Document:

Exhibit 10.3

                          REGISTRATION RIGHTS AGREEMENT

                  This Registration  Rights Agreement (this "AGREEMENT") is made
and entered into as of April 14, 2005, by and among RCG COMPANIES  INCORPORATED,
a Delaware corporation (the "COMPANY"), and the investors signatory hereto (each
a "INVESTOR" and collectively, the "INVESTORS").

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

                  The Company and the Investors hereby agree as follows:

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

                  "ADVICE" has the meaning set forth in Section 6(d).

                  "EFFECTIVE  DATE" means, as to a Registration  Statement,  the
date on which such  Registration  Statement is first  declared  effective by the
Commission.

                  "EFFECTIVENESS  DATE"  means (a) with  respect to the  initial
Registration  Statement required to be filed under Section 2(a), the earlier of:
(a)(i) the 90th calendar day following the Closing Date; provided,  that, if the
Commission reviews and has written comments to the filed Registration  Statement
that would  require the filing of a  pre-effective  amendment  thereto  with the
Commission,  then the  Effectiveness  Date under this clause (a)(i) shall be the
135th  calendar day following  the Closing Date,  and (ii) the fifth Trading Day
following the date on which the Company is notified by the  Commission  that the
initial  Registration  Statement will not be reviewed or is no longer subject to
further review and comments; and (b) with respect to any additional Registration
Statements that may be required pursuant to Section 2(b), the earlier of (i) the
90th  calendar  day  following  (x) if such  Registration  Statement is required
because the  Commission  shall have notified the Company in writing that certain
Registrable  Securities  were not eligible for  inclusion on a previously  filed
Registration Statement,  the date or time on which the Commission shall indicate
as being the first  date or time that such  Registrable  Securities  may then be
included in a Registration  Statement,  or (y) if such Registration Statement is
required for a reason  other than as  described in (x) above,  the date on which
the Company first knows, or reasonably  should have known,  that such additional
Registration Statement(s) is required; provided, that, if the Commission reviews
and has written  comments to a  Registration  Statement  that would  require the
filing  of a  pre-effective  amendment  thereto  with the  Commission,  then the
Effectiveness  Date under this  clause  (b)(i) for such  Registration  Statement
shall be the 135th calendar day following the date that the Company first knows,
or reasonably should have known, that such additional  Registration Statement is
required  under such Section,  and (ii) the fifth Trading Day following the date
on which  the  Company  is  notified  by the  Commission  that  such  additional
Registration  Statement  will not be reviewed or is no longer subject to further
review and comments.

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                  "EFFECTIVENESS  PERIOD"  has the  meaning set forth in Section
2(a).

                  "EXCHANGE ACT" means the  Securities  Exchange Act of 1934, as
amended.

                  "FILING   DATE"   means  (a)  with   respect  to  the  initial
Registration  Statement  required  to be  filed  under  Section  2(a),  the 30th
calendar day following  the Closing Date and (b) with respect to any  additional
Registration  Statements that may be required pursuant to Section 2(b), the 30th
calendar day following (x) if such  Registration  Statement is required  because
the  Commission  shall  have  notified  the  Company  in  writing  that  certain
Registrable  Securities  were not eligible for  inclusion on a previously  filed
Registration Statement,  the date or time on which the Commission shall indicate
as being the first  date or time that such  Registrable  Securities  may then be
included in a Registration  Statement,  or (y) if such Registration Statement is
required for a reason  other than as  described in (x) above,  the date on which
the Company first knows, or reasonably  should have known,  that such additional
Registration Statement(s) is required.

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

                  "INDEMNIFIED PARTY" has the meaning set forth in Section 5(c).

                  "INDEMNIFYING  PARTY"  has the  meaning  set forth in  Section
5(c).

                  "LOSSES" has the meaning set forth in Section 5(a).

                  "NEW YORK COURTS" means the state and federal  courts  sitting
in the City of New York, Borough of Manhattan.

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

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

                  "REGISTRABLE  SECURITIES"  means the  Warrant  Shares  and the
Underlying  Shares  issued  and  issuable  under the  Warrants  and the  Shares,
respectively  (without  regard to any exercise or conversion  caps  thereunder),
together with any securities  issued or issuable upon any stock split,  dividend
or other  distribution,  recapitalization or similar event, or any conversion or
exercise price adjustments with respect to any such securities.

                  "REGISTRATION  STATEMENT"  means (i) the initial  registration
statement  required to be filed in accordance  with Section  2(a),  and (ii) any
additional  registration  statement(s)  required to be filed under Section 2(b),

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including (in each case) the  Prospectus,  amendments  and  supplements  to such
registration  statements  or  Prospectus,   including  pre-  and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference therein.

                  "RULE  144"  means  Rule  144  promulgated  by the  Commission
pursuant to the  Securities  Act, as such Rule may be amended from time to time,
or any similar rule or regulation  hereafter  adopted by the  Commission  having
substantially the same effect as such Rule.

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

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

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

                  "SHARES"  means the shares of Series C  Convertible  Preferred
Stock issuable to the Investors pursuant to the Purchase  Agreement,  having the
rights, preferences and privileges set forth in the Certificate of Designation.

                  "UNDERLYING  SHARES" means the shares of Common Stock issuable
upon conversion of the Shares.

                  "WARRANTS" means the Common Stock purchase  warrants issued or
issuable  to  the  Investors  pursuant  to  the  Purchase  Agreement  and to any
Placement  Agent  identified  in Section  3.1(t) of the  Purchase  Agreement  in
accordance  with the terms of the engagement or similar  agreements  between the
Company and any such agents.

                  "WARRANT  SHARES"  means the shares of Common  Stock issued or
issuable upon exercise of the Warrants.

