Document:

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
         THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
         OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK
         ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR
         SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY
         APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
         SATISFACTORY TO SMARTSERV ONLINE, INC. THAT SUCH REGISTRATION IS NOT
         REQUIRED.

           Right to Purchase up to 3,000,000 Shares of Common Stock of
                             SmartServ Online, Inc.
                             ----------------------
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. 1                                       Issue Date:          August 31, 2005

         SmartServ Online, Inc., a corporation organized under the laws of the
State of Delaware (the "Company"), hereby certifies that, for value received
CAMOFI MASTER LDC, or assigns (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this Warrant and at any time or from time to time before 5:00
p.m., New York time, through the close of business August 31, 2010 (the
"Expiration Date"), up to Three Million (3,000,000) fully paid and nonassessable
shares of Common Stock (as hereinafter defined), $0.01 par value per share, at
the applicable Exercise Price per share (as defined below). The number and
character of such shares of Common Stock and the applicable Exercise Price per
share are subject to adjustment as provided herein.

         As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:

            (a) The term "Company" shall include the Company and any corporation
      which shall succeed, or assume the obligations of the Company hereunder.

            (b) The term "Common Stock" includes (i) the Company's Common Stock,
      par value $0.01 per share; and (ii) any other securities into which or for
      which any of the securities described in (a) may be converted or exchanged
      pursuant to a plan of recapitalization, reorganization, merger, sale of
      assets or otherwise.

            (c) The term "Other Securities" refers to any stock (other than
      Common Stock) and other securities of the Company or any other person

                                       1
<PAGE>

      (corporate or otherwise) which the Holder at any time shall be entitled to
      receive, or shall have received, on the exercise of the Warrant, in lieu
      of or in addition to Common Stock, or which at any time shall be issuable
      or shall have been issued in exchange for or in replacement of Common
      Stock or Other Securities pursuant to Section 5 or otherwise.

            (d) The "Exercise Price" applicable under this Warrant shall be a
      price of $0.50.

            (e) "Warrant Shares" shall mean the shares of Common Stock
      deliverable upon exercise of the Warrant, as adjusted from time to time.

1.    Exercise of Warrant.

      1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as
Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 5.

      1.2 Fair Market Value. For purposes hereof, the "Fair Market Value" of a
share of Common Stock as of a particular date (the "Determination Date") shall
mean:

            (a) If the Company's Common Stock is traded on the American Stock
      Exchange or another national exchange or is quoted on the National or
      SmallCap Market of The Nasdaq Stock Market, Inc.("Nasdaq"), then the
      closing or last sale price, respectively, reported for the last business
      day immediately preceding the Determination Date.

            (b) If the Company's Common Stock is not traded on the American
      Stock Exchange or another national exchange or on the Nasdaq but is traded
      on the NASD OTC Bulletin Board, then the mean of the average of the
      closing bid and asked prices reported for the last business day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's Common
      Stock is not publicly traded, then as the Holder and the Company agree or
      in the absence of agreement by arbitration in accordance with the rules
      then in effect of the American Arbitration Association, before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d) If the Determination Date is the date of a liquidation,
      dissolution or winding up, or any event deemed to be a liquidation,
      dissolution or winding up pursuant to the Company's charter, then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such liquidation, dissolution or winding up,
      plus all other amounts to be payable per

                                       2
<PAGE>

      share in respect of the Common Stock in liquidation under the charter,
      assuming for the purposes of this clause (d) that all of the shares of
      Common Stock then issuable upon exercise of the Warrant are outstanding at
      the Determination Date.

      1.3 Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder acknowledge in writing its
continuing obligation to afford to the Holder any rights to which the Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to the Holder any such rights.

      1.4 Trustee for Warrant Holders. If a bank or trust company shall have
been appointed as trustee for the holders of the Warrant pursuant to Subsection
3.2, such bank or trust company shall have all the powers and duties of a
warrant agent (as hereinafter described) and shall accept, in its own name for
the account of the Company or such successor person as may be entitled thereto,
all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section.

2.    Procedure for Exercise.

      2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares in accordance herewith. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as the Holder (upon payment by the Holder of
any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which the Holder would otherwise be entitled,
cash equal to such fraction multiplied by the then Fair Market Value of one full
share, together with any other stock or other securities and property (including
cash, where applicable) to which the Holder is entitled upon such exercise
pursuant to Section 1 or otherwise.

      2.2 Exercise. Payment may be made either (i) in cash or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Exercise Price, (ii) by delivery of the Warrant, or shares of Common
Stock and/or Warrant Shares in accordance with the payment of this Section 2.2,
or (iii) by a combination of any of the foregoing methods, for the number of
Common Shares specified in such Exercise Notice (as such number shall be
adjusted to reflect any adjustment in the total number of Warrant Shares) and
the Holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.

