Document:

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

                  This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 15, 2000 is made and entered into between HMG WORLDWIDE CORPORATION,
a Delaware corporation ("the Company"), and Societe Generale, a bank organized
under the laws of France (the "Purchaser").

                  WHEREAS, the Company has issued and sold $1,500,000 aggregate
principal amount of its 7% Convertible Notes Due March 15, 2003 (the "Notes"),
which Notes, together with, in certain circumstances, accrued interest thereon,
are convertible into such number of shares of Common Stock, $.01 par value per
share, of the Company as are specified in the Notes (the "Convertible Shares");

                  WHEREAS, the Company and the Purchaser have entered into that
certain Securities Purchase Agreement (the "Subscription Agreement"), dated as
of the date hereof, pursuant to which the Company has issued to the Purchaser
U.S.$1,500,000 aggregate principal amount of the Notes;

                  WHEREAS, pursuant to the terms of, and in partial
consideration for, the Purchaser's agreement to enter into the Subscription
Agreement, the Company has agreed to provide the Purchaser with certain
registration rights with respect to the Conversion Shares (as defined below);

                  NOW, THEREFORE, in consideration of the premises,
representations, warranties, covenants and agreements contained herein and in
the Subscription Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, intending to be
legally bound hereby, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1. Definitions. Capitalized terms defined in the Subscription
Agreement shall have the same meanings herein as are ascribed to them therein.
In addition, the following terms shall have the meanings ascribed to them below:

                  "Purchaser" shall mean the Purchaser referenced in the
preamble, and, unless the context otherwise requires, shall include the
Purchaser for so long as it owns any Registrable Securities and any assignee or
transferee of the Notes or Registrable Securities to whom the registration
rights conferred by this Agreement have been transferred in compliance with this
Agreement.

                  "Registrable Securities" means all of the Convertible Shares
and any other securities issued or issuable upon conversion of the Notes as
provided therein (together, the "Conversion Shares") until (i) a registration
statement under the Securities Act covering the offer and sale of such
Conversion Shares has been declared effective by the Commission and such
Conversion Shares have

<PAGE>

been disposed of pursuant to such effective registration statement, (ii) such
Conversion Shares are sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provision then in force) under the
Securities Act ("Rule 144") are met, (iii) such Conversion Shares have been
otherwise transferred and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend or
(iv) such time as, in the opinion of counsel to the Company, which counsel shall
be reasonably acceptable to the Purchaser, such Conversion Shares may be sold
without any time, volume or manner limitation pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act.

                  "Registration Statement" means the registration statement
filed by the Company pursuant to Section 2.1(a) and any additional Registration
Statement filed by the Company pursuant to Section 2.1(b).

                  "Underwriter" means a securities dealer that purchases any
Registrable Securities as principal in an underwritten offering and not as part
of such dealer's market-making activities.

                                   ARTICLE II
                               REGISTRATION RIGHTS

         SECTION 2.1. Registration Requirements. The Company shall use its best
efforts to effect the registration of the Registrable Securities (including
without limitation the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act) as would permit or facilitate the sale or distribution
of all the Registrable Securities in the manner (including manner of sale) and
in all states reasonably requested by the Purchaser. Such best efforts by the
Company shall include the following:

                  (a) The Company will as expeditiously as possible, and in no
event later than May 15, 2000 (the "Filing Deadline"), prepare and file with the
Commission a registration statement (the "Registration Statement") on Form S-3
(if use of such form is then available to the Company pursuant to the rules of
the Commission and, if not, on such other form promulgated by the Commission for
which the Company then qualifies and that counsel for the Company shall deem
appropriate and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement and in accordance with the intended method of distribution of such
Registrable Securities), and use its commercially reasonable efforts to cause
such filed Registration Statement to become effective by the Effectiveness
Deadline. The Company's obligation hereunder may, at the Company's option, be
accomplished by including the Registrable Securities in a registration statement
pursuant to which the Company also registers other securities of the Company.
The "Effectiveness Deadline" shall mean one hundred and twenty (120) days from
the date hereof; provided that such date shall be extended for such reasonable
additional number of days (not to exceed ninety (90) days) that the Company (i)
delays the timely filing of a report filed under the Exchange Act containing
financial statements (or that the Company requires in order to restate its
financial statements included in a report filed under the Exchange Act) or (ii)
delays the filing or effectiveness of the Registration Statement in order to
amend the disclosure included in the Registration Statement, in each case solely
as a result of the Company or any subsidiary entering into a transaction (such
as a merger or

                                      -2-
<PAGE>

acquisition or disposition of a business) which transaction is required to be
reflected in such financial statements or which otherwise is required to be
reflected in the Registration Statement (together "Delaying Events"). The
Company will as expeditiously as possible prepare and file with the Commission
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective, for a period of not less than: (i) in the case of a
non-underwritten offering of Registrable Securities, until there shall no longer
be any Registrable Securities or (ii) with respect to an underwritten offering
of Registrable Securities, ninety (90) days after the commencement of the
distribution of all Registrable Securities covered by such Registration
Statement (but not before the expiration of the period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable), and the
Company will comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
Purchaser set forth in such Registration Statement.

                  (b) The number of Registrable Securities covered by the
initial Registration Statement shall equal be a number of shares of Common Stock
of the Company equal to the Maximum Share Issuance (as defined in the Notes).

                  In the event that in the future Registrable Securities shall
consist of securities of the Company other than or in additional to the shares
of Common Stock referenced in the preceding paragraph, the Company shall as
expeditiously as possible (and in no event more than fifteen (15) days from the
date of the event that results in such change) file a post-effective amendment
to the Registration Statement (or if necessary file a new or additional
Registration Statement to reflect the registration of the offer and sale of such
additional or other securities and use its commercially reasonable efforts to
cause such post-effective amendment or new or additional Registration Statement
to become effective within ninety (90) days from the date of the event that
results in such change. In the event the filing of a new or additional
Registration Statement is required, references herein to the Registration
Statement shall also refer to such new or additional Registration Statement
(except that for purposes of Section 2.1(a) above, the Filing Deadline and
Effectiveness Deadline shall refer to the date of the expiration of the
respective fifteen (15) and ninety (90) day periods referenced above).

                  (c) The Company will, prior to filing the Registration
Statement or prospectus or any amendment or supplement thereto, furnish to the
Purchaser, and counsel to the Purchaser, and each Underwriter, if any, of the
Registrable Securities covered by such Registration Statement copies of such
Registration Statement and prospectus or any amendment or supplement thereto as
proposed to be filed, together with exhibits thereto, which documents will be
subject to review and approval by the foregoing (such approval not to be
unreasonably withheld or delayed), and thereafter furnish to the Purchaser, its
counsel and each Underwriter, if any, for their review and comment such number
of copies of such Registration Statement, each amendment and supplement thereto
(in each case including all exhibits thereto and documents incorporated by
reference therein), the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents or information
as the Purchaser, its counsel or each Underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities.

                                      -3-
<PAGE>

                  (d) The Company will use its reasonable efforts to (i)
register or qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as the Purchaser may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable the
Purchaser to consummate the disposition of the Registrable Securities; provided
that the Company will not be required to (A) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (d), (B) subject itself to taxation in any such jurisdiction or
(C) consent or subject itself to general service of process in any such
jurisdiction.

                  (e) The Company will promptly notify the Purchaser upon the
occurrence of any of the following events in respect of the Registration
Statement or related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request for additional information by the
Commission or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; (iv) the happening of any event that makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration Statement, related
prospectus or documents so that (or the Company otherwise becomes aware of any
statement included in the Registration Statement, related prospectus or
documents that is untrue in any material respect or that requires the making of
any changes in the Registration Statement, related prospectus or documents so
that), in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate (in which event the Company will promptly make
available to the Purchaser any such supplement or amendment to the Registration
Statement, and as applicable, related prospectus).

                  (f) The Company will enter into customary agreements
(including, if applicable, an underwriting agreement in customary form and that
is reasonably satisfactory to the Company) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities (the Purchaser may, at its option, require that any or
all of the representations, warranties and covenants of the Company to or for
the benefit of any applicable Underwriters also be made to and for the benefit
of the Purchaser).

