Document:

Employment Agreement (Scott L. Kinney)

                                                     Exhibit 10.23

EMPLOYMENT AGREEMENT

This Employment Agreement (the
"Agreement"), is made as of the Effective Date indicated below, by
and between BigCharts Inc., a Minnesota corporation ("Charts") and
Scott L. Kinney (the "Executive").

BACKGROUND

This Agreement is entered into in connection with an
Agreement and Plan of Reorganization (the "Reorganization
Agreement") dated as of April 28, 1999, by and among MarketWatch.com,
Inc., ("MarketWatch"), Big Dog Acquisition Corp., a Minnesota
corporation and a wholly-owned subsidiary of MarketWatch ("Sub"),
Charts and certain shareholders of Charts, pursuant to which Sub is to merge
with and into Charts, with Charts becoming a wholly-owned subsidiary of
MarketWatch (the "Merger"). The date on which the Merger becomes
effective will be the effective date of this Agreement (the "Effective
Date").

MarketWatch and Charts desire to retain the services of
Executive, and Executive desires to be retained by MarketWatch and Charts, on
the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements of the parties contained herein, MarketWatch, Charts and
Executive hereby agree as follows:
1.Term of Employment: The term of employment of
Executive by Charts hereunder shall commence on the Commencement Date and shall
continue thereafter on the same terms and conditions for a period of five (5)
years unless earlier terminated pursuant to Section 6 (such term being
hereinafter referred to as the "Employment Period"). The
Employment Period shall be extended automatically without further action by
either party as of the third anniversary of the Commencement Date for a period
of one (1) year, unless prior to such date Charts or the Executive shall notify
the other in writing of its or his intention not to renew the Agreement, in
which case the Agreement shall terminate at the end of the original term. If the
Employment Period is extended, it shall thereafter be referred to as the
Employment Period.

2.Title; Duties: The Executive shall serve as the
Chief Operating Officer of Charts reporting to the Chief Executive Officer of
Charts. Executive shall perform those duties and responsibilities inherent in
such position including such duties and responsibilities as the Chief Executive
Officer shall assign. The Executive agrees to devote his full time and best
efforts, attention and energies to the business and interests of Charts.
Executive shall serve Charts faithfully and to the best of his ability in such
capacities, devoting his full business time, attention, knowledge, energy and
skills to such employment; provided, however, Charts acknowledges that Executive
may serve on the board of directors of other companies with the prior approval
of the Board, it being expressly understood that such consent shall not be
required for companies in which Executive currently serves as a director.
Executive shall travel as reasonably required in connection with the performance
of his duties hereunder. 

3.Compensation: Charts shall pay and Executive
shall accept as full consideration for his services hereunder, compensation
consisting of the following:
3.1Base Salary. $120,000 per year base salary
during the first year of the term of this Agreement; and increasing 5% per annum
for every year thereafter. (subject to increase by the Board) during successive
years of the term of this Agreement if the Employment Period is extended past
the original five-year term pursuant to Section 1 hereof. "Base
Salary" shall mean the base salary provided for in this Section 3.1.
Base Salary is payable in installments in accordance with Charts' normal payroll
practices, less such deductions or withholdings as are required by law.

3.2Bonus. Annual target bonus at the rate and in
accordance with the specifications on Exhibit A attached
hereto.

4.Benefits: Subject to all applicable eligibility
requirements, and legal limitations, Executive will be able to participate in
any and all 401(k), vacation, medical, dental, life and long-term disability
insurance and/or other benefit plans which from time to time may be established
for other employees of MarketWatch with a similar compensation level, duties and
responsibilities.

5.Reimbursement of Expenses: Charts will reimburse
Executive for all reasonable travel, entertainment and other expenses incurred
or paid by the Executive in connection with, or related to, the performance of
his duties, responsibilities or services under this Agreement subject to review
by the Board or its compensation committee, if applicable, and in a manner
consistent with MarketWatch's policies for reimbursement of such expenses.

6.Benefit Upon Termination of Employment
Period.
6.1Disability. In the event of the permanent
disability (as hereinafter defined) of Executive during the Employment Period,
Charts shall have the right, upon written notice to Executive, to terminate
Executive's employment hereunder, effective upon the 30th calendar
day following the giving of such notice (or such later day as shall be specified
in such notice). Upon the effectiveness of such termination, (i) Charts shall
have no further obligations hereunder, except to pay and provide, subject to
applicable withholding, (A) all amounts of Base Salary accrued, but unpaid, at
the effective date of termination, (B) Executive's target bonus, and (C) all
reasonable unreimbursed business-related expenses, (ii) the shares subject to
Executive's MarketWatch Option (as defined in the Reorganization Agreement)
shall immediately vest and become exercisable and remain exercisable for the
periods specified in the MarketWatch Option, and (iv) Executive shall then be
deemed to be a Charts Employee Shareholder for purposes of the "Lock Up"
restrictions of Section 2.6 of the Reorganization Agreement and the number of
shares that are then Unlocked Shares (as defined in the Reorganization
Agreement) shall be recomputed as if Executive had been subject to the
provisions of Section 2.6(a)(i) of the Reorganization Agreement instead of
Section 2.6(a)(ii) of the Reorganization Agreement since the Closing Date (as
defined in the Reorganization Agreement), and (iii) Executive shall have no
further obligations hereunder other than those provided for in Sections 9 and 10
hereof. All amounts payable to Executive pursuant to this Section 6.1 shall be
payable within 30 days following the effectiveness of the termination of
Executive's employment. For purposes of this Agreement, "permanent
disability" shall be defined as any physical or mental disability or
incapacity which renders Executive incapable in any material respect of
performing the services required of him in accordance with his obligations under
Section 2 for a period of 180 consecutive days, or for 180 days in any 360 day
period.

