Document:

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

                This Registration Rights Agreement (this "Agreement")
is made and entered into as of October ___, 2003, by and among DDS Technologies
USA, Inc., a Nevada corporation (the "Company"), and the investors
signatory hereto (each a "Purchaser" and collectively, the "Purchasers").

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

                The Company and the Purchasers hereby agree as follows:

        1. Definitions. Capitalized terms used and not
otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:

"Effectiveness Date" means, with respect to the
    Registration Statement required to be filed hereunder, the earlier of (a)
    the 150th calendar day following the Closing Date and (b) the fifth Trading
    Day following the date on which the Company is notified by the Commission
    that the Registration Statement will not be reviewed or is no longer subject
    to further review and comments.

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

    "Filing Date" means, with respect to the
    Registration Statement required to be filed hereunder, the 30th calendar day
    following the Closing Date.

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

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

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

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

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

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

     

    and supplements to the Prospectus, including
    post-effective amendments, and all material incorporated by reference or
    deemed to be incorporated by reference in such Prospectus.

    "Registrable Securities" means the Shares and the
    Warrant Shares, together with any shares of Common Stock issued or issuable
    upon any stock split, dividend or other distribution, recapitalization or
    similar event with respect to the foregoing or in connection with any
    anti-dilution provisions in the Warrant.

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

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

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

    "Securities Act" means the Securities Act of 1933,
    as amended.

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        2. Registration. (a) On or prior to the Filing Date, the Company shall
prepare and file with the Commission the Registration Statement covering the
resale of all of the Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement required
hereunder shall be on Form S-3 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case the
Registration shall be on another appropriate form in accordance herewith). The
Registration Statement required hereunder shall contain (except if otherwise
directed by the Holders) the "Plan of Distribution" attached hereto as 
Annex A. The Company shall cause the Registration Statement to become
effective and remain effective as provided herein. The Company shall use its
commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event not later than the Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date which is two
years after the Closing Date or such later date when all Registrable Securities
covered by the Registration Statement (a) have been sold pursuant to the
Registration Statement or an exemption from the registration requirements of the
Securities Act or (b) may be sold without volume restrictions pursuant to Rule
144(k) as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company's transfer agent
and the affected Holders (the "Effectiveness Period").

                (b) If a Registration Statement is not filed on or prior to
thirty days after the date of this Agreement; then in addition to any other
rights the Holders may have hereunder or under applicable law, the Company shall
pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 2.5% of the aggregate purchase price paid by such Holder
pursuant to the Purchase Agreement for any Registrable Securities then held by
such Holder, such payment to be made within seven days. .

 

        3. Registration Procedures. In connection with the Company's
registration obligations hereunder, the Company shall:

                    (a) Not less than three Trading Days, which shall not be
    included in the calculation of time period for the purposes of the Company's
    obligations under this Agreement or under the Purchase Agreement, prior to
    the filing of the Registration Statement or any related Prospectus or any
    amendment or supplement thereto, the Company shall, (i) furnish to the
    Holders copies of all such documents proposed to be filed (including
    documents incorporated or deemed incorporated by reference to the extent
    requested by such Person) which documents will be subject to the review of
    such Holders, and (ii) cause its officers and directors, counsel and
    independent certified public accountants to respond to such inquiries as
    shall be necessary, in the reasonable opinion of respective counsel to
    conduct a reasonable investigation within the meaning of the Securities Act.
    The Company shall not file the Registration Statement or any such Prospectus
    or any amendments or supplements thereto to which the Holders of a majority
    of the Registrable Securities shall reasonably object in good faith.

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                (b) (i) Prepare and file with the Commission such
    amendments, including post-effective amendments, to the Registration
    Statement and the Prospectus used in connection therewith as may be
    necessary to keep the Registration Statement continuously effective as to
    the applicable Registrable Securities for the Effectiveness Period; (ii)
    cause the related Prospectus to be amended or supplemented by any required
    Prospectus supplement, and as so supplemented or amended to be filed
    pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and
    in any event within 15 Trading Days, to any comments received from the
    Commission with respect to the Registration Statement or any amendment
    thereto and, as promptly as reasonably possible, upon request, provide the
    Holders true and complete copies of all correspondence from and to the
    Commission relating to the Registration Statement; and (iv) comply in all
    material respects with the provisions of the Securities Act and the Exchange
    Act with respect to the disposition of all Registrable Securities covered by
    the Registration Statement during the applicable period in accordance with
    the intended methods of disposition by the Holders thereof set forth in the
    Registration Statement as so amended or in such Prospectus as so
    supplemented.

