UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


                                _______________

                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



                Date of Report (Date of earliest event reported):
                                 August 6, 2007



                        INTERNATIONAL FIGHT LEAGUE, INC.
             -------------------------------------------------------
             (Exact name of Registrant as Specified in its Charter)


                                   Delaware
              ----------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)



            000-21134                                      04-2893483
-----------------------------------          -----------------------------------
     (Commission File Number)                  (IRS Employer Identification No.)



               424 West 33rd Street, Suite 650, New York, NY  10001
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (212) 356-4000
                      -----------------------------------
                         (Registrant's Telephone Number)




          Check the  appropriate box below if the Form 8-K filing is intended to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))





Item 1.01 - Entry into a Material Definitive Agreement.

The  information set forth under Item 3.02 of this Current Report on Form 8-K is
incorporated by reference in response to this Item 1.01.


Item 3.02 - Unregistered Sales of Equity Securities.

International  Fight  League,  Inc.  (the  "Company")  entered into a Securities
Purchase Agreement (the "Securities Purchase Agreement"),  dated as of August 1,
2007, among the Company and the purchasers named therein (the "Purchasers"). The
Securities  Purchase  Agreement  provides  for the  sale by the  Company  to the
Purchasers of (i) a total of 25,330,000  shares of common stock, par value $0.01
(the "Shares"), at a price of $0.50 per share for gross proceeds of $12,665,000,
and (ii) five-year warrants (the "Warrants") to acquire up to 12,665,000, or 50%
of the number of Shares sold pursuant to the Securities Purchase  Agreement,  of
additional  shares of common stock of the Company (the  "Warrant  Shares").  The
transactions contemplated by the Securities Purchase Agreements closed on August
6, 2007 (the "Closing  Date").  The Company  issued,  on August 1, 2007, a press
release  under  Rule  135c  of the  Securities  Act of  1933,  as  amended  (the
"Securities Act"),  announcing its entry into the Securities  Purchase Agreement
and describing the transactions contemplated thereby. The full text of the press
release is attached hereto as Exhibit 99.1.

All of the Purchasers represented that they were "accredited investors," as that
term is defined in Rule 501(a) of Regulation D under the Securities Act, and the
sale of the Shares was made in reliance on  exemptions  provided by Regulation D
and Section 4(2) of the Securities Act.

In  connection  with the  Securities  Purchase  Agreement,  the  Company and the
Purchasers entered into a Registration  Rights Agreement,  dated as of August 1,
2007, and the Company  agreed to file a  registration  statement to register the
resale of the Shares and Warrant Shares,  within 60 days of the Closing Date and
to use  reasonable  best  efforts  to cause  the  registration  statement  to be
declared effective within 90 days (or 120 days upon full review by the SEC).

In connection with the private  placement,  the Company incurred  expenses which
included,  without  limitation,  commissions to the placement  agent,  legal and
accounting fees, and other miscellaneous  expenses, of approximately $1 million.
In addition,  the Company will also issue five-year warrants to purchase 729,900
shares  of the  Company's  common  stock to the  placement  agent as  additional
compensation for their services.

The  Company  did not use any form of  advertising  or general  solicitation  in
connection  with the sale of the Shares and Warrants.  The Shares,  the Warrants
and the  Warrant  Shares are  non-transferable  in the  absence of an  effective
registration  statement under the Act, or an available exemption therefrom,  and
all certificates are imprinted with a restrictive legend to that effect.

The  description  of the private  placement  described in this Current Report on
Form 8-K does not purport to be complete  and is  qualified  in its  entirety by
reference to the form of Securities Purchase Agreement filed as Exhibit 4.1, the
form of  Registration  Rights  Agreement  filed as Exhibit  4.2, and the form of
Warrant filed as Exhibit 4.3 to this Current  Report on Form 8-K  (collectively,
the "Transaction Documents"), all of which are incorporated herein by reference.
The forms of the Transaction  Documents have been included to provide  investors
and  security  holders with  information  regarding  their  terms.  They are not
intended  to  provide  any other  factual  information  about the  Company.  The
Transaction Documents contain certain representations and warranties, as well as
indemnification  with respect to a breach of such representations or warranties.
Investors  and  security  holders  should  not rely on the  representations  and
warranties as  characterizations  of the actual state of facts because they were
made only as of the respective dates of the Transaction Documents.  In addition,
information  concerning the subject matter of the representations and warranties
may change after the respective  dates of the  Transaction  Documents,  and such
subsequent  information  may not be  fully  reflected  in the  Company's  public
disclosures.



Item 9.01 - Financial Statements and Exhibits

See the Exhibit Index hereto, which is incorporated by reference herein.









                                   SIGNATURE

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                        INTERNATIONAL FIGHT LEAGUE, INC.


                                    By: /s/ Michael C. Keefe
                                       -----------------------------------------
                                            Michael C. Keefe
                                            President, Business & Legal Affairs
                                            and Secretary

Date:  August 6, 2007






                                  EXHIBIT INDEX

Exhibit
No.          Description
---------    -----------------------------------------------------------------

4.1          Form of Securities Purchase Agreement, dated as of August 1, 2007.
4.2          Form of Registration Rights Agreement, dated as of August 1, 2007.
4.3          Form of Warrant, dated as of August 6, 2007.
99.1         Press Release of International Fight League, Inc., dated August 1,
             2007.







                                                                  Execution Copy
                                                                  --------------

                          SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this "Agreement") is dated as of August
1, 2007, by and among International Fight League,  Inc., a Delaware  corporation
(the  "Company"),  and each purchaser  identified on the signature  pages hereto
(each, including its successors and assigns, a "Purchaser" and collectively, the
"Purchasers").

                                    RECITALS

          A.  The Company and each Purchaser are executing and  delivering  this
agreement in reliance upon the exemption from securities  registration  afforded
by Section  4(2) of the  Securities  Act of 1933,  as amended  (the  "Securities
Act"),  and Rule 506 of  Regulation D  ("Regulation  D") as  promulgated  by the
United States Securities and Exchange Commission under the Securities Act.

          B.  Each Purchaser, severally and not jointly, wishes to purchase, and
the  Company  wishes  to sell,  upon the  terms  and  conditions  stated in this
Agreement,  (i) that aggregate number of shares of common stock, $0.01 par value
per share (the "Common Stock"), of the Company, set forth below such Purchaser's
name on the signature  page of this  Agreement,  at the price of $0.50 per share
(which aggregate amount for all Purchasers  together shall be 25,330,000  shares
of Common Stock and shall be  collectively  referred to herein as the "Shares"),
and (ii) warrants,  in substantially  the form attached hereto as Exhibit A (the
"Warrants"),  to acquire up to that number of additional  shares of Common Stock
equal to 50% of the number of Shares  purchased by such Purchaser (the shares of
Common Stock  issuable upon  exercise of or otherwise  pursuant to the Warrants,
collectively, the "Warrant Shares").

          C.  The Shares, the Warrants and the Warrant Shares issued pursuant to
this Agreement are collectively referred to herein as the "Securities."

          D.  The Company has engaged  [________]  as its  placement  agent (the
"Placement Agent") for the offering of the Securities on a "best efforts" basis.

          E.   Contemporaneously   with  the  execution  and  delivery  of  this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement,  in the form attached hereto as Exhibit B (the  "Registration  Rights
Agreement"),  pursuant to which,  among other things,  the Company will agree to
provide  certain  registration  rights  with  respect  to the  Shares  under the
Securities Act and applicable state securities laws.

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

     1.1  Definitions.  In  addition  to the  terms  defined  elsewhere  in this
Agreement,  for all purposes of this  Agreement,  the following terms shall have
the meanings indicated in this Section 1.1:

          "Action"  means  any  action,  suit,  inquiry,  notice  of  violation,
proceeding   (including  any  partial   proceeding  such  as  a  deposition)  or
investigation  pending or, to the  Company's  Knowledge,  threatened  in writing
against or affecting  the Company,  any  Subsidiary  or any of their  respective
properties  before or by any court,  arbitrator,  governmental or administrative
agency,  regulatory authority (federal,  state, county, local or foreign), stock
market, stock exchange or trading facility.





          "Affiliate"  means, with respect to any Person, any other Person that,
directly  or  indirectly  through  one  or  more  intermediaries,  Controls,  is
controlled  by or is under common  control  with such Person,  as such terms are
used  in and  construed  under  Rule  144.  With  respect  to a  Purchaser,  any
investment fund or managed  account that is managed on a discretionary  basis by
the same investment  manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.

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

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

          "Closing" means the closing of the purchase and sale of the Securities
pursuant to this Agreement.

          "Closing  Date"  means  the  Trading  Day when all of the  Transaction
Documents  have been executed and delivered by the applicable  parties  thereto,
and  all of the  conditions  set  forth  in  Sections  2.1 and  2.2  hereof  are
satisfied, or such other date as the parties may agree.

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

          "Common  Stock" has the  meaning set forth in the  Recitals,  and also
includes  any   securities   into  which  the  Common  Stock  may  hereafter  be
reclassified or changed into.

          "Common Stock  Equivalents" means any securities of the Company or any
Subsidiary  which would entitle the holder thereof to acquire at any time Common
Stock, including without limitation, any debt, preferred stock, rights, options,
warrants  or  other   instrument  that  is  at  any  time  convertible  into  or
exchangeable  for, or otherwise  entitles the holder thereof to receive,  Common
Stock or other  securities  that  entitle  the holder to  receive,  directly  or
indirectly, Common Stock.

          "Company" has the meaning set forth in the Introduction.

          "Company Counsel" means Lowenstein Sandler PC.

          "Company Counsel Duties" has the meaning set forth in Section 6.2(a).

          "Company Deliverables" has the meaning set forth in Section 2.2(a).

          "Control"  (including  the  terms  "controlling",  "controlled  by" or
"under common control with") means the  possession,  direct or indirect,  of the
power to direct or cause the  direction  of the  management  and  policies  of a
Person,  whether  through the  ownership  of voting  securities,  by contract or
otherwise.

          "Disclosure Materials" has the meaning set forth in Section 3.1(h).

          "Effective  Date"  means  the date on which the  initial  Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

          "Effectiveness   Deadline"   means  the  date  on  which  the  initial
Registration  Statement is required to be declared  effective by the  Commission
under the terms of the Registration Rights Agreement.

          "Environmental Laws" has the meaning set forth in Section 3.1(l).


                                       2




          "Escrow Amount" has the meaning set forth in Section 6.1(a).

          "Evaluation Date" has the meaning set forth in Section 3.1(v).

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.

          "GAAP" means U.S. generally accepted accounting principles, as applied
by the Company.

          "Indemnified Party" has the meaning set forth in Section 4.4(a).

          "Indemnifying Party" has the meaning set forth in Section 4.4(a).

          "Intellectual Property" has the meaning set forth in Section 3.1(r).

          "Irrevocable Transfer Agent Instructions" has the meaning set forth in
Section 4.1(e).

          "Knowledge"  means with respect to any statement made to the knowledge
of a party,  that the  statement is based upon the actual  knowledge,  after due
inquiry,  of the executive officers of such party having  responsibility for the
matter or matters that are the subject of the statement.

          "Lien" means any lien, charge, claim, encumbrance,  security interest,
right of first refusal, preemptive right or other restrictions of any kind.

          "Losses" has the meaning set forth in Section 4.4.

          "Material  Adverse  Effect"  means any of (i) a material  and  adverse
effect on the legality,  validity or enforceability of any Transaction Document,
(ii) a  material  and  adverse  effect on the  results  of  operations,  assets,
business or financial condition of the Company and the Subsidiaries,  taken as a
whole,  or (iii) any material  adverse  impairment to the  Company's  ability to
perform in any  material  respect on a timely  basis its  obligations  under any
Transaction Document.

          "Material  Contract"  means any contract of the Company that was filed
as an exhibit to the SEC Filings  pursuant to Item 601(b)(4) or Item  601(b)(10)
of Regulation S-K.

          "Material Permits" has the meaning set forth in Section 3.1(p).

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

          "Outside Date" means August 31, 2007.

          "OTCBB"  has the  meaning set forth in the  definition  of  "Principal
Trading Market."

          "Person"  means  an  individual,  corporation,   partnership,  limited
liability  company,  trust,  business trust,  association,  joint stock company,
joint venture, sole proprietorship,  unincorporated  organization,  governmental
authority or any other form of entity not specifically listed herein.

          "Placement Agent" has the meaning set forth in the Recitals.


                                       3





          "Principal  Trading  Market"  means  the  Trading  Market on which the
Common Stock is primarily  listed on and quoted for  trading,  which,  as of the
Closing Date means the Over the Counter Bulletin Board ("OTCBB").

          "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.

          "Purchaser" or "Purchasers" has the meaning set forth in the Recitals.

          "Purchaser Deliverables" has the meaning set forth in Section 2.2(b).

          "Purchaser Party" has the meaning set forth in Section 4.4.

          "Registration  Rights  Agreement"  has the  meaning  set  forth in the
Recitals.

          "Registration  Statement" means a registration  statement  meeting the
requirements  set forth in the  Registration  Rights  Agreement and covering the
resale by the  Purchasers  of the  Registrable  Securities  (as  defined  in the
Registration Rights Agreement).

          "Regulation D" has the meaning set forth in the Recitals.

          "Required Approvals" has the meaning set forth in Section 3.1(e).

          "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.

          "SEC Reports" has the meaning set forth in Section 3.1(h).

          "Secretary's  Certificate"  has  the  meaning  set  forth  in  Section
2.2(a)(vii).

          "Securities" has the meaning set forth in the Recitals.

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

          "Short  Sales"  include,  without  limitation,  all  "short  sales" as
defined in Rule 200  promulgated  under  Regulation  SHO under the Exchange Act,
whether  or not  against  the box,  and all types of direct and  indirect  stock
pledges, forward sale contracts,  options, puts, calls, short sales, swaps, "put
equivalent  positions"  (as defined in Rule 16a-1(h) under the Exchange Act) and
similar  arrangements  (including on a total return basis),  and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

          "Strategic  Investor"  means an investor who the Board  determines  in
good faith can provide synergistic, marketing, sponsorship, operational or other
business benefits to the Company.

          "Subscription  Amount"  means  with  respect  to each  Purchaser,  the
aggregate amount to be paid for the Shares and the Warrants purchased  hereunder
as indicated on such  Purchaser's  signature  page to this Agreement next to the
heading "Aggregate Purchase Price (Subscription Amount)".


                                       4




          "Subsidiary"  means any  "significant  subsidiary"  as defined in Rule
1-02(w) of Regulation S-X  promulgated by the Commission  under the Exchange Act
and any other entity  required to be  disclosed  in the SEC Reports  pursuant to
Item 601(b)(21) of Regulation S-K.

          "Trading Affiliate" has the meaning set forth in Section 3.2(h).

          "Trading  Day" means (i) a day on which the Common  Stock is listed or
quoted and traded on its primary Trading Market (other than the OTCBB),  or (ii)
if the Common Stock is not listed on a Trading Market (other than the OTCBB),  a
day on which  the  Common  Stock is traded in the  over-the-counter  market,  as
reported by the OTCBB, or (iii) if the Common Stock is not quoted on any Trading
Market, a day on which the Common Stock is quoted in the over-the-counter market
as  reported  by the  National  Quotation  Bureau  Incorporated  (or any similar
organization  or  agency  succeeding  to its  functions  of  reporting  prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

          "Trading  Market" means whichever of the New York Stock Exchange,  the
American  Stock  Exchange,  the NASDAQ Global Select  Market,  the NASDAQ Global
Market,  the NASDAQ  Capital  Market,  or the OTCBB on which the Common Stock is
listed or quoted for trading on the date in question.

          "Transaction  Documents"  means  this  Agreement,  the  schedules  and
exhibits attached hereto, the Warrants,  the Registration Rights Agreement,  the
Irrevocable  Transfer Agent  Instructions  and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

          "Transfer  Agent" means  American  Stock  Transfer,  or any  successor
transfer agent for the Company.

          "Warrants"  has the meaning set forth in the  Recitals.  The Placement
Agent  and/or its  designees  are also  receiving  placement  agent  warrants as
compensation for services rendered in connection with the transactions set forth
herein,  which  warrants  shall  also  constitute  "Warrants"  for all  purposes
hereunder.

          "Warrant  Shares" has the meaning set forth in the  Recitals.  Warrant
Shares  shall also  include  shares of Common Stock  issuable  upon  exercise of
Warrants  received by the Placement  Agent and/or its designees as  compensation
for services rendered in connection with the transactions set forth herein.

                                  ARTICLE II.
                                PURCHASE AND SALE

     2.1  Closing.  Subject to  the  terms  and  conditions  set forth  in  this
Agreement,  at the Closing,  the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly,  purchase from the Company,
such  number of shares of Common  Stock and  Warrants  to  purchase  a number of
Warrant Shares,  as indicated below such  Purchaser's name on the signature page
of this  Agreement,  for an  aggregate  purchase  price  for such  Purchaser  as
indicated below such  Purchaser's  name on the signature page of this Agreement.
Upon  confirmation  that the other  conditions to closing  specified herein have
been  satisfied or duly waived by the  Purchasers,  the Company shall deliver to
Company  Counsel,  in trust, a certificate or  certificates,  registered in such
name or names as the  Purchasers  may  designate,  representing  the  Shares and
Warrants, with instructions that such certificates are to be held for release to
the  Purchasers  only upon  payment  in full of the  Subscription  Amount to the
Company by all the Purchasers. Unless otherwise agreed to by the Company and any
Purchaser,  upon such  receipt by  Company  Counsel  of the  certificates,  each
Purchaser shall promptly, but no more than one Business Day thereafter,  cause a


                                       5




wire  transfer  in same day funds to be sent to the  account  of the  Company as
instructed  in writing by the Company,  in an amount  representing  the purchase
price  for such  Purchaser  as  indicated  below  such  Purchaser's  name on the
signature page of this  Agreement.  On the date (the "Closing Date") the Company
receives the aggregate  Subscription  Amounts,  the certificates  evidencing the
Shares and Warrants shall be released to the  Purchasers  (the  "Closing").  The
Closing of the purchase and sale of the Shares and Warrants  shall take place at
the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, New York, New
York on the Closing  Date or at such other  locations  or remotely by  facsimile
transmission or other electronic means as the parties may mutually agree.

     2.2  Closing Deliveries.  (a) On or prior to the Closing, the Company shall
issue,  deliver or cause to be delivered to each  Purchaser the  following  (the
"Company Deliverables"):

               (i)  This Agreement, duly executed by the Company;

               (ii)  One  or more stock  certificates,  containing  the  legends
provided in Section 4.1(b) hereof, evidencing a number of Shares indicated below
such Purchaser's name on the signature page of this Agreement, registered in the
name of such Purchaser;

               (iii)  One  or  more  Warrants,  executed  by  the  Company   and
registered in the name of such Purchaser, pursuant to which such Purchaser shall
have the right to  acquire  such  number of Warrant  Shares  equal to 50% of the
number of Shares  issuable to such Purchaser  pursuant to Section  2.2(a)(ii) on
the terms set forth therein;

               (iv)  a legal opinion of  Company  Counsel,  in the form attached
hereto as Exhibit D, executed  by such counsel and  addressed to the  Purchasers
and the Placement Agent;

               (v)  the  Registration  Rights  Agreement,  duly  executed by the
Company;

               (vi)  duly  executed  Irrevocable  Transfer  Agent   Instructions
acknowledged in writing by the Transfer Agent;

               (vii)  a  certificate  of  the  Secretary  of  the  Company  (the
"Secretary's  Certificate"),  dated  as of  the  Closing  Date,  certifying  the
resolutions  adopted by the Board of  Directors  of the  Company  approving  the
transactions  contemplated by this Agreement and the other Transaction Documents
and the  issuance of the  Securities,  certifying  the  current  versions of the
certificate or articles of incorporation,  as amended and by-laws of the Company
and  certifying  as to the  signatures  and  authority  of persons  signing  the
Transaction Documents and related documents on behalf of the Company; and

               (viii) the Compliance Certificate referred to in Section 5.1(h).