         2. Registration.

                  (a) On or prior to each Filing Date, the Company shall prepare
and file with the Commission a Registration Statement covering the resale of all
Registrable  Securities  not  already  covered  by  an  existing  and  effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (or on such other form  appropriate  for such purpose).
Such Registration Statement shall contain (except if otherwise required pursuant
to  written  comments  received  from  the  Commission  upon a  review  of  such
Registration  Statement) the "Plan of Distribution"  attached hereto as Annex A.
The Company  shall cause such  Registration  Statement to be declared  effective
under the  Securities  Act as soon as possible but, in any event,  no later than
its  Effectiveness  Date, and shall use its reasonable  best efforts to keep the
Registration Statement continuously effective under the Securities Act until the
date which is the earlier of (i) five years after its Effective  Date, (ii) such
time as all of the Registrable Securities covered by such Registration Statement

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have  been  publicly  sold by the  Holders,  or  (iii)  such  time as all of the
Registrable Securities covered by such Registration Statement may be sold by the
Holders  pursuant  to Rule  144(k) as  determined  by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the  Company's  transfer  agent and the  affected  Holders  (the  "EFFECTIVENESS
PERIOD").

                  (b) If for any  reason the  Commission  does not permit all of
the Registrable  Securities to be included in the  Registration  Statement filed
pursuant to Section  2(a), or for any other reason any  outstanding  Registrable
Securities are not then covered by an effective Registration Statement, then the
Company  shall  prepare  and  file by the  Filing  Date  for  such  Registration
Statement,  an  additional  Registration  Statement  covering  the resale of all
Registrable  Securities  not  already  covered  by  an  existing  and  effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-3 (or on such other form  appropriate  for such purpose).
Each such  Registration  Statement shall contain  (except if otherwise  required
pursuant to written comments  received from the Commission upon a review of such
Registration  Statement) the "Plan of Distribution"  attached hereto as Annex A.
The  Company  shall  cause  each  such  Registration  Statement  to be  declared
effective under the Securities Act as soon as possible but, in any event, by its
Effectiveness  Date,  and shall use its  reasonable  best  efforts  to keep such
Registration  Statement  continuously  effective under the Securities Act during
the entire Effectiveness Period.

                  (c) If: (i) a Registration  Statement is not filed on or prior
to its  Filing  Date (if the  Company  files a  Registration  Statement  without
affording  the  Holders  the  opportunity  to review and  comment on the same as
required  by  Section  3(a)  hereof,  the  Company  shall  not be deemed to have
satisfied  this clause (i)),  or (ii) a  Registration  Statement is not declared
effective by the Commission on or prior to its required  Effectiveness  Date, or
(iii) after its  Effective  Date,  without  regard for the reason  thereunder or
efforts  therefore,  such  Registration  Statement  ceases  for any reason to be
effective and available to the Holders as to all Registrable Securities to which
it is required to cover at any time prior to the expiration of its Effectiveness
Period for 20  consecutive  calendar  days, or an aggregate of 30 calendar days,
during  any  12-month  period  (which  need not be  consecutive  days) (any such
failure or breach  being  referred to as an "EVENT," and for purposes of clauses
(i) or (ii) the date on which such Event occurs, or for purposes of clause (iii)
the date which such 20 or 30 calendar day period is exceeded,  being referred to
as "EVENT  DATE"),  then in  addition  to any other  rights the Holders may have
hereunder or under applicable law: (x) on each such Event Date the Company shall
pay to each Holder an amount in cash, as partial liquidated damages and not as a
penalty,  equal to 1.0% of the aggregate  Investment  Amount paid by such Holder
for  Shares  pursuant  to  the  Purchase  Agreement;  and  (y) on  each  monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable  Event is cured,  the Company shall pay
to each  Holder an amount in cash,  as partial  liquidated  damages and not as a
penalty,  equal to 1.0% of the aggregate  Investment  Amount paid by such Holder
for Shares  pursuant  to the  Purchase  Agreement.  The  parties  agree that the
Company will not be liable for liquidated  damages under this Section in respect
of the  Warrants.  If the Company  fails to pay any partial  liquidated  damages
pursuant  to this  Section in full  within  seven  calendar  days after the date
payable,  the Company will pay  interest  thereon at a rate of 10% per annum (or
such lesser  maximum  amount that is permitted to be paid by applicable  law) to
the Holder, accruing daily from the date such partial liquidated damages are due

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until  such  amounts,  plus all such  interest  thereon,  are paid in full.  The
partial  liquidated  damages pursuant to the terms hereof shall apply on a daily
pro-rata basis for any portion of a month prior to the cure of an Event,  except
in the case of the first Event Date.

                  (d) Each  Holder  agrees to furnish to the Company a completed
Questionnaire  in the form  attached  to this  Agreement  as Annex B (a "SELLING
HOLDER  QUESTIONNAIRE").  The  Company  shall not be  required  to  include  the
Registrable  Securities of a Holder in a Registration Statement and shall not be
required to pay any liquidated or other damages under Section 2(c) to any Holder
who  fails  to  furnish  to  the  Company  a  fully  completed   Selling  Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).  During any periods that the Company is
unable  to  meet  its  obligations  with  respect  to  the  registration  of the
Registrable  Securities  because  a Holder  fails to  furnish  such  information
pursuant to the  Company's  request under this  Agreement or the Selling  Holder
Questionnaire, any failure by the Company to comply with the Registration Rights
Agreement  that may occur  solely  because of such delay  shall be excused as to
such Holder until such information is delivered to the Company.

         3. Registration Procedures.

                  In  connection  with the  Company's  registration  obligations
hereunder, the Company shall:

                  (a) Not less than four  Trading  Days prior to the filing of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,  the  Company  shall  furnish  to each  Holder  copies of the  "Selling
Stockholders" section of such document,  the "Plan of Distribution" and any risk
factor contained in such document that addresses  specifically  this transaction
or the Selling  Stockholders,  as proposed to be filed which  documents  will be
subject to the review of such Holder.  The Company shall not file a Registration
Statement,  any Prospectus or any amendments or supplements thereto in which the
"Selling  Stockholder" section thereof differs from the disclosure received from
a Holder in its Selling Holder Questionnaire (as amended or supplemented).

