WARRANT  AGREEMENT dated as of June , 1996 by and between Phase-Out of
America,  Inc., a Delaware corporation (the "Company"),  and Burton A. Goldstein
(the "Purchaser").

                                  WITNESSETH:

          WHEREAS,  the Company  proposes to issue to  Purchaser a warrant  (the
"Warrant")  to purchase  shares (the "Warrant  Shares") of the Company's  Common
Stock, par value $.0003 per share (the "Common Stock"); and

          NOW,  THEREFORE,  in  consideration  of the premises,  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. On the terms and subject to the conditions set forth herein,
and unless this  agreement is terminated  prior to exercise in  accordance  with
Section 15 hereof,  Purchaser is hereby  granted the right to  purchase,  at any
time  from June , 1996  until  5:00  P.M.,  New York  time,  on June , 2001 (the
"Warrant  Exercise Term"),  up to 9,778,975  Warrant Shares at an exercise price
per share  (subject to adjustment as provided in Article 7 hereof) equal to $.05
per share.

          2.  Warrant   Certificate.   The  warrant  certificate  (the  "Warrant
Certificate")  delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A 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 Warrant.  The Warrant is  exercisable  with respect to
some or all of the  Warrant  Shares  (but not as to any  fractional  shares)  by
payment of the  applicable  Exercise  Price per share on the date of exercise in
cash or by check to the  order of the  Company,  or any  combination  of cash or
check.  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 Warrant  Shares  purchased,  at the Company's
principal offices (currently located at 140 Broadway,  Lynbrook, New York 11563)
Purchaser (or other registered holder of the Warrant Certificate) (the "Holder")
shall be  entitled  to receive a  certificate  or  certificates  for the Warrant
Shares so purchased. The purchase rights represented by each Warrant Certificate
are exercisable at the option of the Holder,  in whole or in part (but not as to
fractional  Warrant  Shares).  In the case of the  purchase of less than all the
Warrant  Shares  purchasable  under any Warrant  Certificate,  the Company shall
cancel said Warrant Certificate upon the surrender thereof and

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shall  execute  and  deliver a new  Warrant  Certificate  of like  tenor for the
balance of the Warrant Shares purchasable thereunder.

          4. Issuance of Certificates.

          Upon the exercise of the Warrants,  the issuance of  certificates  for
the Warrant  Shares  purchased  shall be made forthwith (and in any event within
five business days thereafter)  without 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.

          The Warrant Certificate and the certificates  representing the Warrant
Shares  shall be executed  on behalf of the  Company by the manual or  facsimile
signature of the present or any future Chairman or Vice Chairman of the Board of
Directors of President or Vice President of the Company under its corporate seal
reproduced  thereon,  attested to by the manual or  facsimile  signature  of the
present or any future  Secretary  or Assistant  Secretary  of the  Company.  The
Warrant  Certificate and  certificates  representing the Warrant Shares shall be
dated the date of  execution by the Company  upon  initial  issuance,  division,
exchange, substitution or transfer.

          Upon  exercise,  in part or in whole,  of the  Warrants,  certificates
representing the Warrant 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 issuer,  stating that an exemption from
          registration under such Act is available."

          5. Restrictions on Transfer of Warrants and Warrant Shares.

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<PAGE>


                    (a)  Purchaser,  by his  acceptance  thereof,  covenants and
agrees that the Warrant is  being  acquired as an investment and not with a view
to the distribution thereof.

                    (b) The  Company  agrees  on  request  at  its  expense   to
register  the Warrants  and  the Warrant  Shares  in  a  registration  statement
filed under  the Securities  Act  of 1933, as  amended (the "Act").  The Company
shall also provide the holder(s) of  the  Warrants and  the  Warrant  Shares the
opportunity  to include these Warrants  and  Warrant Shares  in  a  registration
statement under the Act.

          6. Price.

          6.1 Initial and Adjusted Exercise Price. The initial exercise price of
the Warrant shall be equal to five cents ($.05) per share. The adjusted exercise
price  shall be the price  which may  result  from time to time from any and all
adjustments of the initial  exercise price in accordance  with the provisions of
Article 7 hereof, if any such adjustments are required by Article 7.

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

          7. Adjustments of Exercise Price and Number of Warrant Shares.

          7.1 Adjustment in Number of Warrant  Shares.  Upon each  adjustment of
the Exercise  Price  pursuant to the provisions of this Article 7, the number of
Warrant  Shares  issuable  upon the exercise of the Warrant shall be adjusted to
the nearest full  Warrant  Share by  multiplying  a number equal to the Exercise
Price in effect  immediately  prior to such  adjustment by the number of Warrant
Shares  issuable  upon  exercise  of  the  Warrant  immediately  prior  to  such
adjustment and dividing the product so obtained by the adjusted Exercise Price.

