Document:

Exhibit 10.36

          Form of Amended and Restated Warrant issued November 2, 1998
            to Certain Members of Management and Several Employees.

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE SUCH A REGISTRATION IS
IN EFFECT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.

                              AUTOTOTE CORPORATION
                          (formerly UNITED TOTE, INC.)

                          COMMON STOCK PURCHASE WARRANT

                             Issued October 31, 1991

                              Amended and Restated
                        Effective as of November 2, 1998

[No. ]

      Autotote Corporation, a Delaware corporation (the "Company"), for value
received, hereby certifies that ____________, or registered assigns, is entitled
to purchase from the Company _________ duly authorized, validly issued, fully
paid and nonassessable shares (as such number of shares may be adjusted pursuant
to Sections 2 through 4 below, the "Warrant Shares") of Class A Common Stock,
par value $.01 per share (the "Common Stock"), of the Company at the initial
purchase price per share of $1.6875 (the "Initial Warrant Price"), at any time
or from time to time prior to 5:00 p.m., eastern standard time, on October 31,
2002, (the "Expiration Date"), but, except in the event of a Change in Control
(as hereinafter defined), no earlier than November 1, 1999 (the "November
Date"), all subject to the terms, conditions and adjustments set forth below in
this Warrant. Certain capitalized terms used in this Warrant are defined in
Section 11 hereof.

1.    EXERCISE OF WARRANT

      1.1.  Manner of Exercise; Payment

    1.1.1.  Exercise and Payment. This Warrant may be exercised by the holder
            hereof, in whole or in part, during normal business hours on any
            Business Day on or prior to the Expiration Date, but, except in the
            event of a Change in Control, no earlier than the November Date, by
            surrender of this Warrant to the Company at its office maintained
            pursuant to Section 10.2(a) hereof, accompanied by the purchase form
            attached to this Warrant (or a reasonable facsimile thereof) duly
            executed by such holder and accompanied by payment, in cash or by
            certified or official bank check payable to the order of the Company
            (or by any combination of such methods), in the amount obtained by
            multiplying (a) the number of Warrant Shares (without giving effect
            to any adjustment thereof) designated in the purchase form by (b)
            the Initial Warrant Price, and such holder shall thereupon

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            be entitled to receive the number of duly authorized, validly
            issued, fully paid and nonassessable shares of Common Stock (or
            Other Securities) determined as provided in Sections 2 through 4
            hereof.

    1.1.2.  Cashless Exercise. The holder may, in lieu of delivery of the check
            or cash described in Section 1.1.1. above, exercise this Warrant on
            a "cashless" basis and pay the purchase price by delivering to the
            Company a duly completed and executed purchase form providing for
            payment of the Warrant Price by cancellation of a number of Warrant
            Shares having a Current Market Price equal to the Warrant Price of
            the Warrant Shares being purchased.

      1.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in Section 1.1 hereof, and at such time the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock (or
Other Securities) shall be issuable upon such exercise as provided in Section
1.3 hereof shall be deemed to have become the holder or holders of record
thereof.

      1.3. Delivery of Stock Certificates, etc. As soon as practicable after
each exercise of this Warrant, in whole or in part, and in any event within five
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to Section 6 hereof, as such holder
(upon payment by such holder of any applicable transfer taxes) may direct:

      (a)   a certificate or certificates for the number of duly authorized,
            validly issued, fully paid and nonassessable shares of Common Stock
            (or Other Securities) to which such holder shall be entitled upon
            such exercise plus, in lieu of any fractional share to which such
            holder would otherwise be entitled, cash in an amount equal to the
            same fraction of the Market Price per share on the Business Day next
            preceding the date of such exercise; and

      (b)   in case such exercise is in part only, a new Warrant or Warrants of
            like tenor, dated the date hereof and calling in the aggregate on
            the face or faces thereof for the number of shares of Common Stock
            equal (without giving effect to any adjustment thereof) to the
            number of such shares called for on the face of this Warrant minus
            the number of such shares designated by the holder upon such
            exercise as provided in Section 1.1 hereof.

2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.

      2.1. General; Number of Shares; Warrant Price. The number of shares of
Common Stock which the holder of this Warrant shall be entitled to receive upon
each exercise hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of this Section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to
Section 1.1 hereof, by the fraction of which (a) the numerator is the Initial
Warrant Price and (b) the denominator is the Warrant Price in effect on the date
of such exercise. The "Warrant Price" shall initially be the Initial Warrant
Price, shall be adjusted and readjusted from time to time as provided in this
Section 2 and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this Section 2.

      2.2. Adjustment of Warrant Price; Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2.3 or
2.4 hereof) without consideration or for a consideration per share less than the
Current Market Price in effect immediately prior to such issue or sale, then,
and in each such case, subject to Section 2.7 hereof, such

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Warrant Price shall be reduced, concurrently with such issue or sale, to a price
(calculated to the nearest .001 of a cent) determined by multiplying such
Warrant Price by a fraction:

      (a)   the numerator of which shall be (i) the number of shares of Common
            Stock outstanding immediately prior to such issue or sale price plus
            (ii) the number of shares of Common Stock which the aggregate
            consideration received by the Company for the total number of such
            Additional Shares of Common Stock so issued or sold would purchase
            at the Current Market Price; and

      (b)   the denominator of which shall be the number of shares of Common
            Stock outstanding immediately after such issue or sale.