                                      -4-
<PAGE>

                  (g) The Company will make available to the Purchaser (and will
deliver to the Purchasers's counsel) and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the Commission and
the Company, its counsel or auditors and will also make available for inspection
by the Purchaser, any Underwriter participating in any disposition pursuant to a
Registration Statement and any attorney, accountant or other professional
retained by the Purchaser or such Underwriter (collectively, the "Inspectors"),
all financial and other records, pertinent corporate documents and properties of
the Company (collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers and employees to supply all information reasonably requested
by any Inspectors in connection with such Registration Statement. Records that
the Company determines, in good faith, to be confidential and that it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary in the reasonable opinion of the
Inspectors to avoid or correct a misstatement or omission in the Registration
Statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided that prior to any disclosure or release pursuant to
clause (ii), the Inspectors shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to disclose such
Records; and, provided further, that if failing the entry of a protective order
or the waiver by the Company permitting the disclosure or release of such
Records, the Inspectors, upon advice of counsel, are compelled to disclose such
Records, the Inspectors may disclose that portion of the Records that counsel
has advised the Inspectors that the Inspectors are compelled to disclose. The
Company may require, as a condition to the disclosure to any Inspector of any
confidential information, that such Inspector execute and deliver to the Company
a written agreement, in form and substance reasonably satisfactory to the
Company, pursuant to which such Inspector agrees to the confidential treatment
of such information as contemplated above. The Purchaser agrees that information
obtained by it solely as a result of such inspections (not including any
information obtained from a third party who, insofar as is known to the
Purchaser after reasonable inquiry, is not prohibited from providing such
information by a contractual, legal or fiduciary obligation to the Company)
shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Company or its Affiliates unless
and until such information is made generally available to the public. The
Purchaser further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.

                  (h) The Company will furnish to the Purchaser and to each
Underwriter, if any, a signed counterpart, addressed to the Purchaser and such
Underwriter, of (1) an opinion or opinions of counsel to the Company, and (2) a
comfort letter or comfort letters from the Company's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as the
Purchaser or the managing Underwriter therefor reasonably requests. The Company
agrees that, (x) upon effectiveness of the Registration Statement and (y) if
requested by the Purchaser, upon the effectiveness of each amendment thereto
subsequent to the effectiveness of the Registration Statement whether by the
filing of a post-effective amendment thereto or the incorporation by

                                      -5-
<PAGE>

reference of reports subsequently filed with the Commission, it will cause to be
delivered to the Purchaser (i) if applicable, a comfort letter in customary form
from its independent public accountants and (ii) if applicable, an opinion of,
counsel to the Company, covering customary matters, including the absence of any
untrue statement of a material fact or omission to state any material fact
required to be stated therein or necessary to make the statements contained in
the Registration Statement and in the case of the related prospectus (as so
amended), in the light of the circumstances in which they were made not
misleading.

                  (i) The Company will comply with all applicable rules and
regulations of the Commission, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act, and will make
available to its securityholders, as soon as reasonably practicable, an earnings
statement covering a period of twelve (12) months, beginning within three (3)
months after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act.

                  (j) The Company will appoint a transfer agent and registrar
for all Registrable Securities covered by the Registration Statement not later
than the effective date of the Registration Statement.

                  (k) The Company shall take all steps necessary to enable the
Holders to avail themselves of the prospectus delivery mechanism set forth in
Rule 153 (or successor thereto) under the Securities Act, if available.

                  (l) In connection with an underwritten offering, the Company
will cooperate, to the extent reasonably requested by the managing Underwriter
for the offering or the Purchaser, in customary efforts to sell the securities
under the offering, including, without limitation, participating in "road shows"
on a schedule as shall be reasonably satisfactory to, and not unduly burdensome
on, the Company; provided that the Company shall not be obligated to participate
in more than one such offering in any twelve (12)-month period and any such
participation by the Company shall be at the expense of the managing Underwriter
or the Purchaser unless the Company shall also be offering securities in such
underwritten offering.

                  The Company may require the Purchaser promptly to furnish in
writing to the Company such information regarding the intended methods of
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration including, without limitation, all such
information as may be requested by the Commission or the NASD or any state
securities commission or similar authority. If the Purchaser fails to provide
such information requested in connection with such registration within ten (10)
business days after receiving such written request, then the Company may cease
pursuit of such registration until such information is provided.

                  The Purchaser agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
2.1(e)(iv) hereof, the Purchaser will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Purchaser's receipt of the copies of the
supplemented

                                      -6-
<PAGE>

or amended prospectus contemplated by Section 2.1(e) hereof, and, if so directed
by the Company, the Purchaser will deliver to the Company all copies, other than
permanent file copies then in the Purchaser's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.

         SECTION 2.2. Registration Expenses. In connection with registration
hereunder, the Company shall pay the following registration expenses incurred in
connection therewith (the "Registration Expenses"): (i) all registration and
filing fees, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of a single firm of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
printing expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing or quotation of the Registrable Securities, (vi) fees and
disbursements of counsel for the Company and customary fees and expenses for
independent certified public accountants retained by the Company (including the
expenses of any (A) opinion letters or costs associated with delivery by counsel
to the Company of an opinion letter or opinion letters or (B) comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters, in each case required by or requested
pursuant to Section 2.1(h) hereof), (vii) the fees and expenses of any special
experts retained by the Company in connection with such registration and (viii)
reasonable fees and expenses of a single firm of counsel of the Purchaser with
respect to such registration (including without limitation its review of the
Registration Statement and due diligence with respect thereto and related
matters through the period that registration is required hereunder). The Company
shall have no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, or the cost of any special
audit required by the Purchaser, such costs to be borne by the Purchaser.

                                   ARTICLE III
                             PAYMENTS BY THE COMPANY

         SECTION 3.1 Payments by the Company. In the event the Registration
Statement is not filed by the Filing Deadline or declared effective by the
Effectiveness Deadline (or after the Registration Statement has been declared
effective by the Commission, sales of all the Registrable Securities (including
any Registrable Securities required to be registered pursuant to Section 2.1(b)
hereof) cannot be made pursuant to the Registration Statement (by reason of a
stop order, the Company's failure to update such Registration Statement, the
need to file and have declared effective a post-effective amendment or any other
reason outside the control of the Purchaser), then the Company will make
payments to the Purchaser in such amounts and at such times as shall be
determined pursuant to this Section 3.1 as partial relief for the damages to the
Purchaser by reason of any such delay in or reduction of their ability to sell
the Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), provided that in the event of a
Delaying Event requiring the filing of a post-effective amendment to the
Registration Statement, no payment shall be required to the extent sales of
Registrable Securities cannot be made pursuant to the Registration Statement for
periods aggregating no more than ninety (90) days in any 365-day period. The
Company shall pay to the Purchaser an amount equal to (i) (A) .01 times (B) the
aggregate principal amount of the Notes held by the Purchaser (including,
without limitation, Notes

                                      -7-
<PAGE>

that have been converted into Registrable Securities then held by such Purchaser
but excluding any Notes as to which the Notes received upon conversion have been
sold) times (ii) the sum of: (A) the number of months (prorated per day for
partial months) following the Filing Deadline that the Registration Statement is
not filed pursuant to Section 2.1(a) or following the Effectiveness Deadline
that the Registration Statement is not declared effective by the Commission, as
the case may be, plus (B) the number of months (prorated per day for partial
months) following the Effectiveness Deadline that sales cannot be made pursuant
to the Registration Statement after the Registration Statement has been declared
effective. Such amounts shall be paid in cash or, at the Purchaser's option, may
be received in a number of shares of Common Stock as determined based upon the
applicable Conversion Price (as defined in the Notes) on each date that such
payment is due. Any shares of Common Stock so issued shall constitute
Registrable Securities. If the Purchaser desires to receive the amounts due
hereunder in shares of Common Stock, it shall so notify the Company in writing
at least two (2) business days prior to the date on which such amounts are
payable and such shares of Common Stock shall be delivered on the last day upon
which the cash amount would otherwise be due in accordance with the following
sentence. Payments of cash pursuant hereto shall be made within three (3)
business days after the end of the period that gives rise to such obligation,
provided that, if any such period extends for more than thirty (30) days,
payments shall be made for each such thirty (30) day period within three (3)
business days after the end of such thirty (30) day period.

