WARRANT AGREEMENT

                  WARRANT  AGREEMENT  dated  as  of  _________,   2003,  between
Intelli-Check,  Inc., a Delaware  corporation (the  "Company"),  and The Shemano
Group, Inc. (the "Underwriter").

                              W I T N E S S E T H:
                               -------------------

                  WHEREAS,  the  Company  proposes  to issue to the  Underwriter
warrants  ("Warrants")  to purchase up to an  aggregate  of 100,000  shares (the
"Shares") of common stock of the Company, par value $.001 per share (the "Common
Stock"); and

                  WHEREAS,   the   Underwriter   has  agreed   pursuant  to  the
underwriting  agreement (the  "Underwriting  Agreement")  dated _________,  2003
between the Underwriter and the Company, to act as the underwriter in connection
with the Company's proposed public offering (the "Public Offering") of 1,000,000
shares of Common Stock at an initial public  offering price of [$___ per share],
with an option to purchase up to an  additional  150,000  shares of Common Stock
for the purpose of covering over-allotments; and

                  WHEREAS,  the Warrants  issued  pursuant to this Agreement are
being issued by the Company to the  Underwriter  or its  officers,  directors or
partners and members of the selling  group (the  "Selling  Group")  and/or their
officers,  directors  or  partners,  in  consideration  for,  and as part of the
Underwriter's  compensation in connection  with, the  Underwriter  acting as the
underwriter pursuant to the Underwriting Agreement;

                  NOW,  THEREFORE,  in consideration of the foregoing  premises,
the payment by the  Underwriter  to the Company of an  aggregate  of One Hundred
Dollars and No Cents ($100.00),  the agreements  herein set forth and other good
and  valuable  consideration  the  receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto agree as follows:

                  1.  Grant.  The  Underwriter,  and/or  its  designees  who are
officers  or  partners of the  Underwriter  or members of the  Selling  Group in
connection with the Public  Offering,  are hereby granted the right to purchase,
at any time from ________, 2004 until 5:00 P.M., New York City time, on _______,
2008 (the "Warrant  Exercise Term"),  up to an aggregate of 100,000 Shares at an
initial  exercise  price (subject to adjustment as provided in Article 8 hereof)
of  [$___  per  Share]  [120%  of the  public  offering  price  of the  Shares].
Notwithstanding the foregoing, the Warrants shall become immediately exercisable
upon a change in control of the Company.  Except as set forth herein, the Shares
issuable  upon  exercise of the Warrants  are in all  respects  identical to the
shares of Common  Stock being  purchased  by the  Underwriter  for resale to the
public pursuant to the terms and provisions of the Underwriting Agreement.

                  2.  Warrant   Certificates.   The  warrant  certificates  (the
"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be in the form set forth as  Exhibit  A


                                      -1-
<PAGE>

attached  hereto  and made a part  hereof,  with  such  appropriate  insertions,
omissions,  substitutions  and other variations as required or permitted by this
Agreement.

            3. Exercise of Warrants.

                  3.1 Cash Exercise. The Warrants initially are exercisable at a
price of  [$___  per  Share],  payable  in cash or by check to the  order of the
Company, or any combination of cash or check,  subject to adjustment as provided
in Article 8 hereof.  Upon surrender of the Warrant Certificate with the annexed
Form of  Election  to  Purchase  duly  executed,  together  with  payment of the
Exercise  Price  (as  hereinafter  defined)  for  the  Shares  purchased  at the
Company's  principal  offices,  currently  located at 246  Crossways  Park West,
Woodbury,  New York  11797,  the  registered  holder  of a  Warrant  Certificate
("Holder"  or  "Holders")   shall  be  entitled  to  receive  a  certificate  or
certificates  for the Shares so purchased.  The purchase  rights  represented by
each Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the Common Stock underlying
the  Warrants).  In the  case of the  purchase  of  less  than  all  the  Shares
purchasable under any Warrant Certificate, the Company shall cancel said Warrant
Certificate  upon the  surrender  thereof  and shall  execute  and deliver a new
Warrant  Certificate  of like tenor for the  balance  of the Shares  purchasable
thereunder.