                    (c) Notify the Holders of Registrable Securities to be
    sold as promptly as reasonably possible (and, in the case of (i)(A) below,
    not less than two Trading Days prior to such filing) and (if requested by
    any such Person) confirm such notice in writing promptly following the day (i)(A)
    when a Prospectus or any Prospectus supplement or post-effective amendment
    to the Registration Statement is proposed to be filed; (B) when the
    Commission notifies the Company whether there will be a "review" of the
    Registration Statement and whenever the Commission comments in writing on
    the Registration Statement (the Company shall upon request provide true and
    complete copies thereof and all written responses thereto to each of the
    Holders); and (C) with respect to the Registration Statement or any
    post-effective amendment, when the same has become effective; (ii) of any
    request by the Commission or any other Federal or state governmental
    authority during the period of effectiveness of the Registration Statement
    for amendments or supplements to the Registration Statement or Prospectus or
    for additional information; (iii) of the issuance by the Commission or any
    other federal or state governmental authority of any stop order suspending
    the effectiveness of the Registration Statement covering any or all of the
    Registrable Securities or the initiation of any Proceedings for that
    purpose; (iv) of the receipt by the Company of any notification with respect
    to the suspension of the qualification or exemption from qualification of
    any of the Registrable Securities for sale in any jurisdiction, or the
    initiation or threatening of any Proceeding for such purpose; and (v) of the
    occurrence of any event or passage of time that makes the financial
    statements included in the Registration Statement ineligible for inclusion
    therein or any statement made in the Registration Statement or Prospectus or
    any document incorporated or deemed to be incorporated therein by reference
    untrue in any material respect or that requires any revisions to the
    Registration Statement, Prospectus or other documents so that, in the case
    of the Registration Statement or the Prospectus, as the case may be, it will
    not contain any untrue statement of a material fact or omit to state any
    material fact required to be stated therein or necessary to make the
    statements therein, in light of the circumstances under which they were
    made, not misleading.

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

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

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

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

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

                    (i)
    Upon the occurrence of any event contemplated by Section 3(c)(v), as
    promptly as reasonably possible, prepare a supplement or amendment,
    including a post-effective amendment, to the Registration Statement or a
    supplement to the related Prospectus or any document incorporated or deemed
    to be incorporated therein by 

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reference, and file any other required document so that,
    as thereafter delivered, neither the Registration Statement nor such
    Prospectus will contain an untrue statement of a material fact or omit to
    state a material fact required to be stated therein or necessary to make the
    statements therein, in light of the circumstances under which they were
    made, not misleading.

                    (j) Comply with all applicable rules and regulations of
    the Commission.

                    (k) The Company may require each selling Holder to
    furnish to the Company a certified statement as to the number of shares of
    Common Stock beneficially owned by such Holder and, if required by the
    Commission, the person thereof that has voting and dispositive control over
    the Shares. Each Holder agrees to reasonably cooperate with the Company in
    the preparation of the Registration Statement and response by the Company to
    any comments by the Commission.

        4. Registration Expenses. All fees and expenses
incident to the performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to the Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with the Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is reasonably requested by
the holders of a majority of the Registrable Securities included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.

        5. Indemnification

    
                    (a) Indemnification by the Company. The Company
    shall, notwithstanding any termination of this Agreement, indemnify and hold
    harmless each Holder, the officers, directors, agents and employees of each
    of them, each Person who controls any such Holder (within the meaning of
    Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
    officers, directors, agents and employees of each such controlling Person,
    to the fullest extent permitted by applicable law, from and against any and
    all losses, claims, damages, liabilities, costs (including, without
    limitation, reasonable attorneys' fees) and expenses (collectively, "Losses"),
    as incurred, to the extent arising out of or relating to any untrue or
    alleged untrue statement of a material fact contained in the Registration
    Statement, any Prospectus or any form of prospectus or in any  

