Document:

Exhibit 4.3

                                 FORM OF WARRANT

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  EXERCISABLE  HAVE BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR
THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (B) AN OPINION
OF COUNSEL,  IN A GENERALLY  ACCEPTABLE FORM, THAT  REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD  PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING  THE  FOREGOING,  SUBJECT TO  COMPLIANCE  WITH  APPLICABLE
SECURITIES  LAWS, THE  SECURITIES MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
ANY  TRANSFEREE  OF THIS  WARRANT  SHOULD  CAREFULLY  REVIEW  THE  TERMS OF THIS
WARRANT, INCLUDING SECTION 7(D) HEREOF.

                             AEROBIC CREATIONS, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.: WA-_____
Initial Number of Shares of Common Stock: _______________________ after giving
effect to the Reverse Split (as defined below)
Date of Issuance:  November 8, 2006 ("ISSUANCE DATE")

            Aerobic  Creations,  Inc., a Delaware  corporation  (the "COMPANY"),
hereby  certifies  that,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby  acknowledged,  [BUYER],  the registered  holder
hereof or its  permitted  assigns (the  "HOLDER"),  is entitled,  subject to the
terms set forth below,  to purchase from the Company,  at the Exercise Price (as
defined below) then in effect, upon surrender of this Warrant to Purchase Common
Stock  (including  any  Warrants to Purchase  Common  Stock  issued in exchange,
transfer or replacement hereof, the "WARRANT"), at any time or times on or after
the Issuance  Date,  but not after 11:59 P.M.,  New York time, on the Expiration
Date (as defined  below)  fully paid  nonassessable  shares of Common  Stock (as
defined  below) (the  "WARRANT  SHARES").  Except as otherwise  defined  herein,
capitalized  terms in this Warrant  shall have the meanings set forth in Section
16. This Warrant is one of the Warrants to purchase Common Stock issued pursuant
to Section 1 of that certain Securities Purchase Agreement,  dated as of October
31, 2006 (the "SUBSCRIPTION  DATE"), by and among Maritime Logistics US Holdings
Inc., the Company  (pursuant to a Joinder Agreement dated as of the date hereof)
and the buyers (the  "BUYERS")  referred to therein  (the  "SECURITIES  PURCHASE
AGREEMENT").

<PAGE>

      1. EXERCISE OF WARRANT.

            (a)  MECHANICS  OF  EXERCISE.  Subject  to the terms and  conditions
hereof  (including,  without  limitation,  the  limitations set forth in Section
1(f)),  this  Warrant may be  exercised by the Holder on any day on or after the
Issuance Date, in whole or in part, by (i) delivery of a written notice,  in the
form  attached  hereto as EXHIBIT A (the  "EXERCISE  NOTICE"),  of the  Holder's
election to  exercise  this  Warrant  and  (ii)(A)  payment to the Company of an
amount  equal to the  applicable  Exercise  Price  multiplied  by the  number of
Warrant  Shares as to which this  Warrant  is being  exercised  (the  "AGGREGATE
EXERCISE  PRICE") in cash or by wire transfer of immediately  available funds or
(B) by notifying the Company that this Warrant is being exercised  pursuant to a
Cashless  Exercise (as defined in Section  1(d)),  if permitted  hereunder.  The
Holder shall not be required to deliver the original  Warrant in order to effect
an  exercise  hereunder.  Execution  and  delivery of the  Exercise  Notice with
respect to less than all of the  Warrant  Shares  shall have the same  effect as
cancellation  of the original  Warrant and issuance of a new Warrant  evidencing
the right to purchase the remaining  number of Warrant Shares.  On or before the
first  Business Day following the date on which the Company has received each of
the Exercise  Notice and the Aggregate  Exercise  Price (or notice of a Cashless
Exercise) (the  "EXERCISE  DELIVERY  DOCUMENTS"),  the Company shall transmit by
facsimile an  acknowledgment of confirmation of receipt of the Exercise Delivery
Documents to the Holder and the Company's transfer agent (the "TRANSFER AGENT").
On or before the third  Business Day following the date on which the Company has
received all of the Exercise Delivery Documents (the "SHARE DELIVERY DATE"), the
Company  shall (X) if legends are not required to be placed on  certificates  of
Common Stock pursuant to the Securities  Purchase  Agreement,  provided that the
Transfer Agent is  participating  in The Depository  Trust Company  ("DTC") Fast
Automated Securities Transfer Program, and provided, further, that the Holder is
eligible to receive shares  through DTC, upon the request of the Holder,  credit
such aggregate  number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder's or its designee's balance account with
DTC  through its  Deposit  Withdrawal  Agent  Commission  System,  or (Y) if the
Transfer  Agent  is not  participating  in the  DTC  Fast  Automated  Securities
Transfer  Program,  the Holder is not  eligible  therefor or the Holder does not
request such deposit,  issue and dispatch by overnight courier to the address as
specified in the Exercise  Notice,  a  certificate,  registered in the Company's
share  register  in the name of the  Holder or its  designee,  for the number of
shares  of  Common  Stock to which  the  Holder  is  entitled  pursuant  to such
exercise.  The Holder undertakes that whenever the Company credits securities as
set forth in clause (X) of the  preceding  sentence,  (A) upon receipt of notice
from the Company that the applicable registration statement is not, or no longer
is, effective in respect of the resale of such  securities,  the Holder will not
transfer such securities (other than (I) in connection with a transfer,  wherein
the Holder provides ShellCo with an opinion of counsel  reasonably  satisfactory
to ShellCo, in a generally acceptable form, to the effect that such transfer may
be made without registration under the applicable  requirements of the 1933 Act,
or (II) the Holder  provides  ShellCo with assurances  reasonably  acceptable to
ShellCo  that the  transfer  may be  effected  pursuant to Rule 144 or Rule 144)
until the Company notifies the Holder that the applicable registration statement
becomes  effective  (again),  and (B) the Holder  shall  indemnify  and hold the
Company  harmless  against any claim of securities laws violations in respect of
the transfer  (after the receipt of the first  notice from the Company  provided
for in clause (A) of this sentence but

                                      -2-
<PAGE>

prior to the  receipt of the second  notice  from the  Company  provided  for in
clause  (A) of this  sentence)  by the Holder of any  security  as to which such
credit  at DTC  has  been  effected.  Upon  delivery  of the  Exercise  Delivery
Documents or notification to the Company of a Cashless  Exercise  referred to in
Section  1(d),  the Holder  shall be deemed for all  corporate  purposes to have
become  the  holder of record of the  Warrant  Shares in  respect  of which this
Warrant has been  exercised,  irrespective  of the date such Warrant  Shares are
credited to the Holder's DTC account or the date of delivery of the certificates
evidencing such Warrant Shares, as the case may be. If this Warrant is submitted
in connection with any exercise  pursuant to this Section 1(a) and the number of
Warrant  Shares  represented  by this Warrant  submitted for exercise is greater
than the number of Warrant  Shares being  acquired  upon an  exercise,  then the
Company  shall as soon as  practicable  and in no event  later  than  three  (3)
Business Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 7(d))  representing  the right to purchase the number of
Warrant  Shares  purchasable  immediately  prior  to such  exercise  under  this
Warrant,  less the number of Warrant  Shares in respect of which this Warrant is
exercised.  No  fractional  shares  of Common  Stock  are to be issued  upon the
exercise of this Warrant,  but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest  whole  number.  The Company shall pay
any and all taxes, including without limitation, all documentary stamp, transfer
or similar taxes, or other  incidental  expense that may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

            (b) EXERCISE PRICE.  For purposes of this Warrant,  "EXERCISE PRICE"
means  $10.00,  per share of Common  Stock  after  giving  effect to the Reverse
Split, as adjusted as provided herein.

            (c) COMPANY'S FAILURE TO TIMELY DELIVER SECURITIES.  If within three
(3) Trading Days after the Company's  receipt of the facsimile  copy of Exercise
Delivery  Documents,  the Company fails to issue and deliver a  certificate  for
that  number  of shares of Common  Stock to which  the  Holder is  entitled  and
register such shares of Common Stock on the Company's  share  register or credit
the Holder's  balance  account with DTC for the number of shares of Common Stock
to which the Holder is entitled upon such Holder's exercise of this Warrant, and
if on or  after  such  Trading  Day the  Holder  purchases  (in an  open  market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock  issuable  upon such  exercise that
the Holder anticipated receiving from the Company (a "BUY-IN"), then the Company
shall,  within  three (3) Business  Days after the  Holder's  request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions,  if any) for the
shares of Common Stock so purchased  (the  "BUY-IN  PRICE"),  at which point the
Company's  obligation to deliver such  certificate  (and to issue such shares of
Common Stock) shall terminate,  or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates  representing  such shares of Common
Stock or if legends  are not  required  to be placed on  certificates  of Common
Stock pursuant to the Securities Purchase Agreement,  provided that the Transfer
Agent is participating in DTC Fast Automated  Securities Transfer Program,  upon
the request of the Holder,  credit such  aggregate  number of Warrant  Shares to
which the Holder is entitled  pursuant to such  exercise to the  Holder's or its
designee's  balance  account  with DTC  through  its  Deposit  Withdrawal  Agent
Commission system and pay cash to the Holder in an

                                      -3-
<PAGE>

amount  equal to the excess (if any) of the Buy-In Price over the product of (A)
such  number of shares of Common  Stock,  times (B) the Closing Bid Price on the
date of exercise.

            (d) CASHLESS EXERCISE.  Notwithstanding anything contained herein to
the contrary,  if during the period  beginning on the first  anniversary  of the
Issuance Date, and ending on the date after which the Registrable Securities (as
defined in the  Registration  Rights  Agreement)  are no longer  required  to be
registered for resale under the terms of the Registration  Rights  Agreement,  a
Registration  Statement  (as  defined  in  the  Registration  Rights  Agreement,
including a Demand Registration  Statement as defined in the Registration Rights
Agreement)  covering  the Warrant  Shares  that are the subject of the  Exercise
Notice (the  "UNAVAILABLE  WARRANT  SHARES") is not  available for the resale of
such  Unavailable  Warrant  Shares  (other than  pursuant to an Allowable  Grace
Period in the  Registration  Rights  Agreement)  or during  the  pendency  of an
amendment to the Registration Statement, provided that the Company is diligently
pursuing  the  effectiveness  thereof,  under  the  Securities  Act of 1933,  as
amended, then, for so long as such Registration Statement is not available,  the
Holder may, in its sole  discretion,  exercise  this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to be made to the
Company upon such exercise in payment of the  Aggregate  Exercise  Price,  elect
instead to receive upon such exercise the "Net Number" of shares of Common Stock
determined according to the following formula (a "CASHLESS EXERCISE"):

      Net Number = (A X B) - (A X C)
                   -----------------
                           B

            For purposes of the foregoing formula:

                  A= the total number of shares in respect of which this Warrant
                  is then being exercised.

                  B= the  Closing  Sale Price of the shares of Common  Stock (as
                  reported by Bloomberg) on the date  immediately  preceding the
                  date of the Exercise Notice.

                  C= the  Exercise  Price  then in  effect  for  the  applicable
                  Warrant Shares at the time of such exercise.

            (e) DISPUTES.  In the case of a dispute as to the  determination  of
the Exercise Price or the  arithmetic  calculation  of the Warrant  Shares,  the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

            (f) LIMITATIONS ON EXERCISES

                  (i)  BENEFICIAL  OWNERSHIP.  The Company  shall not effect the
      exercise  of this  Warrant,  and the  Holder  shall  not have the right to
      exercise  this  Warrant,  to the extent that after  giving  effect to such
      exercise,  such Person  (together  with such  Person's  affiliates)  would
      beneficially  own in excess of 9.99%  (the  "MAXIMUM  PERCENTAGE")  of the
      number of shares of Common  Stock  outstanding  immediately  after  giving
      effect to

                                      -4-
<PAGE>

      such  exercise.  For purposes of the  foregoing  sentence,  the  aggregate
      number of shares of Common Stock beneficially owned by such Person and its
      affiliates  shall  include the number of shares of Common  Stock  issuable
      upon exercise of this Warrant with respect to which the  determination  of
      such  sentence  is being made,  but shall  exclude the number of shares of
      Common Stock which would be issuable  upon (i) exercise of the  remaining,
      unexercised portion of this Warrant  beneficially owned by such Person and
      its  affiliates  and (ii)  exercise or conversion  of the  unexercised  or
      unconverted  portion of any other  securities of the Company  beneficially
      owned by such Person and its affiliates  (including,  without  limitation,
      any convertible note or convertible  preferred stock or warrants)  subject
      to a limitation  on  conversion  or exercise  analogous to the  limitation
      contained  herein.  Except as set  forth in the  preceding  sentence,  for
      purposes of this  paragraph,  beneficial  ownership shall be calculated in
      accordance  with Section 13(d) of the Securities  Exchange Act of 1934, as
      amended (the "EXCHANGE ACT"). For purposes of this Warrant, in determining
      the number of outstanding  shares of Common Stock,  the Holder may rely on
      the number of  outstanding  shares of Common Stock as reflected in (1) the
      Company's  most recent Form 10-K,  Form  10-KSB,  Form 10-Q,  Form 10-QSB,
      Current  Report on Form 8-K or other public filing with the Securities and
      Exchange  Commission,  as  the  case  may  be,  (2) a more  recent  public
      announcement  by the Company or (3) any other notice by the Company or the
      Transfer  Agent  setting  forth the  number  of  shares  of  Common  Stock
      outstanding.  For any reason at any time, upon the written or oral request
      of the Holder,  the Company  shall within one Business Day confirm  orally
      and in writing  to the  Holder  the number of shares of Common  Stock then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall be determined  after giving effect to the  conversion or exercise of
      securities of the Company,  including the SPA Securities and SPA Warrants,
      by the Holder and its affiliates since the date as of which such number of
      outstanding shares of Common Stock was reported.  By written notice to the
      Company, the Holder may from time to time increase or decrease the Maximum
      Percentage  to any other  percentage  not in excess of 9.99%  specified in
      such notice;  provided  that (i) any such  increase  will not be effective
      until the  sixty-first  (61st) day after such notice is  delivered  to the
      Company,  and (ii) any such  increase or  decrease  will apply only to the
      Holder and not to any other holder of SPA Warrants.

                  (ii)  PRINCIPAL  MARKET  REGULATION.  The Company shall not be
      obligated  to issue any  shares  of Common  Stock  upon  exercise  of this
      Warrant,  and the  Holder  of this  Warrant  shall  not have the  right to
      receive upon exercise of this Warrant any shares of Common  Stock,  if the
      issuance of such shares of Common Stock would exceed the aggregate  number
      of shares of Common Stock which the Company may issue upon exercise of the
      SPA   Securities  and  SPA  Warrants   without   breaching  the  Company's
      obligations  under the rules or  regulations  of the  applicable  Eligible
      Market (the number of shares which may be issued  without  violating  such
      rules and regulations,  the "EXCHANGE  CAP"),  except that such limitation
      shall not apply in the event that the Company (A) obtains the  approval of
      its  stockholders  as required by the  applicable  rules of such  Eligible
      Market for issuances of shares of Common Stock in excess of such amount or
      (B) obtains a written  opinion  from  outside  counsel to the Company that
      such  approval  is  not  required,   which  opinion  shall  be  reasonably
      satisfactory  to the Required  Holders.  Unless and until such approval or
      written  opinion is obtained,  no Buyer shall be issued in the  aggregate,
      upon exercise or otherwise of SPA Securities and SPA Warrants,

                                      -5-
<PAGE>

      shares  of Common  Stock in an  amount  greater  than the  product  of the
      Exchange Cap  multiplied by a fraction the numerator of which is the total
      number of shares of Common Stock  issuable to such Buyer upon the exercise
      of all such Buyer's SPA Securities and SPA Warrants and the denominator of
      which is the total  number of shares  of Common  Stock  issuable  upon the
      exercise of all the SPA  Securities  and SPA  Warrants (in respect of each
      Buyer, the "EXCHANGE CAP  Allocation").  In the event that any Buyer shall
      sell or  otherwise  transfer any of such  Buyer's SPA  Securities  and SPA
      Warrants,  the  transferee  shall be  allocated a pro rata portion of such
      Buyer's  Exchange  Cap  Allocation,  and  the  restrictions  of the  prior
      sentence shall apply to such transferee with respect to the portion of the
      Exchange Cap Allocation  allocated to such  transferee.  In the event that
      any holder shall  exercise all of such  holder's  SPA  Securities  and SPA
      Warrants into a number of shares of Common Stock which,  in the aggregate,
      is less than such holder's  Exchange Cap  Allocation,  then the difference
      between such holder's  Exchange Cap Allocation and the number of shares of
      Common  Stock  actually  issued to such holder  shall be  allocated to the
      respective  Exchange  Cap  Allocations  of the  remaining  holders  of SPA
      Securities  and SPA  Warrants  on a pro rata  basis in  proportion  to the
      shares of Common Stock underlying the SPA Securities and SPA Warrants then
      held by each such holder.

            (g) INSUFFICIENT  AUTHORIZED SHARES. If from and after the effective
date of the Reverse  Split while any of the  Warrants  remain  outstanding,  the
Company does not have a sufficient number of authorized and unreserved shares of
Common Stock to satisfy its  obligation to reserve for issuance upon exercise of
the  Warrants  at least a number of shares  of Common  Stock  equal to 130% (the
"REQUIRED RESERVE AMOUNT") of the number of shares of Common Stock as shall from
time to time be necessary  to effect the  exercise of all of the  Warrants  then
outstanding (an "AUTHORIZED SHARE FAILURE"),  then the Company shall immediately
take all action necessary to increase the Company's  authorized shares of Common
Stock to an amount  sufficient  to allow the  Company  to reserve  the  Required
Reserve  Amount  for  the  Warrants  then  outstanding.   Without  limiting  the
generality of the foregoing  sentence,  as soon as practicable after the date of
the  occurrence  of an  Authorized  Share  Failure,  but in no event  later than
fifteen (15) days after the occurrence of such  Authorized  Share  Failure,  the
Company shall hold a meeting of its stockholders for the approval of an increase
in the number of  authorized  shares of Common Stock.  In  connection  with such
meeting,  the Company shall provide each  stockholder with a proxy statement and
shall  use its best  efforts  to  solicit  its  stockholders'  approval  of such
increase  in  authorized  shares  of  Common  Stock  and to cause  its  board of
directors to recommend to the stockholders that they approve such proposal.