                  3.2 Cashless Exercise. At any time during the Warrant Exercise
Term, the Holder may, at its option,  exchange this Warrant, in whole or in part
(a "Warrant Exchange"),  into the number of Shares determined in accordance with
this Section 3.2, by  surrendering  this Warrant at the principal  office of the
Company or at the office of its transfer agent,  accompanied by a notice stating
(i) such Holder's  intent to effect such exchange,  (ii) the number of Shares to
be exchanged  and (iii) the date on which the Holder  requests that such Warrant
Exchange occur (the "Notice of Exchange"). The Warrant Exchange shall take place
on the date  specified  in the  Notice of  Exchange  or, if later,  the date the
Notice  of  Exchange  is  received  by  the  Company  (the   "Exchange   Date").
Certificates  for the  Shares  issuable  upon  such  Warrant  Exchange  and,  if
applicable,  a new  Warrant of like tenor  evidencing  the balance of the Shares
remaining  subject to this Warrant,  shall be issued as of the Exchange Date and
delivered to the Holder  within five (5) business  days  following  the Exchange
Date. In connection with any Warrant Exchange,  this Warrant shall represent the
right to  subscribe  for and acquire  the number of Shares  (rounded to the next
highest  integer)  equal to (i) the number of Shares  specified by the Holder in
its Notice of Exchange (the "Total Number") less (ii) the number of Shares equal
to the quotient obtained by dividing (A) the product of the Total Number and the
existing Exercise Price (as hereinafter defined) by (B) the current market value
of a share of Common Stock.  For purposes of this Section 3.2, the term "current
market  value" shall mean the (i) last  reported  sale price on the last trading
day or, in case no such  reported sale takes place on such day, the average last
reported  sale  price for the last three (3)  trading  days,  in either  case as
officially  reported by the  principal  securities  exchange on which the Common
Stock is listed or  admitted  to trading,  or by the Nasdaq  National  Market or
SmallCap Market (referred to hereinafter as "NASDAQ") if the Common Stock is not
listed or admitted to trading on any national  securities exchange but is listed
or quoted upon  NASDAQ,  or (ii) if the Common Stock is not traded on a national
securities  exchange or NASDAQ,  the closing bid price on the last  trading day,
or, in case no such  reported bid takes place on such day,  the average  closing
bid price for the last three (3) trading days, as furnished by NASDAQ or similar
organization if NASDAQ is no longer reporting such information,  or (iii) if the
Common  Stock is not listed upon a principal  exchange or quoted on NASDAQ,  but
quotes for the Common  Stock are


                                      -2-
<PAGE>


available in the OTC Bulletin  Board,  or any successor  organization,  or "pink
sheets" the closing bid price on the last  trading  day, or, in case no such bid
takes place on such day,  the  average  closing bid price for the last three (3)
trading  days  as  furnished  on  the  OTC  Bulletin  Board,  or  any  successor
organization,  or (iv) in the  event  the  Common  Stock  is not  traded  upon a
principal  exchange and not listed on NASDAQ and quotes are not available on the
OTC Bulletin  Board, or any successor  organization,  the price as determined in
good faith by resolution of the Board of Directors of the Company,  based on the
best information available to it.

            4. Issuance of Certificates.

                  4.1 Issuance.  Upon the exercise of the Warrants, the issuance
of certificates  for the Shares shall be made forthwith (and in any event within
five (5)  business  days  thereafter)  without any charge to the Holder  thereof
including,  without  limitation,  any tax which may be payable in respect of the
issuance  thereof,  and such  certificates  shall  (subject to the provisions of
Article 5 hereof) be issued in the name of, or in such names as may be  directed
by, the Holder thereof; 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
issuance and delivery of any such  certificates in a name other than that of the
Holder  and  the  Company  shall  not be  required  to  issue  or  deliver  such
certificates  unless or until the  person or  persons  requesting  the  issuance
thereof  shall  have paid to the  Company  the  amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

                  4.2  Form  of  Certificates.   The  Warrant  Certificates  and
certificates  representing the Shares shall be executed on behalf of the Company
by the  manual or  facsimile  signature  of the then  present  Chairman  or Vice
Chairman of the Board of Directors or President or Vice President of the Company
under its  corporate  seal  reproduced  thereon,  attested  to by the  manual or
facsimile  signature of the then present Secretary or Assistant Secretary of the
Company.  Warrant  Certificates  shall be dated  the  date of  execution  by the
Company upon initial issuance, division, exchange, substitution or transfer. The
Warrant  Certificates  and, upon exercise of the Warrants,  in part or in whole,
certificates  representing the Shares shall bear a legend substantially  similar
to the following:

                  "The securities  represented by this certificate have not been
                  registered  under the  Securities Act of 1933, as amended (the
                  "Act"),  and may not be offered or sold except (i) pursuant to
                  an effective registration statement under the Act, (ii) to the
                  extent applicable,  pursuant to Rule 144 under the Act (or any
                  similar  rule under such Act  relating to the  disposition  of
                  securities),  or (iii) upon the  delivery by the holder to the
                  Company of an opinion of counsel,  reasonably  satisfactory to
                  counsel  to  the  Company,  stating  that  an  exemption  from
                  registration under such Act is available. "

            5.  Restriction  on  Transfer of  Warrants.  The Holder of a Warrant
Certificate,  by its acceptance thereof,  covenants and agrees that the Warrants
are being  acquired  as an  investment  and not with a view to the  distribution
thereof,  and  that  the  Warrants  may  not  be  sold,  transferred,  assigned,
hypothecated or otherwise  disposed of, in whole or in part, for a period of one
(1) year from the date hereof, pursuant to Corporate Financing Rule 2710, except
to officers or partners (but not directors) of the Underwriter and to any member
of the Selling  Group  participating  in the  distribution  to the public of the
Common  Stock  and/or their  respective  officers or partners  (each of


                                      -3-
<PAGE>



which  is  hereinafter  referred  to as a  "Transferee"),  in  which  case  such
Transferee  shall be entitled to receive a replacement  Warrant  Certificate  in
accordance with Section 9 hereof upon presentment of a properly executed Form of
Assignment  in the form set forth on Exhibit A  attached  hereto and made a part
hereof.

