Document:

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                                                                    EXHIBIT 10.2

NEITHER THIS WARRANT NOR ANY OF THE SHARES OF CAPITAL STOCK ISSUED UPON ANY
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND NONE OF SUCH
SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS WARRANT OR SUCH
SHARES, AS APPLICABLE, UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED. THIS LEGEND SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR
THIS WARRANT.

                                      Warrant to Purchase Shares of Common Stock

                        WARRANT TO PURCHASE COMMON STOCK
                                       OF
                             XENONICS HOLDINGS, INC.

Warrant No. 00-__

      This certifies that, for value received, Patriot Associates LLC (the
"Holder"), or its registered assigns, is entitled, subject to the terms set
forth below, to purchase from Xenonics Holdings, Inc., a Nevada corporation (the
"Company"), at any time, and from time to time, during the term set forth in
Section 1 below, fully paid, validly issued and nonasessable shares of the
Company's $0.001 par value common stock (the "Common Stock"), upon surrender
hereof, at the principal office of the Company, with the subscription form
attached hereto duly executed, and simultaneous payment therefor in lawful money
of the United States, at the Exercise Price as set forth in Section 2 below. The
Exercise Price of such shares of Common Stock is subject to adjustment as
provided in Section 2 and Section 11 of this Warrant. The term "Warrant" as used
herein shall include this Warrant, and any warrants or warrant delivered in
substitution or exchange therefor.

            1. Term of Warrant. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, at any time or
from time to time, during the term commencing on September 9, 2005 and ending
September 8, 2010.

            2. Number of Shares of Common Stock; Exercise Price.

                  (a) During the term of this Warrant, this Warrant may be
exercised for the purchase of shares of Common Stock.

                  (b) The number of shares of Common Stock that can be purchased
upon the exercise of this Warrant shall be four hundred thirty seven thousand
five hundred (437,500) (as appropriately adjusted for any anti-dilution rights,
stock dividends, splits or similar events).

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                  (c) The Exercise Price at which this Warrant may be exercised
shall be $2.00 per share (as appropriately adjusted for any anti-dilution
rights, stock dividends, splits or similar events).

            3. Exercise of Warrant.

                  (a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, but not for less than one
thousand (1,000) shares at a time (or such lesser number of shares which may
then constitute the maximum number purchasable; such number being subject to
adjustment as provided in Section 11 below), at any time, or from time to time,
during the term hereof as described in Section 1 above, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly completed and executed on
behalf of the Holder, 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 Holder at
the address of the Holder appearing on the books of the Company), upon payment
in cash or by check acceptable to the Company of the purchase price of the
shares of Common Stock to be purchased.

                  (b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event within ten (10)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares of Common Stock issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares of
Common Stock for which this Warrant may then be exercised.

                  (c) All or any portion of the Exercise Price may be paid by
surrendering Warrants effected by presentation and surrender of this Warrant to
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the Holder at the address of the holder appearing on the
books of the Company), with a Notice of Exercise Form annexed hereto duly
executed (a "Cashless Exercise"). Such presentation and surrender shall be
deemed a waiver by the Company of the Holder's obligation to pay all or any
portion of the aggregate Exercise Price. In the event of a Cashless Exercise,
the Holder shall exchange its Warrant for that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock for which the
Holder desires to exercise this Warrant by a fraction, the numerator of which
shall be the difference between the then current market price per share of the
Common Stock and the Exercise Price, and the denominator of which shall be the
then current market price per share of Common Stock. For purposes of any
computation under this Section 3(c), the then current market price per share of
Common Stock at any date shall be deemed to be the average for the ten
consecutive business days immediately prior to the Cashless Exercise of the
daily closing prices of the Common Stock on the principal national securities
exchange on which the Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on any such exchange, the closing prices as
reported by the Nasdaq National Market or, if applicable, the Nasdaq SmallCap
Market, or if not then included for quotation on the Nasdaq National Market or
the Nasdaq SmallCap Market, the average of the highest reported bid and lowest
reported asked prices as reported by the OTC Bulletin Board or the National
Quotations Bureau, as the case may be, or if not then publicly traded, the fair
market price, not less than book value thereof, of the Common Stock as
determined in good faith by the Board of Directors of the Company.

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            4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price then
in effect multiplied by such fraction.

