Document:

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                                                                     Exhibit 4.1

              CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES
         AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
                      OF THE SERIES A PREFERRED STOCK AND
              QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

         INTERACTIVE SYSTEMS WORLDWIDE INC., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify that, pursuant to authority conferred upon
the Board of Directors of the Corporation by its Certificate of Incorporation
(the "Certificate") and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the following resolution was duly
approved and adopted by the Board of Directors of the Corporation pursuant to
the unanimous written consent of all of the members thereof:

         RESOLVED, that, pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate, there is hereby created and
authorized out of the authorized shares of Preferred Stock, par value $0.001 per
share (the "Preferred Stock"), of the Corporation, 60,000 shares of a series of
Preferred Stock designated as the Series A Preferred Stock (the "Series A
Preferred Stock") having the designations, preferences, relative, participating,
optional and other special rights and the qualifications, limitations and
restrictions as are set forth in this Resolution as follows:

                                   ARTICLE 1
                                   DIVIDENDS

         The holders of Series A Preferred Stock shall be entitled to receive
dividends, out of any assets legally available therefor, prior and in preference
to any declaration or payment of any dividend (payable other than in common
stock, par value $0.001 per share (the "Common Stock"), of the Corporation or
other securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock) on the
Common Stock at a rate per annum equal to 6% applied to $1 per share of Series A
Preferred Stock (subject to appropriate adjustments for stock splits, stock
dividends, combinations or other recapitalizations) payable quarterly when, as
and if declared by the Board of Directors. Such dividends shall not be
cumulative.

                                    ARTICLE 2
                                  VOTING RIGHTS

         Except as otherwise required by law or provided herein, a holder of
Series A Preferred Stock shall be entitled (a) to a number of votes equal to the
number of shares of Series A Preferred Stock held by such holder as of the
record date for the determination of stockholders entitled to vote, (b) to vote
on all matters on which the holders of the Common Stock are entitled to vote,
and (c) to receive notice of any shareholders' meeting in accordance with the
By-laws of the Corporation. Except as expressly required by law, the holders of
Series A Preferred Stock and the Common Stock (and any other class of capital
stock that by its terms votes together as a single class with the Common Stock
and Series A Preferred Stock) shall vote together as a single class on all
matters presented to shareholders and not as separate classes.
<PAGE>

                                    ARTICLE 3
                                CONVERSION RIGHTS

         Section 3.1. Definitions.

         Unless the context otherwise requires for the purposes of this
resolution, the following capitalized words, terms and phrases have the meanings
ascribed to them in this Section 3.1:

         "Affiliate" means, as applied to any entity, any other entity directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such entity. For purposes of this definition, "control"
(including, with correlative meaning, the terms "controlling," "controlled by"
and "under common control with"), as applied to any entity, means the
possession, directly or indirectly of the power to direct or cause the direction
of the management and policies of such entity, whether through the ownership of
voting securities, by contract or otherwise.

         "Closing Price" for each day means the last reported sale price or, in
case no such reported sale takes place on such day, the closing bid, in either
case on the principal national securities exchange (including, for purposes
hereof, The Nasdaq Stock Market) on which the Common Stock is listed or admitted
to trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last sale price for the Common Stock as quoted
on the OTC Bulletin Board (the "OTCBB"), or if the Common Stock is not quoted on
the OTCBB, the last sale price as quoted in the "pink sheets" published by the
National Quotation Bureau, Inc. (the "Pink Sheets") or, if not available in the
Pink Sheets, in a similar publication of national standing.

         "Conversion Rights" means the conversion rights set forth in this
Article 3.

         "Fair Market Value" on any date means the average of the daily Closing
Prices for the ten (10) consecutive trading days immediately preceding the date
in question or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, are not quoted on the OTCBB, and are not quoted in
the Pink Sheets or any similar publication of national standing, the Fair Market
Value on such date shall be the fair value per share of Common Stock on such
date, as determined in good faith by the Board of Directors of the Corporation,
whose determination shall be final, binding and conclusive.

         "Mandatory Conversion Event" means the occurrence of any of the
following events:
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                  (A) the merger or consolidation of the Corporation into or
         with another corporation or entity, reorganization or sale of the
         Corporation, or sale of capital stock by the Corporation or its
         shareholders, in which the shareholders of the Corporation immediately
         preceding such merger, consolidation, reorganization or sale (solely by
         virtue of their shares or other securities of the Corporation) shall
         own less than fifty percent (50%) of the voting securities of the
         Corporation or the surviving corporation;

                  (B) the sale, transfer or lease (but not including a transfer
         or lease by pledge or mortgage to a bona fide lender), whether in a
         single transaction or pursuant to a series of related transactions or
         plan, of fifty percent (50%) or more of the assets of the Corporation,
         based on the fair market value of the Corporation's assets as
         determined by the Board of Directors of the Corporation, which assets
         shall include for these purposes fifty percent (50%) or more of the
         outstanding voting capital stock of any subsidiaries of the
         Corporation, the assets of which constitute all or substantially all of
         the assets of the Corporation and its subsidiaries taken as a whole;

                  (C) the voluntary or involuntary liquidation, dissolution or
         winding-up of the affairs of the Corporation;

                  (D) the Transfer or attempted Transfer, by a holder of the
         Series A Preferred Stock of all or any portion of such shares, other
         than a Transfer to an Affiliate of such holder; or

                  (E) a "MultiGames Change of Control".

              "MultiGames" means MultiSports Games Development, Inc.

              "MultiGames Change of Control" means:

                  (A) the merger or consolidation of MultiGames into or with
         another corporation or entity, reorganization or sale of MultiGames, or
         sale of capital stock by MultiGames or its shareholder, in which the
         shareholders of MultiGames immediately preceding such merger,
         consolidation, reorganization or sale (solely by virtue of their shares
         or other securities of MultiGames) shall own less than fifty percent
         (50 %) of the voting securities of MultiGames or the surviving
         corporation; or

                  (B) the voluntary or involuntary liquidation, dissolution or
         winding-up of the affairs of MultiGames.

         "Transfer" means any direct or indirect transfer, sale, assignment,
pledge, encumbrance, tender, or otherwise grant, creation or suffrage of a lien
in or upon, giving, placement in trust or otherwise disposing of by operation of
law or any derivative transaction, including, without limitation, any short
sale, collar, hedging or other derivative transaction that has the effect of
materially changing the economic benefits and risks of ownership or any
agreement to do any of the foregoing.
<PAGE>

         Section 3.2. Optional Conversion.