          (b)  On or prior to the Closing, each Purchaser shall deliver or cause
to be delivered to the Company the following (the "Purchaser Deliverables"):

               (i) This Agreement, duly executed by such Purchaser;

               (ii) Such  Purchaser's  Subscription  Amount,  in  United  States
dollars  and in  immediately  available  funds,  in the  amount set forth as the
"Purchase  Price"  indicated  below  such  Purchaser's  name  on the  applicable
signature  page hereto by wire  transfer to an account  designated in writing by
the Company for such purpose, as set forth on Exhibit F attached hereto;


                                       6




               (iii)  the  Registration Rights Agreement,  duly executed by such
Purchaser;

               (iv) a fully completed and duly  executed Selling  Securityholder
Notice and  Questionnaire  in the form  attached as Annex B to the  Registration
Rights Agreement; and

               (v)  a fully  completed  and  duly  executed Accredited  Investor
Questionnaire and Stock  Certificate  Questionnaire in the forms attached hereto
as Exhibits C-1 and C-2, respectively.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1  Representations  and Warranties  of the Company.  The  Company  hereby
represents  and  warrants to the  Purchasers  and to the  Placement  Agent that,
except as set forth in the Schedules delivered herewith:


          (a) Subsidiaries.  The Company has no direct or indirect  Subsidiaries
other than those  listed in  Schedule  3.1(a)  hereto.  Except as  disclosed  in
Schedule  3.1(a) hereto,  the Company owns,  directly or indirectly,  all of the
capital stock or comparable  equity  interests of each Subsidiary free and clear
of any and all Liens, and all the issued and outstanding shares of capital stock
or comparable  equity  interest of each  Subsidiary  are validly  issued and are
fully  paid,  non-assessable  and  free of  preemptive  and  similar  rights  to
subscribe for or purchase securities.

          (b) Organization and Qualification. The Company and each Subsidiary is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable),  with the requisite power and authority to own or lease and use
its properties  and assets and to carry on its business as currently  conducted.
Neither the Company nor any  Subsidiary is in violation of any of the provisions
of its  respective  certificate  or articles of  incorporation,  bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is
duly  qualified  to  conduct  business  and is in  good  standing  as a  foreign
corporation  or other  entity in each  jurisdiction  in which the  nature of the
business conducted or property owned by it makes such  qualification  necessary,
except where the failure to be so qualified or in good standing, as the case may
be, could not have or  reasonably  be expected to have,  individually  or in the
aggregate,  resulted in a Material  Adverse  Effect and no  Proceeding  has been
instituted in any such jurisdiction revoking,  limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.

          (c)  Authorization;   Enforcement;   Validity.  The  Company  has  the
requisite  corporate  power and  authority to enter into and to  consummate  the
transactions  contemplated by each of the Transaction Documents to which it is a
party and otherwise to carry out its obligations  hereunder and thereunder.  The
execution  and  delivery of each of the  Transaction  Documents to which it is a
party by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including,  but not limited to, the sale and delivery of the
Shares and the Warrants and the  subsequent  issuance of the Warrant Shares upon
the  exercise  of the  Warrants)  have been  duly  authorized  by all  necessary
corporate  action on the part of the Company and no further  corporate action is
required  by  the  Company,  its  Board  of  Directors  or its  stockholders  in
connection therewith other than in connection with the Required Approvals.  Each
of the  Transaction  Documents to which it is a party has been (or upon delivery
will have  been) duly  executed  by the  Company  and is, or when  delivered  in
accordance  with the  terms  hereof,  will  constitute  the  valid  and  binding
obligation of the Company enforceable against the Company in accordance with its
terms,  except as such  enforceability may be limited by applicable  bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting  generally the enforcement of, creditors' rights and remedies or by
other  equitable  principles  of  general  application.  Except  as set forth on
Schedule 3.1(c) hereto, there are no shareholder agreements,  voting agreements,


                                       7





or other similar  arrangements  with respect to the  Company's  capital stock to
which the Company is a party or, to the  Company's  Knowledge,  between or among
any of the Company's shareholders.

          (d) No  Conflicts.  The  execution,  delivery and  performance  of the
Transaction Documents to which it is a party by the Company and the consummation
by the Company of the transactions  contemplated  hereby or thereby  (including,
without limitation, the issuance of the Shares, the Warrants and the reservation
for  issuance and the  issuances of the Warrant  Shares) do not and will not (i)
conflict  with or violate any  provision of the  Company's  or any  Subsidiary's
certificate  or articles of  incorporation,  bylaws or other  organizational  or
charter documents, (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would  become a default)  under,  result in
the creation of any Lien upon any of the  properties or assets of the Company or
any  Subsidiary  or  give  to  others  any  rights  of  termination,  amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement,  credit facility,  debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other  understanding to which the Company or
any  Subsidiary  is a party or by which any  property or asset of the Company or
any  Subsidiary  is  bound,  or  affected,  or  (iii)  subject  to the  Required
Approvals,  conflict with or result in a violation of any law, rule, regulation,
order,  judgment,  injunction,  decree  or  other  restriction  of any  court or
governmental  authority  to  which  the  Company  or  a  Subsidiary  is  subject
(including  federal and state  securities laws and regulations and the rules and
regulations, assuming the correctness of the representations and warranties made
by the  Purchasers  herein,  of any  self-regulatory  organization  to which the
Company  or  its  securities  are  subject,  including  all  applicable  Trading
Markets),  or by which any property or asset of the Company or a  Subsidiary  is
bound or  affected,  except in the case of clauses  (ii) and (iii) such as would
not, individually or in the aggregate,  have or reasonably be expected to result
in a Material Adverse Effect.

          (e)  Filings,  Consents  and  Approvals.  Neither  the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration  with, any court or other
federal,  state,  local or other  governmental  authority  or  other  Person  in
connection  with the execution,  delivery and  performance by the Company of the
Transaction Documents (including the issuance of the Securities), other than (i)
the  filing  with  the  Commission  of one or more  Registration  Statements  in
accordance with the  requirements of the  Registration  Rights  Agreement,  (ii)
filings  required by applicable  state  securities  laws,  (iii) the filing of a
Notice of Sale of Securities on Form D with the Commission under Regulation D of
the   Securities   Act,  (iv)  the  filing  of  any  requisite   notices  and/or
application(s)  to the Principal Trading Market for the issuance and sale of the
Securities and the listing of the Common Stock for trading or quotation,  as the
case may be, thereon in the time and manner  required  thereby,  (v) the filings
required in  accordance  with Section 4.3 of this  Agreement and (vi) those that
have been made or obtained  prior to the date of this  Agreement  (collectively,
the "Required Approvals").

          (f) Issuance of the Securities. The Shares and the Warrant Shares have
been duly  authorized and, when issued and paid for in accordance with the terms
of the Transaction  Documents,  will be duly and validly issued,  fully paid and
nonassessable,  free and clear of all Liens, other than restrictions on transfer
provided for in the  Transaction  Documents or imposed by applicable  securities
laws.  Assuming  the  accuracy  of the  representations  and  warranties  of the
Purchasers in this  Agreement,  the Shares and the Warrant Shares will be issued
in compliance with all applicable federal and state securities laws. The Company
has reserved from its duly authorized capital stock the maximum number of shares
of Common Stock issuable upon exercise of the Warrants.

          (g)  Capitalization.  The number of shares and type of all authorized,
issued and outstanding capital stock, options,  warrants and other securities of
the  Company  (whether  or not  presently  convertible  into or  exercisable  or
exchangeable  for  shares of  capital  stock of the  Company)  is  specified  in

                                       8





Schedule 3.1(g) hereto.  All of the  outstanding  shares of capital stock of the
Company are duly authorized, validly issued, fully paid and non-assessable, have
been issued in compliance in all material  respects with all applicable  federal
and state  securities  laws, and none of such  outstanding  shares was issued in
violation  of any  preemptive  rights  or  similar  rights to  subscribe  for or
purchase  any capital  stock of the  Company.  Except as  specified  in Schedule
3.1(g)  hereto,  there are no outstanding  options,  warrants or scrip rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities,  rights or  obligations  convertible  into or  exchangeable  for, or
giving any  Person  any right to  subscribe  for or  acquire,  any shares of the
Company's   capital  stock,  or  contracts,   commitments,   understandings   or
arrangements  by which the Company or any  Subsidiary  is or may become bound to
issue additional shares of capital stock of the Company, or options,  securities
or rights  convertible  or  exchangeable  into  shares of  capital  stock of the
Company. Except for customary adjustments as a result of stock dividends,  stock
splits,    combination    of   shares,    reorganizations,    recapitalizations,
reclassifications  or other similar  events,  or as disclosed in Schedule 3.1(g)
hereto or in any Schedule 13D or Schedule 13G or Company report on file with the
Commission,  there are no anti-dilution or price adjustment provisions contained
in any security issued by the Company (or in any agreement  providing  rights to
security  holders)  and the  issuance  and  sale  of the  Securities  will  not,
immediately or with the passage of time, obligate the Company to issue shares of
Common Stock or other  securities to any Person (other than the  Purchasers) and
will not,  result in a right of any holder of securities to adjust the exercise,
conversion, exchange or reset price under such securities.

          (h) SEC Reports. The Company has filed all reports,  schedules, forms,
statements  and other  documents  required to be filed by it under the  Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2004
(the  foregoing   materials,   including  the  exhibits  thereto  and  documents
incorporated by reference therein,  being collectively referred to herein as the
"SEC  Reports"  and  together  with this  Agreement  and the  Schedules  to this
Agreement  (if  any),  the  "Disclosure  Materials")  on a  timely  basis or has
received  a valid  extension  of such time of filing  and has filed any such SEC
Reports prior to the  expiration of any such  extension.  As of the date hereof,
the Company is not aware of any event  occurring on or prior to the Closing Date
(other than the  transactions  contemplated by the  Transaction  Documents) that
requires  the  filing of a Form 8-K after the  Closing.  As of their  respective
dates, or to the extent corrected by a subsequent  restatement,  the SEC Reports
complied in all material  respects with the  requirements  of the Securities Act
and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder,  and none of the SEC  Reports,  when  filed,  contained  any  untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

          (i)  Financial  Statements.  The  financial  statements of the Company
included in the SEC Reports  comply in all  material  respects  with  applicable
accounting  requirements  and the rules and  regulations of the Commission  with
respect  thereto as in effect at the time of filing (or to the extent  corrected
by a subsequent  restatement).  Such financial  statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods  involved,
except as may be otherwise  specified in such financial  statements or the notes
thereto  and except  that  unaudited  financial  statements  may not contain all
footnotes  required by GAAP,  and fairly  present in all  material  respects the
financial  position of the Company and its consolidated  subsidiaries taken as a
whole as of and for the dates  thereof  and the results of  operations  and cash
flows for the periods then ended,  subject, in the case of unaudited statements,
to normal,  year-end  audit  adjustments.  All material  agreements to which the
Company or any  Subsidiary  is a party or to which the property or assets of the
Company or any  Subsidiary  are subject are included as part of or  specifically
identified in the SEC Reports.

          (j) Tax  Matters.  Each of the  Company and its  Subsidiaries  (i) has
accurately and timely  prepared and filed all foreign,  federal and state income
and all other tax returns, reports and declarations required by any jurisdiction
to  which  it is  subject,  (ii)  has paid  all  taxes  and  other  governmental


                                       9





assessments  and charges that are material in amount,  shown or determined to be
due on such returns,  reports and declarations,  except those being contested in
good faith,  with respect to which adequate  reserves have been set aside on the
books of the Company and (iii) has set aside on its books provisions  reasonably
adequate for the payment of all taxes for periods  subsequent  to the periods to
which  such  returns,  reports or  declarations  apply,  except,  in the case of
clauses  (i) and (ii)  above,  where the failure to so pay or file any such tax,
assessment,  charge or return  would not  result in a Material  Adverse  Effect.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction.

          (k)  Material Changes. Since December 31, 2006, except as specifically
disclosed  in the SEC Reports or as set forth in  Schedule  3.1(k)  hereto,  (i)
there have been no events,  occurrences  or  developments  that have had or that
could reasonably be expected to result, either individually or in the aggregate,
in a Material  Adverse  Effect,  (ii) the Company has not  incurred any material
liabilities   other  than  (A)  trade  payables,   accrued  expenses  and  other
liabilities  incurred in the ordinary  course of business  consistent  with past
practice and (B)  liabilities  not  required to be  reflected  in the  Company's
financial  statements  pursuant to GAAP or required to be  disclosed  in filings
made with the  Commission,  (iii) the  Company  has not  altered  its  method of
accounting  or the manner in which it keeps its  accounting  books and  records,
(iv) the Company has not declared or made any dividend or  distribution  of cash
or  other  property  to its  shareholders  or  purchased,  redeemed  or made any
agreements  to purchase or redeem any shares of its capital stock (other than in
connection  with  repurchases  of  unvested  stock  issued to  employees  of the
Company),  (v) the Company has not issued any equity  securities to any officer,
director or  Affiliate,  except  Common Stock  issued in the ordinary  course as
dividends on outstanding  preferred stock and pursuant to existing Company stock
option or stock purchase plans or executive and director corporate  arrangements
disclosed in the SEC Reports and (vi) there has not been any material  change or
amendment  to, or any waiver of any  material  right under,  any contract  under
which the Company,  any subsidiary  thereof,  or any of their assets is bound or
subject.

          (l) Environmental  Matters.  To the Company's  Knowledge,  neither the
Company nor any Subsidiary (i) is in violation of any statute, rule, regulation,
decision or order of any governmental  agency or body or any court,  domestic or
foreign,  relating  to the  use,  disposal  or  release  of  hazardous  or toxic
substances or relating to the protection or  restoration  of the  environment or
human exposure to hazardous or toxic  substances  (collectively,  "Environmental
Laws"), (ii) owns or operates any real property  contaminated with any substance
that is in violation of any Environmental Laws, (iii) is liable for any off-site
disposal  or  contamination  pursuant  to any  Environmental  Laws,  and (iv) is
subject  to any claim  relating  to any  Environmental  Laws;  which  violation,
contamination,  liability  or claim has had or could  reasonably  be expected to
have a Material Adverse Effect,  individually or in the aggregate;  and there is
no pending or, to the Company's Knowledge,  threatened  investigation that might
lead to such a claim.

          (m)  Litigation.  There is no Action  which (i)  adversely  affects or
challenges the legality,  validity or  enforceability  of any of the Transaction
Documents or the Securities or (ii) except as specifically  disclosed in the SEC
Reports,  could, if there were an unfavorable  decision,  individually or in the
aggregate,  result in a judgment against the Company or any Subsidiary in excess
of $100,000 and for which no insurance is available. Neither the Company nor any
Subsidiary,  nor, to the Company's  Knowledge,  any current  director or officer
thereof (in his or her  capacity  thereof),  is or has been since  December  31,
2001,  the subject of any Action  involving a claim of violation of or liability
under federal or state  securities  laws or a claim of breach of fiduciary duty.
There  has not been and to the  Company's  Knowledge,  there is not  pending  or
contemplated,  any investigation by the Commission  involving the Company or, to
the Company's Knowledge any current or former director or officer of the Company


                                       10





(in his or her capacity as such).  The  Commission has not issued any stop order
or other order suspending the effectiveness of any registration  statement filed
by the Company or any subsidiary under the Exchange Act or the Securities Act.

          (n)  Employment  Matters.  No material labor dispute exists or, to the
Knowledge of the Company,  is imminent  with respect to any of the  employees of
the Company which could  reasonably be expected to result in a Material  Adverse
Effect.  None of the Company's or its  Subsidiaries'  employees is a member of a
union that relates to such employee's relationship with the Company, and neither
the Company or any of its  Subsidiaries  is a party to a  collective  bargaining
agreement, and the Company and its Subsidiaries believe that their relationships
with their  employees  are good. No executive  officer,  to the Knowledge of the
Company,  is, or is now expected to be, in violation of any material term of any
employment  contract,  confidentiality,  disclosure or  proprietary  information
agreement or  non-competition  agreement,  or any other contract or agreement or
any restrictive  covenant,  and the continued  employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing  matters.  The Company and its Subsidiaries
are in  compliance  with all U.S.  federal,  state,  local and foreign  laws and
regulations  relating  to  employment  and  employment   practices,   terms  and
conditions of employment and wages and hours,  except where the failure to be in
compliance could not,  individually or in the aggregate,  reasonably be expected
to have a Material Adverse Effect.

          (o)  Compliance.  Neither  the Company  nor any  Subsidiary  (i) is in
default  under or in violation  of (and no event has occurred  that has not been
waived that, with notice or lapse of time or both,  would result in a default by
the Company or any  Subsidiary  under),  nor has the  Company or any  Subsidiary
received  notice  of a  claim  that  it is in  default  under  or  that it is in
violation of, any indenture,  loan or credit agreement or any other agreement or
instrument  to which it is a party  or by which it or any of its  properties  is
bound  (whether or not such default or violation  has been  waived),  (ii) is in
violation  of any order of any court,  arbitrator  or  governmental  body having
jurisdiction  over the Company or its  properties or assets,  or (iii) is or has
been in violation  of, or in receipt of notice that it is in  violation  of, any
statute,  rule or regulation  of any  governmental  authority  applicable to the
Company,  except in each case as could not,  individually  or in the  aggregate,
have or reasonably be expected to result in a Material Adverse Effect.

          (p) Regulatory Permits.  The Company and the Subsidiaries  possess all
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state,  local or foreign  regulatory  authorities  necessary  to  conduct  their
respective businesses as described in the SEC Reports,  except where the failure
to possess such permits, individually or in the aggregate, has not and could not
reasonably  be  expected  to  result in a  Material  Adverse  Effect  ("Material
Permits"), and neither the Company nor any Subsidiary has received any notice of
proceedings  relating to the  revocation  or  modification  of any such Material
Permits.  Furthermore,  the Company and the  Subsidiaries  possess all necessary
Material  Permits and/or  Required  Approvals  which were required in connection
with the recently completed reverse merger.

          (q) Title to Assets.  Except for  property  that is  specifically  the
subject of, and covered by, other representations and warranties as to ownership
or title  contained  herein,  the  Company  and the  Subsidiaries  have good and
marketable  title in all  personal  property  owned by them that is  material to
their respective  businesses,  in each case free and clear of all Liens,  except
for Liens as do not  materially  affect  the value of such  property  and do not
materially  interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal,  state
or other  taxes,  the  payment of which is  neither  delinquent  nor  subject to
penalties.  Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable leases
of which the Company and the  Subsidiaries are in material  compliance.  Neither
the Company nor any Subsidiary own any real property.


                                       11





          (r) Patents and  Trademarks.  The  Company and its  Subsidiaries  own,
possess,  license or have other rights to use all foreign and domestic  patents,
patent   applications,   trade  and  service  marks,   trade  and  service  mark
registrations,  trade names, copyrights,  licenses,  inventions,  trade secrets,
technology,  Internet  domain names,  know-how and other  intellectual  property
(collectively,  the "Intellectual  Property") necessary for the conduct of their
respective businesses as now conducted or as proposed to be conducted. Except as
set forth in the SEC Reports and except where such  violations or  infringements
would not  reasonably  be  expected  to result,  either  individually  or in the
aggregate,  in a  Material  Adverse  Effect,  (a)  there  are no rights of third
parties to any such Intellectual Property; (b) to the Company's Knowledge, there
is no infringement by third parties of any such Intellectual Property; (c) there
is  no  pending  or,  to  the  Company's  Knowledge,  threatened  action,  suit,
proceeding or claim by others  challenging  the Company's and its  Subsidiaries'
rights in or to any such  Intellectual  Property,  and the Company is unaware of
any facts which would form a reasonable  basis for any such claim;  (d) there is
no pending or, to the Company's Knowledge,  threatened action, suit,  proceeding
or claim by others  challenging  the validity or scope of any such  Intellectual
Property; and (e) there is no pending or, to the Company's Knowledge, threatened
action,  suit,  proceeding or claim by others that the Company and/or any of its
Subsidiaries  infringe or otherwise  violate any patent,  trademark,  copyright,
trade secret or other proprietary  rights of others,  and the Company is unaware
of any other fact which would form a reasonable basis for any such claim.

          (s)  Insurance.  The  Company  and the  Subsidiaries  are  insured  by
insurers of recognized  financial  responsibility  against such losses and risks
and in such amounts as are prudent and customary in the  businesses and location
in which the Company and the Subsidiaries  are engaged.  Neither the Company nor
any  Subsidiary  has any knowledge  that it will be unable to renew its existing
insurance  coverage  for the  Company  and the  Subsidiaries  as and  when  such
coverage  expires or to obtain similar  coverage from similar insurers as may be
necessary to continue its business without a significant increase in cost.

          (t) Transactions With Affiliates and Employees. Except as set forth in
the SEC Reports  made on or prior to the date  hereof,  none of the  officers or
directors of the Company and, to the Company's Knowledge,  none of the employees
of the Company is presently a party to any  transaction  with the Company or any
Subsidiary or to a presently  contemplated  transaction (other than for services
as  employees,  officers and  directors)  that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.

          (u) Internal  Accounting  Controls.  The Company and the  Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  that (i)  transactions  are executed in  accordance  with
management's general or specific authorizations,  (ii) transactions are recorded
as necessary to permit  preparation of financial  statements in conformity  with
GAAP and to maintain asset  accountability,  (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv)
the recorded  accountability  for assets is compared with the existing assets at
reasonable  intervals  and  appropriate  action  is taken  with  respect  to any
differences.