            5. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and substance
to the Company or, in the case of mutilation, upon surrender or cancellation of
this Warrant, the Company at its expense shall execute and deliver, in lieu of
this Warrant, a new warrant of like tenor representing the right to subscribe
for and purchase the shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation of the Company, whether or not
this Warrant so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.

            6. Rights of Stockholders. The Holder shall not be entitled to vote
or receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised as provided herein.

            7. Transfer of Warrant.

                  (a) Warrant Register. The Company will maintain a register
(the "Warrant Register") containing the names and addresses of the Holder or
Holders. Any Holder of this Warrant or any portion hereof may change its address
as shown on the Warrant Register by written notice to the Company requesting
such change. Any notice or written communication required or permitted to be
given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. Until
this Warrant is transferred on the Warrant Register of the Company, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for the purpose of any exercise hereof or any distribution to the
Holder and for all other purposes, notwithstanding any notice to the contrary.

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                  (b) Warrant Agent. The Company may, by written notice to the
Holder, appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 7(a) above, issuing the Common Stock or other securities
then issuable upon the exercise of this Warrant, exchanging this Warrant,
replacing this Warrant, or any or all of the foregoing. Thereafter, any such
registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.

                  (c) Transferability and Nonnegotiability of Warrant. This
Warrant may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Act"), title to this Warrant may be transferred by endorsement (by
the Holder executing the Assignment Form annexed hereto) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.

                  (d) Exchange of Warrant Upon a Transfer. On surrender of this
Warrant for exchange, properly endorsed on the Assignment Form and subject to
the provisions of this Warrant with respect to compliance with the Act, the
Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants to purchase Common Stock, in substantially the form of this
Warrant, in the name of the Holder or as the Holder (on payment by the Holder of
any applicable transfer taxes) may direct, for the number of shares issuable
upon exercise hereof. In the event of a partial transfer by a Holder, the
Company shall issue to the holders one or more appropriate new warrants. The
acceptance of the new warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a warrant.

                  (e) Compliance with Securities Laws. All shares of Common
Stock issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT.

Upon the registration, under the Act, of the securities issued upon exercise of
the Warrant such legend shall be removed from the certificate evidencing such
securities.

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            8. Reservation of Stock. The Company covenants that during the term
this Warrant is exercisable, the Company will reserve, free from preemptive
rights, from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
charter documents to provide sufficient reserves of shares of Common Stock
issuable upon exercise of this Warrant. The Company further covenants that all
shares that may be issued upon the exercise of rights represented by this
Warrant and payment of the Exercise Price, all as set forth herein, will be free
from all taxes, liens, charges and security interests in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
or otherwise specified herein). The Company agrees 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 shares of Common Stock upon the exercise of this Warrant. The
Company covenants that all such shares of Common Stock will, when issued, be
duly and validly issued, fully paid and nonassessable.

            9. Notices.

                  (a) Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the
Company shall issue a certificate signed by a duly authorized officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Exercise Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.

                  (b) In case:

                        (i) the Company shall take a record of the holders of
its Common Stock (or other stock or securities at the time receivable upon the
exercise of this Warrant) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or

                        (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or

                        (iii) of any voluntary dissolution, liquidation or
winding-up of the Company,

then, and in each such case, the Company will mail or cause to be mailed to the
Holder or Holders a notice specifying, as the case may be, (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 15
days prior to the date therein specified.

<PAGE>

                  (c) All such notices, advices and communications shall be
deemed to have been received (i) in the case of personal delivery, on the date
of such delivery and (ii) in the case of mailing, on the first business day
following the date of such mailing.

            10. Waivers and Amendments.

                  (a) Any term of this Warrant may be amended or waived only
with the written consent of the Company and the Holder.

                  (b) No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.

            11. Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:

                  (a) Merger, Sale of Assets, etc. If at any time while this
Warrant, or any portion hereof, is outstanding and unexpired there shall be a:
(i) reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, or (iii) sale or transfer of the Company's properties and assets as,
or substantially as, an entirety to any other person, then, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Exercise Price then in effect, the number of shares of
Common Stock or other securities or property of the successor corporation
resulting from such reorganization, merger, consolidation, sale or transfer that
a holder of the shares deliverable upon exercise of this Warrant would have been
entitled to receive in such reorganization, consolidation, merger, sale or
transfer if this Warrant had been exercised immediately before such
reorganization, merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 11. The foregoing provisions of this
Section 11 shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of this Warrant.
If the per share consideration payable to the Holder hereof for shares in
connection with any such transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors. In all events, appropriate adjustment
(as determined in good faith by the Company's Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

<PAGE>

                  (b) Reclassification, etc. If the Company, at any time while
this Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.

