Document:

<PAGE>

                                                                     EXHIBIT 4.7

================================================================================

                              SUBSIDIARY GUARANTEE

                                     made by

                               the Subsidiaries of

                             CONSTELLATION 3D, INC.

                                   in favor of

                         THE INVESTOR IDENTIFIED HEREIN

                           Dated as of October 1, 2001

===============================================================================

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                          <C>
SECTION 1.   DEFINED TERMS .................................................  1
   1.1     Definitions .....................................................  1
   1.2     Other Definitional Provisions ...................................  2

SECTION 2.   GUARANTEE .....................................................  2
   2.1     Guarantee .......................................................  2
   2.2     Right Of Contribution ...........................................  2
   2.3     No Subrogation ..................................................  3
   2.4     Amendments, Etc. With Respect To The Obligations ................  3
   2.5     Guarantee Absolute And Unconditional ............................  3
   2.6     Reinstatement ...................................................  4
   2.7     Payments.........................................................  4

SECTION 3.   REPRESENTATIONS AND WARRANTIES ................................  4

SECTION 4.   COVENANTS .....................................................  5

SECTION 5.   MISCELLANEOUS .................................................  5
   5.1     Amendments In Writing ...........................................  5
   5.2     Notices .........................................................  5
   5.3     No Waiver By Course Of Conduct; Cumulative Remedies .............  5
   5.4     Enforcement Expenses; Indemnification ...........................  5
   5.5     Successors And Assigns ..........................................  6
   5.6     Set-Off .........................................................  6
   5.7     Counterparts ....................................................  6
   5.8     Severability ....................................................  6
   5.9     Section Headings ................................................  7
   5.10    Integration .....................................................  7
   5.11    Governing Law ...................................................  7
   5.12    Submission To Jurisdiction; Waivers7
   5.13    Acknowledgements ................................................  7
   5.14    Additional Guarantors ...........................................  8
   5.15    Release Of Guarantors ...........................................  8
   5.16    Waiver Of Jury Trial ............................................  8
</TABLE>

                                       i

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               SUBSIDIARY GUARANTEE, dated as of October 1, 2001, made by each
of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "Guarantors"), in favor of Halifax Fund,
L.P., a Cayman Islands limited partnership as the Investor under the Exchange
Agreement, dated as of the date hereof, between CONSTELLATION 3D, INC., a
Delaware corporation (the "Company") and the Investor.

                              W I T N E S S E T H:

               WHEREAS, the Company and the Investor are entering into the
Exchange Agreement, dated as of the date hereof (the "Exchange Agreement")
pursuant to which the Company will satisfy certain obligations to the Investor
contained in prior agreements in return for, among other things, the issuance to
the Investor by the Company of $5,000,000 aggregate principal amount of its 5%
Senior Secured Convertible Debentures (the "Debentures") and its Optional
Debenture Warrant (the "Warrant") that entitles the Investor to purchase an
additional $5,000,000 aggregate principal amount of Debentures;

               WHEREAS, the execution and delivery of this Guarantee by the
Guarantors to the Investor is required under the Exchange Agreement;

               NOW, THEREFORE, in consideration of the premises and to induce
the Investor to enter into the Exchange Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees with the
Investor as follows:

                            SECTION 1. DEFINED TERMS

               1.1   Definitions. (a)   Unless otherwise defined herein, terms
                     -----------
defined in the Exchange Agreement and used herein shall have the meanings given
to them in the Exchange Agreement.

               (b)   The following terms shall have the following meanings:

               "GUARANTEE": this Subsidiary Guarantee, as the same may be
amended, supplemented or otherwise modified from time to time.

               "OBLIGATIONS": the collective reference to the obligation to pay
the unpaid principal of and interest on the Debentures (including any future
Debentures issued to the Investor upon exercise of the Optional Debenture
Warrant) and all other obligations and liabilities of the Company to the
Investor (including, without limitation, interest accruing at the then
applicable rate provided in the Exchange Agreement after the maturity of the
Debentures and interest accruing at the then applicable rate provided in the
Exchange Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Company, if a claim for post-filing or post-petition interest is allowed in
such proceeding) whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Exchange Agreement, this Guarantee or the other
Transaction Documents (as defined in the Exchange Agreement), or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all reasonable fees and disbursements
of counsel to the

<PAGE>

Investor that are required to be paid by the Company pursuant to the terms of
any of the foregoing agreements).