          (v) Sarbanes-Oxley;  Disclosure Controls. The Company is in compliance
in all material respects with all of the provisions of the Sarbanes-Oxley Act of
2002  which  are  applicable  to it as of the  Closing  Date.  The  Company  has
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and designed such  disclosure  controls
and  procedures to ensure that material  information  relating to the Company is
made known to the  certifying  officers by others  within  those  entities.  The
Company's  certifying  officers have evaluated the effectiveness of its controls
and  procedures  as of a date  within  90 days  prior to the  filing of the most
recently  filed  periodic   report  under  the  Exchange  Act  (such  date,  the
"Evaluation  Date").  The Company  presented in its most recently filed periodic
report under the Exchange Act the  conclusions of the certifying  officers about


                                       12





the  effectiveness  of the  disclosure  controls and  procedures  based on their
evaluations  as of the  Evaluation  Date.  Since  such date  there  have been no
significant  changes in the Company's internal controls (as such term is defined
in Item  307(b) of  Regulation  S-K) or, to the  Company's  Knowledge,  in other
factors that could significantly affect the Company's internal controls.

          (w) Certain  Fees.  No person or entity will have,  as a result of the
transactions  contemplated by this Agreement, any valid right, interest or claim
against or upon the  Company or a  Purchaser  for any  commission,  fee or other
compensation  pursuant to any agreement,  arrangement or  understanding  entered
into by or on behalf of the Company,  other than  [________] as placement  agent
with respect to the offer and sale of the Shares and Warrants  (which  placement
agent fees are being paid by the Company) or the issuance of the Warrant Shares.
The Company shall pay, and hold each Purchaser harmless against,  any liability,
loss  or  expense   (including,   without   limitation,   attorney's   fees  and
out-of-pocket  expenses) arising in connection with any such right,  interest or
claim.

          (x)  Private  Placement.  Assuming  the  accuracy  of the  Purchasers'
representations  and warranties set forth in Section 3.2 of this  Agreement,  no
registration  under the Securities Act is required for the offer and sale of the
Securities by the Company to the  Purchasers  under the  Transaction  Documents.
Other  than  certain   piggy-back   registration   rights  granted  to  Lifeline
Industries,  Inc., as of the date of this  Agreement,  there are no  outstanding
registration rights held by any holder of the Company's securities.

          (y) No Directed Selling Efforts or General  Solicitation.  Neither the
Company, nor any of its Affiliates, nor any Person acting on its or their behalf
has  conducted any "general  solicitation"  or "general  advertising"  (as those
terms are used in Regulation  D) in connection  with the offer or sale of any of
the Shares and Warrants.

          (z) No Integrated  Offering.  Assuming the accuracy of the Purchasers'
representations  and warranties set forth in Section 3.2, and subject to Section
4.9 of this Agreement,  neither the Company,  its  Subsidiaries nor any of their
Affiliates,  nor any  Person  acting on its or their  behalf  has,  directly  or
indirectly,  at any time  within the past six months made any offers or sales of
any  Company  security  or  solicited  any  offers  to buy any  security,  under
circumstances  that would (i) eliminate the  availability  of the exemption from
registration  under Regulation D under the Securities Act in connection with the
offer and sale by the Company of the Shares and  Warrants or the issuance of the
Warrant Shares as  contemplated  hereby or (ii) cause the offering of the Shares
and Warrants or the issuance of the Warrant Shares  pursuant to the  Transaction
Documents to be integrated  with prior  offerings by the Company for purposes of
any applicable law, regulation or shareholder  approval  provisions,  including,
without  limitation,  under the rules and  regulations of the Principal  Trading
Market on which any of the securities of the Company are listed or designated.

          (aa) Exchange Act. The Company's  Common Stock is registered  pursuant
to  Section  12(g) of the  Exchange  Act,  and the  Company  has taken no action
designed to terminate  the  registration  of the Common Stock under the Exchange
Act nor has the  Company  received  any  notification  that  the  Commission  is
contemplating terminating such registration.

          (bb)  Investment   Company.   Neither  the  Company  nor  any  of  its
Subsidiaries  is required to be  registered  as, and is not an Affiliate of, and
immediately  following  the Closing  will not be  required  to  register  as, an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

          (cc)  Questionable  Payments.  Neither  the  Company  nor  any  of its
Subsidiaries,   nor,  to  the  Company's  Knowledge,  any  directors,  officers,
employees, agents or other Persons acting on behalf of the Company or any of its


                                       13





Subsidiaries  has,  in the  course of its  actions  for,  or on behalf  of,  the
Company:  (a)  directly or  indirectly,  used any  corporate  funds for unlawful
contributions,  gifts,  entertainment  or other  unlawful  expenses  relating to
foreign or domestic political activity; (b) made any direct or indirect unlawful
payments to any foreign or domestic  governmental  officials  or employees or to
any foreign or domestic political parties or campaigns from corporate funds; (c)
violated in any material respect any provision of the Foreign Corrupt  Practices
Act of 1977, as amended or (d) made any other unlawful  bribe,  rebate,  payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

          (dd) Application of Takeover Protections. The Company and its board of
directors  have  taken  all  necessary  action,  if  any,  in  order  to  render
inapplicable any control share acquisition,  business  combination,  poison pill
(including  any  distribution   under  a  rights  agreement)  or  other  similar
anti-takeover provision under the Company's charter documents or the laws of its
state of  incorporation  that is or  could  reasonably  be  expected  to  become
applicable  to any of the  Purchasers  as a  result  of the  Purchasers  and the
Company  fulfilling  their  obligations  or  exercising  their  rights under the
Transaction  Documents,  including without  limitation the Company's issuance of
the Securities and the Purchasers' ownership of the Securities.

          (ee)  Disclosure.  The Company confirms that neither it nor any of its
officers or  directors  nor any other  Person  acting on its or their behalf has
provided,  and it has  not  authorized  the  Placement  Agent  to  provide,  any
Purchaser  or its  respective  agents or counsel  with any  information  that it
believes  constitutes  or could  reasonably be expected to constitute  material,
non-public information except insofar as the existence,  provisions and terms of
the Transaction  Documents and the proposed  transactions  hereunder provided to
the Purchasers may constitute such  information,  all of which will be disclosed
by the  Company in the Press  Release  as  contemplated  by  Section  4.3 hereof
together with the Form 8-K. All disclosure provided to the Purchasers  regarding
the Company, its business and the transactions  contemplated  hereby,  furnished
prior to the date of this  Agreement by the Company or authorized by the Company
and furnished by the  Placement  Agent on behalf of the Company  (including  the
Company's  representations  and warranties set forth in this Agreement) are true
and correct in all material  respects and do not contain any untrue statement of
a material  fact or omit to state any material  fact  necessary in order to make
the statements made therein, in light of the circumstances under which they were
made,  not  misleading.  No event or  circumstance  has occurred or  information
exists with respect to the Company nor any of its  Subsidiaries  or its or their
business,   properties,   operations  or  financial  conditions,   which,  under
applicable law, rule or regulation,  requires public  disclosure or announcement
by the Company but which has not been so publicly announced or disclosed, except
for the announcement of this Agreement and related transactions.

          (ff)  Off  Balance  Sheet  Arrangements.   There  is  no  transaction,
arrangement,  or other relationship between the Company and an unconsolidated or
other off balance  sheet  entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed or that  otherwise  would be
reasonably likely to have a Material Adverse Effect.

          (gg)  Consultation  with  Auditors.  The  Company  has  consulted  its
independent  auditors  concerning the accounting  treatment of the  transactions
contemplated  by the  Transaction  Documents,  and in  connection  therewith has
furnished  such  auditors  complete  copies of the  Transaction  Documents.  The
Company intends to (but the Company cannot assure that the Commission will allow
the Company to) account for the gross proceeds  raised from the financing  which
is the subject of this Agreement as equity in its financial statements.


                                       14





     3.2  Representations  and Warranties  of  the  Purchasers.  Each  Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company and the Placement Agent as
follows:

          (a)  Organization;   Authority.  Such  Purchaser  is  an  entity  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction  of its  organization  with the requisite  corporate or partnership
power  and  authority  to  enter  into  and  to  consummate   the   transactions
contemplated by the applicable  Transaction Documents and otherwise to carry out
its  obligations   hereunder  and  thereunder.   The  execution,   delivery  and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly  authorized by all necessary  corporate or, if such  Purchaser is
not  a  corporation,  such  partnership,  limited  liability  company  or  other
applicable like action,  on the part of such  Purchaser.  Each of this Agreement
and the Registration  Rights Agreement has been duly executed by such Purchaser,
and when  delivered by such  Purchaser in  accordance  with terms  hereof,  will
constitute  the  valid  and  legally  binding   obligation  of  such  Purchaser,
enforceable   against  it  in  accordance   with  its  terms,   except  as  such
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application.

          (b) Investment Intent. Such Purchaser  understands that the Securities
are "restricted  securities"  and have not been registered  under the Securities
Act or any  applicable  state  securities  law and is  acquiring  the Shares and
Warrants, and upon the exercise of the Warrants, will acquire the Warrant Shares
issuable upon exercise thereof,  as principal for its own account and not with a
view to, or for distributing or reselling such Securities or any part thereof in
violation of the Securities Act or any applicable state securities laws, without
prejudice, however, to such Purchaser's right, subject to the provisions of this
Agreement  and  the  Registration  Rights  Agreement,  at all  times  to sell or
otherwise  dispose of all or any part of such Shares or Warrant Shares  pursuant
to an effective  registration  statement  under the  Securities  Act or under an
exemption from such  registration and in compliance with applicable  federal and
state securities laws. Such Purchaser is acquiring the Shares and Warrants,  and
upon the exercise of the Warrants, will acquire the Warrant Shares issuable upon
exercise  thereof,  in the ordinary course of its business.  Such Purchaser does
not presently have any agreement, plan or understanding, directly or indirectly,
with  any  Person  to  distribute  or  effect  any  distribution  of  any of the
Securities (or any securities  which are derivatives  thereof) to or through any
person or entity; provided,  however, that by making the representations herein,
such  Purchaser  does not agree to hold any of the  Securities  for any  minimum
period of time.

          (c)  Purchaser  Status.  At the time such  Purchaser  was  offered the
Shares and  Warrants,  it was, and at the date hereof it is, and on each date on
which it exercises  Warrants it will be, an "accredited  investor" as defined in
Rule  501(a)  under the  Securities  Act.  Such  Purchaser  is not a  registered
broker-dealer under Section 15 of the Exchange Act.

          (d) General Solicitation.  Such Purchaser is not purchasing the Shares
and  Warrants  as a  result  of any  advertisement,  article,  notice  or  other
communication  regarding  the Shares and Warrants  published  in any  newspaper,
magazine or similar media or broadcast over  television or radio or presented at
any seminar or any other general advertisement.

          (e)  Experience of Such  Purchaser.  Such  Purchaser,  either alone or
together  with its  representatives,  has  such  knowledge,  sophistication  and
experience in business and  financial  matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated  the merits and risks of such  investment.  Such  Purchaser is able to
bear the economic risk of an investment  in the  Securities  and, at the present
time, is able to afford a complete loss of such investment.


                                       15





          (f) Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed  necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and Warrants and the merits and risks of investing
in the Securities;  (ii) access to information  (other than material  non-public
information)  about  the  Company  and the  Subsidiaries  and  their  respective
financial condition, results of operations, business, properties, management and
prospects  sufficient  to enable it to evaluate  its  investment;  and (iii) the
opportunity to obtain such additional  information that the Company possesses or
can acquire without  unreasonable effort or expense that is necessary to make an
informed  investment  decision  with  respect to the  investment.  Neither  such
inquiries  nor  any  other  investigation  conducted  by or on  behalf  of  such
Purchaser or its  representatives or counsel shall modify,  amend or affect such
Purchaser's  right  to rely  on the  truth,  accuracy  and  completeness  of the
Disclosure Materials and the Company's  representations and warranties contained
in the Transaction Documents.

          (g) Residency.  Such Purchaser has, if an entity,  its principal place
of business or, if an individual,  its primary residence in the jurisdiction set
forth immediately below such Purchaser's name on the signature pages hereto.

          (h)  Certain  Trading  Activities.  Other  than  with  respect  to the
transactions  contemplated  herein,  since the  earlier to occur of (1) the time
that such Purchaser was first  contacted by the Company,  the Placement Agent or
any other  Person  regarding  this  investment  in the Company and (2) the tenth
(10th) day prior to the date of this  Agreement,  neither the  Purchaser nor any
Affiliate  of  such  Purchaser  which  (x)  had  knowledge  of the  transactions
contemplated  hereby, (y) has or shares discretion  relating to such Purchaser's
investments or trading or information  concerning such Purchaser's  investments,
including in respect of the Securities,  and (z) is subject to such  Purchaser's
review  or  input   concerning   such   Affiliate's   investments   or   trading
(collectively,  "Trading  Affiliates")  has directly or indirectly,  nor has any
Person acting on behalf of or pursuant to any understanding  with such Purchaser
or  Trading  Affiliate,  effected  or agreed to effect any  transactions  in the
securities  of the  Company  (including,  without  limitation,  any Short  Sales
involving the Company's securities). Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
Short  Sales  in  the  securities  of  the  Company  after  the  time  that  the
transactions  contemplated  by this  Agreement are first  publicly  announced as
described in Section 4.3.

          (i)  Brokers  and  Finders.  No Person  will have,  as a result of the
transactions  contemplated by this Agreement, any valid right, interest or claim
against or upon the Company,  or any Purchaser for any commission,  fee or other
compensation  pursuant to any agreement,  arrangement or  understanding  entered
into by or on behalf of the Purchaser.

          (j) Independent Investment Decision.  Such Purchaser has independently
evaluated  the merits of its  decision  to  purchase  the  Shares  and  Warrants
pursuant to the Transaction  Documents,  and such Purchaser confirms that it has
not relied on the advice of any other Purchaser's  business and/or legal counsel
in making  such  decision.  Such  Purchaser  understands  that  nothing  in this
Agreement or any other materials presented by or on behalf of the Company to the
Purchaser in connection with the purchase of the Shares and Warrants constitutes
legal,  tax or investment  advice.  Such Purchaser has consulted such legal, tax
and investment  advisors as it, in its sole discretion,  has deemed necessary or
appropriate  in connection  with its purchase of the Shares and  Warrants.  Such
Purchaser  understands that the Placement Agent has acted solely as the agent of
the Company in this  placement of the Shares and Warrants and such Purchaser has
not relied on the business or legal advice of the Placement  Agent or any of its
agents,  counsel or Affiliates in making its investment decision hereunder,  and
confirms that none of such Persons has made any representations or warranties to
such  Purchaser  in  connection  with  the  transactions   contemplated  by  the
Transaction Documents.


                                       16





          (k) Reliance on Exemptions. Such Purchaser understands that the Shares
and  Warrants  being  offered and sold to it in reliance on specific  exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Purchaser's compliance with, the representations,  warranties,  agreements,
acknowledgements  and understandings of such Purchaser set forth herein in order
to determine the  availability  of such  exemptions and the  eligibility of such
Purchaser to acquire the Securities.

          (l) No Governmental Review. Such Purchaser  understands that no United
States federal or state agency or any other  government or  governmental  agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness  or  suitability  of the  investment  in the  Securities  nor have such
authorities passed upon or endorsed the merits of the offering of the Shares and
Warrants.

          The  Company  acknowledges  and agrees that no  Purchaser  has made or
makes  any  representations  or  warranties  with  respect  to the  transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1   (a)  Compliance with Laws.  Notwithstanding  any other  provision  of
this  Article IV,  each  Purchaser  covenants  that the  securities  may only be
disposed  of pursuant  to an  effective  registration  statement  under,  and in
compliance  with the  requirements  of, the  Securities  Act,  or pursuant to an
available  exemption from, or in a transaction not subject to, the  registration
requirements of the Securities Act, and in compliance with any applicable  state
and federal  securities  laws. In connection with any transfer of the Securities
other than (i)  pursuant to an  effective  registration  statement,  (ii) to the
Company, (iii) to an Affiliate of a Purchaser,  (iv) pursuant to Rule 144 or (v)
in connection with a bona fide pledge as contemplated in Section 4.1(b),  except
as otherwise  provided herein, the Company may require the transferor thereof to
provide to the  Company an opinion of counsel  selected  by the  transferor  and
reasonably  acceptable  to the Company,  the form and substance of which opinion
shall be  reasonably  satisfactory  to the  Company,  to the  effect  that  such
transfer does not require registration of such transferred  Securities under the
Securities Act. As a condition of transfer,  any such transferee  shall agree in
writing to be bound by the terms of this  Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights Agreement.

          (b) Legends.  Certificates  evidencing the  Securities  shall bear any
legend as required by the "blue sky" laws of any state and a restrictive  legend
in  substantially  the following form,  until such time as they are not required
under Section 4.1(c):

          [NEITHER THE ISSUANCE AND SALE OF THE  SECURITIES  REPRESENTED BY THIS
          CERTIFICATE  NOR  THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE
          EXERCISABLE HAVE BEEN][THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
          HAVE NOT BEEN] REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION
          OR THE  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN
          EXEMPTION  FROM  REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS
          AMENDED (THE "SECURITIES ACT"), AND,  ACCORDINGLY,  MAY NOT BE OFFERED
          OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER
          THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
          TRANSACTION  NOT  SUBJECT  TO, THE  REGISTRATION  REQUIREMENTS  OF THE


                                       17





          SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
          OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY
          SATISFACTORY TO THE COMPANY.

          The Company  acknowledges and agrees that a Purchaser may from time to
time  pledge,  and/or  grant a security  interest in some or all of the legended
Securities,  in connection with applicable  securities laws,  pursuant to a bona
fide margin  agreement in compliance with a bona fide margin loan. Such a pledge
would not be subject to approval or consent of the Company and no legal  opinion
of legal  counsel to the pledgee,  secured party or pledgor shall be required in
connection  with the  pledge,  but such  legal  opinion  shall  be  required  in
connection with a subsequent  transfer or foreclosure  following  default by the
Purchaser  transferee of the pledge.  No notice shall be required of such pledge
but  Purchaser's  transferee  shall  promptly  notify  the  Company  of any such
subsequent transfer or foreclosure. Each Purchaser acknowledges that the Company
shall  not be  responsible  for any  pledges  relating  to,  or the grant of any
security interest in, any of the Securities or for any agreement,  understanding
or  arrangement  between any  Purchaser  and its pledgee or secured  party.  The
Company's  indemnification  obligations  pursuant  to this  Agreement  shall not
extend to any  Proceeding  or Losses  arising out of or related to this  Section
4.1(b).  At the appropriate  Purchaser's  expense,  the Company will execute and
deliver  such  reasonable  documentation  as  a  pledgee  or  secured  party  of
Securities may reasonably request in connection with a pledge or transfer of the
Securities  including  the  preparation  and filing of any  required  prospectus
supplement  under  Rule  423(b)(3)  of the  Securities  Act or other  applicable
provision  of the  Securities  Act to  appropriately  amend the list of  Selling
Shareholders thereunder.  Each Purchaser acknowledges and agrees that, except as
otherwise  provided in Section  4.1(c),  any  Securities  subject to a pledge or
security  interest as contemplated by this Section 4.1(b) shall continue to bear
the legend set forth in this Section  4.1(b) and be subject to the  restrictions
on transfer set forth in Section 4.1(a).

          (c) Removal of Legends.  The legend set forth in Section  4.1(b) above
shall be removed and the Company shall issue a  certificate  without such legend
to the holder of the Shares  upon which it is stamped or issue to such holder by
electronic  delivery at the applicable  balance account at The Depositary  Trust
Company,  if (i)  such  Shares  are  sold or  transferred  pursuant  to Rule 144
(assuming  the  transferor  is not an  Affiliate of the  Company),  or (ii) such
Shares are  eligible  for sale under Rule  144(k).  The Company  shall cause its
counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions  to the Company's  transfer  agent on the Effective  Date. Any fees
(with  respect  to the  Transfer  Agent,  counsel to the  Company or  otherwise)
associated with the issuance of such opinion or the removal of such legend shall
be borne by the  Company.  If any portion of the Warrant is  exercised at a time
when there is an  effective  registration  statement  to cover the resale of the
Warrant  Shares,  or if such Warrant Shares may be sold under Rule 144(k),  then
such Warrant Shares shall be issued free of all legends. Following the Effective
Date, or at such time as a legend is no longer required for certain Shares,  the
Company  will no later than three (3) Trading Days  following  the delivery by a
Purchaser to the Company or the  Transfer  Agent (with notice to the Company) of
(i) a legended  certificate  representing  such Shares  (endorsed  or with stock
powers  attached,  signatures  guaranteed,  and  otherwise in form  necessary to
affect the reissuance  and/or transfer) or (ii) an Exercise Notice in the manner
stated in the Warrants to effect the exercise of such Warrant in accordance with
its terms and an opinion of counsel to the extent  required  by Section  4.1(a),
deliver or cause to be delivered to such  Purchaser a  certificate  representing
such  Shares  or  Warrant  Shares  that is free from all  restrictive  and other
legends.  The  Company  may  not  make  any  notation  on its  records  or  give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section.