                  (c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion hereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, then (i) the Exercise Price for such securities
shall be proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination, and (ii) the number of
shares issuable hereunder shall be proportionately increased or decreased, as
the case may be, in both cases according to the ratio which the total number of
shares of such security to be outstanding immediately after such event bears to
the total number of shares of such security outstanding immediately prior to
such event.

                  (d) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired, the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 11.

                  (e) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 11, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based.

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                  (f) No Impairment. The Company will not, by amendment of its
charter documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the holder of this Warrant against impairment due
to such event. Without limiting the generality of the foregoing, the Company (i)
will take all action that may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock, free from all taxes, liens and charges with respect to the issue thereof,
on the exercise of all of the Warrants from time to time outstanding, and (ii)
will not consolidate with or merge into any other person or permit any such
person to consolidate with or merge into the Company (if the Company is not the
surviving person), unless such other person shall expressly assume in writing
and agree to be bound by all the terms of this Warrant.

            12. Descriptive Headings and Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California without regard
to conflicts of law provisions.

            13. Speculative Value of Warrant. It is understood and agreed by the
Company and Holder that the Warrant as of the date of issuance has a speculative
value and no definitive value can be expressed.

            14. Notices. All notices and other communications hereunder shall be
delivered by hand, by depositing the notice in the United States mail postage
prepaid and properly addressed to the recipient or by facsimile transmission to
the parties as follow:

                  (a) If to the Company:      Xenonics Holdings, Inc.
                                              2236 Rutherford Road, Suite 123
                                              Carlsbad, California 92008
                                              Telephone:
                                              Fax:

                  (b) If to the Holder:       Patriot Associates LLC
                                              111 E. 56th Street
                                              New York, New York 10022
                                              Telephone:
                                              Fax:

                            [Signature page follows]

<PAGE>

      IN WITNESS WHEREOF, XENONICS HOLDINGS, INC. has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: September 9, 2005

                                              XENONICS HOLDINGS, INC.

                                              By: /s/ Richard J. Naughton
                                              Name: Richard J. Naughton
                                              Title: Chief Executive Officer<PAGE>

                                                                    EXHIBIT 10.3

                          REGISTRATION RIGHTS AGREEMENT

      This REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
September 9, 2005, by and between Xenonics Holdings, Inc., a Nevada corporation
having its principal offices at 2236 Rutherford Road, Suite 123, Carlsbad,
California 92008-7297 (the "Corporation"), and Patriot Associates LLC, a New
York limited liability company having its principal offices at 111 E. 56th
Street, New York, New York 10022 ("Patriot Associates").

      WHEREAS, pursuant to the Consulting Agreement (as defined below), the
Corporation has agreed to grant to Patriot Associates certain registration
rights with respect to (a) the shares of the Corporation's common stock, par
value $0.001 per share (the "Common Stock") and (b) the shares of the
Corporation's Common Stock issuable upon the exercise of the Warrant (as defined
below) or any warrant hereinafter acquired, owned by Patriot Associates as of
the date hereof or hereinafter acquired, as more fully set forth herein.

      NOW THEREFORE, in consideration of the foregoing recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Patriot Associates does hereby agree with the Corporation as
follows:

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

      "Agreement" has the meaning set forth in the Preamble.

      "Availability Date" means the 45th day following the end of the fourth
fiscal quarter that includes the effective date of such Registration Statement,
except that, if such fourth fiscal quarter is the last quarter of the
Corporation's fiscal year, "Availability Date" means the 90th day after the end
of such fourth fiscal quarter.

      "Blackout Period" has the meaning set forth in Section 2.2 hereof.

      "Business Day" means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.

      "Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

      "Common Stock" has the meaning set forth in the Whereas clause hereto.

      "Consulting Agreement" means that certain Consulting Agreement, dated as
of the date hereof, by and between the Corporation and Patriot Associates.

      "Corporation" has the meaning set forth in the Preamble.

      "Effectiveness Period" has the meaning set forth in Section 2.2(a) hereof.