               1.2  Other Definitional Provisions. The words "hereof," "herein",
                    -----------------------------
"hereto" and "hereunder" and words of similar import when used in this Guarantee
shall refer to this Guarantee as a whole and not to any particular provision of
this Guarantee, and Section and Schedule references are to this Guarantee unless
otherwise specified.

               (a)  The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

                              SECTION 2. GUARANTEE

               2.1  Guarantee.  (a)  The Guarantors hereby, jointly and
                    ---------
severally, unconditionally and irrevocably, guarantee to the Investor and its
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

               (b)  Anything herein or in any other Transaction Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Transaction Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws,
including laws relating to the insolvency of debtors, fraudulent conveyance or
transfer or laws affecting the rights of creditors generally (after giving
effect to the right of contribution established in Section 2.2).

               (c)  Each Guarantor agrees that the Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Investor hereunder.

               (d)  The guarantee contained in this Section 2 shall remain in
full force and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full.

               (e)  No payment made by the Company, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Investor
from the Company, any of the Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor in respect
of the Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Obligations are paid in full.

               2.2  Right Of Contribution. Each Guarantor hereby agrees that to
                    ---------------------
the extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any

                                       2

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other Guarantor hereunder which has not paid its proportionate share of such
payment. Each Guarantor's right of contribution shall be subject to the terms
and conditions of Section 2.3. The provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of any Guarantor to the Investor,
and each Guarantor shall remain liable to the Investor for the full amount
guaranteed by such Guarantor hereunder.

               2.3   No Subrogation. Notwithstanding any payment made by any
                     --------------
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Investor, no Guarantor shall be entitled to be subrogated to any of the
rights of the Investor against the Company or any other Guarantor or any
collateral security or guarantee or right of offset held by the Investor for the
payment of the Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Investor by the Company on account of the Obligations are paid in full. If
any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Investor, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Investor in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Investor, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Investor may determine.

               2.4   Amendments, Etc. With Respect To The Obligations. Each
                     ------------------------------------------------
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Obligations made
by the Investor may be rescinded by the Investor and any of the Obligations
continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Investor, and the Exchange Agreement and the
other Transaction Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Investor may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Investor for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. The Investor shall have no obligation to protect,
secure, perfect or insure any Lien at any time held by them as security for the
Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.

               2.5   Guarantee Absolute And Unconditional. Each Guarantor waives
                     ------------------------------------
any and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Investor upon the
guarantee contained in this Section 2 or acceptance of the guarantee contained
in this Section 2; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Company and any of the Guarantors, on the one hand,
and the Investor, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this
Section 2. Each Guarantor waives to the extent permitted by law diligence,

                                       3

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presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company or any of the Guarantors with respect to the Obligations.
Each Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Exchange Agreement or any other Transaction Document, any of the Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Investor, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the Company
or any other Person against the Investor, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Company or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Company for the Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Investor may, but shall be under
no obligation to, make a similar demand on or otherwise pursue such rights and
remedies as they may have against the Company, any other Guarantor or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Investor to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Company, any other Guarantor or any other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Company, any other Guarantor or any other Person
or any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Investor against any Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings.

               2.6   Reinstatement. The guarantee contained in this Section 2
                     -------------
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Investor upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

               2.7   Payments. Each Guarantor hereby guarantees that payments
                     --------
hereunder will be paid to the Investor without set-off or counterclaim in U.S.
dollars at the address set forth or referred to in Section 10(f) of the Exchange
Agreement.

                   SECTION 3. REPRESENTATIONS AND WARRANTIES

               3.1   To induce the Investor to enter into the Exchange Agreement
and to make the exchange thereunder, each Guarantor hereby represents and
warrants to the Investor that the representations and warranties set forth in
the Exchange Agreement and the Security Agreement as they relate to such
Guarantor or to the Transaction Documents to which such Guarantor is a party,
each of which is hereby incorporated herein by reference, are true and correct
as of each time such representations are deemed to be made pursuant to such
Agreements, and the Investor shall be entitled to rely on each of them as if
they were fully set forth herein, PROVIDED that

                                       4

<PAGE>

each reference in each such representation and warranty to the Company's
knowledge shall, for the purposes of this Section 3, be deemed to be a reference
to such Guarantor's knowledge.