         Each share of Series A Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the date of issuance of such
share at the office of the Corporation or any transfer agent for the Series A
Preferred Stock, into Common Stock. The number of shares of Common Stock to
which a holder of Series A Preferred Stock shall be entitled upon conversion
shall be the product obtained by multiplying the Conversion Rate of the Series A
Preferred Stock (determined as provided in Section 3.4 below) by the number of
shares of Series A Preferred Stock being converted. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of the surrender of the shares of Series A Preferred Stock to be converted in
accordance with the procedures described in Section 3.5 below. Notwithstanding
the foregoing, a holder of Series A Preferred Stock may not exercise Conversion
Rights pursuant to this Section 3.2 with respect to less than 10,000 shares
(subject to appropriate adjustments for stock splits, stock dividends,
combinations or other recapitalizations) of the Series A Preferred Stock.

         Section 3.3. Automatic Conversion.

         Notwithstanding anything contained herein to the contrary, in the event
that a Mandatory Conversion Event shall occur, all outstanding shares of the
Series A Preferred Stock shall, without any action on the part of the holder
thereof or the Corporation, be converted automatically into shares of Common
Stock at the applicable Conversion Rate provided for in Section 3.4 below as of
the date of the Mandatory Conversion Event. Such conversion shall be automatic,
without need for any further action by the holders of the Series A Preferred
Stock and regardless of whether the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless certificates
evidencing such shares of Series A Preferred Stock so converted are surrendered
to the Corporation in accordance with the procedures described in Section 3.5
below. If at the time a Mandatory Conversion Event occurs, the Fair Market Value
is equal to, or less than, the Target Price, than any outstanding shares of the
Series A Preferred Stock shall be cancelled in full and the holders thereof
shall not be entitled to receive any shares of Common Stock or any other
consideration or value with respect to such shares of Series A Preferred Stock.
Upon the conversion of the Series A Preferred Stock pursuant to this Section
3.3, the Corporation shall promptly send written notice thereof, by registered
or certified mail return receipt requested and postage prepaid, by hand delivery
or by overnight delivery, to each holder of record of Series A Preferred Stock
at his or its address then shown on the records of the Corporation, which notice
shall state that certificates evidencing shares of Series A Preferred Stock must
be surrendered at the office of the Corporation (or of its transfer agent for
the Common Stock, if applicable) in the manner described in Section 3.5 below.
<PAGE>

         Section 3.4. Conversion Rate.

         Subject to the provisions of this Article 3, the per share conversion
rate in effect at any time with respect to the Series A Preferred Stock (the
"Conversion Rate") shall be the product of (x) 10 and (y) the quotient obtained
by dividing the In the Money Amount (defined below) by the Fair Market Value.
Except as it may be adjusted in accordance with Sections 3.6 or 3.7, the "Target
Price" shall be $15.00. The "In the Money Amount" shall be equal to (x) the Fair
Market Value minus (y) the Target Price.

         Section 3.5. Mechanics of Conversion.

         Before any holder of Series A Preferred Stock shall be entitled to
receive certificates representing the shares of Common Stock into which shares
of Series A Preferred Stock are converted in accordance with Sections 3.2 or 3.3
above, such holder shall surrender the certificate or certificates for such
shares of Series A Preferred Stock duly endorsed at (or in the case of any lost,
mislaid, stolen or destroyed certificate(s) for such shares, deliver an
affidavit as to the loss of such certificate(s), in such form as the Corporation
may reasonably require, to) the office of the Corporation or of any transfer
agent for the Series A Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued, if
different from the name shown on the books and records of the Corporation. Said
conversion notice shall also contain such representations as may reasonably be
required by the Corporation to the effect that the shares to be received upon
conversion are not being acquired and will not be transferred in any way that
might violate the then applicable securities laws. The Corporation shall, as
soon as practicable thereafter and in no event later than thirty (30) days after
the delivery of said certificates, issue and deliver at such office to such
holder of Series A Preferred Stock, or to the nominee or nominees of such holder
as provided in such notice, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled as aforesaid. The
person or persons entitled to receive the shares of Common Stock issuable upon a
conversion pursuant to Sections 3.2 or 3.3 shall be treated for all purposes as
the record holder or holders of such shares of Common Stock as of the effective
date of conversion specified in such section. All certificates issued upon the
exercise or occurrence of the conversion shall contain a legend governing
restrictions upon such shares imposed by law or agreement of the holder or his
or its predecessors.

         Section 3.6. Adjustment for Subdivisions or Combinations of Common
Stock.

         In the event the Corporation at any time or from time to time after the
date hereof effects a subdivision or combination of the outstanding Common Stock
into a greater or lesser number of shares without a proportionate and
corresponding subdivision or combination of the outstanding Series A Preferred
Stock, then and in each such event the Target Price and the corresponding
Conversion Rate shall be increased or decreased proportionately.
<PAGE>

         Section 3.7. Adjustments for Distributions and Common Stock
Equivalents.

         In the event that the Corporation at any time or from time to time
after the date hereof shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, or other
securities or rights convertible into or entitling the holder thereof to receive
additional shares of Common Stock (hereinafter referred to as "Common Stock
Equivalents"), without payment of any consideration by such holder of such
Common Stock Equivalents or the additional shares of Common Stock, and without a
proportionate and corresponding dividend or other distribution to holders of
Series A Preferred Stock, then and in each such event the maximum number of
shares (as set forth in the instrument relating thereto without regard to any
provisions contained therein for subsequent adjustment of such number) of Common
Stock issuable in payment of such dividend or distribution or upon conversion or
exercise of such Common Stock Equivalents shall be deemed, for purposes of this
Section 3.7, to be issued and outstanding as of the time of such issuance or, in
the event such a record date shall have been fixed, as of the close of business
on such record date. In each such event the Target Price shall be decreased (and
the corresponding Conversion Rate shall be proportionately increased) as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Target Price
by a fraction:

         (a) The numerator of the multiplier fraction for the Target Price shall
be the total number of shares of Common Stock issued and outstanding or deemed
pursuant to the terms hereof to be issued and outstanding immediately before the
time of such issuance or the close of business on such record date; and