                                      -1-
<PAGE>

      "Event" has the meaning set forth in Section 2.3 hereof.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

      "Holder" means (i) the Corporation and (ii) any person holding Registrable
Securities to whom the registration rights under this Agreement have been
validly transferred.

      "Indemnified Party" has the meaning set forth in Section 5(c) hereof.

      "Indemnifying Party" has the meaning set forth in Section 5(c) hereof.

      "NASD" means the National Association of Securities Dealers.

      "Patriot Associates" has the meaning set forth in the Preamble.

      "Person" means any individual, partnership, corporation, joint venture,
limited liability company, association, trust, unincorporated organization, or
government or agency or political subdivision thereof or any other entity of
whatever nature.

      "register," "registered" and "registration" means a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement by the Commission.

      "Registrable Securities" means the (i) 62,500 shares of the Corporation's
Common Stock issued to Patriot Associates pursuant to the Consulting Agreement,
(ii) the 437,500 shares of the Corporation's Common Stock underlying the
Warrant, (iii) any shares of the Corporation's Common Stock or any warrants
hereinafter acquired by Patriot Associates from the Corporation pursuant to an
agreement that such shares or warrants shall constitute Registrable Securities,
and (iv) any Common Stock of the Corporation issued or issuable in respect of
the foregoing shares of the Corporation's Common Stock upon any stock split,
stock dividend, recapitalization or similar event; provided, however, that any
such securities shall cease to be Registrable Securities (and the Corporation
shall cease to have any obligation to include such securities on a Registration
Statement) when (A) such securities shall have been registered under the
Securities Act, the registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of pursuant to such effective registration
statement; (B) such securities shall have been otherwise transferred, if new
certificates or other evidences of ownership for them not bearing a legend
restricting further transfer and not subject to any stop transfer order or other
restrictions on transfer shall have been delivered by the Corporation and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act or any state
securities law then in force; (C) such securities shall cease to be outstanding;
(D) the holding period (currently two years) that is applicable under Rule
144(k) of the Securities Act expires, such securities are freely tradable by
Patriot Associates thereof under Rule 144(k) without regard to volume
limitations or other restrictions and the Corporation shall have removed any
restrictive legends and stop transfer restrictions with respect to such
securities; or (E) such securities are sold to the public pursuant to Rule 144
(or any similar provision then in force, but not Rule 144A) under the Securities
Act.

                                      -2-
<PAGE>

      "Registration Expenses" means all expenses incurred by the Corporation in
complying with Section 2.1, including without limitation, all registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Corporation, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration.

      "Registration Statement" means any registration statement (including a
post-effective amendment to a registration statement) of the Corporation filed
under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.

      "Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.

      "Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.

      "Securities Act" means the federal Securities Act of 1933, as amended, or
any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

      "Selling Expenses" means all underwriting discounts, selling commissions,
or stock transfer taxes and fees applicable to the securities registered by the
Holders.

      "Warrant" means that certain Warrant to Purchase Common Stock of the
Corporation, dated as of the date hereof, issued by the Corporation in favor of
Patriot Associates and any additional warrant hereinafter issued in favor of
Patriot Associates upon the partial exercise of the initial warrant.

      Section 2. Registration. The Corporation agrees to use its best efforts to
prepare and file a Registration Statement with the Commission no later than
October 7, 2005, and to thereafter take all steps necessary and proper to effect
a registration of the Registrable Securities (including, without limitation,
appropriate qualification under applicable state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and any
other governmental requirements or regulations), in order to permit or
facilitate the sale and distribution by the Holders of all of their Registrable
Securities. The Registration Statement filed by the Corporation hereunder shall
be a Registration Statement, at the Corporation's option, on Form S-1, Form SB-2
or, if available, Form S-3, or any successor to such forms. If requested by all
of the Holders, the Corporation shall, together with all Holders, enter into an
underwriting agreement in customary form with an investment banking firm or
firms selected for such underwriting by all of the Holders, but subject to the
Corporation's reasonable approval.

                                      -3-
<PAGE>

            2.1 Expenses of Registration. All Registration Expenses incurred in
connection with a registration pursuant to this Section 2 shall be borne by the
Corporation; provided, however, that the Corporation shall have no obligation to
pay or otherwise bear (a) any portion of the fees or disbursements of counsel
for the Holders in connection with the registration of their Registrable
Securities, (b) any portion of the Selling Expenses, or (c) any of such expenses
if the payment of such expenses by the Corporation is prohibited by the laws of
a state in which such offering is qualified and only to the extent so
prohibited. Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Holders shall be borne by the Holders of such
securities pro rata on the basis of the number of shares so registered or
proposed to be so registered.

