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                                                                    EXHIBIT 10.3

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

                          COMMON STOCK PURCHASE WARRANT

No. W1

              To Purchase Shares of $.10 Par Value Common Stock of

                           ALLIED RESEARCH CORPORATION

     THIS CERTIFIES that, for value received, RIVERVIEW GROUP, LLC (the
"Purchaser") is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to 5:00 p.m. New York City time on June 28, 2006 (the "Termination Date"), but
not thereafter, to subscribe for and purchase from ALLIED RESEARCH CORPORATION,
a Delaware corporation (the "Company"), 15,000 shares of Common Stock of the
Company (the "Warrant Shares"). The "Exercise Price" is $28.75. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued in
connection with the Purchase Agreement dated June 28, 2002 (the "Agreement"),
and a Registration Rights Agreement dated June 28, 2002 (the "Registration
Rights Agreement"), each entered into between the Company and the Purchaser.

1.   Title of Warrant. Prior to the expiration hereof and subject to compliance
     with applicable laws, this Warrant and all rights hereunder are
     transferable, in whole or in respect of the right to purchase any part of
     the Warrant Shares, at the office or agency of the Company by the holder
     hereof in person or by duly authorized attorney, upon surrender of this
     Warrant together with (a) the Assignment Form annexed hereto properly
     endorsed, and (b) any other documentation reasonably necessary to satisfy
     the Company that such transfer is in compliance with all applicable
     securities laws.

2.   Authorization of Shares. The Company covenants that all shares of Common
     Stock which may be issued upon the exercise of rights represented by this
     Warrant will, upon exercise of the rights represented by this Warrant and
     payment of the Exercise Price as set forth herein will 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

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     of any transfer occurring contemporaneously with such issue or otherwise
     specified herein).

3.   Exercise of Warrant.

(a)  Exercise of the purchase rights represented by this Warrant may be made at
     any time or times, in whole or in part before 5:00 p.m. New York City time
     on the Termination Date, or such earlier date on which this Warrant may
     terminate as provided in paragraph 11 below, by the surrender on any
     business day of this Warrant and the Notice of Exercise annexed hereto duly
     completed and executed, at the principal 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 hereof at the address of such holder
     appearing on the books of the Company), together with delivery to the
     Company by such holder of all certifications or documentation reasonably
     necessary to establish, to the satisfaction of the Company, that any such
     exercise has been undertaken in compliance with all applicable federal and
     state securities laws, and upon payment of the full Exercise Price of the
     shares thereby purchased; whereupon the holder of this Warrant shall be
     entitled to receive a certificate for the number of shares of Common Stock
     so purchased. Certificates for shares purchased hereunder shall be
     delivered to the holder hereof within three (3) Trading Days after the date
     on which this Warrant shall have been exercised as aforesaid. Payment of
     the Exercise Price of the shares shall be by certified check or cashier's
     check or by wire transfer (of same day funds) to an account designated by
     the Company in an amount equal to the Exercise Price multiplied by the
     number of shares being purchased.

(b)  Alternatively, and only in the event the Warrant Shares are not covered by
     an effective registration statement and a current prospectus and such
     exercise is made after the Effectiveness Deadline (as defined in the
     Registration Rights Agreement), the Warrant holder may exercise this
     Warrant, in whole or in part in a "cashless" or "net-issue" exercise by
     delivering to the offices of the Company or any transfer agent for the
     Common Stock this Warrant, together with a Notice of Exercise specifying
     the number of Warrant Shares to be delivered to such Warrant holder
     ("Deliverable Shares") and the number of Warrant Shares with respect to
     which this Warrant is being surrendered in payment of the aggregate
     Exercise Price for the Deliverable Shares ("Surrendered Shares").

     The number of Deliverable Shares shall be calculated as follows:

<TABLE>
     <S>                                                  <C>
     # of Deliverable Shares = # of Surrendered Shares x Fair Market Value of Common Stock less Exercise Price
                                                         -----------------------------------------------------
                                                         Fair Market Value of Common Stock
</TABLE>

     "Fair Market Value" shall have the meaning specified in Section 12(c)
     below.

     In the event that the Warrant is not exercised in full, the number of
     Warrant Shares shall be reduced by the number of such Warrant Shares for
     which this Warrant is exercised and/or surrendered, and the Company, at its
     expense, shall within three (3) Trading Days issue and deliver to or upon
     the order of the Warrant holder a new Warrant of like tenor

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     in the name of Warrant holder or as Warrant holder (upon payment by Warrant
     holder of any applicable transfer taxes) may request, reflecting such
     adjusted Warrant Shares.

     All exercises will be deemed to occur as of the date of the Notice of
     Exercise, and certificates for shares of Common Stock purchased hereunder
     shall be delivered to the holder hereof within three (3) Trading Days after
     the date on which this Warrant shall have been exercised as aforesaid. The
     Warrant holder may withdraw its Notice of Exercise under Section 3(a) or
     3(b) at any time thereafter if the Company fails to timely deliver the
     applicable certificates to the Warrant holder as provided in this Warrant.

     The Warrant Holder shall not be required to physically surrender this
     Warrant to the Company unless this Warrant is being exercised for all of
     the remaining Warrant Shares for which it is exercisable. The Warrant
     Holder and the Company shall maintain records showing the number of Warrant
     Shares for which this Warrant has been exercised and the dates of such
     exercises or shall use such other method, reasonably satisfactory to the
     Warrant Holder and the Company, so as not to require physical surrender of
     this Warrant upon each such exercise. Notwithstanding the foregoing, if
     this Warrant is exercised as aforesaid, the Warrant Holder may not transfer
     this Warrant unless it first physically surrenders this Warrant to the
     Company, whereupon the Company will forthwith issue and deliver upon the
     order of the Warrant Holder a new Warrant of like tenor, registered as the
     Warrant Holder may request, representing in the aggregate the remaining
     number of Warrant Shares for which this Warrant may be exercised. The
     Warrant Holder and any assignee, by acceptance of this Warrant or a new
     Warrant, acknowledge and agree that, by reason of the provisions of this
     paragraph, following any partial exercise of this Warrant, the number of
     Warrant Shares for which this Warrant is exercisable may be less than the
     number of Warrant Shares set forth on the face hereof.

(c)  In lieu of delivering physical certificates representing the Common Stock
     issuable upon exercise, provided the Company's transfer agent is
     participating in the Depository Trust Company ("DTC") Fast Automated
     Securities Transfer ("FAST") program, upon request of the Warrant Holder,
     the Company shall use its best efforts to cause its transfer agent to
     electronically transmit the Common Stock issuable upon exercise to the
     Warrant Holder by crediting the account of Warrant Holder's prime broker
     with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.
     The time periods for delivery described in the immediately preceding
     paragraph shall apply to the electronic transmittals described herein.

     The term "Trading Day" means (x) if the Common Stock is listed on the New
     York Stock Exchange or the American Stock Exchange, a day on which there is
     trading on such stock exchange, or (y) if the Common Stock is not listed on
     either of such stock exchanges but sale prices of the Common Stock are
     reported on an automated quotation system, a day on which trading is
     reported on the principal automated quotation system on which sales of the
     Common Stock are reported, or (z) if the foregoing provisions are
     inapplicable, a day on which quotations are reported by National Quotation
     Bureau Incorporated.

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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.