            In  connection  with the  transfer  or  exercise  of  Warrants,  the
Transferee  and Holder agree to execute any  documents  which may be  reasonably
required by counsel to the Company to comply with the  provisions of the Act (as
defined below) and applicable state securities laws.

            6. Price.

                  6.1 Initial and Adjusted  Exercise Price. The initial exercise
price of each Warrant shall be [$____ per Share].  The adjusted  exercise  price
shall  be the  price  which  shall  result  from  time to time  from any and all
adjustments of the initial  exercise price in accordance  with the provisions of
Article 8 hereof.

                  6.2 Exercise  Price.  The term  "Exercise  Price" herein shall
mean the initial exercise price or the adjusted  exercise price,  depending upon
the context.

            7. Registration Rights.

                  7.1  Registration  Under  the  Securities  Act  of  1933.  The
Warrants  and the  Shares  have not  been  registered  for  purposes  of  public
distribution under the Securities Act of 1933, as amended (the "Act").

                  7.2   Registrable   Securities.   As  used   herein  the  term
"Registrable  Security"  means each of the Shares and any shares of Common Stock
issued  upon any  stock  split or stock  dividend  in  respect  of such  Shares;
provided,  however,  that with respect to any particular  Registrable  Security,
such security  shall cease to be a Registrable  Security when, as of the date of
determination, (i) it has been effectively registered under the Act and disposed
of pursuant thereto,  (ii) registration  under the Act is no longer required for
the  immediate  public  distribution  of all or any portion of such  security or
(iii) it has ceased to be outstanding.  The term "Registrable  Securities" means
any and/or all of the securities  falling  within the foregoing  definition of a
"Registrable   Security."   In  the   event  of  any   merger,   reorganization,
consolidation, recapitalization or other change in corporate structure affecting
the  Common  Stock,   such  adjustment  shall  be  made  in  the  definition  of
"Registrable  Security"  as is  appropriate  in order to prevent any dilution or
enlargement of the rights granted pursuant to this Article 7.

                  7.3 Piggyback  Registration.  If, at any time during the seven
years following the date of this Agreement,  the Company proposes to prepare and
file  any  new  registration  statement  or  post-effective  amendments  thereto
covering equity or debt securities of the Company, or any such securities of the
Company held by its shareholders  (other than pursuant to a Form S-4 or pursuant
to  a  Form  S-8  or  comparable   forms)  (for  purposes  of  this  Article  7,
collectively,  a "Registration  Statement"),  it will, with respect to each such
registration statement and amendment, give written notice of its intention to do
so by registered mail ("Notice"),  at least thirty (30) days prior to the filing
of  each  such  Registration  Statement,  to  all  holders  of  the  Registrable
Securities.  Upon the written request of such a holder (a "Requesting  Holder"),
made  within  twenty  (20) days after  receipt of the  Notice,  that the Company
include any of the Requesting  Holder's


                                      -4-
<PAGE>



Registrable  Securities  in the  proposed  Registration  Statement,  the Company
shall,  as to each such  Requesting  Holder,  use its best efforts to effect the
registration  under the Act of the Registrable  Securities  which it has been so
requested to register ("Piggyback Registration"), at the Company's sole cost and
expense  and at no  cost  or  expense  to the  Requesting  Holders  (other  than
underwriting   discounts  and  commissions   applicable  to  the  sale  of  such
Registrable Securities and the fees and disbursements, if any, of counsel or any
advisor  to  the  Requesting  Holders),  provided  that,  if  such  Registration
Statement   relates  to  an  underwritten   public  offering  and  the  managing
underwriter  advises the Company and the  Requesting  Holders that the number of
Registrable  Securities  which can be included in such offering must be limited,
priority will be given to any securities  proposed to be offered and sold by the
Company, and, thereafter, the Requesting Holders will agree to reduce the number
of Registrable  Securities included in such Registration Statement on a pro rata
basis with any other selling security holder on whose behalf other securities of
the Company  may be  included  therein  for  registration.  Notwithstanding  the
provisions  of this Section  7.3,  the Company  shall have the right at any time
after  it  shall  have  given  written  notice  pursuant  to  this  Section  7.3
(irrespective  of whether  any  written  request for  inclusion  of  Registrable
Securities  shall have already been made) to elect not to file any such proposed
Registration  Statement,  or to withdraw  the same after the filing but prior to
the effective date thereof.

            7.4  Covenants  of the Company  With  Respect to  Registration.  The
Company covenants and agrees as follows:

                  (a) The  Company  shall pay all costs,  fees and  expenses  in
connection  with all  Registration  Statements  filed  pursuant to Sections  7.3
hereof  (excluding  any  underwriting  discounts  and  commissions  which may be
incurred in connection with the sale of any  Registrable  Securities and fees of
counsel or any  advisor to the  Holders of  Registrable  Securities)  including,
without limitation,  the Company's legal and accounting fees, printing expenses,
blue sky fees and expenses and the  reasonable  fees and expenses (not to exceed
$______ ) of one counsel to the Holders of Registrable Securities.