            2.2 Registration Procedures. In the case of each registration
effected by the Corporation pursuant to this Agreement, the Corporation will
keep each Holder advised in writing as to the initiation of such registration
and as to the completion thereof. The Corporation will:

                  (a) prepare and file with the Commission a Registration
Statement and cause such Registration Statement to become and remain effective
until all Registrable Securities included in the registration statement have
been sold or otherwise cease to be Registrable Securities (the "Effectiveness
Period"), except that the Corporation shall be permitted to suspend the use of
the Registration Statement during certain periods as set forth below in this
Section 2.2;

                  (b) (i) prepare and file with the Commission such amendments
and post-effective supplements to the Registration Statement as may be necessary
to keep the Registration Statement effective with respect to all 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 (or any similar
provisions then in force) promulgated under the Securities Act; (iii) respond as
promptly as possible, and in no event later than fifteen (15) Business Days to
the first set of comments and ten (10) Business Days to each set of comments
thereafter received from the Commission with respect to the Registration
Statement or any amendment thereto and as promptly as reasonably possible
provide Patriot Associates 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 Patriot Associates thereof set forth in the
Registration Statement as so amended or in such prospectus as so supplemented;

                  (c) furnish to the Holders participating in such registration
and to any underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities;

                                      -4-
<PAGE>

                  (d) if requested by Patriot Associates, (i) promptly
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information regarding Patriot Associates or the
Registrable Securities as the Corporation reasonably agrees should be included
therein and (ii) make all required filings of such prospectus supplement or such
post-effective amendment as soon as practicable after the Corporation has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;

                  (e) in the event the Corporation selects an underwriter for
the public offering, the Corporation shall enter into and perform its reasonable
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriter of such offering;

                  (f) if required by the underwriter, the Corporation shall
furnish, on the effective date of the Registration Statement (i) an opinion,
dated as of such date, from independent legal counsel representing the
Corporation for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the underwriter and (ii) a letter, dated such date, from the Corporation's
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriter;

                  (g) use its reasonable best efforts to (i) prevent the
issuance of any stop order or other suspension of effectiveness and, if such
order is issued, obtain the withdrawal of any such order at the earliest
possible moment 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 time;

                  (h) prior to any public offering of Registrable Securities,
use its reasonable best efforts to register or qualify or cooperate with Patriot
Associates and its counsel in connection with the registration or qualification
of such Registrable Securities for offer and sale under the state securities or
blue sky laws of such jurisdictions reasonably requested by Patriot Associates
and do any and all other reasonable acts or things necessary or advisable to
enable the distribution in such jurisdictions of the Registrable Securities
covered by the Registration Statement; provided, that, the Corporation shall not
for any purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified or execute a general consent
to service of process in any jurisdiction;

                  (i) cause all Registrable Securities covered by a Registration
Statement to be listed on each securities exchange, interdealer quotation
system, market or over-the-counter bulletin board on which similar securities
issued by the Corporation are then listed or, if no such listing then exists, as
reasonably determined by the Corporation;

                                      -5-
<PAGE>

                  (j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act and take such other actions as may be reasonably necessary to
facilitate the registration of the Registrable Securities hereunder; and make
available to its security holders, as soon as reasonably practicable, but not
later than the Availability Date (as defined above), an earnings statement
covering a period of at least twelve (12) months, beginning after the effective
date of the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;

                  (k) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration and provide the transfer agent with printed certificates for
Registrable Securities in a form eligible for deposit with The Depositary Trust
Company; and

                  (l) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).