          (d) Acknowledgement.  Each Purchaser hereby covenants with the Company
not to make any sale of the  Shares or  Warrant  Shares  under the  Registration
Statement  without  complying  with the provisions of this Agreement and without
effectively causing the prospectus delivery requirement under the Securities Act


                                       18





to be satisfied,  and such Purchaser  acknowledges and agrees that the Shares or
Warrant  Shares are not  transferable  on the books of the Company in connection
with any sale under the Registration  Statement unless the certificate submitted
to the transfer agent  evidencing the Shares or Warrant Shares is accompanied by
a  separate  Purchaser's   Certificate  of  Subsequent  Sale  delivered  by  the
Purchaser:  (i) in the form of Exhibit F hereto, (ii) executed by an officer of,
or other authorized person designated by, the Purchaser, and (iii) to the effect
that (A) the  Shares or Warrant  Shares  have been sold in  accordance  with the
Registration  Statement,  the Securities Act and any applicable state securities
or blue sky laws and (B) the requirement of delivering a current  prospectus has
been satisfied.  The Purchaser will notify the Company  promptly after each sale
of  Shares  or  Warrant  Shares.  The  Purchaser  acknowledges  that  there  may
occasionally  be times when the Company must  suspend the use of the  Prospectus
forming a part of the Registration Statement (a "Suspension") until such time as
an amendment  to the  Registration  Statement  has been filed by the Company and
declared  effective  by the  Commission,  or until such time as the  Company has
filed an appropriate  report with the  Commission  pursuant to the Exchange Act.
The  Purchaser  hereby  covenants  that it will not sell  any of the  Shares  or
Warrant Shares pursuant to said Prospectus  during the period  commencing at the
time at which the Company gives the Purchaser  written  notice of the Suspension
of the use of said  Prospectus  and  ending  at the time the  Company  gives the
Purchaser written notice that the Purchaser may thereafter effect sales pursuant
to said Prospectus.

          (e) Irrevocable  Transfer Agent Instructions.  The Company shall issue
irrevocable  instructions  to the Transfer  Agent,  and any subsequent  transfer
agent, to issue certificates or credit shares to the applicable balance accounts
at The  Depository  Trust  Company  ("DTC"),  registered  in the  name  of  each
Purchaser or its respective nominee(s), for the Shares or Warrant Shares in such
amounts as specified  from time to time by each  Purchaser to the Company in the
form  of  Exhibit  E  attached   hereto   (the   "Irrevocable   Transfer   Agent
Instructions").  The  Company  warrants  that  no  instruction  other  than  the
Irrevocable Transfer Agent Instructions referred to in this Section 4(e) will be
given by the Company to its transfer  agent in connection  with this  Agreement,
and that the Securities shall otherwise be freely  transferable on the books and
records of the Company as and to the extent  provided in this  Agreement and the
other Transaction Documents. The Company acknowledges that a breach by it of its
obligations  under this Section 4(e) will cause irreparable harm to a Purchaser.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations  under this Section 4(e) will be inadequate and agrees, in the event
of a breach  or  threatened  breach by the  Company  of the  provisions  of this
Section  4(e),  that a  Purchaser  shall be  entitled,  in addition to all other
available  remedies,  to an order and/or  injunction  restraining any breach and
requiring  immediate  issuance and  transfer,  without the  necessity of showing
economic loss and without any bond or other security being required.

     4.2  Reservation of Common Stock.  The  Company  shall  maintain a  reserve
from its duly  authorized  shares of Common Stock for  issuance  pursuant to the
Transaction  Documents  in  such  amount  as  may be  required  to  fulfill  its
obligations in full under the  Transaction  Documents.  In the event that at any
time the then authorized shares of Common Stock are insufficient for the Company
to satisfy its obligations in full under the Transaction Documents,  the Company
shall  promptly  take such  actions as may be required to increase the number of
authorized shares.

     4.3  Securities Laws Disclosure; Publicity. Promptly after the execution of
this  Agreement,  the Company shall issue a press release (the "Press  Release")
disclosing the material terms of the transactions contemplated hereby. After the
Closing  Date,  the  Company  will  file a  Current  Report on Form 8-K with the
Commission  describing the terms of the Transaction  Documents (and including as
exhibits to such Current Report on Form 8-K the material  Transaction  Documents
(including,  without  limitation,  this  Agreement and the  Registration  Rights
Agreement)).  Without any such Purchaser's prior consent, the Company agrees not
to disclose in the Press Release the names,  addresses or any other  information
about a  Purchaser,  except as required  by law and to satisfy  its  obligations
under the Registration Rights Agreement.


                                       19





     4.4  Indemnification.  In  addition  to  the  indemnity  provided  in   the
Registration  Rights  Agreement,   the  Company  will  indemnify  and  hold  the
Purchasers  and their  directors,  officers,  shareholders,  partners,  members,
managers, employees and agents (each, a "Purchaser Party") harmless from any and
all losses, liabilities,  obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,  court costs and
reasonable attorneys' fees and costs of investigation  (collectively,  "Losses")
that any such Purchaser  Party may suffer or incur as a result of or relating to
any  misrepresentation,  breach or inaccuracy of any  representation,  warranty,
covenant  or  agreement  made by the  Company in any  Transaction  Document.  In
addition to the indemnity  contained  herein,  the Company will  reimburse  each
Purchaser Party for its reasonable legal and other expenses  (including the cost
of any investigation,  preparation and travel in connection  therewith) incurred
in connection  therewith,  as such  expenses are incurred.  If and to the extent
that such  indemnification  is unenforceable  for any reason,  the Company shall
make the maximum  contribution  to the payment and  satisfaction  of such losses
permissible under applicable law.

          (a) Conduct of Indemnification Proceedings.

               (i)  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 have the
right to assume  the  defense  thereof,  including  the  employment  of  counsel
reasonably  satisfactory  to  the  Indemnified  Party  and  the  payment  of all
reasonable  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.

               (ii) An Indemnified Party shall have the right to employ separate
counsel in any such  Proceeding  and to  participate  (but not  control)  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),  provided, that
the  Indemnifying  Party  shall not be liable for the fees and  expenses of more
than one separate firm of attorneys at any time for all Indemnified Parties. 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, delayed or conditioned. 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.

               (iii)  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
incurred,   within  twenty  Trading  Days  of  written  notice  thereof  to  the


                                       20





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).

          (b) Contribution.

               (i)  If  a  claim  for  indemnification   under  Section  4.4  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  4.4(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.

               (ii) The parties  hereto agree  that it would  not  be  just  and
equitable if contribution pursuant to this Section 4.4(b) 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  4.4(d),  no Holder
shall be required to contribute,  in the aggregate,  any amount in excess of the
amount by which the net 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.  No
person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any Person
who was not guilty of such fraudulent misrepresentation.

               (iii) 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  and are not in  diminution  or  limitation  of the
indemnification provisions under the Purchase Agreement.

     4.5  Listing of Securities. Promptly following the date hereof, the Company
shall take all  necessary  action to cause the  Shares or  Warrant  Shares to be
listed upon the Principal  Trading  Market,  if any, upon which shares of Common
Stock  are then  listed  (subject  to  official  notice of  issuance)  and shall
maintain,  so long as any other shares of Common Stock shall be so listed,  such
listing.  Further,  if the  Company  applies to have its  Common  Stock or other
securities  listed  on any  other  Trading  Market  it  shall  include  in  such
application  the Shares and Warrant Shares and will take such other action as is
necessary  to cause the  Shares  and  Warrant  Shares to be listed on such other
Trading Market as promptly as practicable.

     4.6  Use of Proceeds.  The Company intends to use the net proceeds from the
sale of the  Shares and  Warrants  hereunder  for  expanding  league  events and
television   production,   working  capital  needs,   repayment  of  outstanding
indebtedness and general corporate purposes.


                                       21





     4.7 Transactions and Confidentiality After The Date  Hereof. Each Purchaser
shall not, and shall cause its Trading  Affiliates not to,  engage,  directly or
indirectly,  in any  transactions  in the securities of the Company  (including,
without limitation,  any Short Sales) involving the Company's  securities during
the period  from the date hereof  until such time as (i) after the  transactions
contemplated  by this  Agreement  are first  publicly  announced as described in
Section 4.3 or (ii) this  Agreement is  terminated  in full  pursuant to Section
7.16.  Notwithstanding  the  foregoing,  in the case of a  Purchaser  or Trading
Affiliate that is a multi-managed  investment vehicle whereby separate portfolio
managers manage  separate  portions of such  Purchaser's or Trading  Affiliate's
assets and the  portfolio  managers have no direct  knowledge of the  investment
decisions  made  by the  portfolio  managers  managing  other  portions  of such
Purchaser's or Trading  Affiliate's  assets,  the representation set forth above
shall only apply with respect to the portion of assets  managed by the portfolio
manager  that made the  investment  decision to purchase the Shares and Warrants
covered  by  this  Agreement.   Each  Purchaser  understands  and  acknowledges,
severally  and not  jointly  with  any  other  Purchaser,  that  the  Commission
currently takes the position that covering a short position established prior to
effectiveness  of a resale  registration  statement with shares included in such
registration  statement would be a violation of Section 5 of the Securities Act,
as set forth in Item 65,  Section 5 under  Section A, of the Manual of  Publicly
Available Telephone Interpretations,  dated July 1997, compiled by the Office of
Chief Counsel,  Division of Corporation Finance.  Each Purchaser,  severally and
not jointly  with the other  Purchasers,  covenants  that until such time as the
transactions  contemplated  by this  Agreement  are  publicly  disclosed  by the
Company  as  described  in  Section  4.3,  such   Purchaser  will  maintain  the
confidentiality   of  all  disclosures  made  to  it  in  connection  with  this
transaction (including the existence and terms of this transaction).

     4.8  Furnishing  of  Information.  As  long  as  any  Purchaser   owns  the
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the  Company  after  the date  hereof  pursuant  to the
Exchange Act. As long as any Purchaser  owns the  Securities,  if the Company is
not required to file reports  pursuant to such laws, it will prepare and furnish
to the  Purchasers  and make publicly  available in accordance  with Rule 144(c)
such  information  as is  required  for the  Purchasers  to sell the  Shares and
Warrant Shares under Rule 144. The Company  further  covenants that it will take
such further action as any holder of the Securities may reasonably request,  all
to the  extent  required  from  time to time to enable  such  Person to sell the
Shares and Warrant Shares without  registration  under the Securities Act within
the limitation of the exemptions provided by Rule 144.

     4.9  Non-Public Information.  Except with respect to the material terms and
conditions of the transactions  contemplated by the Transaction  Documents,  the
Company  shall not, and shall cause each of its officers,  directors,  employees
and  agents,  not to,  provide  any  Purchaser  with  any  material,  non-public
information regarding the Company from and after the filing of the Press Release
without the express written consent of such Purchaser, unless prior thereto such
Purchaser shall have executed a written agreement  regarding the confidentiality
and use of such information.

     4.10  Stock Splits and Reclassification.  From the  date  hereof until  the
earlier  of (i) 60 days  after  the  Effective  Date of the  first  Registration
Statement filed pursuant to the Registration Rights Agreement, and (ii) July 31,
2008 , the  Company  shall  not,  without  the  consent of holders of at least a
majority of the Shares issued at Closing, consummate, undertake, or announce any
intention  to  consummate  or  undertake  a reverse  or forward  stock  split or
reclassification of the Common Stock.

     4.11 Strategic Investors.  Notwithstanding anything in this Agreement or in
any  Transaction  Document to the contrary,  nothing in this Agreement or in any
Transaction  Document shall  prohibit or restrict the Company's  ability to, and
the Company shall have the right to, offer,  sell or otherwise issue, any of its
securities to one or more Strategic Investors;  provided,  however, if, prior to
the Filing  Date,  the Company  proposes to sell its  securities  to one or more


                                       22





Strategic  Investors  for gross cash  proceeds in excess of  $20,000,000,  then,
prior to  consummating  such sale,  the Company  shall have received the written
consent from the Purchasers who, on the Closing Date,  acquired 66.6% or more of
the  number  of Shares  sold  pursuant  to this  Agreement;  provided,  further,
however,  each Purchaser  hereby agrees to keep the receipt and substance of any
such notice  confidential,  until such time as the subject  transaction has been
publicly disclosed by the Company or such Purchaser has received further written
notice from the Company that such transaction has been terminated.

                                   ARTICLE V.
                         CONDITIONS PRECEDENT TO CLOSING

      5.1  Conditions Precedent to the Obligations of the Purchasers to Purchase
the Shares and Warrants.  The obligation of each Purchaser to acquire the Shares
and Warrants at the Closing is subject to the  fulfillment,  to such Purchaser's
satisfaction,  on or  prior  to the  Closing  Date,  of  each  of the  following
conditions, any of which may be waived by such Purchaser (as to itself only):

          (a) Representations and Warranties. The representations and warranties
of the  Company  contained  herein  shall be true and  correct  in all  material
respects  (except to the extent  that any such  representation  or  warranty  is
already qualified by materiality,  in which case it shall be true and correct in
all  respects)  as of the date when made and as of the Closing  Date,  as though
made on and as of such date;

          (b)  Performance.  The Company  shall have  performed,  satisfied  and
complied in all material respects with all covenants,  agreements and conditions
required by the  Transaction  Documents to be  performed,  satisfied or complied
with by it at or prior to the Closing;

          (c) No Injunction.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits  the  consummation  of  any of the  transactions  contemplated  by the
Transaction Documents;

          (d) Consents.  The Company shall have obtained in a timely fashion any
and all consents,  permits,  approvals,  registrations  and waivers necessary or
appropriate  for  consummation  of the  purchase  and  sale  of the  Shares  and
Warrants,  all of which shall be and remain so long as  necessary  in full force
and effect;

          (e) Adverse Changes. Since the date of execution of this Agreement, no
event or series of events  shall have  occurred  that  reasonably  could have or
result in a Material Adverse Effect;

          (f) No Suspensions of Trading in Common Stock; Listing. Trading in the
Common  Stock shall not have been  suspended  by the  Commission  or any Trading
Market  (except for any  suspensions of trading of not more than one Trading Day
solely to permit dissemination of material information regarding the Company) at
any time since the date of execution of this Agreement;

          (g) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a);

          (h) Compliance  Certificate.  The Company shall have delivered to each
Purchaser a  certificate,  dated as of the Closing  Date and signed by its Chief
Executive Officer or its Chief Financial Officer,  dated as of the Closing Date,
certifying to the  fulfillment of the conditions  specified in Sections  5.1(a),
(b), (c), (d), (e) and (f); and


                                       23





          (i)  Termination.  This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 7.16 herein.

     5.2  Conditions Precedent  to the  Obligations of the  Company to  Sell the
Shares and Warrants.  The Company's  obligation to sell and issue the Shares and
Warrants at the Closing is subject to the fulfillment to the satisfaction of the
Company on or prior to the  Closing  Date of the  following  conditions,  any of
which may be waived by the Company:

          (a) Representations and Warranties. The representations and warranties
made by the  Purchasers  in Section 3.2 hereof  shall be true and correct in all
material respects as of the date when made, and as of the Closing Date as though
made on and as of such date;

          (b) Performance.  The Purchasers  shall have performed,  satisfied and
complied in all material respects with all covenants,  agreements and conditions
required by the  Transaction  Documents to be  performed,  satisfied or complied
with by the Purchasers at or prior to the Closing;

          (c) No Injunction.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent  jurisdiction that
prohibits  the  consummation  of  any of the  transactions  contemplated  by the
Transaction Documents;

          (d) Purchasers  Deliverables.  Each Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b); and

          (e)  Termination.  This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 7.16 herein.

                                  ARTICLE VI.
                                     ESCROW

     6.1  Escrow Arrangement.

          (a)  Simultaneously  with the execution and delivery of this Agreement
by a  Purchaser,  such  Purchaser  shall  promptly  cause  a  wire  transfer  of
immediately  available  funds  (U.S.  dollars)  in an amount  representing  such
Purchaser's  Purchase Price, to be paid to a non-interest bearing escrow account
of the Company Counsel (the aggregate  amounts  received being held in escrow by
Company Counsel are referred to herein as the "Escrow Amount").  Company Counsel
shall hold the Escrow Amount in escrow in accordance with Section 6.1(b).

          (b) Company Counsel shall continue to hold the Escrow Amount in escrow
in accordance with and subject to this  Agreement,  from the date of its receipt
of the funds constituting the Escrow Amount until the earlier of:

               (i)  the date  this Agreement  is terminated pursuant  to Section
7.16,  in which case,  if Company  Counsel  then holds any portion of the Escrow
Amount,  then: (A) Company Counsel shall return the portion of the Escrow Amount
received from each Purchaser  which it then holds,  to each such  Purchaser,  in
accordance with written wire transfer instructions received from such Purchaser;
and (B) if Company Counsel has not received  written wire transfer  instructions
from any Purchaser  before such  termination  date, then Company Counsel may, in
its sole and absolute discretion,  either (x) deposit that portion of the Escrow
Amount to be returned to such Purchaser in a court of competent  jurisdiction on
written notice to such Purchaser,  and Company Counsel shall  thereafter have no
further  liability with respect to such deposited funds, or (y) continue to hold


                                       24





such  portion of the Escrow  Amount  pending  receipt of written  wire  transfer
instructions  from  such  Purchaser  or an  order  from  a  court  of  competent
jurisdiction; OR

               (ii) in the case of the Closing,  receipt of written instructions
from both the Company and the  Placement  Agent that the Closing shall have been
consummated,  in which case,  Company Counsel shall release the Escrow Amount as
per the joint instructions received from the Company and the Placement Agent.

          (c) For the avoidance of doubt, the Escrow Amount shall be used to pay
such fees and  expenses as required  under that  certain  Engagement  Agreement,
dated as of October 20, 2006, as amended,  between the Company and the Placement
Agent and the balance of the Escrow  Amount shall be released as per the written
instructions delivered to the Company Counsel pursuant to Section 6.1(b).

     6.2  Duties; Responsibilities.   The Company and the Purchasers acknowledge
and agree for the  benefit of  Company  Counsel  (which  shall be deemed to be a
third party beneficiary of this Section 6) as follows:

          (a) Company Counsel: (i) is not responsible for the performance by the
Company or the Purchasers of this Agreement or any of the Transaction  Documents
or for determining or compelling compliance therewith;  (ii) is only responsible
for (A)  holding  the  Escrow  Amount  in  escrow  pending  receipt  of  written
instructions  from the Company and the Placement  Agent directing the release of
the Escrow Amount,  and (B) disbursing the Escrow Amount in accordance  with the
written  instructions  from the Company  and the  Placement  Agent,  each of the
responsibilities  of Company  Counsel in clause  (A) and (B) is  ministerial  in
nature, and no implied duties or obligations of any kind shall be read into this
Agreement against or on the part of Company Counsel (collectively,  the "Company
Counsel Duties"); (iii) shall not be obligated to take any legal or other action
hereunder  which might in its judgment  involve or cause it to incur any expense
or liability unless it shall have been furnished with indemnification acceptable
to it, in its sole discretion; (iv) may rely on and shall be protected in acting
or  refraining  from  acting upon any written  notice,  instruction  (including,
without limitation,  wire transfer instructions,  whether incorporated herein or
provided in a separate written instruction), instrument, statement, certificate,
request or other  document  furnished to it  hereunder  and believed by it to be
genuine and to have been signed or  presented  by the proper  Person,  and shall
have no  responsibility  for  making  inquiry  as to,  or for  determining,  the
genuineness,  accuracy or validity  thereof,  or of the  authority of the Person
signing or presenting the same; and (v) may consult counsel  satisfactory to it,
and the  opinion  or advice of such  counsel in any  instance  shall be full and
complete  authorization and protection in respect of any action taken,  suffered
or omitted by it hereunder in good faith and in  accordance  with the opinion or
advice of such  counsel.  Documents  and written  materials  referred to in this
Section  6.2(a)  include,  without  limitation,   e-mail  and  other  electronic
transmissions capable of being printed, whether or not they are in fact printed;
and any such e-mail or other  electronic  transmission may be deemed and treated
by Company  Counsel as having been signed or  presented by a Person if it bears,
as sender, the Person's e-mail address.