                                       3
<PAGE>

Notwithstanding any provisions herein to the contrary, if the Fair Market Value
of one share of Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of paying the Exercise price in cash,
the Holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion thereof being exercised) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Exercise Notice in which event the Company shall issue to the Holder a
number of shares of Common Stock computed using the following formula:

      X=Y       (A-B)
                -----
                  A

      Where X =         the number of shares of Common Stock to be issued to
                        the Holder

      Y                 = the number of shares of Common Stock purchasable
                        under the Warrant or, if only a portion of the
                        Warrant is being exercised, the portion of the
                        Warrant being exercised (at the date of such
                        calculation)

      A =               the Fair Market  Value of one share of the  Company's
                        Common Stock (at the date of such calculation)

      B =               Exercise Price (as adjusted to the date of such
                        calculation)

3.    Effect of Reorganization, Etc.; Adjustment of Exercise Price.

      3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which the Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if the Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 5.

      3.2 Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Warrant pursuant to Section 3.1, or, if the
Holder shall so instruct the Company, to a bank or trust

                                       4
<PAGE>

company specified by the Holder and having its principal office in New York, NY
as trustee for the Holder of the Warrant (the "Trustee").

      3.3 Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 5. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders of the Warrant will be delivered to Holder or the Trustee as
contemplated by Section 3.2.

      3.4 Purchase Price Reset Provision. If prior to the expiration of this
Warrant the Company sells publicly (i) shares of its Common Stock, (ii)
securities convertible into shares of its Common Stock, or (iii) options or
warrants to purchase shares of its Common Stock or securities convertible into
shares of its Common Stock at a sale, conversion or exercise price per share
(the "Issue Price"), as the case may be, less than the Exercise Price then in
effect, the Exercise Price shall be reset to the Issue Price and the number of
shares purchasable pursuant to this Warrant shall be increased pro rata to the
percentage reduction in the Exercise Price, provided, however, that the reset
provision shall not apply to (i) any shares issued upon the exercise or
conversion of any currently outstanding options, warrants, or convertible
securities, or (ii) any Common Stock options or warrants issuable pursuant to an
existing employee stock option plan or other existing compensation arrangement
or any underlying Common Stock issued on the exercise thereof, but not pursuant
to any amendment relating thereto to the extent such amendment increase the
number of shares issuable under such plan or arrangement. The Issue Price shall
be calculated taking into account the amount paid for the issuance of such
Common Stock, option or warrant or convertible security and the amount, if any,
payable upon the exercise or conversion thereof.

4.    Intentionally Omitted.

5.    Extraordinary Events Regarding Common Stock. If the Company shall (a)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a smaller
number of shares of the Common Stock, then, in each such event, the Exercise
Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the

                                       5
<PAGE>

product so obtained shall thereafter be the Exercise Price then in effect. The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The number of shares of Common Stock that the holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be increased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 5) be issuable on such exercise by a fraction of which (a) the numerator
is the Exercise Price that would otherwise (but for the provisions of this
Section 5) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.

6.    Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 12 hereof).

7.    Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, shares of Common Stock (or Other Securities)
from time to time issuable on the exercise of the Warrant; provided, however,
that as of the date hereof the Company is reserving 7,492,748 shares of Common
Stock for issuance upon exercise of this Warrant and conversion of the Senior
Secured Convertible Note and Revolving Credit Note issued by the Company in
favor of the Holder (the "Notes"), and within 60 days of the date hereof the
Company shall reserve the balance of the shares of Common Stock issuable on the
exercise of the Warrant and conversion of the Notes.

8.    Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the

                                       6
<PAGE>

Transferor thereof a new Warrant of like tenor, in the name of the Transferor
and/or the transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor.

9.    Replacement of Warrant. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of any such loss, theft or destruction of this Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

10.   Registration Rights. The Holder has been granted certain registration
rights by the Company. These registration rights are set forth in a Registration
Rights Agreement entered into by the Company and Purchaser dated as of even date
of this Warrant.

11.    Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 9.99% of the outstanding shares of Common Stock of
the Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder. Notwithstanding the foregoing, the restriction described in
this paragraph may be revoked upon 75 days prior notice from the Holder to the
Company and is automatically null and void upon an Event of Default under the
Note.

12.    Warrant Agent. The Company may, by written notice to the the Holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 8, and replacing this Warrant pursuant to
Section 9, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.

13.    Transfer on the Company's Books. Until this Warrant is transferred on the
books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

14.    Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
the Holder or,

                                       7
<PAGE>

until the Holder furnishes to the Company an address, then to, and at the
address of, the last Holder of this Warrant who has so furnished an address to
the Company.