5.   Charges, Taxes and Expenses. Issuance of certificates for shares of Common
     Stock upon the exercise of this Warrant shall be made without charge to the
     holder hereof 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 of this Warrant or in such name or names
     as may be directed by the holder of this Warrant; provided, however, that
     in the event certificates for shares of Common Stock are to be issued in a
     name other than the name of the holder of this Warrant, this Warrant when
     surrendered for exercise shall be accompanied by the Assignment Form
     attached hereto duly executed by the holder hereof; and provided further,
     that the Company shall not be required to pay any tax or taxes which may be
     payable in respect of any transfer involved in the issuance of any Warrant
     certificates or any certificates for the Warrant Shares other than the
     issuance of a Warrant Certificate to the Purchaser in connection with the
     Purchaser's surrender of a Warrant Certificate upon the exercise of less
     than all of the Warrants evidenced thereby, and the Company shall not be
     required to issue or deliver such certificates unless or until the person
     or persons requesting the issuance thereof shall have paid to the Company
     the amount of such tax or shall have established to the reasonable
     satisfaction of the Company that such tax has been paid.

6.   Closing of Books. The Company will at no time close its shareholder books
     or records in any manner which interferes with the timely exercise of this
     Warrant.

7.   No Rights as Shareholder until Exercise. Subject to Section 12 of this
     Warrant and the provisions of any other written agreement between the
     Company and the Purchaser, the Purchaser shall not be entitled to vote or
     receive dividends or be deemed the holder of Warrant Shares 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 Purchaser, 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 the Warrant shall have
     been exercised as provided herein. However, at the time of the exercise of
     this Warrant pursuant to Section 3 hereof, the Warrant Shares so purchased
     hereunder shall be deemed to be issued to such holder as the record owner
     of such shares as of the close of business on the date on which this
     Warrant shall have been exercised.

8.   Assignment and Transfer of Warrant. This Warrant may be assigned in whole
     or in part by the surrender of this Warrant and the Assignment 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 hereof at the address of such holder

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     appearing on the books of the Company); provided, however, that this
     Warrant may not be sold or otherwise transferred by the Holder to any
     person who (i) has been convicted of a felony under applicable U.S. law in
     a court of competent jurisdiction, and such conviction has not been vacated
     or overturned, (ii) has been barred by a federal or state regulatory agency
     from serving as an officer or director of a public company, (iii) is a
     person who has pleaded guilty or nolo contendre to a felony, (iv) is a
     person found to have made a false statement or omissions, or has been found
     to have been dishonest, unfair or unethical, (v) is found to be in
     violation of bank or investment-related statutes or regulations, (vi) is
     found to have been a cause of a bank or investment-related business to have
     its authorization to do business denied, suspended, revoked or restricted,
     (vii) had an order entered against them in connection with an investment or
     securities related activity, (viii) is a person who was denied, suspended
     or had a registration or license revoked or was otherwise prevented from
     associating with an investment or securities related business, or whose
     activities were restricted via a disciplinary action, (ix) is a person who
     was ever discharged or permitted to resign because of being accused of
     violating investment or securities related statutes, regulations, rules or
     industry standards of conduct, or (x) is any person who within the past ten
     (10) years has served as an officer or director of a public company that
     filed for bankruptcy protection or sought protection from creditors through
     other means, or (xi) is any person who would have to make the same
     disclosures based upon a foreign court or government's or regulatory bodies
     findings. Provided, further, that this Warrant may not be resold or
     otherwise transferred except (i) in a transaction registered under the
     Securities Act of 1933, as amended (the "Securities Act"), or (ii) in a
     transaction pursuant to an exemption, if available, from registration under
     the Securities Act and whereby, if requested by the Company, an opinion of
     counsel is obtained by the holder of this Warrant to the effect that the
     transaction is so exempt. Notwithstanding the above, the Company shall have
     a right of first refusal with respect to any proposed sale by the Holder of
     this Warrant and shall have the right to match the terms of any bona fide
     offer with respect thereto received from a third party. To effect the
     foregoing, the Holder shall provide written notice to the Company of the
     terms of such proposed sale promptly following receipt of such offer. The
     Company may then exercise its right to match by issuing a written
     counter-notice of its intention to do so within three (3) Trading Days of
     receipt of the notice from the Holder, and the consummation of such
     counteroffer shall occur on the tenth (10th) Trading Day after the
     Company's exercise of its right to match. Any material changes or
     modifications to the proposed transaction shall be reflected to the Company
     pursuant to the procedures of this Section 8. The foregoing right of first
     refusal shall not apply to any assignment of this Warrant by the Holder to
     any affiliate of such Holder or if the Company is or has at any time been
     in "Default" under the terms of the Debentures (as defined in the
     Agreement).

9.   Loss, Theft, Destruction or Mutilation of Warrant. In the event that any
     holder notifies the Company that its Warrant has been mutilated, lost,
     stolen or destroyed, then a replacement Warrant identical in all respects
     to the original Warrant (except for any registration number and any
     adjustments to the Exercise Price or the number of Warrant Shares issuable
     thereunder if different than that shown on the original Warrant) shall be

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     delivered to the holder by the Company within three (3) Trading Days;
     provided, that in case of loss, theft or destruction, the holder has
     provided the Company with an agreement reasonably satisfactory to the
     Company to indemnify the Company against any loss in connection with such
     lost, stolen or destroyed Warrant.

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
     legal holiday.

11.  Effect of Certain Events. If at any time while this Warrant or any portion
     hereof is outstanding and unexpired there shall be (i) a sale or conveyance
     of all or substantially all of the Company's assets or (ii) a transaction
     (by merger or otherwise) in which more than 50% of the voting power of the
     Company is disposed of (collectively, a "Sale or Merger Transaction"), in
     which the consideration to be received by the Company or its shareholders
     consists solely of cash, and in case the Company shall at any time effect a
     Sale or Merger Transaction in which the consideration to be received by the
     Company or its shareholders consists in part of consideration other than
     cash, the holder of this Warrant shall have the right thereafter to
     purchase, by exercise of this Warrant and payment of the aggregate Exercise
     Price in effect immediately prior to such action, the kind and amount of
     shares and other securities and property which it would have owned or have
     been entitled to receive after the happening of such transaction had this
     Warrant been exercised immediately prior thereto, subject to further
     adjustment as provided in Section 12 below. Notwithstanding the above, a
     Sale or Merger Transaction shall not be deemed to occur in the event the
     Company is the acquiring entity in connection with an acquisition by the
     Company.

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

     The number of and kind of securities purchasable upon exercise of this
     Warrant and the Exercise Price shall be subject to adjustment from time to
     time as follows:

(a)  Subdivisions, Combinations and other Issuances. If the Company shall at any
     time after the date hereof but prior to the expiration of this Warrant
     subdivide its outstanding securities as to which purchase rights under this
     Warrant exist, by split-up, spin-off or otherwise, or combine its
     outstanding securities as to which purchase rights under this Warrant
     exist, the number of Warrant Shares as to which this Warrant is exercisable
     as of the date of such subdivision, split-up, spin-off or combination shall
     forthwith be proportionately increased in the case of a subdivision, or
     proportionately decreased in the case of a combination. Appropriate
     proportional adjustments (decrease in the case of subdivision, increase in
     the case of combination) shall also be made to the Exercise Price payable
     per share, so that the aggregate Exercise Price payable for the total
     number of Warrant Shares purchasable under this Warrant as of such date
     shall remain the same as it would have been before such subdivision or
     combination.