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amendment or
    supplement thereto or in any preliminary prospectus, or arising out of or
    relating to any omission or alleged omission of a material fact required to
    be stated therein or necessary to make the statements therein (in the case
    of any Prospectus or form of prospectus or supplement thereto, in light of
    the circumstances under which they were made) not misleading, except to the
    extent, but only to the extent, that (1) such untrue statements or omissions
    are based solely upon information regarding such Holder furnished in writing
    to the Company by such Holder expressly for use therein, or to the extent
    that such information relates to such Holder or such Holder's proposed
    method of distribution of Registrable Securities and was reviewed and
    expressly approved in writing by such Holder expressly for use in the
    Registration Statement, such Prospectus or such form of Prospectus or in any
    amendment or supplement thereto (it being understood that the Holder has
    approved Annex A hereto for this purpose) or (2) in the case of an
    occurrence of an event of the type specified in Section 3(c)(ii)-(v), the
    use by such Holder of an outdated or defective Prospectus after the Company
    has notified such Holder in writing that the Prospectus is outdated or
    defective and prior to the receipt by such Holder of the Advice contemplated
    in Section 6(d). The Company shall notify the Holders promptly of the
    institution, threat or assertion of any Proceeding of which the Company is
    aware in connection with the transactions contemplated by this Agreement.

                    (b) Indemnification by Holders. Each Holder shall,
    severally and not jointly, indemnify and hold harmless the Company, its
    directors, officers, agents and employees, each Person who controls the
    Company (within the meaning of Section 15 of the Securities Act and Section
    20 of the Exchange Act), and the directors, officers, agents or employees of
    such controlling Persons, to the fullest extent permitted by applicable law,
    from and against all Losses, as incurred, to the extent arising out of or
    based upon: (x) such Holder's failure to comply with the prospectus delivery
    requirements of the Securities Act or (y) any untrue or alleged untrue
    statement of a material fact contained in any Registration Statement, any
    Prospectus, or any form of prospectus, or in any amendment or supplement
    thereto or in any preliminary prospectus, or arising out of or relating to
    any omission or alleged omission of a material fact required to be stated
    therein or necessary to make the statements therein not misleading (i) to
    the extent, but only to the extent, that such untrue statement or omission
    is contained in any information so furnished in writing by such Holder to
    the Company specifically for inclusion in the Registration Statement or such
    Prospectus or (ii) to the extent that (1) such untrue statements or
    omissions are based solely upon information regarding such Holder furnished
    in writing to the Company by such Holder expressly for use therein, or to
    the extent that such information relates to such Holder or such Holder's
    proposed method of distribution of Registrable Securities and was reviewed
    and expressly approved in writing by such Holder expressly for use in the
    Registration Statement (it being understood that the Holder has approved
    Annex A hereto for this purpose), such Prospectus or such form of Prospectus
    or in any amendment or supplement thereto or (2) in the case of an
    occurrence of an event of the type specified in Section 3(c)(ii)-(v), the
    use by such Holder of an outdated or defective Prospectus after the Company
    has notified such Holder in writing that the Prospectus is outdated or
    defective and prior to the receipt by such Holder of the Advice contemplated
    in Section 6(d). In no event shall the liability of any selling Holder
    hereunder be greater in amount than the dollar amount of the net proceeds

    

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received by such Holder upon the sale of the Registrable Securities giving
    rise to such indemnification obligation.

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

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

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

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

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

        6. Miscellaneous

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

                    (b) No Piggyback on Registrations. Except as set
    forth on Schedule 6(b), neither the Company nor any of its security holders
    (other than the Holders in such capacity pursuant hereto) may include
    securities of the Company in a Registration  

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Statement other than the Registrable Securities, and the Company shall not after the date hereof
    enter into any agreement providing any such right to any of its security
    holders. Except as set forth in the SEC Reports, no Person has any right to
    cause the Company to effect the registration under the Securities Act of any
    securities of the Company. The Company shall not file any other registration
    statement until after the Effective Date.

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

                    (d) Discontinued Disposition. Each Holder agrees
    by its acquisition of such Registrable Securities that, upon receipt of a
    notice from the Company of the occurrence of any event of the kind described
    in Section 3(c), such Holder will forthwith discontinue disposition of such
    Registrable Securities under the Registration Statement until such Holder's
    receipt of the copies of the supplemented Prospectus and/or amended
    Registration Statement or until it is advised in writing (the "Advice")
    by the Company that the use of the applicable Prospectus may be resumed,
    and, in either case, has received copies of any additional or supplemental
    filings that are incorporated or deemed to be incorporated by reference in
    such Prospectus or Registration Statement. The Company may provide
    appropriate stop orders to enforce the provisions of this paragraph.