                  (b) The Company  shall take all  reasonably  necessary  action
which may be required in qualifying or registering  the  Registrable  Securities
included in a Registration  Statement for offering and sale under the securities
or blue sky laws of such states as are  reasonably  requested  by the holders of
such securities,  provided that the Company shall not be obligated to execute or
file any  general  consent  to  service  of  process  or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction.

                  (c) The Company shall  indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such holder or underwriter or person deemed to be an underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,  damage,
expense  or   liability   (including   all  expenses   reasonably   incurred  in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such Registration  Statement to the same extent and with the same effect as
the  provisions  pursuant  to which the  Company  has  agreed to  indemnify  the
Underwriter in Section 5 of the  Underwriting  Agreement and to provide for just
and  equitable  contribution  as set  forth  in  Section  6 of the  Underwriting
Agreement.

                                      -5-
<PAGE>



                  (d) Any holder of  Registrable  Securities to be sold pursuant
to a Registration  Statement,  and its successors and assigns,  shall severally,
and not jointly,  indemnify,  the Company,  its officers and  directors and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange  Act,  against all loss,  claim,  damage or
expense  or   liability   (including   all  expenses   reasonably   incurred  in
investigating,  preparing or defending  against any claim  whatsoever)  to which
they may become  subject under the Act, the Exchange Act or  otherwise,  arising
from  information  furnished in writing by or on behalf of such  holder,  or its
successors or assigns, for specific inclusion in such Registration  Statement to
the same extent and with the same effect as the provisions  contained in Section
5 of the Underwriting  Agreement pursuant to which the Underwriter has agreed to
indemnify the Company and to provide for just and equitable  contribution as set
forth in Section 6 of the Underwriting Agreement.

                  (e) Nothing  contained in this Agreement shall be construed as
requiring any Holder to exercise his Warrants prior to the initial filing of any
Registration Statement or the effectiveness thereof.

                  (f) The  Company  shall  deliver  promptly  to each  holder of
Registrable   Securities   participating   in  the   offering   copies   of  all
correspondence between the Securities and Exchange Commission (the "Commission")
and the  Company,  its  counsel  or  auditors  and  all  memoranda  relating  to
discussions  with the  Commission or its staff with respect to the  Registration
Statement and permit each holder of Registrable Securities and underwriter to do
such investigation,  upon reasonable advance notice, with respect to information
contained in or omitted from the  Registration  Statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities Dealers, Inc. ("NASD"); provided that each such holder
of Registrable  Securities  agrees not to disclose such information  without the
prior consent of the Company.  Such investigation shall include access to books,
records and properties and  opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such holder of Registrable  Securities
or underwriter shall reasonably request.

                  (g) If  required by the  underwriters  in  connection  with an
underwritten offering which includes Registrable  Securities pursuant to Article
7, the  Company  shall  enter into an  underwriting  agreement  with one or more
underwriters  selected for such underwriting,  such agreement shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily  contained in agreements of that type used by the  underwriters.
If required by the underwriters,  the holders of Registrable Securities shall be
parties to any underwriting  agreement relating to an underwritten sale of their
Registrable  Securities  and may, at their  option,  require that any or all the
representations  and  warranties  of the  Company to or for the  benefit of such
underwriters  shall, to the extent that they may be applicable,  also be made to
and for the benefit of such holders of Registrable  Securities.  Such holders of
Registrable  Securities  shall not be  required to make any  representations  or
warranties to or agreements with the Company or the underwriters  except as they
may relate to such holders of Registrable  Securities and their intended methods
of distribution.

                  (h)  In  connection  with  any  Registration  Statement  filed
pursuant to Sections  7.3 hereof,  the  Company  shall  furnish,  or cause to be
furnished, to each Holder

                                      -6-
<PAGE>



participating in any  underwritten  offering and to each  underwriter,  a signed
counterpart,  addressed  to such  Holder or  underwriter,  of (i) an  opinion of
counsel to the Company,  dated the effective date of such Registration Statement
(and, if such registration  includes an underwritten public offering, an opinion
dated the date of the  closing  under the  underwriting  agreement),  and (ii) a
"cold comfort" letter,  dated the effective date of such Registration  Statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the underwriting  agreement),  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  Registration  Statement,  in each case
covering  substantially  the same  matters  with  respect  to such  Registration
Statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.

                        (i) The  Company  shall  promptly  notify each Holder of
Registrable Securities covered by such Registration  Statement, at any time when
a prospectus  relating  thereto is required to be delivered  under the Act, upon
the Company's  discovery that, or upon the happening of any event as a result of
which,  the  prospectus  included  in such  Registration  Statement,  as then in
effect,  includes an untrue  statement of a material  fact or omits to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading in the light of the  circumstances  under which they were
made,  and upon  receipt of such notice each Holder shall not effect any sale of
Shares and shall immediately cease utilizing or distributing such prospectus. At
the request of any such Holder,  the Company shall promptly  prepare and furnish
to such Holder and each underwriter,  if any, a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include 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
not misleading in the light of the circumstances under which they were made.