15.   Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of New York without regard to principles of conflicts of laws
other than Section 5-1401 of the New York General Obligations Law. Any action
brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Holder may choose to waive
this provision and bring an action outside the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. If any provision of this Warrant is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Warrant. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision hereof. The Company acknowledges that legal counsel participated
in the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       8
<PAGE>

      IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

                                  SMARTSERV ONLINE, INC.

                                  By:      /s/ Robert M. Pons
                                           -----------------------------------
                                  Name:    Robert M. Pons
                                  Title:   Chief Executive Officer

                                  CAMOFI MASTER LDC

                                  By:      /s/ Richard Smithline
                                           -----------------------------------
                                  Name:
                                  Title:

                                       9
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:      SmartServ Online, Inc.
         _____________________
         _____________________
         Attention:  Chief Executive Officer

         The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

________          _______ shares of the Common Stock covered by such Warrant; or

________          the maximum number of shares of Common Stock covered by such
                  Warrant pursuant to the cashless exercise procedure set forth
                  in Section 2.

         The undersigned herewith makes payment of the full Exercise Price for
such shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):

________          $______    in lawful money of the United States; and/or

________          the cancellation of such portion of the attached Warrant as is
                  exercisable for a total of _______  shares of Common  Stock
                  (using a Fair Market Value of $_______ per share for purposes
                  of this calculation); and/or

________          the  cancellation  of such number of shares of Common Stock as
                  is necessary,  in accordance  with the  formula  set forth in
                  Section  2.2, to exercise  this  Warrant  with  respect to the
                  maximum  number of shares of Common Stock  purchasable
                  pursuant to the cashless  exercise  procedure  set forth in
                  Section 2.

      The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to _________________________________ whose address
is______________________________________.

                                       10
<PAGE>

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, (the "Securities Act") or pursuant to an exemption from registration under
the Securities Act.

Dated:
      ----------------------------     -----------------------------------------
                                       (Signature must conform to name of holder
                                        as specified on the face of the Warrant)

                                        Address:
                                                --------------------------------

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

                                       11
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

         For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of SmartServ Online, Inc. into which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
SmartServ Online, Inc. with full power of substitution in the premises.

                                         Percentage              Number
Transferees         Address              Transferred           Transferred
-----------         -------              -----------           -----------
---------------     ------------------   ------------------    -----------------
---------------     ------------------   ------------------    -----------------
---------------     ------------------   ------------------    -----------------
---------------     ------------------   ------------------    -----------------

Dated
      -------------------           --------------------------------------------
                                    (Signature must conform to name of holder as
                                    specified on the face of the Warrant)

                                    Address:
                                             -----------------------------------
                                             -----------------------------------

                                    SIGNED IN THE PRESENCE OF:

                                    --------------------------------------------
                                                      (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

----------------------------------
             (Name)

                                       12REGISTRATION RIGHTS AGREEMENT

         Registration Rights Agreement (this "Agreement"), dated as of August
31, 2005, by and between SMARTSERV ONLINE, INC., a Delaware corporation (the
"Company"), and CAMOFI MASTER LDC (the "Purchaser").

         This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchaser and the Company (as
amended, modified or supplemented from time to time, the "Securities Purchase
Agreement"), and pursuant to the Notes and the Warrants referred to therein.

         The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Securities Purchase Agreement shall have the meanings given such
terms in the Securities Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means shares of the Company's common stock, par
value $0.01 per share.

                  "Effectiveness Date" means (i) with respect to the initial
Registration Statement required to be filed hereunder, a date no later than 120
days following the date hereof and (ii) with respect to each additional
Registration Statement required to be filed hereunder, a date no later than
thirty (30) days following the applicable Filing Date.

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

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.

                  "Filing Date" means, with respect to (i) the initial
Registration Statement required to be filed hereunder, a date no later than
thirty (30) days following the date hereof and (ii) with respect to shares of
Common Stock issuable to the Holder as a result of adjustments to the Fixed
Conversion Price made pursuant to Section 3.4 of the Senior Subordinated
Convertible Note or Section 4 of the Warrant or otherwise, thirty (30) days
after the occurrence such event or the date of the adjustment of the Fixed
Conversion Price.

                  "Holder" or "Holders" means the Purchaser or any of its
affiliates or transferees to the extent any of them hold Registrable Securities.

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

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

<PAGE>

                  "Note" has the meaning set forth in the Securities Purchase
Agreement.

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

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

                  "Registrable Securities" means the shares of Common Stock
issued upon the conversion of the Note and issuable upon exercise of the
Warrants.

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

                  "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,
and any successor statute.

                  "Securities Purchase Agreement" means the agreement between
the parties hereto calling for the issuance by the Company of Secured
Convertible Notes in the original aggregate principal amount of Five Hundred
Thousand Dollars ($500,000) plus Warrants.