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

                    (f) Amendments and Waivers. The provisions of this
    Agreement, including the provisions of this sentence, may not be amended,
    modified or supplemented, and waivers or consents to departures from the
    provisions hereof may not be given, unless the same shall be in writing and
    signed by the Company and each Holder of the then outstanding Registrable
    Securities.

    
                    (g) Notices. Any and all notices or other
    communications or deliveries required or permitted to be provided hereunder
    shall be in writing and shall be deemed given and effective on the earliest
    of (i) the date of transmission, if such notice or communication is
    delivered via facsimile at the facsimile number provided for below prior to
    6:30 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after
    the 

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date of transmission, if such notice or communication is
    delivered via facsimile at the facsimile number provided for below later
    than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
    (New York City time) on such date, (iii) the Trading Day following the date
    of mailing, if sent by nationally recognized overnight courier service, or
    (iv) upon actual receipt by the party to whom such notice is required to be
    given. The address for such notices and communications shall be delivered
    and addressed as set forth in the Purchase Agreement

                    (h) Successors and Assigns. This Agreement shall
    inure to the benefit of and be binding upon the successors and permitted
    assigns of each of the parties and shall inure to the benefit of each
    Holder. Each Holder may assign their respective rights hereunder in the
    manner and to the Persons as permitted under the Purchase Agreement.

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

                    (j) Governing Law.
    All questions concerning the construction, validity, enforcement and
    interpretation of this Agreement shall be governed by and construed and
    enforced in accordance with the internal laws of the State of New York,
    without regard to the principles of conflicts of law thereof. Each party
    agrees that all legal proceedings concerning the interpretations,
    enforcement and defense of the transactions contemplated by this Agreement
    (whether brought against a party hereto or its respective affiliates,
    directors, officers, shareholders, employees or agents) shall be commenced
    exclusively in the state and federal courts sitting in the City of New York,
    New York. Each party hereto hereby irrevocably submits to the exclusive
    jurisdiction of the state and federal courts sitting in the City of New
    York, New York for the adjudication of any dispute hereunder or in
    connection herewith or with any transaction contemplated hereby or discussed
    herein (including with respect to the enforcement of the any of this
    Agreement), and hereby irrevocably waives, and agrees not to assert in any
    suit, action or proceeding, any claim that it is not personally subject to
    the jurisdiction of any such court, that such suit, action or proceeding is
    improper. Each party hereto hereby irrevocably waives personal service of
    process and consents to process being served in any such suit, action or
    proceeding by delivering a copy thereof via overnight delivery (with
    evidence of delivery) to such party at the address in effect for notices to
    it under this Agreement and agrees that such service shall constitute good
    and sufficient service of process and notice thereof. Nothing contained
    herein shall be deemed to limit in any way any right to serve process in any
    manner permitted by law. Each party hereto hereby irrevocably waives, to the
    fullest extent permitted by applicable law, any and all right to trial by
    jury in any legal proceeding arising out of or relating to this Agreement or
    the transactions contemplated hereby. If either party shall commence an
    action or proceeding to enforce any provisions of this Agreement, then the
    prevailing party in such action or proceeding shall be 

    -11-

    
    
reimbursed by the other party for its attorneys fees and
    other costs and expenses incurred with the investigation, preparation and
    prosecution of such action or proceeding.

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

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

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

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

    -12-

  

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

                    
                    
                      
                        
                          
                            
                              
                    DDS TECHNOLOGIES USA, INC.

                        
                        By:_________________________________

                                Name:

        Title:

                              

                            

                          

                        

                      

(PURCHASERS' SIGNATURE PAGES TO FOLLOW)

(PURCHASER'S SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

                [_____________________________]

                
                

                By:__________________________

                Name: 

                Title: 

                
                [_____________________________]

                
                

                By:__________________________

                Name: 

                Title: 

                
                [_____________________________]

                
                

                By:__________________________

                Name: 

                Title: 

              
            
          
        
      
    
  

(ADDITIONAL PURCHASER SIGNATURES FOLLOW)

ANNEX A

Plan of Distribution

                The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

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

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

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

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

 
	privately negotiated transactions;

 
	settlement of short sales;

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

 
	a combination of any such methods of sale; and

 
	any other method permitted pursuant to applicable law.