                  (b) (i) Prepare and file with the Commission such  amendments,
including  post-effective  amendments,  to each  Registration  Statement and the
Prospectus  used in  connection  therewith  as may be  necessary  to  keep  such
Registration  Statement  continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424;  (iii)
respond as promptly as  reasonably  possible to any comments  received  from the
Commission with respect to each Registration  Statement or any amendment thereto
and, as promptly as  reasonably  possible  provide the Holders true and complete
copies  of all  correspondence  from  and to the  Commission  relating  to  such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public  information  concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with  respect to the  Registration  Statements  and the  disposition  of all
Registrable Securities covered by each Registration Statement.

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                  (c) Notify the  Holders as  promptly  as  reasonably  possible
(and,  in the case of (i)(A)  below,  not less than three  Trading Days prior to
such  filing)  and (if  requested  by any such  Person)  confirm  such notice in
writing no later than one Trading Day following the day (i)(A) when a Prospectus
or any  Prospectus  supplement  or  post-effective  amendment to a  Registration
Statement is proposed to be filed; (B) when the Commission  notifies the Company
whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete  copies thereof and all written  responses  thereto to
each of the Holders that pertain to the Holders as a Selling  Stockholder  or to
the Plan of Distribution,  but not information  which the Company believes would
constitute  material and non-public  information);  and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective;  (ii) of any request by the  Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or  Prospectus  or for  additional  information;  (iii) of the  issuance  by the
Commission of any stop order  suspending  the  effectiveness  of a  Registration
Statement covering any or all of the Registrable Securities or the initiation of
any  Proceedings  for that  purpose;  (iv) of the  receipt by the Company of any
notification  with respect to the suspension of the  qualification  or exemption
from  qualification  of  any of  the  Registrable  Securities  for  sale  in any
jurisdiction,  or the  initiation  or  threatening  of any  Proceeding  for such
purpose;  and (v) of the  occurrence  of any event or passage of time that makes
the financial  statements  included in a Registration  Statement  ineligible for
inclusion  therein  or any  statement  made in such  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material respect or that requires any revisions to such
Registration  Statement,  Prospectus or other  documents so that, in the case of
such Registration  Statement or the Prospectus,  as the case may be, it will not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in light of the circumstances under which they were made, not misleading.

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

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

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

                  (g) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders in connection with the
registration  or   qualification   (or  exemption  from  such   registration  or

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qualification)  of such  Registrable  Securities  for offer  and sale  under the
securities  or Blue Sky  laws of all  jurisdictions  within  the  United  States
reasonably  requested  in  writing  by the  selling  Holders,  to keep each such
registration or  qualification  (or exemption  therefrom)  effective  during the
Effectiveness  Period  and to do any and all  other  acts or  things  reasonably
necessary or advisable to enable the  disposition in such  jurisdictions  of the
Registrable Securities covered by the Registration  Statements;  provided,  that
the Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified,  (ii) subject the Company to any
material tax in any such jurisdiction where it is not then so subject,  or (iii)
file a general consent to service of process in any such jurisdiction.

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

                  (i) Upon the occurrence of any event  contemplated  by Section
3(c)(v), as promptly as reasonably possible,  prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated  therein by reference,  and file any other required  document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue  statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances under which they were made, not misleading.

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

         5. Indemnification.

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                  (a)  Indemnification  by  the  Company.   The  Company  shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each Holder, the officers,  directors,  agents,  investment advisors,  partners,
members and employees of each of them,  each Person who controls any such Holder
(within  the  meaning of Section 15 of the  Securities  Act or Section 20 of the
Exchange  Act) and the  officers,  directors,  agents and employees of each such
controlling  Person, to the fullest extent permitted by applicable law, from and
against any and all losses,  claims,  damages,  liabilities,  costs  (including,
without  limitation,  reasonable costs of preparation and reasonable  attorneys'
fees) and expenses  (collectively,  "LOSSES"),  as  incurred,  arising out of or
relating to any untrue or alleged untrue  statement of a material fact contained
in any  Registration  Statement,  any Prospectus or any form of prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or  relating  to any  omission  or alleged  omission  of a material  fact
required to be stated  therein or necessary to make the  statements  therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances  under which they were made) not misleading,  except to the
extent, but only to the extent, that (1) such untrue statements or omissions are
based solely upon information  regarding such Holder furnished in writing to the
Company by such Holder  expressly  for use  therein,  or to the extent that such
information  relates  to  such  Holder  or  such  Holder's  proposed  method  of
distribution of Registrable  Securities and was reviewed and expressly  approved
in writing by such Holder expressly for use in the Registration Statement,  such
Prospectus or such form of Prospectus or in any amendment or supplement  thereto
(it being  understood  that the  Holder  has  approved  Annex A hereto  for this
purpose) or (2) in the case of an occurrence  of an event of the type  specified
in Section  3(c)(ii)-(v),  the use by such Holder of an  outdated  or  defective
Prospectus  after the  Company  has  notified  such  Holder in writing  that the
Prospectus  is outdated or defective  and prior to the receipt by such Holder of
an Advice  or an  amended  or  supplemented  Prospectus,  but only if and to the
extent that  following the receipt of the Advice or the amended or  supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected.  The Company  shall notify the Holders  promptly of the  institution,
threat  or  assertion  of any  Proceeding  of  which  the  Company  is  aware in
connection with the transactions contemplated by this Agreement.