      2.3 Treatment of Options and Convertible Securities. In case the Company
at any time or from time to time after the date hereof shall issue, sell, grant
or assume, or shall fix a record date for the determination of holders of any
class of securities entitled to receive, any Options or Convertible Securities,
then, and in each such case, the maximum number of Additional Shares of Common
Stock (as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number the
purpose of which is to protect against dilution) at any time issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue, sale, grant or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date (or, if the Common Stock
trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading); provided, however, that such Additional Shares of Common
Stock shall not be deemed to have been issued unless the consideration per share
(determined pursuant to Section 2.5 hereof) of such shares would be less than
the Current Market Price in effect on the date of and immediately prior to such
issue, sale, grant or assumption or immediately prior to the close of business
on such record date (or, if the Common Stock trades on an ex-dividend basis, on
the date prior to the commencement of ex-dividend trading), as the case may be;
and provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:

      (a)   no further adjustment of the Warrant Price shall be made upon the
            exercise of such options or the conversion or exchange of such
            Convertible Securities and the consequent issue or sale of
            Convertible Securities or shares of Common Stock;

      (b)   if such options or Convertible Securities by their terms provide,
            with the passage of time or otherwise, for any increase in the
            consideration payable to the Company, or decrease in the number of
            Additional Shares of Common Stock issuable, upon the exercise,
            conversion or exchange thereof (by change of rate or otherwise), the
            Warrant Price computed upon the original issue, sale, grant or
            assumption thereof (or upon the occurrence of the record date, or
            date prior to the commencement of ex-dividend trading, as the case
            may be, with respect thereto), and any subsequent adjustments based
            thereon, shall, upon any such increase or decrease becoming
            effective, be recomputed to reflect such increase or decrease
            insofar as it affects such options, or the rights of conversion or
            exchange under such Convertible Securities, which are outstanding at
            such time;

      (c)   upon the expiration (or purchase by the Company and cancellation or
            retirement) of any such options which shall not have been exercised,
            or the expiration of any rights of conversion or exchange under any
            such Convertible Securities which (or purchase by the Company and
            cancellation or retirement of any such Convertible Securities the
            rights of conversion or exchange under which) shall not have been
            exercised, the Warrant Price computed upon the original issue, sale,
            grant or assumption thereof (or upon the occurrence of the record
            date, or date prior to the commencement of ex-dividend trading, as
            the case may be, with respect thereto), and any subsequent
            adjustments based thereon, shall, upon

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            (and effective as of) such expiration (or such cancellation or
            retirement, as the case may be), be recomputed as if:

            (i)   in the case of Options or Convertible Securities, the only
                  Additional Shares of Common Stock issued or sold were the
                  Additional Shares of Common Stock, if any, actually issued or
                  sold upon the exercise of such Options or the conversion or
                  exchange of such Convertible Securities and the consideration
                  received therefor was the consideration actually received by
                  the Company for the issue, sale, grant or assumption of all
                  such Options, whether or not exercised, plus the consideration
                  actually received by the Company upon such exercise, or for
                  the issue or sale of all such Convertible Securities which
                  were actually converted or exchanged, plus the additional
                  consideration, if any, actually received by the Company upon
                  such conversion or exchange, and

            (ii)  in the case of Options for Convertible Securities, only the
                  Convertible Securities, if any, actually issued or sold upon
                  the exercise of such Options were issued at the time of the
                  issue, sale, grant or assumption of such Options, and the
                  consideration received by the Company for the Additional
                  Shares of Common Stock deemed to have then been issued was the
                  consideration actually received by the Company for the issue,
                  sale, grant or assumption of all such Options, whether or not
                  exercised, plus the consideration deemed to have been received
                  by the Company (pursuant to Section 2.5 hereof) upon the issue
                  or sale of such Convertible Securities with respect to which
                  such Options were actually exercised; and

If the consideration provided for in any Option or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Security
shall be reduced, or the rate at which any option is exercisable or any
Convertible Security is convertible into or exchangeable for shares of Common
Stock shall be increased, at any time under or by reason of provisions with
respect thereto designed to protect against dilution, then, effective
concurrently with each such change, the Warrant Price then in effect shall first
be adjusted to eliminate the effects (if any) of the issuance (or deemed
issuance) of such Option or Convertible Security on the Warrant Price and then
readjusted as if such Option or Convertible Security had been issued on the date
of such change with the terms in effect after such change, but only if as a
result of such adjustment the Warrant Price then in effect hereunder is thereby
reduced.

      2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company
at any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.

      2.5. Computation of Consideration. For the purposes of this Section 2:

      (a)   the consideration for the issue or sale of any Additional Shares of
            Common Stock shall, irrespective of the accounting treatment of such
            consideration:

            (i)   insofar as it consists of cash, be computed without deducting
                  any expenses paid or incurred by the Company or any
                  commissions or compensations paid or concessions or discounts
                  allowed to underwriters, dealers or others performing similar
                  services in connection with such issue or sale;

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            (ii)  insofar as it consists of property (including securities)
                  other than cash, and insofar as it consists neither of cash
                  nor of other property, be computed at the fair value thereof
                  at the time of such issue or sale, as determined in good faith
                  by the Board of Directors of the Company; and

            (iii) in case Additional Shares of Common Stock are issued or sold
                  together with other stock or securities or other assets of the
                  Company for a consideration which covers both, be the portion
                  of such consideration so received, computed as provided in
                  clauses (i) and (ii) above, allocable to such Additional
                  Shares of Common Stock, all as determined in good faith by the
                  Board of Directors of the Company;

      (b)   Additional Shares of Common Stock deemed to have been issued
            pursuant to Section 2.3 hereof shall be deemed to have been issued
            for a consideration per share determined by dividing:

            (i)   the total amount of cash and other property, if any, received
                  and receivable by the Company as direct consideration for the
                  issue, sale, grant or assumption of the Options or Convertible
                  Securities in question, plus the minimum aggregate amount of
                  additional consideration (as set forth in the instruments
                  relating thereto, without regard to any provision contained
                  therein for a subsequent adjustment of such consideration the
                  purpose of which is to protect against dilution) payable to
                  the Company upon the exercise in full of such Options or the
                  conversion or exchange of such Convertible Securities or, in
                  the case of Options for Convertible Securities, the exercise
                  of such Options for Convertible Securities and the conversion
                  or exchange of such Convertible Securities, in each case
                  computing such consideration as provided in the foregoing
                  clause (a), by

            (ii)  the maximum number of shares of Common Stock (as set forth in
                  the instruments relating thereto, without regard to any
                  provision contained therein for a subsequent adjustment of
                  such number the purpose of which is to protect against
                  dilution) issuable upon the exercise of such Options or the
                  conversion or exchange of such Convertible Securities; and

      (c)   Additional Shares of Common Stock deemed to have been issued
            pursuant to Section 2.4 hereof shall be deemed to have been issued
            for no consideration.

      2.6. Adjustments for Combinations, etc. In case the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.

      2.7. Minimum Adjustment of Warrant Price. If the amount of any adjustment
of the Warrant Price required pursuant to this Section 2 would be less than
one-tenth (1/10) of one percent (1%) of the Warrant Price in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth
(1/10) of one percent (1%) of such Warrant Price.