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(b)  Stock Dividend. If at any time after the date hereof the Company declares a
     dividend or other distribution on Common Stock payable in Common Stock or
     other securities or rights convertible into Common Stock ("Common Stock
     Equivalents") without payment of any consideration by holders of Common
     Stock for the additional shares of Common Stock or the Common Stock
     Equivalents (including the additional shares of Common Stock issuable upon
     exercise or conversion thereof), then the number of shares of Common Stock
     for which this Warrant may be exercised shall be increased as of the record
     date (or the date of such dividend distribution if no record date is set)
     for determining which holders of Common Stock shall be entitled to receive
     such dividends, in proportion to the increase in the number of outstanding
     shares (and shares of Common Stock issuable upon conversion of all such
     securities convertible into Common Stock) of Common Stock as a result of
     such dividend, and the Exercise Price shall be proportionately reduced so
     that the aggregate Exercise Price for all the Warrant Shares issuable
     hereunder immediately after the record date (or on the date of such
     distribution, if applicable), for such dividend shall equal the aggregate
     Exercise Price so payable immediately before such record date (or on the
     date of such distribution, if applicable).

(c)  Other Distributions. If at any time after the date hereof the Company
     distributes to holders of its Common Stock, other than as part of its
     dissolution, liquidation or the winding up of its affairs, any cash, shares
     of its capital stock, any evidence of indebtedness or any of its assets
     (other than Common Stock), then the number of Warrant Shares for which this
     Warrant is exercisable shall be increased to equal: (i) the number of
     Warrant Shares for which this Warrant is exercisable immediately prior to
     such event, (ii) multiplied by a fraction, (A) the numerator of which shall
     be the Fair Market Value (as defined below) per share of Common Stock on
     the record date for the dividend or distribution, and (B) the denominator
     of which shall be the Fair Market Value price per share of Common Stock on
     the record date for the dividend or distribution minus the amount allocable
     to one share of Common Stock of the value (as jointly determined in good
     faith by the Board of Directors of the Company and the Warrant holder) of
     any and all such evidences of indebtedness, shares of capital stock, other
     securities or property, so distributed. For purposes of this Warrant, "Fair
     Market Value" shall equal the 10 Trading Day average closing trading price
     of the Common Stock on the Principal Market for the 10 Trading Days
     preceding the date of determination or, if the Common Stock is not listed
     or admitted to trading on any Principal Market, the average of the closing
     bid and asked prices on the over-the-counter market as furnished by any New
     York Stock Exchange member firm reasonably selected from time to time by
     the Company for that purpose and reasonably acceptable to the Holder, or,
     if the Common Stock is not listed or admitted to trading on the Principal
     Market or traded over-the-counter and the average price cannot be
     determined as contemplated above, the Fair Market Value of the Common Stock
     shall be as reasonably determined in good faith by the Company's Board of
     Directors with the concurrence of the Holder. The Exercise Price shall be
     reduced to equal: (i) the Exercise Price in effect immediately before the
     occurrence of any event (ii) multiplied by a fraction, (A) the numerator of
     which is the number of Warrant Shares for which this Warrant is exercisable
     immediately before the adjustment, and (B) the

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     denominator of which is the number of Warrant Shares for which this Warrant
     is exercisable immediately after the adjustment.

(d)  Merger, etc. If at any time after the date hereof there shall be a merger
     or consolidation of the Company with or into or a transfer of all or
     substantially all of the assets of the Company to another entity, then the
     Warrant Holder shall be entitled to receive upon or after such transfer,
     merger or consolidation becoming effective, and upon payment of the
     Exercise Price then in effect, the number of shares or other securities or
     property of the Company or of the successor corporation resulting from such
     merger or consolidation, which would have been received by Warrant Holder
     for the shares of stock subject to this Warrant had this Warrant been
     exercised just prior to such transfer, merger or consolidation becoming
     effective or to the applicable record date thereof, as the case may be. The
     Company will not merge or consolidate with or into any other corporation,
     or sell or otherwise transfer its property, assets and business
     substantially as an entirety to another corporation, unless the corporation
     resulting from such merger or consolidation (if not the Company), or such
     transferee corporation, as the case may be, shall expressly assume in
     writing the due and punctual performance and observance of each and every
     covenant and condition of this Warrant to be performed and observed by the
     Company.

(e)  Reclassification, etc. If at any time after the date hereof there shall be
     a reorganization or reclassification 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, then the Warrant Holder 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 or other securities or property resulting from
     such reorganization or reclassification, which would have been received by
     the Warrant Holder for the shares of stock subject to this Warrant had this
     Warrant at such time been exercised.

(f)  Exercise Price Adjustment. In the event that the Company issues or sells
     any Common Stock or securities which are convertible into or exchangeable
     for its Common Stock or any convertible securities, or any warrants or
     other rights to subscribe for or to purchase or any options for the
     purchase of its Common Stock or any such convertible securities (other than
     (i) securities issued in connection with a strategic partnership,
     acquisition, merger or joint venture of or by the Company with any person
     in the same, related or complementary business as the Company or any vendor
     or customer of the Company, entered into in each such case, with the intent
     to further the business of the Company and not for the primary purpose of
     providing financing, (ii) shares or options issued or which may be issued
     pursuant to the Company's current or future employee or director option
     plans, (iii) shares issued upon exercise of options, warrants or rights
     outstanding on the date of the Agreement and listed in the Company's most
     recent periodic report filed under the Exchange Act or (iv) warrants issued
     by the Company in connection with non-convertible senior or subordinated
     indebtedness, up to a maximum number of warrant shares in the aggregate
     equal to five percent (5%) of the number of outstanding shares of Common
     Stock on the date of issuance of this Warrant) at an effective issue price
     per share which is less than the Conversion Price (as defined in the
     Debentures issued pursuant to the Agreement) then in effect, then the
     Exercise Price in effect immediately prior to such issue or sale shall be
     reduced effective

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     concurrently with such issue or sale to an amount determined by multiplying
     the Exercise Price then in effect by a fraction, (x) the numerator of which
     shall be the sum of (1) the number of shares of Common Stock outstanding
     immediately prior to such issue or sale, plus (2) the number of shares of
     Common Stock which the aggregate consideration received by the Company for
     such additional shares would purchase at such Exercise Price then in
     effect; and (y) the denominator of which shall be the number of shares of
     Common Stock of the Company outstanding immediately after such issue or
     sale.

     For the purposes of the foregoing adjustment, in the case of the issuance
     of any convertible securities, warrants, options or other rights to
     subscribe for or to purchase or exchange for, shares of Common Stock
     ("Convertible Securities"), the maximum number of shares of Common Stock
     issuable upon exercise, exchange or conversion of such Convertible
     Securities shall be deemed to be outstanding, provided that no further
     adjustment shall be made upon the actual issuance of Common Stock upon
     exercise, exchange or conversion of such Convertible Securities.

     The number of shares which may be purchased hereunder shall be increased
     proportionately to any reduction in Exercise Price pursuant to this
     paragraph 12(f), so that after such adjustments the aggregate Exercise
     Price payable hereunder for the increased number of shares shall be the
     same as the aggregate Exercise Price in effect just prior to such
     adjustments.

13.  Voluntary Adjustment by the Company. The Company may at its option, at any
     time during the term of this Warrant, reduce but not increase the then
     current Exercise Price to any amount and for any period of time deemed
     appropriate by the Board of Directors of the Company. In such event, the
     number of Warrant Shares shall be increased proportionately such that the
     product of the adjusted Exercise Price and the number of Warrant Shares
     shall equal such product prior to the adjustment of the Exercise Price.

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, the Company shall promptly mail
     to the holder of this Warrant a notice setting forth 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 after such
     adjustment and setting forth a brief statement of the facts requiring such
     adjustment.

15.  Authorized Shares. The Company covenants that during the period the Warrant
     is outstanding and exercisable, 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 American

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     Stock Exchange or any domestic securities exchange or trading market upon
     which the Common Stock may be listed or quoted.