                  (b) Indemnification by Holders.  Each Holder shall,  severally
and not  jointly,  indemnify  and hold  harmless  the  Company,  its  directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses,  as
incurred,  arising solely out of or based solely upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue statement of a material fact contained in any Registration Statement,
any  Prospectus,  or any form of  prospectus,  or in any amendment or supplement
thereto,  or  arising  solely  out of or based  solely  upon any  omission  of a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading  to the extent,  but only to the extent  that,  (1) such
untrue statements or omissions are based solely upon information  regarding such
Holder  furnished  in writing to the  Company by such Holder  expressly  for use
therein,  or to the extent that such information  relates to such Holder or such
Holder's  proposed  method of  distribution  of  Registrable  Securities and was
reviewed and expressly  approved in writing by such Holder  expressly for use in
the  Registration  Statement (it being  understood  that the Holder has approved
Annex A hereto for this purpose),  such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an

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event of the type specified in Section  3(c)(ii)-(v),  the use by such Holder of
an outdated or defective  Prospectus  after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented  Prospectus,  but only
if and to the extent that  following the receipt of the Advice or the amended or
supplemented  Prospectus the  misstatement  or omission giving rise to such Loss
would have been corrected. In no event shall the liability of any selling Holder
hereunder  be  greater  in amount  than the  dollar  amount of the net  proceeds
received by such Holder upon the sale of the Registrable  Securities giving rise
to such indemnification obligation.

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

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

                  All fees and  expenses  of the  Indemnified  Party  (including
reasonable  fees  and  expenses  to  the  extent  incurred  in  connection  with
investigating   or  preparing  to  defend  such   Proceeding  in  a  manner  not
inconsistent  with this  Section)  shall be paid to the  Indemnified  Party,  as

                                       9
<PAGE>

incurred,  within ten Trading Days of written notice thereof to the Indemnifying
Party  (regardless  of whether it is ultimately  determined  that an Indemnified
Party  is  not  entitled  to  indemnification  hereunder;   provided,  that  the
Indemnifying  Party may require such Indemnified Party to undertake to reimburse
all such fees and  expenses  to the extent it is finally  judicially  determined
that such Indemnified Party is not entitled to indemnification hereunder).

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

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

                  The indemnity and  contribution  agreements  contained in this
Section are in addition to any liability that the Indemnifying  Parties may have
to the Indemnified Parties.

         6. Miscellaneous.

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

                                       10
<PAGE>

action for specific  performance  in respect of such breach,  it shall waive the
defense that a remedy at law would be adequate.

                  (b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 3.1(u) to the Purchase Agreement,  neither the Company nor
any of its security  holders  (other than the Holders in such capacity  pursuant
hereto) may include securities of the Company in a Registration  Statement other
than  the  Registrable  Securities,   and  the  Company  shall  not  during  the
Registration  Period enter into any agreement providing any such right to any of
its security holders.

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

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

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

                  (f) Amendments and Waivers.  The provisions of this Agreement,
including the provisions of this Section 6(f),  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority  in interest of the then  outstanding
Registrable  Securities.  Notwithstanding the foregoing,  a waiver or consent to
depart  from  the  provisions  hereof  with  respect  to a matter  that  relates
exclusively  to the  rights of certain  Holders  and that does not  directly  or

                                       11
<PAGE>

indirectly  affect  the  rights of other  Holders  may be given by Holders of at
least a majority of the  Registrable  Securities to which such waiver or consent
relates.

                  (g) Notices.  Any and all notices or other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (a) the date of
transmission,  if such  notice  or  communication  is  delivered  via  facsimile
(provided the sender  receives a  machine-generated  confirmation  of successful
transmission)  at the facsimile  number  specified in this Section prior to 6:30
p.m.  (New York City time) on a Trading  Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m.  (New York City time) on any  Trading  Day,  (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service,  or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and  communications
shall be as follows:

         If to the Company:    RCG Companies Incorporated
                               6836 Morrison Boulevard, Suite 200
                               Charlotte, NC 28211
                               Attn:  Chief Financial Officer
                               Facsimile: (704) 366-5056

         With a copy to:       Katten Muchin Zavis Rosenman
                               525 West Monroe Street
                               Chicago, IL 60661
                               Attn.:  Matthew S. Brown
                               Facsimile:  (312) 577-8726

         If to a Investor:     To the address set forth under such Investor's
                               name on the signature pages hereto.

         If to any other Person who is then the registered Holder:

                               To the  address of such Holder as it appears
                               in the stock transfer books of the Company

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

                  (h) Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.

                  (i) Execution and Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken  together  shall  constitute  one and the
same  Agreement.  In the event that any  signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the

                                       12
<PAGE>

party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                  (j) Governing Law. All questions  concerning the construction,
validity,  enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party agrees that all Proceedings  concerning the  interpretations,  enforcement
and defense of the transactions  contemplated by this Agreement (whether brought
against a party hereto or its respective  Affiliates,  employees or agents) will
be  commenced  in the New York  Courts.  Each party  hereto  hereby  irrevocably
submits  to  the  exclusive   jurisdiction  of  the  New  York  Courts  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  Proceeding,  any claim that it is not
personally  subject  to the  jurisdiction  of any New York  Court,  or that such
Proceeding has been commenced in an improper or inconvenient  forum.  Each party
hereto hereby  irrevocably  waives  personal  service of process and consents to
process  being  served in any such  Proceeding  by  mailing a copy  thereof  via
registered or certified  mail or overnight  delivery (with evidence of delivery)
to such party at the  address in effect for  notices to it under this  Agreement
and agrees that such service shall  constitute  good and  sufficient  service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve  process in any manner  permitted by law.  Each party
hereto hereby irrevocably  waives, to the fullest extent permitted by applicable
law,  any and all  right to trial by jury in any  Proceeding  arising  out of or
relating to this Agreement or the transactions  contemplated  hereby.  If either
party shall commence a Proceeding to enforce any  provisions of this  Agreement,
then the prevailing  party in such  Proceeding  shall be reimbursed by the other
party for its reasonable  attorney's fees and other costs and expenses  incurred
with the investigation, preparation and prosecution of such Proceeding.