            (h)  LISTING.  The  Company  shall  promptly  secure the  listing or
quotation  of the shares of Common  Stock  issuable  upon the  exercise  of this
Warrant  upon the  Principal  Market  (as  defined  in the  Securities  Purchase
Agreement)  or upon such other  Eligible  Market (as  defined in the  Securities
Purchase  Agreement),  if any, upon which shares of Common Stock are then listed
or quoted (subject to official notice of issuance upon exercise of this Warrant)
and shall  maintain,  so long as any other  shares of Common  Stock  shall be so
listed or quoted,  such  listing or quotation of all shares of Common Stock from
time to time issuable  upon the exercise of this Warrant;  and the Company shall
so list or apply for quotation on each Eligible Market,  and shall maintain such
listing or  quotation  of,  any other  shares of  capital  stock of the  Company
issuable

                                      -6-
<PAGE>

upon the exercise of this Warrant if and so long as any shares of the same class
shall be listed or quoted on such Eligible Market.

            (i) BLUE SKY LAWS.  The  Company  shall,  on or  before  the date of
issuance  of  any  Warrant  Shares,  take  such  actions  as the  Company  shall
reasonably  determine are necessary to qualify the Warrant Shares for, or obtain
exemption  for the Warrant  Shares for,  sale to the holder of this Warrant upon
the exercise hereof under applicable securities or "blue sky" laws of the states
of the United States,  and shall provide evidence of any such action so taken to
the holder of this  Warrant  prior to such  date;  PROVIDED,  HOWEVER,  that the
Company shall not be required in connection  therewith or as a condition thereto
to (i) qualify to do business in any  jurisdiction  where it would not otherwise
be required to qualify but for this Section 1(i), (ii) subject itself to general
taxation in any such  jurisdiction or (iii) file a general consent to service of
process in any such jurisdiction.

      2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price and the number of Warrant  Shares  shall be adjusted  from time to time as
follows:

            (a)  ADJUSTMENT  UPON  ISSUANCE  OF SHARES OF COMMON  STOCK.  If and
whenever on or after the  Subscription  Date, the Company issues or sells, or in
accordance  with this Section 2(a) is deemed to have issued or sold,  any shares
of Common Stock (including,  without limitation,  the issuance or sale of shares
of Common  Stock  owned or held by or for the  account  of the  Company  and the
issuance of any shares of Common  Stock,  Options or  Convertible  Securities in
exchange for any  non-convertible  security such as a non-convertible  note, but
excluding  shares of Excluded  Securities  and Common  Stock deemed to have been
issued or sold by the Company in connection with any Excluded  Securities) for a
consideration  per  share  (the "NEW  ISSUANCE  PRICE")  less than a price  (the
"APPLICABLE  PRICE") equal to the Exercise Price in effect  immediately prior to
such  issue or sale or  deemed  issuance  or sale  (the  foregoing  a  "DILUTIVE
ISSUANCE"),  then immediately after such Dilutive  Issuance,  the Exercise Price
then in effect  shall be  reduced to an amount  equal to the  product of (A) the
Exercise Price in effect immediately prior to such Dilutive Issuance and (B) the
quotient  determined  by  dividing  (1) the sum of (I) the  product  derived  by
multiplying  the Exercise  Price in effect  immediately  prior to such  Dilutive
Issuance and the number of shares of Common Stock Deemed Outstanding immediately
prior to such Dilutive Issuance plus (II) the consideration, if any, received by
the  Company  upon  such  Dilutive  Issuance,  by (2)  the  product  derived  by
multiplying (I) the Exercise Price in effect  immediately prior to such Dilutive
Issuance  by (II) the  number  of  shares of  Common  Stock  Deemed  Outstanding
immediately  after such  Dilutive  Issuance.  Upon each such  adjustment  of the
Exercise Price hereunder,  the number of Warrant Shares shall be adjusted to the
number of shares of Common Stock determined by multiplying the Exercise Price in
effect  immediately  prior to such  adjustment  by the number of Warrant  Shares
acquirable  upon exercise of this Warrant  immediately  prior to such adjustment
and  dividing  the product  thereof by the Exercise  Price  resulting  from such
adjustment.  For purposes of determining the adjusted  Exercise Price under this
Section 2(a), the following shall be applicable:

                  (i) ISSUANCE OF OPTIONS.  If the Company in any manner  grants
      any Options  whether or not  immediately  exercisable and the lowest price
      per  share  for which  one  share of  Common  Stock is  issuable  upon the
      exercise of any such Option or upon

                                      -7-
<PAGE>

      conversion,  exercise or exchange of any Convertible  Securities  issuable
      upon exercise of any such Option is less than the Applicable  Price,  then
      such share of Common Stock shall be deemed to be  outstanding  and to have
      been issued and sold by the Company at the time of the granting or sale of
      such  Option  for such  price per  share.  For  purposes  of this  Section
      2(a)(i),  the "lowest  price per share for which one share of Common Stock
      is  issuable  upon the  exercise of any such  Options or upon  conversion,
      exercise or exchange of any Convertible  Securities issuable upon exercise
      of any such  Option"  shall be equal to the sum of the  lowest  amounts of
      consideration   (if  any)  received  or  receivable   (but  excluding  any
      contingency  amounts)  by the  Company  with  respect  to any one share of
      Common Stock upon the granting or sale of the Option, upon exercise of the
      Option  and upon  conversion,  exercise  or  exchange  of any  Convertible
      Security issuable upon exercise of such Option.  No further  adjustment of
      the  Exercise  Price or number of  Warrant  Shares  shall be made upon the
      actual  issuance  of such  shares of Common  Stock or of such  Convertible
      Securities  upon the exercise of such Options or upon the actual  issuance
      of such shares of Common  Stock upon  conversion,  exercise or exchange of
      such Convertible Securities.

                  (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
      manner  issues  or  sells  any  Convertible   Securities  whether  or  not
      immediately convertible and the lowest price per share for which one share
      of Common  Stock is  issuable  upon the  conversion,  exercise or exchange
      thereof is less than the Applicable Price, then such share of Common Stock
      shall be deemed to be outstanding  and to have been issued and sold by the
      Company at the time of the issuance or sale of such Convertible Securities
      for such price per share. For the purposes of this Section  2(a)(ii),  the
      "lowest  price per share for which one share of Common  Stock is  issuable
      upon the conversion,  exercise or exchange  thereof" shall be equal to the
      sum of the lowest amounts of consideration (if any) received or receivable
      (but excluding any contingency amounts) by the Company with respect to one
      share  of  Common  Stock  upon  the  issuance  or sale of the  Convertible
      Security  and upon  conversion,  exercise or exchange of such  Convertible
      Security. No further adjustment of the Exercise Price or number of Warrant
      Shares  shall be made upon the actual  issuance  of such  shares of Common
      Stock  upon   conversion,   exercise  or  exchange  of  such   Convertible
      Securities,  and if any such issue or sale of such Convertible  Securities
      is made upon exercise of any Options for which  adjustment of this Warrant
      has been or is to be made  pursuant to other  provisions  of this  Section
      2(a),  no further  adjustment  of the Exercise  Price or number of Warrant
      Shares shall be made by reason of such issue or sale.

                  (iii)  CHANGE IN OPTION  PRICE OR RATE OF  CONVERSION.  If the
      purchase price provided for in any Options, the additional  consideration,
      if any,  payable upon the issue,  conversion,  exercise or exchange of any
      Convertible  Securities,  or the rate at which any Convertible  Securities
      are convertible  into or exercisable or exchangeable  for shares of Common
      Stock  increases  or decreases  at any time,  the  Exercise  Price and the
      number  of  Warrant  Shares  in  effect  at the time of such  increase  or
      decrease shall be adjusted to the Exercise Price and the number of Warrant
      Shares  which  would have been in effect at such time had such  Options or
      Convertible  Securities  provided for such increased or decreased purchase
      price, additional consideration or increased or decreased conversion rate,
      as the case may be, at the time  initially  granted,  issued or sold.  For
      purposes of this

                                      -8-
<PAGE>

      Section 2(a)(iii), if the terms of any Option or Convertible Security that
      was  outstanding  as of the date of issuance of this Warrant are increased
      or  decreased  in  the  manner  described  in  the  immediately  preceding
      sentence,  then such  Option or  Convertible  Security  and the  shares of
      Common Stock deemed issuable upon exercise, conversion or exchange thereof
      shall be  deemed to have been  issued as of the date of such  increase  or
      decrease.  No  adjustment  pursuant to this  Section 2(a) shall be made if
      such adjustment  would result in an increase of the Exercise Price then in
      effect or a decrease in the number of Warrant Shares.

                  (iv) CALCULATION OF CONSIDERATION RECEIVED. In case any Option
      is issued in connection with the issue or sale of other  securities of the
      Company,  together  comprising  one  integrated  transaction  in  which no
      specific  consideration  is  allocated  to  such  Options  by the  parties
      thereto,   the  Options   will  be  deemed  to  have  been  issued  for  a
      consideration of $0.01. For avoidance of doubt,  such $0.01  consideration
      will be added to any consideration received upon exercise of the Option to
      determine  the "lowest price per share for which one share of Common Stock
      issuable  upon  the  exercise  of any  such  Options  or upon  conversion,
      exercise or exchange of any Convertible  Securities issuable upon exercise
      of any such Option"  pursuant to clause (i) above. If any shares of Common
      Stock,  Options or Convertible  Securities are issued or sold or deemed to
      have been issued or sold for cash,  the  consideration  received  therefor
      will be deemed to be the net amount received by the Company  therefor.  If
      any shares of Common Stock,  Options or Convertible  Securities are issued
      or  sold  for  a  consideration  other  than  cash,  the  amount  of  such
      consideration  received  by the  Company  will be the  fair  value of such
      consideration,  except where such consideration consists of securities, in
      which case the amount of consideration received by the Company will be the
      Closing Sale Price of such security on the date of receipt.  If any shares
      of Common  Stock,  Options  or  Convertible  Securities  are issued to the
      owners of the non-surviving  entity in connection with any merger in which
      the Company is the surviving entity, the amount of consideration  therefor
      will be deemed to be the fair value of such  portion of the net assets and
      business of the non-surviving  entity as is attributable to such shares of
      Common Stock, Options or Convertible  Securities,  as the case may be. The
      fair  value of any  consideration  other than cash or  securities  will be
      determined  jointly  by the  Company  and the  Required  Holders.  If such
      parties  are  unable to reach  agreement  within  ten (10) days  after the
      occurrence of an event requiring  valuation (the "VALUATION  EVENT"),  the
      fair  value  of such  consideration  will be  determined  within  ten (10)
      Business  Days after the tenth day  following  the  Valuation  Event by an
      independent,  reputable  appraiser jointly selected by the Company and the
      Required  Holders.  The determination of such appraiser shall be final and
      binding upon all parties  absent  manifest error and the fees and expenses
      of such appraiser shall be borne by the Company.

                  (v) RECORD DATE.  If the Company takes a record of the holders
      of shares of Common Stock for the purpose of entitling them (A) to receive
      a  dividend  or other  distribution  payable  in shares  of Common  Stock,
      Options or in  Convertible  Securities or (B) to subscribe for or purchase
      shares of Common  Stock,  Options  or  Convertible  Securities,  then such
      record  date  will be  deemed  to be the date of the  issue or sale of the
      shares of Common Stock deemed to have been issued or sold upon the

                                      -9-
<PAGE>

      declaration of such dividend or the making of such other  distribution  or
      the date of the granting of such right of subscription or purchase, as the
      case may be.

            (b) ADJUSTMENT  UPON  SUBDIVISION OR COMBINATION OF COMMON STOCK. If
the Company at any time on or after the  Subscription  Date  subdivides  (by any
stock split, stock dividend,  recapitalization or otherwise) one or more classes
of its outstanding  shares of Common Stock into a greater number of shares,  the
Exercise  Price  in  effect  immediately  prior  to  such  subdivision  will  be
proportionately reduced and the number of Warrant Shares will be proportionately
increased. If the Company at any time on or after the Subscription Date combines
(by  combination,  reverse  stock  split  (other  than  the  Reverse  Split)  or
otherwise) one or more classes of its outstanding  shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to such
combination will be  proportionately  increased and the number of Warrant Shares
will be proportionately  decreased. Any adjustment under this Section 2(b) shall
become  effective  at the  close of  business  on the date  the  subdivision  or
combination becomes effective.

            (c) OTHER EVENTS.  If any event occurs of the type  contemplated  by
the  provisions  of  this  Section  2 but  not  expressly  provided  for by such
provisions  (including,  without limitation,  the granting of stock appreciation
rights,  phantom  stock rights or other rights with equity  features),  then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price  and the  number of  Warrant  Shares so as to  protect  the  rights of the
Holder;  provided  that no such  adjustment  pursuant to this  Section 2(c) will
increase  the  Exercise  Price or  decrease  the  number  of  Warrant  Shares as
otherwise determined pursuant to this Section 2.

            (d) REVERSE SPLITS. For so long as any Warrants remain  outstanding,
if the Company  shall effect a reverse stock split of one or more classes of the
Company's  Common Stock (other than the Reverse Split),  then the Exercise Price
shall be reduced to an amount  equal to the  arithmetic  average of the Weighted
Average Price of the Common Stock the twenty (20) Trading Day period immediately
following such reverse split.

            (e) NOTICE OF  ADJUSTMENT.  Upon the  occurrence  of any event which
requires any  adjustment  or  readjustment  of the  Exercise  Price or change in
number or type of stock, securities and/or other property issuable upon exercise
of this Warrant,  then, and in each such case, the Company shall promptly make a
public  announcement of such  adjustment or  readjustment  and shall give notice
thereof to the holder  hereof,  which  notice  shall  state the  Exercise  Price
resulting from such adjustment or  readjustment  and any change in the number or
type of stock,  securities  and/or other property issuable upon exercise of this
Warrant,  setting forth in reasonable  detail the method of calculation  and the
facts upon which such calculation is based.

      3. RIGHTS UPON  DISTRIBUTION  OF ASSETS.  If the Company  shall declare or
make any dividend or other  distribution of its assets (or rights to acquire its
assets)  to holders  of shares of Common  Stock,  by way of return of capital or
otherwise  (including,  without  limitation,  any distribution of cash, stock or
other  securities,  property  or  options  by  way  of  a  dividend,  spin  off,
reclassification,  corporate  rearrangement,  scheme  of  arrangement  or  other
similar transaction) (a "DISTRIBUTION"),  at any time after the issuance of this
Warrant, then, in each such case:

                                      -10-
<PAGE>

            (a) any Exercise Price in effect  immediately  prior to the close of
business on the record date fixed for the  determination of holders of shares of
Common Stock entitled to receive the Distribution shall be reduced, effective as
of the  close  of  business  on  such  record  date,  to a price  determined  by
multiplying  such Exercise Price by a fraction of which (i) the numerator  shall
be the  Closing  Bid  Price of the  shares of Common  Stock on the  Trading  Day
immediately  preceding such record date minus the value of the  Distribution (as
determined in good faith by the Company's Board of Directors)  applicable to one
share of Common Stock,  and (ii) the denominator  shall be the Closing Bid Price
of the shares of Common  Stock on the Trading  Day  immediately  preceding  such
record date; and

            (b) the number of Warrant  Shares  shall be increased to a number of
shares  equal to the  number of shares of Common  Stock  obtainable  immediately
prior to the close of business on the record date fixed for the determination of
holders  of  shares  of  Common  Stock  entitled  to  receive  the  Distribution
multiplied  by the  reciprocal  of the  fraction  set  forth in the  immediately
preceding  paragraph (a); provided that in the event that the Distribution is of
shares of Common Stock (or common stock)  ("OTHER  SHARES OF COMMON STOCK") of a
company  whose common shares are traded on a national  securities  exchange or a
national  automated  quotation  system,  then the  Holder may elect to receive a
warrant to purchase  Other  Shares of Common Stock in lieu of an increase in the
number of Warrant Shares, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the number of shares
of Other  Shares of Common  Stock  that  would  have been  payable to the Holder
pursuant to the Distribution  had the Holder exercised this Warrant  immediately
prior to such  record  date and with an  aggregate  exercise  price equal to the
product of the amount by which the exercise  price of this Warrant was decreased
with  respect  to the  Distribution  pursuant  to the  terms of the  immediately
preceding  paragraph  (a)  and  the  number  of  Warrant  Shares  calculated  in
accordance with the first part of this paragraph (b).

      4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

            (a)  PURCHASE  RIGHTS.  In addition to any  adjustments  pursuant to
Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible  Securities  or rights to purchase  stock,  warrants,  securities or
other  property pro rata to the record  holders of any class of shares of Common
Stock (the "PURCHASE RIGHTS"), then the Holder will be entitled to acquire, upon
the terms  applicable to such Purchase  Rights,  the aggregate  Purchase  Rights
which the Holder could have acquired if the Holder had held the number of shares
of Common Stock  acquirable  upon  complete  exercise of this  Warrant  (without
regard to any  limitations on the exercise of this Warrant)  immediately  before
the date on which a record  is taken  for the  grant,  issuance  or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined  for the grant,  issue or
sale of such Purchase Rights.