                                   ARTICLE IV
                        INDEMNIFICATION AND CONTRIBUTION

         SECTION 4.1. Indemnification by the Company. The Company agrees to
indemnify and hold harmless the Purchaser, its partners, Affiliates, officers,
directors, employees and duly authorized agents, and each Person or entity, if
any, who controls the Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners,
Affiliates, officers, directors, employees and duly authorized agents of such
controlling Person or entity (collectively, the "Controlling Persons"), from and
against any loss, claim, damage, liability, reasonable attorneys' fees, costs or
expenses and costs and expenses of investigating and defending any such claim
(collectively, "Damages"), joint or several, and any action in respect thereof
to which the Purchaser, its partners, Affiliates, officers, directors, employees
and duly authorized agents, and any such Controlling Person may become subject
under the Securities Act or otherwise, insofar as such Damages (or proceedings
in respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or prospectus relating to the Registrable Securities or any
preliminary prospectus, or arises out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of any prospectus or
preliminary prospectus, in the light of the circumstances in which they were
made) not misleading, except insofar as the same are based upon information
furnished in writing to the Company by the Purchaser or an Underwriter expressly
for use therein, and shall reimburse the Purchaser, its partners, Affiliates,
officers, directors, employees and duly authorized agents, and each such
Controlling Person for any legal and other expenses reasonably incurred by the
Purchaser, its partners, Affiliates, officers, directors, employees and duly
authorized agents, or any such Controlling Person in investigating or defending
or preparing to defend against any such Damages or proceedings as such expenses
are

                                      -8-
<PAGE>

incurred; provided, however, that the Company shall not be liable to the
Purchaser to the extent that any such Damages arise out of or are based upon an
untrue statement or omission made in any preliminary prospectus if (i) the
Purchaser failed to send or deliver a copy of the final prospectus with or prior
to the delivery of written confirmation of the sale by the Purchaser to the
Person asserting the claim from which such Damages arise, and (ii) the final
prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission; provided further, however, that
the Company shall not be liable in any such case to the extent that any such
Damages arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in any prospectus if (x) such untrue
statement or omission or alleged omission is corrected in an amendment or
supplement to such prospectus, and (y) having previously been furnished by or on
behalf of the Company with copies of such prospectus as so amended or
supplemented, the Purchaser thereafter fails to deliver such prospectus as so
amended or supplemented prior to or concurrently with the sale of a Registrable
Security to the Person asserting the claim from which such Damages arise. The
Company also agrees to indemnify any Underwriters of the Registrable Securities,
their officers and directors and each Person or entity who controls such
Underwriters on customary terms.

         SECTION 4.2. Indemnification by the Purchaser. The Purchaser agrees to
indemnify and hold harmless the Company, its partners, Affiliates, officers,
directors, employees and duly authorized agents and each Person or entity, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person, to the same extent as the foregoing indemnity from the Company to the
Purchaser, but only with reference to information related to the Purchaser or
its plan of distribution, furnished in writing by the Purchaser or on the
Purchaser's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. In case any action or proceeding shall be brought
against the Company or its partners, Affiliates, officers, directors, employees
or duly authorized agents or any such controlling Person or its partners,
Affiliates, officers, directors, employees or duly authorized agents, in respect
of which indemnity may be sought against the Purchaser, the Purchaser shall have
the rights and duties given to the Company, and the Company or its partners,
Affiliates, officers, directors, employees or duly authorized agents, or such
controlling Person, or its partners, Affiliates, officers, directors, employees
or duly authorized agents, shall have the comparable rights and duties given to
the Purchasers by Section 4.1. The Purchaser also agrees to indemnify and hold
harmless any Underwriters of the Registrable Securities with reference to the
same information as to which it agrees to indemnify the Company referenced
above, their officers and directors and each Person who controls such
Underwriters on customary terms. The Company shall be entitled to receive
indemnities on customary terms from Underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above, with respect to information
so furnished in writing by such persons specifically for inclusion in any
prospectus or the Registration Statement.

         SECTION 4.3. Conduct of Indemnification Proceedings. Promptly after
receipt by any person or entity in respect of which indemnity may be sought
pursuant to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim
or the commencement of any action, the Indemnified Party shall, if a claim in
respect thereof is to be made against the Person against whom such

                                      -9-
<PAGE>

indemnity may be sought (an "Indemnifying Party"), notify the Indemnifying Party
in writing of the claim or the commencement of such action; in the event an
Indemnified Party shall fail to give such notice as provided in this Section 4.3
and the Indemnifying Party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, the indemnification provided for in Section
4.1 or 4.2 shall be reduced to the extent of any actual prejudice resulting from
such failure to so notify the Indemnifying Party; provided, that the failure to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2. If any
such claim or action shall be brought against an Indemnified Party, the
Indemnifying Party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified Indemnifying Party, to
assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. After notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation; provided that
the Indemnified Party shall have the right to employ separate counsel to
represent the Indemnified Party and its controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) in the reasonable judgment of
the Company and such Indemnified Party, representation of both parties by the
same counsel would be inappropriate due to actual or potential conflicts of
interest between them, it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties, or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent, which
consent will not be unreasonably withheld.

         SECTION 4.4. Contribution. If the indemnification provided for in this
Article IV is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages (i) as between the Company and the
Purchaser on the one hand and the Underwriters on the other, in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Purchaser, on the one hand, and the Underwriters, on the other hand, from
the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Company and the
Purchaser, on the one hand, and of the Underwriters, on the other hand, in
connection with the statements or omissions

                                      -10-
<PAGE>

which resulted in such Damages, as well as any other relevant equitable
considerations, and (ii) as between the Company, on the one hand, and the
Purchaser, on the other hand, in such proportion as is appropriate to reflect
the relative fault of the Company and of the Purchaser in connection with such
statements or omissions, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Purchaser, on the one
hand, and the Underwriters, on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Purchaser bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the
Purchaser, on the one hand, and of the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Purchaser
or by the Underwriters. The relative fault of the Company, on the one hand, and
of the Purchaser, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

                  The Company and the Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 4.4 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and the Purchaser shall in no event be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of the Purchaser were offered to the public (less
underwriting discounts and commissions) less the amount paid by the Purchaser to
the Company for the Notes exceeds the amount of any damages that the Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

                                    ARTICLE V
                                  MISCELLANEOUS

                                      -11-
<PAGE>

         SECTION 5.1. Term. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate on such date as there shall be
no Registrable Securities; provided, however, that the provisions of Article IV
hereof shall survive any termination of this Agreement.

         SECTION 5.2. Rule 144. The Company covenants that it will file all
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as registered holders of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable the Purchaser to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by (a)
Rule 144, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the Commission. If at any time the Company is
not required to file such reports, it will, upon the request of any registered
holder of Registrable Securities, make publicly available other information so
long as necessary to permit sales pursuant to Rule 144, within the limitations
of the exemption provided thereby. Upon the request of the Purchaser, the
Company will deliver to the Purchaser a written statement as to whether it has
complied with such requirements.

         SECTION 5.3. Restrictions on Sale by the Company and Others. If, and to
the extent, reasonably requested by the managing Underwriter or Underwriters in
the case of an underwritten public offering, that includes Registrable
Securities as contemplated by Section 2.1, the Company agrees and it shall use
its best efforts to cause its Affiliates to agree not to effect any public sale
or distribution of any securities similar to those being registered in
accordance with Section 2.1 hereof, or any securities convertible into or
exchangeable or exercisable for such securities, during the thirty (30) days
prior to, and during the period beginning on the effective date of the
Registration Statement (except as part of the Registration Statement) until all
of the Registrable Securities offered thereunder have been sold pursuant to such
underwritten public offering, provided, however, that such period shall not
exceed ninety (90) days.