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

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

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

                  (n) Independent  Nature of Investors'  Obligations and Rights.
The  obligations of each Investor under this Agreement are several and not joint
with  the  obligations  of  each  other  Investor,  and  no  Investor  shall  be
responsible  in any way for the  performance  of the  obligations  of any  other

                                       13
<PAGE>

Investor under this Agreement.  Nothing  contained  herein or in any Transaction
Document,  and no action taken by any Investor pursuant thereto, 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  with  respect to such  obligations  or the
transactions  contemplated by this Agreement or any other Transaction  Document.
Each  Investor  acknowledges  that no other  Investor will be acting as agent of
such Investor in enforcing its rights under this Agreement.  Each Investor shall
be entitled to independently  protect and enforce its rights,  including without
limitation  the  rights  arising  out of this  Agreement,  and it  shall  not be
necessary  for any other  Investor  to be joined as an  additional  party in any
Proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Registration Rights Agreement for the purpose of
closing a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]

                                       14
<PAGE>

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

                                            RCG COMPANIES INCORPORATED

                                            By: \s\ Marc E. Bercoon
                                                -------------------------------
                                                Name:  Marc E. Bercoon
                                                Title:  Chief Financial Officer

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES OF INVESTORS TO FOLLOW]

                                       15
<PAGE>

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

                                        NAME OF INVESTING ENTITY

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                        ADDRESS FOR NOTICE

                                        c/o:
                                             ----------------------------------

                                        Street:
                                                -------------------------------

                                        City/State/Zip:
                                                        -----------------------

                                        Attention:
                                                   ----------------------------

                                        Tel:
                                                 ------------------------------

                                        Fax:
                                                 ------------------------------

                                        Email:
                                                 ------------------------------

                                       16
<PAGE>

                                                                         Annex A

                                               Plan of Distribution

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

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

         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;

         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        to  cover   short   sales   made  after  the  date  that  this
                  Registration   Statement   is   declared   effective   by  the
                  Commission;

         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.

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

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

         The  Selling  Stockholders  may  from  time to time  pledge  or grant a
security  interest  in some or all of the  Shares  owned  by them  and,  if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell  shares of Common  Stock from time to time under this
prospectus,  or under an amendment to this  prospectus  under Rule  424(b)(3) or
other  applicable  provision of the  Securities Act of 1933 amending the list of
selling  stockholders to include the pledgee,  transferee or other successors in
interest as selling stockholders under this prospectus.

                                       17
<PAGE>

         Upon the Company  being  notified  in writing by a Selling  Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale  of  Common  Stock  through  a  block  trade,  special  offering,  exchange
distribution or secondary  distribution  or a purchase by a broker or dealer,  a
supplement  to this  prospectus  will be filed,  if  required,  pursuant to Rule
424(b) under the  Securities  Act,  disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved,  (iii) the price at which such the  shares of Common  Stock were sold,
(iv)the   commissions   paid  or  discounts  or  concessions   allowed  to  such
broker-dealer(s),  where  applicable,  (v) that  such  broker-dealer(s)  did not
conduct any  investigation  to verify the information set out or incorporated by
reference in this prospectus,  and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee  intends to sell more than 500 shares of Common Stock, a
supplement to this  prospectus will be filed if then required in accordance with
applicable securities law.

         The Selling  Stockholders  also may transfer the shares of Common Stock
in  other  circumstances,  in  which  case the  transferees,  pledgees  or other
successors  in interest  will be the selling  beneficial  owners for purposes of
this prospectus.

         The  Selling  Stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions  or discounts  under the  Securities  Act.  Discounts,  concessions,
commissions and similar selling expenses,  if any, that can be attributed to the
sale  of  Securities  will  be  paid  by  the  Selling  Stockholder  and/or  the
purchasers.  Each  Selling  Stockholder  has  represented  and  warranted to the
Company that it acquired the securities  subject to this registration  statement
in the ordinary course of such Selling  Stockholder's  business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings,  directly or indirectly,  with any person to distribute any such
securities.

         The Company has advised  each Selling  Stockholder  that it may not use
shares registered on this Registration  Statement to cover short sales of Common
Stock  made prior to the date on which this  Registration  Statement  shall have
been declared  effective by the Commission.  If a Selling  Stockholder uses this
prospectus  for any  sale  of the  Common  Stock,  it  will  be  subject  to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible  to comply with the applicable  provisions of the Securities
Act and Exchange  Act,  and the rules and  regulations  thereunder  promulgated,
including,  without  limitation,  Regulation  M, as  applicable  to such Selling
Stockholders  in connection with resales of their  respective  shares under this
Registration Statement.

         The Company is required  to pay all fees and  expenses  incident to the
registration  of the shares,  but the Company will not receive any proceeds from
the sale of the Common  Stock.  The Company has agreed to indemnify  the Selling
Stockholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.

                                       18
<PAGE>

                                                                         Annex B

                           RCG COMPANIES INCORPORATED

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

The undersigned  beneficial owner of common stock (the "COMMON  STOCK"),  of RCG
COMPANIES INCORPORATED (the "COMPANY") understands that the Company has filed or
intends to file with the Securities and Exchange Commission (the "COMMISSION") a
Registration  Statement  for the  registration  and  resale  of the  Registrable
Securities,  in accordance with the terms of the Registration  Rights Agreement,
dated as of April 14,  2005 (the  "REGISTRATION  RIGHTS  AGREEMENT"),  among the
Company and the  Investors  named  therein.  A copy of the  Registration  Rights
Agreement  is  available  from the Company upon request at the address set forth
below.  All capitalized  terms used and not otherwise  defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.       NAME.

         (a)      Full Legal Name of Selling Securityholder

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

         (b)      Full Legal Name of  Registered  Holder (if not the same as (a)
                  above) through which  Registrable  Securities Listed in Item 3
                  below are held:

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

         (c)      Full Legal  Name of  Natural  Control  Person  (which  means a
                  natural person who directly or indirectly alone or with others
                  has power to vote or dispose of the securities  covered by the
                  questionnaire):

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

2.  ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

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

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

--------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------

                                       19
<PAGE>

Fax:
     ---------------------------------------------------------------------------
Contact Person:
                ----------------------------------------------------------------

3.  BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

                  Type  and   Principal   Amount   of   Registrable   Securities
                  beneficially owned:

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

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

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

4.  BROKER-DEALER STATUS:

         (a) Are you a broker-dealer?