      Notwithstanding the foregoing, the Corporation shall notify each Holder
whose securities are included in a registration of the happening of any event
which makes any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or which requires the making of any
changes in the Registration Statement or prospectus so that, in the case of the
Registration Statement, it will not 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 not misleading, and that in the case of the
prospectus, it will not contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. In
such event, the Corporation may suspend use of the prospectus on written notice
to each participating Holder, in which case each participating Holder shall not
dispose of Registrable Securities covered by the Registration Statement or
prospectus until copies of a supplemented or amended prospectus are distributed
to the participating Holders or until the participating Holders are advised in
writing by the Corporation that the use of the applicable prospectus may be
resumed (the period of such suspension shall be a "Blackout Period"). The
Corporation shall ensure that the use of the prospectus may be resumed as soon
as practicable, provided, that such Blackout Periods shall not exceed an
aggregate of ninety (90) days each year. The Corporation shall, upon the
occurrence of any event contemplated by this paragraph, prepare a supplement or
post-effective amendment to the registration statement or a supplement to the
related prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

                                      -6-
<PAGE>

            2.3 Failure to File Registration Statement and Other Events. The
Corporation and Patriot Associates agree that Patriot Associates will suffer
damages if the Registration Statement is not filed and maintained in the manner
contemplated herein during the Effectiveness Period. The Corporation and Patriot
Associates further agree that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, if (a) the Corporation fails to
file with the Commission a request for acceleration in accordance with Rule 461
promulgated under the Securities Act within five (5) Business Days after the
date that the Corporation is notified (orally or in writing, whichever is
earlier) by the Commission that a Registration Statement will not be "reviewed"
or will not be subject to further review, or (b) the Registration Statement is
filed with and declared effective by the Commission but thereafter ceases to be
effective as to all Registrable Securities at any time prior to the expiration
of the Effectiveness Period, without being succeeded within twenty days
thereafter by a subsequent Registration Statement filed with the Commission,
except as otherwise permitted by this Agreement (any such failure or breach
being referred to as an "Event"), the Corporation will make payments to Patriot
Associates in an amount equal to $1,250 for each twenty (20)-day period or pro
rata for any portion thereof following the date on which the Event occurred.
Such payments shall be in partial compensation to Patriot Associates and shall
not constitute Patriot Associates' exclusive remedy for such Events. Such
payments shall be made to Patriot Associates in cash. The amounts payable
pursuant to this paragraph shall be payable in lawful money of the United States
within two (2) Business Days of the last day of each such twenty (20)-day period
during which the Registration Statement should have been filed for which no
Registration Statement was filed with respect to the Registrable Securities.
Notwithstanding the foregoing, the Corporation shall remain obligated to cure
the breach or correct the condition that caused such Event, and Patriot
Associates shall have the right to take any action necessary or desirable to
enforce such obligation.

      Section 3. Due Diligence Review; Information. The Corporation shall make
available, during normal business hours, for reasonable inspection and review by
Patriot Associates, advisors to and representatives of Patriot Associates (who
may or may not be affiliated with Patriot Associates), and any underwriter
participating in any disposition of Common Stock on behalf of Patriot Associates
pursuant to a Registration Statement or amendments or supplements thereto or any
blue sky, NASD or other filing, all financial and other records, and all other
corporate documents and properties of the Corporation as may be reasonably
necessary for the purpose of such review, and cause the Corporation's officers,
directors and employees, within a reasonable time period, to supply all such
information reasonably requested by Patriot Associates or any such
representative, advisor or underwriter in connection with such Registration
Statement (including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for the
sole purpose of enabling Patriot Associates and such representatives, advisors
and underwriters and its accountants and attorneys to conduct initial and
ongoing due diligence with respect to the Corporation and the accuracy of such
Registration Statement.

      Notwithstanding the foregoing, the Corporation shall not disclose material
non-public information to Patriot Associates, or to advisors to or
representatives of Patriot Associates, unless prior to disclosure of such
information the Corporation identifies such information as being material
non-public information and provides Patriot Associates, such advisors and
representatives with the opportunity to accept or refuse to accept such material
non-public information for review; provided, furthermore, that Patriot
Associates and such advisors and representatives shall not be entitled in any
event to review such material non-public information until they first execute
and deliver to the Corporation confidentiality agreements in a form reasonably
requested by the Corporation.

                                      -7-
<PAGE>

      Section 4. Obligations of Patriot Associates.

                  (a) Patriot Associates shall furnish in writing to the
Corporation such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities held
by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Corporation may reasonably request. At least fifteen (15)
Business Days prior to the first anticipated filing date of any Registration
Statement, the Corporation shall notify Patriot Associates of the information
the Corporation requires from Patriot Associates to have Patriot Associates'
Registrable Securities included in the Registration Statement. Patriot
Associates shall provide such information to the Corporation at least ten (10)
Business Days prior to the first anticipated filing date of such Registration
Statement.