         SECTION 5.4. Amendment and Modification. Any provision of this
Agreement may be waived, provided that such waiver is set forth in a writing
executed by the party against whom the enforcement of such waiver is sought. The
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the registered holders of a majority of the then outstanding
Notes (for the purposes of determining whether the consent of such holders has
been obtained, the registered holders of issued and outstanding Registrable
Securities shall be deemed to hold the Notes that were converted into such
Registrable Securities. Notwithstanding the foregoing, the waiver of any
provision hereof with respect to a matter that relates exclusively to the rights
of registered holders of Registrable Securities whose securities are being
resold pursuant to the Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by registered holders of a majority of the Registrable Securities being so
resold; provided that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence. No course of dealing between or among any
Persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this Agreement.

                                      -12-
<PAGE>

         SECTION 5.5. Successors and Assigns; Entire Agreement. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns; provided,
however, that the benefits and rights contemplated hereunder to be provided to
any holder of Notes or Registrable Securities shall be limited to the registered
holder thereof. The Purchaser may assign its rights under this Agreement to any
subsequent holder of Notes or Conversion Shares, provided that the Company shall
have the right to require any such subsequent holder of Notes or Registrable
Securities to execute a counterpart of this Agreement as a condition to such
holder's claim to any rights hereunder. This Agreement, together with the
Subscription Agreement and the Notes, sets forth the entire agreement and
understanding (written or oral) between the parties as to the subject matter
hereof and thereof and merges and supersedes all prior discussions, agreements
and understandings of any and every nature among them with respect to such
subject matter.

         SECTION 5.6. Separability. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.

         SECTION 5.7. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder or
that are given with respect to this Agreement shall be in writing and shall be
personally served or deposited in the mail, registered or certified, return
receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below, or to such other address as such
party shall have specified most recently by written notice: (i) if to the
Company, to: HMG Worldwide Corporation, 475 Tenth Avenue, New York, New York
10018-1199, Attention: Chief Financial Officer, Facsimile No.: (212) 564-3395;
with copies (which shall not constitute notice) to: Parker Duryee Rosoff & Haft,
529 Fifth Avenue, New York, New York 10017, Attention: Herbert Kozlov, Esq.,
Facsimile No.: (212)972-9487; and (ii) if to the Purchaser: Societe Generale,
c/o SG Cowen Securities Corporation, 1221 Avenue of the Americas, New York, New
York 10020, Attention: Guillaume Pollet, Facsimile No.: (212) 278-5467, with
copies (which shall not constitute notice) to: Jones, Day, Reavis & Pogue, 599
Lexington Avenue, New York, New York 10022, Attention: J. Eric Maki, Esq.,
Facsimile No.: (212) 755-7306. Notice shall be deemed given on the date of
service or transmission if personally served or transmitted by telegram, telex
or facsimile. Notice otherwise sent as provided herein shall be deemed given on
the third business day following the date mailed or on the second business day
following delivery of such notice by a reputable air courier service.

         SECTION 5.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         SECTION 5.9. Headings. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.

                                      -13-
<PAGE>

         SECTION 5.10. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.

         SECTION 5.11. Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.

         SECTION 5.12. Remedies. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
including monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.

                                      -14-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.

                                           HMG WORLDWIDE CORPORATION

                                           By:
                                               ---------------------------------
                                           Name:  Robert V. Cuddihy, Jr.
                                           Title: Chief Operating Officer
                                                  and Chief Financial Officer

                                           SOCIETE GENERALE

                                           By:
                                               ---------------------------------
                                           Name:  Guillaume Pollet
                                           Title: Authorized Signatory

                                      -15-THE SECURITIES  REPRESENTED BY THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE  TRANSFERRED  EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT
FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT.

Void after 5:00 P.M., New York Time, on December 31, 2001

                                                             Warrant to Purchase
                                                             _________ Shares of
                                                             Common Stock

                CLASS A REDEEMABLE COMMON STOCK PURCHASE WARRANT

                  This Is to Certify That, FOR VALUE RECEIVED,

                               ___________________

is  entitled  to  purchase,  subject to the  provisions  of this  Warrant,  from
SYCONET.COM,  INC. (the "Company"),  a Delaware  corporation,  at any time on or
after May 1, 2000 (the "effective date"), and not later than 5:00 P.M., New York
time, on December 31,  2001, _________________ (________) shares of Common Stock
of the Company at a purchase price per share of $1.00;  provided,  however, that
the number of shares of Common  Stock to be received  upon the  exercise of this
Warrant  and the price to be paid for a share of Common  Stock shall be adjusted
form  time to time  as  hereinafter  set  forth.  The  shares  of  Common  Stock
deliverable  upon  such  exercise,  and as  adjusted  from  time  to  time,  are
hereinafter  sometimes  referred to as "Warrant Stock" and the exercise price of
this  Warrant  in  effect  at any  time  and as  adjusted  from  time to time is
hereinafter  sometimes  referred to as the  "Exercise  Price".  The  above-named
registered owner of this Warrant and its permitted  transferees and/or assignees
are hereinafter referred to as, collectively,  the "Holder". This Warrant is one
of the Class A Redeemable  Common Stock Purchase  Warrants  representing  on the
original  issue  thereof the right of the holders to  purchase an  aggregate  of
181,562  shares of Warrant  Stock.  The Warrants  are  identical in all respects
except as to the name of the holder  thereof and the number of shares of Warrant
Stock purchasable thereunder.

     (a) Exercise of Warrant.  This Warrant may be exercised in whole or in part
at any time or from time to time on or after the effective  date,  but not later
than 5:00 P.M., New York time, on December 31, 2001, or if such  expiration date
is a day on which banking  institutions are authorized by law to close,  then on
the next succeeding day which shall not be such a day, by presentation

                                       1
<PAGE>

and surrender  hereof to the Company with the Purchase Form annexed  hereto duly
executed  and  accompanied  by payment of the  Exercise  Price for the number of
shares of Warrant  Stock  specified in such form,  together with all federal and
state taxes  applicable upon such exercise.  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 Stock  purchasable  hereunder.  At
the close of business  on the day of receipt by the  Company of this  Warrant at
the office or agency of the Company, in proper form for exercise and accompanied
by payment as aforesaid for the Warrant  Stock to be acquired,  the Holder shall
be  deemed  to be the  holder  of  record  of  the  number  of  fully  paid  and
non-assessable   shares   of  Common   Stock   issuable   upon  such   exercise,
notwithstanding  that the stock  transfer  books of the  Company  shall  then be
closed or that  certificates  representing such shares of Common Stock shall not
then actually be delivered to the Holder.

     (b)  Reservation  of Shares.  The Company  hereby  agrees that at all times
there shall be reserved  for  issuance  and/or  delivery  upon  exercise of this
Warrant  such  number of shares of its  Common  Stock as shall be  required  for
issuance or delivery upon exercise of this Warrant.

     (c)  Fractional   Shares.  No  fractional  shares  or  scrip   representing
fractional  shares  shall be issued  upon the  exercise  of this  Warrant.  With
respect to any  fraction of a share  called for upon any  exercise  hereof,  the
Company  shall  pay to the  holder  an  amount  in cash  equal to such  fraction
multiplied by the current market value of such fractional  share,  determined as
follows:

          (1) If the Common Stock is listed on a national securities exchange or
     admitted to unlisted trading privileges on such exchange, the current value
     shall be the last reported sales price of the Common Stock on such exchange
     on the last trading day prior to the date of exercise of this  Warrant,  or
     if no such  sale is made on such day,  the  average  closing  bid and asked
     prices for such day on the composite tape of such exchange; or

          (2) If the  Common  Stock is not so listed  or  admitted  to  unlisted
     trading  privileges,  the  current  value  shall  be the  mean of the  last
     reported  bid and asked  prices  reported by the  National  Association  of
     Securities  Dealers  Automated  Quotation  System  ("NASDAQ")  (or,  if not
     reported by NASDAQ,  then reported by the National Quotation Bureau,  Inc.)
     on the last trading day prior to the date of the exercise of this  Warrant;
     or

                                       2
<PAGE>

          (3) If the  Common  Stock is not so listed  or  admitted  to  unlisted
     trading  privileges  and bid and  asked  prices  are not so  reported,  the
     current  value shall be an amount,  not less than fully diluted book value,
     determined in such  reasonable  manner as may be prescribed by the Board of
     Directors of the Company, such determination to be final and binding on the
     Holder.