      2.8. Shares Deemed Outstanding. For all purposes of the computations to be
made pursuant to this Section 2, (i) there shall be deemed to be outstanding all
shares of Common Stock issuable pursuant to the exercise of Options and
conversion of Convertible Securities outstanding on October 31, 1998, (ii)
immediately after any Additional Shares of Common Stock are deemed to have been
issued pursuant to

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Section 2.3 or 2.4 hereof, such Additional Shares shall be
deemed to be outstanding, (iii) treasury shares shall not be deemed to be
outstanding, and (iv) no adjustment shall be made in the Warrant Price upon the
issuance of shares of Common Stock pursuant to Options and Convertible
Securities so deemed to be outstanding, but this Section 2.8 shall not prevent
other adjustments in the Warrant Price arising by virtue of such outstanding
Options or Convertible Securities pursuant to the provisions of Section 2.3
hereof; provided, however, that, for purposes of calculating adjustments to the
Warrant Price, there shall be deemed to be outstanding immediately after giving
effect to any issuance of shares of Common Stock, Options or Convertible
Securities all shares of Common Stock issuable upon the exercise of Options and
conversion of Convertible Securities then outstanding (including without
limitation the Warrants) after giving effect to anti-dilution provisions
contained in all such outstanding options and Convertible Securities which cause
an adjustment in the number of shares of Common Stock so issuable, either by
virtue of such issuance of shares of Common Stock, Options or Convertible
Securities or by virtue of the operation of such anti-dilution provisions.
Notwithstanding the foregoing, no adjustment in the number of shares of Common
Stock into which this Warrant is exercisable shall be made upon the issuance of
shares of Common Stock upon exercise of options granted under the Company's 1984
Stock Option Plan, as amended, 1992 Equity Incentive Plan, as amended, 1995
Equity Incentive Plan, as amended, or 1997 Incentive Compensation Plan, or upon
the grant or exercise of Options or Convertible Securities or issuance of Common
Stock, to officers, employees and directors of, or consultants or lenders to,
the Company or its subsidiaries pursuant to arrangements, contracts or plans
approved by the Board of Directors of the Company (and by an independent
committee thereof with respect to grants and issuances to directors) for
compensatory purposes.

3. CONSOLIDATION, MERGER, ETC.

      3.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or Other Securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification to the extent that such
capital reorganization or reclassification results in the issue of Additional
Shares of Common Stock for which adjustment in the Warrant Price is provided in
Section 2.2 hereof), then, and in the case of each such transaction, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such transaction, shall be entitled to
receive (at the aggregate Warrant Price in effect at the time of such
consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock or
Other Securities issuable upon such exercise prior to such consummation, the
greatest amount of securities, cash or other property to which such holder would
actually have been entitled as a shareholder upon such consummation if such
holder had exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Sections 2, 3 and 4
hereof.

      3.2. Assumption of Obligations. Notwithstanding anything contained in the
Warrants to the contrary, the Company will not effect any of the transactions
described in clauses (a) through (d) of Section 3.1 hereof unless, prior to the
consummation thereof, each Person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Company, (a) the obligations of the Company
under this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant) and
(b) the obligation to deliver to such holder such shares of

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stock, securities, cash or property as, in accordance with the foregoing
provisions of this Section 3, such holder may be entitled to receive.

4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, intentionally avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of stock on the exercise
of the Warrants from time to time outstanding, and (c) will not take any action
which results in any adjustment of the Warrant Price if the total number of
shares of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.

5. NOTICES OF CORPORATE ACTION. In the event of

      (a)   any taking by the Company of a record of the holders of any class of
            securities for the purpose of determining the holders thereof who
            are entitled to receive any dividend or other distribution, or any
            right to subscribe for, purchase or otherwise acquire any shares of
            stock of any class or any Other Securities or property, or to
            receive any other right, or

      (b)   any capital reorganization of the Company, any reclassification or
            recapitalization of the capital stock of the Company or any
            consolidation or merger involving the Company and any other Person
            or any transfer of all or substantially all the assets of the
            Company to any other Person, or

      (c)   any voluntary or involuntary dissolution, liquidation or winding-up
            of the Company, or

      (d)   any issuance of any Common Stock, Convertible Security or Option by
            the Company requiring an adjustment of the Warrant Price pursuant to
            Section 2.2 hereof,

the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, the time, if
any such time is to be fixed, as of which the holders of record of Common Stock
(or Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other Securities) for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up and a description in reasonable
detail of the transaction, and (iii) the date of such issuance, together with a
description of the security so issued and the consideration received by the
Company therefor. Such notice shall be mailed at least 10 days prior to the date
therein specified.

6. [Deleted].

7. RESTRICTIONS ON TRANSFER.

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      7.1. Restrictive Legends. Except as otherwise permitted by this Section 7,
each certificate for Common Stock (or Other Securities) issued upon the exercise
of any Warrant, each certificate issued upon the direct or indirect transfer of
any such Common Stock (or Other Securities), and each Warrant issued upon direct
or indirect transfer or in substitution for any Warrant pursuant to Section 10
hereof shall be transferable only upon satisfaction of the conditions specified
in this Section 7 and shall be stamped or otherwise imprinted with appropriate
legends referring to such restrictions and any other legend referred by law.

      7.2 Notice of Proposed Transfer; Opinions of Counsel. Prior to any
transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act, the holder thereof
will give written notice to the Company of such holder's intention to effect
such transfer and to comply in all other respects with this Section 7.2. Each
such notice (a) shall describe the manner and circumstances of the proposed
transfer in sufficient detail to enable counsel to render the opinions referred
to below, and (b) shall designate counsel for the holder giving such notice. The
Company will promptly submit a copy thereof to its counsel. The following
provisions shall then apply:

            (i)   If in the opinion of both such counsel the proposed transfer
                  may be effected without registration of such Restricted
                  Securities under the Securities Act, such holder shall
                  thereupon be entitled to transfer such Restricted Securities
                  in accordance with the terms of the notice delivered by such
                  holder to the Company. Each certificate representing such
                  Restricted Securities issued upon or in connection with such
                  transfer shall bear the restrictive legends required by
                  Section 7.1 hereof. If for any reason counsel for the Company
                  (after having been furnished with the information required to
                  be furnished by clause (a) of this Section 7.2) shall fail to
                  deliver an opinion to the Company as aforesaid within 15 days
                  after such information has been furnished, then for all
                  purposes of this Agreement the opinion of counsel for the
                  Company shall be deemed to be the same as the opinion of
                  counsel for such holders.