  

                The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

                Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

                The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933  

 

amending the list of
Selling Stockholders to include the pledgee, transferee or other successors in
interest as Selling Stockholders under this prospectus.

                The Selling Stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Selling Stockholders have informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

                The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.Exhibit 10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS
SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

COMMON STOCK PURCHASE WARRANT

 

To Purchase __________ Shares of Common Stock of

DDS Technologies USA, Inc.

                THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, _____________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after October __, 2003 (the "Initial Exercise Date")
and on or prior to the close of business on October __, 2006 (the "Termination
Date") but not thereafter, to subscribe for and purchase from DDS
Technologies USA, Inc., a corporation incorporated in the State of Nevada (the "Company"),
up to ____________ shares (the "Warrant Shares") of Common Stock, par
value $0.0001 per share, of the Company (the "Common Stock"). The
purchase price of one share of Common Stock (the "Exercise Price") under
this Warrant shall be $8.00, subject to adjustment hereunder. The
Exercise Price and the number of Warrant Shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the "Purchase Agreement"),
dated October __, 2003, between the Company and the purchasers signatory
thereto.

1

        1. Title to Warrant. Prior to the Termination Date and subject
to compliance with applicable laws and Section 7 of this Warrant, this Warrant
and all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

        2. Authorization of Shares. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

        3. Exercise of Warrant. 

                (a) Exercise of the purchase rights represented by this Warrant may be
made at any time or times on or after the Initial Exercise Date and on or before
the Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price of the shares thereby purchased
by wire transfer or cashier's check drawn on a United States bank or by means of
a cashless exercise pursuant to Section 3(d), the Holder shall be entitled to
receive a certificate for the number of Warrant Shares so purchased.
Certificates for shares purchased hereunder shall be delivered to the Holder
within three (3) Trading Days after the date on which this Warrant shall have
been exercised as aforesaid. This Warrant shall be deemed to have been exercised
and such certificate or certificates shall be deemed to have been issued, and
the Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the Warrant has been exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 prior to the issuance of such shares, have been paid. If the Company
fails to deliver to the Holder a certificate or certificates representing the
Warrant Shares pursuant to this Section 3(a) by the close of business on the
third Trading Day after the date of exercise, then the Holder will have the
right to rescind such exercise. In addition to any other rights available to the
Holder, if the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise by the
close of business on the eighth Trading Day after the date of exercise, and if
after such eighth Trading Day the Holder is required by its broker to purchase
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not 

2

honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company. Nothing
herein shall limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

                (b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant. 

                (c) The Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect to
such issuance after exercise, the Holder (together with the Holder's
Affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to such issuance.  For purposes
of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its Affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without
limitation, any other Debentures or Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates.  Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act. For
purposes of this Section 3(c), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company's most recent Form 10-Q or Form
10-K, as the case may be, (y) a more recent public announcement by the Company
or (z) any other notice by the Company or the Company's Transfer Agent setting
forth the number of shares of Common Stock outstanding.  Upon the written
or oral request of the Holder, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of Common Stock then
outstanding.  In any case, the number of outstanding shares of Company
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 3(c) may be waived by
the Holder upon, at the election of the Holder, not less than 61 days' prior

3

notice to the Company, and the provisions of this Section 3(c) shall continue to
apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver).

                (d) If, but only if, at any time after one year from the date of
issuance of this Warrant there is no effective Registration Statement
registering the resale of the Warrant Shares by the Holder, this Warrant may
also be exercised at such time by means of a "cashless exercise" in which the
Holder shall be entitled to receive a certificate for the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

                            (A) = the Closing Price on the Trading Day
            preceding the date of such election;

          
        
      
    
  

                            (B) = the Exercise Price of the Warrants, as
            adjusted; and 

                            (X) = the number of Warrant Shares issuable upon
            exercise of the Warrants in accordance with the terms of this
            Warrant.

          
        
      
    
  

        4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

        5. Charges, Taxes and Expenses. Issuance of certificates for
Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder or in such name or
names as may be directed by the Holder; provided, however, that in
the event certificates for Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

        6. Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

        7. Transfer, Division and Combination. 

                (a) 
Subject to compliance with any applicable securities laws and the conditions set
forth in Sections 1 and 7(e) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the 

4

assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly
assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued. 

                (b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

                (c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.

                (d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.