         (b) The denominator of the multiplier fraction for the Target Price
shall be the total number of shares of Common Stock (x) issued and outstanding
or deemed pursuant to the terms hereof to be issued and outstanding (not
including any shares described in clause (y) immediately below), immediately
before the time of such issuance or the close of business on such record date,
plus (y) the number of shares of Common Stock issuable in payment of such
dividend or distribution or upon conversion or exercise of such Common Stock
Equivalents; provided, however, that:

                  (i) If such record date shall have been fixed and such
         dividend is not fully paid or if such distribution is not fully made on
         the date fixed therefor, the Target Price (and the corresponding
         Conversion Rate) shall be recomputed accordingly as of the close of
         business on such record date and thereafter the Target Price (and the
         corresponding Conversion Rate) shall be adjusted pursuant to this
         Section 3.7 as of the time of actual payment of such dividend or
         distribution; or

                  (ii) If such Common Stock Equivalents provide, with the
         passage of time or otherwise, for any decrease in the number of shares
         of Common Stock issuable upon conversion or exercise thereof (or upon
         the occurrence of a record date with respect thereto), the Conversion
         Price (and the corresponding Conversion Rate) computed upon the
         original issue thereof (or upon the occurrence of a record date with
         respect thereto), and any subsequent adjustments based thereon, shall
         upon any such decrease becoming effective, be recomputed to reflect
         such decrease insofar as it affects the rights of conversion or
         exercise of the Common Stock Equivalents then outstanding; or
<PAGE>

                  (iii) Upon the expiration of any rights of conversion or
         exercise under any unexercised Common Stock Equivalents, the Conversion
         Price (and the corresponding Conversion Rate) computed upon the
         original issue thereof (or upon the occurrence of a record date with
         respect thereto), and any subsequent adjustments based thereon, shall
         upon such expiration, be recomputed as if the only additional shares of
         Common Stock issued were the shares of such stock, if any, actually
         issued upon the conversion or exercise of such Common Stock
         Equivalents; or

                  (iv) In the event of issuance of Common Stock Equivalents that
         expire by their terms not more than sixty (60) days after the date of
         issuance thereof, no adjustments of the Conversion Price (or the
         corresponding Conversion Rate) shall be made until the expiration or
         exercise of all such Common Stock Equivalents, whereupon the adjustment
         otherwise required by this Section 3.7 shall be made in the manner
         provided herein.

         Section 3.8. De Minimis Adjustments; Fractional Shares; No Adjustment
                      for Dividends.

         (a) No adjustment to the Target Price (and, thereby, the Conversion
Rate) shall be made if such adjustment would result in a change in the Target
Price of less than $0.15. Any adjustment of less than $0.15 that is not made
shall be carried forward and shall be made at the time of and together with any
subsequent adjustment that, on a cumulative basis, amounts to an adjustment of
$0.15 or more in the Target Price.

         (b) No fractional shares of Common Stock shall be issued upon
conversion of Series A Preferred Stock, and any shares of Series A Preferred
Stock surrendered for conversion that would otherwise result in a fractional
share of Common Stock shall be redeemed at the then effective Fair Market Value
per share of Series A Preferred Stock, payable as promptly as possible when
funds are legally available therefor.

         (c) Upon any conversion, no adjustment shall be made for dividends on
the Series A Preferred Stock surrendered for conversion or on the Common Stock
delivered.

         Section 3.9. Certificate Regarding Adjustments.

         Upon the occurrence of each adjustment or readjustment of the
Conversion Price pursuant to this Article 3, the Corporation at its expense
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and cause the Corporation's independent public accountants to
verify such computation and prepare and furnish to each holder of Series A
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of
Series A Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth such adjustments and readjustments, (ii) the Target
Price and the Conversion Rate at that time in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property that at that
time would be received upon the conversion of Series A Preferred Stock.
<PAGE>

         Section 3.10. Notices of Record Date.

         In the event of any taking by the Corporation of a record of the
holders of any class of securities other than Series A Preferred Stock for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, any Common Stock Equivalents or any right to
subscribe for, purchase, or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, the
Corporation shall mail to each holder of Series A Preferred Stock, at least ten
(10) days before to the date specified therein, a notice specifying the date on
which any such record is to be taken for the purpose of such dividend,
distribution, or rights, and the amount and character of such dividend,
distribution, or rights.

         Section 3.11. Reservation of Stock Issuable Upon Conversion.

         The Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of the Series A Preferred Stock such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series A Preferred Stock;
and if at any time the number of authorized but unissued shares of Common Stock
shall be insufficient to effect the conversion of all then outstanding shares of
the Series A Preferred Stock, the Corporation shall take such corporate action
as may, in the opinion of its counsel be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose.

                                    ARTICLE 4
                               OPTIONAL REDEMPTION

         The Corporation shall have the right at any time on or after July 31,
2009, to redeem the outstanding shares of Series A Preferred Stock, in whole or
in part, upon not less than ten (10) days notice, for a cash payment per share
equal to 100% of the par value of such Series A Preferred Stock per share. A
holder of shares of Series A Preferred Stock which are redeemed must surrender
the certificate or certificates evidencing such shares to the Corporation at its
registered office, or such other location as designated in writing by the
Corporation, in order to receive the payment and, in the case of a redemption in
part, certificates(s) for any shares not redeemed, to which such holder is
entitled by reason of such redemption. In the event of a redemption in part, new
certificates representing the number of shares of Series A Preferred Stock
outstanding after giving effect to the redemption in part shall be issued in the
name of the registered holder of the shares of Series A Preferred Stock so
partially redeemed.
<PAGE>

                                    ARTICLE 5
                                     GENERAL

         Section 5.1. Future Issuances

         If any other class or series of preferred or special shares or series
of Preferred Stock whether ranking prior to or on a parity with or junior to
Series A Preferred Stock as to dividends or in liquidation, shall be created,
either by or pursuant to authority granted in the Certificate of Incorporation
(as the same may hereafter be amended), nothing in the Certificate of
Incorporation shall prevent the holders of any such other class or series of
preferred or special shares or series of Preferred Stock from being given any
other powers, preferences and relative, participating, optional and other
special rights, including any that are senior to those granted to the Series A
Preferred Stock hereunder, authorized by law and the Certificate of
Incorporation (as the same may hereafter be amended).