     (d) Exchange,  Assignment or Loss of Warrant. This Warrant is exchangeable,
without expense,  at the option of the Holder,  upon  presentation and surrender
hereof to the Company or at the office of its stock transfer  agent, if any, for
other  Warrants  of  different  denominations  entitling  the Holder  thereof to
purchase  in  the  aggregate  the  same  amount  of  Warrant  Stock  purchasable
hereunder. Any such assignment shall be made by surrender of this Warrant to the
Company  or at the  office  of its  stock  transfer  agent,  if  any,  with  the
Assignment  Form annexed  hereto duly  executed and funds  sufficient to pay any
transfer tax; whereupon the Company shall, without charge, execute and deliver a
new Warrant in the name of the assignee  named in such  instrument of assignment
and this Warrant  shall  promptly be  cancelled.  This Warrant may be divided or
combined  with other  Warrants  which carry the same  rights  upon  presentation
hereof  at the  office of the  Company  or at the  office of its stock  transfer
agent,  if  any,  together  with a  written  notice  specifying  the  names  and
denominations in which new Warrants are to be issued. The term "Warrant" as used
herein includes any Warrants  issued in substitution  for or replacement of this
Warrant, or into which this Warrant may be divided or exchanged. Upon receipt by
the Company of evidence  satisfactory to it of the loss,  theft,  destruction or
mutilation of this Warrant,  and (in the case of loss,  theft or destruction) of
indemnification  reasonably  satisfactory  in form and substance to its counsel,
and upon surrender and cancellation of this Warrant,  if mutilated,  the Company
will  execute  and  deliver a new  Warrant of like tenor and date.  Any such new
Warrant  executed and  delivered  shall  constitute  an  additional  contractual
obligation  on the part of the  Company,  whether  or not this  Warrant so lost,
stolen, destroyed, or mutilated, shall be at any time enforceable by anyone.

     (e) Rights of the  Holder.  The  Holder  shall not,  by virtue  hereof,  be
entitled  to any rights of a  shareholder  of the  Company,  either at law or in
equity,  and the  rights of the Holder are  limited to those  expressed  in this
Warrant and are not  enforceable  against  the Company  except to the extent set
forth herein.

                                       3
<PAGE>

     (f) Anti-Dilution Provisions.

          (1) Stock  Dividends,  Subdivisions and  Combinations.  If the Company
     shall  at  any  time  issue  Common  Stock  by  way of  dividend  or  other
     distribution  on the Common Stock of the  Company,  or subdivide or combine
     the  outstanding  shares of Common Stock,  then the Exercise Price shall be
     proportionately  decreased  in the  case  of  such  issuance  (on  the  day
     following the date fixed for determining  shareholders  entitled to receive
     such  dividend  or other  distribution)  or  decreased  in the case of such
     subdivision or increased in the case of such  combination (on the date that
     such  subdivision  or  combination  shall  become   effective).   Upon  any
     adjustment  of the  Exercise  Price  pursuant to this Section  (f)(1),  the
     holder of this Warrant shall thereafter  (until another such adjustment) be
     entitled to  purchase,  at the new  Exercise  Price,  the amount of Warrant
     Stock,  calculated to the nearest full share,  obtained by multiplying  the
     number of shares of  Warrant  Stock then  issuable  upon  exercise  of this
     Warrant by the  Exercise  Price then in effect and  dividing the product so
     obtained by the new Exercise Price.

          (2) No Adjustment for Small  Amounts.  Anything in this Section (f) to
     the  contrary  notwithstanding,  the Company  shall not be required to give
     effect to any  adjustment  in the  Exercise  Price unless and until the net
     effect of one or more adjustments, determined as above provided, shall have
     required a change of the  Exercise  Price by at least five  percent in such
     Price,  but when the  cumulative  net effect of more than one adjustment so
     determined  shall be to change the actual  Exercise  Price by at least five
     percent, such change in the Exercise Price shall thereupon be given effect.

          (3) Common Stock Defined.  Whenever  reference is made in this Section
     (f) to the issue or sale of shares of Common Stock, the term "Common Stock"
     shall mean the Common  Stock of the Company of the class  authorized  as of
     the date hereof and any other class of stock  ranking on a parity with such
     Common  Stock.  However,  subject to the  provisions of Section (i) hereof,
     shares issuable upon exercise hereof shall include only shares of the class
     designated as Common Stock of the Company as of the date hereof.

     (g) Officer's Certificate. Whenever the Exercise Price shall be adjusted as
required by the  provisions of Section (f) hereof,  the Company shall  forthwith
file in the custody of its Secretary or an Assistant  Secretary at its principal
office,  and with its stock  transfer  agent,  if any, an officer's  certificate
showing the adjusted Exercise Price determined as herein provided

                                       4
<PAGE>

and setting forth in reasonable  detail the facts  requiring  such  adjustments.
Each officer's  certificate  shall be made available at all reasonable times for
inspection  by the Holder,  and the  Company  shall,  forthwith  after each such
adjustment,  mail a copy of such  certificate  to the Holder.  Such  certificate
shall be conclusive as to the correctness of such adjustment.

     (h)  Notices  to  Warrant  Holders.  So  long  as  this  Warrant  shall  be
outstanding and  unexercised,  (i) if the Company shall pay any dividend or make
any  distribution  upon the Common  Stock to the  holders  thereof as a group in
proportion to their respective shareholdings, or (ii) if the Company shall offer
to the holders of Common Stock,  as a group in  proportion  to their  respective
shareholdings,  for  subscription or purchase by them any shares of stock of any
class  or any  other  rights,  or  (iii) if any  capital  reorganization  of the
Company,  reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another  corporation  (other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification,  capital reorganization or other similar change of outstanding
shares of Common Stock of the class  issuable  upon  exercise of this  Warrant),
sale, lease or transfer of all or  substantially  all of the property and assets
of the Company to another corporation,  or voluntary or involuntary dissolution,
liquidation  or winding up of the Company  shall be effected,  then, in any such
case,  the Company shall cause to be delivered to the Holder,  at least ten days
prior to the date  specified  in (x) or (y) below,  as the case may be, a notice
containing a brief  description  of the proposed  action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification,  reorganization, consolidation, merger,
conveyance,  lease, dissolution,  liquidation or winding up is to take place and
the date,  if any,  as of which the holders of Common  Stock of record  shall be
entitled  to  exchange  their  shares of Common  Stock for  securities  or other
property deliverable upon such reclassification,  reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up.

     (i)   Reclassification,   Reorganization   or   Merger.   In  case  of  any
reclassification,  capital  reorganization or other change of outstanding shares
of  Common  Stock of the  Company  (other  than a change  in par value or to par
value, or as a result of an issuance of Common Stock by way of dividend or other
distribution  or  of  a  subdivision  or   combination),   or  in  case  of  any
consolidation or merger of the Company with or into another  corporation  (other
than a merger in which the Company is the continuing  corporation and which does
not result in any reclassification, capital

                                       5
<PAGE>

reorganization or other similar change of outstanding  shares of Common Stock of
the class  issuable  upon exercise of this  Warrant),  or in case of any sale or
conveyance to any other corporation of the property and assets of the Company as
an entirety or substantially  as an entirety,  the Company shall cause effective
provision  to be made so that the  Holder  shall have the right  thereafter,  by
exercising this Warrant, to purchase the kind and amount of shares of securities
and other property receivable upon such reclassification, capital reorganization
or other similar  change,  consolidation,  merger,  sale or conveyance as if the
Holder had exercised this Warrant prior to such transaction.  Any such provision
shall include  provision for adjustments  which shall be as nearly equivalent as
may be  practicable  to  the  adjustments  provided  for in  this  Warrant.  The
foregoing  provisions  of this Section (i) shall  similarly  apply to successive
reclassifications,  capital  reorganizations  and  similar  changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.

     (j)  Spin-Offs.  In  the  event  the  Company  spins-off  a  subsidiary  by
distributing to the shareholders of the Company, as a dividend or otherwise, the
stock of the subsidiary, the Company shall reserve, for the life of the Warrant,
shares of the  subsidiary  to be  delivered  to the Holder upon  exercise of the
Warrant to the same  extent as if Holder was the owner of record of the  Warrant
Stock on the record date for payment of the shares of the subsidiary.

