person,  if any, who controls the
Company  within the  meaning of the 1933 Act or the 1934 Act  (collectively  and
together with an Indemnified Person, an "Indemnified Party"),  against any Claim
or Indemnified Damages to which any Indemnified Party may become subject,  under
the 1933 Act, the 1934 Act or  otherwise,  insofar as such Claim or  Indemnified
Damages  arise  out of or are  based  upon any  Violation,  in each  case to the
extent, and only to the extent,  that such Violation (i) occurs in reliance upon
and in  conformity  with  written  information  furnished to the Company by such
Investor  expressly for use in connection with such Registration  Statement (ii)
is based on a failure of the Investor to deliver or to cause to be delivered the
prospectus  made  available by the Company,  if such  prospectus was timely made
available  by the  Company  pursuant to Section  3(d),  or (iii) is based on the
failure of the  Investor to comply with  governing  laws and  regulations;  and,
subject  to  Section  6(d),  such  Investor  will  reimburse  any legal or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending  any such  Claim;  provided,  however,  that the  indemnity  agreement
contained in this Section 6(b) and the  agreement  with respect to  contribution
contained  in Section 7 shall not apply to  amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written consent of such
Investor, which consent shall not be unreasonably withheld;  provided,  further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified  Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration  Statement.  Such  indemnity  shall remain in full force and effect
regardless of any  investigation  made by or on behalf of such Indemnified Party
and shall  survive the transfer of the  Registrable  Securities by the Investors
pursuant  to Section 10.  Notwithstanding  anything  to the  contrary  contained
herein,  the  indemnification  agreement  contained  in this  Section  6(b) with
respect  to any  preliminary  prospectus  shall not inure to the  benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

                                       11
<PAGE>

c. The  Company  shall be  entitled to receive  indemnities  from  underwriters,
selling brokers,  dealer managers and similar securities industry  professionals
participating in any  distribution,  to the same extent as provided above,  with
respect to  information  such  persons so  furnished  in writing  expressly  for
inclusion in the Registration Statement.

d. Promptly  after receipt by an Indemnified  Person or Indemnified  Party under
this  Section 6 of  notice  of the  commencement  of any  action  or  proceeding
(including  any  governmental  action or  proceeding)  involving  a Claim,  such
Indemnified  Person or 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  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying  party, if, in
the  reasonable  opinion of counsel  retained  by the  indemnifying  party,  the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented by such counsel in such  proceeding.  The Company shall
pay reasonable  fees for only one separate legal counsel for the Investors,  and
such legal  counsel  shall be  selected by the  Investors  holding a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim  relates.  The  Indemnified  Party or  Indemnified  Person shall
cooperate fully with the  indemnifying  party in connection with any negotiation
or  defense  of any such  action  or claim by the  indemnifying  party and shall
furnish to the indemnifying  party all information  reasonably  available to the
Indemnified  Party or Indemnified  Person which relates to such action or claim.
The indemnifying  party shall keep the Indemnified  Party or Indemnified  Person
fully  apprised at all times as to the status of the  defense or any  settlement
negotiations with respect thereto. No indemnifying party shall be liable for any
settlement  of any  action,  claim or  proceeding  effected  without its written
consent,  provided,  however, that the indemnifying party shall not unreasonably
withhold,  delay or condition its consent. No indemnifying party shall,  without
the consent of the Indemnified Party or Indemnified Person,  consent to entry of
any judgment or enter into any  settlement  or other  compromise  which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified  Person of a release from all liability
in respect to such claim or litigation.  Following  indemnification  as provided
for hereunder,  the indemnifying  party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations  relating to the matter for which indemnification has been made.
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  Person or  Indemnified
Party under this Section 6, except to the extent that the indemnifying  party is
prejudiced in its ability to defend such action.

e. 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 and when bills are received or Indemnified Damages are incurred.

                                       12
<PAGE>

f. The  indemnity  agreements  contained  herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified  Person
against  the  indemnifying   party  or  others  and  (ii)  any  liabilities  the
indemnifying party may be subject to pursuant to law.

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:
(i) no seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent misrepresentation; and (ii) 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 THE 1934 ACT.
         --------------------------

                  With a view to making  available to the Investors the benefits
of Rule  144  promulgated  under  the  1933  Act or any  other  similar  rule or
regulation  of the  SEC  that  may at any  time  permit  the  Investors  to sell
securities of the Company to the public without  registration  ("Rule 144"), the
Company agrees to, until such time as all of the  Registrable  Securities may be
sold without restriction pursuant to Rule 144(k):

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 1933  Act and the  1934  Act so long as the  Company
remains subject to such  requirements  (it being  understood that nothing herein
shall limit the  Company's  obligations  under  Section  4(c) of the  Securities
Purchase  Agreement)  and the  filing of such  reports  and other  documents  is
required for the applicable provisions of Rule 144; and

c.  furnish  to  each  Investor  so  long  as  such  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 1933 Act and
the 1934 Act, (ii) 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 investors to
sell such securities pursuant to Rule 144 without registration.