                                 Yes [ ]   No [ ]

         Note:    If yes, the Commission's staff has indicated that you should
                  be identified as an underwriter in the Registration Statement.

         (b) Are you an affiliate of a broker-dealer?

                                 Yes [ ]   No [ ]

         (c)      If you are an  affiliate  of a  broker-dealer,  do you certify
                  that you bought the  Registrable  Securities  in the  ordinary
                  course of  business,  and at the time of the  purchase  of the
                  Registrable  Securities to be resold, you had no agreements or
                  understandings,  directly  or  indirectly,  with any person to
                  distribute the Registrable Securities?

                                 Yes [ ]   No [ ]

         Note:    If no, the Commission's staff has indicated that you should be
                  identified as an underwriter in the Registration Statement.

5. BENEFICIAL  OWNERSHIP OF OTHER SECURITIES OF THE COMPANY OWNED BY THE SELLING
SECURITYHOLDER.

         Except as set forth  below in this Item 5, the  undersigned  is not the
         beneficial or registered  owner of any  securities of the Company other
         than the Registrable Securities listed above in Item 3.

                  Type and Amount of Other Securities  beneficially owned by the
         Selling Securityholder:

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

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

                                       20
<PAGE>

6.  RELATIONSHIPS WITH THE COMPANY:

         Except as set  forth  below,  neither  the  undersigned  nor any of its
         affiliates,  officers, directors or principal equity holders (owners of
         5% of more of the equity  securities of the  undersigned)  has held any
         position or office or has had any other material  relationship with the
         Company  (or its  predecessors  or  affiliates)  during  the past three
         years.

         State any exceptions here:

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

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

The  undersigned  agrees to promptly  notify the Company of any  inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned  consents to the disclosure of the information
contained  herein in its answers to Items 1 through 6 and the  inclusion of such
information  in the  Registration  Statement  and the  related  prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection  with the preparation or amendment of the  Registration  Statement
and the related prospectus.

IN WITNESS  WHEREOF the  undersigned,  by authority duly given,  has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                                Beneficial Owner:
       ----------------------                           ------------------------

                                      By:
                                           -------------------------------------
                                           Name:
                                           Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                          Katten Muchin Zavis Rosenman
                          525 West Monroe Street
                          Chicago, IL 60661
                          Attn.:  Matthew S. Brown
                          Facsimile:  (312) 577-8726

                                       21Exhibit 10.4

                           RCG COMPANIES INCORPORATED
                       6836 Morrison Boulevard, Suite 200
                               Charlotte, NC 28211

                                                                   April 6, 2005

Crescent International Ltd.                 Perfect Timing, LLC
Alpha Capital AG                            Andrew Reckles
Bristol Investment Fund, Ltd.               JGB Capital L.P.
Palisades Master Fund LP                    Portside Growth and Opportunity Fund

Ladies and Gentlemen:

         Reference is hereby made to that certain

         (i)      Securities  Purchase  Agreement  dated September 13, 2004 (the
                  "Preferred  Stock  Purchase  Agreement"),  by  and  among  RCG
                  Companies  Incorporated  (the  "Company")  and the  purchasers
                  signatory thereto (the "Preferred Stock Purchasers"), pursuant
                  to  which  the  Company  issued  certain  shares  of  Series A
                  Preferred  Stock (the  "Preferred  Stock")  and  common  stock
                  purchase  warrants  (the  "Preferred  Stock  Warrants") to the
                  Preferred Stock Purchasers;

         (ii)     Securities  Purchase  Agreement  dated  February  8, 2005 (the
                  "Debenture Purchase Agreement"),  by and among the Company and
                  the purchasers signatory thereto ("Debenture Purchasers"), and
                  that certain  Security  Agreement  dated February 8, 2005 (the
                  "Security   Agreement"),   by  and  among  the  Company,   all
                  subsidiaries  of the  Company  and the  Debenture  Purchasers,
                  pursuant  to  which  agreements  the  Company  issued  certain
                  convertible  debentures  (the  "Debentures")  and common stock
                  purchase warrants (the "Debenture  Warrants") to the Debenture
                  Purchasers; and

         (iii)    Securities Purchase Agreement dated October 2003 (the "October
                  Purchase  Agreement"),  by  and  among  the  Company  and  the
                  purchasers  signatory  thereto (the "October  Purchasers"  and
                  together with the Preferred Stock Purchasers and the Debenture
                  Purchasers,   the  "Purchasers")  and  common  stock  purchase
                  warrants  issued  pursuant  thereto (the "$.94  Warrants"  and
                  collectively  with the Preferred  Stock Warrants and Debenture
                  Warrants, the "Warrants").

         The  Preferred  Stock  Purchase   Agreement,   the  Debenture  Purchase
Agreement and the October Purchase Agreement are collectively referred to as the
"Purchase  Agreements".  The Purchase  Agreements,  Preferred  Stock,  Warrants,
Security Agreement, Debentures, and all agreements,  instruments,  certificates,
and other  securities  issued or entered into in  connection  therewith  and any
other  agreements  you have with the Company are sometimes  herein  collectively
referred to as the "Transaction Documents."

<PAGE>

April 6, 2005
Page 2

         WHEREAS,  the Company has  determined it to be in its best interests to
offer and sell  through a private  placement to be closed on or before April 22,
2005 through Roth Capital  Partners,  LLC, as a placement  agent,  approximately
$35,000,000,  but may, at the Company's  sole  discretion,  be more or less (the
"Private  Placement"),  shares of redeemable  convertible preferred stock of the
Company  with a  conversion  price at closing of $0.55 (the  "Private  Placement
Preferred  Stock") and common  stock  purchase  warrants of the company  with an
exercise price at closing of $0.55 per share (the "Private Placement Warrants"),
and in connection therewith to effectuate, upon receipt of stockholder approval,
a reverse stock split (the "Reverse Stock Split").

         WHEREAS,  the Company has  determined it to be in its best interests to
use certain of the  proceeds  from the Private  Placement to (i) acquire 100% of
the outstanding capital stock of OneTravel,  Inc. (the "Acquisition"),  and (ii)
to redeem the Debentures (the "Redemption").