                              SECTION 4. COVENANTS

               Each Guarantor covenants and agrees with the Investor that, from
and after the date of this Guarantee until the Obligations shall have been paid
in full, such Guarantor (x) shall take, and/or shall refrain from taking, as the
case may be, each commercially reasonable action that is necessary to be taken
or not taken, as the case may be, so that no Default or Event of Default is
caused by the failure to take such action or to refrain from taking such action
by such Guarantor and (y) without limitation, shall take, and/or refrain from
taking, as the case may be, all actions so that all covenants in Paragraphs 4, 5
and 6 of the Exchange Agreement and Section 2 of the Security Agreement are
performed in accordance with their terms.

                            SECTION 5. MISCELLANEOUS

               5.1   Amendments In Writing. None of the terms or provisions of
                     ---------------------
this Guarantee may be waived, amended, supplemented or otherwise modified except
in accordance with Paragraph 10(e) of the Exchange Agreement.

               5.2   Notices. All notices, requests and demands to or upon the
                     --------
Investor or any Guarantor hereunder shall be effected in the manner provided for
in Paragraph 10(f) of the Exchange Agreement; PROVIDED that any such notice,
request or demand to or upon any Guarantor shall be addressed to such Guarantor
at its notice address set forth on SCHEDULE 1.

               5.3   No Waiver By Course Of Conduct; Cumulative Remedies. The
                     --------------------- -----------------------------
Investor shall not by any act (except by a written instrument pursuant to
Section 5.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Investor, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Investor of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Investor would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.

               5.4   Enforcement Expenses; Indemnification. (a) (a) Each
                     ---------------------
Guarantor agrees to pay, or reimburse the Investor for, all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Guarantee and the other Transaction Documents to which such Guarantor is a
party, including, without limitation, the reasonable fees and disbursements of
counsel to the Investor.

               (b)   Each Guarantor agrees to pay, and to save the Investor
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable in connection with any of the transactions
contemplated by this Guarantee.

                                       5

<PAGE>
               (c)   Each Guarantor agrees to pay, and to save the Investor
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Guarantee to the extent the Company would
be required to do so pursuant to the Exchange Agreement.

               (d)   The agreements in this Section shall survive repayment of
the obligations and all other amounts payable under the Exchange Agreement and
the other Transaction Documents.

               5.5   Successors And Assigns. This Guarantee shall be binding
                     ----------------------
upon the successors and assigns of each Guarantor and shall inure to the benefit
of the Investor and their respective successors and assigns; PROVIDED that no
Guarantor may assign, transfer or delegate any of its rights or obligations
under this Guarantee without the prior written consent of the Investor.

               5.6   Set-Off. Each Guarantor hereby irrevocably authorizes the
                     -------
Investor at any time and from time to time while an Event of Default under any
of the Transaction Documents shall have occurred and be continuing, without
notice to such Guarantor or any other Guarantor, any such notice being expressly
waived by each Guarantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Investor to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as the Investor
may elect, against and on account of the obligations and liabilities of such
Guarantor to the Investor hereunder and claims of every nature and description
of the Investor against such Guarantor, in any currency, whether arising
hereunder, under the Exchange Agreement, any other Loan Document or otherwise,
as the Investor may elect, whether or not the Investor have made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. The Investor shall notify such Guarantor promptly of any such
set-off and the application made by the Investor of the proceeds thereof,
PROVIDED that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Investor under this Section are
in addition to other rights and remedies(including, without limitation, other
rights of set-off) which the Investor may have.

               5.7   Counterparts. This Guarantee may be executed by one or more
                     ------------
of the parties to this Guarantee on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

               5.8   Severability. Any provision of this Guarantee which is
                     ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                                       6

<PAGE>

               5.9   Section Headings. The Section headings used in this
                     ----------------
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

               5.10  Integration. This Guarantee and the other Transaction
                     -----------
Documents represent the agreement of the Guarantors and the Investor with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Investor relative to subject
matter hereof and thereof not expressly set forth or referred to herein or in
the other Transaction Documents.

               5.11  GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
                     -------------
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

               5.12  Submission To Jurisdiction; Waivers. Each Guarantor hereby
                     -----------------------------------
irrevocably and unconditionally:

               (a)   submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Transaction Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, located in New York County, New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts from any thereof;

               (b)   consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

               (c)   agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Guarantor at its address referred to in Section 5.2 or at such other address of
which the Investor shall have been notified pursuant thereto;

               (d)    agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and

               (e)    waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.