         Section 5.2. Legend.

         Each certificate evidencing a share of the Series A Preferred Stock
shall contain legends substantially to the following effect (and any Transfer of
any such shares shall be subject to the following):

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                  TRANSFERRED TO ANY PERSON OTHER THAN TO CERTAIN AFFILIATES OF
                  THE REGISTERED HOLDER AND AS PERMITTED BY THE CERTIFICATE OF
                  DESIGNATION FOR THE SHARES OF SERIES A PREFERRED STOCK
                  REPRESENTED BY THIS CERTIFICATE."

                  "THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED
                  OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM
                  REGISTRATION THEREUNDER OR PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT THEREUNDER."

<PAGE>

         IN WITNESS WHEREOF, the undersigned has signed this Certificate as of
July 31, 2002.

                                         INTERACTIVE SYSTEMS WORLDWIDE INC.

                                         By:  /s/ Barry Mindes
                                              -----------------------
                                              Name: Barry Mindes
                                              Title: Chairman<PAGE>

                                                                     Exhibit 4.2

                            NON TRANSFERABLE WARRANT

THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.

                       INTERACTIVE SYSTEMS WORLDWIDE INC.

               Warrant for the Purchase of Shares of Common Stock,
                            par value $.001 per share

                     This Warrant Expires on March 16, 2005

No. 4                                                            268,435 Shares

THIS CERTIFIES that, for value received, Global Interactive Gaming Limited, a
corporation organized under the laws of England, with an address at Centre Point
Tower, 103 New Oxford Street, London, WC1A1DD, England (the "Holder"), is
entitled to subscribe for and purchase from Interactive Systems Worldwide Inc.
(f/k/a/ International Sports Wagering Inc.), a Delaware corporation (the
"Company"), upon the terms and conditions set forth herein, at any time
commencing on September 17, 2001 or from time to time before 5:00 p.m.on March
16, 2005, New York City time (the "Exercise Period"), 268,435 shares of the
Company's Common Stock, par value $.001 per share ("Common Stock"), at a price
equal to $4.38 per share ("Exercise Price"). As used herein the term "Warrant"
shall mean and include this Warrant and any Warrant or Warrants hereafter issued
as a consequence of the exercise or transfer of this Warrant in whole or in
part.
<PAGE>

         The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Period may be adjusted from
time to time as hereinafter set forth.

     1. This Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of whole Warrant Shares, but in no event less than
50,000 Warrant Shares, unless less than 50,000 Warrant Shares remain exercisable
on the Exercise Date, by the surrender of this Warrant (with the "election to
exercise" at the end hereof duly executed) to the Company at its office at 2
Andrews Drive, 2nd Floor, West Patterson, New Jersey 07424, or at such other
place as is designated in writing by the Company. Such executed election must be
accompanied by payment in an amount (the "Stock Purchase Price") equal to the
Exercise Price multiplied by the number of Warrant Shares for which this Warrant
is being exercised. Such payment shall be made by certified or bank cashier's
check payable to the order of the Company.

     2. Upon each exercise of the Holder's rights to purchase Warrant Shares,
the Holder shall be deemed to be the holder of record of the Warrant Shares
issuable upon such exercise, notwithstanding that the transfer books of the
Company shall then be closed or certificates representing such Warrant Shares
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Warrant, the Company shall issue
and deliver to the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares subject to purchase hereunder.

     3. (a) Any Warrant issued upon exercise in part of this Warrant shall be
numbered and shall be registered in a Warrant Register as they are issued. The
Company shall be entitled to treat the registered holder of any Warrant on the
Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his authorized attorney or representative, or accompanied by proper
evidence of succession, assignment (in accordance with the terms hereof), or
authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent; provided that Warrants exercisable for less than 50,000
Warrant Shares may not be issued, unless that is the remaining number of Warrant
Shares for which the Warrant is exercisable. Notwithstanding the foregoing, the
Company shall have no obligation to cause Warrants to be transferred on its
books to any person if, in the opinion of counsel to the Company, such transfer
does not comply with the provisions of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations thereunder.

                                       2
<PAGE>

         (b) The Holder acknowledges that he has been advised by the Company
that neither this Warrant nor the Warrant Shares have been registered under the
Act, that this Warrant is being or has been issued and the Warrant Shares may be
issued on the basis of the statutory exemption provided by Section 4(2) of the
Act or Regulation D promulgated thereunder, or both, relating to transactions by
an issuer not involving any public offering, and that the Company's reliance
thereon is based in part upon the representations made by the Holder in Exhibit
A attached hereto. The Holder acknowledges that he has been informed by the
Company of, or is otherwise familiar with, the nature of the limitations imposed
by the Act and rules and regulations thereunder on the transfer of securities.
In particular, the Holder agrees that no sale, assignment or transfer of this
Warrant or the Warrant Shares issuable upon exercise hereof shall be valid or
effective, and the Company shall not be required to give any effect to any such
sale, assignment or transfer, unless (i) the sale, assignment or transfer of
this Warrant or such Warrant Shares is registered under the Act, it being
understood that neither this Warrant nor such Warrant Shares are currently
registered for sale and that the Company has no obligation or intention to so
register this Warrant or such Warrant Shares except as specifically provided,
herein, or (ii) this Warrant or such Warrant Shares are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
under the Act or (iii) such sale, assignment, or transfer is otherwise exempt
form registration under the Act.

     4. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
this Warrant, such number of shares of Common Stock as shall, from time to time,
be sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the Company of the full
Exercise Price therefor, shall be validly issued, fully paid, nonasessable, and
free of preemptive rights.

     5. (a) In case the Company shall at any time after the date the Warrant was
first issued (i) declare a dividend on the outstanding Common Stock payable in
shares of its capital stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock by reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then, in each case,
the Exercise Price, and the number of Warrant Shares issuable upon exercise of
this Warrant, in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination, or reclassification, shall
be proportionately adjusted so that the Holder after such time shall be entitled
to receive the aggregate number and kind of shares which, if such Warrant had
been exercised immediately prior to such time, such Holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.