          (b) Company Counsel shall not be liable to anyone for any action taken
or omitted to be taken by it hereunder,  except in the case of Company Counsel's
gross negligence or willful  misconduct in breach of the Company Counsel Duties.
IN NO EVENT SHALL COMPANY COUNSEL BE LIABLE FOR INDIRECT,  PUNITIVE,  SPECIAL OR
CONSEQUENTIAL  DAMAGE  OR LOSS  (INCLUDING  BUT  NOT  LIMITED  TO LOST  PROFITS)
WHATSOEVER,  EVEN IF COMPANY COUNSEL HAS BEEN INFORMED OF THE LIKELIHOOD OF SUCH
LOSS OR DAMAGE AND REGARDLESS OF THE FORM OF ACTION.


                                       25





          (c) The Company and the Purchasers  hereby indemnify and hold harmless
Company Counsel from and against any and all loss,  liability,  cost, damage and
expense,  including,  without limitation,  reasonable counsel fees and expenses,
which  Company  Counsel  may suffer or incur by reason of any  action,  claim or
proceeding  brought  against  Company  Counsel arising out of or relating to the
performance  of the  Company  Counsel  Duties,  unless  such  action,  claim  or
proceeding is  exclusively  the result of the willful  misconduct,  bad faith or
gross negligence of Company Counsel.

          (d) Company Counsel shall have the right at any time to resign for any
reason and be  discharged  of its duties as escrow  agent  hereunder  (including
without  limitation the Company  Counsel Duties) by giving written notice of its
resignation  to the Company and the  Placement  Agent at least ten (10) calendar
days prior to the specified effective date of such resignation.  All obligations
of the Company Counsel hereunder shall cease and terminate on the effective date
of its resignation and its sole  responsibility  thereafter shall be to hold the
Escrow  Amount,  for a period of ten (10) calendar days  following the effective
date of resignation, at which time,

               (i) if a successor  escrow  agent shall have been  appointed  and
have  accepted  such  appointment  in a  writing  to both  the  Company  and the
Placement  Agent,  then  upon  written  notice  thereof  given  to  each  of the
Purchasers, the Company Counsel shall deliver the Escrow Amount to the successor
escrow  agent,  and upon such  delivery,  Company  Counsel shall have no further
liability or obligation; or

               (ii) if a successor  escrow agent shall not have been  appointed,
for any  reason  whatsoever,  Company  Counsel  shall at its  option in its sole
discretion,  either  (A)  deliver  the  Escrow  Amount  to a court of  competent
jurisdiction  selected by Company Counsel and give written notice thereof to the
Company and the  Purchasers,  or (B)  continue  to hold Escrow  Amount in escrow
pending  written  direction from the Company and the Placement Agent in form and
formality satisfactory to Company Counsel.

          (e) In the event that the Company Counsel shall be uncertain as to its
duties or rights  hereunder or shall  receive  instructions  with respect to the
Escrow Amount or any portion  thereunder  which, in its sole discretion,  are in
conflict either with other instructions  received by it or with any provision of
this  Agreement,  Company  Counsel shall have the absolute  right to suspend all
further  performance  under this Agreement  (except for the  safekeeping of such
Escrow  Amount) until such  uncertainty or  conflicting  instructions  have been
resolved to the Company Counsel's sole satisfaction by final judgment of a court
of competent  jurisdiction,  joint written instructions from the Company and all
of the  Purchasers,  or  otherwise.  In the event  that any  controversy  arises
between the Company  and one or more of the  Purchasers  or any other party with
respect to this Agreement or the Escrow Amount, the Company Counsel shall not be
required to determine the proper  resolution of such  controversy  or the proper
disposition of the Escrow Amount, and shall have the absolute right, in its sole
discretion,  to deposit the Escrow Amount with the clerk of a court  selected by
the Company  Counsel and file a suit in interpleader in that court and obtain an
order from that court  requiring all parties  involved to litigate in that court
their respective  claims arising out of or in connection with the Escrow Amount.
Upon the deposit by the Company  Counsel of the Escrow  Amount with the clerk of
such  court in  accordance  with  this  provision,  the  Company  Counsel  shall
thereupon be relieved of all further obligations and released from all liability
hereunder.

          (f) The provisions of this Article VI shall survive any termination of
this Agreement.


                                       26





                                  ARTICLE VII.
                                  MISCELLANEOUS

     7.1  Fees and Expenses.  The Company and the Purchasers  shall each pay the
fees and expenses of their respective advisers,  counsel,  accountants and other
experts, if any and all other expenses incurred by such party in connection with
the  negotiation,  preparation,  execution,  delivery  and  performance  of this
Agreement.  The Company shall pay all Transfer Agent fees, stamp taxes and other
taxes and duties levied in  connection  with the sale and issuance of the Shares
and Warrants to the Purchasers.  Each party acknowledges that Lowenstein Sandler
PC has rendered legal advice to the Company, and not to such party in connection
with the transactions  contemplated  hereby,  and that such party has relied for
such matters on the advice of its own respective  counsel.  The Company  further
agrees  to pay such fees and  expenses  as  required  by it under  that  certain
Engagement  Agreement,  dated as of  October  20,  2006,  as  amended,  with the
Placement Agent, including without limitation,  the reasonable fees and expenses
of the Placement Agent's counsel.

     7.2 Entire Agreement. The Transaction Documents, together with the Exhibits
and  Schedules  thereto,  contain the entire  understanding  of the parties with
respect  to the  subject  matter  hereof  and  supersede  all prior  agreements,
understandings,  discussions and representations,  oral or written, with respect
to such  matters,  which the  parties  acknowledge  have been  merged  into such
documents,  exhibits and schedules. At or after the Closing, and without further
consideration,  the Company and the  Purchasers  will execute and deliver to the
other such  further  documents as may be  reasonably  requested in order to give
practical  effect  to  the  intention  of  the  parties  under  the  Transaction
Documents.

     7.3  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 5:00 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 5:00 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 with next day delivery specified,  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:     International Fight League, Inc.
                            424 West 33rd Street, Suite 650
                            New York, New York 10001
                            Telephone No.: (212) 356-4000
                            Facsimile No.:  (212) 564-6546
                            Attention: Michael Keefe

     With a copy to:        Lowenstein Sandler PC
                            1251 Avenue of the Americas
                            New York, New York 10020
                            Telephone No.: (212) 262-6700
                            Facsimile No.:  (973) 597-2507
                            Attention: Steven E. Siesser, Esq.


                                       27





     If to a Purchaser:     To the address set forth under such Purchaser's name
                            on the signature page hereof; or such other  address
                            as may be designated  in writing  hereafter, in  the
                            same manner, by such Person.

     7.4  Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an amendment prior to Closing, by the Company and each of the Purchasers
or, in the case of an amendment after Closing, by the Company and the Purchasers
then holding a majority of the Shares,  and in the case of a waiver at any time,
by the party against whom enforcement of such waiver is sought. No waiver of any
default  with  respect  to any  provision,  condition  or  requirement  of  this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any  subsequent  default  or a  waiver  of any  other  provision,  condition  or
requirement  hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right.

     7.5  Construction.  The headings  herein  are for convenience only,  do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict  construction  will be applied against any party. This Agreement
shall be construed as if drafted  jointly by the parties,  and no presumption or
burden of proof shall arise favoring or  disfavoring  any party by virtue of the
authorship  of any  provisions  of  this  Agreement  or  any of the  Transaction
Documents.

     7.6 Successors and Assigns. The provisions of this Agreement shall inure to
the  benefit  of and be  binding  upon the  parties  and  their  successors  and
permitted assigns. This Agreement,  or any rights or obligations hereunder,  may
not be  assigned  by the  Company  without  the  prior  written  consent  of the
Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to
any  Person to whom such  Purchaser  assigns  or  transfers  any  Securities  in
compliance  with this agreement and  applicable  law,  provided such  transferee
shall  have  agreed in  writing to be bound,  with  respect  to the  transferred
Securities,  by the terms and  conditions  of this  Agreement  that apply to the
"Purchasers".

     7.7  No Third-Party  Beneficiaries.  This  Agreement is  intended  for  the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except (i) each Purchaser Party is an intended third party
beneficiary of Section 4.4, and (ii) Placement  Agent is an intended third party
beneficiary  of Article III hereof,  and each  Purchaser  Party or the Placement
Agent, as the case may be, may enforce the provisions of such Sections  directly
against the parties with obligations thereunder.

     7.8  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  and  any  other
Transaction  Documents (whether brought against a party hereto or its respective
Affiliates,  employees or agents) shall be commenced exclusively 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 (including with respect to the enforcement of the any of the
Transaction Documents),  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 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


                                       28





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  attorney's  fees and other costs and expenses  incurred with
the investigation, preparation and prosecution of such Proceeding.

     7.9   Survival.  Subject   to  applicable   statute  of  limitations,   the
representations,  warranties,  agreements and covenants  contained  herein shall
survive the Closing Date and the delivery of the Shares and the Warrants.

     7.10 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together shall be considered one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to the other  party,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile transmission, or by e-mail delivery of a ".pdf" format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile signature page were an original thereof.

     7.11 Severability. If any provision of this Agreement is held to be invalid
or  unenforceable  in  any  respect,  the  validity  and  enforceability  of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

     7.12 Replacement of Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation  thereof, or
in lieu of and substitution therefor, a new certificate or instrument,  but only
upon receipt of evidence  reasonably  satisfactory  to the Company of such loss,
theft or destruction and the execution by the holder thereof of a customary lost
certificate  affidavit  of that  fact and an  agreement  to  indemnify  and hold
harmless the Company for any losses in connection therewith.  The applicants for
a new  certificate  or instrument  under such  circumstances  shall also pay any
reasonable  third-party  costs  associated with the issuance of such replacement
Shares.  If a replacement  certificate  or instrument  evidencing  any Shares is
requested due to a mutilation thereof,  the Company may require delivery of such
mutilated  certificate or instrument as a condition precedent to any issuance of
a replacement.

     7.13  Payment Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.


                                       29





     7.14  Adjustments in Share Numbers and Prices.  In the event  of any  stock
split,  subdivision,  dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock),  combination or other
similar  recapitalization  or event occurring after the date hereof,  and before
the Closing  Date,  each  reference in any  Transaction  Document to a number of
shares or a price per share shall be amended to  appropriately  account for such
event.

     7.15  Independent  Nature  of  Purchasers'  Obligations  and  Rights.   The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser  under any  Transaction  Document.  The decision of each  Purchaser to
purchase the Shares and Warrants pursuant to the Transaction  Documents has been
made by such Purchaser independently of any other Purchaser and independently of
any information,  materials, statements or opinions as to the business, affairs,
operations, assets, properties,  liabilities,  results of operations,  condition
(financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other  Purchaser  or by any agent or  employee of
any other  Purchaser,  and no Purchaser and any of its agents or employees shall
have any liability to any other  Purchaser (or any other Person)  relating to or
arising from any such  information,  materials,  statement or opinions.  Nothing
contained  herein or in any  Transaction  Document,  and no action  taken by any
Purchaser  pursuant  thereto,  shall be deemed to constitute the Purchasers as a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction  Documents.  Each Purchaser acknowledges that no other Purchaser has
acted as agent for such  Purchaser  in  connection  with  making its  investment
hereunder  and that no  Purchaser  will be acting as agent of such  Purchaser in
connection  with  monitoring  its  investment in the Securities or enforcing its
rights under the  Transaction  Documents.  Each  Purchaser  shall be entitled to
independently  protect and enforce its rights,  including without limitation the
rights arising out of this Agreement or out of the other Transaction  Documents,
and it shall  not be  necessary  for any  other  Purchaser  to be  joined  as an
additional  party in any proceeding for such purpose.  The Company  acknowledges
that  each of the  Purchasers  has  been  provided  with  the  same  Transaction
Documents for the purpose of closing a transaction with multiple  Purchasers and
not  because  it  was  required  or  requested  to do so by any  Purchaser.  The
Company's  obligations to each  Purchaser  under this Agreement are identical to
its obligations to each other Purchaser  other than such  differences  resulting
solely from the number of the Shares and Warrants  purchased by such  Purchaser,
but regardless of whether such obligations are memorialized herein or in another
agreement between the Company and a Purchaser.

     7.16  Termination.  This  Agreement  may  be  terminated and the  sale  and
purchase of the Shares and  Warrants  abandoned at any time prior to the Closing
by either  the  Company or any  Purchaser  (with  respect  to itself  only) upon
written notice to the other, if the Closing has not been consummated on or prior
to 5:00 p.m. (New York City time) on the Outside Date; provided,  however,  that
the right to  terminate  this  Agreement  under this  Section  7.16 shall not be
available to any Person whose failure to comply with its obligations  under this
Agreement  has been the cause of or  resulted  in the  failure of the Closing to
occur on or before such time.  Nothing in this  Section  7.16 shall be deemed to
release any party from any  liability  for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific  performance by any other party of its
obligations  under this  Agreement or the other  Transaction  Documents.  In the
event of a  termination  pursuant to this Section,  the Company  shall  promptly
notify all  non-terminating  Purchasers.  Upon a termination in accordance  with
this Section,  the Company and the terminating  Purchaser(s)  shall not have any
further obligation or liability (including arising from such termination) to the
other and no Purchaser will have any liability to any other  Purchaser under the
Transaction Documents as a result therefrom.


                                       30




                                                                  Execution Copy
                                                                  --------------

       IN  WITNESS  WHEREOF, the  parties hereto  have  caused  this  Securities
Purchase   Agreement  to  be  duly  executed  by  their  respective   authorized
signatories as of the date first indicated above.

                                             INTERNATIONAL FIGHT LEAGUE, INC.



                                             By:     /s/ Gareb Shamus
                                                --------------------------------
                                                  Name:  Gareb Shamus
                                                  Title: Chief Executive Officer






WITH RESPECT TO ARTICLE VI ONLY,
ACKNOWLEDGED AND AGREED TO BY:


LOWENSTEIN SANDLER PC


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


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
                     [SIGNATURE PAGES FOR PURCHASERS FOLLOW]






                                       NAME OF PURCHASER:_______________________



                                       By:_
                                           Name:
                                           Title:



                                       Purchase Price Per Share:  $_____________

                                       Aggregate Purchase Price
                                            (Subscription Amount): $____________

                                       Number of Shares to be acquired:_________

                                       Number of Warrant Shares:________________

                                       Tax ID No.:______________________________

                                       Address for Notice:

                                       _________________________________________


                                       _________________________________________

                                       _________________________________________

                                       Telephone No.:___________________________

                                       Facsimile No.:___________________________

                                       Attention:_______________________________

Delivery Instructions:
(if different than above)

c/o  ______________________________________________

Street:  __________________________________________

City/State/Zip:  __________________________________

Attention:  _______________________________________

Telephone No.:  ___________________________________







                                       2






                                                                  Execution Copy
                                                                  --------------


                          REGISTRATION RIGHTS AGREEMENT

          This  Registration  Rights  Agreement  (this  "Agreement") is made and
entered  into as of August 1, 2007,  by and among  International  Fight  League,
Inc.,  a  Delaware  corporation  (the  "Company"),  and the  several  purchasers
signatory hereto (each a "Purchaser" and collectively, the "Purchasers").

          This Agreement is made pursuant to the Securities  Purchase Agreement,
dated as of the  date  hereof  between  the  Company  and  each  Purchaser  (the
"Purchase Agreement").

          NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy of which are hereby acknowledged,  the Company and the Purchasers agree
as follows:

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

          "Advice" shall have the meaning set forth in Section 6(e).

          "Affiliate"  means, with respect to any person, any other person which
directly or indirectly  controls,  is controlled  by, or is under common control
with, such person.

          "Agreement" shall have the meaning set forth in the Introduction.

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

          "Closing" shall have the meaning set forth in the Purchase Agreement.

          "Closing  Date"  shall  have the  meaning  set  forth in the  Purchase
Agreement.

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the common stock of the Company,  $0.01 par value
per share,  and any securities  into which such common stock may  hereinafter be
reclassified.

          "Company" shall have the meaning set forth in the Introduction.

          "Effective Date" means the date that the Registration  Statement filed
pursuant to Section 2(a) is first declared effective by the Commission.

          "Effectiveness  Deadline"  means,  with  respect  to the  Registration
Statement  required  to be filed to  cover  the  resale  by the  Holders  of the
Registrable Securities,  the earlier of: (i) the 90th calendar day following the
Closing Date; provided, that, if the Commission reviews and has written comments
to the filed Registration Statement,  then the Effectiveness Deadline under this
clause (i) shall be the 120th  calendar day following the Closing Date, and (ii)
the fifth (5th)  Trading Day following the date on which the Company is notified
by the Commission that the Registration  Statement will not be reviewed or is no
longer  subject to further  review and  comments  and the  effectiveness  of the
Registration Statement may be accelerated.

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





          "Event" shall have the meaning set forth in Section 2(c).

          "Event Date" shall have the meaning set forth in Section 2(c).

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

          "Filing  Deadline" means,  with respect to the Registration  Statement
required to be filed  pursuant to Section 2(a),  the 60th calendar day following
the Closing Date.

          "Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of 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).

          "Losses" shall have 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.

          "OTCBB"  shall  have  the  meaning  set  forth  in the  definition  of
"Principal Trading Market."

          "Person"  means an  individual  or  corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company,  joint stock company,  government (or an agency or subdivision thereof)
or other entity of any kind.

          "Placement Agent" means [_________] and any permitted assigns.

          "Principal  Trading  Market"  means  the  Trading  Market on which the
Common Stock is primarily  listed on and quoted for  trading,  which,  as of the
Closing Date shall be the Over the Counter Bulletin Board ("OTCBB").

          "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.

          "Purchase   Agreement"  shall  have  the  meaning  set  forth  in  the
Introduction.

          "Purchaser" and "Purchasers"  shall have the meanings set forth in the
Introduction.


                                       2





          "Register,"  "registered" and  "registration"  refer to a registration
made by preparing  and filing a  Registration  Statement or similar  document in
compliance  with  the  Securities  Act,  and  the  declaration  or  ordering  of
effectiveness of such Registration Statement or document.

          "Registrable Securities" means all of (i) the Shares issuable (ii) the
Warrant Shares issuable, (iii) any additional shares issuable in connection with
any  anti-dilution  provisions  in the Warrants  (without  giving  effect to any
limitations on exercise set forth in the Warrant) and (iv) any securities issued
or   issuable   upon  any  stock   split,   dividend   or  other   distribution,
recapitalization or similar event;  provided,  that the Holder has completed and
delivered  to the Company a Selling  Shareholder  Questionnaire;  and  provided,
further, that a Holder's security shall cease to be Registrable  Securities upon
the  earliest to occur of the  following:  (A) sale  pursuant to a  Registration
Statement  or Rule 144  under  the  Securities  Act (in  which  case,  only such
security  sold shall cease to be a Registrable  Security);  or (B) such security
becoming eligible for sale by the Holder pursuant to Rule 144(k).

          "Registration  Statement"  means  any  registration  statement  of the
Company  filed  under the  Securities  Act that  covers the resale of any of the
Registrable  Securities pursuant to the provisions of this Agreement,  including
(in each case) the Prospectus,  amendments and supplements to such  registration
statement,  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 purpose and 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 purpose and 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 purpose and effect as such Rule.

          "SEC  Guidance"  means  (i)  any  publicly-available  written  or oral
guidance,  comments,  requirements or requests of the Commission  staff and (ii)
the Securities Act.

          "Securities"  means,  collectively,  the Shares,  Warrants and Warrant
Shares.

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

          "Selling Shareholder  Questionnaire" means a questionnaire in the form
attached  as  Annex  B  hereto,  or such  other  form  of  questionnaire  as may
reasonably be adopted by the Company from time to time.

          "Shares"  means the shares of Common  Stock  issued or issuable to the
Purchasers pursuant to the Purchase Agreement.

          "Trading  Day" means (i) a day on which the Common  Stock is listed or
quoted and traded on its primary Trading Market (other than the OTCBB),  or (ii)
if the Common Stock is not listed on a Trading Market (other than the OTCBB),  a
day on which  the  Common  Stock is traded in the  over-the-counter  market,  as
reported by the OTCBB, or (iii) if the Common Stock is not quoted on any Trading


                                       3





Market, a day on which the Common Stock is quoted in the over-the-counter market
as  reported  by the  National  Quotation  Bureau  Incorporated  (or any similar
organization  or  agency  succeeding  to its  functions  of  reporting  prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

          "Trading  Market" means whichever of the New York Stock Exchange,  the
American  Stock  Exchange,  the NASDAQ Global Select  Market,  the NASDAQ Global
Market,  the NASDAQ  Capital Market or OTCBB on which the Common Stock is listed
or quoted for trading on the date in question.