               5.13   Acknowledgements. Each Guarantor hereby acknowledges that:
                      ----------------

               (a)    it has been advised by counsel in the negotiation,
execution and delivery of this Guarantee and the other Transaction Documents to
which it is a party;

               (b)    the Investor has no fiduciary relationship with or duty to
any Guarantor arising out of or in connection with this Guarantee or any of the
other Transaction Documents,

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<PAGE>

and the relationship between the Guarantors, on the one hand, and the Investor,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

               (c)   no joint venture is created hereby or by the other
Transaction Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Guarantors and the Investor.

               5.14   Additional Guarantors. The Company shall cause each of its
                      ---------------------
subsidiaries formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and delivering an
Assumption Agreement in the form of Annex 1 hereto.

               5.15   Release Of Guarantors. Subject to Section 2.6, each
                      ---------------------
Guarantor will be released from all liability hereunder concurrently with the
repayment in full of all amounts owed under the Exchange Agreement, the
Debentures and the other Transaction Documents.

               5.16   WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF
                      --------------------
THE BENEFITS HEREOF, THE INVESTOR, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND
FOR ANY COUNTERCLAIM THEREIN.

                                       8

<PAGE>
          IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered as of the date first above written.

                              Guarantors:

                              VELOR INCORPORATED

                              By: /s/ Eugene Levich
                                  ---------------------------
                                        Name:
                                        Title:

                              TRIDSTORE IP, L.L.C.

                              By: /s/ Eugene Levich
                                  ---------------------------
                                        Name:
                                        Title:

                              TRID STORE VOSTOK

                              By: /s/ Eugene Levich
                                  ---------------------------
                                        Name:
                                        Title:

                              C-TRID ISRAEL LTD

                              By: /s/ Eugene Levich
                                  ---------------------------
                                        Name:
                                        Title:

                              TRIDSV, INC.

                              By: /s/ Eugene Levich
                                  ---------------------------
                                        Name:
                                        Title:

                                       9

<PAGE>

                              CONSTELLATION 3D TRUST LLC

                              By: /s/ Eugene Levich
                                 ---------------------------
                                         Name:
                                         Title:

                                       10

<PAGE>

                                                                      SCHEDULE 1

                         NOTICE ADDRESSES OF GUARANTORS

Except otherwise noted the Notice Address of each Guarantor is:

[to be provided]

<PAGE>

                                                                      Annex 1 to
                                                            SUBSIDIARY GUARANTEE

               ASSUMPTION AGREEMENT, dated as of ____ __, ______ made by
______________________________, a ______________ corporation (the "ADDITIONAL
GUARANTOR"), in favor the Investor pursuant to the Exchange Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Exchange Agreement.

                              W I T N E S S E T H :

               WHEREAS, Constellation 3D, Inc. (the "Company") and the Investor
have entered into an Exchange Agreement, dated as of September ___, 2001 (as
amended, supplemented or otherwise modified from time to time, the "EXCHANGE
AGREEMENT");

               WHEREAS, in connection with the Exchange Agreement, the Company
and its Subsidiaries (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of September __, 2001 (as amended, supplemented
or otherwise modified from time to time, the "GUARANTEE") in favor of the
Investor;

               WHEREAS, the Exchange Agreement requires the Additional Guarantor
to become a party to the Guarantee; and

               WHEREAS, the Additional Guarantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee;

               NOW, THEREFORE, IT IS AGREED:

               1.   GUARANTEE. By executing and delivering this Assumption
Agreement, the Additional Guarantor, as provided in Section 5.14 of the
Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder
with the same force and effect as if originally named therein as a Guarantor
and, without limiting the generality of the foregoing, hereby expressly assumes
all obligations and liabilities of a Guarantor thereunder. The information set
forth in Annex 1-A hereto is hereby added to the information set forth in
Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and
warrants that each of the representations and warranties contained in Section 3
of the Guarantee is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.

               2.   GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

<PAGE>

               IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

                                            [ADDITIONAL GUARANTOR]

                                            By:
                                                  Name:
                                                  Title:<PAGE>

                                                                     EXHIBIT 4.8

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT") OR OTHERWISE. THIS OPTIONAL WARRANT
SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.

                           OPTIONAL DEBENTURE WARRANT

No. ODW1

              To Purchase 5% Senior Secured Convertible Debentures
                             due October 1, 2006 of

                             CONSTELLATION 3D, INC.