            8. Adjustments of Exercise Price and Number of Shares.

                  8.1  Computation of Adjusted  Price. In case the Company shall
at any time after the date  hereof pay a dividend  in shares of Common  Stock or
make a  distribution  in shares  of Common  Stock,  then upon such  dividend  or
distribution the Exercise Price in effect  immediately prior to such dividend or
distribution shall forthwith be reduced to a price determined by dividing:

                        (a) an  amount  equal to the  total  number of shares of
Common Stock  outstanding  immediately  prior to such  dividend or  distribution
multiplied by the Exercise Price in effect immediately prior to such dividend or
distribution, by

                        (b)  the  total   number  of  shares  of  Common   Stock
outstanding  immediately  after such  issuance or sale.  For the purposes of any
computation  to be made in accordance  with the  provisions of this Section 8.1,
the following  provisions  shall be applicable:  Common Stock issuable by way of
dividend or other  distribution  on any stock of the Company  shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for the  determination  of stockholders  entitled to receive such
dividend or other distribution.

                                      -7-
<PAGE>



                  8.2 Subdivision and Combination.  In case the Company shall at
any time  subdivide  or combine  the  outstanding  shares of Common  Stock,  the
Exercise  Price shall  forthwith  be  proportionately  decreased  in the case of
subdivision or increased in the case of combination.

                  8.3  Adjustment in Number of Shares.  Upon each  adjustment of
the Exercise  Price  pursuant to the provisions of this Article 8, the number of
Shares  issuable  upon the  exercise  of each  Warrant  shall be adjusted to the
nearest full Share,  by  multiplying  a number  equal to the  Exercise  Price in
effect  immediately  prior to such  adjustment by the number of Shares  issuable
upon exercise of the Warrants  immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.

                  8.4 Reclassification,  Consolidation,  Merger, etc. In case of
any  reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par  value,  or from no par value to par value,
or as a  result  of a  subdivision  or  combination),  or in  the  case  of  any
consolidation  of the  Company  with,  or merger of the  Company  into,  another
corporation  (other than a  consolidation  or merger in which the Company is the
surviving  corporation  and which  does not  result in any  reclassification  or
change of the outstanding shares of Common Stock, except a change as a result of
a  subdivision  or  combination  of such  shares  or a change in par  value,  as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety,  the Holders shall  thereafter  have the
right to  purchase  the kind and number of shares of stock and other  securities
and  property  receivable  upon such  reclassification,  change,  consolidation,
merger,  sale or  conveyance  as if the Holders were the owners of the shares of
Common Stock underlying the Warrants  immediately  prior to any such events at a
price equal to the product of (x) the number of shares issuable upon exercise of
the  Warrants  and (y) the  Exercise  Price in effect  immediately  prior to the
record date for such reclassification,  change,  consolidation,  merger, sale or
conveyance as if such Holders had exercised the Warrants.

                  8.5  Determination of Outstanding  Shares of Common Stock. The
number of shares of Common Stock at any one time  outstanding  shall include the
aggregate  number of shares  issued or  issuable  upon the  exercise of options,
rights,  warrants  and  upon  the  conversion  or  exchange  of  convertible  or
exchangeable  securities (excluding shares issuable upon the exercise of options
and warrants outstanding on the date hereof).

                  8.6  Dividends  and  Other   Distributions   with  Respect  to
Outstanding Securities. In the event that the Company shall at any time prior to
the  exercise  of all  Warrants  declare  a  dividend  (other  than  a  dividend
consisting  solely of shares of Common Stock or a cash dividend or  distribution
payable out of current or retained  earnings)  or  otherwise  distribute  to its
shareholders any monies, assets,  property,  rights,  evidences of indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity,  or any other thing of value, the Holder or Holders
of the unexercised  Warrants shall  thereafter be entitled to receive,  upon the
exercise of such  Warrants,  in addition to the shares of Common  Stock or other
securities  receivable  upon the exercise  thereof,  the same monies,  property,
assets,  rights,  evidences of  indebtedness,  securities  or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution.  At the time of any such dividend or distribution,  the Company
shall  make  appropriate  reserves  to  ensure  the  timely  performance  of the
provisions of this Section 8.6.

                                      -8-
<PAGE>



                  8.7  Subscription  Rights for Shares of Common  Stock or Other
Securities.  In the case the Company or an affiliate of the Company shall at any
time after the date hereof and prior to the exercise of all the  Warrants  issue
any rights to subscribe  for shares of Common Stock or any other  securities  of
the Company or of such  affiliate to all the  shareholders  of the Company,  the
Holders of the unexercised Warrants shall be entitled, in addition to the shares
of  Common  Stock or  other  securities  receivable  upon  the  exercise  of the
Warrants,  to receive such rights at the time such rights are distributed to the
other shareholders of the Company.