          "Warrants"  means those Warrants issued to the Purchasers  pursuant to
the Purchase Agreement.

          "Warrant  Shares"  means those  shares of Common Stock  issuable  upon
exercise of the Warrants.

     2.  Registration.

          (a)  On or prior to the Filing Deadline, 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.  The Registration  Statement shall be on Form S-1 and 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.

          (b)  The Company shall use its  reasonable  best  efforts to cause the
Registration  Statement to be declared  effective by the  Commission  as soon as
practicable  and,  in any  event,  no  later  than  the  Effectiveness  Deadline
(including   filing  with  the   Commission  a  request  for   acceleration   of
effectiveness  in accordance with Rule 461 promulgated  under the Securities Act
within  five (5)  Business  Days  after the date that the  Company  is  notified
(orally  or  in  writing,  whichever  is  earlier)  by  the  Commission  that  a
Registration  Statement  will not be  "reviewed,"  or not be  subject to further
review and the  effectiveness of the Registration  Statement may be accelerated)
and shall use its  reasonable  best efforts to keep the  Registration  Statement
continuously  effective under the Securities Act until the earliest of: (i) such
time as all of the Registrable Securities covered by such Registration Statement
have been  publicly  sold by the  Holders;  (ii) the date  that all  Registrable
Securities  covered by the Registration  Statement may be sold by non-affiliates
without volume restrictions  pursuant to Rule 144(k) as determined by 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;  and (iii)
the second  anniversary  of this  Agreement (the  "Effectiveness  Period").  The
Company shall ensure that each Registration  Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein,  or necessary to make the statements  therein (in the case of
prospectuses,  in the light of the  circumstances  in which  they were made) not
misleading.  Such  Registration  Statement  shall  also  cover,  to  the  extent
allowable  under  the  Securities  Act  and  the  rules  promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Registrable Securities.

          (c) If: (i) the Registration Statement is not filed on or prior to the
Filing Deadline, (ii) a Registration Statement is  not declared effective by the
Commission  (or  otherwise  does  not  become  effective)  on or  prior  to  its
Effectiveness  Deadline or (iii) after its  Effective  Date,  such  Registration
Statement  ceases for any reason  (including  without  limitation by reason of a


                                       4





stop order, or the Company's failure to update the Registration Statement),  but
excluding the inability of any Holder to sell the Registrable Securities covered
thereby due to market conditions, to remain continuously 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 the Effectiveness Period for an aggregate
of more than 20  consecutive  Trading  Days or for more than an  aggregate of 40
Trading Days in any 12-month period (which need not be  consecutive),  (any such
failure or breach in clauses  (i),  (ii) or (iii) above 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 consecutive or
40 Trading Day period (as  applicable) is exceeded,  being referred to as "Event
Date"),  then in addition to any other rights  available to the Holders:  (x) on
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
purchase  price paid by such Holder  pursuant to the Purchase  Agreement for any
Registrable  Securities  then held by such  Holder  (which  remedy  shall not be
exclusive of any other remedies available under this Agreement); and (y) on each
monthly  anniversary  of each such Event Date thereof (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 purchase price paid
by such Holder pursuant to the Purchase Agreement for any Registrable Securities
then held by such  Holder  (which  remedy  shall not be  exclusive  of any other
remedies  available  under this  Agreement).  The parties agree that the Company
will not be liable for liquidated  damages under this Section 2(c) in respect of
the  Warrants or the  Warrant  Shares.  If the Company  fails to pay any partial
liquidated  damages pursuant to this Section in full within seven days after the
date such liquidated damages are 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 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.
Notwithstanding  the foregoing,  the maximum payment to a Holder associated with
all  Events in the  aggregate  shall not exceed  (i) in any  30-day  period,  an
aggregate of 1.0% of the purchase price paid by such Holder for its  Registrable
Securities (plus interest accrued thereon,  if applicable) and (ii) 10.0% of the
purchase paid by such Holder for its Registrable Securities.

          (d)  The Company  shall  not,  from the  date  hereof  until  the date
occurring  sixty  (60)  days  after  the  Effective  Date  of  the  Registration
Statement,  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 a  registration
statement on Form S-8 or, in connection with an acquisition, on Form S-4.

          (e)  Each Holder agrees to furnish to the Company a completed  Selling
Shareholder  Questionnaire.  The  Company  shall not be  required to include the
Registrable  Securities  of a Holder in a  Registration  Statement  who fails to
furnish to the Company a fully completed  Selling  Shareholder  Questionnaire at
least two Trading Days prior to the Filing Deadline (subject to the requirements
set forth in Section 3(a)).

          (f) Notwithstanding anything in this Agreement to the contrary, if the
Commission  refuses to declare a Registration  Statement  filed pursuant to this
Agreement  effective  as a valid  secondary  offering  under Rule 415 due to the
number  of  Registrable  Securities  included  in  such  Registration  Statement
relative to the outstanding  number of shares of Common Stock, then, without any
liability  under Section 2(c) or any further  obligation to register such excess
Registrable  Securities,  the Company shall be permitted to reduce the number of
Registrable Securities included in such Registration Statement to an amount that
does not exceed an amount that the Commission allows for the offering thereunder
to qualify as a valid  secondary  offering under Rule 415. The Company shall not
be liable for  liquidated  damages  under this  Agreement as to any  Registrable
Securities  which  are not  permitted  by the  Commission  to be  included  in a


                                       5


Registration  Statement  due  solely  to SEC  Guidance  from the time that it is
determined that such  Registrable  Securities are not permitted to be registered
solely  due to SEC  Guidance.  In such case,  the  liquidated  damages  shall be
calculated to only apply to the percentage of Registrable  Securities  which are
permitted in  accordance  with SEC Guidance to be included in such  Registration
Statement.

     3.  Registration Procedures

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

          (a)  Not less  than  four (4) Trading  Days  prior to the  filing of a
Registration  Statement or any related Prospectus or any amendment or supplement
thereto,   furnish  to  each  Holder  copies  of  such  Registration  Statement,
Prospectus or amendment or supplement  thereto,  as proposed to be filed,  which
documents  will be subject to the review of such  Holder (it being  acknowledged
and agreed that if a Holder does not object to or comment on the  aforementioned
documents  within two Trading  Days after its receipt  thereof,  then the Holder
shall be deemed to have  consented to and  approved the use of such  documents).
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
Shareholder Questionnaire (as amended or supplemented),  except as may otherwise
be required by applicable securities law or the Commission.

          (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 practicable, and, provide the Holders true and
complete  copies of all  correspondence  from and to the Commission  relating to
such Registration Statement that pertains to the Holders as Selling Stockholders
but not any  comments  that would  result in the  disclosure  to the  Holders of
material and non-public information concerning the Company; and (iv) comply with
the  provisions of the  Securities  Act and the Exchange Act with respect to the
disposition  of  all  Registrable   Securities   covered  by  each  Registration
Statement.

          (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,  in
the case of (iii) and (iv)  below,  not more  than one  Trading  Day after  such
issuance or receipt and, in the case of (v) below,  not less than three  Trading
Days prior to the financial  statements in any Registration  Statement  becoming
ineligible for inclusion  therein) 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 any  Registration  Statement (in
which case 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 that pertains
to the Holders as Selling Stockholders or the Plan of Distribution; (iii) of the


                                       6


issuance by the Commission or any other federal or state governmental  authority
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 the case of any  Prospectus,  form of prospectus or supplement  thereto,  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, as soon as practicable.

          (e)  If requested by a Holder, furnish to such 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 or incorporated by reference) promptly after the filing of
such documents  with the  Commission;  provided,  that the Company shall have no
obligation to provide any document  pursuant to this clause that is available on
the Commission's EDGAR system.

          (f) Upon notification by the Commission that a Registration  Statement
will not be reviewed or is no longer subject to further review and comments, the
Company shall request  acceleration of such  Registration  Statement within five
(5) Business Days after receipt of such notice such that it becomes effective no
later  than  5:00  p.m.  New York  City  time on the  Effective  Date and file a
prospectus  supplement  for any  Registration  Statement,  whether  or not it is
required under Rule 424 (or otherwise),  by 9:00 a.m. New York City time the day
after the Effective Date.

          (g)  Prior to any  public  offering  of  Registrable  Securities  by a
Holder,  register or qualify such  Registrable  Securities for offer and sale by
the Holder under the  securities or Blue Sky laws of such  jurisdictions  within
the United  States as any Holder  reasonably  requests in writing,  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 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 qualify  generally  to do business in any  jurisdiction
where it is not then so qualified  or to take any action that would  subject the
Company to general service of process in any  jurisdiction  where it is not then
so subject or subject the Company to any material  tax in any such  jurisdiction
where it is not then so subject.

          (h)  If requested  by the  Holders,  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  Statement,  which  certificates  shall  be  free,  to  the  extent
permitted by the Purchase Agreement and under applicable law, of all restrictive
legends,  and to enable such Registrable  Securities to be in such denominations


                                       7


and  registered  in such names as any such Holders may  reasonably  request.  In
connection  therewith,  if required by the Company's transfer agent, the Company
shall promptly after the  effectiveness of the  Registration  Statement cause an
opinion of counsel as to the  effectiveness of the Registration  Statement to be
delivered to and  maintained  with its transfer  agent,  together with any other
authorizations,  certificates  and  directions  required by the transfer  agent,
which  authorize  and  direct  the  transfer  agent  to issue  such  Registrable
Securities  without legend upon sale by the holder of such shares of Registrable
Securities under the Registration Statement.

          (i) Following  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
the case of any Prospectus,  form of prospectus or supplement  thereto, in light
of the circumstances under which they were made), not misleading.

          (j)  (i) In the time  and  manner required  by the  Principal  Trading
Market,  prepare and file with such Trading Market an additional  shares listing
application  covering  all of the  Registrable  Securities,  (ii) take all steps
necessary to cause such Registrable Securities to be approved for listing on the
Principal Trading Market as soon as possible  thereafter,  (iii) if requested by
any Holder,  provide such Holder  evidence of such listing,  and (iv) during the
Effectiveness Period, maintain the listing of such Registrable Securities on the
Principal Trading Market.

          (k)  As long as any Holder owns Securities,  the Company  covenants to
timely  file (or  obtain  extensions  in  respect  thereof  and file  within the
applicable  grace period) all reports  required to be filed by the Company after
the date hereof  pursuant to Section 13(a) or 15(d) of the Exchange Act. As long
as any Holder owns  Securities,  if the Company is not  required to file reports
pursuant to Section  13(a) or 15(d) of the  Exchange  Act,  it will  prepare and
furnish to the Holders  and make  publicly  available  in  accordance  with Rule
144(c)  promulgated  under the  Securities  Act annual and  quarterly  financial
statements, together with a discussion and analysis of such financial statements
in form and  substance  substantially  similar to those that would  otherwise be
required  to be included  in reports  required by Section  13(a) or 15(d) of the
Exchange Act, as well as any other  information  required  thereby,  in the time
period that such  filings  would have been  required to have been made under the
Exchange  Act.  The Company  further  covenants  that it will take such  further
action as any Holder may  reasonably  request,  all to the extent  required from
time to time to enable  such  Person to sell  Shares or Warrant  Shares  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act, including  compliance
with the  provisions of the Purchase  Agreement  relating to the transfer of the
Shares or Warrant Shares.

          (l)  The Company  may require  each  selling  Holder to furnish to the
Company a  certified  statement  as to the  number  of  shares  of Common  Stock
beneficially  owned by such Holder and any Affiliate  thereof and as to any NASD
affiliations and of any natural persons who have the power to vote or dispose of
the Common Stock.

     4.  Registration Expenses.  All fees and expenses incident to the Company's
performance  of  or  compliance  with  its  obligations   under  this  Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and  expenses of legal  counsel  for any  Holder)  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 the securities  exchanges 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


                                       8


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.  In no event shall the Company be
responsible  for any  broker or similar  commissions  of any Holder or any legal
fees or other costs of the Holders.

     5.  Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement,  indemnify and hold harmless each Holder, the
officers,   directors,   agents,  partners,  members,  managers,   shareholders,
Affiliates  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,  partners,  members,  managers,
shareholders,  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  investigation  and reasonable  attorneys'  fees) and
expenses (collectively,  "Losses"),  as incurred,  arising out of or relating to
(i) 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  (it being  understood  that the  Holder  has
approved Annex A hereto for this purpose) 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,  or (ii)
any  violation  or  alleged  violation  by the  Company of the  Securities  Act,
Exchange Act or any state securities law, or any rule or regulation  thereunder,
in connection  with the  performance of its  obligations  under this  Agreement,
except to the extent,  but only to the extent,  that (A) such untrue statements,
alleged untrue statements,  omissions or alleged 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 approved 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 each  Holder has
approved Annex A hereto for this purpose) or (B) in the case of an occurrence of
an event of the type specified in Section  3(c)(ii)-(v),  the use by a 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 Advice (as defined in Section 6(e) below),  but only if and to
the extent that following the receipt of the Advice the misstatement or omission
giving rise to such Loss would have been corrected;  provided, however, that the
indemnity  agreement  contained  in this Section 5(a) shall not apply to amounts
paid in  settlement  of any Losses if such  settlement  is effected  without the
prior written  consent of the Company,  which consent shall not be  unreasonably
withheld.  Each Holder  shall  notify the Company  promptly of the  institution,
threat or assertion of any Proceeding of which the Holder is aware in connection
with the  transactions  contemplated  by this  Agreement.  Such indemnity  shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf of an  Indemnified  Party (as defined in Section  5(c)) and shall survive
the transfer of the Registrable Securities by the Holders.


                                       9


          (b) Indemnification by Holders. Each Holder shall, notwithstanding any
termination  of this  Agreement,  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 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 arising solely out of
or based  solely  upon 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 any form of prospectus or supplement thereto, in
light of the  circumstances  under which they were made) not  misleading  to the
extent,  but only to the extent,  that 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 approved 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;  provided,
however,  that the indemnity  agreement contained in this Section 5(b) shall not
apply to amounts paid in settlement of any Losses if such settlement is effected
without the prior  written  consent of the Holder,  which  consent  shall not be
unreasonably  withheld.  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 have the right to assume the defense thereof, including
the employment of counsel  reasonably  satisfactory to the Indemnified Party and
the payment of all  reasonable  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.

          An Indemnified  Party shall have the right to employ separate  counsel
in any such  Proceeding  and to  participate  (but not  control)  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),  provided,  that the  Indemnifying  Party shall not be
liable for the fees and expenses of more than one separate  firm of attorneys at
any time for all Indemnified Parties. 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,  delayed or  conditioned.  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


                                       10


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 incurred,  within twenty
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
net 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. No person guilty of fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any Person who was not guilty of such
fraudulent misrepresentation.

          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  and  are  not  in   diminution   or   limitation  of  the
indemnification provisions under the Purchase Agreement.




                                       11


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

          (b) Entire  Agreement.  This Agreement is intended by the parties as a
final  expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the  subject  matter  contained  herein.  This  Agreement  supersedes  all prior
agreements and  understandings  between the parties with respect to such subject
matter, except for, and as provided in the Transaction Documents.

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

          (d)  Compliance.  Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it (unless an exemption  therefrom is  available)  in  connection  with sales of
Registrable Securities pursuant to the Registration Statement and shall sell the
Registrable  Securities  only  in  accordance  with  a  method  of  distribution
described in the Registration Statement.

          (e)  Discontinued  Disposition.  Each  Holder  further  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)(ii)-(v),  such  Holder  will  forthwith  discontinue  disposition  of  such
Registrable  Securities under the Registration  Statement 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.

          (f)  Amendments  and Waivers.  This Agreement may be amended only by a
writing  signed by the Company and the Holders of a majority of the  Registrable
Securities  issued  at the  Closing.  The  Company  may take any  action  herein
prohibited,  or omit to perform any act herein  required to be  performed by it,
only if the Company shall have obtained the written  consent to such  amendment,
action or omission to act, of each  Purchaser.  Failure of any party to exercise
any right or remedy  under this  Agreement  or  otherwise or delay by a party in
exercising such right or remedy shall not operate as a waiver thereof.

          (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 (i) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
specified in this Section  prior to 5:00 p.m.  (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice or


                                       12


communication  is delivered via  facsimile or e-mail to the facsimile  number or
e-mail addressed specified in this Section on a day that is not a Trading Day or
later than 5:00 p.m. (New York City time) on any Trading Day, (iii) the Business
Day following the date of mailing,  if sent by nationally  recognized  overnight
courier service with next day delivery specified, or (iv) 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:                 424 West 33rd Street, Suite 650
                                         New York, New York 10001
                                         Telephone No.: (212) 356-4000
                                         Facsimile No.: (212) 564-6546
                                         Attention: Michael Keefe

      With a copy to:                    Lowenstein Sandler PC
                                         1251 Avenue of the Americas
                                         New York, New York 10020
                                         Telephone No.: (212) 262-6700
                                         Facsimile No.: (212) 262-7402
                                         Attention: Steven E. Siesser, Esq.

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

      If to any other Person who is      To  the  address of  such  Holder as it
      then the registered Holder:        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.

provided, that any party may change its address for notices by providing written
notice to the other parties in the manner prescribed by this Section.

          (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.  The rights of the Holders  hereunder,  including the right to have
the Company register Registrable  Securities pursuant to this Agreement,  may be
assigned by each Holder to transferees or assignees of all or any portion of the
Registrable  Securities,  but only if (i) the Holder  agrees in writing with the
transferee  or assignee to assign such rights,  and a true and complete  copy of
such agreement is furnished to the Company prior to such assignment,  (ii) prior
to such assignment, the Company is furnished with written notice of the name and
address of such  transferee or assignee and the securities with respect to which
such registration  rights are being transferred or assigned,  (iii) at or before
the time the Company received the written notice  contemplated by clause (ii) of
this sentence,  the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein and (iv) the transferee is an
"accredited investor" as that term is defined in Rule 501 of Regulation D.

          (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


                                       13


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 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 any 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 parties
for its  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 Purchasers'  Obligations  and Rights.  The
obligations  of each  Purchaser  under this  Agreement are several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser  hereunder.  The  decision of each  Purchaser  to purchase  Shares and
Warrant Shares pursuant to the Transaction Documents has been made independently
of any other  Purchaser.  Nothing  contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto  or  thereto,   shall  be  deemed  to  constitute  the  Purchasers  as  a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a presumption  that the  Purchasers are in any way acting in concert with
respect to such obligations or the transactions  contemplated by this Agreement.
Each Purchaser  acknowledges that no other Purchaser has acted as agent for such
Purchaser  in  connection  with  making  its  investment  hereunder  and that no
Purchaser  will  be  acting  as  agent  of such  Purchaser  in  connection  with


                                       14


monitoring  its  investment in the  Securities or enforcing its rights under the
Transaction  Documents.  Each Purchaser shall be entitled to protect and enforce
its  rights,  including  without  limitation  the  rights  arising  out of  this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any Proceeding for such purpose. The Company acknowledges
that each of the Purchasers has been provided with the same Registration  Rights
Agreement for the purpose of closing a transaction with multiple  Purchasers and
not because it was required or requested to do so by any Purchaser.

          (o) Currency.  Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars.  All amounts owing under this
Agreement  are in  United  States  Dollars.  All  amounts  denominated  in other
currencies shall be converted in the United States dollar  equivalent  amount in
accordance  with  the  applicable  exchange  rate  in  effect  on  the  date  of
calculation.

          (p) Further Assurances. The parties shall execute and deliver all such
further  instruments  and  documents  and  take all such  other  actions  as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfillment of the agreements herein contained.


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                           SIGNATURE PAGES TO FOLLOW]

















                                       15







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

                                            INTERNATIONAL FIGHT LEAGUE, INC.


                                            By:_________________________________
                                                 Name: Gareb Shamus
                                                 Title: Chief Executive Officer



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







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


                                       NAME OF INVESTING ENTITY


                                       ____________________________________

                                       AUTHORIZED SIGNATORY


                                       By:_________________________________
                                           Name:
                                           Title:

                                       ADDRESS FOR NOTICE

                                       c/o:________________________________

                                       Street:_____________________________

                                       City/State/Zip:_____________________

                                       Attention:__________________________

                                       Tel:________________________________

                                       Fax:________________________________

                                       Email:______________________________






NEITHER  THESE  SECURITIES  NOR THE  SECURITIES  ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR
THE  SECURITIES  COMMISSION  OF ANY STATE IN  RELIANCE  UPON AN  EXEMPTION  FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
AND APPLICABLE  STATE  SECURITIES LAWS AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR
SOLD  EXCEPT  PURSUANT  TO (I) AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE
SECURITIES  ACT OR (II) AN AVAILABLE  EXEMPTION  FROM, OR IN A  TRANSACTION  NOT
SUBJECT  TO,  THE  REGISTRATION  REQUIREMENTS  OF  THE  SECURITIES  ACT  AND  IN
ACCORDANCE  WITH  APPLICABLE  STATE  SECURITIES  LAWS OR BLUE  SKY  LAWS.  THESE
SECURITIES AND THE SECURITIES  ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE
PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.