         THIS CERTIFIES that, for value received, Halifax Fund, L.P. (the
         "Investor") is entitled, upon the terms and subject to the conditions
         hereinafter set forth, at any time and from time to time on or after
         the date hereof and on or prior to 5:00 p.m. New York City time on
         October 8, 2002 (the "Termination Date"), but not thereafter, to
         subscribe for and purchase from CONSTELLATION 3D, INC., a Delaware
         corporation (the "Company"), 5% Secured Convertible Debentures of the
         Company due five years following the date of their respective issuance
         in the aggregate principal amount of $5,000,000 in the form of Exhibit
                                                                        -------
         A to the Exchange Agreement (as defined below) ("Debentures") The
         -
         "Exercise Price" is $1,000 per $1,000 principal amount of Debentures.
         This Warrant is being issued in connection with the Exchange Agreement
         dated October 1, 2001 (the "Exchange Agreement") entered into by the
         Company and the Investor.

1.       Title of Warrant. Prior to the expiration hereof and subject to
         ----------------
         compliance with applicable law, this Warrant and all rights hereunder
         are transferable, in whole or in respect of the right to purchase
         Debentures, at the office or agency of the Company by the holder hereof
         in person or by duly authorized attorney, upon surrender of this
         Warrant together with (a) the Assignment Form annexed hereto properly
         endorsed, and (b) any other documentation reasonably necessary to
         satisfy the Company that such transfer is in compliance with all
         applicable securities laws.

2.       Authorization. The Company covenants that the Debentures, upon exercise
         -------------
         of the rights represented by this Warrant and payment of the
         appropriate Exercise Price as set forth herein, will be duly
         authorized, validly issued, fully paid and nonassessable and free from
         all taxes, liens and charges in respect of the issue thereof (other
         than taxes in respect of any transfer occurring contemporaneously with
         such issue or otherwise specified herein).

<PAGE>

3.        Exercise of Warrant.  Exercise of the purchase rights represented by
          -------------------
          this Warrant may be made at any time or times, in whole or in part, on
          or before 5:00 p.m. New York City time on the Termination Date, by the
          surrender on any business day of this Warrant and the Notice of
          Exercise annexed hereto duly completed and executed, at the principal
          office of the Company (or such other office or agency of the Company
          as it may designate by notice in writing to the registered holder
          hereof at the address of such holder appearing on the books of the
          Company) and upon payment of the appropriate Exercise Price; whereupon
          the holder of this Warrant shall be entitled to receive Debentures (in
          such denominations as reasonably requested by the holder) in the
          aggregate principal amount for which this Warrant has been exercised.
          Payment of the Exercise Price shall be by certified check or cashier's
          check or by wire transfer (of same day funds) to an account designated
          by the Company.

          The exercise of this Warrant will be deemed to occur as of the date of
          the Notice of Exercise, and the Debentures shall be delivered to the
          holder hereof within three (3) Trading Days after the date on which
          this Warrant shall have been exercised as aforesaid. The Warrant
          holder may withdraw its Notice of Exercise at any time thereafter if
          the Company fails to timely deliver the Debentures to the Warrant
          holder as provided above.

4.        Charges, Taxes and Expenses. Issuance of Debentures purchased
          ---------------------------
          hereunder shall be made without charge to the holder hereof for any
          issue or transfer tax or other incidental expense in respect of the
          issuance thereof, all of which taxes and expenses shall be paid by the
          Company, and Debentures shall be issued in the name of the holder of
          this Warrant or in such name or names as may be directed by the holder
          of this Warrant; provided, however, that if a Debenture is to be
                           --------  -------
          issued in a name other than the name of the holder of this Warrant,
          this Warrant when surrendered for exercise shall be accompanied by a
          copy of the Assignment Form attached hereto duly executed by the
          holder hereof.

5.        Closing of Books.  The Company will at no time close any of its books
          ----------------
          or records in any manner which interferes with the timely exercise of
          this Warrant.

6.        No Rights as Holder until Exercise.  Subject to Section 11 of this
          ----------------------------------
          Warrant and the provisions of any other written agreement between the
          Company and the Investor, the Investor shall not be deemed the holder
          of Debentures or any other securities of the Company that may at any
          time be issuable on the exercise hereof for any purpose, nor shall
          anything contained herein be construed to confer upon the Investor, as
          such, any of the rights of a holder of Debentures until this Warrant
          shall have been exercised as provided herein. However, at the time of
          the exercise of this Warrant pursuant to Section 3 hereof, the
          Debentures issued in connection with such exercise shall be deemed to
          be issued to such holder as the record owner thereof as of the close
          of business on the date on which this Warrant shall have been
          exercised.