                (e) If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable
state securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this Warrant, as the
case may be, furnish to the Company a written opinion of counsel (which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable
state securities or blue sky laws, (ii) that the holder or transferee execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company and (iii) that the transferee be an "accredited investor" as
defined in Rule 501(a) promulgated under the Securities Act.

        8. No Rights as Shareholder until Exercise. This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price (or by means of a cashless
exercise), the Warrant Shares so purchased shall be and be deemed to be issued
to such Holder as the record owner of such shares as of the close of business on
the later of the date of such surrender or payment.

        9. Loss, Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

5

        10. Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not a
Saturday, Sunday or legal holiday.

        11. Adjustments of Exercise Price and Number of Warrant Shares.

                (a) Stock Splits, etc. The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price shall be
subject to adjustment from time to time upon the happening of any of the
following. In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or (iv) issue any shares
of its capital stock in a reclassification of the Common Stock, then the number
of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per Warrant Share or other security obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.

                (b) Anti-Dilution Provisions. From the Initial Exercise Date
until the 30th day following the Effective Date, the Exercise Price
and the number of Warrant Shares issuable hereunder and for which this Warrant
is then exercisable pursuant to Section 1 hereof shall be subject to adjustment
from time to time as provided in this Section 11(b). In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a
cent, such Exercise Price shall be rounded up or down to the nearest cent.

                
                
                  
                (i) Adjustment of Exercise Price. If and
                whenever the Company issues or sells, or in accordance with
                Section 8(b) hereof is deemed to have issued or sold, any shares
                of Common Stock for a consideration per share of less than the
                then the Exercise Price or for no consideration (such lower
                price, the "Base Share Price" and such issuances
                collectively, a "Dilutive Issuance"), then, the Exercise
                Price shall be reduced to equal the Base Share Price, 
                provided, that for purposes hereof, all shares of Common
                Stock that are issuable upon conversion, exercise or exchange of
                Capital Share Equivalents shall be deemed outstanding
                immediately after the issuance of such Common Stock. Such
                adjustment shall be 

                6

                    
                
made whenever such shares of Common Stock or Capital Share
                Equivalents are issued.

                
                (ii) Effect on Exercise Price of Certain Events.
                For purposes of determining the adjusted Exercise Price under
                Section 11(b) hereof, the following will be applicable:

                    
                    
                    (A) Issuance of Rights or Options. If the
                    Company in any manner issues or grants any warrants, rights
                    or options, whether or not immediately exercisable, to
                    subscribe for or to purchase Common Stock or other
                    securities exercisable, convertible into or exchangeable for
                    Common Stock ("Convertible Securities") (such
                    warrants, rights and options to purchase Common Stock or
                    Convertible Securities are hereinafter referred to as "Options")
                    and the effective price per share for which Common Stock is
                    issuable upon the exercise of such Options is less than the
                    Exercise Price ("Below Base Price Options"), then the
                    maximum total number of shares of Common Stock issuable upon
                    the exercise of all such Below Base Price Options (assuming
                    full exercise, conversion or exchange of Convertible
                    Securities, if applicable) will, as of the date of the
                    issuance or grant of such Below Base Price Options, be
                    deemed to be outstanding and to have been issued and sold by
                    the Company for such price per share and the maximum
                    consideration payable to the Company upon such exercise
                    (assuming full exercise, conversion or exchange of
                    Convertible Securities, if applicable) will be deemed to
                    have been received by the Company. For purposes of the
                    preceding sentence, the "effective price per share for which
                    Common Stock is issuable upon the exercise of such Below
                    Base Price Options" is determined by dividing (i) the total
                    amount, if any, received or receivable by the Company as
                    consideration for the issuance or granting of all such Below
                    Base Price Options, plus the minimum aggregate amount of
                    additional consideration, if any, payable to the Company
                    upon the exercise of all such Below Base Price Options,
                    plus, in the case of Convertible Securities issuable upon
                    the exercise of such Below Base Price Options, the minimum
                    aggregate amount of additional consideration payable upon
                    the exercise, conversion or exchange thereof at the time
                    such Convertible Securities first become exercisable,
                    convertible or exchangeable, by (ii) the maximum total
                    number of shares of Common Stock issuable upon the exercise
                    of all such Below Base Price Options (assuming full
                    conversion of Convertible Securities, if applicable). No
                    further adjustment to the Exercise Price will be made 

                    7

                      
                    
upon
                    the actual issuance of such Common Stock upon the exercise
                    of such Below Base Price Options or upon the exercise,
                    conversion or exchange of Convertible Securities issuable
                    upon exercise of such Below Base Price Options. 