            9. Exchange and Replacement of Warrant Certificates.

                  9.1 Exchange. Each Warrant Certificate is exchangeable without
expense,  upon the surrender  hereof by the  registered  Holder at the principal
executive office of the Company, for a new Warrant Certificate of like tenor and
date  representing  in the  aggregate  the right to purchase  the same number of
Shares in such denominations as shall be designated by the Holder thereof at the
time of such surrender.

                  9.2  Replacement.  Upon  receipt by the  Company  of  evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
any  Warrant  Certificate,  and,  in case of  loss,  theft  or  destruction,  of
indemnity or security  reasonably  satisfactory to it, and  reimbursement to the
Company of all reasonable expenses  incidental  thereto,  and upon surrender and
cancellation of the Warrants, if mutilated,  the Company will make and deliver a
new Warrant Certificate of like tenor, in lieu thereof.

                  10. Elimination of Fractional Interests. The Company shall not
be required to issue  certificates  representing  fractions  of shares of Common
Stock and shall not be required to issue scrip or pay cash in lieu of fractional
interests,  it being the intent of the  parties  that all  fractional  interests
shall be  eliminated  by rounding any fraction up to the nearest whole number of
shares of Common Stock.

                  11.  Reservation and Listing of Securities.  The Company shall
at all times reserve and keep available out of its  authorized  shares of Common
Stock,  solely for the purpose of issuance  upon the  exercise of the  Warrants,
such  number of shares of Common  Stock as shall be issuable  upon the  exercise
thereof.  The Company  covenants and agrees that,  upon exercise of the Warrants
and payment of the Exercise Price  thereof,  all shares of Common Stock issuable
upon such exercise shall be duly and validly issued, fully paid,  non-assessable
and not  subject to the  preemptive  rights of any  shareholder.  As long as the
Warrants shall be  outstanding,  the Company shall use its best efforts to cause
all shares of Common  Stock  issuable  upon the  exercise of the  Warrants to be
listed on or quoted by the  exchange  upon which the  Company's  Common Stock is
then listed or quoted.

                  12.  Notices to Warrant  Holders.  Nothing  contained  in this
Agreement  shall be construed as conferring upon the Holder or Holders the right
to vote or to consent or to receive  notice as a  shareholder  in respect of any
meetings of shareholders  for the election of directors or any other matter,  or
as having any rights whatsoever as a shareholder of the Company. If, however, at
any time prior to the expiration of the Warrants and their exercise,  any of the
following events shall occur:

                        (a) the  Company  shall take a record of the  holders of
its  shares of Common  Stock for the  purpose  of  entitling  them to  receive a
dividend or distribution  payable



                                      -9-
<PAGE>



otherwise  than in cash, or a cash dividend or  distribution  payable  otherwise
than out of  current  or  retained  earnings,  as  indicated  by the  accounting
treatment of such dividend or distribution on the books of the Company; or

                        (b) the  Company  shall  offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company,  or
any option, right or warrant to subscribe therefor; or

                        (c) a  dissolution,  liquidation  or  winding  up of the
Company (other than in connection with a  consolidation  or merger) or a sale of
all or  substantially  all of its  property,  assets and business as an entirety
shall be proposed; or

                        (d) a change in control of the Company occurs;

then, in any one or more of said events,  the Company shall give written  notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the  date  of  closing  the  transfer  books  for  the  determination  of the
shareholders   entitled  to  such   dividend,   distribution,   convertible   or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up, sale or change of
control.  Such notice  shall  specify such record date or the date of closing of
the  transfer  books,  as the case may be.  Failure  to give such  notice or any
defect  therein  shall not affect the validity of any action taken in connection
with the  declaration  or payment of any such dividend or  distribution,  or the
issuance of any convertible or exchangeable  securities or subscription  rights,
options or warrants, or any proposed dissolution,  liquidation, winding up, sale
or change of control.

            13.   Notices.   All   notices,   requests,   consents   and   other
communications  hereunder  shall be in writing  and shall be deemed to have been
duly made when delivered,  telecopied or mailed by registered or certified mail,
return receipt requested:

                        (a) If to a registered  Holder of the  Warrants,  to the
address of such Holder as shown on the books of the Company; or

                        (b) If to the  Company,  to the  address  set  forth  in
Section  3 of this  Agreement  or to  such  other  address  as the  Company  may
designate by notice to the Holders.

            14. Supplements and Amendments.  The Company and the Underwriter may
from time to time supplement or amend this Agreement without the approval of any
Holders of Warrant  Certificates  in order to cure any ambiguity,  to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions  arising  hereunder  which the Company and the Underwriter may deem
necessary or  desirable  and which the Company and the  Underwriter  deem not to
adversely affect the interests of the Holders of Warrant Certificates.

            15.  Successors.  All the covenants and provisions of this Agreement
by or for the benefit of the  Company  and the  Holders  inure to the benefit of
their respective successors and assigns hereunder.