7.        Assignment and Transfer.  This Warrant may be assigned in whole or in
          -----------------------
          part by the surrender of this Warrant and a copy of the Assignment
          Form annexed hereto duly executed at the office of the Company (or
          such other office or agency of the Company as it may designate by
          notice in writing to the registered holder hereof at the address of
          such

                                       2

<PAGE>

          holder appearing on the books of the Company); provided, however, that
                                                         --------  -------
          this Warrant may not be resold or otherwise transferred except (i) in
          a transaction registered under the Securities Act of 1933, as amended
          (the "1933 Act"), or (ii) in a transaction pursuant to an exemption
          from registration under the 1933 Act and whereby, if requested by the
          Company, an opinion of counsel reasonably satisfactory to the Company
          is obtained by the holder of this Warrant to the effect that the
          transaction is so exempt.

8.        Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
          --------------------------------------
          of evidence reasonably satisfactory to it of the loss, theft,
          destruction or mutilation of this Warrant, and in case of loss, theft
          or destruction, of indemnity reasonably satisfactory to it, and upon
          reimbursement to the Company of all reasonable expenses incidental
          thereto, the Company will make and deliver a new Warrant of like tenor
          and dated as of such cancellation, in lieu of this Warrant.

9.        Saturdays, Sundays, Holidays.  If the last or appointed day for the
          ----------------------------
          taking of any action or the expiration of any right required or
          granted herein shall be a Saturday, Sunday or a legal holiday, then
          such action may be taken or such right may be exercised on the next
          succeeding day not a legal holiday.

10.       Effect of Certain Events.  If at any time after the date hereof there
          ------------------------
          shall be a merger or consolidation of the Company with or into, or a
          transfer of all or substantially all of the assets of the Company to,
          another entity (collectively, a "Sale or Merger Transaction"), the
          holder of this Warrant shall have the right thereafter to purchase, by
          exercise of this Warrant and payment of the Exercise Price, the kind
          and amount of cash, shares and other securities and property which it
          would have owned or have been entitled to receive after the happening
          of such transaction had this Warrant been exercised immediately prior
          thereto. Notwithstanding the above, a Sale or Merger Transaction shall
          not be deemed to occur in the event the Company is the acquiring
          entity in connection with an acquisition by the Company.

11.       Adjustments.
          -----------

(a)       Merger, etc. The Company will not merge or consolidate with or into
          -----------
          any other corporation, or sell or otherwise transfer its property,
          assets and business substantially as an entirety to another
          corporation, unless the corporation resulting from such merger or
          consolidation (if not the Company), or such transferee corporation, as
          the case may be, shall expressly assume in writing the due and
          punctual performance and observance of each and every covenant and
          condition of this Warrant to be performed and observed by the Company.

(b)       Reclassification, etc. If at any time after the date hereof there
          ---------------------
          shall be a reorganization or reclassification of the securities as to
          which purchase rights (either directly or indirectly) under this
          Warrant exist into the same or a different number of securities of any
          other class or classes, then the Warrant holder shall thereafter be
          entitled to receive upon proper exercise of this Warrant, the amount
          securities or other property resulting from such

                                       3

<PAGE>
          reorganization or reclassification which would have been received by
          the Warrant holder for Debentures had this Warrant been exercised at
          such time.

(c)       Debentures. Notwithstanding any term of the Debentures to the
          ----------
          contrary, the "Conversion Price" of any Debenture issued upon the
          exercise of this Warrant and the number of shares of Common Stock for
          which such Debenture is exercisable, shall equal the Conversion Price
          and number of shares of Common Stock that would have been applicable
          at the time of such issuance if such Debenture had been issued on the
          date of this Warrant. Upon the issuance of a Debenture pursuant to an
          exercise of this Warrant, such Debenture shall be modified as
          appropriate to comply with the terms of this Section 11(c).

12.       Voluntary Adjustment by the Company.  The Company may at its option
          -----------------------------------
          at any time during the term of this Warrant, reduce but not increase
          the Exercise Price to any amount and for any period of time deemed
          appropriate by the Board of Directors of the Company.