6.2Death. In the event of the death of Executive
during the Employment Period, this Agreement shall automatically terminate and
Charts shall have no further obligations hereunder, except to pay and provide to
Executive's beneficiary or other legal representative, subject to applicable
withholding, (i) all amounts of Base Salary and bonus accrued but unpaid, at the
date of death, (ii) the shares subject to Executive's MarketWatch Option shall
immediately vest and become exercisable and remain exercisable for the periods
specified in the Option, (iii) Executive shall then be deemed to be a Charts
Employee Shareholder for purposes of the "Lock Up" restrictions of Section 2.6
of the Reorganization Agreement and the number of shares that are then Unlocked
Shares shall be recomputed as if Executive had been subject to the provisions of
Section 2.6(a)(i) of the Reorganization Agreement instead of Section 2.6(a)(ii)
of the Reorganization Agreement since the Closing, and (iv) all reasonable
unreimbursed business-related expenses. All amounts payable to Executive
pursuant to this Section 6.2 shall be payable within 30 days following the date
of death.

6.3Termination Without Cause. In the event of the
termination of Executive's employment by Charts without Cause (as defined below)
or upon the Executive's voluntary termination of his employment for Good Reason
(as defined below), (i) all amounts of Base Salary and bonus accrued but unpaid
on the date of termination shall be paid by Charts within 30 days following the
date of termination, (ii) an amount equal to Executive's Base Salary on the date
of termination for a period of six months shall be paid by Charts in six equal
installments, (iii) the shares subject to Executive's MarketWatch Option shall
immediately vest and become exercisable and remain exercisable for the periods
specified in the Option, and (iv) Executive shall then be deemed to be a Charts
Employee Shareholder for purposes of the "Lock Up" restrictions of Section 2.6
of the Reorganization Agreement and the number of shares that are then Unlocked
Shares shall be recomputed as if Executive had been subject to the provisions of
Section 2.6(a)(i) of the Reorganization Agreement instead of Section 2.6(a)(ii)
of the Reorganization Agreement since the Closing. For purposes of this
Agreement, "Cause" shall be limited to:
(a) Willful and repeated failure by Executive to carry out
the lawful instructions of the Board after being notified of such failure, other
than a failure resulting from his complete or partial incapacity due to physical
or mental illness or impairment;

(b) Indictment or a violation of a federal or state law or
regulation which indictment or violation is for a crime which is a felony under
federal or state law, or any violation of state or federal securities laws
involving securities of MarketWatch which would result in a civil penalty being
imposed by the U.S. Securities and Exchange Commission or similar state
securities law authority;

(c) An act of personal dishonesty that would result
in Executive's personal enrichment at the expense of MarketWatch or Charts;
or

(d) Executive's willful breach of a material provision of
Executive's Non-Competition Agreement after notice by the Board of Directors of
MarketWatch.

6.4Circumstances Under Which Termination Benefits
Would Not Be Paid. Charts shall only be obligated to pay the amounts of Base
Salary and bonus accrued but unpaid on the date of termination, and shall not be
obligated to pay Executive the termination benefits described in subparagraphs
6.1 through 6.3 above if the Employment Period is terminated for Cause, or if
Executive voluntarily terminates his employment other than for Good Reason (as
defined below). If the Employment Period is terminated for Other Cause (defined
below), Employee shall be entitled to the option vesting and lock-up adjustment
in clauses (iii) and (iv) of Section 6.3, but shall receive no other termination
benefits. For purposes of this Agreement, "Other Cause" shall be
limited to:

(a)Willful and deliberate failure by Executive to
substantially perform his duties hereunder and not cured within a reasonable
period after written notice from the Board, other than a failure resulting from
his complete or partial incapacity due to physical or mental illness or
impairment;

(b)A material and willful violation of a federal or
state law or regulation applicable to the business of the company without the
company's knowledge;

(c)Commission of a willful and deliberate act by
Executive which constitutes gross misconduct and is injurious to Charts or
MarketWatch; or

(d)A willful and deliberate breach of a material
provision of this Agreement after written notice.

6.5Constructive Termination. Notwithstanding
anything in Section 3 or in this Section 6 to the contrary, for purposes of
this Agreement the Employment Period will be deemed to have been terminated and
Executive will be deemed to have Good Reason for voluntary termination of the
Employment Period ("Good Reason"), if there should
occur:

(a)
                  Without Executive's consent, a change in Executive's
position and responsibilities from those immediately prior to the Effective Date
such that those duties and responsibilities are not reasonably comparable to
those held prior to the Effective Date;

(b)
                a reduction in base salary; or

(c)
                       A relocation of Executive's principal place of employment
more than 50 miles from Minneapolis, Minnesota, San Francisco, California, or
New York, New York without Executive's consent.

7.Change in Control Benefits:

Should there occur a Change in Control, then the
following provisions shall become applicable:

(A)During the period (if any) following a Change in
Control that Executive shall continue to remain employed, then the terms and
provisions of this Agreement shall continue in full force and effect, and the
Option shall continue to vest and become and remain exercisable in accordance
with the terms of the Option; or

(B)In the event of (i) a termination of the
Executive's employment by Charts or its successor or MarketWatch or its
successor, as applicable, other than for Other Cause or Cause within six (6)
months after a Change in Control or (ii) Executive voluntarily terminates his
employment for Good Reason within six (6) months after a Change in Control:

(i)Charts shall pay to Executive an amount equal to (A)
all amounts of bonus accrued to the date of termination, (B) 100% of Executive's
Base Salary for a period of one year, and (C) Executive's target bonus for a
period of one year, in one lump sum amount on or before the fifth business day
following the effective date of Executive's termination; and

(ii)The unvested portion of the MarketWatch
Option held by Executive on the date of such Change in Control shall immediately
vest and become exercisable and Executive shall then be deemed to be a Charts
Employee Shareholder for purposes of the "Lock Up" restrictions of Section 2.6
of the Reorganization Agreement and the number of shares that are then Unlocked
Shares shall be recomputed as if Executive had been subject to the provisions of
Section 2.6(a)(i) of the Reorganization Agreement instead of Section 2.6(a)(ii)
of the Reorganization Agreement since the Closing Date.