                                       2
<PAGE>

                  "Trading Market" means any of the NASD OTC Bulletin Board,
NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock Exchange
or the New York Stock Exchange.

                  "Warrants" means the Common Stock purchase warrants issued
pursuant to the Securities Purchase
Agreement.

            2.    Registration.

                  (a) On or prior to the Filing Date the Company shall prepare
            and file with the Commission a Registration Statement covering the
            Registrable Securities for an offering to be made on a continuous
            basis pursuant to Rule 415. The Registration Statement shall be on
            Form S-3 (except if the Company is not then eligible to register for
            resale the Registrable Securities on Form S-3, in which case such
            registration shall be on another appropriate form in accordance
            herewith). The Company shall cause the Registration Statement to
            become effective and remain effective as provided herein. The
            Company shall use its reasonable commercial efforts to cause the
            Registration Statement to be declared effective under the Securities
            Act as promptly as possible after the filing thereof, but in any
            event no later than the Effectiveness Date. The Company shall use
            its reasonable commercial efforts to keep the Registration Statement
            continuously effective under the Securities Act until the date which
            is the earlier date of when (i) all Registrable Securities have been
            sold or (ii) all Registrable Securities may be sold immediately
            without registration under the Securities Act and without volume
            restrictions pursuant to Rule 144(k), as determined by the counsel
            to the Company pursuant to a written opinion letter to such effect,
            addressed and acceptable to the Company's transfer agent and the
            affected Holders (the "Effectiveness Period").

                  (b) If: (i) the Registration Statement is not filed on or
            prior to the Filing Date; (ii) the Registration Statement is not
            declared effective by the Commission by the Effectiveness Date;
            (iii) after the Registration Statement is filed with and declared
            effective by the Commission, the Registration Statement ceases to be
            effective (by suspension or otherwise) as to all Registrable
            Securities to which it is required to relate at any time prior to
            the expiration of the Effectiveness Period (without being succeeded
            immediately by an additional registration statement filed and
            declared effective) for a period of time which shall exceed thirty
            (30) days in the aggregate per year or more than twenty (20)
            consecutive calendar days (defined as a period of 365 days
            commencing on the date the Registration Statement is declared
            effective); or (iv) the Common Stock is not listed or quoted, or is
            suspended from trading on any Trading Market for a period of three
            (3) consecutive Trading Days (provided the Company shall not have
            been able to cure such trading suspension within thirty (30) days of
            the notice thereof or list the Common Stock on another Trading
            Market); (any such failure or breach being referred to as an
            "Event," and for purposes of clause (i) or (ii) the date on which
            such Event occurs, or for purposes of clause (iii) the date which
            such thirty (30) day or twenty (20) consecutive day period (as the
            case may be) is exceeded, or for purposes of clause (iv) the date on
            which such three (3)

                                       3
<PAGE>

            Trading Day period is exceeded, being referred to as "Event Date"),
            then until the applicable Event is cured, the Company shall pay to
            each Holder an amount in cash, as liquidated damages and not as a
            penalty, equal to 1.5% for each thirty (30) day period (prorated for
            partial periods) on a daily basis of the original principal amount
            of the Note. While such Event continues, such liquidated damages
            shall be paid not less often than each thirty (30) days. Any unpaid
            liquidated damages as of the date when an Event has been cured by
            the Company shall be paid within three (3) days following the date
            on which such Event has been cured by the Company.

                  (c) Within three business days of the Effectiveness Date, the
            Company shall cause its counsel to issue a blanket opinion in the
            form attached hereto as Exhibit A, to the transfer agent stating
            that the shares are subject to an effective registration statement
            and can be reissued free of restrictive legend upon notice of a sale
            by the Purchaser and confirmation by the Purchaser that it has
            complied with the prospectus delivery requirements, provided that
            the Company has not advised the transfer agent orally or in writing
            that the opinion has been withdrawn. Copies of the blanket opinion
            required by this Section 2(c) shall be delivered to the Purchaser
            within the time frame set forth above.

            3.    Registration Procedures. If and whenever the Company is
      required by the provisions hereof to effect the registration of any
      Registrable Securities under the Securities Act, the Company will, as
      expeditiously as possible:

                  (a) prepare and file with the Commission the Registration
            Statement with respect to such Registrable Securities, respond as
            promptly as possible to any comments received from the Commission,
            and use its best efforts to cause the Registration Statement to
            become and remain effective for the Effectiveness Period with
            respect thereto, and promptly provide to the Purchaser copies of all
            filings and Commission letters of comment relating thereto;

                  (b) prepare and file with the Commission such amendments and
            supplements to the Registration Statement and the Prospectus used in
            connection therewith as may be necessary to comply with the
            provisions of the Securities Act with respect to the disposition of
            all Registrable Securities covered by the Registration Statement and
            to keep such Registration Statement effective until the expiration
            of the Effectiveness Period;