         NOW,  THEREFORE,  in consideration of the foregoing and intending to be
legally bound hereby, notwithstanding any provision in any Transaction Documents
to the contrary, the Company and the Purchasers hereby agree as follows:

         (i)

            (a)   the Purchasers,  severally and not jointly, waive any right of
                  first refusal,  participation  or similar  right,  that any of
                  them may have under any Transaction Document to participate in
                  the Private Placement and, in connection therewith,  waive any
                  claims that they may respectively  have against any investment
                  banker,  placement agent or potential  investor in the Private
                  Placement as a result of the execution,  delivery, performance
                  of, or participation in, the Private Placement;

            (b)   upon the closing of the Private  Placement,  the Company  will
                  redeem,  and the  Purchasers  hereby consent to the Redemption
                  of,  the  Debentures  for  an  amount  equal  to  110%  of the
                  outstanding   principal  amount  thereof,  and  in  connection
                  therewith  the  Debenture  Purchasers  agree to  tender  their
                  respective Debentures for Redemption at closing;

            (c)   effective   immediately   upon  the  closing  of  the  Private
                  Placement and the receipt of the approval of our  stockholders
                  as may be  required  under  the  rules of the  American  Stock
                  Exchange,  (1) the conversion price of the Preferred Stock and
                  the exercise  price of each of the $.94 Warrants and Debenture
                  Warrants shall be  automatically  adjusted to and  permanently
                  fixed  at  $0.55,  except  that  the  conversion  price of the
                  Preferred Stock will be reset to the same price which,  and at
                  the same time as, the  Private  Placement  Preferred  Stock is
                  reset in connection with the Reverse Stock Split,  and (2) the
                  exercise  price  of  the  Preferred  Stock  Warrants  with  an

<PAGE>

April 6, 2005
Page 3

                  original  exercise  price  of  $1.20  shall  automatically  be
                  adjusted to and permanently  fixed at $1.00,  which adjustment
                  shall  require no further  action by either the Company or any
                  of the Purchasers;

            (d)   other  than the  adjustments  specified  in clause  (c) above,
                  neither the exercise  price of the Warrants nor the conversion
                  price of the  Preferred  Stock  shall be  subject  to  further
                  adjustments   other  than  equitable   adjustments   following
                  subsequent  stock splits and reverse  stock splits  (including
                  the Reverse Stock Split) or issuances or  distributions to all
                  of our equity  holders,  and other similar events not relating
                  to the price of subsequent agreements relating to or issuances
                  of our securities,  including the Private Placement other than
                  as specified in (c) above; and

            (e)   each  Purchaser,  severally  and not  jointly  with the  other
                  Purchasers,  hereby  agrees  that  neither  it, nor any person
                  acting on its behalf or in concert  therewith  will  engage in
                  any  transactions in or involving our common stock  (including
                  "Short Sales" as  hereinafter  defined) (i) until such time as
                  the  closing  of  the  Private  Placement  has  been  publicly
                  disclosed or April 23, 2005, whichever is earlier, and (ii) if
                  the Private Placement has closed no later than April 22, 2005,
                  during the time  period  that is used to  calculate  the reset
                  conversion price of the Private Placement Preferred Stock as a
                  result of the Reverse  Stock  Split.  "Short  Sales"  include,
                  without  limitation,  all "short sales" as defined in Rule 200
                  promulgated  under  Regulation  SHO under the Exchange Act and
                  all types of direct and indirect stock  pledges,  forward sale
                  contracts,  options,  puts,  calls,  short  sales,  swaps  and
                  similar arrangements  (including on a total return basis), and
                  lending of securities and sales and other transactions through
                  non-US   broker   dealers   or  foreign   regulated   brokers.
                  Notwithstanding  anything herein to the contrary,  in no event
                  shall the  restrictions on a Purchaser's  ability to undertake
                  any such  transactions  as provided  in this clause  (i)(e) be
                  more  restrictive  than the  restrictions on the purchasers in
                  the Private Placement.

      (ii)  conditional   upon  and  subject  to  the  Company   performing  its
            obligations under clause (i)(b) above, each Purchaser, severally and
            not jointly with the other Purchasers, hereby:

            (a)   consents  (to the extent it has the right or is required to do
                  so) to the Private  Placement and the designation and issuance
                  of the Private  Placement  Preferred  Stock as a security pari
                  passu with the Preferred Stock;

            (b)   agrees that all  "Obligations"  under the  Security  Agreement
                  will  have been  satisfied  in full  upon the  payment  of the
                  Redemption amount under clause (i)(b) above, and in connection
                  therewith,  each Debenture  Purchaser shall, at the reasonable
                  request of the Company,  execute such  termination  statements
                  and other  documents  (including an estoppel  certificate  and
                  payoff letter) and make or join with the Company in such other

<PAGE>

April 6, 2005
Page 4

                  filings with respect to any  financing  statements  or similar
                  documents executed or filed pursuant to the Security Agreement
                  as may be reasonably  requested by the Company to evidence the
                  termination  of the  security  interests  and liens  under the
                  Security Agreement;

            (c)   agrees  to  modify  and  amend  the   Purchasers'   respective
                  unsatisfied  registration rights (it being understood that the
                  only Company  securities not yet registered for the Purchasers
                  on the date  hereof are the shares  underlying  the  Debenture
                  Warrants)  and  the  Transaction  Documents  entered  in to in
                  connection  therewith,  such that (1) the Company may register
                  the  resale  of  the  shares  of  common  stock   issuable  in
                  connection with the Private Placement  concurrently  with, and
                  in the same registration statement as, the registration of the
                  shares of common stock issuable upon exercise of the Debenture
                  Warrants,  and may  include  the shares  issued or issuable in
                  connection with the Farequest Holdings, Inc. merger, and up to
                  an additional 200,000  (calculated before giving effect to the
                  Reverse Split) common shares (2) the "Filing Date" will be the
                  earlier  of (x)  the  filing  date  of the  next  registration
                  statement  on Form S-3,  which the Company  will file to cover
                  the common  stock  issuable  in  connection  with the  Private
                  Placement and (y) July 15, 2005, (3) the "Effectiveness  Date"
                  shall be the date on which the registration statement required
                  in connection with the Private  Placement is required to first
                  be declared  effective and (4) the Company may file additional
                  registration  statements  at any time  following the filing of
                  your registration statement;