For purposes of Sections 6 and 7 hereof, the term
"Change in Control" shall mean:

(x)the sale, lease, conveyance, liquidation or other
disposition of all or substantially all of Charts' or MarketWatch's assets as an
entirety or substantially as an entirety to any person, entity or group of
persons acting in concert other than (i) to MarketWatch or any affiliates of
Charts or MarketWatch, including, without limitation, DBC, CBS or any of their
affiliates, (ii) in the ordinary course of business; or

(y)any transaction or series of related transactions (as
a result of a tender offer, merger, consolidation or otherwise) that results in
any Person (as defined in Section 13(h)(8)(E) under the Securities Exchange Act
of 1934) other than MarketWatch or Sub becoming the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the aggregate voting power of all classes of
common equity securities of Charts or MarketWatch, except if such Person is (A)
a subsidiary of Charts or MarketWatch, (B) an employee stock ownership plan for
employees of Charts or MarketWatch, (C) a company formed to hold Charts' or
MarketWatch's common equity securities and whose shareholders constituted, at
the time such company became such holding company, substantially all the equity
owners or shareholders of Charts or MarketWatch, or (D) DBC, CBS and/or any of
their affiliates.

In the event that the severance and other benefits provided
to Executive pursuant to Section 6 of this Agreement or otherwise
("Total Payments") (i) constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") and (ii) but for this
Section 7, such severance and benefits would be subject to the excise tax
imposed by Section 4999 of the Code (the "Excise Tax"), then
Executive shall be entitled to receive an additional cash payment (a "Gross-Up
Payment") within 30 days of the Change in Control equal to an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed upon the
Gross-Up Payment, Executive would retain an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Total Payments. For purposes of the foregoing
determination, Executive's tax rate shall be deemed to be the highest statutory
marginal state and Federal tax rate (on a combined basis) (including Executive's
share of F.I.C.A and Medicare taxes) then in effect. If no determination by the
Company's auditors is made prior to the time a tax return reflecting the Total
Payments is required to be filed, Executive will be entitled to receive a Gross-
Up Payment calculated on the basis of the Total Payments reported by Executive
in such tax return, within 30 days of the filing of such tax return. In all
events, if any tax authority determines that a greater Excise Tax should be
imposed upon the Total Payments than is determined by the Company's independent
auditors of reflected in Executive's tax return pursuant to this Section 7,
Executive shall be entitled to receive the full Gross-Up Payment calculated on
the basis of the amount of Excise Tax determined to be payable by such tax
authority from the Company within 30 days of such determination.

Unless Charts and Executive otherwise agree in writing, any
determination required under this Section 7 shall be made in writing by
independent public accountants agreed to by Charts and Executive (the
"Accountants"), whose determination shall be conclusive and
binding upon Executive and Charts for all purposes. The Accountants may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. Charts and Executive shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in
order to make a determination under this Section 7. Charts shall bear all costs
the Accountants may reasonably incur in connection with any calculations
contemplated by this Section 7.

8.Dispute Resolution: Charts and Executive agree
that any dispute regarding the interpretation or enforcement of this Agreement
shall be decided by confidential, final and binding arbitration conducted by
Judicial Arbitration and Mediation Services ("JAMS") under the
then-existing JAMS rules, rather than by litigation in court, trial by jury,
administrative proceeding, or in any other forum.

9.Cooperation with Charts After Termination of the
Employment Period: Following termination of the Employment Period by
Executive, Executive shall reasonably cooperate with Charts and/or MarketWatch
in all matters relating to the winding up of his pending work on behalf of
Charts and the orderly transfer of any such pending work to other employees of
Charts as may be designated by Charts.

10.Confidentiality; Return of Property: The
Executive acknowledges that during the Employment Period he will receive
confidential information from Charts and affiliates of Charts (including,
without limitation, MarketWatch) and the respective clients thereof (each a
"Relevant Entity"). Accordingly, the Executive agrees that during
the Employment Period (as it may be extended from time to time) and thereafter
for a period of two years, the Executive and his affiliates shall not, except in
the performance of his obligations to Charts hereunder or as may otherwise be
approved in advance by Charts, directly or indirectly, disclose or use (except
for the direct benefit of Charts) any confidential information that he may learn
or has learned by reason of his association with any Relevant Entity. Upon
termination of this Agreement, the Executive shall promptly return to Charts any
and all properties, records or papers of any Relevant Entity, that may have been
in his possession at the time of termination, whether prepared by the Executive
or others, including, but not limited to, confidential information and keys. For
purposes of this Agreement, "confidential information" includes
all data, analyses, reports, interpretations, forecasts, documents and
information concerning a Relevant Entity and its affairs, including, without
limitation with respect to clients, products, policies, procedures,
methodologies, trade secrets and other intellectual property, systems,
personnel, confidential reports, technical information, financial information,
business transactions, business plans, prospects or opportunities, (i) that
Charts reasonably believes are confidential or (ii) the disclosure of which
could be injurious to a Relevant Entity or beneficial to competitors of a
Relevant Entity, but shall exclude any information that (x) the Executive is
required to disclose under any applicable laws, regulations or directives of any
government agency, tribunal or authority having jurisdiction in the matter or
under subpoena or other process of law, (y) is or becomes publicly available
prior to the Executive's disclosure or use of the information in a manner
violative of the second sentence of this Section 10, or (z) is rightfully
received by Executive without restriction or disclosure from a third party
legally entitled to possess and to disclose such information without restriction
(other than information that he may learn or has learned by reason of his
association with any Relevant Entity). For purposes of this Agreement,
"affiliate" means any entity that, directly or indirectly, is
controlled by, or under common control with, the Executive. For purposes of this
definition, the terms "controlled" and "under common control
with" means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such person, whether
through the ownership of voting stock, by contract or otherwise.

11.General:
11.1Indemnification. In the event Executive is
made, or threatened to be made, a party to any legal action or proceeding,
whether civil or criminal, by reason of the fact that Executive is or was a
director or officer of Charts or serves or served any other corporation fifty
percent (50%) or more owned or controlled by Charts in any capacity at Charts'
request, Executive shall be indemnified by Charts, and Charts shall pay
Executive's related expenses when and as incurred, all to the fullest extent
permitted by law. Upon the closing of the Merger, MarketWatch shall execute an
indemnification agreement with Executive, which indemnification agreement is on
the same terms and conditions as MarketWatch has entered into with its other
executive officers and directors.