            (ii)  If in the opinion of either of or both such counsel the
                  proposed transfer may not legally be effected without
                  registration of such Restricted Securities under the
                  Securities Act (such opinion or opinions to state the basis of
                  the legal conclusions reached therein), the Company will
                  promptly so notify the holder thereof and thereafter such
                  holder shall not be entitled to transfer such Restricted
                  Securities until either (x) receipt by the Company of a
                  further notice from such holder pursuant to the foregoing
                  provisions of this Section 7.2 and fulfillment of the
                  provisions of clause (i) above or (y) such Restricted
                  Securities have been effectively registered under the
                  Securities Act.

The Company will pay the reasonable fees and disbursements of counsel for the
Company in connection with all opinions rendered by them pursuant to this
Section 7.2 and pursuant to Section 7.3 hereof.

      7.3. Termination of Restrictions. The restrictions imposed by this Section
7 upon the transferability of Restricted Securities shall cease and terminate as
to any particular Restricted Securities (a) when such Restricted Securities
shall have been effectively registered under the Securities Act, or (b) when, in
the opinions of both counsel for the holder thereof and counsel for the Company,
such restrictions are no longer required in order to insure compliance with the
Securities Act. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the holder thereof shall be entitled to receive from the
Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
7.1 hereof.

8. AVAILABILITY OF INFORMATION. The Company will comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act and will comply with
all other public information reporting

                                     - 9 -
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requirements of the Commission (including Rule 144 promulgated by the Commission
under the Securities Act) from time to time in effect and relating to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will also cooperate with each holder of any
Restricted Securities in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Restricted Securities. The
Company will furnish to each holder of any Warrants, promptly upon their
becoming available, copies of all financial statements, reports, notices and
proxy statements sent or made available generally by the Company to its
stockholders, and copies of all regular and periodic reports and all
registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.

9. RESERVATION OF STOCK, ETC. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of the Warrants, the
number of shares of Common Stock of each class (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof.

10. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.

      10.1. Ownership of Warrants. The Company may treat the person in whose
name any Warrant is registered on the register kept at the office of the Company
maintained pursuant to Section 10.2(a) hereof as the owner and holder thereof
for all purposes, notwithstanding any notice to the contrary, except that, if
and when any Warrant is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer thereof as the owner of such Warrant for
all purposes, notwithstanding any notice to the contrary. Subject to Section 7
hereof, a Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.

      10.2. Office; Transfer and Exchange of Warrants.

      (a)   The Company will maintain an office (which may be an agency
            maintained at a bank) in Newark, Delaware where notices,
            presentations and demands in respect of this Warrant may be made
            upon it. Such office shall be maintained at 220 S. Continental
            Drive, Suite 407, Newark, Delaware, 19713 until such time as the
            Company shall notify the holders of the Warrants of any change of
            location of such office.

      (b)   The Company shall cause to be kept at its office maintained pursuant
            to Section 10.2(a) hereof a register for the registration and
            transfer of the Warrants. The names and addresses of holders of
            Warrants, the transfers thereof and the names and addresses of
            transferees of Warrants shall be registered in such register. The
            Person in whose name any Warrant shall be so registered shall be
            deemed and treated as the owner and holder thereof for all purposes
            of this Warrant, and the Company shall not be affected by any notice
            or knowledge to the contrary.

      (c)   Upon the surrender of this Warrant to the Company, at the office
            maintained pursuant to Section 10.2(a) hereof, for transfer or
            exchange by the holder, with, in the case of a transfer, the
            Assignment Form attached hereto (or a reasonable facsimile thereof)
            duly executed by such holder, the Company at its expense will
            (subject to compliance with Section 7 hereof, if applicable) execute
            and deliver a new Warrant or Warrants of like tenor in the name, as
            the case may be, of the assignee(s) (upon payment by the holder of
            any applicable transfer taxes), or the holder, calling in the
            aggregate on the face or faces thereof for the number of shares of
            Common Stock called for on the face or faces of the Warrant or
            Warrants so surrendered.

                                     - 10 -
<PAGE>

      10.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of such warrant
for cancellation at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor and dated the date hereof.

11. DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:

      Additional Shares of Common Stock: All shares (including treasury shares)
of Common Stock issued or sold (or, pursuant to Section 2.3 or 2.4 hereof,
deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than the shares of
Common Stock issued upon the exercise of Warrants.

      Business Day: Any day other than a Saturday or a Sunday or a day on which
commercial banking institutions in New York, New York or Newark, Delaware are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.

      Change in Control: A Change in Control shall be deemed to occur if:

            (i)   any "person" as defined in Section 3(a)(9) of the Exchange
                  Act, and as used in Sections 13(d) and 14(d) thereof,
                  including a "group" as defined in Section 13(d) of the
                  Exchange Act but excluding the Company and any subsidiary and
                  any employee benefit plan sponsored or maintained by the
                  Company or any subsidiary (including any trustee of such plan
                  acting as trustee), directly or indirectly, becomes the
                  "beneficial owner" (as defined in Rule 13d-3 under the
                  Exchange Act) of securities of the Company representing at
                  least 40% of the combined voting power of the Company's
                  then-outstanding securities;

            (ii)  the stockholders of the Company approve a merger,
                  consolidation, recapitalization, or reorganization of the
                  Company, or a reverse stock split of any class of voting
                  securities of the Company, or the consummation of any such
                  transaction if stockholder approval is not obtained, other
                  than any such transaction which would result in at least 60%
                  of the total voting power represented by the voting securities
                  of the Company or the surviving entity outstanding immediately
                  after such transaction being beneficially owned by persons who
                  together beneficially owned at least 80% of the combined
                  voting power of the voting securities of the Company
                  outstanding immediately prior to such transaction; provided
                  that, for purposes of this paragraph (ii), such continuity of
                  ownership (and preservation of relative voting power) shall be
                  deemed satisfied if the failure to meet such 60% threshold is
                  due solely to the acquisition of voting securities by an
                  employee benefit plan of the Company or such surviving entity
                  or of any subsidiary of the Company or such surviving entity;

            (iii) the stockholders of the Company approve a plan of complete
                  liquidation of the Company or an agreement for the sale or
                  disposition by the Company of all or substantially all of its
                  assets (or any transaction having a similar effect); or

            (iv)  during any period of two consecutive years, individuals who at
                  the beginning of such period constitute the Board of Directors
                  of the Company, together with any new director (other than a
                  director designated by a person who has entered into an

                                     - 11 -
<PAGE>

                  agreement with the Company to effect a transaction described
                  in paragraph (i), (ii), or (iii) hereof) whose election by the
                  Board of Directors or nomination for election by the Company's
                  stockholders was approved by a vote of at least two-thirds
                  (2/3) of the directors then still in office who either were
                  directors at the beginning of the period or whose election or
                  nomination for election was previously so approved, cease for
                  any reason to constitute at least a majority of the Board of
                  Directors."