16.  9.9% Limitation. Notwithstanding anything to the contrary contained herein,
     the number of shares of Common Stock that may be acquired by the Purchaser
     upon exercise pursuant to the terms hereof shall not exceed a number that,
     when added to the total number of shares of Common Stock deemed
     beneficially owned by such holder (other than by virtue of the ownership of
     securities or rights to acquire securities (including the Warrant) that
     have limitations on the Purchaser's right to convert, exercise or purchase
     similar to the limitation set forth herein), together with all shares of
     Common Stock deemed beneficially owned (other than by virtue of the
     ownership of securities or rights to acquire securities (including the
     Warrant) that have limitations on the right to convert, exercise or
     purchase similar to the limitation set forth herein) by the holder's
     "affiliates" (as defined Rule 144 of the Securities Act) ("Aggregation
     Parties") that would be aggregated for purposes of determining whether a
     group under Section 13(d) of the Exchange Act exists, would exceed 9.99% of
     the total issued and outstanding shares of the Company's Common Stock (the
     "Restricted Ownership Percentage"). Each Holder shall have the right (w) at
     any time and from time to time to reduce its Restricted Ownership
     Percentage immediately upon notice to the Company and (x) at any time and
     from time to time, to increase its Restricted Ownership Percentage
     immediately in the event of the announcement as pending or planned of an
     event of:

     (i)   any consolidation or merger of the Company with or into any other
           corporation or other entity or person (whether or not the Company is
           the surviving corporation), or any other corporate reorganization or
           transaction or series of related transactions in which in excess of
           50% of the Company's voting power is transferred through a merger,
           consolidation, tender offer or similar transaction,

     (ii)  any person (as defined in Section 13(d) of the Exchange Act),
           together with its affiliates and associates (as such terms are
           defined in Rule 405 under the Securities Act), beneficially owns or
           is deemed to beneficially own (as described in Rule 13d-3 under the
           Exchange Act without regard to the 60-day exercise period) in excess
           of 50% of the Company's voting power,

     (iii) there is a replacement of more than one-half of the members of the
           Company's Board of Directors which is not approved by those
           individuals who are members of the Company's Board of Directors on
           the date thereof, in one or a series of related transactions, or

     (iv)  a sale or transfer of all or substantially all of the assets of the
           Company, determined on a consolidated basis.

     The Company's obligation to issue shares of Common Stock which would exceed
     such limits referred to in this Section 16 shall be suspended to the extent
     necessary until such time, if any, as shares of Common Stock may be issued
     in compliance with such restrictions.

                                       10

<PAGE>

17.  Compliance with Securities Laws.

(a)  The holder hereof acknowledges that the Warrant Shares acquired upon the
     exercise of this Warrant, if not registered (or if no exemption from
     registration exists), will have restrictions upon resale imposed by state
     and federal securities laws. Each certificate representing the Warrant
     Shares issued to the Holder upon exercise (if not registered or if no
     exemption from registration exists) will bear the following legend:

     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF 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, BASED ON AN OPINION LETTER OF COUNSEL
     SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND
     EXCHANGE COMMISSION.

(b)  Without limiting the Purchaser's right to transfer, assign or otherwise
     convey the Warrant or Warrant Shares in compliance with all applicable
     securities laws, the Purchaser, by acceptance hereof, acknowledges that
     this Warrant and the Warrant Shares to be issued upon exercise hereof are
     being acquired solely for the Purchaser's own account and not as a nominee
     for any other party, and that the Purchaser will not offer, sell or
     otherwise dispose of this Warrant or any Warrant Shares to be issued upon
     exercise hereof except under circumstances that will not result in a
     violation of applicable federal and state securities laws.

(c)  Neither this Warrant nor any Share of Common Stock issued upon exercise of
     this Warrant may be offered for sale or sold, or otherwise transferred or
     sold in any transaction which would constitute a sale thereof within the
     meaning of the Securities Act, unless (i) such security has been registered
     for sale under the Securities Act and registered or qualified under
     applicable state securities laws relating to the offer an sale of
     securities, or (ii) exemptions from the registration requirements of the
     Securities Act and the registration or qualification requirements of all
     such state securities laws are available and the Company shall have
     received an opinion of counsel that the proposed sale or other disposition
     of such securities may be effected without registration under the
     Securities Act.

18.  Miscellaneous.

(a)  Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
     WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL

                                       11

<PAGE>

     RESPECTS AS IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE
     HEREOF. THIS WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE
     COMPANY. THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
     GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, EXCEPT FOR MATTERS ARISING
     UNDER THE SECURITIES ACT, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
     LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE U.S.
     DISTRICT COURT SITTING IN THE STATE OF DELAWARE IN CONNECTION WITH ANY
     DISPUTE ARISING UNDER THIS WARRANT AND HEREBY WAIVES, TO THE MAXIMUM EXTENT
     PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION BASED ON FORUM NON
     CONVENIENS, TO THE BRINGING OF ANY SUCH PROCEEDING IN SUCH JURISDICTION.
     EACH PARTY HEREBY AGREES THAT IF THE OTHER PARTY TO THIS WARRANT OBTAINS A
     JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY WHICH OBTAINED SUCH
     JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN THE COURTS OF ANY COUNTRY
     HAVING JURISDICTION OVER THE PARTY AGAINST WHOM SUCH JUDGMENT WAS OBTAINED,
     AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE TO IT UNDER LOCAL LAW
     AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT. EACH PARTY TO THIS
     WARRANT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH
     PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
     MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS IN ACCORDANCE WITH
     SECTION 18(C). NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
     PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY WAIVES ITS RIGHT
     TO A TRIAL BY JURY.

(b)  Modification and Waiver. This Warrant and any provisions hereof may be
     changed, waived, discharged or terminated only by an instrument in writing
     signed by the party against which enforcement of the same is sought. Any
     amendment effected in accordance with this paragraph shall be binding upon
     the Purchaser, each future holder of this Warrant and the Company. 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.

(c)  Notices. Any notice, request or other document required or permitted to be
     given or delivered to the Purchaser or future holders hereof or the Company
     shall be personally delivered or shall be sent by certified or registered
     mail, postage prepaid, to the Purchaser or each such holder at its address
     as shown on the books of the Company or to the Company at the address set
     forth in the Agreement. All notices under this Warrant shall be deemed to
     have been given when received.

     A party may from time to time change the address to which notices to it are
     to be delivered or mailed hereunder by notice in accordance with the
     provisions of this Section 18(c).

                                       12

<PAGE>

(d)  Severability. Whenever 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 is held to be invalid, illegal or
     unenforceable in any respect under any applicable law or rule in any
     jurisdiction, such invalidity, illegality or unenforceability shall not
     affect the validity, legality or enforceability of any other provision of
     this Warrant in such jurisdiction or affect the validity, legality or
     enforceability of any provision in any other jurisdiction, but this Warrant
     shall be reformed, construed and enforced in such jurisdiction as if such
     invalid, illegal or unenforceable provision had never been contained
     herein.

(e)  No Impairment. The Company will not, by amendment of its Charter 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 action as may be necessary or
     appropriate in order to protect the rights of the Warrant Holder against
     impairment. Without limiting the generality of the foregoing, the Company
     (a) will not increase the par value of any Warrant Shares above the amount
     payable therefore on such exercise, and (b) will take all such action as
     may be reasonably necessary or appropriate in order that the Company may
     validly and legally issue fully paid and nonassessable Warrant Shares on
     the exercise of this Warrant.