                                       3
<PAGE>

         (b) In case the Company shall issue or fix a record date for the
issuance to all holders of Common Stock of rights, options, or warrants to
subscribe for or purchase Common Stock (or securities convertible into or
exchangeable for Common Stock) at a price per share (or having a conversion or
exchange price per share, if a security convertible into or exchangeable for
Common Stock) less than the Current Market Price per share of Common Stock (as
defined in Section 5(d) hereof) on such record date, then, in each case, the
Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so to be offered (or the aggregate
initial conversion or exchange price of the convertible or exchangeable
securities to be offered) would purchase at such Current Market Price and the
denominator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the convertible or
exchangeable securities so to be offered are initially convertible or
exchangeable); provided, however, that no such adjustment shall be made which
results in an increase in the Exercise Price. Such adjustment shall become
effective at the close of business on such record date; provided, however, that,
to the extent the shares of Common Stock (or securities convertible into or
exchangeable for shares of Common Stock) are not delivered, the Exercise Price
shall be readjusted after the expiration of such rights, options, or warrants
(but only with respect to Warrants exercised after such expiration), to the
Exercise Price which would then be in effect had the adjustments made upon the
issuance of such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities convertible
into or exchangeable for such shares of Common Stock) actually issued. In case
any subscription price may be paid in a consideration part or all of which shall
be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error. Shares of Common Stock
owned by or held for the account of the Company or any majority-owned subsidiary
shall no be deemed outstanding for the purpose of any such computation.

                                       4
<PAGE>
         (c) In case the Company shall distribute to all holders of Common Stock
(including any such distribution made to the stockholders of the Company in
connection with a consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness, cash (other than any cash dividend
which, together with any cash dividends paid within the 12 months prior to the
record date for such distribution, does not exceed 5% of the Current Market
Price at the record date for such distribution) or assets (other than
distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock or securities
convertible into or changeable for shares of Common Stock (excluding those with
respect to the issuance of which an adjustment of the Exercise Price is provided
pursuant to section 5(b) hereof), then, in each case, the Exercise Price shall
be adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for the determination of stockholders entitled to receive such
distribution by a fraction, the numerator of which shall be the Current Market
Price per share of Common Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of such rights,
options, or warrants or convertible or exchangeable securities, or the amount of
such cash, applicable to one share, and the denominator of which shall be such
Current Market Price per share of Common Stock. Such adjustment shall become
effective at the close of business on such record date.

         (d) For the purpose of any computation under this Section 5, the
Current Market Price per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices for the 15 consecutive trading days
immediately preceding the date in question. The closing price for each day shall
be the last reported sales price regular way or, in case no such reported sale
takes place on such day, the closing bid price regular way, in either case on
the principal national securities exchange (including, for purposes hereof, the
NASDAQ National Market or Small Cap Market) on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the highest reported bid price for
the Common Stock as furnished by the National Association of Securities Dealers,
Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting
such information. If on any such date the Common Stock is not listed or admitted
to trading on any national securities exchange and is not quoted by NASDAQ or
any similar organization, the fair value of a share of Common Stock on such
date, as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive absent manifest error, shall be used.

         (e) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments which by
reason of this Section 5 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest one-thousandth of
a share, as the case may be.

         (f) In any case in which this Section 5 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the Holder, if the Holder exercised this Warrant after such
record date, the shares of Common Stock, if any, issuable upon exercise on the
basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to the Holder a due bill or other
appropriate instrument evidencing the Holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

                                       5
<PAGE>

         (g) Upon each adjustment of the Exercise Price as a result of the
calculations made in Section 5(b) or 5(c) hereof, this Warrant shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
shares (calculated to the nearest thousandth) obtained by dividing (A) the
product obtained by multiplying the number of shares purchasable upon exercise
of this Warrant prior to adjustment of the number of shares by the Exercise
Price in effect after such adjustment of the Exercise Price by (B) the Exercise
Price in effect after such adjustment of the Exercise Price.

         (h) Whenever there shall be an adjustment as provided in this Section
5, the Company shall promptly cause written notice thereof to be sent by
certified or registered mail, postage prepaid, to the Holder, at its address as
it shall appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof, which officer's certificate shall be conclusive
evidence of the correctness of any such adjustment absent manifest error.

         (i) The Company shall not be required to issue fractions of shares of
Common Stock or other capital stock of the Company upon the exercise of this
Warrant. If any fraction of a share would be issuable on the exercise of this
Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the Current Market
Price of such share of Common Stock on the date of exercise of this Warrant.

     6. (a) In case of any consolidation with or merger of the Company with or
into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease or conveyance to another corporation of the property and assets of any
nature of the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may be, shall (i)
execute with the Holder an agreement providing that the Holder shall have the
right thereafter to receive upon exercise of this Warrant solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such consolidation, merger, sale, lease, or
conveyance by a holder of the number of shares of Common Stock for which this
Warrant might have been exercised immediately prior to such consolidation,
merger, sale, lease, or conveyance, and (ii) make effective provision in its
certificate of incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 5.

                                       6
<PAGE>

         (b) In case of any reclassification or change of the shares of Common
Stock issuable upon exercise of this Warrant (other than a change in par value
or from no par value to a specified par value, or as a result of a subdivision
or combination, but including any change in the shares into two or more classes
or series of shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from no par value to a specified par value, or as
a result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise of this Warrant solely the kind and amount
of shares of stock and other securities, property, cash, or any combination
thereof receivable upon such reclassification, change, consolidation, or merger
by a holder of the number of shares of Common Stock for which this Warrant might
have been exercised immediately prior to such reclassification, change,
consolidation, or merger. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 5.

         (c) Notwithstanding anything to the contrary herein contained, in the
event of a transaction contemplated by Section 6(a) in which the surviving,
continuing, successor, or purchasing corporation demands that all outstanding
Warrants be extinguished prior to the closing date of the contemplated
transaction, the Company shall give prior notice (the "Merger Notice") thereof
to the Holders advising them of such transaction. The Holders shall have ten
days after the date of the Merger Notice to elect to (i) exercise the Warrants
in the manner provided herein or (ii) receive from the surviving, continuing,
successor, or purchasing corporation the same consideration receivable by a
holder of the number of shares of Common Stock for which this Warrant might have
been exercised immediately prior to such consolidation, merger, sale, or
purchase reduced by such amount of the consideration as has a market value equal
to the Exercise Price, as determined by the Board of Directors of the Company,
whose determination shall be conclusive absent manifest error. If any Holder
fails to timely notify the Company of its election, the Holder shall be deemed
for all purposes to have elected the option set forth in (ii) above. Any amounts
receivable by a Holder who has elected the option set forth in (ii) above shall
be payable at the same time as amounts payable to stockholders in connection
with any such transactions.