     (k) "Piggyback" Registration Rights.

          (1)  Definitions.  As used in this Section (k),  the  following  terms
     shall have the following meanings:

               (a) The term "Holder"  shall mean any person owning or having the
          right to acquire Registrable Securities or any permitted transferee of
          a Holder.

               (b) The terms "register",  "registered" and "registration"  refer
          to a  registration  effected by  preparing  and filing a  registration
          statement or similar document  (except a Registration  Statement filed
          for a purpose  which would render  inappropriate  the covenants of the
          Company contained in this Section (k) such as a Registration Statement
          on Form S-8 or any other  inappropriate  form), in compliance with the
          Securities  Act of 1933, as amended (the  "Securities  Act"),  and the
          declaration or order of effectiveness of such  registration  statement
          or document.

               (c) The term  "Registrable  Securities"  shall  mean the  Warrant
          Stock; provided, however, that securities shall

                                       6
<PAGE>

only be treated as  Registrable  Securities  if and only for so long as they (A)
have  not  been  disposed  of  pursuant  to a  registration  statement  declared
effective by the Securities and Exchange Commission  ("SEC"),  (B) have not been
sold in a  transaction  exempt from the  registration  and  prospectus  delivery
requirements  of the  Securities  Act  wherein  all  transfer  restrictions  and
restrictive  legends with respect  thereto are removed upon the  consummation of
such sale and (C) are held by a Holder  or a  permitted  transferee  of a Holder
pursuant to Section (k)(10) below.

          (2) Registration under the Securities Act.

               (a) In the event that at any time  before the second  anniversary
          of the effective date of this Warrant the Company  intends to register
          securities  which relate to a current  offering of  securities  of the
          Company,  the Company shall give written notice (the "Company Notice")
          of such intention to the Holder, and upon receipt within 30 days after
          the giving of the Company Notice of the written request of the Holder,
          the  Company  shall  include  in  such  registration  the  Registrable
          Securities  of the Holder so as to permit the public  sale  thereof by
          the Holder in compliance with the Securities Act. Neither the delivery
          of a Company Notice nor of a registration  request by any Holder shall
          in any way obligate the Company to file such  Registration  Statement.
          Notwithstanding  the filing of the Registration  Statement the Company
          may, at any time prior to the effective date thereof, determine not to
          offer the  securities  to which it relates,  without  liability to the
          Holder  except that the Company  shall pay such  expenses as are to be
          paid by it under Section (k)(5).

               (b) In no event shall the Company be  obligated to file more than
          one registration  statement for the subject Registrable  Securities on
          account of the registration rights granted to the Holders thereof.

          (3) Obligations of the Company.  Whenever  required under this Section
     (k) to include  Registrable  Securities in a  registration  statement,  the
     Company shall, as expeditiously as reasonably possible:

               (a) Use its  reasonable  best efforts to cause such  registration
          statement to become effective, and, upon the request of the Holders of
          a majority of the Registrable Securities registered  thereunder,  keep
          such registration  statement  effective for a period of up to 120 days
          or until the distribution  contemplated in the Registration  Statement
          has been  completed  and,  during  the period  that such  registration
          statement  is  required  to  be   maintained   hereunder,   file  such
          post-effective amendments and

                                       7
<PAGE>

          supplements  thereto as may be required by the  Securities Act and the
          rules and  regulations  thereunder  or  otherwise  to ensure  that the
          prospectus  included  therein does not contain any untrue statement of
          material fact or omit to state a fact required to be stated therein or
          necessary to make the statements  contained  therein,  in light of the
          circumstances  under which they are made,  not  misleading;  provided,
          however,  that such  120-day  period shall be extended for a period of
          time equal to the period  that the Holder  refrains  from  selling any
          securities  included  in  such  registration  at  the  request  of  an
          underwriter of Common Stock (or other securities) of the Company,  and
          provided  further that if applicable  rules under the  Securities  Act
          governing the obligation to file a post-effective amendment permit, in
          lieu of  filing  a  post-effective  amendment  that (i)  includes  any
          prospectus  required by Section 10(a)(3) of the Securities Act or (ii)
          reflects facts or events representing a material or fundamental change
          in the  information  set  forth  in the  registration  statement,  the
          Company  may  incorporate  by  reference  information  required  to be
          included  in (i) and (ii)  above to the  extent  such  information  is
          contained in periodic reports filed pursuant to Section 13 or 15(d) of
          the Securities  Exchange Act of 1934, as amended (the "Exchange Act"),
          in the registration statement.

               (b) Prepare and file with the SEC such amendments and supplements
          to such registration statement,  and the prospectus used in connection
          with such registration  statement,  as may be necessary to comply with
          the provisions of the  Securities Act with respect to the  disposition
          of all securities covered by such registration statement.

               (c)  Furnish  to  the  Holders   such  numbers  of  copies  of  a
          prospectus,   including  a   preliminary   prospectus  as  amended  or
          supplemented from time to time, in conformity with the requirements of
          the  Securities  Act, and such other  documents as they may reasonably
          request  in  order  to  facilitate  the   disposition  of  Registrable
          Securities owned by them.

               (d) Use its  reasonable  best efforts to register and qualify the
          Registrable  Securities  covered by such registration  statement under
          such other federal or state  securities laws of such  jurisdictions as
          shall be reasonably requested by the Holders; provided,  however, that
          the  Company  shall not be required in  connection  therewith  or as a
          condition  thereto  to  qualify  to do  business  or to file a general
          consent to service  of  process in any such  states or  jurisdictions,
          unless the Company is already subject to service in such  jurisdiction
          and except as may be required by the Securities Act.

                                       8
<PAGE>

               (e) In the event of any underwritten public offering,  enter into
          and perform its obligations under an underwriting  agreement, in usual
          and customary  form,  with the managing  underwriter of such offering.
          Each Holder  participating in such underwriting  shall also enter into
          and perform its obligations under such an agreement.

               (f) At  any  time  when  a  prospectus  relating  to  Registrable
          Securities  covered by such  registration  statement is required to be
          delivered  under the Securities  Act,  notify each Holder (i) when the
          registration statement or any post-effective  amendment and supplement
          thereto has become  effective,  (ii) of the issuance by the SEC of any
          stop order or the initiation of proceedings for that purpose (in which
          event the Company shall make every effort to obtain the  withdrawal of
          any order suspending  effectiveness  of the registration  statement at
          the earliest possible time or prevent the entry thereof), (iii) of the
          receipt  by  the  Company  of any  notification  with  respect  to the
          suspension of the qualification of the Registrable Securities for sale
          in any  jurisdiction  or the  initiation  of any  proceeding  for such
          purpose  and (iv) of the  happening  of any event as a result of which
          the prospectus  included in such  registration  statement,  as then in
          effect,  includes an untrue  statement of a material  fact or omits to
          state a material  fact  required to be stated  therein or necessary to
          make  the  statements  therein  not  misleading  in the  light  of the
          circumstances then existing.

               (g) Cause all such Registrable Securities registered hereunder to
          be listed on each  securities  exchange or quotation  service on which
          similar securities issued by the Company are then listed or quoted.

               (h) Provide a transfer  agent and registrar  for all  Registrable
          Securities  registered  hereunder  and a CUSIP  number  for  all  such
          Registrable Securities, in each case not later than the effective date
          of such registration.

               (4) Holders'  Obligation  to Furnish  Information.  It shall be a
          condition  precedent  to the  obligation  of the  Company  to take any
          action  pursuant to this Section (k) with  respect to the  Registrable
          Securities of any selling Holder that such Holder shall furnish to the
          Company  such  information   regarding  the  Holder,  the  Registrable
          Securities held by the Holder,  and the intended method of disposition
          of such  securities as shall be reasonably  required by the Company to
          effect the registration of such Holder's Registrable Securities.