                                       13

<PAGE>

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

Dated: June 28, 2002

                                            ALLIED RESEARCH CORPORATION

                                            By: ______________________________
                                                Name:
                                                Title:
Agreed and Accepted
this 28th day of June, 2002

RIVERVIEW GROUP, LLC

By: ____________________________
    Name:
    Title:

                                       14

<PAGE>

                               NOTICE OF EXERCISE

To:  ALLIED RESEARCH CORPORATION

(1)  The undersigned hereby elects:

     (A) to purchase ________ shares of Common Stock of Allied Research
Corporation pursuant to the terms of the attached Warrant, and tenders herewith
payment of the Exercise Price in full, together with all applicable transfer
taxes, if any.

     (B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder, ______ shares of Common Stock, and herewith makes payment therefore
with _______ Surrendered Shares.

(2)  Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                           _______________________________
                           (Name)

                           _______________________________
                           (Address)
                           _______________________________

(3)  Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:

                           Other Name: ___________________

                                                 _______________________________
                                                 (Name)

_____________________________                    _______________________________
(Date)                                           (Signature)
                                                 ______________________________
                                                 (Address)

<PAGE>

                                 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 of Allied Research Corporation
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 an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of June
28, 2002 between Allied Research Corporation, a Delaware corporation with
offices at 8000 Towers Crescent Drive, Suite 260, Vienna, Virginia 22182 (the
"Company") and Riverview Group LLC (the "Purchaser").

                              W I T N E S S E T H:

     WHEREAS, pursuant to that certain Purchase Agreement by and between the
Company and the Purchaser (the "Purchase Agreement"), the Company has agreed to
sell and issue to the Purchaser, and the Purchaser has agreed to purchase from
the Company, an aggregate of $7.5 million principal amount of the Company's 8%
Convertible Debentures Series A (the "Debentures") on the terms and conditions
set forth therein;

     WHEREAS, pursuant to the Purchase Agreement, and subject to the terms and
conditions thereof, the Purchaser has the option to purchase, and the Company
has the option to sell, up to $3.75 million principal amount of the Company's 8%
Convertible Debentures Series B (the "Additional Debentures");

     WHEREAS, the Purchase Agreement contemplates that the Debentures and
Additional Debentures will be convertible into shares (the "Common Shares" and
"Additional Common Shares," respectively) of common stock, par value $.10, of
the Company ("Common Stock");

     WHEREAS, pursuant to the terms of, and in partial consideration for, the
Purchaser's agreement to enter into the Purchase Agreement, the Company has
agreed to issue warrants (the "Warrants") exercisable for shares of Common Stock
(the "Warrant Shares") in connection with the issuance of the Debentures;

     WHEREAS, pursuant to the terms of, and in partial consideration for, the
Purchaser's agreement to enter into the Purchase Agreement, the Company has
agreed to issue, with the Additional Debentures, warrants (the "Additional
Warrants") exercisable for shares of Common Stock (the "Additional Warrant
Shares,") in connection with the issuance of the Additional Debentures;

     WHEREAS, pursuant to the terms of, and in partial consideration for, the
Purchaser's agreement to enter into the Purchase Agreement, the Company has
agreed to provide the Purchaser with certain registration rights with respect to
the Common Shares, Additional Common Shares, Warrant Shares, Additional Warrant
Shares, and certain other rights and remedies with respect to the Debentures and
Additional Debentures as set forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in the Purchase Agreement and
this Agreement, the Company and the Purchasers agree as follows:

<PAGE>

     1. Certain Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement, the
Warrants or the Debentures. As used in this Agreement, the following terms shall
have the following respective meanings:

     "Closing" and "Closing Date" shall have the meanings ascribed to such terms
in the Purchase Agreement.

     "Conversion Price" shall have meaning ascribed to such term in Section 5(c)
of the Debenture.

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

     "Debenture Amount" shall mean the Outstanding Principal Amount of, the
accrued but unpaid interest on, and the accrued but unpaid Delay Payments on,
the Debentures.

     "Delay Payment" shall mean a payment equal to 1% of the Debenture Amount
held by the relevant Holder. Delay Payments shall be pro-rated for periods of
less than 30 days.

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

     "Filing Deadline" shall have the meaning set forth in Section 2(a).

     "Holder" and "Holders" shall mean the Purchaser, and any transferee or
transferees of the Debentures, Warrants, Warrant Shares, or Common Shares or
Registrable Securities which have not been sold to the public to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.

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

     "Market Price for Shares of Common Stock" shall have the meaning ascribed
to such term in the Debentures.

     "Outstanding Principal Amount" shall have the meaning ascribed to such term
in the Debentures.

     "Premium Redemption Price" shall mean 110% of the Debenture Amount.

     "Put Notice" shall have the meaning set forth in Section 2(b)(i)(B).

     "Registrable Securities" shall mean: (a) the Common Shares and Warrant
Shares issued or issuable to each Holder or its permitted transferee or designee
upon conversion of the Debentures or exercise of the Warrants, as applicable, or
upon any stock split, stock dividend, recapitalization or similar event with
respect to such Common Shares or Warrant Shares; (b) any securities issued or
issuable to each Holder upon the conversion, exercise or exchange of any
Debentures, Warrants, Warrant Shares or Common Shares; and (c) any other
security of the

                                        2

<PAGE>

Company issued as a dividend or other distribution with respect to, conversion
or exchange of, or in replacement of, Registrable Securities.

     The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

     "Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, "Blue Sky"
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company).

     "Registration Statement" shall have the meaning set forth in Section 2(a)
herein.

     "Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.

     "Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.

     2.   Registration Requirements. The Company shall use its best efforts to
effect the registration of the Registrable Securities (including without
limitation the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable "Blue Sky" or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as would permit or facilitate the sale or distribution of all
the Registrable Securities in the manner (including manner of sale) reasonably
requested by the Holder and in all U.S. jurisdictions. Such best efforts by the
Company shall include the following:

          (a) The Company shall, as expeditiously as reasonably possible after
the Closing Date:

     (i)  But in any event within 240 days thereafter ("Filing Deadline"),
prepare and file a registration statement with the Commission on Form S-3 under
the Securities Act (or in the event that the Company is ineligible to use such
form, such other form as the Company is eligible to use under the Securities
Act) covering the Registrable Securities (such registration statement, including
any amendments or supplements thereto and prospectuses contained therein, is
referred to herein as the "Registration Statement"), which Registration
Statement, to the extent allowable under the Securities Act and the rules
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such number of additional shares of Common Stock as may
become issuable to prevent dilution resulting from stock splits, stock dividends
or similar events. The Registration Statement shall identify the Holders as
selling securityholders and not as underwriters. The number of shares of Common
Stock initially included in such Registration Statement shall be no less than
the sum of (A) 2.0 times the sum of the number of Common Shares that are as of
the date of this Agreement issuable upon conversion of the Debentures plus (B)
the number of Warrant Shares issuable upon exercise of the Warrants in each case
without

                                        3

<PAGE>

regard to any limitation on the Purchaser's ability to convert the Debentures or
Warrants. Thereafter, the Company shall use its best efforts to cause such
Registration Statement to be declared effective as soon as practicable, and in
any event prior to the earlier of (i) 300 days following the Closing Date or
(ii) five days after SEC clearance to request acceleration (the "Effectiveness
Deadline"). The Company shall provide Holders and their legal counsel reasonable
opportunity to review any such Registration Statement or amendment or supplement
thereto prior to filing.

     (ii)  Prepare and file with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
Registration Statement in accordance with the intended methods of disposition by
the seller thereof as set forth in the Registration Statement and notify the
Holders of the filing and effectiveness of such Registration Statement and any
amendments or supplements.

     (iii) After the registration, furnish to each Holder such numbers of copies
of a current prospectus conforming with the requirements of the Act, copies of
the Registration Statement, any amendment or supplement thereto and any
documents incorporated by reference therein and such other documents as such
Holder may reasonably require in order to facilitate the disposition of
Registrable Securities owned by such Holder.