         (d) The above provisions of this Section 6 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

     7. In case at any time the Company shall propose to:

         (a) pay any dividend or make any distribution on shares of Common Stock
in shares of Common Stock or make any other distribution (other than regularly
scheduled cash dividends which are not in a greater amount per share than the
most recent such cash dividend) to all holders of Common Stock; or

         (b) issue any rights, warrants, or other securities to all holders of
Common Stock entitling them to purchase any additional shares of Common Stock or
any other rights, warrants, or other securities; or

         (c) effect any reclassification or change of outstanding shares of
Common Stock, or any consolidation, merger, sale, lease, or conveyance of
property, described in Section 6; or
                                       7
<PAGE>

         (d) effect any liquidation, dissolution, or winding-up of the Company;
or

         (e) take any other action which would cause an adjustment to the
Exercise Price;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by certified or registered mail, postage prepaid, to the Holder
at the Holder's address as it shall appear on the Warrant Register, mailed at
least 10 days prior to (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such dividend, distribution,
rights, warrants, or other securities are to be determined, (ii) the date on
which any such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up, or (iii) the date of such action which would require
an adjustment to the Exercise Price.

     8. The issuance of any shares or other securities upon the exercise of this
Warrant, and the delivery of certificates or other instruments representing such
shares or other securities, shall be made without charge to the Holder for any
tax or other charge in respect of such issuance. The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of any certificate in a name other than that
of the Holder and the Company shall not be required to issue or deliver any such
certificate unless and until the person or persons requesting the issue 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.

         (a) If, at any time following the date of issuance of this Warrant, the
Company shall file a registration statement (other than any registration
statement on Form S-4, Form S-8, or any successor or comparable form) with the
Securities and Exchange Commission (the "Commission") while any Registrable
Securities (as hereinafter defined) are outstanding, and for any reason any
Eligible Holder (as hereinafter defined) will not otherwise have, as of the
effective date of such registration statement, the benefit of an effective
registration statement, registering for sale such Eligible Holders' Registrable
Securities, the Company shall give all such Eligible Holders at least 15 days
prior written notice of the filing of such registration statement. If requested
by any such Eligible Holder in writing within 10 days after receipt of any such
notice, the Company shall, at the Company's sole expense (other than the fees
and disbursements of counsel for such Eligible Holders and the underwriting
discounts, if any, payable in respect of the Registrable Securities registered
or sold by any such Eligible Holder), register or qualify all or, at each such
Eligible Holder's option, any portion of the Registrable Securities of any such
Eligible Holders who shall have made such request, concurrently with the
registration of such other securities, all to the extent requisite to permit the
public offering and sale of such Eligible Holders' Registrable Securities
through the facilities of all appropriate securities exchanges and the
over-the-counter market, and will use its commercially reasonable efforts
through its officers, directors, auditors, and counsel to cause such
registration statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if the managing underwriter of any such offering,
if any, shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Registrable Securities requested to be
included in the registration concurrently with the securities being registered
by the Company would materially adversely affect the distribution of such
securities by the Company for its own account, then any Eligible Holder who
shall have requested registration of his or its Registrable Securities shall not
be entitled to have such Eligible Holder's Registrable Securities (or the
portions thereof so designated by such managing underwriter included in such
registration statement, provided that no such exclusion or reduction shall be
made as to any Registrable Securities if any securities of the Company are
included in such registration statement for the account of any person other than
the Company and any Eligible Holder unless the securities so included in such
registration statement for each such other person or persons requesting
registration shall have been reduced by the same proportion (based upon the
total amount of securities for which each person has requested registration in
such registration statement) as the Registrable Securities which were requested
to be included in such registration were reduced. As used herein (i)
"Registrable Securities" shall mean the Warrant Shares, if any, which in each
case, have not previously been sold pursuant to a registration statement or Rule
144 promulgated under the Act and (ii) "Eligible Holders" shall mean the then
holders of Registrable Securities.

                                       8
<PAGE>

         (b) In the event of a registration pursuant to the provisions of this
Section 8, the Company shall use its commercially reasonable efforts to cause
the Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Holder or
such holders may reasonably request; provided, however, that the Company shall
not by reason of this Section 8(b) be required to qualify to do business in any
state in which it is not otherwise required to qualify to do business or to file
a general consent to service process.

         (c) The Company shall keep effective any registration or qualification
contemplated by this Section 8 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document, and communication for such period of time as
shall be required to permit the Eligible Holders to complete the offer and sale
of the Registrable Securities covered thereby; provided, however, that the
Company shall in no event be required to keep registration or qualification
under Section 8(a) above in effect for more than two years from the effective
date thereof; provided, however, that, if the Company is required to keep any
such registration or qualification in effect with respect to securities other
than the Registrable Securities beyond such period, the Company shall keep such
registration or qualification in effect as it relates to the Registrable
Securities for so long as such registration or qualification remains or is
required to remain in effect in respect of such other securities.

                                       9
<PAGE>

         (d) In the event of a registration pursuant to the provisions of this
Section 8, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such number of copies of each
prospectus contained in such registration statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other documents, as any Eligible Holder may reasonably request to
facilitate the disposition of the Registrable Securities included in such
registration.

         (e) The Company agrees that, until all the Registrable Securities have
been sold under a registration statement or pursuant to Rule 144 under the Act,
it shall use its commercially reasonable efforts to keep current in filing all
reports, statements and other materials required to be filed with the Commission
to permit holders of the Registrable Securities to sell such securities under
Rule 144.

     9. (a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Eligible Holder, its officers, directors,
partners, employees, agents, and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of the Act or Section 20(a) of
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 9, without
limitation, reasonable attorneys' fees and any reasonable expense incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim of litigation), as and when incurred, arising out of, based upon,
or in connection with (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, relating to the sale of any of the
Registrable Securities, or (B) in any application or other document or
communication (in this Section 9 collectively called an "application") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Registrable Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
furnished to the Company with respect to such Eligible Holder by or on behalf of
such person expressly for inclusion in any registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be, or (ii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in this Warrant.