      Commission: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

      Common Stock: As defined in the introduction to this Warrant, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.

      Company: As defined in the introduction to this Warrant, such term to
include any corporation which shall succeed to or assume the obligations of the
Company hereunder in compliance with Section 3 hereof.

      Convertible Securities: Any evidences of indebtedness, shares of stock
(other than Common Stock) or other securities directly or indirectly convertible
into or exchangeable for Additional Shares of Common Stock.

      Current Market Price: On any date specified herein, the average daily
Market Price during the period of the most recent 20 days, ending on such date,
on which the national securities exchanges were open for trading, except that if
no class of the Common Stock is then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.

      Exchange Act: The Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

      Expiration Date: As defined in the introduction to this Warrant.

      Market Price: On any date specified herein, the amount per share of Common
Stock equal to (a) the last sale price of Common Stock, regular way, on such
date or, if no such sale takes place on such date, the average of the closing
bid and asked prices thereof on such date, in each case as officially reported
on the principal national securities exchange on which Common Stock is then
listed or admitted to trading, or (b) if Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of Common
Stock on such date, or (c) if there shall have been no trading on such date or
if Common Stock is not so designated, the average of the closing bid and asked
prices of Common Stock on such date as shown by the NASD automated quotation
system, or (d) if Common Stock is not then listed or admitted to trading on any
national exchange or quoted in the over-the-counter market, the fair value
thereof determined in good faith by the Board of Directors of the Company as of
a date which is within 15 days of the date as of which the determination is to
be made; provided, however, that notwithstanding the foregoing, in the case of
the issuance of Additional Shares of Common Stock to a third party in an arm's
length transaction, such price shall be the price at which such shares are
issued.

      NASD: The National Association of Securities Dealers, Inc.

                                     - 12 -
<PAGE>

      Options: Rights, options or warrants to subscribe for, purchase or
otherwise acquire either Additional Shares of Common Stock or Convertible
Securities.

      Other Securities: Any stock (other than Common Stock) and other securities
of the Company or any other person (corporate or otherwise) which the holders of
the Warrants at any time shall be entitled to receive, or shall have received,
upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section 3 hereof
or otherwise.

      Person: A corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.

      Purchasers: As defined in the introduction to this Warrant.

      Register, Registered, and Registration: A registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities act, and the automatic effectiveness or the declaration or
ordering of effectiveness of such registration statement or document.

      Restricted Securities: All of the following: (a) any Warrants bearing the
applicable legend or legends referred to in Section 7.1 hereof, (b) any shares
of Common Stock (or Other Securities) which have been issued upon the exercise
of Warrants and which are evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section, (c) unless the context
otherwise requires, any shares of Common Stock (or Other Securities) which are
at the time issuable upon the exercise of Warrants and which, when so issued,
will be evidenced by a certificate or certificates bearing the applicable legend
or legends referred to in such Section.

      Securities Act: The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.

      Warrant Price: As defined in Section 2.1 hereof.

      Warrants: This Warrant, together with all other warrants initially issued
as of October 31, 1991 to the holders of the Company's Subordinated Debentures,
originally due January 1, 1998, in connection with such holders entering into a
modification agreement with the Company with respect to reducing the principal
amount of, and accrued interest on, the Subordinated Debentures, which
Debentures are no longer outstanding as of the date of this Amended and Restated
Warrant.

12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein by an injunction against a violation of any of
the terms hereof or otherwise.

13. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this Warrant
shall be construed as conferring upon the holder hereof of any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.

14. NOTICES. Any notice or other communication in connection with this Warrant
shall be deemed to be delivered if in writing (or in the form of a telex or
telecopy) addressed as hereinafter provided and if either (x) actually delivered
at said address (evidenced in the case of a telex by receipt of the correct
answerback and evidenced in the case of a telecopy by a telecopy back to the
sender) or (y) in the case of a letter, three

                                     - 13 -
<PAGE>

Business days shall have elapsed after the same shall have been deposited in the
United States mails, postage prepaid and registered or certified:

                  (a) if to any holder, to the address set forth in the register
                  kept at the office of the Company maintained pursuant to
                  Section 10.2(a) hereof; and

                  (b) if to the Company, to the attention of its Treasurer at
                  its office maintained pursuant to Section 10.2(a) hereof,
                  provided, however, that the exercise of any Warrant shall be
                  effective in the manner provided in Section 1 hereof.

15. MISCELLANEOUS. Each reference in the Warrant to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import referring to the
Warrant, shall mean and be a reference to the Warrant. This Warrant and any term
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant shall be construed and enforced
in accordance with and governed by the laws of the State of Delaware. The
section headings in this Warrant are for purposes of convenience only and shall
not constitute a part hereof.