     (iv)  Use its best efforts to register and qualify the securities covered
by such Registration Statement under such other securities or "Blue Sky" laws of
all U.S. jurisdictions; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.

     (v)   Notify each Holder immediately of the happening of any event as a
result of which the prospectus (including any supplements thereto or thereof and
any information incorporated or deemed to be incorporated by reference therein)
included in such Registration Statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and, pursuant to Section 2(f), use its
best efforts to promptly update and/or correct such prospectus.

     (vi)  Notify each Holder immediately of the issuance by the Commission or
any state securities commission or agency of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company shall use its best efforts to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible time.

     (vii) Permit a single firm of counsel, designated as Holders' counsel by
the Holders of a majority of the Registrable Securities included in the
Registration Statement, to review the Registration Statement and all amendments
and supplements thereto within a reasonable period of time prior to each filing,
and shall not file any document containing information regarding one

                                        4

<PAGE>

or more Holders if such counsel reasonably objects to the form or substance of
such information concerning such Holders.

     (viii) Use its best efforts to list the Registrable Securities covered by
such Registration Statement with all securities exchange(s) and/or markets on
which the Common Stock is then listed and prepare and file any required filings
with the National Association of Securities Dealers, Inc. or any exchange or
market where the Common Stock is then traded.

     (ix)   If applicable, take all steps necessary to enable Holders to avail
themselves of the prospectus delivery mechanism set forth in Rule 153 (or
successor thereto) under the Act.

     (x)    File and cause to become effective additional Registration
Statements if the number of Registrable Securities at any time exceeds 85% of
the number of shares of Common Stock then registered in the existing
Registration Statements hereunder.

            (b)  Set forth below in this Section 2(b) are (I) events that may
arise that the Purchaser considers will interfere with the full enjoyment of its
rights under the Debentures, the Purchase Agreement and this Agreement (the
"Interfering Events"), and (II) certain remedies applicable in each of these
events.

            Paragraphs (i) through (iv) of this Section 2(b) describe the
            Interfering Events, provide a remedy to the Holders if an
            Interfering Event occurs and provide that the Holders may require
            that the Company redeem outstanding Debentures, Warrants, or
            Registrable Securities at a specified price if certain Interfering
            Events are not timely cured.

            Paragraph (v) provides, inter alia, that each Holder shall have the
            option as to whether it would like to receive any payment required
            as a remedy in the case of certain of the Interfering Events in cash
            or shares of Common Stock.

            Paragraph (vi) provides, inter alia, that if payments required as
            the remedy in the case of certain of the Interfering Events are not
            paid when due, the Company may be required by the Holders to redeem
            outstanding Debentures, Warrants, or Registrable Securities at a
            specified price.

            Paragraph (viii) provides, inter alia, that the Holders have the
            right to specific performance.

            The preceding paragraphs in this Section 2(b) are meant to serve
            only as an introduction to this Section 2(b), are for convenience
            only, and are not to be considered in applying, construing or
            interpreting this Section 2(b).

     (i)    Delay in Effectiveness of Registration Statement.

                 (A)  In the event that the Registration Statement has not been
            filed by the Filing Deadline or been declared effective by the
            Effectiveness Deadline, then the Company shall pay in cash or common
            stock, as provided in Section 2(b)(v), to each Holder a Delay
            Payment for each 30 day period (or portion thereof)

                                        5

<PAGE>

               thereafter until the earliest of (i) the date on which a Holder's
               Debentures have been redeemed pursuant to its delivery of a Put
               Notice (as defined below) (with respect to that Holder only),
               (ii) the first anniversary of the Closing Date, and (iii) the
               date on which the Registration Statement is declared effective,
               which Delay Payments shall not in the aggregate exceed the
               maximum percentage permitted by law.

                      (B) If the Registration Statement has not been declared
               effective within one (1) year of the Closing Date, then each
               Holder shall have the right to require the Company to redeem the
               Debentures in whole or in part at the Premium Redemption Price.
               Each Holder shall exercise such right by providing the Company
               with written notice thereof (the "Put Notice") no later than
               forty-five (45) calendar days following the first anniversary of
               the Closing Date, which such Put Notice shall include the amount
               of Debentures that the Holder seeks to redeem and a date at least
               ninety (90) days from the date thereof on which the Holder seeks
               the redemption to occur (the "Redemption Date"). Nothing herein
               shall be construed as precluding the Holder from exercising its
               conversion rights under the Debenture unless the Company redeems
               the Debenture and pays the Premium Redemption Price set forth
               above in full pursuant to Section 2(b)(i)(B). Delay Payments
               shall no longer accrue on Debentures after such Debentures have
               been redeemed by the Company pursuant hereto. In lieu of
               exercising the right to have its Debentures redeemed, a Holder
               may elect to have the Conversion Price applicable to its
               Debentures reduced by fifteen percent (15%) (subject to further
               adjustment in accordance with the terms of the Debentures), which
               election must be made during the forty-five calendar day period
               referred to above. In such event, upon request by the Holder, the
               Company shall issue to the Holder new Debentures reflecting the
               reduced Conversion Price.

       (ii)    No Listing; Premium Price Redemption for Delisting of Class of
               Shares.

                      In the event that (A) the Company fails, refuses or is
               unable to cause the Registrable Securities covered by the
               Registration Statement to be listed with the applicable Approved
               Markets and each other securities exchange and market on which
               the Common Stock is then traded at all times during the period
               ("Listing Period") commencing the earlier of the effective date
               of the Registration Statement or the one year anniversary
               following the Closing Date, and continuing thereafter for so long
               as any Debentures are outstanding (but not more than three years
               from the last Closing Date) or (B) shares of Common Stock of the
               Company are delisted from the applicable Approved Markets at any
               time following the Closing Date and prior to the earlier of (i)
               the time at which there are no longer any outstanding Debentures
               and (ii) the third (3rd) anniversary of the last Closing Date,
               and remain delisted for 5 consecutive business days, then at the
               option of each Holder and to the extent such Holder so elects,
               the Company shall on 2 business days notice redeem the Debentures
               held by such Holder, in whole or in part, at a redemption price
               equal to the Premium Redemption Price (as defined above);
               provided, however, that such Holder may revoke such request at
               any time prior to receipt of payment of such Premium Redemption
               Price.

                                        6

<PAGE>

       (iii) Blackout Periods. In the event any Holder is unable to sell
Registrable Securities under the Registration Statement for more than (A) seven
(7) consecutive days or (B) an aggregate of twenty (20) days in any 12 month
period ("Suspension Grace Period"), including without limitation by reason of a
suspension of trading of the Common Stock on the Approved Market, any suspension
or stop order with respect to the Registration Statement or the fact that an
event has occurred as a result of which the prospectus (including any
supplements thereto) included in such Registration Statement then in effect
includes an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, or the number of shares
of Common Stock covered by the Registration Statement is insufficient at such
time to make such sales (a "Blackout"), then a Holder shall have the right but
not the obligation to elect to have the Company redeem its Debentures at the
price equal to the Premium Redemption Price.