13.       Notice of Adjustment. Whenever the securities or other property
          --------------------
          purchasable upon the exercise of this Warrant is adjusted, the Company
          shall promptly mail to the holder of this Warrant a notice setting
          forth a brief statement of the facts requiring such adjustment.

14.       Authorized  Shares. The Company covenants that during the period that
          ------------------
          this Warrant is outstanding and exercisable, it will reserve from its
          authorized and unissued common stock a sufficient number of shares to
          provide for the issuance of the Debenture Shares and Interest Shares
          issuable under the Debentures following the full exercise of the
          purchase rights under this Warrant and the full conversion of the
          Debentures received upon such exercise. The Company further covenants
          that its issuance of this Warrant shall constitute full authority to
          its officers who are charged with the duty of executing evidence of
          the Company's indebtedness to execute and issue the necessary
          documents for the Debentures upon the exercise of the purchase rights
          under this Warrant. The Company will take all such reasonable action
          as may be necessary to assure that the Debentures may be issued as
          provided herein without violation of any applicable law or regulation,
          or of any requirements of any domestic securities exchange or market
          upon which the Common Stock may be listed.

15.       Compliance with Securities Laws.
          -------------------------------

(a)       The holder hereof acknowledges that the Debentures acquired upon the
          exercise of this Warrant (if no exemption from registration
          exists), will have restrictions upon resale imposed by state and
          federal securities laws. The Debentures issued to the holder upon
          exercise (if no exemption from registration exists) will each bear the
          following legend:

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE
          TRANSFERRED, ASSIGNED, SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN
          EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE
          STATE SECURITIES LAW OR AN OPINION OF

                                       4

<PAGE>

         COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY THAT
         REGISTRATION IS NOT REQUIRED BECAUSE OF AN APPLICABLE EXEMPTION FROM
         SUCH REGISTRATION REQUIREMENTS.

(b)      Without limiting the Investor's right to transfer, assign or otherwise
         convey this Warrant or the Debentures in compliance with all applicable
         securities laws, the Investor, by acceptance hereof, acknowledges that
         this Warrant and any Debentures to be issued upon exercise hereof are
         being acquired solely for the Investor's own account and not as a
         nominee for any other party, and that the Investor will not offer, sell
         or otherwise dispose of such securities under circumstances that will
         result in a violation of applicable federal or state securities laws.

(c)      Neither this Warrant nor the Debentures issued upon exercise hereof
         may be offered for sale or sold, or otherwise transferred or sold in
         any transaction which would constitute a sale thereof within the
         meaning of the 1933 Act, unless (i) such security has been registered
         for sale under the 1933 Act and registered or qualified under
         applicable state securities laws relating to the offer an sale of
         securities, or (ii) exemptions from the registration requirements of
         the 1933 Act and the registration or qualification requirements of all
         such state securities laws are available and the Company shall have
         received an opinion of counsel that the proposed sale or other
         disposition of such securities may be effected without registration
         under the 1933 Act.

(d)      The Investor recognizes that investing in this Warrant and the
         Debentures involves a high degree of risk, and the Investor is in a
         financial position to hold these securities indefinitely and is able to
         bear the economic risk and withstand a complete loss of its investment
         therein. The Investor is a sophisticated investor and is capable of
         evaluating the merits and risks of investing in the Company and is an
         "accredited investor" as defined by Rule 501(a) under the 1933 Act.

16.      Miscellaneous.
         -------------

(a)      Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
         ----------------------------------------------
         WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS
         IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF.
         THIS WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE
         COMPANY. THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
         AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR MATTERS
         ARISING UNDER THE 1933 ACT, WITHOUT REFERENCE TO PRINCIPLES OF
         CONFLICTS OF LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE
         JURISDICTION OF THE U.S. DISTRICT COURT SITTING IN THE STATE AND CITY
         OF NEW YORK IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS WARRANT
         AND HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
         OBJECTION, INCLUDING ANY OBJECTION BASED ON FORUM NON CONVENIENS, TO
         THE BRINGING OF ANY SUCH PROCEEDING IN SUCH URISDICTION. EACH PARTY
         HEREBY AGREES THAT

                                       5

<PAGE>
         IF THE OTHER PARTY TO THIS WARRANT OBTAINS A JUDGMENT AGAINST IT IN
         SUCH A PROCEEDING, THE PARTY WHICH OBTAINED SUCH JUDGMENT MAY ENFORCE
         SAME BY SUMMARY JUDGMENT IN THE COURTS OF ANY COUNTRY HAVING
         JURISDICTION OVER THE PARTY AGAINST WHOM SUCH JUDGMENT WAS OBTAINED,
         AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE TO IT UNDER LOCAL
         LAW AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT. EACH PARTY TO
         THIS WARRANT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY
         SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
         CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS IN
         ACCORDANCE WITH SECTION 16(C). NOTHING HEREIN SHALL AFFECT THE RIGHT
         OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
         EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.