                                      -10-
<PAGE>



            16.  Termination.  This  Agreement  shall  terminate at the close of
business on _________,  2008. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date when all Warrants have been  exercised and all the
Shares  issuable  upon  exercise of the Warrants have been resold to the public;
provided,  however,  that the  provisions  of  Section  7.4 shall  survive  such
termination until the close of business on _________, 20__.

            17.  Governing  Law.  This  Agreement  and each Warrant  Certificate
issued  hereunder  shall be deemed to be a  contract  made under the laws of the
State of New York with respect to contracts  made and to be wholly  performed in
said State and for all purposes  shall be construed in accordance  with the laws
of said State. The Company,  the Underwriter and any other registered  holder or
holders of the Warrant  Certificates  (i) agree that any legal  Suit,  action or
proceeding  arising  out of or relating to this  Agreement  shall be  instituted
exclusively  in New York  State  Supreme  Court,  County of New York,  or in the
United States  District Court for the Southern  District of New York, (ii) waive
any objection  which the they may have now or hereafter to the venue of any such
suit, action or proceeding, and (iii) irrevocably consent to the jurisdiction of
the New York  State  Supreme  Court,  County of New York and the  United  States
District Court for the Southern District of New York in any such suit, action or
procedure.  The Company,  the  Underwriter  and any other  registered  holder or
holders of the Warrant  Certificates,  Warrants or the Shares  further  agree to
accept and acknowledge service of any and all process which may be served in any
suit,  action or proceeding in the New York State Supreme  Court,  County of New
York and the United States District Court for the Southern District of New York,
and agree that service of process  upon them mailed by  certified  mail to their
respective  addresses  shall be deemed in every  respect  effective  service  of
process  upon  them in any such  suit,  action  or  proceeding.  In the event of
litigation between the parties arising hereunder,  the prevailing party shall be
entitled to costs and reasonable attorney's fees.

            18. Benefits of This  Agreement.  Nothing in this Agreement shall be
construed to give to any person or  corporation,  other than the Company and the
Underwriter  and  any  other  registered   holder  or  holders  of  the  Warrant
Certificates,  Warrants or the Shares,  any legal or equitable right,  remedy or
claim  under  this  Agreement;  and  this  Agreement  shall  be for the sole and
exclusive  benefit of the Company and the  Underwriter  and any other  holder or
holders of the Warrant Certificates, Warrants or the Shares.

            19.  Preservation  of Rights.  The Company will not, by amendment of
its   articles  of   incorporation   or  through  any   consolidation,   merger,
reorganization,  transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Agreement or the Warrants or the rights  represented
hereby or thereby,  but will at all times in good faith  assist in the  carrying
out of all such terms and in the taking of all such  actions as may be necessary
or  appropriate  in order to protect the rights of the  Holders of the  Warrants
against dilution or other impairment.

            20.  Counterparts.  This  Agreement may be executed in any number of
counterparts and each of such  counterparts  shall for all purposes be deemed to
be an original,  and such counterparts shall together constitute but one and the
same instrument.

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



                                      -11-
<PAGE>



[SEAL]                          INTELLI-CHECK, INC.


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

Attest:



Name:
Title:                          THE SHEMANO GROUP, INC.


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





118952.00102/11245297v3
                                      -12-
<PAGE>



                                    EXHIBIT A

THE WARRANTS  REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES  ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE ACT"),  AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF  SECURITIES),  OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY,  STATING  THAT  AN  EXEMPTION  FROM  REGISTRATION  UNDER  SUCH  ACT  IS
AVAILABLE.

THE  TRANSFER OR EXCHANGE OF THE WARRANTS  REPRESENTED  BY THIS  CERTIFICATE  IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                 5:00 P.M., NEW YORK TIME, ______________, 2008

No. W-                                                         ________ Warrants


                               WARRANT CERTIFICATE

            This Warrant  Certificate  certifies that The Shemano Group, Inc. or
registered assigns is the registered holder of __________ ( ______ ) Warrants to
purchase, at any time from _________, 2004 until 5:00 P.M. New York City time on
_________,  2008 ("Expiration Date") up to ____________ ( ) shares ("Shares") of
fully-paid and  nonassessable  common stock,  par value $.001 per share ("Common
Stock"), of Intelli-Check,  Inc., a Delaware corporation (the "Company"), at the
initial  exercise price,  subject to adjustment in certain events (the "Exercise
Price"),  of $ ____ per Share upon  surrender  of this Warrant  Certificate  and
payment of the  Exercise  Price or notice of  cashless  exchange at an office or
agency of the Company, but subject to the conditions set forth herein and in the
warrant agreement dated as of __________, 2003 ("Warrant Agreement") between the
Company and The Shemano Group, Inc. Payment of the Exercise Price may be made in
cash,  by  certified  or official  bank check in New York  Clearing  House funds
payable to the order of the Company,  or any combination of cash or check, or in
shares of Common  Stock  pursuant  to a Notice of Exchange  in  accordance  with
Section 3 of the Warrant Agreement.