            (b) FUNDAMENTAL TRANSACTIONS.  If, at any time while this Warrant is
outstanding there is a Fundamental  Transaction,  then the Holder shall have the
right thereafter to receive,  upon exercise of this Warrant, the same amount and
kind of  securities,  cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental  Transaction if it had been, immediately
prior to such  Fundamental  Transaction,  the  holder of the  number of  Warrant
Shares then issuable upon exercise in full of this Warrant (the "ALTERNATE

                                      -11-
<PAGE>

CONSIDERATION").  For purposes of any such exercise,  the  determination  of the
Exercise  Price  shall be  appropriately  adjusted  to  apply to such  Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such  Fundamental  Transaction,  and the Company
shall  apportion  the  Exercise  Price among the  Alternate  Consideration  in a
reasonable manner  reflecting the relative value of any different  components of
the Alternate Consideration.  If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it  receives  upon any  exercise  of this  Warrant  following  such  Fundamental
Transaction.  At the Holder's option and request made prior to the  consummation
of a Fundamental  Transaction,  any successor to the Company or surviving entity
in such  Fundamental  Transaction  shall,  either  (1) issue to the Holder a new
warrant  substantially  in the  form of this  Warrant  and  consistent  with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof,  or (2) in
the event that the amount of the Alternate  Consideration  issuable per share of
Common Stock in such  Fundamental  Transaction  is less than or equal to 120% of
the Exercise  Price,  purchase the Warrant from the Holder for a purchase price,
payable in cash within five Trading  Days after such  request (or, if later,  on
the effective date of the Fundamental  Transaction),  equal to the Black Scholes
Value of the remaining  unexercised  portion of this Warrant on the date of such
request. The terms of any agreement pursuant to which a Fundamental  Transaction
is effected shall include terms requiring any such successor or surviving entity
to comply  with the  provisions  of this  paragraph  (b) and  insuring  that the
Warrant (or any such replacement  security) will be similarly  adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.

      5.  NONCIRCUMVENTION.  The Company  hereby  covenants  and agrees that the
Company will not, by amendment of its  Certificate of  Incorporation,  Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement,  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,  and  will  at all  times  in good  faith  carry  out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder.  Without  limiting the  generality of the  foregoing,  the
Company  (i) shall not  increase  the par  value of any  shares of Common  Stock
receivable  upon the exercise of this Warrant  above the Exercise  Price then in
effect,  (ii) shall take all such actions as may be necessary or  appropriate in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable  shares of Common  Stock upon the  exercise of this  Warrant,  and
(iii) shall,  after the effective  date of the Reverse Merger and so long as any
of the SPA Warrants are  outstanding,  take all action  necessary to reserve and
keep available out of its authorized and unissued shares of Common Stock, solely
for the  purpose of  effecting  the  exercise of the SPA  Warrants,  130% of the
number  of shares of Common  Stock as shall  from time to time be  necessary  to
effect the exercise of the SPA Warrants then outstanding  (without regard to any
limitations on exercise).

      6.  WARRANT  HOLDER  NOT  DEEMED  A   STOCKHOLDER.   Except  as  otherwise
specifically  provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share  capital of the  Company for any  purpose,  nor shall
anything  contained  in this  Warrant be  construed  to confer  upon the Holder,
solely in such  Person's  capacity  as the  Holder of this  Warrant,  any of the
rights of a stockholder of the Company or any right to vote, give or withhold

                                      -12-
<PAGE>

consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the issuance to the Holder of the Warrant Shares which such
Person is then  entitled to receive  upon the due exercise of this  Warrant.  In
addition,  nothing  contained in this Warrant shall be construed as imposing any
liabilities  on the Holder to purchase  any  securities  (upon  exercise of this
Warrant  or  otherwise)  or  as a  stockholder  of  the  Company,  whether  such
liabilities  are  asserted  by the  Company  or by  creditors  of  the  Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same  notices  and other  information  given to the  stockholders  of the
Company   generally,   contemporaneously   with  the   giving   thereof  to  the
stockholders.

      7. REISSUANCE OF WARRANTS.

            (a) TRANSFER OF WARRANT.  If this Warrant is to be transferred,  the
Holder shall surrender this Warrant to the Company,  whereupon the Company will,
subject  to  the  satisfaction  of the  transfer  provisions  of the  Securities
Purchase  Agreement,  forthwith issue and deliver upon the order of the Holder a
new Warrant (in  accordance  with Section  7(d)),  registered  as the Holder may
request,  representing  the right to purchase the number of Warrant Shares being
transferred  by the Holder and, if less then the total number of Warrant  Shares
then underlying this Warrant is being transferred,  a new Warrant (in accordance
with Section 7(d)) to the Holder  representing  the right to purchase the number
of Warrant Shares not being transferred.

            (b) LOST, STOLEN OR MUTILATED  WARRANT.  Upon receipt by the Company
of  evidence  reasonably  satisfactory  to  the  Company  of  the  loss,  theft,
destruction  or mutilation of this Warrant,  and, in the case of loss,  theft or
destruction,  of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this  Warrant,  the  Company  shall  execute  and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

            (c)   EXCHANGEABLE   FOR   MULTIPLE   WARRANTS.   This   Warrant  is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company,  for a new Warrant or Warrants (in  accordance  with Section  7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase  such portion of such Warrant  Shares as is designated by the Holder
at the  time  of  such  surrender;  provided,  however,  that  no  Warrants  for
fractional shares of Common Stock shall be given.

            (d)  ISSUANCE OF NEW  WARRANTS.  Whenever the Company is required to
issue a new Warrant pursuant to the terms of this Warrant,  such new Warrant (i)
shall be of like tenor with this Warrant, (ii) shall represent,  as indicated on
the face of such new  Warrant,  the right to purchase  the  Warrant  Shares then
underlying  this Warrant (or in the case of a new Warrant being issued  pursuant
to Section 7(a) or Section  7(c),  the Warrant  Shares  designated by the Holder
which,  when added to the number of shares of Common Stock  underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then  underlying  this Warrant),  (iii) shall have an issuance
date, as indicated on the face of

                                      -13-
<PAGE>

such new Warrant which is the same as the Issuance Date, and (iv) shall have the
same rights and conditions as this Warrant.

      8.  NOTICES.  Whenever  notice is required to be given under this Warrant,
unless otherwise provided herein,  such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant,
including  in  reasonable  detail a  description  of such  action and the reason
therefor.  Without  limiting the generality of the  foregoing,  the Company will
give written  notice to the Holder (i)  immediately  upon any  adjustment of the
Exercise  Price,  setting  forth  in  reasonable  detail,  and  certifying,  the
calculation of such  adjustment and (ii) at least fifteen (15) days prior to the
date on which the Company closes its books or takes a record (A) with respect to
any dividend or distribution  upon the shares of Common Stock,  (B) with respect
to any grants,  issuances or sales of any  Options,  Convertible  Securities  or
rights to purchase stock,  warrants,  securities or other property to holders of
shares of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction,  dissolution or liquidation, provided in each case that
such  information  shall be made known to the public prior to or in  conjunction
with such notice being provided to the Holder.

      9.  AMENDMENT  AND  WAIVER.  Except  as  otherwise  provided  herein,  the
provisions  of this  Warrant  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company  has  obtained  the  written  consent of the  Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrant  or  decrease  the  number of shares or class of stock  obtainable  upon
exercise of any SPA Warrant without the written  consent of the Holder.  No such
amendment  shall be  effective to the extent that it applies to less than all of
the holders of the SPA Warrants then outstanding.

      10.  GOVERNING  LAW.  This Warrant  shall be governed by and construed and
enforced in accordance  with,  and all questions  concerning  the  construction,
validity,  interpretation  and performance of this Warrant shall be governed by,
the internal laws of the State of New York,  without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions other than the State of New York.

      11.  CONSTRUCTION;  HEADINGS.  This Warrant  shall be deemed to be jointly
drafted by the Company and all the Buyers and shall not be construed against any
person as the drafter  hereof.  The headings of this Warrant are for convenience
of reference and shall not form part of, or affect the  interpretation  of, this
Warrant.

      12.  SEVERABILITY.  If any  provision of this  Warrant or the  application
thereof  becomes  or is  declared  by a court of  competent  jurisdiction  to be
illegal, void or unenforceable,  the remainder of the terms of this Warrant will
continue in full force and effect.

      13. DISPUTE  RESOLUTION.  In the case of a dispute as to the determination
of the Exercise Price or the arithmetic  calculation of the Warrant Shares,  the
Company shall submit the disputed  determinations or arithmetic calculations via
facsimile within two Business Days of receipt of the Exercise Notice giving rise
to such dispute, as the case may be, to the Holder. If

                                      -14-
<PAGE>

the  Holder and the  Company  are  unable to agree  upon such  determination  or
calculation  of the Exercise  Price or the Warrant  Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the Holder,  then the Company  shall,  within two (2)  Business  Days submit via
facsimile  (a)  the  disputed   determination   of  the  Exercise  Price  to  an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed  arithmetic  calculation of the Warrant Shares to
the Company's  independent,  outside accountant.  The Company shall cause at its
expense the investment  bank or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the Holder of the
results no later than ten  Business  Days from the time it receives the disputed
determinations  or  calculations.  If such Investment Bank or accountant  agrees
with the Company's  determination or calculations (as the case may be), then the
Holder  shall  reimburse  the  Company  for the expense it incurred to cause the
investment  bank/accountant to perform such  determination or calculation.  Such
investment bank's or accountant's determination or calculation,  as the case may
be, shall be binding upon all parties absent demonstrable error.

      14.  REMEDIES,  OTHER  OBLIGATIONS,  BREACHES AND INJUNCTIVE  RELIEF.  The
remedies  provided in this Warrant  shall be  cumulative  and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity  (including  a decree of specific  performance  and/or other
injunctive  relief),  and nothing  herein shall limit the right of the Holder to
pursue actual damages for any failure by the Company to comply with the terms of
this Warrant.  The Company  acknowledges  that a breach by it of its obligations
hereunder will cause  irreparable  harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened  breach, the holder of this Warrant shall
be  entitled,  in addition to all other  available  remedies,  to an  injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.

      15. TRANSFER.  This Warrant may be offered for sale, sold,  transferred or
assigned without the consent of the Company, except as may otherwise be required
by Section 2(f) of the Securities Purchase Agreement.

      16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms
shall have the following meanings:

            (a) "APPROVED STOCK PLAN" means any employee  benefit plan which has
been  approved by the Board of Directors  of the Company,  pursuant to which the
Company's  securities  may be  issued to any  employee,  officer,  director,  or
consultant for services provided to the Company.

            (b) "BLACK  SCHOLES  VALUE" means the value of this Warrant based on
the Black and Scholes  Option  Pricing Model  obtained from the "OV" function on
Bloomberg determined as of the day immediately following the public announcement
of  the  applicable  Fundamental  Transaction  and  reflecting  (i) a  risk-free
interest rate  corresponding to the U.S. Treasury rate for a period equal to the
remaining  term of this  Warrant as of such date of request  and (ii) the actual
volatility  of the Common Stock since the Issuance  Date  obtained  from the HVT
function on Bloomberg.

                                      -15-
<PAGE>

            (c) "BLOOMBERG" means Bloomberg Financial Markets.

            (d)  "BUSINESS  DAY"  means any day other than  Saturday,  Sunday or
other day on which  commercial  banks in The City of New York are  authorized or
required by law to remain closed.

            (e)  "CLOSING  BID PRICE" and "CLOSING  SALE PRICE"  means,  for any
security  as of any date,  the last  closing  bid price and last  closing  trade
price,  respectively,  for such security on the Principal Market, as reported by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade  price,  respectively,
of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported in the "pink  sheets" by Pink
Sheets LLC (formerly the National  Quotation  Bureau,  Inc.). If the Closing Bid
Price or the  Closing  Sale  Price  cannot be  calculated  for a  security  on a
particular  date on any of the  foregoing  bases,  the  Closing Bid Price or the
Closing Sale Price,  as the case may be, of such  security on such date shall be
the fair market value as mutually  determined by the Company and the Holder.  If
the  Company  and the Holder are unable to agree upon the fair  market  value of
such security,  then such dispute shall be resolved  pursuant to Section 13. All
such determinations to be appropriately  adjusted for any stock dividend,  stock
split,  stock  combination  or other similar  transaction  during the applicable
calculation period.

            (f) "COMMON  STOCK" means (i) the Company's  shares of Common Stock,
and (ii) any share  capital into which such Common Stock shall have been changed
or any share capital resulting from a reclassification of such Common Stock.

            (g) "COMMON STOCK DEEMED  OUTSTANDING" means, at any given time, the
number of shares of Common Stock  actually  outstanding  at such time,  plus the
number of shares of Common Stock deemed to be  outstanding  pursuant to Sections
2(a)(i) and 2(a)(ii)  hereof  regardless  of whether the Options or  Convertible
Securities  are actually  exercisable  at such time, but excluding any shares of
Common Stock owned or held by or for the account of the Company or issuable upon
exercise of the SPA Warrants.

            (h) "CONVERTIBLE  SECURITIES"  means any stock or securities  (other
than  Options)  directly  or  indirectly  convertible  into  or  exercisable  or
exchangeable for shares of Common Stock.

            (i) "ELIGIBLE MARKET" means the Initial  Principal  Market,  The New
York Stock Exchange, Inc., the American Stock Exchange, The NASDAQ Global Select
Market, The NASDAQ Global Market or The NASDAQ Capital Market.

                                      -16-
<PAGE>

            (j)  "EXCLUDED  SECURITIES"  means  any  Common  Stock,  Options  or
Convertible  Securities,  stock appreciation  rights or other rights with equity
features  issued or issuable:  (i) in connection  with any Approved  Stock Plan;
(ii) upon the  exercise  of the  Warrants;  (iii) upon  conversion,  exercise or
exchange of any Options or Convertible  Securities  which are outstanding on the
date of closing of the  transactions  contemplated  by the  Securities  Purchase
Agreement, provided that the terms of such Options or Convertible Securities are
not  amended,  modified  or  changed  on or after the  Subscription  Date;  (iv)
pursuant to a bona fide firm  commitment  underwritten  public  offering  with a
nationally recognized  underwriter which generates gross proceeds to the Company
in excess of $10,000,000  (other than an "at-the-market  offering" as defined in
Rule 415(a)(4)  under the 1933 Act or equity lines);  or (v) in connection  with
any acquisition  (including strategic  acquisitions or strategic  transactions),
whether through an acquisition of shares or a merger of any business,  assets or
technologies, the primary purpose of which is not to raise equity capital.

            (k) "EXPIRATION  DATE" means the date that is sixty months after the
Issuance  Date;  provided that if such date falls on a day other than a Business
Day or on which trading does not take place on the applicable Eligible Market (a
"HOLIDAY"), the next date that is not a Holiday.

            (l) "FUNDAMENTAL TRANSACTION" means that the Company shall, directly
or  indirectly,  in one or more  related  transactions  effected  after the date
hereof, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Person, or (ii) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of the
Company to another  Person,  or (iii) be the  subject of a  purchase,  tender or
exchange  offer by another  Person  that is accepted by the holders of more than
50% of the  outstanding  shares of Voting  Stock  (not  including  any shares of
Voting Stock held by the Person or Persons  making or party to, or associated or
affiliated  with the  Persons  making  or party  to,  such  purchase,  tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization,  recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires  more  than the 50% of the  outstanding  shares of  Common  Stock  (not
including  any shares of Common Stock held by the other Person or other  Persons
making or party to, or associated or affiliated with the other Persons making or
party to, such stock purchase agreement or other business  combination),  or (v)
reclassify or change the outstanding shares of Common Stock (other than a change
in par  value,  or from par value to no par  value,  or from no par value to par
value, or as a result of a subdivision or combination),  or (vi) any "person" or
"group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange  Act) is or shall  become the  "beneficial  owner" (as  defined in Rule
13d-3 under the Exchange Act),  directly or indirectly,  of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock.

            (m) "INITIAL  PRINCIPAL  MARKET" means the National  Association  of
Securities Dealers Inc.'s OTC Bulletin Board.

            (n) "OPTIONS" means any rights, warrants or options to subscribe for
or purchase shares of Common Stock or Convertible Securities.

                                      -17-
<PAGE>

            (o) "PARENT  ENTITY" of a Person means an entity  that,  directly or
indirectly,  controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market,  or, if there is more
than one such  Person or Parent  Entity,  the Person or Parent  Entity  with the
largest  public  market  capitalization  as of the date of  consummation  of the
Fundamental Transaction.

            (p) "PERSON" means an individual,  a limited  liability  company,  a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization,  any other entity and a  government  or any  department  or agency
thereof.

            (q) "PRINCIPAL MARKET" means, from time to time, the Eligible Market
upon which the Common Stock is admitted or listed and principally trades.

            (r) "REGISTRATION  RIGHTS AGREEMENT" means that certain registration
rights agreement by and among the Company and the Buyers.

            (s)  "REQUIRED  HOLDERS"  means  the  holders  of the  SPA  Warrants
representing  at least a majority of shares of Common Stock  underlying  the SPA
Warrants then outstanding.

            (t) "REVERSE  SPLIT" means that certain  reverse split in respect of
the shares  Common  Stock of the Company in which each  11.226  shares of Common
Stock prior to such  reverse  split shall be  exchanged  for one share of Common
Stock  after such  reverse  split to be  effected  by the Company as promptly as
practicable after the Issuance Date.

            (u) "SPA  SECURITIES"  means the Common Stock issued pursuant to the
Securities Purchase Agreement.