9.       LIQUIDATED DAMAGES.
         ------------------

                  The Company  agrees that the Buyers will suffer damages if the
Company  violates any provision of or fails to fulfill its obligations  pursuant
to this Agreement (a  "Registration  Default") and that it would not be possible
to  ascertain  the  extent of such  damages.  Accordingly,  in the event of such
Registration  Default,  the  Company  hereby  agrees to pay  liquidated  damages
("Liquidated   Damages")  to  each  Buyer   following  the  occurrence  of  such
Registration Default in an amount determined by multiplying (i) one percent (1%)
of such  Buyer's  portion of the  Purchase  Price (as defined in the  Securities
Purchase  Agreement) by (ii) the  percentage  derived by dividing (A) the actual
number of days elapsed from the last day of the date of the Registration Default

                                       13
<PAGE>

or the prior 30-day period, as applicable,  to the day such Registration Default
has been completely  cured by (B) 30, in cash, or at the Buyer's option,  in the
number of shares of Company common stock equal to the quotient of (v) the dollar
amount of the  Liquidated  Damages on the Payment Date (as defined below) by (w)
the  closing  bid  price  of the  Company's  common  stock as of the date of the
Registration  Default  (as  quoted  in the  Principal  Market  or the  market or
exchange  where the  Company's  common  stock is then  traded).  The  Liquidated
Damages  payable  pursuant hereto shall be payable within five (5) business days
from the end of the calendar  month  commencing on the first  calendar  month in
which the Registration Default occurs (each, a "Payment Date"). In the event the
Buyer  elects to  receive  the  Liquidated  Damages  amount in shares of Company
common stock,  such shares shall also be considered  Registrable  Securities and
shall have the registration rights set forth in this Agreement.

10.      ASSIGNMENT OF REGISTRATION RIGHTS.
         ---------------------------------

                  The  rights  under  this  Agreement  shall  be   automatically
assignable  by the  Investors  to any  transferee  of  all  or  any  portion  of
Registrable  Securities  if:  (i)  the  Investor  agrees  in  writing  with  the
transferee  or assignee to assign such rights,  and a copy of such  agreement is
furnished to the Company within a reasonable  time after such  assignment;  (ii)
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;  (iii) immediately following such transfer or
assignment  the further  disposition  of such  securities  by the  transferee or
assignee is restricted  under the 1933 Act and applicable state securities laws;
provided,  however, that the transferee or assignee may subsequently transfer or
assign all or any portion of the  Registrable  Securities  if an exemption  from
registration  under the 1933 Act is applicable  to such transfer or  assignment;
(iv) at or before the time the Company receives the written notice  contemplated
by clause (ii) of this  sentence the  transferee  or assignee  agrees in writing
with the Company to be bound by all of the provisions  contained herein; and (v)
such  transfer   shall  have  been  made  in  accordance   with  the  applicable
requirements of the Securities Purchase Agreement.

11.      AMENDMENT OF REGISTRATION RIGHTS.
         --------------------------------

                  Provisions 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 then hold two-thirds (2/3) of the Registrable Securities.  Any
amendment or waiver effected in accordance with this Section 11 shall be binding
upon each Investor and the Company.  No such amendment shall be effective to the
extent  that it  applies  to less  than all of the  holders  of the  Registrable
Securities.  No consideration shall be offered or paid to any Person to amend or
consent to a waiver or  modification  of any provision of any of this  Agreement
unless the same  consideration  also is  offered  to all of the  parties to this
Agreement.

                                       14
<PAGE>

12.      MISCELLANEOUS.
         -------------

a. A Person is deemed to be a holder of  Registrable  Securities  whenever  such
Person owns or is deemed to own of record such  Registrable  Securities.  If the
Company receives conflicting instructions, notices or elections from two or more
Persons 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. Any notices,  consents, waivers or other communications required or permitted
to be given  under the terms of this  Agreement  must be in writing  and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt,  when sent by facsimile (provided  confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one business day after deposit with a nationally  recognized  overnight
delivery  service,  in each case properly  addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

                  Altair International Inc.
                  1725 Sheridan Avenue, Suite 140
                  Cody, Wyoming  82414
                  Telephone:        (307) 587-8245
                  Facsimile:        (307) 587-8357
                  Attention:        William P. Long, Chief Executive Officer

With a copy to:

                  Altair International Inc.
                  230 South Rock Blvd, Suite 21
                  Reno, Nevada  89502
                  Telephone:        (775) 837-1966
                  Facsimile:        (775) 857-1920
                  Attention:        Edward Dickinson, Chief Financial Officer

                  Stoel Rives LLP
                  201 South Main Street
                  Suite 1100

                  Telephone:         (801) 578-6908
                  Facsimile:         (801) 578-6999
                  Attention:         Bryan T. Allen, Esq.