                                                  AUTOTOTE CORPORATION

                                                  By:___________________________
                                                     Martin E. Schloss
                                                     Vice President & Secretary

                                     - 14 -
<PAGE>

                                  PURCHASE FORM

                 (To be executed only upon exercise of Warrant)

To Autotote Corporation

      The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, ______________(1) shares
of the Common Stock and herewith makes payment:

      Option 1

            of $______________ therefor, or

      Option 2

            by cancellation of a number of Warrant Shares having a Current
            Market Price equal to the Warrant Price of the Warrant Shares being
            purchased,

and requests that the shares of Common Stock be issued to:

                            Registration Instructions

      Name:     _________________________________________________

      Address:  _________________________________________________

Date:____________                   ____________________________________________
                                    (Signature)(must conform in all respects to
                                    name of holder as specified on the face
                                    of Warrant)

                                    ____________________________________________
                                                    (Street Address)

                                    ____________________________________________
                                    (City)      (State)     (Zip Code)

--------
(1) Insert the number of shares called for on the face of this Warrant (or, in
the case of a partial exercise, the portion thereof as to which this Warrant is
being exercised), in either case without making any adjustment for Additional
Shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
the Warrant, to the holder surrendering the Warrant.
<PAGE>

                                 ASSIGNMENT FORM

                 (To be executed only upon transfer of Warrant)

      FOR VALUE RECEIVED, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto:

      Name: _________________________________________________

      Address: _________________________________________________

the right represented by such Warrant to purchase ___________(1) shares of
Common Stock of Autotote Corporation to which such Warrant relates, and appoints
______________ Attorney to make such transfer on the books of Autotote
Corporation maintained for such purpose, with full power of substitution in the
premises.

Date:____________                   ____________________________________________
                                    (Signature)(must conform in all respects to
                                    name of holder as specified on the face
                                    of Warrant)

                                    ____________________________________________
                                                    (Street Address)

                                    ____________________________________________
                                    (City)      (State)     (Zip Code)

Signed in the presence of:

________________________________

----------
(1) Insert the number of shares called for on the face of this Warrant (or, in
the case of a partial assignment, the portion thereof as to which this Warrant
is being assigned), in either case without making any adjustment for Additional
Shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial assignment, a new Warrant or
Warrants will be issued and delivered, representing the unassigned portion of
the Warrant, to the holder surrendering the Warrant.<PAGE>

                                                                     EXHIBIT 4.3

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                       WARRANT TO PURCHASE A MAXIMUM OF

                   21,000 SHARES OF SERIES A PREFERRED STOCK
                         RELEASE SOFTWARE CORPORATION
                          (Void after July 31, 2003)

          This certifies that VENTURE LENDING & LEASING, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from RELEASE SOFTWARE CORPORATION, a Delaware corporation (the
"Company"), 21,000 fully paid and nonassessable shares of the Company's Series A
Preferred Stock ("Preferred Stock") for cash at a price of $1.00 per share (the
"Stock Purchase Price") at any time or from time to time up to and including
5:00 p.m. (Pacific time) on July 31, 2003 (the "Expiration Date"), upon
surrender to the Company at its principal office at 200 Middlefield Road, Suite
202 Menlo Park, CA 94025 (or at such other location as the Company may advise
Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in cash
or by check of the aggregate Stock Purchase Price for the number of shares for
which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 4 of this Warrant.

          This Warrant is subject to the following terms and conditions:

     1.   Exercise; Issuance of Certificates; Payment for Shares.
          -------------------------------------------------------

          (a) Unless an election is made pursuant to clause (b) of this Section
1, this Warrant shall be exercisable at the option of the Holder, at any time or
from time to time, on or before the Expiration Date for all or any portion of
the shares of Preferred Stock (but not for a fraction of a share) which may be
purchased hereunder for the Stock Purchase Price multiplied by the number of
shares to be purchased. In the event, however, that pursuant to the Company's
Certificate of Incorporation, as amended, an event causing automatic conversion
of the Company's Preferred Stock shall have occurred prior to the exercise of
this Warrant, in whole or in part, then this Warrant shall be exercisable for
<PAGE>

the number of shares of Common Stock of the Company into which the Preferred
Stock not purchased upon any prior exercise of the Warrant would have been so
converted (and, where the context requires, reference to "Preferred Stock" shall
be deemed to include such Common Stock). The Company agrees that the shares of
Preferred Stock purchased under this Warrant shall be and are deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for such shares. Subject to the provisions of Section 2,
certificates for the shares of Preferred Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by this
Warrant have been so exercised. Except as provided in clause (b) of this Section
1, in case of a purchase of less than all the shares which may be purchased
under this Warrant, the Company shall cancel this Warrant and execute and
deliver a new Warrant or Warrants of like tenor for the balance of the shares
purchasable under the Warrant surrendered upon such purchase to the Holder
hereof within a reasonable time. Each stock certificate so delivered shall be in
such denominations of Preferred Stock as may be requested by the Holder hereof
and shall be registered in the name of such Holder or such other name as shall
be designated by such Holder, subject to the limitations contained in Section 2.

          (b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect, at
any time on or before the Expiration Date, to receive that number of shares of
Preferred Stock equal to the quotient of: (i) the difference between (A) the Per
Share Price (as hereinafter defined) of the Preferred Stock, less (B) the Stock
Purchase Price then in effect, multiplied by the number of shares of Preferred
Stock the Holder would otherwise have been entitled to purchase hereunder
pursuant to clause (a) of this Section 1 (or such lesser number of shares as the
Holder may designate in the case of a partial exercise of this Warrant); over
(ii) the Per Share Price.

          (c) For purposes of clause (b) of this Section 1, "Per Share Price"
means the product of: (i) the greater of (A) the average of the closing bid and
asked prices of the Company's Common Stock as quoted by NASDAQ or listed on any
exchange, whichever is applicable, as published in the Western Edition of The
                                                                          ---
Wall Street Journal for the ten (10) trading days prior to the date of the
-------------------
Holder's election hereunder or, (B) if applicable at the time of or in
connection with the exercise under clause (b) of this Section 1, the gross sales
price of one share of the Company's Common Stock pursuant to a registered public
offering or that amount

                                       2
<PAGE>

which shareholders of the Company will receive for each share of Common Stock
pursuant to a merger, reorganization or sale of assets; and (ii) that number of
shares of Common Stock into which each share of Preferred Stock is convertible.
If the Company's Common Stock is not quoted by NASDAQ or listed on an exchange,
the Per Share Price of the Preferred Stock (or the equivalent number of shares
of Common Stock into which such Preferred Stock is convertible) shall be the
price per share which the Company would obtain from a willing buyer for shares
sold by the Company from authorized but unissued shares as such price shall be
agreed upon by the Holder and the Company or, if agreement cannot be reached
within ten (10) business days of the Holder's election hereunder, as such price
shall be determined by a panel of three (3) appraisers, one (1) to be chosen by
the Company, one (1) to be chosen by the Holder and the third to be chosen by
the first two (2) appraisers. If the appraisers cannot reach agreement within 30
days of the Holder's election hereunder, then each appraiser shall deliver its
appraisal and the appraisal which is neither the highest nor the lowest shall
constitute the Per Share Price. In the event either party fails to choose an
appraiser within 30 days of the Holder's election hereunder, then the appraisal
of the sole appraiser shall constitute the Per Share Price. Each party shall
bear the cost of the appraiser selected by such party and the cost of the third
appraiser shall be borne one-half by each party. In the event either party fails
to choose an appraiser, the cost of the sole appraiser shall be borne one-half
by each party.