                                       9
<PAGE>

               (5) Expenses of Piggyback  Registration.  The Company  shall bear
          and pay all expenses  incurred in connection with any  registration of
          Registrable  Securities pursuant to Section (k)(2)(a) for each Holder,
          including   (without   limitation)  all  registration,   filing,   and
          qualification   fees,   printers  and  accounting   fees  relating  or
          apportionable   thereto,  but  excluding  underwriting  discounts  and
          commissions  relating to Registrable  Securities;  provided,  however,
          that the Company shall not bear the cost of any  professional  fees or
          costs  of  accounting,  financial  or  legal  advisors  to  any of the
          Holders.  Notwithstanding  the  foregoing,  each Holder  shall pay all
          registration  expenses  that  such  Holder  is  required  to pay under
          applicable law.

               (6)  Underwriting  Requirements.  In connection with any offering
          involving an  underwriting  of shares of the Company's  capital stock,
          the Company shall not be required  under Section (k)(2) to include any
          of the Holders'  Registrable  Securities in such  underwriting  unless
          they accept the terms of the  underwriting  as agreed upon between the
          Company  and the  underwriters  selected  by it (or by  other  persons
          entitled to select the  underwriters),  and then only in such quantity
          as the  underwriters  determine  in  their  sole  discretion  will not
          jeopardize  the success of the offering by the  Company.  If the total
          amount of securities,  including Registrable Securities,  requested by
          selling stockholder to be included in such offering exceeds the amount
          of  securities  to  be  sold  other  than  by  the  Company  that  the
          underwriters determine in their sole discretion is compatible with the
          success of the offering, then the Company shall be required to include
          in the  offering  only  that  number  of  such  securities,  including
          Registrable Securities, which the underwriters determine in their sole
          discretion  will not  jeopardize  the  success  of the  offering  (the
          securities  so included to be  apportioned  pro rata among the selling
          stockholders,  including the Holders, according to the total amount of
          securities  entitled  to be  included  therein  owned by each  selling
          stockholder  or in such other  proportions as shall mutually be agreed
          to by  such  selling  stockholders).  For  purposes  of the  preceding
          parenthetical  concerning  apportionment,  for any selling stockholder
          who is a Holder of  Registrable  Securities  and is a  partnership  or
          corporation,  the partners,  retired partners and stockholders of such
          holder,  or the estates and family  members of any such  partners  and
          retired  partners  and  any  trusts  for  the  benefit  of  any of the
          foregoing   persons   shall  be  deemed   to  be  a  single   "selling
          stockholder", and any pro-rata reduction with respect to such "selling
          stockholder"  shall  be based  upon the  aggregate  amount  of  shares
          carrying  registration  rights owned by all  entities and  individuals
          included in such "selling stockholder", as defined in this sentence.

                                       10
<PAGE>

               (7)  Delay of  Registration.  No Holder  shall  have any right to
          obtain or seek an  injunction  restraining  or otherwise  delaying any
          such  registration as the result of any  controversy  that might arise
          with  respect  to  the   interpretation  or  implementation  of  these
          Registration Rights.

               (8) Indemnification. In the event that any Registrable Securities
          are included in a registration statement under this Section (k)(2):

                    (a) To  the  extent  permitted  by  law,  the  Company  will
               indemnify  and hold  harmless each Holder,  any  underwriter  (as
               defined in the  Securities  Act) for such Holder and each person,
               if any,  who  controls  such  Holder or  underwriter  within  the
               meaning of the  Securities  Act or the Exchange Act,  against any
               losses,  claims,  damages,  or liabilities  (joint or several) to
               which they may become  subject under the  Securities  Act, or the
               Exchange  Act,  insofar  as  such  losses,  claims,  damages,  or
               liabilities  (or actions in respect  thereof) arise out of or are
               based  upon  any  of  the  following  statements,   omissions  or
               violations (collectively a "Violation"): (i) any untrue statement
               or alleged untrue  statement of a material fact contained in such
               registration  statement,  including any preliminary prospectus or
               final   prospectus   contained   therein  or  any  amendments  or
               supplements  thereto,  (ii) the  omission or alleged  omission to
               state therein a material fact required to be stated  therein,  or
               necessary to make the statements therein not misleading, or (iii)
               any  violation  or  alleged  violation  by  the  Company  of  the
               Securities  Act,  the  Exchange  Act,  or any rule or  regulation
               promulgated  under the  Securities  Act, or the Exchange Act, and
               the  Company  will  pay  to  each  such  Holder,  underwriter  or
               controlling  person,  as  incurred,  any legal or other  expenses
               reasonably  incurred by them in connection with  investigating or
               defending any such loss,  claim,  damage,  liability,  or action;
               provided, however, that the indemnity agreement contained in this
               Section  (k)(8) shall not apply to amounts paid in  settlement of
               any such  loss,  claim,  damage,  liability,  or  action  if such
               settlement is effected  without the consent of the Company (which
               consent  shall  not be  unreasonably  withheld),  nor  shall  the
               Company  be  liable in any such  case for any such  loss,  claim,
               damage,  liability, or action to the extent that it arises out of
               or is based upon a Violation which occurs in reliance upon and in
               conformity with written  information  furnished expressly for use
               in  connection  with  such   registration  by  any  such  Holder,
               underwriter or controlling person.

                    (b) To the extent permitted by law, each selling Holder will
               indemnify and hold harmless the Company,  each of its  directors,
               each of its officers who has signed the regis-

                                       11
<PAGE>

               tration statement,  each person, if any, who controls the Company
               within the meaning of the Securities  Act, any  underwriter,  any
               other person selling  securities in such  registration  statement
               and any  controlling  person  of any  such  underwriter  or other
               person,  against  any losses,  claims,  damages,  or  liabilities
               (joint or  several)  to which any of the  foregoing  persons  may
               become  subject,  under the Securities  Act, or the Exchange Act,
               insofar as such  losses,  claims,  damages,  or  liabilities  (or
               actions  in respect  thereto)  arise out of or are based upon any
               Violation,  in each case to the extent  (and only to the  extent)
               that such  Violation  occurs in reliance  upon and in  conformity
               with written  information  furnished by such Holder expressly for
               use in connection  with such  registration;  and each such Holder
               will pay, as  incurred,  any legal or other  expenses  reasonably
               incurred  by any person  intended to be  indemnified  pursuant to
               this  Section  (8)(b),   in  connection  with   investigating  or
               defending any such loss,  claim,  damage,  liability,  or action;
               provided, however, that the indemnity agreement contained in this
               Section  (8)(b) shall not apply to amounts paid in  settlement of
               any  such  loss,  claim,  damage,  liability  or  action  if such
               settlement is effected  without the consent of the Holder,  which
               consent shall not be unreasonably withheld; provided, that, in no
               event shall any  indemnity  under this Section  (8)(b) exceed the
               gross proceeds from the offering received by such Holder.

                    (c) Promptly  after  receipt by an  indemnified  party under
               this  Section  (8) of notice of the  commencement  of any  action
               (including  any  governmental  action),  such  indemnified  party
               shall,  if a claim in respect  thereof is to be made  against any
               indemnifying  party  under  this  Section  (8),  deliver  to  the
               indemnifying  party a written notice of the commencement  thereof
               and the  indemnifying  party shall have the right to  participate
               in, and, to the extent the indemnifying party so desires, jointly
               with any other indemnifying party similarly  notified,  to assume
               the defense  thereof  with counsel  selected by the  indemnifying
               party and approved by the indemnified party (whose approval shall
               not  be  unreasonably  withheld);   provided,  however,  that  an
               indemnified  party (together with all other  indemnified  parties
               which may be represented  without  conflict by one counsel) shall
               have the right to retain one separate counsel,  with the fees and
               expenses to be paid by the indemnifying  party, if representation
               of  such  indemnified  party  by  the  counsel  retained  by  the
               indemnifying  party  would  be  inappropriate  due to  actual  or
               potential  differing interests between such indemnified party and
               any other party  represented by such counsel in such  proceeding.
               The failure to deliver written notice to the  indemnifying  party
               within a reasonable time of the  commencement of any such action,
               if  prejudicial  to its  ability  to defend  such  action,  shall
               relieve  such   indemnifying   party  of  any  liability  to  the
               indemnified party under this

                                       12
<PAGE>

               Section (8), but the omission so to deliver written notice to the
               indemnifying  party will not relieve it of any liability  that it
               may have to any  indemnified  party  otherwise  than  under  this
               Section (8).