            No Warrant may be exercised  after 5:00 P.M., New York City time, on
the  Expiration  Date,  at which  time all  Warrants  evidenced  hereby,  unless
exercised prior thereto, shall thereafter be void.

            The Warrants  evidenced by this  Warrant  Certificate  are part of a
duly  authorized  issue of Warrants  issued  pursuant to the Warrant  Agreement,
which Warrant  Agreement is hereby  incorporated by reference in and made a part
of this  instrument  and is hereby  referred to


                                      -13-
<PAGE>



in a description of the rights,  limitation of rights,  obligations,  duties and
immunities  thereunder  of the Company and the holders  (the words  "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.

            The Warrant  Agreement  provides that upon the occurrence of certain
events,  the Exercise Price and/or number of the Company's  securities  issuable
thereupon may, subject to certain  conditions,  be adjusted.  In such event, the
Company  will,  at the  request of the holder,  issue a new Warrant  Certificate
evidencing  the  adjustment in the Exercise  Price and the number and/or type of
securities issuable upon the exercise of the Warrants;  provided,  however, that
the failure of the Company to issue such new Warrant  Certificates  shall not in
any way change,  alter,  or  otherwise  impair,  the rights of the holder as set
forth in the Warrant Agreement.

            Upon due  presentment  for  registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant  Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants  shall be issued to the  transferee(s)  in exchange for this Warrant
Certificate,  subject to the  limitations  provided  herein  and in the  Warrant
Agreement,  without any charge except for any tax, or other governmental  charge
imposed in connection therewith.

            Upon the exercise of less than all of the Warrants evidenced by this
Certificate,  the  Company  shall  forthwith  issue to the  holder  hereof a new
Warrant Certificate representing such number of unexercised Warrants.

            The Company may deem and treat the  registered  holder(s)  hereof as
the absolute owner(s) of this Warrant Certificate  (notwithstanding any notation
of ownership  or other  writing  hereon made by anyone),  for the purpose of any
exercise hereof,  and of any distribution to the holder(s)  hereof,  and for all
other  purposes,  and the  Company  shall not be  affected  by any notice to the
contrary.

            All terms used in this Warrant  Certificate which are defined in the
Warrant  Agreement  shall  have the  meanings  assigned  to them in the  Warrant
Agreement.



                  [Remainder of page intentionally left blank]


<PAGE>



            IN WITNESS WHEREOF,  the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.

Dated:  __________, 2003              INTELLI-CHECK, INC.

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

[SEAL]



Attest:

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

<PAGE>



                         [FORM OF ELECTION TO PURCHASE]

            The undersigned  registered owner of this Warrant hereby irrevocably
elects to  exercise  the right,  represented  by this  Warrant  Certificate,  to
purchase  _______ Shares and herewith tenders in payment for such Shares cash or
a certified or official bank check  payable in New York Clearing  House Funds to
the order of  _____________________  in the amount of $_______ all in accordance
with the terms this Warrant.

            The  undersigned  requests  that a  certificate  for such  Shares be
registered   in   the   name   of   ____________________,   whose   address   is
_____________________  and that such Certificate be delivered to  _____________,
whose address is__________________________________________________.


| |  The Undersigned hereby elects to exercise the Warrants held by it in
accordance with Section ___ of the Warrant  Agreement dated __________, 2003.


Dated:                      ----------------------------------------------------
                            Name of Registered Owner

\
                            ----------------------------------------------------
                            Signature of Registered Owner
                            (Signature  must conform in all  respects  to  name
                            of holder as specified on the face of the   Warrant
                            Certificate.)


                            ----------------------------------------------------
                            Street Address

                            ----------------------------------------------------
                            City, State, Zip


                            ----------------------------------------------------
                            IRS Identification Number/Social Security Number


<PAGE>



                              [FORM OF ASSIGNMENT]

            (To be executed by the  registered  holder if such holder desires to
transfer the Warrant Certificate.)

            FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby  sells,  assigns and transfers  unto the Assignee  named below all of the
rights,  title  and  interest  therein  of  the  undersigned  under  the  within
Underwriter's  Warrant, with respect to the number of shares of Common stock set
forth below:

NAME OF ASSIGNEE               ADDRESS                          NUMBER OF SHARES
----------------               -------                          ----------------



and does hereby irrevocably  constitute and appoint  __________________________,
Attorney,   to  transfer  the  within  Warrant   Certificate  on  the  books  of
Intelli-Check, Inc., maintained for the purpose, with full power of substitution
in the premises.  The undersigned understand that compliance with the provisions
of the Underwriter's Warrant is necessary to effect any assignment or transfer.

Dated:
                          ------------------------------------------------------
                          Signature of Registered Owner
                          (Signature  must  conform in all  respects  to name of
                          holder  as  specified  on  the  face  of  the  Warrant
                          Certificate.)

                          ------------------------------------------------------
                          Name of Registered Owner


                          ------------------------------------------------------
                          IRS Identification Number/Social Security Number