            (v)  "SUCCESSOR  ENTITY"  means the Person (or, if so elected by the
Required Holders,  the Parent Entity) formed by, resulting from or surviving any
Fundamental  Transaction  or the  Person  (or,  if so  elected  by the  Required
Holders,  the Parent Entity) with which such Fundamental  Transaction shall have
been entered into.

            (w) "TRADING DAY" means any day on which trading the Common Stock is
reported on the Initial Principal Market, or, if the Initial Principal Market is
not the  principal  trading  market for the Common  Stock,  then on the Eligible
Market that is the principal  securities  exchange or securities market on which
the Common Stock is then traded;  provided  that "Trading Day" shall not include
any day on which the Common  Stock is  scheduled  to trade on such  exchange  or
market  for less than 4.5 hours or any day that the  Common  Stock is  suspended
from trading  during the final hour of trading on such exchange or market (or if
such  exchange or market  does not  designate  in advance  the  closing  time of
trading on such exchange or market, then during the hour ending at 4:00:00 p.m.,
New York Time).

            (x)  "TRANSACTION  DOCUMENTS" is defined in the Securities  Purchase
Agreement.

            (y) "VOTING STOCK" of a Person means capital stock of such Person of
the class or classes  pursuant  to which the  holders  thereof  have the general
voting power to elect,  or the general power to appoint,  at least a majority of
the board of directors, managers or trustees of

                                      -18-
<PAGE>

such Person  (irrespective  of whether or not at the time  capital  stock of any
other class or classes  shall have or might have  voting  power by reason of the
happening of any contingency).

            (z)  "WEIGHTED  AVERAGE  PRICE"  means,  for  any  date,  the  price
determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on an Eligible Market,  the daily volume weighted
average price of the Common Stock for such date (or the nearest  preceding date)
on the  Eligible  Market on which the Common  Stock is then  listed or quoted as
reported  by  Bloomberg  Financial  L.P.  (based on a Trading Day from 9:30 a.m.
Eastern  Time to 4:02 p.m.  Eastern  Time);  (b) if the Common Stock is not then
listed or quoted on an  Eligible  Market and if prices for the Common  Stock are
then quoted on the OTC Bulletin Board,  the volume weighted average price of the
Common Stock for such date (or the nearest  preceding  date) on the OTC Bulletin
Board;  (c) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then  reported in the "Pink Sheets"
published  by  the  Pink  Sheets,  LLC  (or a  similar  organization  or  agency
succeeding to its functions of reporting prices),  the most recent bid price per
share of the  Common  Stock so  reported;  or (d) in all other  cases,  the fair
market  value  of a share  of  Common  Stock  as  determined  by an  independent
appraiser selected in good faith by the Holders and reasonably acceptable to the
Company.

                            [SIGNATURE PAGE FOLLOWS]

                                      -19-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.

                                                     AEROBIC CREATIONS, INC.

                                                     By:________________________
                                                     Name:
                                                     Title:

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE

            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK
                             AEROBIC CREATIONS, INC.

      The   undersigned   holder   hereby   exercises   the  right  to  purchase
_________________  of the shares of Common Stock  ("WARRANT  SHARES") of [Summit
Global  Logistics,   Inc.,  formerly,]  Aerobic  Creations,   Inc.,  a  Delaware
corporation  (the  "COMPANY"),  evidenced  by the  attached  Warrant to Purchase
Common Stock (the  "WARRANT").  Capitalized  terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

      1. FORM OF EXERCISE PRICE. The Holder intends that payment of the Exercise
Price shall be made as:

      ___________ a "Cash  Exercise" in respect of ___________  Warrant  Shares;
and/or  When  available  pursuant  to the terms of the  Warrant,  ___________  a
"Cashless Exercise" in respect of ___________ Warrant Shares.

      2. CASH EXERCISE. In the event that the holder has elected a Cash Exercise
in respect of some or all of the Warrant  Shares to be issued  pursuant  hereto,
the undersigned holder hereby exercises the right to purchase  _________________
of the shares of Common Stock  ("WARRANT  SHARES") of [Summit Global  Logistics,
Inc., formerly,] Aerobic Creations, Inc. a Delaware corporation (the "Company"),
evidenced by the  attached  Warrant to Purchase  Common  Stock (the  "WARRANT").
Capitalized  terms  used  herein  and  not  otherwise  defined  shall  have  the
respective meanings set forth in the Warrant.

      3. PAYMENT OF EXERCISE PRICE. The holder shall pay the Aggregate  Exercise
Price in the sum of  $___________________  to the Company in accordance with the
terms of the Warrant.

      4.  DELIVERY OF WARRANT  SHARES.  The Company  shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

________________________________
   Name of Registered Holder

By: ____________________________
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby  acknowledges  this Exercise  Notice and hereby directs
___________________________________,  as  transfer  agent  to  issue  the  above
indicated number of shares of Common Stock in accordance with the Transfer Agent
Instructions dated ____________________,  2006 from the Company and acknowledged
and agreed to by the transfer agent.

                                                     AEROBIC CREATIONS, INC.

                                                     By:________________________
                                                        Name:
                                                        Title:

                                       -2-Exhibit 4.4

                      FORM OF REGISTRATION RIGHTS AGREEMENT

            REGISTRATION  RIGHTS  AGREEMENT  (this  "AGREEMENT"),  dated  as  of
November 8, 2006, by and among Aerobic Creations,  Inc., a Delaware corporation,
with  headquarters  located  at  547  Boulevard,   Kenilworth,   NJ  07033  (the
"COMPANY"),  and the undersigned buyers (each, a "BUYER", and collectively,  the
"BUYERS").

            WHEREAS:

            A. In connection with the Securities  Purchase  Agreement (Notes and
Warrants),  dated as of  November  8, 2006 by and among  Maritime  Logistics  US
Holdings Inc., a Delaware  corporation  ("MLI"),  the Company  (pursuant to that
certain  Joinder  Agreement  dated as of the date  hereof)  and the Buyers  (the
"SECURITIES  PURCHASE  AGREEMENT"),  the Company has agreed,  upon the terms and
subject to the  conditions set forth in the Securities  Purchase  Agreement,  to
issue and sell to each Buyer (i) senior secured convertible notes of the Company
(the "NOTES"), which will, among other things, be convertible into shares of the
Company's  common  stock,  $0.001 par value per share (the "COMMON  STOCK",  the
shares of Common Stock issuable upon  conversion of the Notes,  the  "CONVERSION
SHARES")  in  accordance  with the terms of the Notes,  and (ii)  warrants  (the
"WARRANTS"),  which will be exercisable to purchase  shares of Common Stock (the
shares of Common Stock  issuable  upon  exercise of the  Warrants,  the "WARRANT
SHARES") in accordance with the terms of the Warrants.

            B. In order to  induce  the  Buyers  to  purchase  the Notes and its
Warrants pursuant to the Securities Purchase  Agreement,  the Company has agreed
to provide  certain  registration  rights under the  Securities  Act of 1933, as
amended,  and the rules and  regulations  thereunder,  or any similar  successor
statute (collectively, the "1933 ACT"), and applicable state securities laws.

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

            1. DEFINITIONS.

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

                  a. "BUSINESS DAY" means any day other than Saturday, Sunday or
any other day on which  commercial  banks in the City of New York are authorized
or required by law to remain closed.

                  b.  "CLOSING  DATE"  shall have the  meaning  set forth in the
Securities Purchase Agreement.

                  c. "DEMAND REGISTRATION" shall mean a registration required to
be effected by the Company pursuant to Section 2 (e).

<PAGE>

                  d. "DEMAND  REGISTRATION  STATEMENT" shall mean a registration
statement of the Company which covers those Registrable  Securities requested to
be  included  therein  pursuant  to the  provisions  of  Section  2(e)  and  all
amendments  and   supplements   to  such   registration   statement,   including
post-effective  amendments,  in each case  including  the  prospectus  contained
therein,  all exhibits  thereto and all material  incorporated  by reference (or
deemed to be incorporated by reference) therein.

                  e. "EFFECTIVE DATE" means the date the Registration  Statement
has been declared effective by the SEC.

                  f. "EFFECTIVENESS DEADLINE" means the date that is (i) 90 days
after the Closing  Date (if the  Registration  Statement  is not reviewed by the
SEC)  or (ii)  within  150  days  after  the  Closing  Date if the  Registration
Statement is reviewed by the SEC.

                  g. "ELIGIBLE MARKET" means the Initial  Principal Market,  The
New York Stock Exchange,  Inc., the American Stock  Exchange,  The NASDAQ Global
Select Market, The NASDAQ Global Market or The NASDAQ Capital Market.

                  h. "FILING  DEADLINE" means the date that is 60 days after the
Closing Date.

                  i.  "INVESTOR"  means a Buyer or any  permitted  transferee or
assignee thereof to whom a Buyer assigns its rights under this Agreement and who
agrees to become bound by the  provisions of this  Agreement in accordance  with
Section 9 and any transferee or assignee thereof to whom a permitted  transferee
or assignee  assigns its rights  under this  Agreement  and who agrees to become
bound by the provisions of this Agreement in accordance with Section 9.

                  j. "KRG  ENTITIES"  means  collectively  KRG Capital  Fund II,
L.P.; KRG Capital Fund II (PA), L.P.; KRG Capital Fund II (FF), L.P.; and KRG Co
Invest, LLC.

                  k.  "OTHER   SECURITIES"   means  the  shares   identified  as
"Registrable  Securities" in the  Registration  Rights  Agreement dated the date
hereof among the Company and the purchasers of the Company's  Common Stock named
therein.

                  l. "PERSON" means an individual,  a limited liability company,
a  partnership,  a joint  venture,  a corporation,  a trust,  an  unincorporated
organization and a government or any department or agency thereof.

                  m. "PRINCIPAL  MARKET" means,  from time to time, the Eligible
Market upon which the Common Stock is admitted or listed and principally trades.

                  n. "REGISTER,"  "REGISTERED,"  and  "REGISTRATION"  refer to a
registration   effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as defined  below) in compliance  with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness  of such  Registration
Statement(s) by the SEC.

                                       2
<PAGE>

                  o.  "REGISTRABLE  SECURITIES"  means (i) the Conversion Shares
issued or issuable upon conversion of the Notes,  (ii) the Warrant Shares issued
or issuable  upon exercise of the Warrants and (iii) any shares of capital stock
of the  Company  issued or  issuable in respect of the  Conversion  Shares,  the
Notes, the Warrant Shares and the Warrants as a result of any stock split, stock
dividend,   recapitalization,   exchange,   merger,   consolidation   or   other
reorganization or similar event or otherwise,  without regard to any limitations
on conversions of the Notes or exercises of the Warrants.

                  p. "REGISTRATION  STATEMENT" means a registration statement or
registration  statements  of the Company  filed under the 1933 Act  covering the
Registrable Securities.

                  q. "REQUIRED HOLDERS" means the holders of at least a majority
of the Registrable  Securities);  provided, that any Registrable Securities that
are held by an  Affiliate of the Company  shall not be deemed to be  outstanding
for purposes of the determination of "Required Holders."

                  r.  "REQUIRED   REGISTRATION   AMOUNT"  for  the  Registration
Statement  means 130% of the sum of (x) the  aggregate of the maximum  number of
Conversion  Shares  issued  and  issuable  pursuant  to the  Notes  at the  then
applicable  Conversion  Price as of the Trading Day  immediately  preceding  the
applicable  date of  determination  and, (y) the number of Warrant Shares issued
and  issuable  pursuant  to the  Warrants  as of  the  trading  day  immediately
preceding the  applicable  date of  determination  each subject to adjustment as
provided  in  Sections  2(c) and 2(d)  (without  regard  to any  limitations  on
conversion of the Notes or exercise of the Warrants).

                  s. "RULE 415" means Rule 415 promulgated under the 1933 Act or
any successor rule providing for offering  securities on a continuous or delayed
basis.

                  t.  "SEC"  means the United  States  Securities  and  Exchange
Commission.

                  u.  "TRADING  DAY" means any day on which the Common  Stock is
traded on the Principal Market, or, if the Principal Market is not the principal
trading  market for the Common Stock,  then on the Eligible  Market which is the
principal  securities exchange or securities market on which the Common Stock is
then traded;  provided that "Trading Day" shall not include any day on which the
Common Stock is scheduled to trade on such  exchange or market for less than 4.5
hours or any day that the Common  Stock is  suspended  from  trading  during the
final hour of trading on such  exchange or market (or if such exchange or market
does not  designate in advance the closing  time of trading on such  exchange or
market, then during the hour ending at 4:00:00 p.m., New York Time).

            2. REGISTRATION.

                  a. MANDATORY REGISTRATION.  The Company shall prepare, and, as
soon as practicable  but in no event later than the Filing  Deadline,  file with
the SEC the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities (the date of such filing the "FILING DATE"). In the event
that Form S-3 is unavailable for such a registration, the

                                       3
<PAGE>

Company  shall use such other form as is available  for such a  registration  on
another appropriate form reasonably acceptable to the Required Holders,  subject
to the provisions of Section 2(h). The Registration  Statement prepared pursuant
hereto  shall  register for resale at least the number of shares of Common Stock
equal to the  Required  Registration  Amount as of the Trading  Day  immediately
preceding the date the  Registration  Statement is initially filed with the SEC.
The  Registration  Statement shall contain (except if otherwise  directed by the
Required Holders) the "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION" sections
in substantially the form attached hereto as EXHIBIT B; PROVIDED,  HOWEVER, that
each of the "Selling  Stockholders" and "Plan of Distribution" sections shall be
amended  as  necessary  to  comply  with  then  applicable  securities  law  and
regulation.  The  Company  shall use its best  efforts to have the  Registration
Statement declared effective by the SEC as soon as practicable,  but in no event
later than the  Effectiveness  Deadline.  By 9:30 a.m. on the first Business Day
following the Effective  Date, the Company shall file with the SEC in accordance
with Rule 424 under the 1933 Act the final  prospectus  to be used in connection
with sales pursuant to such Registration Statement.

                  b. ALLOCATION OF REGISTRABLE SECURITIES. The initial number of
Registrable  Securities included in any Registration  Statement and any increase
in the number of Registrable  Securities included therein shall be allocated pro
rata among the Investors  based on the number of Registrable  Securities held by
each  Investor at the time the  Registration  Statement  covering  such  initial
number of Registrable  Securities or increase  thereof is declared  effective by
the SEC. In the event that an Investor sells or otherwise  transfers any of such
Investor's Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable  Securities included in such
Registration Statement for such transferor.  Any shares of Common Stock included
in a  Registration  Statement  and which  remain  allocated  to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining  Investors,  pro rata based on the number of
Registrable  Securities  then held by such  Investors  which are covered by such
Registration   Statement.   In  no  event  shall  the  Company  include  on  any
Registration Statement without the prior written consent of the Required Holders
any securities  other than (i) Registrable  Securities,  (ii) Other  Securities,
(iii) Common  Stock  issuable  upon the exercise of warrants  issued to Rodman &
Renshaw,  LLC as placement  agent in respect of the offerings of the Registrable
Securities and Other  Securities,  (iv) the shares of Common Stock (increased to
reflect the effect of any stock split or  decreased to reflect the effect of any
reverse  stock split,  as  applicable)  held by those holders of the Company who
held shares of the Company prior to the  effectiveness of the Merger (as defined
in the Securities Purchase  Agreement),  and (v) the shares of Common Stock held
by the persons  listed on SCHEDULE 2(B) (the "EXISTING  HOLDERS")  hereto not to
exceed  that number of shares of Common  Stock set forth next to the  respective
Existing  Holder's name on SCHEDULE  2(B)  (PROVIDED,  however,  that such limit
shall be  increased  to reflect the effect of any stock split and  decreased  to
reflect the effect of any reverse stock split).

                  c. SUFFICIENT NUMBER OF SHARES REGISTERED.  Subject to Section
2(d), in the event the number of shares available under a Registration Statement
filed pursuant to Section 2(a) is  insufficient  to cover all of the Registrable
Securities  required  to  be  covered  by  such  Registration  Statement  or  an
Investor's  allocated portion of the Registrable  Securities pursuant to Section
2(b), the Company shall amend the applicable  Registration  Statement, or file a
new  Registration   Statement  (on  the  short  form  available   therefor,   if
applicable),  or both, so as to cover at least the Required  Registration Amount
as of the Trading Day immediately preceding

                                       4
<PAGE>

the date of the filing of such amendment or new Registration  Statement, in each
case,  as soon as  practicable,  but in any event not later  than  fifteen  (15)
Trading Days after the necessity therefor arises. The Company shall use its best
efforts to cause such  amendment  and/or new  Registration  Statement  to become
effective as soon as practicable  following the filing thereof.  For purposes of
the foregoing  provision,  the number of shares  available  under a Registration
Statement  shall  be  deemed  "insufficient  to  cover  all of  the  Registrable
Securities"  if at any time the number of shares of Common Stock  available  for
resale  under the  Registration  Statement is less than the sum of the number of
(i) the Required Registration Amount, (ii) Other Securities,  (iii) Common Stock
issuable  upon the  exercise  of  warrants  issued to Rodman &  Renshaw,  LLC as
placement  agent in respect of the offerings of the  Registrable  Securities and
Other  Securities,  (iv) the shares of Common Stock held by those holders of the
Company who held shares of the Company prior to the  effectiveness of the Merger
and (v) the shares of Common Stock held by the Existing Holders. The calculation
set  forth  in the  foregoing  sentence  shall  be made  without  regard  to any
limitations  on the  conversion of the Notes or the exercise of the Warrants and
such calculation shall assume that the Notes are then convertible into shares of
Common Stock at the then  prevailing  Conversion  Rate (as defined in the Notes)
and that the  Warrants  are then  exercisable  for shares of Common Stock at the
then prevailing Exercise Price (as defined in the Warrants).