11.2Waiver. Neither party shall, by mere lapse of
time, without giving notice or taking other action hereunder, be deemed to have
waived any breach by the other party of any of the provisions of this Agreement.
Further, the waiver by either party of a particular breach of this Agreement by
the other shall neither be construed as, nor constitute a, continuing waiver of
such breach or of other breaches by the same or any other provision of this
Agreement.

11.3Severability. If for any reason a court of
competent jurisdiction or arbitrator finds any provision of this Agreement to be
unenforceable, the provision shall be deemed amended as necessary to conform to
applicable laws or regulations, or if it cannot be so amended without materially
altering the intention of the parties, the remainder of the Agreement shall
continue in full force and effect as if the offending provision were not
contained herein.

11.4Notices. All notices and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be considered effective upon personal service or upon transmission of a
facsimile or the deposit with Federal Express or in Express Mail and addressed
to the Chairman of the Board of Charts at its principal corporate address, and
to Executive at his most recent address shown on Charts' corporate records, or
at any other address which he may specify in any appropriate notice to
Charts.

11.5Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original and all
of which taken together constitutes one and the same instrument and in making
proof hereof it shall not be necessary to produce or account for more than one
such counterpart.

11.6Entire Agreement. The parties hereto
acknowledge that each has read this Agreement, understands it, and agrees to be
bound by its terms. The parties further agree that this Agreement, together with
the Noncompetition Agreement of even date herewith, shall constitute the
complete and exclusive statement of the agreement between the parties and
supersedes all proposals (oral or written), understandings, representations,
conditions, covenants, and all other communications between the parties relating
to the subject matter hereof. 

11.7Governing Law. This Agreement shall be
governed by the law of the State of Minnesota.

11.8Assignment and Successors. Charts shall have
the right to assign its rights and obligations under this Agreement to an entity
which acquires substantially all of the assets of Charts, whether by merger or
otherwise including, without limitation, MarketWatch or any affiliate thereof.
The rights and obligations of Charts under this Agreement shall inure to the
benefit and shall be binding upon the successors and assigns of Charts.

 

 

 

 

 

 

[Remainder of this page intentionally left blank]

 

IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

BIGCHARTS INC.

/s/ Philip D. Hotchkiss

Name: Philip D. Hotchkiss

Title: Chief Executive Officer

EXECUTIVE

/s/ Scott L. Kinney

Scott L. Kinney

[Signature Page to Employment Agreement]

Exhibit A

TARGET BONUS AND SPECIFICATIONS

 

 

Annual Target Bonus Rate: fifty percent (50%) of the then-applicable
base salary actually paid in a given year. For example, if the base salary
actually paid in the second year of the term of this Agreement is $210,000, the
maximum target bonus would be $105,000 ($210,000 multiplied by 50%) for that
year.

 

Specifications: two components.
Discretionary Component: Board may decide when, and if to grant this
component. This component shall be 25% of the then-applicable base salary
actually paid in a given year.

Achievement of Financial Objectives Component: Target Bonus, in the
amount payable shown below, is payable upon the achievement of the financial
objectives of the consolidated Charts and MarketWatch set forth below:

	
 
	
% of Base Salary Actually Paid for Such Year Payable Upon
Achievement of

Financial Objectives
	
 

 

Financial Objectives

	
1st Year
	
25%
	
To be determined annually by the Board

	
2nd Year
	
25%
	
To be determined annually by the Board

	
3rd Year
	
25%
	
To be determined annually by the Board

	
4th Year
	
25%
	
To be determined annually by the Board

	
5th Year
	
25%
	
To be determined annually by the BoardEXHIBIT 4.5
                                                                     -----------

         WARRANT AGREEMENT dated as of January 5, 2001 between Delcath Systems,
Inc., a Delaware corporation (the "Company"), and Euroland Marketing Solutions,
LTD. (hereinafter referred to as the "Consultant").

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

         WHEREAS, the Company proposes to issue to the Consultant warrants (the
"Warrants") to purchase up to 150,000 (as such number may be adjusted from time
to time pursuant to Article 8 of this Agreement) "Units" (as herewith defined in
Article 1 hereof); and
         WHEREAS, the Consultant has agreed, pursuant to the Consulting Services
Agreement (the "Consulting Services Agreement") dated January 5, 2001 between
the Consultant and the Company, to provide, among other services, financial
consulting services and advice pertaining to the Company's business in Europe;
and
         WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to the Consultant or to its designees who are officers and
shareholders of the Consultant (collectively, the "Designees"), in consideration
for, and as the Consultant's compensation in connection with, the Consulting
Services Agreement;
         NOW, THEREFORE, in consideration of the premises, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1.       Grant.
         -----

         The Consultant and/or the Designees are hereby granted the right to
purchase, at any time from January 5, 2001 until 5:00 P.M., New York City time,
on

<PAGE>

January 4, 2005 (the "Warrant Exercise Term"), up to 150,000 Units at an
initial exercise price (subject to adjustment as provided in Article 8 hereof)
of $7.00 per Unit. Each Unit consists of one fully-paid and non-assessable share
(the "Shares") of the Company's Common Stock, $.01 par value ("Common Stock"),
and one Common Stock purchase warrant (the "Unit Warrants"). The Unit Warrants
are each exercisable to purchase one fully-paid and non-assessable share of
Common Stock at a price of $6.60 per share (the "Unit Warrant Shares"). The Unit
Warrants are exercisable commencing October 19, 2001 (or such earlier date as to
which Whale Securities Co., L.P. (the "Underwriter") consents to the Units
becoming detachable and separately transferable) (the "Separation Date") until
5:00 P.M., New York City time on October 18, 2005.

2.       Warrant Certificates.
         --------------------
         The warrant certificates delivered and to be delivered pursuant to this
Agreement (the "Warrant Certificates") shall be in the form set forth in Exhibit
A attached hereto and made a part hereof, with such appropriate insertions,
omissions, substitutions and other variations as required or permitted by this
Agreement.