       (iv)  Conversion Deficiency; Premium Price Redemption for Conversion
Deficiency. In the event that the Company does not have a sufficient number of
Common Shares available to satisfy the Company's obligations to any Holder upon
receipt of a Conversion Notice (as defined in the Debenture) or is otherwise
unable or unwilling to issue such Common Shares in accordance with the terms of
the Debenture for any reason after receipt of a Conversion Notice, then: at any
time five days thereafter, at the request of any Holder pursuant to a redemption
notice, the Company promptly (1) shall purchase from such Holder, at a purchase
price equal to the Premium Redemption Price, the Debenture Amount of Debentures
equal to such Holder's pro rata share of the Deficiency (as such term is defined
below), if the failure to issue Common Shares results from the lack of a
sufficient number thereof and (2) shall purchase all (or such portion as such
Holder may elect) of such Holder's Debentures at such Premium Redemption Price
if the failure to issue Common Shares results from any other cause. The
"Deficiency" shall be equal to the Debenture Amount of Debentures that would not
be able to be converted for Common Shares, due to an insufficient number of
Common Shares available, if all the outstanding Debentures were submitted for
conversion at the Conversion Price set forth in the Debentures as of the date
such Deficiency is determined. Any request by a Holder pursuant to this
paragraph (iv)(B) shall be revocable by that Holder at any time prior to its
receipt of the Premium Redemption Price.

       (v)   Delay Payment and Put Terms; Status of Unpaid Delay Payments.

                 (A)  All Delay Payments (which payments shall be pro rata on a
             per diem basis for any period of less than 30 days) required to be
             made in connection with the above provisions shall be paid at any
             time upon demand, by the fifteenth (15th) day of each calendar
             month for the partial or full calendar month occurring prior to
             that date. Such Delay Payments shall be payable in cash or Common
             Stock, as determined by each Holder in its sole discretion. If the
             Holder elects to be paid in Common Stock, the Holder shall be
             entitled to that number of shares of Common Stock as shall equal to
             the amount of such Delay Payment multiplied by a fraction, the
             numerator of which is one and the denominator of which is equal to
             the average of the Market Price for Shares of Common Stock for the
             three (3) business days prior to, but not including, the date upon
             which such payments are due. Unless the Company shall receive
             written notice to the contrary from the respective Holder, the
             Delay Payments shall be paid in cash. Until paid as

                                        7

<PAGE>

              required in this Agreement, Delay Payments shall be deemed added
              to, and a part of, the Outstanding Principal Amount of a Holder's
              Debentures.

                 (B)  Any Debentures required to be redeemed under this Section
              2(b) shall be redeemed by no later than five business days from
              the delivery of the applicable redemption request. Until redeemed,
              the Holder shall be permitted to exercise conversion and any other
              rights under the Debentures. The Holder may withdraw a redemption
              request if the Company does not timely redeem the Debentures
              required to be redeemed.

       (vi)   Premium Price Redemption for Delay Payment Defaults. In the event
that the Company fails or refuses to pay any Delay Payment provided for in the
foregoing paragraphs (i) through (iv) when due, at any Holder's request and
option, the Company shall purchase all or a portion of the Debentures held by
such Holder (with Delay Payments accruing through the date of such purchase),
within five (5) days of such request, at a purchase price equal to the Premium
Redemption Price (as defined above); provided that such Holder may revoke such
request at any time prior to receipt of such payment of such purchase price.
Until such time as the Company purchases such Debentures at the request of such
Holder pursuant to the preceding sentence, at any Holder's request and option
the Company shall as to such Holder pay such amount by adding and including the
amount of such Delay Payment to the Outstanding Principal Amount of a Holder's
Debentures.

       (vii)  Cumulative Remedies. Each Delay Payment triggered by an
Interfering Event provided for in the foregoing paragraphs (ii) through (iv)
shall be in addition to each other Delay Payment triggered by another
Interfering Event; provided, however, that in no event shall the Company be
obligated to pay to any Holder Delay Payments in an aggregate amount greater
than one Delay Payment for any 30-day period (or portion thereof). The Delay
Payments and mandatory redemptions provided for above are in addition to and not
in lieu or limitation of any other rights the Holders may have at law, in equity
or under the terms of the Debentures, the Purchase Agreement, the Warrants or
this Agreement, including without limitation the right to specific performance.
Each Holder shall be entitled to specific performance of any and all obligations
of the Company in connection with the registration rights of the Holders
hereunder.

       (viii) Certain Acknowledgments. The Company acknowledges that any
failure, refusal or inability by the Company described in the foregoing
paragraphs (i) through (iv) and paragraph (vi) will cause the Holders to suffer
damages in an amount that will be difficult to ascertain, including without
limitation damages resulting from the loss of liquidity in the Registrable
Securities and the additional investment risk in holding the Registrable
Securities. Accordingly, the parties agree that it is appropriate to include in
this Agreement the foregoing provisions for Delay Payments and mandatory
redemptions in order to compensate the Holders for such damages. The parties
acknowledge and agree that the Delay Payments and mandatory redemptions set
forth above represent the parties' good faith effort to quantify such damages
and, as such, agree that the form and amount of such Delay Payments and
mandatory redemptions are reasonable and will not constitute a penalty. The
parties agree that the provisions of this clause (viii) consist of certain
acknowledgments and agreements concerning the remedies of the Holders set forth
in clauses (i) through (iv) and paragraph (vi) of this paragraph; nothing in
this

                                        8

<PAGE>

clause (viii) imposes any additional default payments and mandatory redemptions
for violations under this Agreement.

              (c) [Intentionally omitted.]

              (d) [Intentionally omitted.]

              (e) The Company shall make available for inspection, upon
reasonable written notice and during regular business hours, by the Holders,
representative(s) of all the Holders together, any underwriter participating in
any disposition pursuant to a Registration Statement, and any attorney or
accountant retained by any Holder or underwriter, all financial and other
records customary for purposes of the Holders' due diligence examination of the
Company and review of any Registration Statement, all SEC Documents (as defined
in the Purchase Agreement) filed subsequent to the Closing, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in connection with such
Registration Statement, provided that such parties agree to keep such
information confidential.

              (f) (i) The Company shall file a Registration Statement with
respect to any newly authorized and/or reserved shares, with respect to its
obligation to reserve or register Registrable Securities, within 30 days of any
corporate action authorizing or reserving same and shall file a Registration
Statement with respect to additional Registrable Securities within 30 days of
the occurrence of an event referred to in Section 2(a)(x) and shall use its best
efforts to cause, in either case, such Registration Statement to become
effective within seventy-five (75) days of such corporate action or such
occurrence, as the case may be. If the Holders become entitled, pursuant to an
event described in clause (iii) of the definition of Registrable Securities, to
receive any securities in respect of Registrable Securities that were already
included in a Registration Statement, subsequent to the date such Registration
Statement is declared effective, and the Company is unable under the securities
laws to add such securities to the then effective Registration Statement, the
Company shall promptly file, in accordance with the procedures set forth herein,
an additional Registration Statement with respect to such newly Registrable
Securities. The Company shall use its best efforts to (x) cause any such
additional Registration Statement, when filed, to become effective under the
Securities Act, and (y) keep such additional Registration Statement effective
during the period described in Section 5 below. All of the registration rights
and remedies under this Agreement shall apply to the registration of such newly
reserved shares and such new Registrable Securities, including without
limitation the provisions providing for Delay Payments contained herein.

       (ii)   If the Company has issued Additional Debentures and Additional
Warrants, then all of the provisions of this Registration Rights Agreement shall
apply to such Additional Debentures and Additional Warrants, and the underlying
Additional Common Shares and Additional Warrant Shares, mutatis mutandis, as if
they were Debentures, Warrants, Common Shares and Warrant Shares, with the
following changes:

                                        9

<PAGE>

              (A) References to the Closing and Closing Date shall refer to the
         closing and closing dates of the purchases of the Additional Debentures
         and Additional Warrants.

              (B) References to the Effectiveness Deadline shall refer to 300
         days from the second tranche (Additional Debentures/Additional
         Warrants) closing, for the second tranche.

              (C) References to the Filing Deadline for the registration
         statement for the second tranche shall refer to 210 days from the
         closing of the second tranche.