                  d.  MANDATED  REDUCTION OF SECURITIES  REGISTERED.  If the SEC
requires that the number of shares of Common Stock to be  registered  for resale
pursuant to the  Registration  Statement  be reduced,  such  reduction  shall be
accomplished as follows:

      First,  the number of shares of Common Stock held by the Existing  Holders
      other than the KRG Entities included in such Registration  Statement shall
      be reduced (such reduction allocated pro rata among such Existing Holders)
      until the reduction required by the SEC is effected;

      Second,  if the exclusion of the number of all shares of Common Stock held
      by the Existing Holders is insufficient to meet the reduction  required by
      the SEC, then (i) the number of shares of Common Stock held by R&R Biotech
      Partners, LLC prior to the effectiveness of the Merger after giving effect
      to the Reverse  Split,  (ii) 130% of the number of shares of Common  Stock
      issuable upon the exercise of warrants issued to Rodman & Renshaw,  LLC as
      placement agent in respect of the offerings of the Registrable  Securities
      and  Other  Securities  and  (iii)  securities  held by the  KRG  Entities
      included in such  Registration  Statement shall be reduced (such reduction
      allocated  pro rata among  those  holders  who held  shares of the Company
      prior to the  effectiveness  of the Merger,  the KRG Entities and Rodman &
      Renshaw, LLC) until the reduction required by the SEC is effected;

      Third,  if the  exclusion of the sum of (i) the number of shares of Common
      Stock held by R&R Biotech Partners,  LLC prior to the effectiveness of the
      Merger after giving effect to the Reverse  Split,  (ii) 130% of the number
      of shares of Common Stock issuable upon the exercise of warrants issued to
      Rodman & Renshaw,  LLC as placement  agent in respect of the  offerings of
      the Registrable  Securities and Other  Securities and (iii) the securities
      held by KRG is  insufficient  to meet the  reduction  required by the SEC,
      then  130% of the  number of shares  of  Common  Stock  issuable  upon the
      exercise of Warrants and the Common Warrants included in such Registration
      Statement  shall be reduced (such

                                       5
<PAGE>

      reduction  allocated  pro  rata  among  the  holders  thereof)  until  the
      reduction required by the SEC is effected.

                  e. DEMAND  REGISTRATION.  Subject to Section 2(f), at any time
or from time to time after the six-month  anniversary of the Effectiveness Date,
any Holder whose  Registrable  Securities  were excluded  from the  Registration
Statement in accordance with the provisions of Section 2(d) shall have the right
to request in writing  that the Company  register  all or part of such  Holder's
previously  excluded  Registrable  Securities (a "REQUEST") (which Request shall
specify the amount of Registrable  Securities intended to be disposed of by such
Holder and the intended method of disposition  thereof) by filing with the SEC a
Demand  Registration  Statement.  In the event that Form S-3 is unavailable  for
such a  registration,  the Company shall use such other form as is available for
such a registration on another  appropriate  form  reasonably  acceptable to the
requesting Holder(s),  subject to the provisions of Section 2(h). As promptly as
practicable,  but no later than 10 days after receipt of a Request,  the Company
shall give  written  notice of such  requested  registration  to all  Holders of
Registrable Securities which were previously excluded.  Subject to Section 2(f),
the  Company  shall  include  in  a  Demand  Registration  (i)  the  Registrable
Securities  intended to be disposed of by the requesting  Holder(s) and (ii) the
Registrable  Securities  intended to be disposed  of by any other  Holder  which
shall have made a written  request  (which  request  shall specify the amount of
Registrable  Securities to be registered and the intended  method of disposition
thereof) to the Company for  inclusion  thereof in such  registration  within 20
days after the  receipt of such  written  notice from the  Company.  The Company
shall,  promptly, and in any event within 40 days following a Request, file with
the SEC a Demand Registration Statement providing for the registration under the
Securities  Act of the  Registrable  Securities  which the  Company  has been so
requested to register in accordance  herewith by all such Holders, to the extent
necessary to permit the  disposition  of such  Registrable  Securities  so to be
registered  in  accordance  with the  intended  methods of  disposition  thereof
specified in such Request or further  requests.  The Company  shall use its best
efforts to have such Demand Registration Statement declared effective by the SEC
not later  than 45 days  after a Request  and to keep such  Demand  Registration
Statement continuously effective for the period specified in Section 2(h).

                  f. LIMITATIONS ON DEMAND REGISTRATIONS.  The rights of Holders
of Registrable  Securities to request Demand  Registrations  pursuant to Section
2(d) are subject to the  following  limitations:  (i) the  Company  shall not be
obligated to effect a Demand Registration unless 120 days have elapsed since the
last day that a prior Demand  Registration  Statement remained effective (or, if
earlier, the day on which the last of the Registrable Securities covered by such
prior Demand  Registration  Statement was sold),  and (ii) in no event shall the
Company  be  required  to pay  Registration  Expenses  of more than four  Demand
Registrations.  The Company shall not be required to file a Demand  Registration
Statement  unless the aggregate number of shares of Common Stock requested to be
registered for resale thereby shall be at least the lesser of (i) 500,000 shares
of Common Stock (subject to adjustment for stock splits, stock dividends and the
like) and (ii) the  Registerable  Securities,  Other  Securities,  Common  Stock
issuable  upon the  exercise  of  warrants  issued to Rodman &  Renshaw,  LLC as
placement  agent in respect of the offerings of the  Registrable  Securities and
Other  Securities,  the  shares of Common  Stock  held by those  holders  of the
Company who held shares of the Company prior to the  effectiveness of the Merger
and the shares of Common  Stock held by the  Existing  Holders  not  theretofore
registered  for  resale  on a  Registration  Statement  or  Demand  Registration
Statement.

                                       6
<PAGE>

                  g. LEGAL  COUNSEL.  Subject to Section 5 hereof,  the  Holders
shall have the right to select one legal  counsel to review and oversee for such
Holders any registrations  pursuant to this Section 2 ("LEGAL  COUNSEL"),  which
shall be Paul, Weiss,  Rifkind,  Wharton & Garrison LLP or such other counsel as
thereafter   designated  by  (i)  the  Required  Holders  in  the  case  of  the
Registration  Statement  and (ii) the  Holders  of the  majority  of  requesting
Holder(s) in the case of a Demand Registration Statement.  The Company and Legal
Counsel shall  reasonably  cooperate with each other in performing the Company's
obligations under this Agreement.

                  h.  INELIGIBILITY  FOR FORM S-3. In the event that Form S-3 is
not  available  for the  registration  of the resale of  Registrable  Securities
hereunder,  the Company (unless at such time the Company is eligible to register
its Common Stock for resale on Form SB-2,  and the  Registrable  Securities  are
duly  registered  for resale on Form SB-2) shall (i)  register the resale of the
Registrable  Securities on another appropriate form reasonably acceptable to the
Required  Holders  and (ii)  undertake  to  promptly  register  the  Registrable
Securities on Form S-3 if such form becomes  available to the Company during the
two year period  following  the Closing  Date,  provided  that the Company shall
maintain the  effectiveness of the  Registration  Statement then in effect until
such time as a  Registration  Statement  on Form S-3  covering  the  Registrable
Securities has been declared effective by the SEC.

                  i.  EFFECT  OF  FAILURE  TO  FILE  AND  OBTAIN  AND   MAINTAIN
EFFECTIVENESS  OF  REGISTRATION  STATEMENT.  If  (i)  a  Registration  Statement
covering all of the  Registrable  Securities  required to be covered thereby and
required to be filed by the Company  pursuant to this Agreement is (A) not filed
with the SEC on or before the Filing  Deadline (a "FILING  FAILURE") or (B) not,
subject to the reductions  provided for by Section 2(d),  declared  effective by
the SEC on or before the Effectiveness Deadline (an "EFFECTIVENESS  FAILURE") or
(ii) on any  day  after  the  Effective  Date  sales  of all of the  Registrable
Securities  required  to be included on such  Registration  Statement  or Demand
Registration Statement, as applicable,  cannot be made (other than (A) during an
Allowable  Grace Period (as defined in Section 3(r)) or (B) during any period in
which the Company is diligently pursuing the effectiveness under the 1933 Act of
any amendment to such Registration Statement or Demand Registration Statement (a
"MAINTENANCE GRACE PERIOD"))  pursuant to such Registration  Statement or Demand
Registration Statement (including,  without limitation,  because of a failure to
keep such  Registration  Statement,  subject to the  reductions  provided for by
Section  2(d),  or Demand  Registration  Statement  effective,  to disclose such
information  as is necessary for sales to be made pursuant to such  Registration
Statement  or Demand  Registration  Statement,  as  applicable,  to  register  a
sufficient  number of shares of Common  Stock or to maintain the listing of such
shares of Common Stock) (a  "MAINTENANCE  FAILURE")  then, as partial relief for
the  damages to any holder by reason of any such  delay in or  reduction  of its
ability to sell the underlying shares of Common Stock (which remedy shall not be
exclusive  of any other  remedies  available  at law or in equity),  the Company
shall pay to each holder of Registrable Securities relating to such Registration
Statement, or Demand Registration  Statement, as applicable,  an amount in cash,
equal to one percent  (1.0%) of the  aggregate  Purchase  Price (as such term is
defined in the Securities  Purchase  Agreement) of such  Investor's  Registrable
Securities included (or required to be included) in such Registration  Statement
(or, in the case of a Maintenance  Failure,  Demand Registration  Statement,  as
applicable) on each of the following  dates: (i) the thirtieth day (prorated for
periods totaling less than thirty (30) days) after any Filing Failure;  (ii) the
thirtieth day  (prorated for periods  totaling less than thirty (30) days) after
any Effectiveness Failure; and (iii) the thirtieth day (prorated for

                                       7
<PAGE>

periods  totaling less than thirty (30) days) after any  Maintenance  Failure is
cured  and an  amount  in cash  equal to two  percent  (2.0%)  of the  aggregate
Purchase Price of such Investor's  Registrable  Securities included (or required
to be included) in such Registration Statement (or, in the case of a Maintenance
Failure,  Demand Registration Statement, as applicable) on each of the following
dates:  (i) on every  thirtieth  day  (prorated  for periods  totaling less than
thirty (30) days) starting with the sixtieth day after the Filing Deadline until
such Filing Failure is cured;  (ii) on every thirtieth day (prorated for periods
totaling  less than thirty (30) days)  starting  with the sixtieth day after the
Effectiveness  Deadline until such Effectiveness  Failure is cured; and (iii) on
every  thirtieth day (prorated for periods  totaling less than thirty (30) days)
after the occurrence of a Maintenance  Failure until such Maintenance Failure is
cured. The payments to which a holder shall be entitled pursuant to this Section
2(i) are referred to herein as "REGISTRATION DELAY PAYMENTS." Registration Delay
Payments  shall be paid on the earlier of (I) the last day of the calendar month
during which such  Registration  Delay  Payments are incurred and (II) the third
Business Day after the event or failure  giving rise to the  Registration  Delay
Payments is cured.  In the event the Company  fails to make  Registration  Delay
Payments  in a timely  manner,  such  Registration  Delay  Payments  shall  bear
interest at the rate of one and one-half  percent (1.5%) per month (prorated for
partial  months) until paid in full.  Notwithstanding  anything herein or in the
Securities  Purchase  Agreement  to  the  contrary,  (i) no  Registration  Delay
Payments  shall be due and  payable in respect of the  Warrants  or the  Warrant
Shares,  (ii) in no event  shall  the  aggregate  amount of  Registration  Delay
Payments payable to any Investor (other than Registration Delay Payments payable
pursuant to events that are within the control of the Company or MLI) exceed, in
the aggregate, 10% of the aggregate Purchase Price of the Notes, and (iii) in no
case shall  Registration  Delay  Payments be payable from and after the date the
Conversion  Shares are eligible for sale  pursuant to Rule 144(k) under the 1933
Act.

            3. RELATED OBLIGATIONS.

            At such time as the  Company  is  obligated  to file a  Registration
Statement  or Demand  Registration  Statement  with the SEC  pursuant to Section
2(a),  2(c) 2(e) or 2(h),  the Company  will use its best  efforts to effect the
registration  of the  Registrable  Securities  in  accordance  with the intended
method of disposition thereof and, pursuant thereto,  the Company shall have the
following obligations:

                  a.  The  Company  shall  submit  to the  SEC,  within  two (2)
Business  Days  after  the  Company  learns  that  no  review  of  a  particular
Registration Statement or Demand Registration Statement, as applicable,  will be
made by the  staff  of the  SEC or  that  the  staff  of the SEC has no  further
comments  on  a  particular   Registration   Statement  or  Demand  Registration
Statement,  as the case may be, a request for  acceleration of  effectiveness of
such Registration Statement or Demand Registration Statement, as applicable to a
time and date not later than 48 hours after the submission of such request.  The
Company shall keep each Registration Statement and Demand Registration Statement
effective  pursuant to Rule 415 at all times until the  earliest of (i) the date
as of which the Investors may sell all of the Registrable  Securities covered by
such  Registration  Statement  without  restriction  pursuant to Rule 144(k) (or
successor  thereto)  promulgated  under the 1933 Act, (ii) the third anniversary
hereof,  or (iii) the date on which  the  Investors  shall  have sold all of the
Registrable   Securities  covered  by  such  Registration  Statement  or  Demand
Registration   Statement,   as  applicable  (the  "REGISTRATION  PERIOD").  Each
Registration  Statement and each Demand  Registration  Statement  (including any
amendments or

                                       8
<PAGE>

supplements  thereto and prospectuses  contained  therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein,  or necessary to make the statements  therein (in the case of
prospectuses,  in the light of the  circumstances  in which  they were made) not
misleading.

                  b.  The  Company  shall  prepare  and  file  with the SEC such
amendments   (including   post-effective   amendments)   and  supplements  to  a
Registration Statement or Demand Registration Statement, as applicable,  and the
prospectus  used in  connection  with  such  Registration  Statement  or  Demand
Registration Statement, as applicable,  which prospectus is to be filed pursuant
to Rule 424  promulgated  under the 1933 Act, as may be  necessary  to keep such
Registration  Statement  or  Demand  Registration   Statement,   as  applicable,
effective at all times during the applicable  Registration  Period,  and, during
such  period,  comply  with the  provisions  of the 1933 Act in  respect  of the
disposition  of all  Registrable  Securities  of the  Company  covered  by  such
Registration Statement or Demand Registration  Statement,  as applicable,  until
such time as all of such  Registrable  Securities shall have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in such Registration  Statement.  In the case of amendments
and  supplements  to a  Registration  Statement  which are  required to be filed
pursuant to this Agreement  (including  pursuant to this Section 3(b)) by reason
of the Company filing a report on Form 10-Q, Form 10-QSB, Form 10-K, Form 10-KSB
or any analogous  report under the  Securities  Exchange Act of 1934, as amended
(the "1934 ACT"), the Company shall have  incorporated  such report by reference
into such Registration Statement,  if applicable,  or shall file such amendments
or  supplements  with the SEC on the same day on which  the 1934 Act  report  is
filed which created the  requirement for the Company to amend or supplement such
Registration Statement or Demand Registration Statement, as applicable.

                  c. The Company  shall (A) permit  Legal  Counsel to review and
comment upon (i) a Registration Statement or Demand Registration  Statement,  as
applicable, at least five (5) Business Days prior to its filing with the SEC and
(ii) all amendments and  supplements  to all  Registration  Statements or Demand
Registration Statements, as applicable,  (except for Annual Reports on Form 10-K
and Form  10-KSB,  and  Reports on Form 10-Q and Form  10-QSB and any similar or
successor reports) within a reasonable number of days prior to their filing with
the SEC,  and (B) not file any  Registration  Statement  or Demand  Registration
Statement or amendment or  supplement  thereto in a form to which Legal  Counsel
reasonably  objects.  The Company shall not submit a request for acceleration of
the effectiveness of a Registration Statement or Demand Registration  Statement,
as applicable,  or any amendment or supplement  thereto without prior consent of
Legal Counsel,  which consent shall not be  unreasonably  withheld.  The Company
shall furnish to Legal Counsel, without charge, (i) copies of any correspondence
from  the SEC or the  staff  of the SEC to the  Company  or its  representatives
relating to any  Registration  Statement or Demand  Registration  Statement,  as
applicable, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any  Registration  Statement or Demand  Registration  Statement  and any
amendment(s)  thereto,   including  financial  statements  and  schedules,   all
documents incorporated therein by reference, if requested by an Investor and not
available on the EDGAR system, and all exhibits and (iii) upon the effectiveness
of any Registration Statement or Demand Registration  Statement,  as applicable,
one copy of the  prospectus  included in such  Registration  Statement or Demand
Registration  Statement and all amendments and supplements  thereto. The Company
shall  reasonably

                                       9
<PAGE>

cooperate with Legal Counsel in performing the Company's obligations pursuant to
this Section 3.

                  d.  The  Company  shall   furnish  to  such   Investor   whose
Registrable  Securities  are  included in any  Registration  Statement or Demand
Registration  Statement,  as applicable,  without charge, (i) promptly after the
same is prepared and filed with the SEC, at least one copy of such  Registration
Statement  or  Demand  Registration  Statement  and  any  amendment(s)  thereto,
including financial statements and schedules, all documents incorporated therein
by reference that have not been made available on the EDGAR system, all exhibits
and each preliminary prospectus, (ii) upon the effectiveness of any Registration
Statement or Demand Registration  Statement,  as applicable,  ten (10) copies of
the prospectus  included in such Registration  Statement or Demand  Registration
Statement and all  amendments and  supplements  thereto (or such other number of
copies as such Investor may reasonably  request) and (iii) such other documents,
including  copies of any preliminary or final  prospectus,  as such Investor may
reasonably  request from time to time in order to facilitate the  disposition of
the Registrable Securities owned by such Investor.