3.       Exercise of Warrant.
         -------------------
         The Warrants initially are exercisable at a price of $7.00 per Unit,
payable in cash or by check to the order of the Company, or any combination
thereof, subject to adjustment as provided in Article 8 hereof. Upon surrender
of the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Units purchased, at the Company's principal offices in Connecticut
(currently located at 1100 Summer Street, Stamford, Connecticut 06905) the
registered holder of a Warrant Certificate ("Holder" or "Holders")

                                      -2-
<PAGE>

shall be entitled to receive a certificate or certificates for the Shares so
purchased and a certificate or certificates for the Unit Warrants so purchased.
The purchase rights represented by each Warrant Certificate are exercisable at
the option of the Holder thereof, in whole or in part (but not as to fractional
Shares or fractional Unit Warrants). In the case of the purchase of less than
all the Units purchasable under any Warrant Certificate, the Company shall
cancel said Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the Units
purchasable thereunder.

4.       Issuance of Certificates.
         ------------------------
         Upon the exercise of the Warrants, the issuance of certificates for the
Shares purchased and certificates for the Unit Warrants purchased, and upon
exercise of the Unit Warrants, the issuance of certificates for the Unit Warrant
Shares purchased shall be made forthwith (and in any event within three (3)
business days thereafter) without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Article 5
hereof) be issued in the name of, or in such names as may be directed by, the
Holder thereof; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than that of the Holder
and the Company shall not be required to issue or deliver such certificates
unless or until the person or persons requesting the issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

                                      -3-
<PAGE>

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

         Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares and the Unit Warrants purchased, and upon exercise, in
whole or in part, of the Unit Warrants, certificates representing the Unit
Warrant Shares purchased (collectively, the "Warrant Securities"), shall bear a
legend substantially similar to the following:

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

5.       Restriction on Transfer of Warrants.
         -----------------------------------
         The Holder of a Warrant Certificate, by the Holder's acceptance
thereof, covenants and agrees that the Warrants are being acquired as an
investment and not with a view to the distribution thereof, and that the
Warrants may not be sold, transferred, assigned, hypothecated or otherwise
disposed of, in whole or in part, except to the Designees, unless the Holder
provides to the Company a legal opinion, in

                                      -4-

<PAGE>

form and substance acceptable to the Company, that such sale, transfer,
assignment or hypothecation is in full compliance with all applicable U.S.
federal and state and foreign securities laws.

6.       Price.
         -----
         6.1. Initial and Adjusted Exercise Price. The initial exercise price of
each Warrant shall be $7.00 per Unit. The adjusted exercise price shall be the
price which shall result from time to time from any and all adjustments of the
initial exercise price in accordance with the provisions of Article 8 hereof.
         6.2. Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.

7.       Registration Rights.
         -------------------
         7.1. Registration Under the Securities Act of 1933. None of the
Warrants, Shares, Unit Warrants or Unit Warrant Shares have been registered for
purposes of public distribution under the Securities Act of 1933, as amended
(the "Act").
         7.2. Registrable Securities. As used herein the term "Registrable
Security" means each of the Warrants, the Shares, the Unit Warrants, the Unit
Warrant Shares and any shares of Common Stock issued upon any stock split or
stock dividend in respect of such Shares or Unit Warrant Shares; provided,
however, that with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security when, as of the date of determination,
(i) it has been effectively registered under the Act and disposed of pursuant
thereto, (ii) registration under the Act is no longer required for the
subsequent public distribution of such security or (iii) it has ceased to be
outstanding. The term "Registrable Securities" means any and/or all of

                                      -5-
<PAGE>

the securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Article 7.

         7.3. Demand Registration.

(a) At any time during the Warrant Exercise Term, any "Majority
Holder" (as such term is defined in Section 7.3(c) below) of
the Registrable Securities shall have the right, exercisable by written notice
to the Company (the "Demand Registration Request"), to have the Company prepare
and file with the Securities and Exchange Commission (the "Commission"), on one
occasion, at the sole expense of the Company (except as provided in Section
7.4(b) hereof), a Registration Statement and such other documents, including a
prospectus, as may be necessary (in the opinion of both counsel for the Company
and counsel for such Majority Holder), in order to comply with the provisions of
the Act, so as to permit a public offering and sale of the Registrable
Securities by the holders thereof. The Company shall use its best efforts to
cause the Registration Statement to become effective under the Act, so as to
permit a public offering and sale of the Registrable Securities by the holders
thereof. Once effective, the Company will use its best efforts to maintain the
effectiveness of the Registration Statement until the earlier of (i) the date
that all of the Registrable Securities have been sold or (ii) the date that the
holders of the Registrable Securities receive an opinion of counsel to the
Company that all of the Registrable Securities may be freely traded (without
limitation or restriction as to quantity or timing and without

                                      -6-

<PAGE>

registration under the Act) under Rule 144(k) promulgated under the Act or
otherwise.
              (b) The Company covenants and agrees to give written notice of any
Demand Registration Request to all holders of the Registrable Securities within
ten (10) business days from the date of the Company's receipt of any such Demand
Registration Request. After receiving notice from the Company as provided in
this Section 7.3(b), holders of Registrable Securities may request the Company
to include their Registrable Securities in the Registration Statement to be
filed pursuant to Section 7.3(a) hereof by notifying the Company of their
decision to have such securities included within ten (10) days of their receipt
of the Company's notice.
              (c) The term "Majority Holder" as used in Section 7.3 hereof shall
mean any holder or any combination of holders of Registrable Securities, if
included in such holders' Registrable Securities are that aggregate number of
shares of Common Stock (including Shares already issued and Shares issuable
pursuant to the exercise of outstanding Warrants, Unit Warrant Shares already
issued and Unit Warrant Shares issuable pursuant to the exercise of outstanding
Unit Warrants) as would constitute a majority of the aggregate number of Shares
(including Shares already issued and Shares issuable pursuant to the exercise of
outstanding Warrants, Unit Warrant Shares already issued and Unit Warrant Shares
issuable pursuant to the issue of outstanding Unit Warrants) included in all the
Registrable Securities.
         7.4. Covenants With Respect to Registration. The Company covenants and
agrees as follows:

              (a) In connection with any registration under Section 7.3 hereof,
the Company shall file the Registration Statement as expeditiously as possible,
but in