If to a Buyer,  to it at the  address  and  facsimile  number  set  forth on the
Schedule of Buyers attached hereto, with copies to such Buyer's  representatives
as set  forth  on the  Schedule  of  Buyers,  or at such  other  address  and/or
facsimile  number  and/or to the attention of such other person as the recipient
party has specified by written  notice given to each other party five days prior
to the effectiveness of such change.

                                       15
<PAGE>

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  construed  in all  respects by the
internal laws of the State of Illinois (except for the proper application of the
United States federal  securities laws),  without giving effect to any choice of
law or conflict of law  provision  or rule  (whether of the State of Illinois or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions  other than the State of Illinois.  Each party hereby  irrevocably
submits  to the  non-exclusive  jurisdiction  of the  state and  federal  courts
sitting the City of Chicago,  for the adjudication of any dispute hereunder.  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 in that jurisdiction or the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdiction.

e. This Agreement, the Securities Purchase Agreement and the Warrants constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof  and  thereof.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement,  the  Securities  Purchase  Agreement and the Warrants  supersede all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.

f. Subject to the  requirements of Section 10, this Agreement shall inure to the
benefit of and be binding upon the permitted  successors  and assigns of each of
the parties hereto.

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

h. This Agreement may be executed in identical 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 facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

i. Each party shall do and perform, or cause to be done and performed,  all such
further  acts  and  things,  and  shall  execute  and  deliver  all  such  other
agreements,  certificates,  instruments  and  documents,  as the other party may
reasonably  request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

j. All consents and other determinations to be made by the Investors pursuant to
this Agreement shall be made, unless otherwise  specified in this Agreement,  by
Investors holding a majority of the Registrable Securities, determined as if all
of the Warrants then outstanding have been converted into Registrable Securities
without regard to any limitation on exercise of the Warrants.

                                       16
<PAGE>

k. The language used in this Agreement will be deemed to be the language  chosen
by  the  parties  to  express  their  mutual  intent  and  no  rules  of  strict
construction will be applied against any party.

l. This  Agreement is intended  for the benefit of the parties  hereto and their
respective  permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

                                   * * * * * *

                                       17
<PAGE>

                  IN WITNESS WHEREOF,  the parties have caused this Registration
Rights Agreement to be duly executed as of day and year first above written.

COMPANY:

ALTAIR INTERNATIONAL INC.

By:         /s/ William P. Long
    ----------------------------------
Name:           William P. Long
Title:          CEO

BUYERS:

CRANSHIRE CAPITAL, L.P.

By:      Downsview Capital, Inc.,
         the General Partner

By:      /s/ Mitchell P. Kopin
    ----------------------------------
Name:        Mitchell P. Kopin
Title:       President

Iron Equity Fund LP

By:      /s/ Richard Lakin
    ----------------------------------
Name:        General Partner

Title:   Iron Partners LLC for Iron Equity Fund

                                       18
<PAGE>

                               SCHEDULE OF BUYERS
--------------------------------------------------------------------------------
                        BUYER NAME                    CONTACT INFORMATION

--------------------------------------------------------------------------------
Cranshire Capital, L.P.                     666 Dundee Rd., Ste. 1901
                                            Northbrook, Illinois 60062
                                            Attn: Mitchell P. Kopin
                                            (p) 847/562-9030
                                            (f) 847/562-9031
--------------------------------------------------------------------------------

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

                                       19
<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS

                            OF REGISTRATION STATEMENT

[TRANSFER AGENT]
Attn: ___________________

Re: Altair International Inc.

Ladies and Gentlemen:

                  We are counsel to Altair  International  Inc.,  a  corporation
incorporated under the laws of the Province of Ontario (the "Company"), and have
represented  the Company in  connection  with that certain  Securities  Purchase
Agreement (the "Purchase  Agreement")  entered into by and among the Company and
the buyers named therein  (collectively,  the  "Holders")  pursuant to which the
Company  issued to the  Holders  shares of its common  stock,  no par value (the
"Common  Stock") and Warrants  exercisable  into its Common Stock (the  "Warrant
Shares").  Pursuant to the Purchase Agreement, the Company also has entered into
a  Registration  Rights  Agreement  with the Holders (the  "Registration  Rights
Agreement")  pursuant  to which the  Company  agreed,  among  other  things,  to
register  the  Registrable  Securities  (as defined in the  Registration  Rights
Agreement),  including the Common Stock and Warrant Shares, under the Securities
Act of 1933,  as amended  (the "1933 Act").  In  connection  with the  Company's
obligations under the Registration Rights Agreement, on May 7, 2002, the Company
filed a  Registration  Statement  on Form  S-3  (File  No.  _____________)  (the
"Registration  Statement")  with the  Securities  and Exchange  Commission  (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.

                  In connection with the foregoing,  we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF  EFFECTIVENESS]  on [ENTER DATE OF  EFFECTIVENESS]  and we have no knowledge,
after  telephonic  inquiry of a member of the SEC's  staff,  that any stop order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration Statement.

                                              Very truly yours,

                                              [ISSUER'S COUNSEL]

                                              By:_________________________

cc:      [LIST NAMES OF HOLDERS]

                                       20

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