                  (c) furnish to the Purchaser such number of copies of the
            Registration Statement and the Prospectus included therein
            (including each preliminary Prospectus) as the Purchaser reasonably
            may request to facilitate the public sale or disposition of the
            Registrable Securities covered by the Registration Statement;

                  (d) use its commercially reasonable efforts to register or
            qualify the Purchaser's Registrable Securities covered by the
            Registration Statement under the securities or "blue sky" laws of
            such jurisdictions within the United States as the Purchaser may
            reasonably request, provided, however, that the Company shall

                                       4
<PAGE>

            not for any such purpose be required to qualify generally to
            transact business as a foreign corporation in any jurisdiction where
            it is not so qualified or to consent to general service of process
            in any such jurisdiction;

                  (e) list the Registrable Securities covered by the
            Registration Statement with any securities exchange on which the
            Common Stock of the Company is then listed;

                  (f) immediately notify the Purchaser at any time when a
            Prospectus relating thereto is required to be delivered under the
            Securities Act, of the happening of any event of which the Company
            has knowledge as a result of which the Prospectus contained in such
            Registration Statement, as then in effect, includes an untrue
            statement of a material fact or omits to state a material fact
            required to be stated therein or necessary to make the statements
            therein not misleading in light of the circumstances then existing;
            and

                  (g) make available for inspection by the Purchaser and any
            attorney, accountant or other agent retained by the Purchaser, all
            publicly available, non-confidential financial and other records,
            pertinent corporate documents and properties of the Company, and
            cause the Company's officers, directors and employees to supply all
            publicly available, non-confidential information reasonably
            requested by the attorney, accountant or agent of the Purchaser.

            4.    Registration Expenses. All expenses relating to the Company's
      compliance with Sections 2 and 3 hereof, including, without limitation,
      all registration and filing fees, printing expenses, fees and
      disbursements of counsel and independent public accountants for the
      Company, fees and expenses (including reasonable counsel fees) incurred in
      connection with complying with state securities or "blue sky" laws, fees
      of the NASD, transfer taxes, fees of transfer agents and registrars, fees
      of, and disbursements incurred by, one counsel for the Holders (to the
      extent such counsel is required due to Company's failure to meet any of
      its obligations hereunder), are called "Registration Expenses". All
      selling commissions applicable to the sale of Registrable Securities,
      including any fees and disbursements of any special counsel to the Holders
      beyond those included in Registration Expenses, are called "Selling
      Expenses." The Company shall only be responsible for all Registration
      Expenses.

            5.    Indemnification.

                  (a) In the event of a registration of any Registrable
            Securities under the Securities Act pursuant to this Agreement, the
            Company will indemnify and hold harmless each Purchaser, and its
            officers, directors and each other person, if any, who controls the
            Purchaser within the meaning of the Securities Act, against any
            losses, claims, damages or liabilities, joint or several, to which
            the Purchaser, or such persons may become subject under the
            Securities Act or otherwise, insofar as such losses, claims, damages
            or liabilities (or actions in respect thereof) arise out of or are
            based upon any untrue statement or alleged untrue statement of any
            material fact contained in any Registration Statement under which
            such

                                       5
<PAGE>

            Registrable Securities were registered under the Securities Act
            pursuant to this Agreement, any preliminary Prospectus or final
            Prospectus contained therein, or any amendment or supplement
            thereof, or arise out of or are based upon the omission or alleged
            omission to state therein a material fact required to be stated
            therein or necessary to make the statements therein not misleading,
            and will reimburse the Purchaser, and each such person for any
            reasonable legal or other expenses incurred by them in connection
            with investigating or defending any such loss, claim, damage,
            liability or action; provided, however, that the Company will not be
            liable in any such case if and to the extent that any such loss,
            claim, damage or liability arises out of or is based upon an untrue
            statement or alleged untrue statement or omission or alleged
            omission so made in conformity with information furnished by or on
            behalf of the Purchaser or any such person in writing specifically
            for use in any such document.