                                      -7-

<PAGE>

any event no later than forty-five (45) days following receipt of any demand
therefor, shall use its best efforts to have any such Registration Statement
declared effective at the earliest possible time, and shall furnish each holder
of Registrable Securities such number of prospectuses as shall reasonably be
requested.
              (b) The Company shall pay all costs, fees and expenses (other than
underwriting fees, discounts and nonaccountable expense allowance applicable to
the Registrable Securities and the fees and expenses of counsel retained by the
holders of Registrable Securities) in connection with all Registration
Statements filed pursuant to Sections 7.3(a) hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, and blue
sky fees and expenses.
              (c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in the
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the holders of such
securities.
              (d) The Company shall indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement against all loss,
claim, damage, expense or liability (including all expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever), to which
such holder may become subject under the Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement except to

                                      -8-

<PAGE>

the extent that such holder of Registrable Securities is obligated to indemnify
the Company pursuant to Section 7.4(e).
              (e) Any holder of Registrable Securities to be sold pursuant to a
Registration Statement, and such holder's successors and assigns, shall jointly
and severally indemnify, the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against all loss, claim, damage or
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such holder, or such holder's
successors or assigns, and included in such Registration Statement.
              (f) Promptly after receipt of notice of the commencement of any
action in respect of which indemnity may be sought against any indemnifying
party under Section 7.4(d) or Section 7.4(e), the indemnified party will notify
the indemnifying party in writing of the commencement thereof, and the
indemnifying party will, subject to the provisions hereinafter stated, assume
the defense of such action (including the employment of counsel selected by the
Company and the payment of expenses) insofar as such action relates to an
alleged liability in respect of which indemnity may be sought against the
indemnifying party. After notice from the indemnifying party of its election to
assume the defense of such claim or action, the indemnifying party shall no
longer be liable to the indemnified party under Section 7.4(d) or Section
7.4(e), as applicable, for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation;

                                      -9-

<PAGE>

provided, however, that if, in the reasonable judgment of the indemnified party
or parties, it is advisable for the indemnified party or parties to be
represented by separate counsel, the indemnified party or parties shall have the
right to employ a single counsel to represent the indemnified parties who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the indemnified parties thereof against the indemnifying party, in
which event the fees and expenses of such separate counsel shall be borne by the
indemnifying party. Any party against whom indemnification may be sought under
Sections 7.4(d) or Section 7.5(e) shall not be liable to indemnify any person
that might otherwise be indemnified pursuant hereto for any settlement of any
action effected without such indemnifying party's consent, which consent shall
not be unreasonably withheld.
            (g) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 7.4(d)
or 7.4(e) hereof (subject to the limitations thereof) and it is finally
determined, by a judgment, order or decree not subject to further appeal, that
such claim for indemnification may not be enforced, even though this Agreement
expressly provides for indemnification in such case; or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act, or
otherwise, then the Company (including, for this purpose, any contribution made
by or on behalf of any director of the Company, any officer of the Company and
any controlling person of the Company) as one entity and the Consultant
(including, for this purpose, any contribution by or on behalf of each person,
if any, who controls the Consultant within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act and each officer, director, shareholder,
employee and agent of the

                                      -10-

<PAGE>

Consultant) as a second entity, shall contribute to the losses, liabilities,
claims, damages and expenses whatsoever to which any of them may be subject,
based upon considerations such as the relative fault of the Company and the
Consultant in connection with the facts which resulted in such losses,
liabilities, claims, damages and expenses shall also be considered. The relative
fault, in the case of an untrue statement, alleged untrue statement, omission or
alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission or alleged omission relates to
information supplied by the Company or by the Consultant, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, alleged statement, omission or alleged omission. The
Company and the Consultant agree that it would be unjust and inequitable if the
respective obligations of the Company and the Consultant for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages and expenses or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
7.4(g). No person guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) will be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. For purposes of this
Section 7.4(g), each person, if any, who controls the Consultant within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, shareholder, employee and agent of the Consultant will have
the same rights to contribution as the Consultant, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company and each director of the

                                      -11-

<PAGE>

Company will have the same rights to contribution as the Company, subject in
each case to the provisions of this Section 7.4(g). Anything in this Section
7.4(g) to the contrary notwithstanding, no party will be liable for contribution
with respect to the settlement of any claim or action effected without its
written consent. This Section 7.4(g) is intended to supersede, to the extent
permitted by law, any right to contribution under the Act or the Exchange Act or
otherwise available.
              (h) Nothing contained in this Agreement shall be construed as
requiring any Holder to exercise the Warrants or the Unit Warrants included in
the Units underlying such Warrants prior to the initial filing of any
Registration Statement or the effectiveness thereof.
              (i) The Company shall promptly deliver copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with
respect to the Registration Statement to each holder of Registrable Securities
included for such registration in such Registration Statement pursuant to
Section 7.3 hereof requesting such correspondence and memoranda and to the
managing underwriter, if any, of the offering in connection with which such
holder's Registrable Securities are being registered and shall permit each
holder of Registrable Securities and such underwriter to do such reasonable
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the Registration Statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. Such investigation shall include access
to books, records and properties and opportunities to discuss the business of
the Company with

                                      -12-

<PAGE>

its officers and independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such holder of Registrable Securities or
underwriter shall reasonably request.

8.       Adjustments of Exercise Price and Number of Units.
         -------------------------------------------------
         8.1. Computation of Adjusted Price. In case the Company shall at any
time after the date hereof pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such dividend or distribution
the Exercise Price in effect immediately prior to such dividend or distribution
shall forthwith be reduced to a price determined by dividing:
              (a) an amount equal to the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution multiplied by the
Exercise Price in effect immediately prior to such dividend or distribution, by
              (b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale. For the purposes of any computation to
be made in accordance with the provisions of this Section 8.1, the Common Stock
issuable by way of dividend or other distribution on any stock of the Company
shall be deemed to have been issued immediately after the opening of business on
the date following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution.
         8.2. Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.