                    
                    (B) Issuance of Convertible Securities. If
                    the Company in any manner issues or sells any Convertible
                    Securities, whether or not immediately convertible (other
                    than where the same are issuable upon the exercise of
                    Options) and the effective price per share for which Common
                    Stock is issuable upon such exercise, conversion or exchange
                    is less than the Exercise Price, then the maximum total
                    number of shares of Common Stock issuable upon the exercise,
                    conversion or exchange of all such Convertible Securities
                    will, as of the date of the issuance of such Convertible
                    Securities, be deemed to be outstanding and to have been
                    issued and sold by the Company for such price per share and
                    the maximum consideration payable to the Company upon such
                    exercise (assuming full exercise, conversion or exchange of
                    Convertible Securities, if applicable) will be deemed to
                    have been received by the Company. For the purposes of the
                    preceding sentence, the "effective price per share for which
                    Common Stock is issuable upon such exercise, conversion or
                    exchange" is determined by dividing (i) the total amount, if
                    any, received or receivable by the Company as consideration
                    for the issuance or sale of all such Convertible Securities,
                    plus the minimum aggregate amount of additional
                    consideration, if any, payable to the Company upon the
                    exercise, conversion or exchange thereof at the time such
                    Convertible Securities first become exercisable, convertible
                    or exchangeable, by (ii) the maximum total number of shares
                    of Common Stock issuable upon the exercise, conversion or
                    exchange of all such Convertible Securities. No further
                    adjustment to the Exercise Price will be made upon the
                    actual issuance of such Common Stock upon exercise,
                    conversion or exchange of such Convertible Securities.

                    
                    (C) Change in Option Price or Conversion Rate.
                    If there is a change at any time in (i) the amount of
                    additional consideration payable to the Company upon the
                    exercise of any Options; (ii) the amount of additional
                    consideration, if any, payable to the Company upon the
                    exercise, conversion or exchange of any Convertible
                    Securities; or (iii) the rate at which any Convertible
                    Securities are convertible into or exchangeable for Common
                    Stock (in each such case, other than under or by reason of
                    provisions designed to protect 

                    8

                      
                    
against dilution), the Exercise Price in effect at the
                    time of such change will be readjusted to the Exercise Price
                    which would have been in effect at such time had such
                    Options or Convertible Securities still outstanding provided
                    for such changed additional consideration or changed
                    conversion rate, as the case may be, at the time initially
                    granted, issued or sold.

                    
                    (D) Calculation of Consideration Received.
                    If any Common Stock, Options or Convertible Securities are
                    issued, granted or sold for cash, the consideration received
                    therefor for purposes of this Warrant will be the amount
                    received by the Company therefor, before deduction of
                    reasonable commissions, underwriting discounts or allowances
                    or other reasonable expenses paid or incurred by the Company
                    in connection with such issuance, grant or sale. In case any
                    Common Stock, Options or Convertible Securities are issued
                    or sold for a consideration part or all of which shall be
                    other than cash, the amount of the consideration other than
                    cash received by the Company will be the fair market value
                    of such consideration, except where such consideration
                    consists of securities, in which case the amount of
                    consideration received by the Company will be the fair
                    market value (closing bid price, if traded on any market)
                    thereof as of the date of receipt. In case any Common Stock,
                    Options or Convertible Securities are issued in connection
                    with any merger or consolidation in which the Company is the
                    surviving corporation, the amount of consideration therefor
                    will be deemed to be the fair market value of such portion
                    of the net assets and business of the non-surviving
                    corporation as is attributable to such Common Stock, Options
                    or Convertible Securities, as the case may be. The fair
                    market value of any consideration other than cash or
                    securities will be determined in good faith by an investment
                    banker or other appropriate expert of national reputation
                    selected by the Company and reasonably acceptable to the
                    holder hereof, with the costs of such appraisal to be borne
                    by the Company.