(b)      Modification and Waiver. This Warrant and any provisions hereof may be
         -----------------------
         changed, waived, discharged or terminated only by an instrument in
         writing signed by the party against which enforcement of the same is
         sought. Any amendment effected in accordance with this paragraph shall
         be binding upon the Investor, each future holder of this Warrant and
         the Company. No waivers of, or exceptions to, any term, condition or
         provision of this Warrant, in any one or more instances, shall be
         deemed to be, or construed as, a further or continuing waiver of any
         such term, condition or provision.

(c)      Notices. Any notice, request or other document required or permitted to
         -------
         be given or delivered to the Investor or future holders hereof or the
         Company shall be personally delivered or shall be sent by certified or
         registered mail, postage prepaid, to the Investor or each such holder
         at its address as shown on the books of the Company or to the Company
         at the address set forth in the Agreement. All notices under this
         Warrant shall be deemed to have been given when received. A party may
         from time to time change the address to which notices to it are to be
         delivered or mailed hereunder by notice in accordance with the
         provisions of this Section 16(c).

(d)      Severability.  Whenever possible, each  provision of this Warrant shall
         ------------
         be interpreted in such manner as to be effective and valid under
         applicable law, but if any provision of this Warrant is held to be
         invalid, illegal or unenforceable in any respect under any applicable
         law or rule in any jurisdiction, such invalidity, illegality or
         unenforceability shall not affect the validity, legality or
         enforceability of any other provision of this Warrant in such
         jurisdiction or affect the validity, legality or enforceability of any
         provision in any other jurisdiction, but this Warrant shall be
         reformed, construed and enforced in such jurisdiction as if such
         invalid, illegal or unenforceable provision had never been contained
         herein.

(e)      No Impairment. The Company will not, by amendment of its Certificate of
         -------------
         Incorporation or through any reorganization, transfer of assets,
         consolidation, merger, 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 Warrant, but will at all times
         in good faith

                                       6

<PAGE>

     assist in the carrying out of all such terms and in the taking of all such
     action as may be necessary or appropriate in order to protect the rights of
     the Warrant holder against impairment. Without limiting the generality of
     the foregoing, the Company will take all such action as may be reasonably
     necessary or appropriate in order that the Company may validly and legally
     issue the Debentures upon the exercise of this Warrant.

                                       7

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Optional Debenture
Warrant to be executed by its duly authorized officer.

Dated: October 1, 2001

                                      CONSTELLATION 3D, INC.

                                      By: /s/ Eugene Levich
                                      Name:
                                      Title: Chief Executive Officer

Agreed and Accepted
this 1/st/ day of October, 2001

HALIFAX FUND, L.P.

By: /s/ Maurice Hryshko
Name:
Title: Counsel

                                       8

<PAGE>

                               NOTICE OF EXERCISE
                               ------------------

To:  CONSTELLATION 3D, INC.

(1)  The undersigned hereby elects to purchase a 5% Senior Secured Convertible
Debenture due _____________ of Constellation 3D, Inc. in the principal amount of
U.S.$_________ pursuant to the terms of the attached Warrant, and tenders
herewith payment of the Exercise Price therefore in full.

(2)  Please issue the Debenture in the name of the undersigned or in such other
name as is specified below:

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

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

                        -------------------------------
                                    (Address)

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

--------------------                       -----------------------------------
(Date)                                                   (Signature)

                                           -----------------------------------
                                                          (Address)

<PAGE>

                                 ASSIGNMENT FORM
                                 ---------------

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

          FOR VALUE RECEIVED, the foregoing Optional Debenture Warrant of
Constellation 3D, Inc. and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

__________________________________________________________________.

__________________________________________________________________

                                            Dated: _______________,

                   Holder's Signature:______________________________

                   Holder's Address:  ______________________________

                                      ______________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Optional Debenture Warrant and must be guaranteed by
a bank or trust company. Officers of corporations and those acting in an
fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Optional Debenture Warrant.

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