                  e. The Company  shall use its best efforts to (i) register and
qualify,  unless an exemption from registration and qualification  applies,  the
resale by  Investors of the  Registrable  Securities  covered by a  Registration
Statement or Demand  Registration  Statement,  as  applicable,  under such other
securities  or "blue  sky" laws of all  applicable  jurisdictions  in the United
States, (ii) prepare and file in those jurisdictions, such amendments (including
post-effective   amendments)   and   supplements  to  such   registrations   and
qualifications as may be necessary to maintain the effectiveness  thereof during
the  applicable  Registration  Period,  (iii) take such other  actions as may be
necessary to maintain such  registrations  and  qualifications  in effect at all
times during the applicable Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required
in connection  therewith or as a condition thereto to (x) qualify to do business
in any jurisdiction  where it would not otherwise be required to qualify but for
this  Section  3(e),  (y)  subject  itself  to  general  taxation  in  any  such
jurisdiction,  or (z) file a general  consent  to service of process in any such
jurisdiction.  The Company shall promptly notify Legal Counsel and each Investor
who  holds  Registrable  Securities  of  the  receipt  by  the  Company  of  any
notification in respect of the suspension of the  registration or  qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any  jurisdiction  in the United  States or its receipt of notice of the
initiation or threatening of any proceeding for such purpose.

                  f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event,  as promptly as  practicable,  and in any
event within  forty-eight  (48) hours after becoming aware (provided that if the
time of awareness is not a Trading Day, such forty-eight hour period shall start
at the  beginning of the next  Trading Day) of such event,  as a result of which
the  prospectus  included in a  Registration  Statement  or Demand  Registration
Statement,  as applicable,  as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such
notice contain any material,  nonpublic  information),  and,  subject to Section
3(r), promptly prepare a supplement or amendment to such Registration  Statement
or Demand  Registration

                                       10
<PAGE>

Statement  to correct such untrue  statement  or omission,  and deliver ten (10)
copies of such  supplement  or amendment to each  investor and Legal Counsel (or
such other  number of copies as such  Investor or Legal  Counsel may  reasonably
request). The Company shall also promptly notify Legal Counsel and each Investor
in writing (i) when a prospectus or any prospectus  supplement or post-effective
amendment  has  been  filed,  and  when  a  Registration   Statement  or  Demand
Registration  Statement or any  post-effective  amendment  has become  effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by  facsimile  within one  Business  Day of such  effectiveness  and by
overnight mail), (ii) of any request by the SEC for amendments or supplements to
a Registration  Statement or Demand Registration Statement or related prospectus
or related information, and (iii) of the Company's reasonable determination that
a post-effective  amendment to a Registration  Statement or Demand  Registration
Statement, as applicable, would be appropriate.

                  g. The  Company  shall use its best  efforts  to  prevent  the
issuance  of  any  stop  order  or  other   suspension  of  effectiveness  of  a
Registration Statement or Demand Registration Statement,  as applicable,  or the
suspension of the qualification of any of the Registrable Securities for sale in
any  jurisdiction  and, if such an order or suspension is issued,  to obtain the
withdrawal of such order or suspension  at the earliest  possible  moment and to
notify Legal Counsel and each Investor who holds  Registrable  Securities  being
sold of the issuance of such order and the resolution  thereof or its receipt of
notice of the initiation or threat of any proceeding for such purpose.

                  h. At the  reasonable  request of any  Investor,  the  Company
shall  furnish  to  such  Investor,  on the  date  of the  effectiveness  of the
Registration  Statement or Demand  Registration  Statement,  as applicable,  and
thereafter from time to time on such dates as an Investor may reasonably request
(i) a letter, dated such date, from the Company's  independent  certified public
accountants  in respect of the numeric values in the  Registration  Statement or
Demand Registration Statement,  as applicable,  which are taken from the audited
or reviewed  financial  statements  of the Company  (and its  Subsidiaries  on a
consolidated basis),  addressed to the Investors,  and (ii) an opinion, dated as
of  such  date,  of  counsel  representing  the  Company  for  purposes  of such
Registration Statement or Demand Registration Statement, as applicable, in form,
scope and substance as is customarily  given in an underwritten  public offering
and filed with the Registration Statement, addressed to the Investors.

                  i. Upon the written request of any Investor in connection with
any  Investor's  due  diligence  requirements,  if any,  the Company  shall make
available for inspection by (i) such Investor,  (ii) Legal Counsel and (iii) one
firm  of   accountants   or  other  agents   retained  by  all  such   Investors
(collectively, the "INSPECTORS"), all pertinent financial and other records, and
pertinent corporate documents and properties of the Company  (collectively,  the
"RECORDS"), as shall be reasonably deemed necessary by each Inspector, and cause
the Company's officers,  directors and employees to supply all information which
any Inspector may reasonably  request;  provided,  however,  that each Inspector
shall  agree in  writing  to hold in  strict  confidence  and shall not make any
disclosure  (except to an  Investor)  or use of any Record or other  information
which the  Company  determines  in good faith to be  confidential,  and of which
determination the Inspectors are so notified,  unless (a) the disclosure of such
Records is  necessary  to avoid or correct a  misstatement  or  omission  in any
Registration  Statement  or is  otherwise  required  under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final,  non-appealable

                                       11
<PAGE>

subpoena or order from a court or government body of competent jurisdiction,  or
(c) the  information  in such Records has been made  generally  available to the
public other than by disclosure  in violation of this or any other  agreement of
which the  Inspector has  knowledge of the terms.  Each Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for,  the  Records  deemed  confidential.   Nothing  herein  (or  in  any  other
confidentiality  agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

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

                  k. The Company shall use its best efforts  either to (i) cause
all of the Registrable  Securities covered by a Registration Statement or Demand
Registration Statement, as applicable,  to be listed on each securities exchange
on which  securities  of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable  Securities is then permitted
under the rules of such exchange, or (ii) if, despite the Company's best efforts
to satisfy,  the preceding  clause (i) the Company is unsuccessful in satisfying
the  preceding  clause (i), to  maintain  the  inclusion  for  quotation  on the
National  Association  of Securities  Dealers  Inc.'s OTC Bulletin  Board or the
American Stock Exchange for such  Registrable  Securities and,  without limiting
the generality of the foregoing, to use its best efforts to arrange for at least
two market  makers to  register  with the  National  Association  of  Securities
Dealers,  Inc. as such in respect of such  Registrable  Securities.  The Company
shall pay all fees and expenses in connection  with  satisfying  its  obligation
under this Section 3(k).

                  l. The Company  shall  cooperate  with the  Investors who hold
Registrable  Securities being offered and, to the extent applicable,  facilitate
the timely preparation and delivery of certificates representing the Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
Investors may  reasonably  request and registered in such names as the Investors
may request.

                  m. If requested by an Investor,  the Company shall (i) as soon
as  practicable   incorporate  in  a  prospectus  supplement  or  post-effective
amendment  such

                                       12
<PAGE>

information as an Investor  reasonably  requests to be included therein relating
to the sale and  distribution  of  Registrable  Securities,  including,  without
limitation, information in respect of the number of Registrable Securities being
offered or sold,  the purchase  price being paid therefor and any other terms of
the offering of the Registrable Securities to be sold in such offering;  (ii) as
soon as practicable make all required  filings of such prospectus  supplement or
post-effective  amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective  amendment; and (iii) as soon as
practicable,  supplement  or make  amendments to any  Registration  Statement or
Demand  Registration  Statement,  as applicable,  if reasonably  requested by an
Investor holding any Registrable Securities.

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

                  o. The Company shall make generally  available to its security
holders  as soon as  practical,  but not later than  ninety  (90) days after the
close of the period covered  thereby,  an earnings  statement (in form complying
with,  and in the manner  provided by, the provisions of Rule 158 under the 1933
Act) covering a  twelve-month  period  beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement or Demand Registration Statement, as applicable.

                  p. NASD RULE 2710  FILING;  BROKER  COMPENSATION.  The Company
shall  effect a filing in  respect of the public  offering  contemplated  by the
Registration  Statement (an "ISSUER  FILING") with the National  Association  of
Securities  Dealers,  Inc. ("NASD") Corporate  Financing  Department pursuant to
NASD  Rule  2710  (b)(10)(A)(i)  within  one  Trading  Day of the date  that the
Registration Statement is first filed with the Commission and pay the filing fee
required by such Issuer Filing.  The Company shall use  commercially  reasonable
efforts to pursue the Issuer  Filing  until the NASD issues a letter  confirming
that it does  not  object  to the  terms  of the  offering  contemplated  by the
Registration  Statement.  The Company  shall  otherwise  use its best efforts to
comply with all applicable  rules and  regulations of the SEC in connection with
any registration.

                  q. Within two (2) Business Days after a Registration Statement
or Demand  Registration  Statement,  as  applicable,  which  covers  Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel for the Company to deliver,  to the transfer  agent for such
Registrable   Securities  (with  copies  to  the  Investors  whose   Registrable
Securities are included in such  Registration  Statement or Demand  Registration
Statement,  as  applicable)  confirmation  that such  Registration  Statement or
Demand Registration Statement, as applicable, has been declared effective by the
SEC in the form attached hereto as EXHIBIT A.

                  r.  Notwithstanding  anything to the contrary  herein,  at any
time after the Effective Date, the Company may delay the disclosure of material,
non-public  information  concerning  the Company the  disclosure of which at the
time is not, in the good faith  opinion of the Board of Directors of the Company
and its  counsel,  in the best  interest of the  Company  and, in the opinion of
counsel to the Company, otherwise required (a "GRACE PERIOD"); provided that

                                       13
<PAGE>

the Company shall  promptly (i) notify the Investors in writing of the existence
of material,  non-public information giving rise to a Grace Period in conformity
with the  provisions  of this  Section  3(r)  (provided  that in each notice the
Company will not disclose the content of such material,  non-public  information
to the  Investors)  and the date on which the Grace Period will begin,  and (ii)
notify the Investors in writing of the date on which the Grace Period ends; and,
provided  further,  that no Grace Period shall exceed ten (10)  consecutive days
and during any three  hundred sixty five (365) day period there shall be no more
than three such Grace  Periods and the first day of any Grace  Period must be at
least five (5) Trading Days after the last day of any prior Grace Period  (each,
an "ALLOWABLE GRACE PERIOD").  For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the Investors
receive  the notice  referred  to in clause (i) and shall end on and include the
later of the date the  Investors  receive the notice  referred to in clause (ii)
and the date referred to in such notice.  The  provisions of Section 3(g) hereof
shall not be applicable  during the period of any Allowable  Grace Period.  Upon
expiration  of the Grace  Period,  the Company shall again be bound by the first
sentence  of Section  3(f) in respect of the  information  giving  rise  thereto
unless such material, non-public information is no longer applicable. Subject to
compliance with applicable securities laws, notwithstanding anything else to the
contrary,  the Company  shall  cause its  transfer  agent to deliver  unlegended
shares of Common Stock to a  transferee  of an Investor in  accordance  with the
terms  of the  Securities  Purchase  Agreement,  and  delivered  a  copy  of the
prospectus included as part of the applicable  Registration Statement (unless an
exemption  from  such  prospectus  delivery  requirement  exists),  prior to the
Investor's  receipt of the notice of a Grace  Period and for which the  Investor
has not yet settled.

                  s. The  Company  shall use its best  efforts to  maintain  the
eligibility  of  its  registration   statement(s)  on  Form  SB-2,  or  S-3,  as
applicable,  until the  earliest of (i) the date as of which the  Investors  may
sell all of the Registrable  Securities  covered by such Registration  Statement
without restriction  pursuant to Rule 144(k) (or successor thereto)  promulgated
under the 1933  Act,  (ii) the third  anniversary  hereof,  or (iii) the date on
which the Investors shall have sold all of the Registrable Securities covered by
such Registration Statement or Demand Registration Statement, as applicable.

            4. OBLIGATIONS OF THE INVESTORS.

                  a.  At  least  five  (5)  Business  Days  prior  to the  first
anticipated  filing  date of a  Registration  Statement  or Demand  Registration
Statement,  as applicable,  the Company shall notify each Investor in writing of
the  information  the Company  requires from each such Investor if such Investor
elects to have any of such Investor's  Registrable  Securities  included in such
Registration Statement or Demand Registration  Statement,  if applicable to such
Investor  pursuant to Section  2(e).  It shall be a condition  precedent  to the
obligations  of the  Company  to  complete  the  registration  pursuant  to this
Agreement in respect of the Registrable Securities of a particular Investor that
such Investor shall furnish to the Company such  information  regarding  itself,
the Registrable  Securities held by it and the intended method of disposition of
the Registrable  Securities held by it as shall be reasonably required to effect
the  effectiveness of the registration of such Registrable  Securities and shall
execute such documents in connection  with such  registration as the Company may
reasonably request.

                                       14
<PAGE>

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

                  c. Each Investor  agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind  described in Section 3(g)
or the first  sentence  of 3(f),  such  Investor  will  immediately  discontinue
disposition of Registrable Securities pursuant to any Registration  Statement(s)
or Demand Registration  Statement(s),  as applicable,  covering such Registrable
Securities  until  such  Investor's  receipt  of copies of the  supplemented  or
amended  prospectus  contemplated  by Section 3(g) or the first sentence of 3(f)
has been filed with the SEC or receipt of notice that no supplement or amendment
is  required.   Subject  to  compliance   with   applicable   securities   laws,
notwithstanding  anything  else to the  contrary,  the  Company  shall cause its
transfer agent to deliver  unlegended  shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement if
requested by such Investor prior to the Investor's  receipt of a notice from the
Company of the  happening of any event of the kind  described in Section 3(g) or
the first  sentence of 3(f) and as to the sale of which the Investor has not yet
settled.

                  d. Each Investor covenants and agrees that it will comply with
the prospectus  delivery  requirements of the 1933 Act as applicable to it or an
exemption therefrom in connection with sales of Registrable  Securities pursuant
to the Registration Statement or Demand Registration Statement, as applicable.

            5. EXPENSES OF REGISTRATION.

            All  reasonable  expenses,  other than  underwriting  discounts  and
commissions incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including,  without limitation,  all registration,
listing and  qualifications  fees,  printers and  accounting  fees, and fees and
disbursements  of counsel for the  Company,  shall be paid by the  Company.  The
Company shall also  reimburse the  Investors for the fees and  disbursements  of
Legal Counsel in connection with registration,  filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $35,000.

            6. INDEMNIFICATION.

            In  the  event  any   Registrable   Securities  are  included  in  a
Registration Statement or Demand Registration  Statement,  as applicable,  under
this Agreement:

                  a. To the fullest  extent  permitted by law, the Company will,
and hereby  does,  indemnify,  hold  harmless  and  defend  each  Investor,  the
directors,  officers, members, partners, employees, agents,  representatives of,
and each Person,  if any,  who  controls any Investor  within the meaning of the
1933 Act or the 1934 Act (each,  an "INDEMNIFIED  PERSON"),  against any losses,
claims,  damages,  liabilities,  judgments,  fines,  penalties,  charges, costs,
reasonable  attorneys'  fees,  amounts paid in settlement or expenses,  joint or
several,  (collectively,  "CLAIMS")  incurred  in  investigating,  preparing  or
defending any action, claim, suit,

                                       15
<PAGE>

inquiry,  proceeding,  investigation  or appeal  taken from the  foregoing by or
before any court or governmental,  administrative  or other  regulatory  agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or alleged  untrue  statement  of a  material  fact in a
Registration  Statement or Demand  Registration  Statement or any post-effective
amendment  thereto or in any filing made in connection with the qualification of
the offering under the  securities or other "blue sky" laws of any  jurisdiction
in which Registrable Securities are offered ("BLUE SKY FILING"), or the omission
or alleged  omission to state a material fact  required to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement or Demand Registration Statement,  as applicable,  or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement  thereto with the SEC) or the omission or alleged omission
to state  therein  any  material  fact  necessary  to make the  statements  made
therein,  in the light of the circumstances  under which the statements  therein
were made,  not  misleading,  (iii) any  violation  or alleged  violation by the
Company  of the 1933  Act,  the 1934  Act,  any other  law,  including,  without
limitation,  any state  securities  law,  or any rule or  regulation  thereunder
relating  to the  offer  or sale of the  Registrable  Securities  pursuant  to a
Registration Statement or Demand Registration Statement, as applicable,  or (iv)
any  violation  of this  Agreement  (the  matters in the  foregoing  clauses (i)
through (iv) being,  collectively,  "VIOLATIONS").  Subject to Section 6(c), the
Company shall reimburse the Indemnified  Persons,  promptly as such expenses are
incurred and are due and payable,  for reasonable legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim.   Notwithstanding   anything  to  the  contrary   contained  herein,  the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified  Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information  furnished in writing
to the Company by such Indemnified  Person for such Indemnified Person expressly
for use in connection  with the  preparation  of the  Registration  Statement or
Demand  Registration  Statement  or any such  amendment  thereof  or  supplement
thereto if the  prospectus  contained  therein was timely made  available by the
Company to such  Indemnified  Person and (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company,  which  consent  shall not be  unreasonably  withheld or
delayed.  Such indemnity shall remain in full force and effect regardless of any
investigation  made by or on behalf of the Indemnified  Person and shall survive
the transfer of the Registrable  Securities by the Investors pursuant to Section
9.

                  b. In  connection  with any  Registration  Statement or Demand
Registration  Statement,  as applicable,  in which an Investor is participating,
each such Investor agrees to severally and not jointly indemnify,  hold harmless
and defend, to the same extent and in the same manner as is set forth in Section
6(a),  the Company,  each of its  directors,  each of its officers who signs the
Registration Statement or Demand Registration Statement, as applicable, and each
Person,  if any, who controls the Company  within the meaning of the 1933 Act or
the 1934 Act (each,  an "INDEMNIFIED  PARTY"),  against any Claim or Indemnified
Damages to which any of them may become  subject,  under the 1933 Act,  the 1934
Act or otherwise,  insofar as such Claim or Indemnified  Damages arise out of or
are  based  upon any  Violation,  in each  case to the