                    
                    (E) Exceptions to Adjustment of Exercise Price.
                    Notwithstanding anything to the contrary herein, this
                    Section 11(b) shall not apply to the following (1) the
                    granting of options to employees, officers and directors of
                    the Company pursuant to any stock option plan duly adopted
                    by a majority of the non-employee members of the Board of
                    Directors of the Company or a majority of the 

                    9

                      
                    
members of a committee of non-employee directors
                    established for such purpose, or (2) the exercise of any
                    security issued by the Company in connection with the offer
                    and sale of this Company's securities pursuant to the
                    Purchase Agreement, or (3) the exercise of or conversion of
                    any convertible securities, options or warrants issued and
                    outstanding on the date hereof, provided such securities
                    have not been amended since the date hereof, or (4)
                    acquisitions or strategic investments, the primary purpose
                    of which is not to raise capital. (e) the one-time issuance
                    of Common Stock or Common Stock Equivalents for an aggregate
                    purchase price of up to $10,000,000 less the aggregate
                    Subscription Amounts raised pursuant to the Purchase
                    Agreement.

                    

                
                (iii) Minimum Adjustment of Exercise Price. No
                adjustment of the Exercise Price shall be made in an amount of
                less than 1% of the Exercise Price in effect at the time such
                adjustment is otherwise required to be made, but any such lesser
                adjustment shall be carried forward and shall be made at the
                time and together with the next subsequent adjustment which,
                together with any adjustments so carried forward, shall amount
                to not less than 1% of such Exercise Price. 

                  

        12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common
Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the 

10

adjustments provided for in this Section 12. For purposes of this Section 12,
"common stock of the successor or acquiring corporation" shall include stock of
such corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 12 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets. 

        13. Voluntary Adjustment by the Company. The Company may at any
time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of
Directors of the Company.

        14. Notice of Adjustment. Whenever the number of Warrant Shares
or number or kind of securities or other property purchasable upon the exercise
of this Warrant or the Exercise Price is adjusted, as herein provided, the
Company shall give notice thereof to the Holder, which notice shall state the
number of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.

        15. Notice of Corporate Action. If at any time:

                (a) the Company shall take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
or any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or

                (b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,

                (c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i)
at least 10 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date 

11

on which any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up is to take
place and the time, if any such time is to be fixed, as of which the holders of
Common Stock shall be entitled to exchange their Warrant Shares for securities
or other property deliverable upon such disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if addressed to
Holder at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

        16. Authorized Shares. The Company covenants that during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed. 

            Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

            Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

        17. Miscellaneous.

                (a) Jurisdiction. This Warrant shall constitute a contract
under the laws of New York, without regard to its conflict of law, principles or
rules.

                (b) Restrictions. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

12

                (c) Nonwaiver and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

                (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement;
provided upon any permitted assignment of this Warrant, the assignee shall
promptly provide the Company with its contact information.

                (e) Limitation of Liability. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any Common
Stock or as a stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.

                (f) Remedies. Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

                (g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.

                (h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

                (i) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

                (j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

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

13

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

Dated: October ___, 2003

	 	
DDS TECHNOLOGIES USA, INC.

    
	 	

    
	
    By: 
	
 

    
	 	Name:

    Title:

14

NOTICE OF EXERCISE

To:     DDS Technologies USA, Inc.

               
(1)        The undersigned hereby elects to purchase ________ Warrant
Shares of DDS Technologies USA, Inc. pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer taxes, if any.

               
(2)        Payment shall take the form of (check applicable box):

                                          [ ] in lawful money of the United States; or

            
              
                
            [ ] the cancellation of such number of Warrant
            Shares as is necessary, in accordance with the formula set forth in
            subsection 3(d), to exercise this Warrant with respect to the
            maximum number of Warrant Shares purchasable pursuant to the
            cashless exercise procedure set forth in subsection 3(d).

                

              

               
(3)        Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                            _______________________________

The Warrant Shares shall be delivered to the following:

                            _______________________________

                            _______________________________

                            _______________________________

            (4)         Accredited Investor. The undersigned is an
"accredited investor" as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.

  
    
      [PURCHASER]

       

      By: _________________________

Name:

Title:

Dated: ______________________

          

        

      

    
  

 

 

 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

 

                FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

_______________________________________________ whose address
is

_______________________________________________________________.

 

_______________________________________________________________

                                                                        Dated: ______________, _______

 

  

Holder's Signature: _______________________

Holder's Address: ________________________

                            __________________________

        

      

    

 

Signature Guaranteed:
______________________________________

NOTE: The signature to this Assignment Form must correspond
with the name as it appears on the face of the Warrant, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Warrant.

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