                  (b) In the event of a registration of the Registrable
            Securities under the Securities Act pursuant to this Agreement, each
            Purchaser will indemnify and hold harmless the Company, and its
            officers, directors and each other person, if any, who controls the
            Company within the meaning of the Securities Act, against all
            losses, claims, damages or liabilities, joint or several, to which
            the Company or such persons may become subject under the Securities
            Act or otherwise, insofar as such losses, claims, damages or
            liabilities (or actions in respect thereof) arise out of or are
            based upon any untrue statement or alleged untrue statement of any
            material fact which was furnished in writing by the Purchaser to the
            Company expressly for use in (and such information is contained in)
            the Registration Statement under which such Registrable Securities
            were registered under the Securities Act pursuant to this Agreement,
            any preliminary Prospectus or final Prospectus contained therein, or
            any amendment or supplement thereof, or arise out of or are based
            upon the omission or alleged omission to state therein a material
            fact required to be stated therein or necessary to make the
            statements therein not misleading, and will reimburse the Company
            and each such person for any reasonable legal or other expenses
            incurred by them in connection with investigating or defending any
            such loss, claim, damage, liability or action, provided, however,
            that the Purchaser will be liable in any such case if and only to
            the extent that any such loss, claim, damage or liability arises out
            of or is based upon an untrue statement or alleged untrue statement
            or omission or alleged omission so made in conformity with
            information furnished in writing to the Company by or on behalf of
            the Purchaser specifically for use in any such document.
            Notwithstanding the provisions of this paragraph, the Purchaser
            shall not be required to indemnify any person or entity in excess of
            the amount of the aggregate net proceeds received by the Purchaser
            in respect of Registrable Securities in connection with any such
            registration under the Securities Act.

                  (c) Promptly after receipt by a party entitled to claim
            indemnification hereunder (an "Indemnified Party") of notice of the
            commencement of any action, such Indemnified Party shall, if a claim
            for indemnification in respect thereof is to be made against a party
            hereto obligated to indemnify such Indemnified Party (an
            "Indemnifying Party"), notify the Indemnifying Party in writing
            thereof, but the

                                       6
<PAGE>

            omission so to notify the Indemnifying Party shall not relieve it
            from any liability which it may have to such Indemnified Party other
            than under this Section 5(c) and shall only relieve it from any
            liability which it may have to such Indemnified Party under this
            Section 5(c) if and to the extent the Indemnifying Party is
            prejudiced by such omission. In case any such action shall be
            brought against any Indemnified Party and it shall notify the
            Indemnifying Party of the commencement thereof, the Indemnifying
            Party shall be entitled to participate in and, to the extent it
            shall wish, to assume and undertake the defense thereof with counsel
            satisfactory to such Indemnified Party, and, after notice from the
            Indemnifying Party to such Indemnified Party of its election so to
            assume and undertake the defense thereof, the Indemnifying Party
            shall not be liable to such Indemnified Party under this Section
            5(c) for any legal expenses subsequently incurred by such
            Indemnified Party in connection with the defense thereof; if the
            Indemnified Party retains its own counsel, then the Indemnified
            Party shall pay all fees, costs and expenses of such counsel,
            provided, however, that, if the defendants in any such action
            include both the indemnified party and the Indemnifying Party and
            the Indemnified Party shall have reasonably concluded that there may
            be reasonable defenses available to it which are different from or
            additional to those available to the Indemnifying Party or if the
            interests of the Indemnified Party reasonably may be deemed to
            conflict with the interests of the Indemnifying Party, the
            Indemnified Party shall have the right to select one separate
            counsel and to assume such legal defenses and otherwise to
            participate in the defense of such action, with the reasonable
            expenses and fees of such separate counsel and other expenses
            related to such participation to be reimbursed by the Indemnifying
            Party as incurred.

                  (d) In order to provide for just and equitable contribution in
            the event of joint liability under the Securities Act in any case in
            which either (i) a Purchaser, or any officer, director or
            controlling person of the Purchaser, makes a claim for
            indemnification pursuant to this Section 5 but it is judicially
            determined (by the entry of a final judgment or decree by a court of
            competent jurisdiction and the expiration of time to appeal or the
            denial of the last right of appeal) that such indemnification may
            not be enforced in such case notwithstanding the fact that this
            Section 5 provides for indemnification in such case, or (ii)
            contribution under the Securities Act may be required on the part of
            the Purchaser or such officer, director or controlling person of a
            Purchaser in circumstances for which indemnification is provided
            under this Section 5; then, and in each such case, the Company and
            the Purchaser will contribute to the aggregate losses, claims,
            damages or liabilities to which they may be subject (after
            contribution from others) in such proportion so that the Purchaser
            is responsible only for the portion represented by the percentage
            that the public offering price of its securities offered by the
            Registration Statement bears to the public offering price of all
            securities offered by such Registration Statement, provided,
            however, that, in any such case, (A) the Purchaser will not be
            required to contribute any amount in excess of the public offering
            price of all such securities offered by it pursuant to such
            Registration Statement; and (B) no person or entity guilty of
            fraudulent misrepresentation (within the meaning of Section 10(f) of
            the Act) will be entitled

                                       7
<PAGE>

            to contribution from any person or entity who was not guilty of such
            fraudulent misrepresentation.