              (D) References in the Registration Rights Agreement to Debentures,
         Warrants, Common Shares and/or Warrant Shares, shall be deemed to refer
         respectively, to Additional Debentures, Additional Warrants, Additional
         Common Shares and Additional Warrant Shares.

     3.  Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company.

     4.  Registration on Form S-3; Other Forms. The Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act.

     5.  Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective until the two year anniversary of effectiveness
date of the Registration Statement.

     6.  Indemnification.

         (a)  The Company Indemnity. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any underwriter,
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 prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, 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 not
misleading, or any violation by the Company of the Securities Act or any state
securities law or in either case, any rule or regulation thereunder applicable
to the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each Holder, each of its officers, directors and partners, and each
person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses

                                       10

<PAGE>

reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to a Holder to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by such
Holder or the underwriter (if any) therefor and stated to be specifically for
use therein. The indemnity agreement contained in this Section 6(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent will not be unreasonably withheld).

       (b) Holder Indemnity. Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s), 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 statement
therein not misleading, and will reimburse the Company and such other Holder(s)
and their directors, officers and partners, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
in each case to the extent, but only to the extent, that such 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 written information furnished to the
Company by such Holder and stated to be specifically for use therein, and
provided that the maximum amount for which such Holder shall be liable under
this indemnity shall not exceed the net proceeds received by such Holder from
the sale of the Registrable Securities. The indemnity agreement contained in
this Section 6(b) shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities if such settlement is effected without
the consent of such Holder (which consent shall not be unreasonably withheld).

       (c) Procedure. Each party entitled to indemnification under this Section
6 (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 in any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably 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 Article except to the extent
that the Indemnifying Party is materially and adversely affected by such failure
to provide notice. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or

                                       11

<PAGE>

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. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.

     7. Contribution. If the indemnification provided for in Section 6 herein is
unavailable to the Indemnified Parties in respect of any losses, claims, damages
or liabilities referred to herein (other than by reason of the exceptions
provided therein), then each such Indemnifying Party, in lieu of indemnifying
each of such Indemnified Parties, shall contribute to the amount paid or payable
by each such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.

     In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Section 6(a) or 6(b) hereof had been available under the
circumstances.

     The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

     8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall

                                       12

<PAGE>

remain operative and in full force and effect regardless of (i) any termination
of this Agreement or the Purchase Agreement or any underwriting agreement, (ii)
any investigation made by or on behalf of any Indemnified Party or by or on
behalf of the Company, and (iii) the consummation of the sale or successive
resales of the Registrable Securities.

     9.  Information by Holders. Each Holder shall reasonably promptly furnish
to the Company such information regarding such Holder and the distribution
and/or sale proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement. The intended method
or methods of disposition and/or sale (Plan of Distribution) of such securities
as so provided by such Purchaser shall be included without alteration in the
Registration Statement covering the Registrable Securities and shall not be
changed without written consent of such Holder, except that such Holder may not
require an intended method of disposition which violates applicable securities
law.

     10. [Intentionally omitted.]

     11. Replacement Certificates. The certificate(s) representing the Common
Shares or Warrant Shares held by the Purchaser (or then Holder) may be exchanged
by the Purchaser (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Common Shares or Warrant Shares, as reasonably requested by the Purchaser (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.

     12. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Purchasers by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Debentures or Warrants, and all other rights granted to the
Purchasers by the Company hereunder may be transferred or assigned to any
transferee or assignee of any Debentures or Warrants; provided in each case
that: (i) any transfer of Debentures shall be for at least $500,000 in principal
amount thereof; and (ii) the Company must be given written notice by the such
Purchaser at the time of or within a reasonable time after said transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned; provided that the transferee or assignee of such
rights agrees in writing to be bound by the provisions of this Agreement.

     13. Miscellaneous.

         (a) Remedies. The Company and the Purchaser 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.

                                       13

<PAGE>

         (b) Jurisdiction. EACH OF THE COMPANY AND THE PURCHASER (I) HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT, THE DELAWARE STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING
IN THE STATE OF DELAWARE FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES
NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND THE PURCHASER CONSENTS
TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY
THEREOF 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 IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

         (c) Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing by facsimile, mail or personal delivery
and shall be effective upon actual receipt of such notice. The addresses for
such communications shall be:

         to the Company:

             Allied Research Corporation
             8000 Towers Crescent Drive
             Suite 260
             Vienna, Virginia  22182
             Attn:  Charles A. Hasper
             Phone: (703) 847-5268
             Fax:   (703) 847-5334

             with copies to:

             Baxter Baker Sidle Conn & Jones, P.A.
             Suntrust Building, Suite 2100
             120 East Baltimore Street
             Baltimore, MD  21202
             Attn:  James E. Baker, Jr., Esq.
             Tel:   (410) 230-3800
             Fax:   (410) 230-3801

         to the Purchaser:

             Riverview Group, LLC
             666 Fifth Avenue
             New York, New York  101013

                                       14

<PAGE>

              Attention: Dan Cardella
              Phone: (212) 841-4176
              Fax:   (212) 841-6302

              with copies to:

              Kleinberg, Kaplan, Wolff & Cohen, P.C.
              551 Fifth Avenue
              New York, New York 10176
              Attention: Stephen M. Schultz
              Phone: (212) 986-6000
              Fax:   (212) 986-8866

     Any party hereto may from time to time change its address for notices by
giving at least 10 days' written notice of such changed address to the other
parties hereto.

          (d) Indemnity. Each party shall indemnify each other party against any
loss, cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant or
agreement in this Agreement.

          (e) Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Purchaser contained herein shall survive the
Closing.

          (f) Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.

          (g) Publicity. The Company agrees that it will not disclose, and will
not include in any public announcement, the name of any Purchaser without its
express written approval, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company agrees to deliver a copy of any public announcement regarding the
matters covered by this Agreement or any agreement or document executed herewith
to each Purchaser and any public announcement including the name of an Purchaser
to such Purchaser, prior to the publication of such announcements.

          (h) No Piggyback on Registration. Neither the Company nor any of its
security holders (other than the holders of up to 400,000 shares of Common Stock
that the Company agreed to register for resale pursuant to its acquisitions) may
include securities of the Company in the Registration 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.

                                       15

<PAGE>

          (i) Entire Agreement. This Agreement, together with the Purchase
Agreement, the Debentures, the Warrants and the agreements and documents
contemplated hereby and thereby, contains the entire understanding and agreement
of the parties, and may not be modified or terminated except by a written
agreement signed by both parties.

          (j) Governing Law. THIS AGREEMENT AND THE VALIDITY AND PERFORMANCE OF
THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED
AND TO BE PERFORMED ENTIRELY IN SUCH STATE.

          (k) Severability. The parties acknowledge and agree that the
Purchasers are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Purchasers
hereunder are several and not joint, that no Purchaser shall have any
responsibility or liability for the representations, warrants, agreements, acts
or omissions of any other Purchaser, and that any rights granted to "Purchasers"
hereunder shall be enforceable by each Purchaser hereunder.

          (l) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.

          (m) Titles. The titles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.

          (n) 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 the Holders of at least a majority of the then issued or issuable
Registrable Securities; provided, however, that, for the purposes of this
sentence, Registrable Securities that are owned, directly or indirectly, by the
Company, or an affiliate of the Company are not deemed outstanding.

                             Signature page follows

                                       16

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                        ALLIED RESEARCH CORPORATION

                                        By:_____________________________________
                                               Name:
                                               Title:

                                        PURCHASER:

                                        RIVERVIEW GROUP LLC

                                        By:_____________________________________
                                               Name:
                                               Title:

                [Signature page to Registration Rights Agreement]

                                       17

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