            (d)   waives any  obligation  of the Company to conduct a meeting of
                  its shareholders prior to June 30, 2005;

            (e)   acknowledges, consents to and approves the Reverse Stock Split
                  and the Redemption;

            (f)   waives any  violations of the terms of, or conflicts  with, or
                  liquidated   damages  in  connection   with,  the  Transaction
                  Documents  which  may  exist or which  may  arise  solely as a
                  result  of the  entering  into or  consummation  of any of the
                  Private Placement,  the Reverse Stock Split and the Redemption
                  and the respective  transactions  undertaken by the Company in
                  connection therewith;

            (g)   acknowledges  that no default or  violation  by the Company of
                  any term of any Transaction Document has occurred that has not
                  been waived or cured; and

            (h)   waives any  liquidated  or other  damages and  penalties  that
                  otherwise  might have accrued to the benefit of the Purchasers
                  under the Transaction Documents prior to the Redemption.

<PAGE>

April 6, 2005
Page 5

         The  Company   acknowledges  and  agrees  that  any  Voting  Agreements
delivered to the  investors  under the Private  Placement  will provide that the
persons  delivering  such  agreements  will  vote in favor  of the  reset of the
exercise  prices and conversion  prices as provided in clause (i)(c) above.  The
Company  also agrees that it will submit to its  stockholders  for approval as a
single proxy item (or otherwise  provide that the  approvals  will be contingent
upon approval of both) the matters  required to be approved by the  stockholders
for the Private  Placement and the resetting of exercise  prices and  conversion
prices as provided in clause (i)(c) above.

         This  letter  agreement  shall not be  effective  unless  and until all
Purchasers agree to all of the foregoing actions, which agreement shall occur on
or before April 15, 2005.

         Other than the  waivers,  consents and  agreements  set forth in clause
(i)(a) and (i)(e) (which will be  irrevocable,  effective and permanent upon the
execution  and  delivery of  counterpart  signature  pages of this  letter,  the
waivers,  consents  and  agreements  set forth in this  letter  agreement  shall
terminate  ab initio and be of no further  force and effect among the parties if
the closing of the Private Placement or the Redemption do not occur by April 22,
2005.

         This  letter  is  not  a  "Pre-Notice"  under  the  Debenture  Purchase
Agreement and shall not operate as an offer to sell  securities to any Purchaser
pursuant to any other Transaction Document.

         Each Debenture  Purchaser hereby represents and warrants that it is the
sole owner of 100% of the Debentures originally issued to it upon the closing of
the transactions contemplated by the Debenture Purchase Agreement, so that, upon
the  Redemption of its  Debentures in accordance  with clause (i)(b) above,  all
Debentures  issued to it at such  closing will be fully  redeemed,  paid off and
discharged.  Each Preferred Stock Purchaser hereby  represents and warrants that
it is the sole owner of 100% of the Preferred Stock and Preferred Stock Warrants
originally issued to it upon the closing of the transactions contemplated by the
Preferred Stock Purchase Agreement. Each October Purchaser hereby represents and
warrants  that it is the  sole  owner of 100% of the  $.94  Warrants  originally
issued to it upon the closing of the  transactions  contemplated  by the October
Purchase Agreement. Each Purchaser severally and not jointly hereby acknowledges
the confidential nature of the information  contained in this letter, and agrees
to maintain in strictest confidence such information and the existence and terms
of this letter.  The Company agrees to file an 8-K with regard to this Agreement
at the same time it files an 8-K regarding the Private Placement.

         This letter  agreement  may be executed in any number of  counterparts,
all of which taken  together shall  constitute  one and the same  instrument and
shall  become  effective  when  counterparts  have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. Execution of this letter agreement may be made by
delivery by facsimile.

<PAGE>

April 6, 2005
Page 6

         Any and all notices or other  communications or deliveries  required or
permitted  to be  provided  hereunder  shall be  delivered  as set  forth in the
applicable  Purchase  Agreements,  except  as set forth on the  signature  pages
hereto.
         The Company  acknowledges and agrees that no  consideration  other than
the  consideration  set forth herein has been or shall be offered or paid to any
other  person to  obtain a  Purchaser's  agreement  to enter  into  this  letter
agreement  or agree to the terms set forth  herein.  The first  sentence of this
paragraph  is intended to treat for the  Company the  Purchasers  as a class and
shall not in any way be  construed as the  Purchasers  acting in concert or as a
group with respect to the purchase,  disposition  or voting of securities of the
Company or otherwise.  We have elected to provide all  Purchasers  with the same
letter  agreement  for the  convenience  of the  Company  and not because it was
required or requested to do so by the Purchasers.

         Except as expressly amended, waived or modified hereby, the Transaction
Documents  are ratified and  confirmed by the parties  hereto and remain in full
force and effect in accordance with the terms hereof.

         By their  respective  execution and delivery of this letter  agreement,
each  Purchaser  and  the  Company  hereby  represents  and  warrants  that  the
execution,  delivery,  performance and consummation of this letter agreement has
been duly  authorized by all necessary  action on the part of such  Purchaser or
the Company,  as applicable,  and upon the delivery of signatures to this letter
agreement by all Purchasers or the Company, as applicable, this letter agreement
shall form a legal and binding  agreement of such Purchasers or the Company,  as
applicable,  enforceable  against the  signatory  in  accordance  with the terms
hereof.

Sincerely,
RCG Companies Incorporated

/s/ William Goldstein
Chairman of the Board

Name of Purchaser: __________________________
Signature of Authorized Signatory of Purchaser: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________

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