                                       16
<PAGE>

extent, and only to the extent,  that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor
expressly  for use in  connection  with such  Registration  Statement  or Demand
Registration  Statement,  as  applicable;  and,  subject to Section  6(c),  such
Investor will  reimburse any legal or other expenses  reasonably  incurred by an
Indemnified Party in connection with  investigating or defending any such Claim;
PROVIDED,  HOWEVER,  that the indemnity agreement contained in this Section 6(b)
and the  agreement in respect of  contribution  contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such  settlement is effected
without the prior written  consent of such Investor,  which consent shall not be
unreasonably withheld or delayed; PROVIDED,  FURTHER, HOWEVER, that the Investor
shall be liable  under  this  Section  6(b) for only  that  amount of a Claim or
Indemnified  Damages as does not exceed the net  proceeds to such  Investor as a
result  of the sale of  Registrable  Securities  pursuant  to such  Registration
Statement or Demand Registration Statement, as applicable.  Such indemnity shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf  of  such  Indemnified  Party  and  shall  survive  the  transfer  of the
Registrable Securities by the Investors pursuant to Section 9.

                  c.  Promptly  after  receipt  by  an  Indemnified   Person  or
Indemnified  Party  under this  Section 6 of notice of the  commencement  of any
action or proceeding (including any governmental action or proceeding) involving
a Claim,  such  Indemnified  Person or  Indemnified  Party shall,  if a Claim in
respect thereof is to be made against any indemnifying  party under this Section
6,  deliver  to the  indemnifying  party a written  notice  of the  commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the  extent  the  indemnifying  party so  desires,  jointly  with  any  other
indemnifying party similarly  noticed,  to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; PROVIDED,  HOWEVER, that an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees  and  expenses  of not  more  than one  counsel  for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by such counsel of the Indemnified  Person or Indemnified  Party
and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented by such counsel in such  proceeding.  In the case of an
Indemnified  Person,  legal  counsel  referred to in the  immediately  preceding
sentence  shall be  selected  by the  Investors  holding at least a majority  in
interest of the Registrable Securities included in the Registration Statement or
Demand Registration  Statement,  as applicable,  to which the Claim relates. The
Indemnified  Party  or  Indemnified   Person  shall  cooperate  fully  with  the
indemnifying  party in connection  with any  negotiation  or defense of any such
action or Claim by the indemnifying  party and shall furnish to the indemnifying
party  all  information   reasonably  available  to  the  Indemnified  Party  or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified  Person  reasonably  apprised at
all times as to the status of the  defense  or any  settlement  negotiations  in
respect thereof. No indemnifying party shall be liable for any settlement of any
action,  claim  or  proceeding  effected  without  its  prior  written  consent;
PROVIDED,  HOWEVER, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent.  No indemnifying party shall,  without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other  compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such

                                       17
<PAGE>

Indemnified  Party or  Indemnified  Person of a release  from all  liability  in
respect to such Claim or litigation,  and such settlement  shall not include any
admission  as  to  fault  on  the  part  of  the  Indemnified  Party.  Following
indemnification  as provided  for  hereunder,  the  indemnifying  party shall be
subrogated  to all  rights of the  Indemnified  Party or  Indemnified  Person in
respect of all third parties,  firms or corporations  relating to the matter for
which  indemnification  has been made. The failure to deliver  written notice to
the indemnifying  party within a reasonable time of the commencement of any such
action  shall  not  relieve  such  indemnifying  party of any  liability  to the
Indemnified  Person or  Indemnified  Party  under this  Section 6, except to the
extent that the  indemnifying  party is materially  prejudiced in its ability to
defend such action.

                  d. The  indemnification  required  by this  Section 6 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation or defense,  as and when bills are received or Indemnified Damages
are incurred.

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

            7. CONTRIBUTION.

            To the  extent  any  indemnification  by an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  in respect of any amounts for which it would  otherwise  be liable
under Section 6 to the fullest extent permitted by law; PROVIDED, HOWEVER, that:
(i) no Person  involved in the sale of Registrable  Securities,  which Person is
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act) in connection  with such sale,  shall be entitled to  contribution
from any Person  involved  in such sale of  Registrable  Securities  who was not
guilty of fraudulent  misrepresentation;  and (ii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement or Demand Registration Statement, as applicable.

            8. REPORTS UNDER THE 1934 ACT.

            With a view to making  available  to the  Investors  the benefits of
Rule 144 promulgated  under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time permit the  Investors to sell  securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:

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

                  b. file with the SEC in a timely  manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such  requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

                                       18
<PAGE>

                  c.  furnish to each  Investor  so long as such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company,  if true, that it has complied with the reporting  requirements of Rule
144,  the 1933 Act and the 1934 Act,  (ii) a copy of the most  recent  annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other  information as may be reasonably  requested to
permit  the  Investors  to sell such  securities  pursuant  to Rule 144  without
registration.

            9. ASSIGNMENT OF REGISTRATION RIGHTS.

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

            10. AMENDMENT OF REGISTRATION RIGHTS.

            Provisions  of this  Agreement  may be  amended  and the  observance
thereof may be waived (either  generally or in a particular  instance and either
retroactively  or  prospectively),  only with the written consent of the Company
and the Required  Holders.  Any amendment or waiver  effected in accordance with
this  Section 10 shall be binding upon each  Investor  and the Company.  No such
amendment  shall be  effective to the extent that it applies to less than all of
the holders of the Registrable Securities.  No consideration shall be offered or
paid to any  Person  to amend or  consent  to a waiver  or  modification  of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.

            11. MISCELLANEOUS.

                  a. The  provisions of this  Agreement  shall apply to the full
extent set forth herein in respect of (i) the shares of Common  Stock,  (ii) any
and all shares of voting  common  stock of the Company  into which the shares of
Common Stock are converted,  exchanged or substituted in any recapitalization or
other  capital  reorganization  by the  Company  and  (iii)  any and all  equity
securities of the Company or any successor or assign of the Company  (whether by
merger,  consolidation,  sale of  assets  or  otherwise)  which may be issued in
respect of, in conversion of, in exchange for or in substitution  of, the shares
of Common Stock and shall be  appropriately  adjusted  for any stock  dividends,
splits,  reverse  splits  (other  than  the  Reverse  Split  as  defined  in the
Securities Purchase  Agreement),  combinations,  recapitalizations  and the like
occurring  after the date hereof.  The Company shall not enter into an agreement
in respect of a Fundamental Transaction (as defined in the Notes) which does not
provide  that the  Successor

                                       19
<PAGE>

Entity (as defined in the Notes), if any, shall assume the obligations set forth
herein or enter into a new  registration  rights agreement with the Investors on
terms  substantially  the same as those  remaining  under  this  Agreement  as a
condition of any such transaction.

                  b. A Person is deemed to be a holder of Registrable Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two  or  more  Persons  in  respect  of  the  same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the record owner of such Registrable Securities.

                  c. Any  notices,  consents,  waivers  or other  communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered personally provided same is on a Business Day and, if not, on the next
Business Day; (ii) upon receipt,  when sent by facsimile (provided  confirmation
of transmission is mechanically or electronically  generated and kept on file by
the sending  party)  provided same is on a Business Day and, if not, on the next
Business Day; (iii) one (1) Business Day after deposit with an overnight courier
service,  in each case  properly  addressed to the party to receive the same; or
(iv) if sent by certified mail, return receipt requested, when received or three
(3) days after deposited in the mails, whichever occurs first. The addresses and
facsimile numbers for such communications shall be:

      If to the Company:

            Aerobic Creations, Inc.
            547 Boulevard
            Kenilworth, NJ 07033
            Telephone: (908) 497-0280
            Facsimile: (908) 497-0295
            Attention: Robert Agresti

            with a copy to:

            Brown Rudnick Berlack Israels LLP
            One Financial Center
            Boston, MA  02111
            Telephone: (617) 856-8200
            Facsimile: (617) 856-8201
            Attention: Raymer McQuiston, Esq.
                       John G. Nossiff, Jr., Esq.

If to an Investor,  to its address and facsimile number set forth in the records
of the Company or the Transfer Agent, as applicable, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers,

      with a copy (for informational purposes) to:

                                       20
<PAGE>

            Schulte Roth & Zabel LLP
            919 Third Avenue
            New York, New York  10022
            Telephone: (212) 756-2000
            Facsimile: (212) 593-5955
            Attention: Eleazer N. Klein, Esq.

or to such other address and/or facsimile number and/or to the attention of such
other Person as the  recipient  party has  specified by written  notice given to
each  other  party  five (5) days  prior to the  effectiveness  of such  change.
Written  confirmation  of receipt  (A) given by the  recipient  of such  notice,
consent,  waiver or other  communication,  (B)  mechanically  or  electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile  number  and an image of the first  page of such  transmission  or (C)
provided by a courier or overnight courier service shall be rebuttable  evidence
of  personal  service,  receipt  by  facsimile  or  receipt  from  a  nationally
recognized  overnight  delivery  service in accordance  with clause (i), (ii) or
(iii) above, respectively.

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

            e. All questions concerning the construction,  validity, enforcement
and  interpretation  of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to any choice of law or conflict of
law  provision  or  rule  (whether  of the  State  of  New  York  or  any  other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby  irrevocably  submits to the
exclusive  jurisdiction  of the state and federal  courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction  contemplated hereby or discussed
herein,  and hereby  irrevocably  waives,  and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  The Company hereby appoints  Corporation
Service  Company,  as its agent for  service  of  process  in New York.  Nothing
contained  herein shall be deemed to limit in any way any right to serve process
in any manner  permitted  by law. If any  provision of this  Agreement  shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability  of any  provision of this  Agreement in any other  jurisdiction.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

                                       21
<PAGE>

            f.  This  Agreement  supersedes  all  other  prior  oral or  written
agreements  between the Company,  their  affiliates  and Persons acting on their
behalf in respect of the  matters  discussed  herein,  and this  Agreement,  the
Transaction  Documents and the instruments  referenced herein contain the entire
understanding  of the  parties  in  respect of the  matters  covered  herein and
therein and,  except as  specifically  set forth herein or therein,  neither the
Company  nor  any  Buyer  makes  any  representation,   warranty,   covenant  or
undertaking  in respect of such matters.  No provision of this  Agreement may be
amended other than by an instrument  in writing  signed by the Company,  and the
Required  Holders,  and any amendment to this Agreement made in conformity  with
the  provisions of this Section 11(f) shall be binding on all Buyers and holders
of Securities as applicable.  No provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the applicable  Securities then outstanding.  No consideration
shall be  offered  or paid to any  Person  to amend or  consent  to a waiver  or
modification  of any provision of any of the  Transaction  Documents  unless the
same  consideration  also is  offered to all of the  parties to the  Transaction
Documents,  holders of Notes or holders of the Warrants, as the case may be. The
Company has not,  directly or indirectly,  made any  agreements  with any Buyers
relating to the terms or  conditions  of the  transactions  contemplated  by the
Transaction Documents except as set forth in the Transaction Documents.  Without
limiting the foregoing,  the Company confirms that,  except as set forth in this
Agreement  and the  applicable  Transaction  Documents,  no  Buyer  has made any
commitment  or promise or has any other  obligation  to provide any financing to
the Company or otherwise.

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

            h. The headings in this  Agreement are for  convenience of reference
only  and  shall  not form a part  of,  or  affect  the  interpretation  of this
Agreement.

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

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

            k. All consents and other determinations  required to be made by the
Investors  pursuant to this Agreement shall be made, unless otherwise  specified
in this  Agreement,  by the Required  Holders,  determined  as if all of the (i)
Notes held by Investors were converted into, and (ii) Warrants held by Investors
then outstanding were exercised for,  Registrable  Securities  without regard to
any limitation on conversion of the Notes or exercise of the Warrants.

                                       22
<PAGE>

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

            m. This  Agreement is intended for the benefit of the parties hereto
and  their  respective  permitted  successors  and  assigns,  and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person except
to the extent set forth in Section 6.

            n. The  obligations  of each Investor  hereunder are several and not
joint with the  obligations  of any other  Investor,  and no  provision  of this
Agreement is intended to confer any  obligations  on any Investor  vis-a-vis any
other Investor.  Nothing contained  herein,  and no action taken by any Investor
pursuant  hereto,  shall be deemed to constitute the Investors as a partnership,
an  association,  a joint  venture  or any  other  kind of  entity,  or create a
presumption that the Investors are in any way acting in concert or as a group in
respect of such obligations or the transactions contemplated herein.

            o. This Agreement and each of the provisions hereof shall be subject
to the Intercreditor Agreement

                                   * * * * * *

                                       23
<PAGE>

            IN WITNESS  WHEREOF,  each Buyer and the Company  have caused  their
respective  signature  page to this  Registration  Rights  Agreement  to be duly
executed as of the date first written above.

                                           COMPANY:

                                           AEROBIC CREATIONS, INC.

                                           By: _________________________________
                                               Name:
                                               Title:

                       [Signature Pages of Buyers Follow]

<PAGE>

            IN WITNESS  WHEREOF,  each Buyer and the Company  have caused  their
respective  signature  page to this  Registration  Rights  Agreement  to be duly
executed as of the date first written above.

                                           BUYERS:

                                           SILVER OAK CAPITAL, L.L.C.

                                           By: _________________________________
                                               Name:
                                               Title:

<PAGE>

            IN WITNESS  WHEREOF,  each Buyer and the Company  have caused  their
respective  signature  page to this  Registration  Rights  Agreement  to be duly
executed as of the date first written above.

                                           BUYERS:

                                           [BUYER]

                                           By: _________________________________
                                               Name:
                                               Title:

<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                  BUYER'S ADDRESS                 BUYER'S REPRESENTATIVE'S ADDRESS
               BUYER                           AND FACSIMILE NUMBER                     AND FACSIMILE NUMBER
<S>                                <C>                                          <C>
Silver Oak Capital, L.L.C.         [               ]
                                   Attention:                                   PAUL, WEISS, RIFKIND, WHARTON &
                                   Facsimilie:                                  GARRISON LLP
                                   Telephone:                                   1285 Avenue of the Americas | New
                                   Residence:                                   York, NY 10019-6064
                                                                                Attn: Doug Cifu
Alexandra Global Master Fund LTD   c/o Alexandra Investment Management, LLC
                                   767 Third Avenue,
                                   39th Floor
                                   New York, NY 10019
                                   Attention: Dov Gal
                                              Mikhail Filimonov
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Bay Harbour Management             885 Third Ave, 34th Floor
                                   New York, NY 10016
                                   Attention: Gaurav Aggarwal
                                              Steven Van Dyke
                                   Facsimilie:
                                   Telephone:
                                   Residence:
CAMOFI Master LDC                  c/o Centrecourt Asset Management LLC
                                   350 Madison Avenue, 8th Floor
                                   New York, NY 10017
                                   Attention: Jeffrey M. Haas
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Diamond Opportunity Fund, LLC      500 Skokie Blvd, Suite 300
                                   Northbrook, IL 60062
                                   Attention: Richard Marks
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Evolution Master Fund LTD SPC,     c/o Evolution Capital Management, LLC
Segregated Portfolio M             1132 Bishop Street, Suite 1880
                                   Honolulu, HI 96813
                                   Attention: Adrian Brindle
                                   Facsimilie:
                                   Telephone:
                                   Residence:
</TABLE>

<PAGE>

<TABLE>
<S>                                <C>                                          <C>
Harvest Capital, LP                Marjorie G. Kellner
                                   c/o Harvest Management LLC
                                   600 Madison Avenue - 11th Floor
                                   New York, NY 10022
                                   Attention:
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Harvest Offshore Investors, Ltd.   c/o Harvest Management LLC
                                   600 Madison Avenue - 11th Floor
                                   New York, NY 10022
                                   Attention: Marjorie G. Kellner
                                   Facsimilie:
                                   Telephone:
                                   Residence:
TE Harvest Portfolio, Ltd.         c/o Harvest Management LLC
                                   600 Madison Avenue - 11th Floor
                                   New York, NY 10022
                                   Attention: Marjorie G. Kellner
                                   Facsimilie:
                                   Telephone:
                                   Residence:
JMG Capital Partners, LP           11601 Wilshire Blvd,
                                   Ste 2180
                                   Los Angeles, CA 90025
                                   Attention: Nouk Newton
JMG Triton Offshore Fund, Ltd      Wickham Cay
                                   Road Town Tortola BVI
                                   11601 Wilshire Blvd, Ste 2180
                                   Los Angeles, CA 90025
                                   Attention: Nouk Newton
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Shoshone Partners, L.P.            485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Knott Partners, L.P.               485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
</TABLE>

<PAGE>

<TABLE>
<S>                                <C>                                          <C>
Finderne LLC                       485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Mulsanne Partners, L.P.            485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Matterhorn Offshore Fund Ltd.      485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
CommonFund Hedged Equity Company   485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Good Steward Trading Co. s.p.c.    485 Underhill Blvd.
                                   Suite 205
                                   Syosset, NY 11791
                                   Attention: Lisa Nigro
                                              Pat Eaton-Buettner
                                              Anthony Campbell
                                              David Jeuda
                                   Facsimilie:
                                   Telephone:
                                   Residence:
</TABLE>

<PAGE>

<TABLE>
<S>                                <C>                                          <C>
Radcliffe SPC, Ltd. for and on     c/o RG Capital Management, L.P.
behalf of the Class A Segregated   3 Bala Plaza - East
Portfolio                          Suite 501
                                   Bala Cynwyd, PA 19004
                                   Attention: Gerald F. Stahlecker
                                   Facsimilie:
                                   Telephone:
                                   Residence:
Wolverine Convertible Arbitrage    c/o Wolverine Asset Management
Trading, Limited                   175 W Jackson #200
                                   Chicago, IL 60604
                                   Attention: Andy Sujdak
                                              Alicia Alvez
                                   Facsimilie:
                                   Telephone:
                                   Residence:
</TABLE>

<PAGE>

                                                                   SCHEDULE 2(B)

                                EXISTING HOLDERS

Robert Agresti - 434,561                   Gregory DeSaye - 43,750

Christopher Dombalis - 351,897             Peter Klaver - 208,713

Neil Devine - 36,000                       James Madden - 283,995

Raymer McQuiston - 370,033                 Robert O'Neill - 43,750

Paul Shahbazian - 197,959                  Peter Stone - 142,695

Michael DeSaye - 43,750                    William Knight - 345,772

Robert Lee - 334,875                       Robert Wu - 334,875

Protex Holdings Limited - 450,000          Paul Gaidis - 18,500

James Deveau - 27,250                      Darren Young - 12,500

Juan Rocio - 18,500                        Richard Nazarro - 15,500

Kenneth Kausner - 2,000                    James O'Neill - 15,500

Anthony Marcello - 14,000                  Joseph Cangelosi - 15,500

John Kurowski - 15,500                     Debra Ann Sheehy - 13,500

Owen Kelly - 15,500                        Sean Burns - 2,500

Thomas Pentland - 2,500                    Kenneth Savulich - 7,500

Gary Hecht - 12,500                        Thomas Wyville - 2,500

Brian Southwell - 8,500                    Di Wang

James Killen - 2,500                       Han Huy Ling - 1,000

Lucille Waldrip - 500                      Joseph A. DeSaye - 18,750

Wang Dong - 18,500

FMI, INC. - 1,105,840

<PAGE>

KRG CAPITAL FUND (FF), L.P. - 7,423        KRG CO-INVESTMENT, LLC - 654

KRG CAPITAL FUND II, L.P. - 301,695        KRG CAPITAL FUND (PA), L.P. - 94,388

INDOSUEZ CAPITAL PARTNERS. 2003,           ACAS EQUITY HOLDING CORP. - 99,610
L.L.C. - 41,780

INDOSUEZ CMII, INC. - 16,110

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Transfer Agent]
[address]

Attention: [                ]

            Re:   Aerobic Creations, Inc.