            6.    Representations and Warranties.

                  (a) The Common Stock of the Company is registered pursuant to
            Section 12(b) or 12(g) of the Exchange Act and, except with respect
            to certain matters which the Company has disclosed to the Purchaser
            on Schedule 4.21 to the Securities Purchase Agreement, the Company
            has timely filed all proxy statements, reports, schedules, forms,
            statements and other documents required to be filed by it under the
            Exchange Act. The Company has filed (i) its Annual Report on Form
            10-KSB for its fiscal year ended December 31, 2004 and (ii) its
            Quarterly Report on Form 10-QSB for the fiscal quarters ended March
            30, 2005 and June 30, 2005 (collectively, the "SEC Reports"). Each
            SEC Report was, at the time of its filing, in substantial compliance
            with the requirements of its respective form and none of the SEC
            Reports, nor the financial statements (and the notes thereto)
            included in the SEC Reports, as of their respective filing dates,
            contained any untrue statement of a material fact or omitted 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. The financial statements of
            the Company included in the SEC Reports comply as to form in all
            material respects with applicable accounting requirements and the
            published rules and regulations of the Commission or other
            applicable rules and regulations with respect thereto. Such
            financial statements have been prepared in accordance with generally
            accepted accounting principles ("GAAP") applied on a consistent
            basis during the periods involved (except (i) as may be otherwise
            indicated in such financial statements or the notes thereto or (ii)
            in the case of unaudited interim statements, to the extent they may
            not include footnotes or may be condensed) and fairly present in all
            material respects the financial condition, the results of operations
            and the cash flows of the Company and its subsidiaries, on a
            consolidated basis, as of, and for, the periods presented in each
            such SEC Report.

                  (b) Neither the Company, nor any of its affiliates, nor any
            person acting on its or their behalf, has directly or indirectly
            made any offers or sales of any security or solicited any offers to
            buy any security under circumstances that would cause the offering
            of the Securities pursuant to the Securities Purchase Agreement to
            be integrated with prior offerings by the Company for purposes of
            the Securities Act which would prevent the Company from selling the
            Common Stock pursuant to Rule 506 under the Securities Act, or any
            applicable exchange-related stockholder approval provisions, nor
            will the Company or any of its affiliates or subsidiaries take any
            action or steps that would cause the offering of the Securities to
            be integrated with other offerings.

                  (c) The Warrants, the Notes and the shares of Common Stock
            which the Purchaser may acquire pursuant to the Warrants and the
            Note are all restricted securities under the Securities Act as of
            the date of this Agreement. The Company will not issue any stop
            transfer order or other order impeding the sale

                                       8
<PAGE>

            and delivery of any of the Registrable Securities at such time as
            such Registrable Securities are registered for public sale or an
            exemption from registration is available, except as required by
            federal or state securities laws.

                  (d) The Company understands the nature of the Registrable
            Securities issuable upon the conversion of the Notes and the
            exercise of the Warrants and recognizes that the issuance of such
            Registrable Securities may have a potential dilutive effect. The
            Company specifically acknowledges that its obligation to issue the
            Registrable Securities is binding upon the Company and enforceable
            regardless of the dilution such issuance may have on the ownership
            interests of other shareholders of the Company.

                  (e) Except for agreements made in the ordinary course of
            business, there is no agreement that has not been filed with the
            Commission as an exhibit to a registration statement or to a form
            required to be filed by the Company under the Exchange Act, the
            breach of which could reasonably be expected to have a material and
            adverse effect on the Company and its subsidiaries, or would
            prohibit or otherwise interfere with the ability of the Company to
            enter into and perform any of its obligations under this Agreement
            in any material respect.

                  (f) The Company will at all times have authorized and reserved
            a sufficient number of shares of Common Stock for the full
            conversion of the Notes and exercise of the Warrants; provided, as
            of the date hereof the Company is reserving 7,492,748 shares of
            Common Stock for issuance upon such conversion and exercise, and
            within 60 days of the date hereof the Company shall reserve the
            balance of shares of Common Sock sufficient for such full conversion
            of the Notes and exercise of the Warrants.

            7.    Miscellaneous.

                  (a) Remedies. In the event of a breach by the Company or by a
            Holder, of any of their respective 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.

                  (b) No Piggyback on Registrations. Except as and to the extent
            specified in Schedule 7(b) hereto, 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 any
            Registration Statement other than the Registrable Securities, and
            the Company shall not after the date hereof enter into any agreement
            providing any such right for inclusion of shares in the Registration
            Statement to any of its security holders. Except as and to the
            extent specified in Schedule 7(b) hereto, the Company has not
            previously entered into any agreement granting any registration
            rights with respect to any of its securities to any Person that have
            not been fully satisfied.