                                      -13-

<PAGE>

         8.3. Adjustment in Number of Units. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Article 8, the number of Units
issuable upon the exercise of each Warrant shall be adjusted to the nearest full
number of Units by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Units issuable upon
exercise of the Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
         8.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation of the property of the
Company as an entirety, the Holders shall thereafter have the right to purchase
the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holders were the owners of the shares of Common Stock
underlying the Warrants and the Unit Warrant Shares contained in the Unit
Warrants underlying such Warrants immediately prior to any such events at a
price equal to the product of (x) the number of shares of Common Stock issuable
upon exercise of the Warrants and the Unit Warrants

                                      -14-

<PAGE>

underlying such Warrants and (y) the Exercise Price in effect immediately prior
to the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holders had exercised the Warrants and the Unit
Warrants underlying such Warrants.
         8.5. Adjustment of Unit Warrants Exercise Price and Securities on
Exercise of Unit Warrant. With respect to any of the Unit Warrants underlying
the Warrants, whether or not the Warrants have been exercised and whether or not
the Warrants are issued and outstanding, the exercise price for, and the number
of, shares of Common Stock issuable upon exercise of the Unit Warrants shall be
automatically adjusted in accordance with Section 9 of the Unit Warrant
Agreement, upon the occurrence of any of the events described therein.
Thereafter, the underlying Unit Warrants shall be exercisable at such adjusted
exercise price and for such adjustment number of underlying shares of Common
Stock.
         8.6. Determination of Outstanding Shares of Common Stock. The number of
shares of Common Stock at any one time outstanding shall include the aggregate
number of shares of Common Stock issued and the aggregate number of shares of
Common Stock issuable upon the exercise of options, rights, warrants and upon
the conversion or exchange of convertible or exchangeable securities.
         8.7. Dividends and Other Distributions with Respect to Outstanding
Securities. In the event that the Company shall at any time prior to the
exercise of all Warrants make any distribution of its assets to holders of its
Common Stock as a liquidating or a partial liquidating dividend, then the holder
of Warrants who exercises its Warrants after the record date for the
determination of those holders of Common Stock

                                      -15-

<PAGE>

entitled to such distribution of assets as a liquidating or partial liquidating
dividend shall be entitled to receive for the Warrant Price per Warrant, in
addition to each share of Common Stock, the amount of such distribution (or, at
the option of the Company, a sum equal to the value of any such assets at the
time of such distribution as determined by the Board of Directors of the Company
in good faith) which would have been payable to such holder had he been the
holder of record of the Common Stock receivable upon exercise of his Warrant on
the record date for the determination of those entitled to such distribution. At
the time of any such dividend or distribution, the Company shall make
appropriate reserves to ensure the timely performance of the provisions of this
Section 8.7.
         8.8. Subscription Rights for Shares of Common Stock or Other
Securities. In the case that the Company or an affiliate of the Company shall at
any time after the date hereof and prior to the exercise of all the Warrants
issue any rights, warrants or options to subscribe for shares of Common Stock or
any other securities of the Company or of such affiliate to all the stockholders
of the Company, the Holders of unexercised Warrants on the record date set by
the Company or such affiliate in connection with such issuance of rights,
warrants or options shall be entitled, in addition to the shares of Common Stock
or other securities receivable upon the exercise of the Warrants, to receive
such rights, warrants or options that such Holders would have been entitled to
receive had they been, on such record date, the holders of record of the number
of whole shares of Common Stock then issuable upon exercise of their outstanding
Warrants (assuming for purposes of this Section 8.8), that the exercise of the
Warrants is permissible immediately upon issuance).

                                      -16-

<PAGE>

9.       Exchange and Replacement of Warrant Certificates.
         ------------------------------------------------
         Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
         Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.

10.      Elimination of Fractional Interests.
         -----------------------------------
         The Company shall not be required to issue certificates representing
fractions of Units, nor shall it be required to issue scrip or pay cash in lieu
of fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of Shares and Unit Warrants.

11.      Reservation and Listing of Securities.
         -------------------------------------
         The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants and the Unit Warrants, such number of shares of Common
Stock as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Warrants and payment of the Exercise Price
therefor,

                                      -17-

<PAGE>

all Shares issuable upon such exercise shall be duly and validly issued, fully
paid, non-assessable and not subject to the preemptive rights of any
stockholder. The Company further covenants and agrees that upon exercise of the
Unit Warrants underlying the Warrants and payment of the Unit Warrant exercise
price therefor, all Unit Warrant Shares issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any stockholder.

12.      Notices to Warrant Holders.
         --------------------------
         Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a stockholder in respect of any meetings of stockholders for the election of
directors or any other matter, or as having any rights whatsoever as a
stockholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
              (a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
              (b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or

                                      -18-

<PAGE>

              (c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; or
              (d) reclassification or change of the outstanding shares of Common
Stock (other than a change in par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), consolidation of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or a sale or
conveyance to another corporation of the property of the Company as an entirety
is proposed; or
              (e) The Company or an affiliate of the Company shall propose to
issue any rights to subscribe for shares of Common Stock or any other securities
of the Company or of such affiliate to all the shareholders of the Company;
then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in

                                      -19-

<PAGE>

connection with the declaration or payment of any such dividend or distribution,
or the issuance of any convertible or exchangeable securities or subscription
rights, options or warrants, or any proposed dissolution, liquidation, winding
up or sale.

13.      Unit Warrants
         -------------
         The form of the certificates representing the Unit Warrants (and the
form of election to purchase shares of Common Stock upon the exercise of the
Unit Warrants and the form of assignment printed on the reverse thereof) shall
be substantially as set forth in Exhibit "A" to the Unit Warrant Agreement;
provided, however, (i) each Unit Warrant issuable upon exercise of the Warrants
shall evidence the right to initially purchase one fully paid and non-assessable
share of Common Stock in respect of the Unit Warrant at an initial purchase
price of $6.60 per share from the Separation Date until 5:00 p.m. on October 18,
2005 and (ii) the Target Redemption Price (as defined in the Public Warrant
Agreement) of the Unit Warrants is 150% of the then effective exercise price of
the Unit Warrants. As set forth in Section 8.5 of this Agreement, the exercise
price of the Unit Warrants and the number of shares of Common Stock issuable
upon the exercise of the Unit Warrants are subject to adjustment, whether or not
the Warrants have been exercised and the Unit Warrants have been issued, in the
manner and upon the occurrence of the events set forth in Section 9 of the Unit
Warrant Agreement, which is hereby incorporated herein by reference and made a
part hereof as is set forth in its entirety herein. Subject to the provisions of
this Agreement and upon issuance of the Unit Warrants underlying the Warrants,
each registered holder of such Unit Warrants shall have the right to purchase
from the Company (and the Company shall issue to such registered holders) up to
the number of fully paid and