                                       10
<PAGE>

         If any action is brought against any Eligible Holder or any of its
officers, directors, partners, employees, agents, or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action and the Company shall promptly assume the defense of
such action with counsel selected by the Company. Such indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be one or more legal defenses available to
it or them which are different from or in addition to those available to the
Company, in any of which events such reasonable fees and expenses shall be borne
by the Company and the Company shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties. Anything in this
Section 9 to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent,
which shall not be unreasonably withheld. The Company agrees promptly to notify
the Eligible Holders of the commencement of any litigation or proceedings
against the Company or any of its officers or directors in connection with the
sale of any Registrable Securities or any preliminary prospectus, prospectus,
registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Registrable Securities.

         (b) The Holder agrees to indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who shall have signed any
registration statement covering Registrable Securities held by the Holder, each
other person, if any, who controls the Company within the meaning of Section 15
of the Act or section 20(a) of the Exchange Act, and its or their respective
counsel, to the same extent as the foregoing indemnity from the Company to the
Eligible Holders in Section 9(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary prospectus,
or final prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
furnished to the Company with respect to the Holder by or on behalf of the
Holder expressly for inclusion in any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement thereto, or in
any application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based on any such registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which indemnity may
be sought against the Holder pursuant to this Section 9(b), the Holder shall
have the rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of Section 9(a).

                                       11
<PAGE>

         (c) To provide for just and equitable contribution, if (i) and
indemnified party makes a claim for indemnification pursuant to Section 9(a) or
9(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Warrant expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company, and its or their
respective counsel), as one entity, and the Eligible Holders of the Registrable
Securities included in such registration in the aggregate (including for this
purpose any contribution by or on behalf of an indemnified party), as a second
entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Eligible Holders in connection with the facts which resulted in such
losses, liabilities, claims, damages, and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission, or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission, or alleged omission relates to information supplied
by the Company or by such Eligible Holders, and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement, alleged statement, omission, or alleged omission. In no case shall
any Eligible Holder be responsible for a portion of the contribution obligation
imposed on all Eligible Holders in excess of its pro rata share based on the
number of Registrable Securities owned by it and included in such registration
as compared to the number of Registrable Securities owned by all Eligible
Holders and included in such registration. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
representation. For purposes of this Section 9(c), each person, if any, who
controls any Eligible Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner, employee,
agent, and counsel of each such Eligible Holder or control person shall have the
same rights to contribution as each Eligible Holder or control person 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, each officer of the Company who shall
have signed any such registration statement, each director of the Company, and
its or their respective counsel shall have the same rights to contribution as
the Company, subject in each case to the provisions of this Section 9(c).
Anything in this Section 9(c) to the contrary notwithstanding, no party shall be
liable for contribution with respect to the settlement of any claim or action
effected without its written consent. This Section 9(c) is intended to supersede
any right to contribution under the Act, the Exchange Act or otherwise.

     10. Unless registered pursuant to the provisions of Section 8 hereof, the
Warrant Shares issued upon exercise of this Warrant shall be subject to a stop
transfer order and the certificate or certificates evidencing such Warrant
Shares shall bear the following legend:

                                       12
<PAGE>

         "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
         SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
         MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
         (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER
         THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY
         RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH
         COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT
         SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED
         IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS."

In the event the Warrant Shares are registered pursuant to Section 8, the
foregoing legend will be replaced by a legend reflecting the regulatory
requirements applicable to the resale of registered shares.

     11. Upon receipt of evidence of satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant (and upon surrender of any
Warrant if mutilated), and upon reimbursement of the Company's reasonable
incidental expenses and indemnity reasonably satisfactory to the Company, the
Company shall execute and deliver to the Holder thereof a new Warrant of like
date, tenor, and denomination.

     12. The Holder of any Warrant shall not have solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity,
or to any notice of meetings of stockholders or of any other proceedings of the
Company, except as provided by this Warrant.

     13. This Warrant has been negotiated and consummated in the State of New
York and shall be construed in accordance with the laws of the State of New York
applicable to contracts made and performed within such State, without regard to
principles governing conflicts of law.

     14. The Company and the Holders irrevocably consent to the jurisdiction of
the courts of the State of New York and of any federal court located in such
State in connection with any action or proceeding arising out of or relating to
this Warrant, any document or instrument delivered pursuant to, in connection
with or simultaneously with this Warrant, or a breach of this Warrant or any
such document or instrument. In any such action or proceeding, the Company and
the Holders waive personal service of any summons, complaint or other process
and agrees that service thereof may be made in accordance with Section 15
hereof.

                                       13
<PAGE>

     15. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or by Federal Express, Express Mail or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, (i) if to the Company, at 2 Andrews Drive, 2nd Floor, West
Patterson, New Jersey 07424, (fax: 973-256-8211) Attention: President, with a
copy to Friedman Kaplan Seiler & Adelman LLP, 1633 Broadway, 46th Floor, New
York, New York 10019, (fax: 212 833-1250) Attention: Richard M. Hoffman, Esq.,
(ii) if to the Holder, at its address set forth on the first page hereof, or
(iii) in either case, to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 15. Notice to the
estate of any party shall be sufficient if addressed to the party as provided in
this Section 15. Any notice or other communication given by certified mail shall
be deemed given at the time of certification thereof, except for a notice
changing a party's address which shall be deemed given at the time of receipt
thereof. Any notice given by other means permitted by this Section 15 shall be
deemed given at the time of receipt thereof.

     16. No course of dealing and no delay or omission on the part of the Holder
in exercising any right or remedy shall operate as a waiver thereof or otherwise
prejudice the Holder's rights, powers or remedies. No right, power or remedy
conferred by this Warrant upon the Holder shall be exclusive of any other right,
power or remedy referred to herein or now or hereafter available at law, in
equity, by statute or otherwise, and all such remedies may be exercised singly
or concurrently.

     17. This Warrant may be amended or any of its provisions waived only by a
written consent or consents executed by the Company and Holders of Warrants
representing a majority of the shares underlying the Warrants. Any amendment or
waiver shall be binding upon all existing and future Holders.

                  [remainder of page intentionally left blank]

                                       14
<PAGE>

Dated:  July 31, 2002

                                            INTERACTIVE SYSTEMS WORLDWIDE INC.