     2.   Limitation on Transfer.
          ----------------------

          (a) The Warrant and the Preferred Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to insure compliance with the provisions of the Securities Act. Each
holder of this Warrant or the Preferred Stock issuable hereunder will cause any
proposed transferee of the Warrant or Preferred Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2.

          (b) Each certificate representing (i) this Warrant, (ii) the Preferred
Stock, (iii) shares of the Company's Common Stock issued upon conversion of the
Preferred Stock and (iv) any other securities issued in respect of the Preferred
Stock or Common Stock issued upon conversion of the Preferred Stock upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of this Section 2 or
unless such securities have been registered under the Securities Act or sold
under Rule 144) be stamped or otherwise imprinted with a legend substantially in
the

                                       3
<PAGE>

following form (in addition to any legend required under applicable state
securities laws):

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
     INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
     ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
     IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
     ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

          (c) The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer the Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any other rule under the
Securities Act relating to the disposition of securities), or (iii)an opinion of
counsel, reasonably satisfactory to counsel for the Company, that an exemption
from such registration is available.

     3.   Shares to be Fully Paid; Reservation of Shares. The Company covenants
          ----------------------------------------------
and agrees that all shares of Preferred Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this Warrant, a sufficient number of shares of authorized but unissued
Preferred Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Preferred Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Preferred Stock may be listed. The Company will not take
any action which would result in any adjustment of the Stock Purchase Price (as
defined in Section 4 hereof) (i) if the total number of shares of Preferred
Stock issuable after such action upon exercise of all outstanding warrants,
together with all shares of Preferred Stock then outstanding and all shares of
Preferred Stock then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding, would exceed the
total number of

                                       4
<PAGE>

shares of Preferred Stock then authorized by the Company's Certificate of
Incorporation, or (ii) if the total number of shares of Common Stock issuable
after such action upon the conversion of all such shares of Preferred Stock
together with all shares of Common Stock then outstanding and then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding would exceed the total number of shares of Common Stock then
authorized by the Company's Articles of Incorporation.

     4.   Adjustment of Stock Purchase Price Number of Shares. The Stock
          ---------------------------------------------------
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.

          4.1  Subdivision or Combination of Stock. In case the Company shall at
               -----------------------------------
any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

          4.2  Dividends in Preferred Stock, Other Stock, Property,
               ----------------------------------------------------
Reclassification. If at any time or from time to time the holders of Preferred
----------------
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

               (a) Preferred Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or

               (b) any cash paid or payable otherwise than as a cash dividend,
or

               (c) Preferred Stock or other or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares

                                       5
<PAGE>

or similar corporate rearrangement, (other than shares of Preferred Stock issued
as a stock split, adjustments in respect of which shall be covered by the terms
of Section 4.1 above), then and in each such case, the Holder hereof shall, upon
the exercise of this Warrant, be entitled to receive, in addition to the number
of shares of Preferred Stock receivable thereupon, and without payment of any
additional consideration therefore, the amount of stock and other securities and
property (including cash in the cases referred to in clauses (b) and (c) above)
which such Holder would hold on the date of such exercise had he been the holder
of record of such Preferred Stock as of the date on which holders of Preferred
Stock received or became entitled to receive such shares and/or all other
additional stock and other securities and property.

          4.3  Reorganization, Reclassification, Consolidation, Merger or Sale.
               ---------------------------------------------------------------
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Preferred Stock Shall be entitled to receive
stock, securities or assets with respect to or in exchange for Preferred Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provisions shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive(in lieu of the
shares of the Preferred Stock of the Company immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Preferred Stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In any such case,
appropriate provision shall be made with respect to the rights and interests of
the holder of this Warrant to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Stock Purchase Price and
of the number of shares purchasable and receivable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be possible, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect any such consolidation,
merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered to the registered Holder hereof at the last address of
such Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock,

                                       6
<PAGE>

securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase.

          4.4  Intentionally Deleted.
               ---------------------

          4.5  Notice of Adjustment. Upon any adjustment of the Stock Purchase
               --------------------
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

          4.6  Other Notices. If at any time:
               -------------

               (a) the Company shall declare any cash dividend upon its
Preferred Stock;

               (b) the Company shall declare any dividend upon its Preferred
Stock payable in stock or make any special dividend or other distribution to the
holders of its Preferred Stock;

               (c) the Company shall offer for subscription pro rata to the
holders of its Preferred Stock any additional shares of stock of any class or
other rights;

               (d) there shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;

               (e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or

               (f) the Company shall take or propose to take any other action,
notice of which is actually provided to holders of the Preferred Stock;

then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (i) at least 20 day's prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,

                                       7
<PAGE>

reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, or other action, at least 20 day's written notice of the date when
the same shall take place. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Preferred Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (ii)
shall also specify the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.

          4.7  Certain Events. If any change in the outstanding Preferred Stock
               --------------
of the Company or any other event occurs as to which the other provisions of
this Section 4 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of the Company shall make an adjustment in the number and class of
shares available under the Warrant, the Stock Purchase Price and/or the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid. The adjustment
shall be such as will give the Holder of the Warrant upon exercise for the same
aggregate Stock Purchase Price the total number, class and kind of shares as he
would have owned had the Warrant been exercised prior to the event and had he
continued to hold such shares until after the event requiring adjustment.

     5.   Issue Tax. The issuance of certificates for shares of Preferred Stock
          ---------
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect 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 certificate in a name
other than that of the then Holder of the Warrant being exercised.

     6.   Closing of Books. The Company will at no time close its transfer books
          ----------------
against the transfer of any Warrant or of any shares of Preferred Stock issued
or issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.