                                      -20-

<PAGE>

non-assessable shares of Common Stock underlying such Unit Warrants (subject to
adjustment as provided herein and in the Unit Warrant Agreement), free and clear
of all preemptive rights of shareholders, provided that such registered holder
complies with the terms governing exercise of the Unit Warrants set forth in the
Unit Warrant Agreement, and pays the applicable exercise price, determined in
accordance with the terms of the Unit Warrant Agreement. Upon exercise of the
Unit Warrants, the Company shall forthwith issue to the registered holder of any
such Unit Warrant in his name or in such name as may be directed by him,
certificates for the number of shares of Common Stock and the number of Unit
Warrants so purchased. Except as otherwise provided in Section 8.5 hereof, the
Unit Warrants underlying the Warrants shall be governed in all respects by the
terms of the Unit Warrant Agreement. The Unit Warrants shall be transferable in
the manner provided in the Unit Warrant Agreement, and upon any such transfer, a
new Unit Warrant shall be issued promptly to the transferee. The Company will
send to each Holder, irrespective of whether or not the Warrants have been
exercised, any and all notices required by the Unit Warrant Agreement to be sent
to holders of the Unit Warrants.

14.      Notices.
         -------
         All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
              (a) If to a registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or
              (b) If to the Company, to the address set forth in Section 3 of

                                      -21-

<PAGE>

this Agreement or to such other address as the Company may designate by notice
to the Holders.

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

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

17.      Termination.
         -----------
         This Agreement shall terminate at the close of business on January 4,
2005. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date when all Warrants and Unit Warrants have been exercised and all
Warrant Securities have been resold to the public; provided, however, that the
provisions of Section 7.4(d) and Section 7.4(e) shall survive any termination
pursuant to this Section 17 until the close of business on January 4, 2008.

                                      -22-

<PAGE>

18.      Governing Law.
         -------------
         This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Connecticut and for
all purposes shall be construed in accordance with the laws of said State.

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

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

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

EUROLAND MARKETING SOLUTIONS, LTD.           DELCATH SYSTEMS, INC.

By:       /s/ Y. Gorobets                    By:  /s/ M.S. Koly
          ------------------------------          -----------------------------
Name:     Y. Gorobets                             M.S. Koly
Title:    Director                         Title: Chief Executive Officer
          ------------------------------

                                      -23-

<PAGE>

                                                                       EXHIBIT A

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

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

                            EXERCISABLE ON OR BEFORE
                 5:00 P.M., NEW YORK CITY TIME, January 4, 2005

No. W-2                                                         150,000 Warrants

                               WARRANT CERTIFICATE

         This Warrant Certificate certifies that Euroland Marketing Solutions,
LTD. or registered assigns, is the registered holder of (150,000) Warrants to
purchase, at any time from January 5, 2001 until 5:00 P.M. New York City time on
January 4, 2005 ("Expiration Date"), up to 150,000 units ("Units"), each
consisting of one fully-paid and non-assessable share of common stock, par value
$.01 per share (the "Common Stock"), of Delcath Systems, Inc., a Delaware
corporation (the "Company"), and one Common Stock Purchase Warrant, each Common
Stock Purchase Warrant entitling the holder thereof to purchase one share of
Common Stock (collectively, the "Unit Warrants") at the initial exercise price,
subject to adjustment in certain events (the "Exercise Price"), of $7.00 per
Unit upon surrender of this Warrant Certificate and payment of the Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the Warrant Agreement dated as of January 5, 2001 between
the Company and Euroland Marketing Solutions, LTD. (the "Warrant Agreement").
Payment of the Exercise Price may be made in cash, or by certified or official
bank check in New York Clearing House funds payable to the order of the Company,
or any combination thereof.

<PAGE>

         Each Unit Warrant issuable upon the exercise of a Warrant is initially
exercisable from the Separation Date through January 4, 2005, for one fully-paid
and non-assessable share of Common Stock at an initial exercise price of $6.60
per share. The Unit Warrants are issuable pursuant to the terms and provisions
of a certain agreement dated as of October 24, 2000 by and among the Company,
Whale Securities Co., L.P. (the "Underwriter") and American Stock Transfer &
Trust Company (the "Unit Warrant Agreement"). The Unit Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to (except as otherwise provided in the Warrant Agreement) for a
description of the rights, limitations of rights, manner of exercise,
anti-dilution provisions and other provisions with respect to the Unit Warrants.

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

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.

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

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

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

         The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of

                                      -2-

<PAGE>

any distribution to the holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary.

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

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

Dated:  January 5, 2001

                                        DELCATH SYSTEMS, INC.

                                        By:
                                              ----------------------------------
                                                M.S. Koly
                                        Title: Chief Executive Officer

                                      -3-

<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

         The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ Units and
herewith tenders in payment for such securities cash or a certified or official
bank check payable in New York Clearing House Funds to the order of Delcath
Systems, Inc. in the amount of $ _____, all in accordance with the terms hereof.
The undersigned requests that a certificate for such securities be registered in
the name of __________, whose address is __________________, and that such
Certificate be delivered to __________________, whose address is _____________.

Dated:                              Signature:
                                               ---------------------------------

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

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

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

                                    (Insert Social Security or Other
                                    Identifying Number of Holder)

<PAGE>

                              [FORM OF ASSIGNMENT]

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

FOR VALUE RECEIVED
                   -------------------------------------------------------------

hereby sells, assigns and transfers unto
                                         ---------------------------------------

--------------------------------------------------------------------------------
(Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.

Dated:                              Signature:
                                               ---------------------------------

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

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

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

(Insert Social Security or Other
Identifying Number of Holder)

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