                        INTERNATIONAL FIGHT LEAGUE, INC.

                        WARRANT TO PURCHASE COMMON STOCK


Warrant No. [    ]                           Original Issue Date: August 6, 2007


          INTERNATIONAL  FIGHT  LEAGUE,   INC.,  a  Delaware   corporation  (the
"Company"),  hereby certifies that, for value received,  [_____________________]
or its permitted registered assigns (the "Holder"), is entitled to purchase from
the Company up to a total of  [___________]  shares of common  stock,  $0.01 par
value per share  (the  "Common  Stock"),  of the  Company  (each such  share,  a
"Warrant Share" and all such shares,  the "Warrant Shares") at an exercise price
per share equal to $1.05 (as adjusted from time to time as provided in Section 9
herein, the "Exercise Price"),  at any time and from time to time from and after
the Original  Issue Date (the  "Issuance  Date") and through and including  5:00
P.M., New York City time, on August 6, 2012 (the "Expiration Date"), and subject
to the following terms and conditions:

          This Warrant (this  "Warrant") is one of a series of similar  warrants
issued  pursuant to that  certain  Securities  Purchase  Agreement,  dated as of
August 1, 2007, by and among the Company and the Purchasers  identified  therein
(the  "Purchase   Agreement").   All  such  warrants  are  referred  to  herein,
collectively, as the "Warrants."

1.  Definitions.  In addition to the terms  defined  elsewhere in this  Warrant,
capitalized  terms  that are not  otherwise  defined  herein  have the  meanings
ascribed to such terms in the Purchase Agreement.

2.  Registration  of Warrants.  The Company shall  register  this Warrant,  upon
records  to be  maintained  by  the  Company  for  that  purpose  (the  "Warrant
Register"),  in the name of the record  Holder  (which shall include the initial
Holder or, as the case may be, any registered  assignee to which this Warrant is
permissibly  assigned  hereunder)  from time to time.  The  Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any  distribution  to the Holder,  and for all
other purposes, absent actual notice to the contrary.

3. Registration of Transfers.  Subject to the restrictions on transfer set forth
in Section 4.1 of the Purchase Agreement and Section 15(b) hereof and compliance
with all applicable  securities laws, the Company shall register the transfer of


                                       1





all or any portion of this  Warrant to an Affiliate of the Holder in the Warrant
Register, upon (i) surrender of this Warrant with a completed Form of Assignment
attached  as  Schedule 1 duly  completed  and signed by the  transferee,  to the
Company at its address specified herein;  (ii) if the Registration  Statement is
not  effective,  delivery  by or on behalf of the  transferring  Holder  (at its
expense),  at the request of the  Company,  of an opinion of counsel  reasonably
satisfactory  to the Company to the effect that the  transfer of such portion of
this  Warrant  may  be  made  pursuant  to  an  available   exemption  from  the
registration  requirements  of the  Securities  Act  and  all  applicable  state
securities or blue sky laws; and (iii) accurate completion, execution and by the
transferee  of the  Certification  attached  hereto as Appendix A to Schedule 1.
Upon any such  registration or transfer  (including,  to the extent  applicable,
receipt  of the items  set  forth in  clauses  (i),  (ii) and (iii)  immediately
preceding),  a new warrant to purchase Common Stock in substantially the form of
this Warrant (any such new warrant,  a "New Warrant")  evidencing the portion of
this Warrant so transferred shall be issued to the transferee, and a New Warrant
evidencing  the remaining  portion of this Warrant not so  transferred,  if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the transferee  thereof shall be deemed the acceptance by such transferee of all
of the rights and obligations of a Holder of a Warrant.

4.  Exercise and Duration of Warrant.

    (a)  All or any part of this Warrant shall be exercisable by the  registered
Holder  at any time and from  time to time on or  after  the  Issuance  Date and
through and including  5:00 P.M. New York City time on the  Expiration  Date. At
5:00 P.M.,  New York City time,  on the  Expiration  Date,  the  portion of this
Warrant not exercised prior thereto shall be and become void and of no value and
this Warrant shall be terminated and no longer outstanding;

    (b) The Holder may exercise  this Warrant by  delivering  to the Company (i)
an exercise  notice,  in the form  attached as Schedule 2 hereto (the  "Exercise
Notice"),  appropriately  completed  and duly  signed,  and (ii)  payment of the
Exercise  Price for the  number of Warrant  Shares as to which  this  Warrant is
being  exercised  (which  may  take  the  form of a  "cashless  exercise"  if so
indicated in the Exercise Notice and if a "cashless  exercise" may occur at such
time pursuant to Section 10 below), and the date such items are delivered to the
Company (as determined in accordance  with the notice  provisions  hereof) is an
"Exercise  Date." The  delivery by (or on behalf of) the Holder of the  Exercise
Notice and the applicable  Exercise Price as provided above shall constitute the
Holder's certification to the Company that its representations  contained in the
Purchase  Agreement are true and correct as of the Exercise Date as if remade in
their  entirety  (or,  in the case of any  transferee  Holder,  such  transferee
Holder's duly executed  certification  to the Company that such  representations
are true and  correct as to such  transferee  Holder as of the  Exercise  Date).
Execution  and  delivery of the  Exercise  Notice  shall have the same effect as
cancellation  of the original  Warrant and issuance of a New Warrant  evidencing
the right to purchase the remaining number of Warrant Shares.

5.  Delivery of Warrant Shares.

    (a)  Upon exercise of this Warrant,  the Company shall  promptly (but in  no
event later than three (3) Trading Days after the Exercise  Date) issue or cause
to be  issued  and cause to be  delivered  to or upon the  written  order of the
Holder and in such name or names as the Holder may designate  (provided that, if
the  Registration  Statement is not effective and the Holder directs the Company
to deliver a certificate for the Warrant Shares in a name other than that of the
Holder or an  Affiliate  of the Holder,  it shall  deliver to the Company on the
Exercise Date an opinion of counsel  reasonably  satisfactory  to the Company to
the effect that the  issuance of such  Warrant  Shares in such other name may be


                                       2





made pursuant to an available  exemption from the  registration  requirements of
the  Securities  Act and all  applicable  state  securities or blue sky laws), a
certificate  for  the  Warrant  Shares  issuable  upon  such  exercise,  free of
restrictive legends,  unless a registration statement covering the resale of the
Warrant Shares and naming the Holder as a selling stockholder  thereunder is not
then effective or the Warrant Shares are not freely transferable  without volume
restrictions  pursuant to Rule 144(k) under the Securities  Act. The Holder,  or
any Person  permissibly so designated by the Holder to receive  Warrant  Shares,
shall be deemed to have become the holder of record of such Warrant Shares as of
the Exercise Date.

    (b)  If by  the  close of the  third (3) Trading Day  after delivery  of  an
Exercise  Notice,  the  Company  fails to deliver  to the  Holder a  certificate
representing  the  required  number of  Warrant  Shares in the  manner  required
pursuant to Section  5(a),  and if after such third Trading Day and prior to the
receipt  of such  Warrant  Shares,  the  Holder  purchases  (in an  open  market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated  receiving
upon such exercise (a "Buy-In"),  then the Company  shall,  within three Trading
Days after the Holder's request and in the Holder's sole discretion,  either (1)
pay in cash to the Holder an amount equal to the Holder's  total  purchase price
(including  brokerage  commissions,  if any) for the  shares of Common  Stock so
purchased  (the "Buy-In  Price"),  at which point the  Company's  obligation  to
deliver such  certificate  (and to issue such Warrant Shares) shall terminate or
(2) promptly  honor its  obligation  to deliver to the Holder a  certificate  or
certificates  representing  such Warrant Shares and pay cash to the Holder in an
amount  equal to the excess (if any) of the Buy-In Price over the product of (A)
such  number of Warrant  Shares,  times (B) the  closing bid price of a share of
Common Stock on the date of exercise.

    (c) To the extent permitted by law, the Company's  obligations  to issue and
deliver  Warrant  Shares in  accordance  with the terms  hereof are absolute and
unconditional,  irrespective  of any action or inaction by the Holder to enforce
the same,  any  waiver or consent  with  respect to any  provision  hereof,  the
recovery of any  judgment  against any Person or any action to enforce the same,
or any setoff,  counterclaim,  recoupment,  limitation  or  termination,  or any
breach or alleged  breach by the Holder or any other Person of any obligation to
the Company or any  violation  or alleged  violation of law by the Holder or any
other Person,  and irrespective of any other  circumstance which might otherwise
limit  such  obligation  of the  Company to the  Holder in  connection  with the
issuance of Warrant  Shares.  Nothing  herein shall limit the Holder's  right to
pursue  any  other  remedies  available  to it  hereunder,  at law or in  equity
including,   without  limitation,   a  decree  of  specific  performance  and/or
injunctive  relief  with  respect to the  Company's  failure  to timely  deliver
certificates  representing  shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.

6.  Charges,  Taxes and Expenses.  Issuance  and  delivery of  certificates  for
shares of Common  Stock upon  exercise  of this  Warrant  shall be made  without
charge to the Holder for any issue or transfer tax,  withholding  tax,  transfer
agent fee or other  incidental tax or expense in respect of the issuance of such
certificates,  all of which  taxes and  expenses  shall be paid by the  Company;
provided,  however,  that the Company shall not be required to pay any tax which
may be payable in respect of any transfer  involved in the  registration  of any
certificates  for  Warrant  Shares or  Warrants in a name other than that of the
Holder or an Affiliate  thereof.  The Holder shall be responsible  for all other
tax liability that may arise as a result of holding or transferring this Warrant
or receiving Warrant Shares upon exercise hereof.

7.  Replacement  of Warrant.  If  this Warrant is  mutilated,  lost,  stolen  or
destroyed,  the  Company  shall  issue or cause to be  issued  in  exchange  and
substitution for and upon  cancellation  hereof,  or in lieu of and substitution


                                       3





for this Warrant,  a New Warrant,  but only upon receipt of evidence  reasonably
satisfactory  to the Company of such loss,  theft or destruction  (in such case)
and,  in  each  case,  a  customary  and  reasonable  indemnity,  if  requested.
Applicants  for a New Warrant  under such  circumstances  shall also comply with
such other  reasonable  regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation  of this  Warrant,  then the Holder shall  deliver such
mutilated  Warrant to the  Company as a  condition  precedent  to the  Company's
obligation to issue the New Warrant.

8.  Reservation of Warrant Shares.  The Company covenants that it will initially
reserve and keep  available out of the aggregate of its  authorized but unissued
and otherwise  unreserved Common Stock, solely for the purpose of enabling it to
issue  Warrant  Shares upon  exercise of this  Warrant as herein  provided,  the
number of Warrant Shares which are initially  issuable and deliverable  upon the
exercise  of this  entire  Warrant,  free  from  preemptive  rights or any other
contingent purchase rights of persons other than the Holder. The Company further
covenants  that it will at all  times  reserve  and  keep  available  out of the
aggregate of its authorized but unissued and otherwise  unreserved Common Stock,
solely for the purpose of enabling it to issue  Warrant  Shares upon exercise of
this  Warrant as herein  provided,  the number of Warrant  Shares which are then
issuable and  deliverable  upon the exercise of this entire  Warrant,  free from
preemptive rights or any other contingent  purchase rights of persons other than
the Holder (taking into account the adjustments and  restrictions of Section 9).
The Company covenants that all Warrant Shares so issuable and deliverable shall,
upon  issuance and the payment of the  applicable  Exercise  Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.  The  Company  will  take all such  action  as may be  reasonably
necessary  to assure that such shares of Common  Stock may be issued as provided
herein  without  violation  of  any  applicable  law  or  regulation,  or of any
requirements of any securities exchange or automated quotation system upon which
the Common Shares may be listed.

9.  Certain  Adjustments.  The  Exercise  Price  and  number  of  Warrant Shares
issuable upon  exercise of this Warrant are subject to  adjustment  from time to
time as set forth in this Section 9.

    (a)  Stock  Dividends and Splits.  If  the Company,  at any  time while this
Warrant  is  outstanding,  (i)  pays a stock  dividend  on its  Common  Stock or
otherwise  makes a distribution on any class of capital stock that is payable in
shares of Common Stock,  (ii) subdivides its outstanding  shares of Common Stock
into a larger  number of shares,  or (iii)  combines its  outstanding  shares of
Common  Stock  into a  smaller  number  of  shares,  then in each  such case the
Exercise  Price shall be multiplied by a fraction,  the numerator of which shall
be the number of shares of Common  Stock  outstanding  immediately  before  such
event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective  immediately  after the record date
for the  determination  of  stockholders  entitled to receive  such  dividend or
distribution,  and any  adjustment  pursuant  to  clause  (ii) or  (iii) of this
paragraph shall become  effective  immediately  after the effective date of such
subdivision or combination.

    (b)  Pro Rata Distributions.  If the Company, at any time while this Warrant
is outstanding,  distributes to all holders of Common Stock (i) evidences of its
indebtedness,  (ii) any  security  (other than a  distribution  of Common  Stock
covered by the preceding  paragraph),  (iii) rights or warrants to subscribe for
or purchase any  security,  or (iv) any other asset (in each case,  "Distributed
Property"), then, upon any exercise of this Warrant that occurs after the record
date  fixed  for   determination  of  stockholders   entitled  to  receive  such
distribution,  the Holder  shall be  entitled  to  receive,  in  addition to the


                                       4





Warrant  Shares  otherwise  issuable  upon such  exercise (if  applicable),  the
Distributed  Property  that such Holder  would have been  entitled to receive in
respect of such number of Warrant  Shares had the Holder been the record  holder
of such Warrant Shares immediately prior to such record date.

    (c)   Fundamental  Transactions.  If, at  any  time  while  this  Warrant is
outstanding (i) the Company effects any merger or  consolidation  of the Company
with or into another Person, in which the Company is not the survivor,  (ii) the
Company effects any sale of all or substantially all of its assets or a majority
of its Common  Stock is acquired  by a third  party,  in each case,  in one or a
series  of  related  transactions,  (iii) any  tender  offer or  exchange  offer
(whether by the Company or another Person) is completed pursuant to which all or
substantially  all of the  holders of Common  Stock are  permitted  to tender or
exchange  their  shares  for other  securities,  cash or  property,  or (iv) the
Company effects any reclassification of the Common Stock or any compulsory share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged for other  securities,  cash or property  (other than as a result of a
subdivision  or  combination  of shares of Common Stock  covered by Section 9(a)
above) (in any such case, a  "Fundamental  Transaction"),  then the Holder shall
have the right  thereafter to receive,  upon exercise of this Warrant,  the same
amount and kind of  securities,  cash or property as it would have been entitled
to receive upon the occurrence of such  Fundamental  Transaction if it had been,
immediately prior to such Fundamental  Transaction,  the holder of the number of
Warrant  Shares then  issuable  upon  exercise in full of this  Warrant  without
regard  to  any  limitations  on  exercise   contained  herein  (the  "Alternate
Consideration").  Notwithstanding  the foregoing,  in the event of a Fundamental
Transaction  that,  is (1) a  transaction  where the  consideration  paid to the
holders  of the  Common  Stock  consists  solely  of  cash,  (2) a  "Rule  13e-3
transaction" as defined in Rule 13e-3 under the Securities Exchange Act of 1934,
as amended,  or (3) a Fundamental  Transaction  involving a person or entity not
traded on a Trading Market (other than the OTC Bulletin  Board),  at the request
of the Holder delivered before the 90th day after such Fundamental  Transaction,
the Company (or the successor entity to the Company) shall purchase this Warrant
from the Holder by paying to the  Holder,  within five (5)  Business  Days after
such  request  (or,  if  later,   on  the  effective  date  of  the  Fundamental
Transaction),  cash in an amount equal to the value of the remaining unexercised
portion of this Warrant on the date of such Fundamental Transaction, which value
shall be determined by use of the Black Scholes  Option  Pricing Model  obtained
from  the  "OV"  function  on  Bloomberg  determined  as of the day  immediately
following the public announcement of the applicable Fundamental  Transaction and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period  equal to the  remaining  term of this  Warrant  as of such date of
request and (ii) an expected  volatility equal to the greater of (A) 40% and (B)
the 100 day volatility obtained from the HVT function on Bloomberg determined as
of the Trading Day  immediately  prior to the  announcement  of the  Fundamental
Transaction.  The  provisions  of this  paragraph (c) shall  similarly  apply to
subsequent transactions analogous to a Fundamental Transaction.

    (d)  Subsequent Equity Sales.

          (i) Except as provided in subsection  (d)(iii) hereof, if and whenever
the Company shall issue or sell, or is, in  accordance  with any of  subsections
(d)(ii)(l) through (d)(ii)(7) hereof,  deemed to have issued or sold, any shares
of Common Stock for no consideration or for a consideration  per share less than
the  Exercise  Price in effect  immediately  prior to the time of such  issue or
sale,  then and in each  such  case (a  "Trigger  Issuance")  the  then-existing
Exercise  Price shall be reduced as of the close of  business  on the  effective
date of the Trigger Issuance, to a price determined as follows:

           Adjusted Exercise Price = (A x B) + D
                                     -----------
                                          A+C


                                       5





                   where

                   "A" equals the number of shares of  Common Stock outstanding,
including  Additional  Shares of Common  Stock (as defined  below)  deemed to be
issued hereunder, immediately preceding such Trigger Issuance;

                   "B" equals the Exercise Price in effect immediately preceding
such Trigger Issuance;

                   "C" equals the  number of  Additional  Shares of Common Stock
issued or deemed issued hereunder as a result of the Trigger Issuance; and

                   "D" equals the  aggregate consideration,  if any, received or
deemed to be received by the Company upon such Trigger Issuance;

provided, however, that in no event shall the Exercise Price after giving effect
to such Trigger Issuance be greater than the original Exercise Price.

For purposes of this subsection (d),  "Additional  Shares of Common Stock" shall
mean all  shares of Common  Stock  issued by the  Company or deemed to be issued
pursuant to this  subsection  (d), other than Excluded  Issuances (as defined in
subsection (d)(iii) hereof).

          (ii) For purposes of this subsection  9(d), the following  subsections
(d)(ii)(l) to (d)(ii)(7) shall also be applicable:

               (1)  Issuance  of Rights or  Options.  In  case at any  time  the
Company shall in any manner grant (directly and not by assumption in a merger or
otherwise) any warrants or other rights to subscribe for or to purchase,  or any
options for the purchase of,  Common Stock or any stock or security  convertible
into or exchangeable  for Common Stock (such  warrants,  rights or options being
called "Options" and such convertible or exchangeable  stock or securities being
called  "Convertible  Securities"),  whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable  upon the exercise of
such Options or upon the conversion or exchange of such  Convertible  Securities
(determined  by dividing (i) the sum (which sum shall  constitute the applicable
consideration)  of (x) the total amount,  if any,  received or receivable by the
Company  as  consideration  for the  granting  of  such  Options,  plus  (y) the
aggregate  amount of  additional  consideration  payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration,  if
any, payable upon the issue or sale of such Convertible  Securities and upon the
conversion or exchange  thereof,  by (ii) the total maximum  number of shares of
Common Stock  issuable upon the exercise of such Options or upon the  conversion
or exchange of all such  Convertible  Securities  issuable  upon the exercise of
such Options) shall be less than the Exercise Price in effect  immediately prior
to the time of the granting of such Options,  then the total number of shares of
Common Stock  issuable  upon the exercise of such Options or upon  conversion or
exchange of the total amount of such  Convertible  Securities  issuable upon the
exercise of such Options  shall be deemed to have been issued for such price per
share  as of the  date of  granting  of such  Options  or the  issuance  of such
Convertible  Securities  and thereafter  shall be deemed to be  outstanding  for
purposes of  adjusting  the  Exercise  Price.  Except as  otherwise  provided in


                                        6




subsection  9(d)(ii)(3),  no adjustment of the Exercise Price shall be made upon
the actual issue of such Common  Stock or of such  Convertible  Securities  upon
exercise  of such  Options or upon the actual  issue of such  Common  Stock upon
conversion or exchange of such Convertible Securities.