                  (b) Patriot Associates, by its acceptance of the Registrable
Securities, agrees to cooperate with the Corporation as reasonably requested by
the Corporation in connection with the preparation and filing of a Registration
Statement hereunder.

                  (c) In the event the Corporation determines to engage the
services of an underwriter, Patriot Associates agrees to enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
dispositions of the Registrable Securities.

                  (d) Patriot Associates agrees that, upon receipt of any notice
from the Corporation of the happening of any event rendering a Registration
Statement no longer effective, Patriot Associates will immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities, until Patriot Associates' receipt of
copies of the supplemented or amended prospectus filed with the Commission and
declared effective and, if so directed by the Corporation, Patriot Associates
shall deliver to the Corporation (at the expense of the Corporation) or destroy
(and deliver to the Corporation a certificate of destruction) all copies in
Patriot Associates' possession of the prospectus covering the Registrable
Securities current at the time of receipt of such notice.

                  (e) Patriot Associates may not participate in any third party
underwritten registration hereunder unless it (i) agrees to sell the Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Corporation, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions. Notwithstanding the foregoing, Patriot Associates
shall not be required to make any representations to such underwriter, other
than those with respect to itself and the Registrable Securities owned by it,
including its right to sell the Registrable Securities, and any indemnification
in favor of the underwriter by Patriot Associates shall be limited to the net
proceeds received by Patriot Associates from the sale of its Registrable
Securities. The scope of any such indemnification in favor of an underwriter
shall be limited to the same extent as the indemnity provided in Section 5(b)
hereof.

                                      -8-
<PAGE>

      Section 5. Indemnification.

                  (a) The Corporation will indemnify each Holder, each of its
officers, directors, employees, successor, assigns and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
Registration Statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration, or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or any violation
by the Corporation of the Securities Act, the Exchange Act, state securities
laws or any rule or regulation promulgated under such laws applicable to the
Corporation in connection with any such registration, and the Corporation will
reimburse each such Holder, each of its officers, directors, employees,
successors, assigns and each person controlling such Holder, for any legal and
any other expenses reasonably incurred, as such expenses are incurred, in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, provided that the Corporation will not be liable in
any such case (i) to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in conformity with
written information furnished to the Corporation by or on behalf of such Holder
expressly for use therein or (ii) to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission in a prospectus that was
used by such Holder during a Blackout Period.

                  (b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration is being
effected, indemnify the Corporation, each of its officers and directors, each
person who controls the Corporation within the meaning of Section 15 of the
Securities Act, each other holder of the Corporation's securities covered by
such Registration Statement, and each such holder's officers and directors and
each person controlling such holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Holder of the Securities Act, the Exchange Act, state securities laws or any
rule or regulation promulgated under such laws applicable to the Holder, and
will reimburse the Corporation, such other holders, such officers, directors, or
control persons for any legal or any other expenses reasonably incurred, as such
expenses are incurred, in connection with investigating or defending any such
claim, loss, damage, liability or action, but in the case of the Corporation or
the other holders or their officers, directors, employees, successors, assigns
or control persons, only to the extent that such

                                      -9-
<PAGE>

untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with information furnished to the
Corporation in writing by such Holder. Notwithstanding the foregoing, the
liability of each Holder under this Section 2.3(b) shall be limited to an amount
equal to the net proceeds from the offering received by such Holder. A Holder
will not be required to enter into any agreement or undertaking in connection
with any registration under this Section 2 providing for any indemnification or
contribution on the part of such Holder greater than the Holder's obligations
under this Section 2.3(b).

                  (c) Each party entitled to indemnification under this Section
8 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or there are separate
and different defenses. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party (whose
consent shall not be unreasonably withheld), consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.

                  (d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in any underwriting
agreement entered into in connection with an underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.

      Section 6. Transfer of Rights. The rights granted under Section 2 of this
Agreement may be assigned to any transferee or assignee in connection with any
transfer or assignment by the Holder of such Holder's Registrable Securities,
provided that: (a) such transfer is otherwise effected in accordance with
applicable securities laws and the terms of this Agreement; (b) written notice
is promptly given to the Corporation; and (c) such transferee or assignee agrees
in writing to be bound by the provisions of this Agreement and by any other
agreement reasonably necessary to ensure compliance with the Federal and state
securities laws.