                                        9
<PAGE>

                  (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 a Discontinuation Event
            (as defined below), such Holder will forthwith discontinue
            disposition of such Registrable Securities under the applicable
            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.
            For purposes of this Section 7(d), a "Discontinuation Event" shall
            mean (i) 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); (ii) any request
            by the Commission or any other Federal or state governmental
            authority for amendments or supplements to such Registration
            Statement or Prospectus or for additional information; (iii) the
            issuance by the Commission of any stop order suspending the
            effectiveness of such Registration Statement covering any or all of
            the Registrable Securities or the initiation of any Proceedings for
            that purpose; (iv) 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/or (v) the occurrence of any event or passage
            of time that makes the financial statements included in such
            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
            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.

                  (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

                                       10
<PAGE>

            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 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 to the extent the
            Company may do so without violating registration rights of others
            which exist as of the date of this Agreement, subject to customary
            underwriter cutbacks applicable to all holders of registration
            rights and subject to obtaining any required the consent of any
            selling stockholder(s) to such inclusion under such registration
            statement.

                  (f) Amendments and Waivers. The provisions of this Agreement,
            including the provisions of this sentence, may not be amended,
            modified or supplemented, and waivers or consents to departures from
            the provisions hereof may not be given, unless the same shall be in
            writing and signed by the Company and the Holders 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 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;
            provided, however, that the provisions of this sentence may not be
            amended, modified, or supplemented except in accordance with the
            provisions of the immediately preceding sentence.

                  (g) Notices. Any notice or request hereunder may be given to
            the Company or the Purchaser at the respective addresses set forth
            below or as may hereafter be specified in a notice designated as a
            change of address under this Section 7(g). Any notice or request
            hereunder shall be given by registered or certified mail, return
            receipt requested, hand delivery, overnight mail, Federal Express or
            other national overnight next day carrier (collectively, "Courier")
            or telecopy (confirmed by mail). Notices and requests shall be, in
            the case of those by hand delivery, deemed to have been given when
            delivered to any party to whom it is addressed, in the case of those
            by mail or overnight mail, deemed to have been given three (3)
            business days after the date when deposited in the mail or with the
            overnight mail carrier, in the case of a Courier, the next business
            day following timely delivery of the package with the Courier, and,
            in the case of a telecopy, when confirmed. The address for such
            notices and communications shall be as follows:

            If to the Company, to:             SmartServ Online, Inc.
                                               2250 Butler Pike
                                               Plymouth Meetings, PA
                                               Attention:   Robert Pons

                                               Facsimile:    (610) 397-0846

                                       11
<PAGE>

            If to the Purchaser, to:           c/o Centrecourt Asset Management
                                               350 Third Avenue, 8th Floor
                                               New York, New York  10017
                                               Attention: Keith D. Wellner, Esq.

                                               Facsimile:  (646) 304-0500

                                               with a copy to:

                                               Katten Muchin Rosenman LLP
                                               575 Madison Avenue
                                               New York, NY 10022
                                               Attention:  Howard Jacobs, Esq.

                                               Facsimile: (212) 940-8776

or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) 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 Notes and the Securities Purchase Agreement with the prior
      written consent of the Company, which consent shall not be unreasonably
      withheld.

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

            (j) Governing Law. All questions concerning the construction,
      validity, enforcement and interpretation of this Agreement shall be
      governed by and construed and enforced in accordance with the internal
      laws of the State of New York, without regard to the principles of
      conflicts of law thereof. Each party agrees that all Proceedings
      concerning the interpretations, enforcement and

                                       12
<PAGE>

      defense of the transactions contemplated by this Agreement shall be
      commenced exclusively in the state and federal courts sitting in the City
      of New York, Borough of Manhattan. Each party hereto 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 Proceeding, any claim that it is not
      personally subject to the jurisdiction of any such court, that such
      Proceeding is improper. 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 legal 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 a Transaction Document, then the prevailing
      party in such Proceeding shall be reimbursed by the other party for its
      reasonable attorneys 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.

                                       13
<PAGE>

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

SMARTSERV ONLINE, INC.                   CAMOFI MASTER LDC

By:   /s/ Robert M. Pons                 By:   /s/ Richard Smithline
      -----------------------------            -------------------------------
Name: Robert M. Pons                     Name:
Title: Chief Executive Officer           Title:

<PAGE>

                                   Schedule A

                                                                Shares
      Selling Stockholder                                   Being Offered
      -------------------                                   -------------

<PAGE>

                                    EXHIBIT A

                                                                 [__], 2005

[           ]
[           ]
[           ]
[           ]

      Re: SmartServ Online, Inc. - Registration Statement on Form S-3
          -----------------------------------------------------------

Ladies and Gentlemen:

      As counsel to SmartServ Online, Inc., a Delaware corporation (the
"Company"), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule A attached
hereto (the "Selling Stockholders"), of an aggregate of __________ shares (the
"Shares") of the Company's Common Stock.

      A Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.

      Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.

                                                     Very truly yours,

                                                     [Company counsel]

                                       16

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