Ladies and Gentlemen:

            [We  are][I  am]  counsel to  Aerobic  Creations,  Inc.,  a Delaware
corporation (the "COMPANY"), and have represented Maritime Logistics US Holdings
Inc.  ("MLI") in  connection  with that certain  Securities  Purchase  Agreement
(Notes) (the "SECURITIES PURCHASE AGREEMENT") entered into by and among MLI, and
the Company  (pursuant to that certain Joinder Agreement dated as of November 8,
2006) and the buyers named therein  (collectively,  the  "HOLDERS")  pursuant to
which the Company issued to the Holders secured  convertible notes (the "NOTES")
convertible  into the Company's  common  stock,  $0.001 par value per share (the
"COMMON  STOCK")  and  warrants  exercisable  for  shares of Common  Stock  (the
"WARRANTS"). Pursuant to the Securities Purchase Agreement, the Company also has
entered into a Registration Rights Agreement with the Holders (the "REGISTRATION
RIGHTS AGREEMENT")  pursuant to which the Company agreed, among other things, to
register  the  Registrable  Securities  (as defined in the  Registration  Rights
Agreement), including the shares of Common Stock issuable upon conversion of the
Notes and the shares of Common Stock  issuable  upon  exercise of the  Warrants,
under the  Securities  Act of 1933,  as amended (the "1933 ACT").  In connection
with the Company's  obligations  under the  Registration  Rights  Agreement,  on
____________  ___,  200_,  the Company  filed a  Registration  Statement on Form
[S-3/SB-2] (File No.  333-_____________) (the "REGISTRATION STATEMENT") with the
Securities  and  Exchange  Commission  (the "SEC")  relating to the  Registrable
Securities which names each of the Holders as a selling stockholder thereunder.

            Please  notify us  immediately  upon the  request  of any  Holder to
transfer shares of Common Stock pursuant to the Registration  Statement. We will
then provide you a letter regarding the  transferability of the shares of Common
Stock under the Registration Statement.

                                             Very truly yours,

                                             Brown Rudnick Berlack Israels LLP

                                             By:_____________________

CC:   [LIST NAMES OF HOLDERS]

                                      A-1
<PAGE>

                                                                       EXHIBIT B

                              SELLING STOCKHOLDERS

      The shares of Common Stock being offered by the selling  stockholders  are
those  previously  issued to the selling  stockholders  and those  issuable upon
conversion  of the  convertible  notes and upon  exercise of the  warrants.  For
additional  information  regarding  the issuance of those shares of Common Stock
and warrants  and  convertible  notes and  warrants,  see "Private  Placement of
Common Stock and  Warrants"  and "Private  Placement  of  Convertible  Notes and
Warrants"  above.  We are  registering  the  shares of Common  Stock in order to
permit the  selling  stockholders  to offer the  shares for resale  from time to
time. Except for the ownership of the shares of common stock,  convertible notes
and warrants issued pursuant to the Securities Purchase Agreements,  the selling
stockholders who acquired their securities  pursuant to the Securities  Purchase
Agreements have not had any material  relationship with us within the past three
years.  [INCLUDE  IF  SUCH  PERSONS  ARE  "SELLING  SHAREHOLDERS"  -  MODIFY  AS
APPLICABLE:   ______________,   _________________,   and  _________________  are
officers, directors, and/or consultants of the company subject to the provisions
of a lock up agreement pursuant to which,  although their shares of Common Stock
are being registered for resale  hereunder,  are generally not permitted to sell
their  shares  for a period of at least two years  from the date of the  reverse
merger described under  "_______________"  in this prospectus.  _______________,
_______________,  and  __________________  acquired their shares of Common Stock
registered  for  resale  hereunder,  in  connection  with  various  transactions
pursuant to which the company  acquired  businesses  and/or  business  interests
previously  [controlled] by such persons.  Although their shares of Common Stock
are being registered for resale  hereunder,  they are generally not permitted to
sell  their  shares  for a period  of at least  two  years  from the date of the
reverse  merger.  For a description of the  acquisitions  of such businesses and
business   interests,   see   "_______________________"   in  this   prospectus.
________________,  __________________ and __________________  held shares of the
Company prior to the date of the reverse  merger and may therefore be considered
"promoters".  Rodman & Renshaw,  LLC acted as our placement  agent in respect of
the  issuance of the  convertible  notes and  warrants  and the shares of Common
Stock,  and  received  warrants  exercisable  for  shares  of  Common  Stock  in
connection therewith.]

      The table  below  lists the  selling  stockholders  and other  information
regarding the beneficial  ownership of the shares of Common Stock by each of the
selling  stockholders.  The second  column  lists the number of shares of Common
Stock beneficially owned by each selling stockholder,  based on its ownership of
the convertible  notes and warrants,  as of ________,  200_.(1) In computing the
number of shares  beneficially owned by a selling stockholder and the

----------
(1) Note to Draft: Each Investor's entry in this column should be footnoted with
the following text: As described  below, all conversions of, or exercises under,
the convertible  notes and the warrants are subject to the restriction that such
conversions  or  exercises  do not  result  in the  holder  and  its  affiliates
beneficially  owning more than 9.99% of our outstanding  shares of common stock.
Based on the [_______]  shares of our common stock that were  outstanding  as of
[insert date], as of such date, each of these selling stockholders may be deemed
to beneficially  own and may only convert and/or exercise a maximum of [_______]
shares of our common stock under its respective convertible note and warrant.

                                      B-1
<PAGE>

percentage  of  ownership of that  selling  stockholder,  shares of common stock
underlying  the  convertible  notes  and  the  warrants  held  by  that  selling
stockholder  that are convertible or exercisable,  as the case may be, within 60
days of  [insert  date] are  included.  Those  shares,  however,  are not deemed
outstanding  for the purpose of computing the percentage  ownership of any other
selling stockholder.  Each selling stockholder's  percentage of ownership in the
following table is based upon [______] shares of common stock  outstanding as of
[insert  date].  We will not  receive any of the  proceeds  from the sale of our
common stock by the selling  stockholders.  None of these  selling  stockholders
are, or are affiliates of, a broker-dealer registered under the Exchange Act.

      The third column  lists the shares of Common  Stock being  offered by this
prospectus by each selling stockholder.

      In accordance with the terms of registration  rights  agreements among the
Company and the  selling  stockholders,  this  prospectus  generally  covers the
resale of at least the shares of Common Stock issued in the private placement of
Common  Stock and warrants and 130% of the sum of the number of shares of Common
Stock issued or issuable (x) upon conversion of the convertible  notes,  and (y)
upon  exercise of the  warrants,  determined  as if the  outstanding  notes were
converted  and  warrants  were  exercised  in full,  each as of the  trading day
immediately  preceding the date the  registration  statement is initially  filed
with the SEC.  Because  the  conversion  price of the  convertible  notes may be
adjusted and the exercise  price of the warrants may be adjusted,  the number of
shares  that  will  actually  be issued  may be more or less than the  number of
shares being offered by this  prospectus.  The fourth column assumes the sale of
all of  the  shares  offered  by  the  selling  stockholders  pursuant  to  this
prospectus.

      Under  the terms of the  convertible  notes  and the  warrants,  a selling
stockholder  may not convert the  convertible  notes or exercise the warrants to
the extent such  conversion  or exercise  would cause such selling  stockholder,
together with its affiliates,  to beneficially  own a number of shares of Common
Stock which would exceed [9.99%] of our then outstanding  shares of Common Stock
following  such   conversion  or  exercise,   excluding  for  purposes  of  such
determination shares of Common Stock issuable upon conversion of the convertible
notes which have not been  converted and upon exercise of the warrants that have
not been  exercised.  The number of shares in the second column does not reflect
this  limitation.  The selling  stockholders may sell all, some or none of their
shares in this offering. See "Plan of Distribution."

<TABLE>
<CAPTION>
                                                                    MAXIMUM NUMBER OF SHARES
                                          NUMBER OF SHARES OWNED     TO BE SOLD PURSUANT TO       NUMBER OF SHARES
NAME OF SELLING STOCKHOLDER                  PRIOR TO OFFERING           THIS PROSPECTUS        OWNED AFTER OFFERING
<S>                                                                                                      <C>
                                                                                                         0
</TABLE>

                                      B-2
<PAGE>

                              PLAN OF DISTRIBUTION

      We are  registering  the shares of Common  Stock  issued  pursuant  to the
Securities  Purchase  Agreement  (Common and  Warrants) and the shares of Common
Stock issuable upon conversion of the convertible notes and upon exercise of the
warrants to permit the resale of these  shares of Common Stock by the holders of
the  convertible  notes and  warrants  from time to time  after the date of this
prospectus.  [INCLUDE IF SUCH  PERSONS ARE  "SELLING  SHAREHOLDERS"  - MODIFY AS
APPLICABLE:  We are  also  registering  the  shares  of  Common  Stock  held  by
______________,  _________________,  and  _________________  who  are  officers,
directors,    and/or   consultants   of   the   company,   by   _______________,
_______________,  and  __________________  who  acquired  their shares of Common
Stock in  connection  with  various  transactions  pursuant to which the company
acquired  businesses and/or business interests  previously  [controlled] by such
persons, by ________________, __________________ and __________________ who held
shares of the company  prior to the date of the  reverse  merger and by Rodman &
Renshaw,  LLC who received  warrants  exercisable  for shares of Common Stock in
connection  services  performed to the company as placement  agent.] We will not
receive any of the  proceeds  from the sale by the selling  stockholders  of the
shares  of Common  Stock.  We will bear all fees and  expenses  incident  to our
obligation to register the shares of Common Stock.

      The selling stockholders may sell all or a portion of the shares of Common
Stock  beneficially  owned by them and offered hereby from time to time directly
or through one or more underwriters,  broker-dealers or agents. If the shares of
Common  Stock are sold  through  underwriters  or  broker-dealers,  the  selling
stockholders  will be responsible for  underwriting  discounts or commissions or
agent's  commissions.  The  shares  of  Common  Stock may be sold in one or more
transactions  at fixed prices,  at  prevailing  market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions,  which may involve crosses or block
transactions,

      o     on any national  securities  exchange or quotation  service on which
            the securities may be listed or quoted at the time of sale;

      o     in the over-the-counter market;

      o     in  transactions  otherwise than on these exchanges or systems or in
            the over-the-counter market;

      o     through the writing of options,  whether  such options are listed on
            an options exchange or otherwise;

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

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

                                      B-3
<PAGE>

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

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

      o     privately negotiated transactions;

      o     short sales;

      o     sales pursuant to Rule 144;

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

      o     a combination of any such methods of sale; and

      o     any other method permitted pursuant to applicable law.

      If the selling  stockholders effect such transactions by selling shares of
Common  Stock  to  or  through  underwriters,  broker-dealers  or  agents,  such
underwriters,  broker-dealers  or agents may receive  commissions in the form of
discounts,   concessions  or  commissions  from  the  selling   stockholders  or
commissions  from purchasers of the shares of Common Stock for whom they may act
as agent or to whom they may sell as principal (which discounts,  concessions or
commissions as to particular  underwriters,  broker-dealers  or agents may be in
excess of those customary in the types of transactions involved);  provided that
the commissions payable to, or discounts received by, any member of the National
Securities  Dealers  Association,  Inc.  shall not  exceed 8% of the sale of any
shares of Common Stock being registered pursuant to Rule 415. In connection with
sales of the shares of Common Stock or otherwise,  the selling  stockholders may
enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of the shares of Common  Stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of Common Stock short
and deliver shares of Common Stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling  stockholders  may  also  loan or  pledge  shares  of  Common  Stock  to
broker-dealers that in turn may sell such shares.

      The selling  stockholders may pledge or grant a security  interest in some
or all of the  convertible  notes,  warrants or shares of Common  Stock owned by
them and, if they default in the performance of their secured  obligations,  the
pledgees or secured  parties may offer and sell the shares of Common  Stock from
time to time pursuant to this  prospectus  or any  amendment to this  prospectus
under Rule  424(b)(3) or other  applicable  provision of the  Securities  Act of
1933, as amended,  amending,  if necessary,  the list of selling stockholders to
include  the  pledgee,  transferee  or other  successors  in interest as selling
stockholders under this prospectus.  The selling  stockholders also may transfer
and donate the shares of Common Stock in other  circumstances  in which case the
transferees,  donees,  pledgees  or other  successors  in  interest  will be the
selling beneficial owners for purposes of this prospectus.

                                      B-4
<PAGE>

      The  selling  stockholders  and any  broker-dealers  or  agents  that  are
involved  in  selling   the  shares  of  Common   Stock  may  be  deemed  to  be
"underwriters"  within the meaning of the Securities Act in connection with such
sales. In such event, any commissions  received by such broker dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting  commissions or discounts  under the  Securities  Act. Each Selling
Stockholder  has  informed the Company that it does not have any written or oral
agreement  or  understanding,   directly  or  indirectly,  with  any  person  to
distribute the Common Stock.  The maximum  commission or discount to be received
by any NASD member or independent  broker/dealer  will not be greater than eight
percent  (8.0%)  for the  sale of any  securities  registered  pursuant  to this
registration  statement.  At the time a  particular  offering  of the  shares of
Common Stock is made, a prospectus supplement,  if required, will be distributed
which  will set forth the  aggregate  amount  of  shares of Common  Stock  being
offered  and the  terms  of the  offering,  including  the  name or names of any
broker-dealers   or  agents,   any  discounts,   commissions   and  other  terms
constituting  compensation  from the  selling  stockholders  and any  discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.

      Under the securities  laws of some states,  the shares of Common Stock may
be sold in such states only through  registered or licensed  brokers or dealers.
In  addition,  in some states the shares of Common  Stock may not be sold unless
such  shares  have been  registered  or  qualified  for sale in such state or an
exemption from registration or qualification is available and is complied with.

      There can be no assurance  that any selling  stockholder  will sell any or
all of the  shares of  Common  Stock  registered  pursuant  to the  registration
statement, of which this prospectus forms a part.

      The  selling  stockholders  and any  other  person  participating  in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended,  and the rules and regulations  thereunder,  including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of  purchases  and sales of any of the  shares of  Common  Stock by the  selling
stockholders and any other participating person.  Regulation M may also restrict
the ability of any person  engaged in the  distribution  of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the  ability  of any  person  or  entity  to  engage in  market-making
activities in respect of the shares of Common Stock.

      We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration  rights agreements,  estimated to be $[ ] in total,
including,  without  limitation,  Securities and Exchange Commission filing fees
and expenses of compliance with state  securities or "blue sky" laws;  PROVIDED,
HOWEVER,  that a selling  stockholder  will pay all  underwriting  discounts and
selling commissions,  if any. We will indemnify the selling stockholders against
liabilities,  including some liabilities under the Securities Act, in accordance
with the registration  rights  agreements,  or the selling  stockholders will be
entitled to  contribution.  We may be  indemnified  by the selling  stockholders
against civil liabilities,  including liabilities under the Securities Act, that
may  arise  from  any  written  information  furnished  to  us  by  the  selling
stockholder  specifically  for use in this  prospectus,  in accordance  with the
related registration rights agreements, or we may be entitled to contribution.

                                      B-5
<PAGE>

      Once sold under the registration statement, of which this prospectus forms
a part,  the  shares of Common  Stock  will be freely  tradable  in the hands of
persons other than our affiliates.

                                      B-6

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