      Section 7. Rule 144. As long as Patriot Associates owns Common Stock, if
the Corporation is required to file reports pursuant to Section 13(a) or 15(d)
of the Exchange Act, it will prepare and make publicly available in accordance
with Rule 144(c) promulgated under the Securities Act annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the

                                      -10-
<PAGE>

Exchange Act, as well as any other information required thereby, in the time
period that such filings would have been required to have been made under the
Exchange Act. The Corporation further covenants that it will take such further
action as Patriot Associates may reasonably request, all to the extent required
from time to time to enable such Person to sell shares of Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act. Upon the request of
Patriot Associates, the Corporation shall deliver to Patriot Associates a
written certification of a duly authorized officer as to whether it has complied
with such requirements.

      Section 8. Waiver. Any waiver by the Corporation or by Patriot Associates
of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach of the same or any other provision hereof.

      Section 9. Severability; Reformation. In case any one or more of the
provisions or parts of a provision contained in this Agreement shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement; and this Agreement shall, to the
fullest extent lawful, be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of a provision, had never been contained
herein, and such provision or part reformed so that it would be valid, legal and
enforceable to the maximum extent possible. Without limiting the foregoing, if
any provision (or part of provision) contained in this Agreement shall for any
reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting and reducing it, so as to
be enforceable to the fullest extent compatible with then existing applicable
law.

      Section 10. Survival of Obligations. The Corporation's and Patriot
Associates' obligations under this Agreement shall survive the termination of
this Agreement, regardless of the manner of such termination.

      Section 11. Amendments; Assignments. This Agreement may be amended,
modified or assigned in whole or in part, only by an instrument in writing
signed by both parties hereto.

      Section 12. Notices. Any notices or other communications required
hereunder shall be in writing and shall be deemed given when delivered in
person, or upon receipt of confirmation of facsimile or E-mail transmission, or
when mailed, by certified or registered first-class mail, postage prepaid,
return receipt requested, addressed, to such entity at their principal offices
identified on the first page of this Agreement; or to such other addresses as
either party shall have notified the others in accordance with the provisions of
this Section 12.

      Section 13. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original and both of which shall
be deemed a single agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

                                      -11-
<PAGE>

      Section 14. Entire Agreement.This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.

      Section 15. Benefits of the Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

      Section 16. Remedies. In the event of a breach by the Corporation or
Patriot Associates, of any of their obligations under this Agreement, Patriot
Associates or the Corporation, 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 Corporation and Patriot Associates 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.

      Section 17. Headings. The headings of this Agreement are for convenience
of reference only and shall not form part of, or affect the interpretation of,
this Agreement.

      Section 18. Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

      Section 19. Specific Enforcement; Governing Law; Consent to Jurisdiction.
The Corporation and Patriot Associates acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity. This Agreement shall be enforced, governed by and construed in
accordance with, the internal laws of the State of New York without regard to
the choice of law principles thereof. The parties hereto hereby agree that any
suit or proceeding arising directly and/or indirectly pursuant to or under this
instrument or the consummation of the transactions contemplated hereby, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any

                                      -12-
<PAGE>

such jurisdiction is not a convenient forum for any such suit or proceeding and
any defense or lack of in personam jurisdiction with respect thereto. In the
event of any such action or proceeding, the party prevailing therein shall be
entitled to payment from the other party hereto of its reasonable counsel fees
and disbursements in an amount judicially determined.

                            [Signature Pages Follow]

                                      -13-
<PAGE>

                          [Corporation Signature Page]

      IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer
to execute this Registration Rights Agreement as of the date first above
written.

                                              XENONICS HOLDINGS, INC.

                                             By: /s/ Richard J. Naughton
                                                --------------------------------
                                                Name: Richard J. Naughton
                                                Title:   Chief Executive Officer

                                      -14-
<PAGE>

                       [Patriot Associates Signature Page]

      IN WITNESS WHEREOF, the undersigned has caused its duly authorized officer
to execute this Registration Rights Agreement as of the date first above
written.

                                            PATRIOT ASSOCIATES LLC

                                            By: /s/ Michael Stern
                                                --------------------------------
                                                Name: Michael Stern
                                                Title:   Senior Managing Partner

                                            By: /s/ Bill White
                                                --------------------------------
                                                Name: Bill White
                                                Title:   Senior Partner

                                      -15-

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