                    (d) If the indemnification  provided for in this Section (8)
               is held by a court of competent jurisdiction to be unavailable to
               an indemnified party with respect to any loss, liability,  claim,
               damage,  or expense  referred to therein,  then the  indemnifying
               party, in lieu of indemnifying  such indemnified party hereunder,
               shall   contribute   to  the  amount  paid  or  payable  by  such
               indemnified party as a result of such loss, liability, claim, dam
               age, or expense in such  proportion as is  appropriate to reflect
               the relative fault of the indemnifying  party on the one hand and
               of the  indemnified  party on the  other in  connection  with the
               statements or omissions  that  resulted in such loss,  liability,
               claim, damage, or expense as well as any other relevant equitable
               considerations.  The relative fault of the indemnifying party and
               of the  indemnified  party shall be  determined  by reference to,
               among  other  things,   whether  the  untrue  or  alleged  untrue
               statement of a material  fact or the omission to state a material
               fact relates to information supplied by the indemnifying party or
               by the  indemnified  party  and  the  parties'  relative  intent,
               knowledge,  access to information,  and opportunity to correct or
               prevent such statement or omission.

                    (e)  Notwithstanding  the foregoing,  to the extent that the
               provisions on indemnification  and contribution  contained in the
               underwriting  agreement  entered  into  in  connection  with  the
               underwritten  public  offering are in conflict with the foregoing
               provisions,  the provisions in the  underwriting  agreement shall
               control.

                    (f) The  obligations  of the Company and Holders  under this
               Section  (8) shall  survive  the  completion  of any  offering of
               Registrable  Securities in a registration  statement  under these
               Registration Rights, and otherwise.

               (9)  Reports  under  the  Exchange  Act.  With a view  to  making
          available  to the Holders the  benefits of Rule 144 and any other rule
          or  regulation of the SEC that may at any time permit a Holder to sell
          securities of the Company to the public  pursuant to an exemption from
          registration, the Company agrees to:

                    (a) File with the SEC in a timely  manner  all  reports  and
               other documents  required of the Company under the Securities Act
               and the Exchange Act; and

                                       13
<PAGE>

                    (b)  Furnish to any  Holder,  so long as the Holder owns any
               Registrable Securities,  forthwith upon request (i) a copy of the
               most recent  annual or  quarterly  report of the Company and such
               other  reports and  documents so filed by the  Company,  and (ii)
               such other information as may be reasonably requested in availing
               any Holder of any rule or regulation of the SEC which permits the
               selling of any such securities  without  registration or pursuant
               to such form.

          (10) Permitted Transferees. The right to cause the Company to register
     Registrable  Securities  granted  to the Holder by the  Company  under this
     Warrant may be assigned in full by a Holder in  connection  with a transfer
     by such Holder of its  Registrable  Securities  if:  (a) such  Holder gives
     prior written notice to the Company;  (b) such transferee  agrees to comply
     with the terms and  provisions  of this  Agreement;  (c) such  transfer  is
     otherwise  in  compliance  with this  Agreement  and  (d) such  transfer is
     otherwise be effected in accordance with applicable securities laws. Except
     as specifically permitted by this Section (10), the rights of a Holder with
     respect  to  Registrable   Securities  as  set  out  herein  shall  not  be
     transferable  to any other person,  and any attempted  transfer shall cause
     all rights of such Holder therein to be forfeited.

          (11)  Termination of Registration  Rights.  The right of any Holder to
     request the filing or  inclusion  in any  registration  pursuant to Section
     (k)(2) shall  terminate if all  Registrable  Securities held by such Holder
     may immediately be sold under Rule 144.

     (l)  Redemption  of Warrants.  Provided the closing  price of the Company's
Common Stock is greater than $2.00 for 10 consecutive trading days, or if on any
particular  day within  such  period on which no trading  occurs,  provided  the
closing  bid price is greater  than $2.00,  the Company  shall have the right to
call the  Warrants for  redemption  at a price of $.001 per Warrant at any time.
The Company shall give no less than 30 days written  notice of redemption to the
Holders as of the date of such notice.  Such notice shall set a redemption  date
not more than 90 days after the date of the redemption  notice (the  "Redemption
Date").  Upon the  Redemption  Date,  the Warrants  shall be cancelled and shall
thereafter  be null and void and of no effect,  and the Company shall pay to the
Holders as of the date of the notice the above  redemption  price upon surrender
of their Warrants.  No Warrant will be subject to redemption  unless at the time
of the giving of such notice the Company has an effective registration statement

                                       14
<PAGE>

under the Securities Act registering its sale of the Warrant Stock.

     (m) Transfer to Comply with the Securities Act.

          (1) This Warrant,  or any new warrant  issued  pursuant to Section (d)
     hereof,  or the Warrant Stock or any other security issued or issuable upon
     exercise of this  Warrant,  may not be offered or sold except in conformity
     with the  Securities  Act and then only against  receipt of an agreement of
     such  person  to whom  such  offer  of sale is  made  to  comply  with  the
     provisions  of this  Section  (m)  with  respect  to any  resale  or  other
     disposition of such securities.

          (2) The  Company  may cause a  customary  legend  for  securities  not
     registered  under the  Securities  Act to be set forth on each  certificate
     representing  Warrant Stock or any other  security  issued or issuable upon
     exercise of this Warrant not theretofore  distributed to the public or sold
     to  underwriters  for  distribution  to the public  pursuant to Section (k)
     hereof,  unless  counsel  for the  Company is of the opinion as to any such
     certificate that such legend is unnecessary.

     (n)   Notices.   All   notices,   requests,   claims,   demands  and  other
communications  hereunder  shall be in writing and shall be given  either (i) by
delivery in person,  in which case any such notice  shall be deemed to have been
duly given upon  receipt,  or (ii) by certified  mail,  (postage paid and return
receipt requested), in  which case said  notice will be deemed to have been duly
given three (3) days after such mailing, to the respective parties as follows:

     If to the Company:

     SYCONET.COM, INC.
     9208A Venture Court
     Manassas Park, Virginia  20111

     If to Holder:

                       _____________________

                       _____________________

                       _____________________

                                       15
<PAGE>

or to such other  address  as either  party may have  furnished  to the other in
writing in accordance herewith, except that notices of a change of address shall
only be effective upon receipt.

     (n)  Governing  Law.  This  Warrant  shall be governed by and  construed in
accordance  with  the laws of the  State  of New  York,  without  regard  to the
principles of conflict of laws.

     (o) No Prior  Agreements.  This Warrant (i) contains the entire  agreement,
and supersedes all other prior agreements and  understandings,  both written and
oral,  between the parties hereto with respect to the subject matter hereof, and
(ii) is not  intended  to confer  upon any other  person any rights or  remedies
hereunder.

     (p) Effect of Headings.  The section  headings  herein are for  convenience
only and shall not affect the meaning or construction of this Agreement.

                                       SYCONET.COM, INC.

                                       By:
                                           -------------------------------------
                                            Sy Picon, Chairman

                CLASS A REDEEMABLE COMMON STOCK PURCHASE WARRANT

                                       16
<PAGE>

                                  PURCHASE FORM

                                                    Dated _______________, 20___

     The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing  _____________  shares of Common Stock of  SYCONET.COM,
INC. and hereby makes payment of $__________  in payment of the actual  exercise
price thereof.

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name ___________________________________________________________________________
     (please typewrite or print in block letters)

Address ________________________________________________________________________

Signature ______________________________________________________________________

Social Security or Employer I.D. No. ___________________________________________

                                 ASSIGNMENT FORM

     FOR VALUE RECEIVED, _______________________________________________________

hereby sells, assigns and transfers unto

Name ___________________________________________________________________________
     (please typewrite or print in block letters)

Address ________________________________________________________________________

the right to purchase Common Stock, represented by this Warrant to the extent of
____________  shares  as  to  which  right  is  exercisable,   and  does  hereby
irrevocably  constitute  and  appoint  ________________________________________,
attorney,  to transfer  the same on the books of the Company  with full power of
substitution in the premises.

                                          Signature ____________________________

Dated: ___________________, 20___

                                       17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]