               (2)  Issuance  of Convertible Securities.  In  case  the  Company
shall in any  manner  issue  (directly  and not by  assumption  in a  merger  or
otherwise)  or sell any  Convertible  Securities,  whether  or not the rights to
exchange or convert any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon such  conversion
or exchange  (determined by dividing (i) the sum (which sum shall constitute the
applicable  consideration) of (x) the total amount received or receivable by the
Company as consideration  for the issue or sale of such Convertible  Securities,
plus (y) the aggregate  amount of additional  consideration,  if any, payable to
the Company upon the conversion or exchange thereof, by (ii) the total number of
shares of Common  Stock  issuable  upon the  conversion  or exchange of all such
Convertible  Securities)  shall  be less  than  the  Exercise  Price  in  effect
immediately  prior to the time of such  issue or sale,  then the  total  maximum
number of shares of Common Stock  issuable  upon  conversion  or exchange of all
such  Convertible  Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter  shall be deemed to be  outstanding  for  purposes of  adjusting  the
Exercise  Price,  provided  that (a) except as otherwise  provided in subsection
9(d)(ii)(3),  no adjustment of the Exercise  Price shall be made upon the actual
issuance of such Common Stock upon  conversion  or exchange of such  Convertible
Securities and (b) no further  adjustment of the Exercise Price shall be made by
reason of the  issue or sale of  Convertible  Securities  upon  exercise  of any
Options to purchase any such Convertible Securities for which adjustments of the
Exercise  Price have been made  pursuant to the other  provisions  of subsection
9(d).

               (3) Change in Option Price or Conversion Rate. Upon the happening
of any of the following  events,  namely,  if the purchase price provided for in
any  Option  referred  to  in  subsection  9(d)(ii)(l)  hereof,  the  additional
consideration,   if  any,  payable  upon  the  conversion  or  exchange  of  any
Convertible Securities referred to in subsections 9(d)(ii)(l) or 9(d)(ii)(2), or
the rate at which Convertible Securities referred to in subsections  9(d)(ii)(l)
or  9(d)(ii)(2)  are  convertible  into or  exchangeable  for Common Stock shall
change at any time (including, but not limited to, changes under or by reason of
provisions  designed to protect against dilution),  the Exercise Price in effect
at the time of such event shall  forthwith be readjusted  to the Exercise  Price
which  would have been in effect at such time had such  Options  or  Convertible
Securities  still   outstanding   provided  for  such  changed  purchase  price,
additional  consideration  or  conversion  rate, as the case may be, at the time
initially  granted,  issued or sold. On the  termination of any Option for which
any adjustment was made pursuant to this subsection 9(e) or any right to convert
or exchange Convertible Securities for which any adjustment was made pursuant to
this  subsection 9(d)  (including,  without  limitation,  upon the redemption or
purchase for consideration of such Convertible  Securities by the Company),  the
Exercise  Price  then in effect  hereunder  shall  forthwith  be  changed to the
Exercise  Price which would have been in effect at the time of such  termination
had such Option or Convertible Securities, to the extent outstanding immediately
prior to such termination, never been issued.

               (4) Stock Dividends.  Subject to the  provisions of this  Section
9(d),  in  case  the  Company  shall  declare  a  dividend  or  make  any  other
distribution upon any stock of the Company (other than the Common Stock) payable
in Common  Stock,  Options or  Convertible  Securities,  then any Common  Stock,


                                        7




Options or Convertible  Securities,  as the case may be,  issuable in payment of
such  dividend  or  distribution  shall be deemed  to have  been  issued or sold
without consideration.

               (5) Consideration for Stock.  In case any shares of Common Stock,
Options  or  Convertible  Securities  shall  be  issued  or sold for  cash,  the
consideration  received therefor shall be deemed to be the gross amount received
by the  Company  therefor.  In case any  shares  of  Common  Stock,  Options  or
Convertible  Securities  shall be issued or sold for a consideration  other than
cash,  the amount of the  consideration  other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined in good
faith by the Board of  Directors of the  Company.  In case any Options  shall be
issued in connection with the issue and sale of other securities of the Company,
together comprising one integral transaction in which no specific  consideration
is  allocated  to such Options by the parties  thereto,  such  Options  shall be
deemed to have been issued for such consideration as determined in good faith by
the Board of Directors of the Company.  If Common Stock,  Options or Convertible
Securities shall be issued or sold by the Company and, in connection  therewith,
other Options or Convertible  Securities (the  "Additional  Rights") are issued,
then the consideration received or deemed to be received by the Company shall be
reduced by the fair market value of the Additional  Rights (as determined  using
the  Black-Scholes  option pricing model or another method mutually agreed to by
the Company and the Holder). The Board of Directors of the Company shall respond
promptly, in writing, to an inquiry by the Holder as to the fair market value of
the Additional  Rights.  In the event that the Board of Directors of the Company
and the Holder are unable to agree upon the fair market value of the  Additional
Rights,  the Company and the Holder shall  jointly  select an  appraiser  who is
experienced in such matters.  The decision of such appraiser  shall be final and
conclusive,  and the cost of such appraiser shall be borne evenly by the Company
and the Holder.

               (6)  Record Date.  In case the Company shall take a record of the
holders of its Common Stock for the purpose of  entitling  them (i) to receive a
dividend or other distribution  payable in Common Stock,  Options or Convertible
Securities  or (ii) to  subscribe  for or  purchase  Common  Stock,  Options  or
Convertible Securities,  then such record date shall be deemed to be the date of
the issue or sale of the shares of Common  Stock  deemed to have been  issued or
sold  upon  the  declaration  of such  dividend  or the  making  of  such  other
distribution  or the  date of the  granting  of such  right of  subscription  or
purchase, as the case may be.

               (7)  Treasury  Shares.  The  number  of  shares of  Common  Stock
outstanding  at any given time shall not include  shares owned or held by or for
the  account of the  Company or any of its  wholly-owned  subsidiaries,  and the
disposition  of any such  shares  (other  than the  cancellation  or  retirement
thereof) shall be considered an issue or sale of Common Stock for the purpose of
this subsection (d).

          (iii) Upon any  adjustment to the Exercise  Price  pursuant to Section
9(d) above, the number of Warrant Shares purchasable hereunder shall be adjusted
by  multiplying  such number by a fraction,  the numerator of which shall be the
Exercise  Price  in  effect   immediately  prior  to  such  adjustment  and  the
denominator  of  which  shall  be  the  Exercise  Price  in  effect  immediately
thereafter.

     (e)  Number of Warrant Shares.  Simultaneously  with any  adjustment to the
Exercise Price pursuant to this Section 9, the number of Warrant Shares that may
be  purchased  upon  exercise of this  Warrant  shall be  increased or decreased
proportionately,  so that after such  adjustment  the aggregate  Exercise  Price


                                        8




payable  hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate  Exercise Price in effect immediately prior to such
adjustment.

     (f)  Calculations.  All calculations  under this Section 9 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock  outstanding  at any given time shall not include  shares
owned or held by or for the account of the Company,  and the sale or issuance of
any such shares shall be considered an issue or sale of Common Stock.

     (g) Notice of Adjustments.  Upon the occurrence of each adjustment pursuant
to this Section 9, the Company at its expense  will,  at the written  request of
the Holder, promptly compute such adjustment,  in good faith, in accordance with
the  terms  of this  Warrant  and  prepare  a  certificate  setting  forth  such
adjustment,  including a statement of the adjusted  Exercise  Price and adjusted
number or type of Warrant Shares or other  securities  issuable upon exercise of
this Warrant (as applicable),  describing the  transactions  giving rise to such
adjustments and showing in detail the facts upon which such adjustment is based.
Upon  written  request,  the Company will  promptly  deliver a copy of each such
certificate to the Holder and to the Company's transfer agent.

10.  Payment of Exercise  Price.  The Holder  shall pay the  Exercise  Price  in
immediately available funds; provided,  however, that,  notwithstanding anything
contained  herein to the  contrary,  if at any time after the twelve  (12) month
anniversary of the Original Issuance Date a registration  statement covering the
issuance  of the Warrant  Shares that are subject to the  exercise by the Holder
pursuant to the Securities Act is not available for the issuance of such Warrant
Shares,  the Holder may, in its sole  discretion,  satisfy its obligation to pay
the Exercise  Price  through a "cashless  exercise",  in which event the Company
shall issue to the Holder the number of Warrant Shares determined as follows:


                    X = Y [(A-B)/A]

              where:

                    X = the number of Warrant Shares to be issued to the Holder.

                    Y = the total number of Warrant Shares with respect to which
                    this Warrant is being exercised.

                    A = the average of the Closing Sale Prices of the  shares of
                    Common Stock (as  reported by  Bloomberg  Financial Markets)
                    for  the  five Trading Days  ending on the  date immediately
                    preceding the Exercise Date.

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

For purposes of this Warrant, "Closing Sale Price" means, for any security as of
any date,  the last trade price for such  security on the  principal  securities
exchange or trading market for such security, as reported by Bloomberg Financial
Markets, or, if such exchange or trading market begins to operate on an extended
hours basis and does not  designate  the last trade  price,  then the last trade
price of such  security  prior to 4:00 P.M.,  New York City time, as reported by
Bloomberg  Financial  Markets,  or if the foregoing do not apply, the last trade


                                        9




price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg  Financial  Markets,  or, if no
last trade price is reported for such security by Bloomberg  Financial  Markets,
the average of the bid prices,  or the ask prices,  respectively,  of any market
makers for such security as reported in the "pink sheets" by Pink Sheets LLC. If
the Closing Sale Price cannot be calculated for a security on a particular  date
on any of the foregoing  bases,  the Closing Sale Price of such security on such
date shall be the fair market value as  determined in good faith by the Company.
If the Holder  disputes the fair market value of such security by written notice
to the  Company and the Company and the Holder are unable to agree upon the fair
market value of such  securities,  then the Company  shall,  within two business
days submit via facsimile (a) the disputed  determination  of the Exercise Price
to an  independent,  reputable  investment  bank  selected  by the  Company  and
approved by the Holder or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company's independent, outside accountant. The Company shall cause
the  investment  bank or the  accountant,  as the case may be,  to  perform  the
determinations  or  calculations  and notify the  Company  and the Holder of the
results no later than ten  business  days from the time it receives the disputed
determinations   or  calculations.   Such  investment   bank's  or  accountant's
determination  or  calculation,  as the case may be,  shall be binding  upon all
parties  absent   demonstrable   error.   All  such   determinations   shall  be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar  transaction during the applicable  calculation  period. The party
whose  determination of fair market value is further from the fair market value,
as determined by the investment  bank or the  accountant,  shall pay the fees of
such investment bank or accountant.

For purposes of Rule 144  promulgated  under the Securities Act, it is intended,
understood  and  acknowledged  that the  Warrant  Shares  issued  in a  cashless
exercise  transaction  shall be deemed to have been acquired by the Holder,  and
the holding period for the Warrant Shares shall be deemed to have commenced,  on
the date this Warrant was originally  issued pursuant to the Purchase  Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).

11.  No Fractional  Shares.  No  fractional  Warrant  Shares will  be issued  in
connection with any exercise of this Warrant.  In lieu of any fractional  shares
which would otherwise be issuable,  the number of shares of Warrant Shares to be
issued shall be rounded up to the nearest whole number.

12.  Notices.  Any  and  all  notices  or  other  communications  or  deliveries
hereunder  (including,  without  limitation,  any Exercise  Notice)  shall be in
writing and shall be deemed given and  effective on the earliest of (i) the date
of  transmission,  if such notice or communication is delivered via facsimile or
e-mail at the  facsimile  number or e-mail  address  specified  in the  Purchase
Agreement  prior to 5:00 p.m.  (New York City time) on a Trading  Day,  (ii) the
next Trading Day after the date of transmission, if such notice or communication
is delivered  via facsimile at the  facsimile  number  specified in the Purchase
Agreement  on a day that is not a Trading Day or later than 5:00 p.m.  (New York
City time) on any  Trading  Day,  (iii) the Trading  Day  following  the date of
mailing, if sent by nationally  recognized  overnight courier service specifying
next Trading Day delivery, or (iv) upon actual receipt by the party to whom such
notice is required to be given,  if by hand delivery.  The address and facsimile
number of a party for such notices or communications shall be as set forth below
unless  changed by such party by two (2) Trading Days' prior notice to the other
party in accordance with this Section 12:


                                       10




      If to the Company:                 International Fight League, Inc.
                                         424 West 33rd Street, Suite 650
                                         New York, New York 10001
                                         Telephone No.: (212) 356-4000
                                         Facsimile No.: (212) 564-6546
                                         Attention: Michael Keefe

      With a copy to:                    Lowenstein Sandler PC
                                         1251 Avenue of the Americas
                                         New York, New York 10020
                                         Telephone No.: (212) 262-6700
                                         Facsimile No.: (973) 597-2507
                                         Attention: Steven E. Siesser, Esq.

      If to the original 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.

13.  Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon  thirty  (30) days'  notice to the  Holder,  the  Company may appoint a new
warrant agent.  Any corporation  into which the Company or any new warrant agent
may be merged or any corporation  resulting from any  consolidation to which the
Company or any new warrant  agent shall be a party or any  corporation  to which
the  Company  or  any  new  warrant  agent  transfers  substantially  all of its
corporate trust or shareholders  services  business shall be a successor warrant
agent under this Warrant  without any further act.  Any such  successor  warrant
agent shall  promptly  cause  notice of its  succession  as warrant  agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

14.  Limitations  on  Exercise.  The  Company  shall not effect the  exercise of
this Warrant,  and the Holder shall not have the right to exercise this Warrant,
to the extent that after giving effect to such exercise,  such Person  (together
with such Person's  affiliates)  would  beneficially own in excess of 4.99% (the
"Maximum  Percentage")  of the shares of Common  Stock  outstanding  immediately
after giving effect to such  exercise.  For purposes of the foregoing  sentence,
the aggregate number of shares of Common Stock beneficially owned by such Person
and its  affiliates  shall include the number of shares of Common Stock issuable
upon  exercise of this Warrant with respect to which the  determination  of such
sentence is being made,  but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
beneficially  owned by such  Person  and its  affiliates  and (ii)  exercise  or
conversion of the unexercised or unconverted  portion of any other securities of
the Company  beneficially  owned by such Person and its  affiliates  (including,
without  limitation,  any  convertible  notes or convertible  preferred stock or
warrants)  subject to a limitation on  conversion  or exercise  analogous to the
limitation contained herein. Except as set forth in the preceding sentence,  for
purposes  of  this  paragraph,  beneficial  ownership  shall  be  calculated  in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended.  For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding  shares
of Common Stock as reflected in (1) the  Company's  most recent Form 10-K,  Form
10-KSB,  Form 10-Q,  Form  10-QSB,  Current  Report on Form 8-K or other  public
filing with the  Securities and Exchange  Commission,  as the case may be, (2) a
more recent  public  announcement  by the Company or (3) any other notice by the


                                       11





Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the
Holder,  the Company shall within one Business Day confirm orally and in writing
to the  Holder the number of shares of Common  Stock  then  outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving  effect to the  conversion  or exercise  of  securities  of the  Company,
including the warrants issued pursuant to the Purchase Agreement,  by the Holder
and its affiliates since the date as of which such number of outstanding  shares
of Common Stock was reported.  By written notice to the Company,  the Holder may
from time to time  increase or  decrease  the  Maximum  Percentage  to any other
percentage  not in excess of 9.99%  specified in such notice;  provided that (I)
any such increase will not be effective until the  sixty-first  (61st) day after
such notice is delivered to the Company,  and (II) any such increase or decrease
will apply only to the Holder  and not to any other  holder of  warrants  issued
pursuant to the Purchase Agreement.

15.  Miscellaneous.

     (a)  The Holder,  solely in  such Person's  capacity as  a holder  of  this
Warrant,  shall not be  entitled to vote or receive  dividends  or be deemed the
holder of share  capital of the  Company  for any  purpose,  nor shall  anything
contained in this Warrant be construed to confer upon the Holder, solely in such
Person's  capacity  as the  Holder  of  this  Warrant,  any of the  rights  of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization,  issue of stock,  reclassification
of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive
notice of meetings,  receive  dividends or  subscription  rights,  or otherwise,
prior to the  issuance to the Holder of the Warrant  Shares which such Person is
then  entitled to receive  upon the due exercise of this  Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase  any  securities  (upon  exercise  of this  Warrant or
otherwise)  or as a stockholder  of the Company,  whether such  liabilities  are
asserted by the Company or by creditors of the Company.

     (b)  Subject to compliance  with applicable  securities  laws, this Warrant
shall not be assigned by the Holder, unless the Holder shall, together with such
assignment,  provide  written  notice  thereof  to the  Company,  in the form of
Schedule 1 annexed  hereto and made a part  hereof.  This  Warrant  shall not be
assigned by the  Company  except to a  successor  in the event of a  Fundamental
Transaction.

     (c)  This  Warrant  shall be  binding on  and inure  to the  benefit of the
parties hereto and their respective permitted successors and assigns. Subject to
the  preceding  sentence,  nothing in this Warrant shall be construed to give to
any Person other than the Company and the Holder any legal or  equitable  right,
remedy or cause of action under this Warrant. This Warrant shall be amended only
in writing signed by the Company and the Holder,  or their permitted  successors
and assigns.

     (d)  GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.  ALL  QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL
BE GOVERNED BY AND CONSTRUED  AND ENFORCED  EXCLUSIVELY  IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT  REGARD TO THE  PRINCIPLES OF CONFLICTS OF
LAW  THEREOF  (OTHER  THAN  SECTIONS  5-1401 AND 5-1402 OF THE NEW YORK  GENERAL
OBLIGATIONS  LAW).  EACH  PARTY  HEREBY  IRREVOCABLY  SUBMITS  TO THE  EXCLUSIVE
JURISDICTION  OF THE STATE AND FEDERAL  COURTS  SITTING IN THE CITY OF NEW YORK,
BOROUGH OF  MANHATTAN,  FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH OR WITH ANY  TRANSACTION  CONTEMPLATED  HEREBY OR DISCUSSED
HEREIN  (INCLUDING  WITH RESPECT TO THE  ENFORCEMENT  OF ANY OF THE  TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,


                                       12





ACTION  OR  PROCEEDING,  ANY  CLAIM  THAT IT IS NOT  PERSONALLY  SUBJECT  TO THE
JURISDICTION  OF ANY SUCH  COURT,  THAT  SUCH  SUIT,  ACTION  OR  PROCEEDING  IS
IMPROPER.  EACH PARTY HEREBY  IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS  TO PROCESS  BEING  SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  BY
MAILING A COPY THEREOF 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. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

     (e)  The headings herein are for convenience only, do not constitute a part
of this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

     (f)  In case any one or more of the  provisions  of this  Warrant  shall be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms and provisions of this Warrant shall not in any way be affected
or impaired thereby,  and the parties will attempt in good faith to agree upon a
valid  and  enforceable  provision  which  shall  be a  commercially  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Warrant.

     (g)  Prior to  exercise  of this  Warrant,  the Holder  hereof  shall  not,
by reason of by being a Holder,  be entitled to any rights of a stockholder with
respect to the Warrant Shares.

16.   Registration Rights.  This Warrant has been issued in connection  with the
transactions  contemplated by (a) the Purchase  Agreement,  and (b) that certain
Registration Rights Agreement of even date therewith. The Holder of this Warrant
is entitled to have the Warrant Shares  included as  Registrable  Securities and
registered  for resale under the  Securities  Act,  subject to and in accordance
with the Registration Rights Agreement.

17.   Definitions.

          "Affiliate"  of any specified  Person means any other person or entity
directly or  indirectly  controlling,  controlled by or under direct or indirect
common  control with such  specified  Person.  For purposes of this  definition,
"control"  means the power to direct the  management and policies of such Person
or firm,  directly  or  indirectly,  whether  through  the  ownership  of voting
securities, by contract or otherwise.

          "Eligible Market" means whichever of the New York Stock Exchange,  the
American  Stock  Exchange,  the NASDAQ Global Select  Market,  the NASDAQ Global
Market, the NASDAQ Capital Market, or the OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.

          "Person"  means  any  court or other  federal,  state,  local or other
governmental authority or other individual or corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company,  joint stock company,  government (or an agency or subdivision thereof)
or other entity of any kind.


                                       13






          "Trading  Day" shall mean any day on which the Common  Stock is listed
or quoted on any Eligible Market.



                            [Signature Page Follows.]





































                                       14




          IN WITNESS WHEREOF, each of the undersigned has caused this Warrant to
be duly executed by its authorized officer as of the date first indicated above.

                                             INTERNATIONAL FIGHT LEAGUE, INC.

                                             By: _______________________________
                                             Name:  Gareb Shamus
                                             Title:  Chief Executive Officer