          7.2 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.

          7.3  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 form 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

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<PAGE>

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 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 Warrant  Shares  underlying  the Warrant at a
price equal to the product of (x) the number of shares of Common Stock  issuable
upon  conversion of the Warrant  Shares and (y) the Exercise  Price prior to the
record date for such reclassification,  change,  consolidation,  merger, sale or
conveyance as if such Holders had exercised the Warrant.

          7.4 Redemption of Warrant: Redemption of Warrant Shares.

          Notwithstanding  anything to the contrary  contained in the Warrant to
elsewhere,   the  Warrant   cannot  be   redeemed  by  the  Company   under  any
circumstances.

          7.5  Dividends  and Other  Distributions  with Respect to  Outstanding
Securities.  In the  event  that the  Company  shall  at any  time  prior to the
exercise of the  Warrant  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  of the  Warrant  shall
thereafter  be  entitled,  in addition  to the  securities  receivable  upon the
exercise  thereof,  to  receive,  upon the  exercise of such  Warrant,  the same
monies, property,  assets, rights, evidences of indebtedness,  securities or any
other thing of value that he 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 Subsection 7.5.

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

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<PAGE>

          7.7 Additional  Adjustment.  In the event that during the term of this
Warrant the  Company  raises  additional  funds  through the  issuance of equity
(other than through an offering  registered under the Securities Act of 1933, as
amended) the number of shares of Common  Stock  acquired  upon  issuance of this
Warrant  shall be  increased by 9\of the number of  additional  shares of Common
Stock of the Company being issued in such financing.

          8. Exchange and Replacement of Warrant Certificates.

          The 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 Warrant Shares in such
denominations  as shall be designated by the Holder  thereof at the time of such
surrender.

          Upon receipt by the Company of evidence reasonably  satisfactory to if
of the loss, theft,  destruction or mutilation of the 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  expense
incidental  thereto,  and upon  surrender and  cancellation  of the Warrant,  if
mutilated,  the Company will make and deliver a new Warrant  Certificate of like
tenor, in lieu thereof.

          9. Elimination of Fractional Interests.

          The Company shall not be required to issue  certificates  representing
fractions of Warrant  Shares upon the  exercise of the Warrant,  nor shall it 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 Warrant Shares.

          10. 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  Warrant,  such  number of  shares of Common  Stock as shall be
issuable  upon such  exercise.  The  Company  covenants  and agrees  that,  upon
exercise of the Warrant and payment of the Exercise Price  therefor,  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.  The Company  shall take all action within its control to cause all
Warrant  Shares to be  listed on or quoted by NASDAQ or listed on such  national
securities exchanges as the Company's Common Stock is listed.

          11. Notices to Warrant Holder.

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<PAGE>

          Nothing  contained in this Agreement  shall be construed as conferring
upon the  Holder  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  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;

then, in any one or more of said events,  the Company shall give written  notice
to the Holder of such event at least  fifteen  (15) 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 or sale.  Such
notice shall specify such record date or the date of closing 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 or sale.

          12. Notices.

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


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<PAGE>

                    (a) If to the  registered  Holder  of  the  Warrant,  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 Holder.

          13. Supplements and Amendments.

          The Company and  Purchaser  may from time to time  supplement or amend
this  Agreement  without  the  approval  of any  Holder  of the  Warrant  and/or
securities underlying the Warrant 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
of  questions  arising  hereunder  which  the  Company  and  Purchaser  may deem
necessary  or  desirable  and which the Company and  Purchaser  not to adversely
affect the interests of the Holder of the Warrant.

          14. Successors.

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

          15. Termination.

          This  Agreement  shall  terminate  at the close of  business on June ,
2001.  Notwithstanding  the  foregoing,  this  Agreement  will  terminate on any
earlier date when the Warrant has been exercised and all  securities  underlying
the Warrant have been resold to the public.

          16. Governing Law.

          This Agreement and the Warrant  Certificate  issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the laws of said State.

          17. Benefits of This Agreement.

          Nothing in this Agreement  shall be construed to give to any person or
corporation other than the Company and Purchaser and any other registered Holder
of the Warrant or any  securities  underlying the Warrant 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  Purchaser  and any such other
Holder.

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<PAGE>



          18. 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.

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<PAGE>




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

                                                      Phase-Out of America, Inc.

                                                      By------------------------

                                                      Burton A. Goldstein


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