                                            By: /s/ Bernard Albanese
                                                -------------------------------
                                                Name: Bernard Albanese
                                                Title: President

/s/ Barry Mindes
-------------------------------
Secretary: Barry Mindes

                                       15
<PAGE>

To:      Interactive Systems Worldwide Inc.
         2 Andrews Drive, 2nd Floor
         West Patterson, New Jersey  07424

                              ELECTION TO EXERCISE

         The undersigned hereby exercises his or its rights to purchase ________
Warrant Shares covered by the within Warrant and tenders payment herewith in the
amount of $_________________ in accordance with the terms thereof, and requests
that certificates for such securities be issued in the name of, and delivered
to:

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

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

--------------------------------------------------------------------------------
     (Print Name, Address and Social Security or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated:                                             Name:
      -----------------------                           ------------------------
                                                           (Print)

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

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

                                       16
<PAGE>

                                                                       EXHIBIT A

         The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:

         (a)______The undersigned is an "Accredited Investor" as that term is
defined in Section (a) of Regulation D promulgated under the Securities Act of
1933, as amended (the "Act"). Specifically, the undersigned is (initial
appropriate items(s)):

         _____ i) A bank as defined in Section 3(a)(2) of the Act, or a savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Act, whether acting in its individual or fiduciary capacity; a broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
an insurance company as defined in Section 2(13) of the Act; an investment
company registered under the Investment Company Act of 1940 (the "Investment
Company Act") or a business development company as defined in Section 2(a)(48)
of the Investment Company Act; a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; a plan established and maintained by a state,
its political subdivisions or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA,
which is either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has total assets
in excess of $5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors.

         _____ ii) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.

         _____ iii) An organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.

         _____ iv) A director or executive officer of the Company.

         _____ v) A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her purchase exceeds
$1,000,000.

         _____ (vi) A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.

                                       17
<PAGE>

         _____ (vii) A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) (i.e., a person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the merits and risks of
the prospective investment).

         _____ viii) An entity in which all of the equity owners are accredited
investors.

         (b) For California and Massachusetts individuals: If the subscriber is
a California resident, such subscriber's investment in the Company will not
exceed 10% of such subscriber's net worth (or joint net worth with his spouse).
If the subscriber is a Massachusetts resident, such subscriber's investment in
the Company will not exceed 25% of such subscriber's joint net worth with his
spouse (exclusive of principal residence and its furnishings).

         (c) If a natural person, the undersigned is: a bona fide resident of
the State contained in the address set forth on the signature page of this
Agreement as the undersigned's home address; at least 21 years of age; and
legally competent to execute this Agreement. If an entity, the undersigned is
duly authorized to execute this Agreement and this Agreement constitutes the
legal, valid and binding obligation of the undersigned enforceable against the
undersigned in accordance with its terms.

         (d) The undersigned is familiar with the Company's business, plans and
financial condition, the undersigned has received all materials which have been
requested by the undersigned; has had a reasonable opportunity to ask questions
of the Company and its representatives; and the Company has answered all
inquiries that the undersigned or the undersigned's representatives have put to
it. The undersigned has had access to all additional information and has taken
all the steps necessary to evaluate the merits and risks of an investment as
proposed hereunder.

         (e) The undersigned has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to protect
the interests of the undersigned in connection with this transaction, and the
undersigned's investment in the Company hereunder is not material when compared
to the undersigned's total financial capacity.

         (f) The undersigned understands the various risks of an investment in
the Company as proposed herein and can afford to bear such risks, including,
without limitation, the risks of losing the entire investment.

         (g) The undersigned acknowledges that no market for the Warrants
presently exists and none may develop in the future and that the undersigned may
find it impossible to liquidate the investment at a time when it may be
desirable to do so, or at any other time.

                                       18
<PAGE>

         (h) The undersigned has been advised by the Company that none of the
Warrants have been registered under the Act, that the Warrants will be issued on
the basis of the statutory exemption provided by Section 4(2) of the Act or
Regulation D promulgated thereunder, or both, relating to transactions by an
issuer not involving any public offering and under similar exemptions under
certain state securities laws, that this transaction has not been reviewed by,
passed on or submitted to any Federal or state agency or self-regulatory
organization where an exemption is being relied upon, and that the Company's
reliance thereon is based in part upon the representations made by the
undersigned in this Agreement. The undersigned acknowledges that the undersigned
has been informed by the Company of, or is otherwise familiar with, the nature
of the limitations imposed by the Act and the rules and regulations thereunder
on the transfer of securities, including the Warrants. In particular, the
undersigned agrees that no sale, assignment or transfer of any of the Warrants
shall be valid or effective, and the Company shall not be required to give any
effect to such a sale, assignment or transfer, unless (i) the sale, assignment
or transfer of such Warrants is registered under the Act, it being understood
that the Warrants are not currently registered for sale and that the Company has
no obligation or intention to so register the Warrants except as contemplated by
the terms of the Warrants, or (ii) such Warrants are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
under the Act, it being understood that Rule 144 is not available at the present
time for the sale of the Securities, or (iii) such sale, assignment or transfer
is otherwise exempt from registration under the Act. The undersigned further
understands that an opinion of counsel and other documents may be required to
transfer the securities as provided in the Warrants. The undersigned
acknowledges that the Warrants shall be subject to a stop transfer order and the
certificate or certificates evidencing any Warrants shall bear the following or
a substantially similar legend or such other legend as may appear on the forms
of Warrants and such other legends as may be required by state securities or
blue sky laws:

         "The securities represented by this certificate have not been
         registered under the Securities Act of 1933, as amended (the "Act"), or
         any state securities laws and neither such securities nor any interest
         therein may be offered, sold, pledged, assigned or otherwise
         transferred unless (1) a registration statement with respect thereto is
         effective under the Act and any applicable state securities laws, or
         (2) the Company receives an opinion of counsel to the holder of such
         securities, which counsel and opinion are reasonably satisfactory to
         the Company, that such securities may be offered, sold, pledged,
         assigned or transferred in the manner contemplated without an effective
         registration statement under the Act or applicable state securities
         laws."

                                       19
<PAGE>

         (i) The undersigned will acquire the Warrants for the undersigned's own
account for investment and not with a view to the sale or distribution thereof
or the granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein.

GLOBAL INTERACTIVE GAMING LTD.

By:_______________________________
Name: Peter Sprogis
Title: Director

                                       20

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