     7.   No Voting or Dividend Rights; Limitation of Liability. Nothing
          -----------------------------------------------------
contained in this Warrant shall be

                                       8
<PAGE>

construed as conferring upon the Holder hereof the right to vote or to consent
as a shareholder in respect of meetings of shareholders for the election of
directors of the Company or any other matters or any rights whatsoever as a
shareholder of the Company. No dividends or interest shall be payable or accrued
in respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised. No provisions hereof, in the absence of affirmative action
by the holder to purchase shares of Preferred Stock, and no mere enumeration
herein of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Stock Purchase Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by its creditors.

     8.   Intentionally Deleted.
          ---------------------

     9.   Registration Rights. The Holder hereof shall be entitled, with respect
          -------------------
to the shares of Preferred Stock issued upon exercise hereof or the shares of
Common Stock or other securities issued upon conversion of such Preferred Stock
as the case may be, to all of the registration rights set forth in the Investor
Rights Agreement dated as of February 26, 1996 to the same extent and on the
same terms and conditions as possessed by the Purchasers. The company shall take
such action as may be reasonably necessary to assure that the granting of such
registration rights to the Holder does not violate the provisions of such
agreement or any of the Company's charter documents or rights of prior Grantees
of registration rights.

     10.  Rights and Obligations Survive Exercise of Warrant. The rights and
          --------------------------------------------------
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, contained in
Sections 6 and 8 shall survive the exercise of this Warrant.

     11.  Modification and Waiver. This Warrant and any provision hereof may be
          -----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

     12.  Notices. Any notice, request or other document required or permitted
          -------
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier (ii) upon
confirmation of receipt if by telecopy or (iii) three business days after
deposit in the US mail, with postage prepaid and certified or registered, to
each such holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor in the first paragraph of this
Warrant.

                                       9
<PAGE>

     13.  Binding Effect on Successors. This Warrant shall be binding upon any
          ----------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Preferred Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of the
exercise of this Warrant, in whole or in part, upon request of the Holder hereof
but at the Company's expense, acknowledge in writing its continuing obligation
to the Holder hereof in respect of any rights (including, without limitation,
any right to registration of the shares of Common Stock) to which the holder
hereof shall continue to be entitled after such exercise in accordance with this
Warrant; provided, that the failure of the holder hereof to make any such
request shall not affect the continuing obligation of the Company to the Holder
hereof in respect of such rights.

     14.  Descriptive Headings and Governing Law. The descriptive headings of
          --------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.

     15.  Lost Warrants or Stock Certificates. The Company represents and
          -----------------------------------
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.

     16.  Fractional Shares. No fractional shares shall be issued upon exercise
          -----------------
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.

     17.  Representations of Holder.  With respect to this Warrant, Holder
          -------------------------
represents and warrants to the Company as follows:

                                       10
<PAGE>

          17.1  Experience. It is experienced in evaluating and investing in
                ----------
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.

          17.2  Investment. It is acquiring the Warrant for investment for its
                ----------
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Preferred
Stock issuable upon exercise thereof and the shares of Common Stock issuable
upon conversion of the Preferred Stock, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.

          17.3  Rule 144. It acknowledges that the Warrant, the Preferred Stock
                --------
and the Common Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. It has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.

          17.4  Access to Data. It has had an opportunity to discuss the
                --------------
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.

     18.  Additional Representations and Covenants of the Company. The Company
          -------------------------------------------------------
hereby represents, warrants and agrees as follows:

          18.1  Corporate Power. The Company has all requisite corporate power
                ---------------
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.

          18.2  Authorization. All corporate action on the part of the Company,
                -------------
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.

                                       11
<PAGE>

          18.3  Offering. Subject in part to the truth and accuracy of Holder's
                --------
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Preferred Stock upon exercise of the Warrant
and the issuance of Common Stock upon conversion of the Preferred Stock will be
exempt from the registration requirements of the Securities Act, and are exempt
from the qualification requirements of any applicable state securities laws; and
neither the Company nor anyone acting on its behalf will take any action
hereafter that would cause the loss of such exemptions.

          18.4  Stock Issuance. Upon exercise of the Warrant, the Company will
                --------------
use its best efforts to cause stock certificates representing the shares of
Preferred Stock purchased pursuant to the exercise to be issued in the
individual names of Holder, its nominees or assignees, as appropriate at the
time of such exercise. Upon conversion of the shares of Preferred Stock to
shares of Common Stock, the Company will issue the Common Stock in the
individual names of Holder, its nominees or assignees, as appropriate.

          18.5  Articles and By-Laws. The Company has provided Holder with true
                --------------------
and complete copies of the Company's Articles or Certificate of Incorporation,
By-Laws, and each Certificate of Determination or other charter document
setting, forth any rights, preferences and privileges of Company's capital
stock, each as amended and in effect on the date of issuance of this Warrant.

          18.6  Conversion of Preferred Stock. As of the date hereof, each share
                -----------------------------
of the Preferred Stock is convertible into one share of the Common Stock.

          18.7  Financial and Other Reports. From time to time up to the earlier
                ---------------------------
of the Expiration Date or the complete exercise of this Warrant, the Company
shall furnish to Holder (i) within 90 days after the close of each fiscal year
of the Company an audited balance sheet and statement of changes in financial
position at and as of the end of such fiscal year, together with an audited
statement of income for such fiscal year; (ii) within 45 days after the close of
each fiscal quarter of the Company, an unaudited balance sheet and statement of
cash flows at and as of the end of such quarter, together with an unaudited
statement of income for such quarter; and (iii) promptly after sending, making
available, or filing, copies of all reports, proxy statements, and financial
statements that the Company sends or makes available to its shareholders and all
registration statements and reports that the Company files with the SEC or any
other governmental or regulatory authority.

                                       12
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 31st day of July, 1996.

RELEASE SOFTWARE CORPORATION

By:       /s/ Mark Benning
          ------------------

Title:    VP Sales & Finance
          ------------------

                                       13
<PAGE>

                             FORM OF SUBSCRIPTION
                             --------------------

                 (To be signed only upon exercise of Warrant)

TO:______________________________

          The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder,______________ (___) (1) shares of Preferred Stock of_____
and herewith makes payment of_________________________________________________
___________________________ Dollars ($______) therefor, and requests that the
certificates for such shares be issued in the name of, and delivered to,
___________________________ , whose address is_______________________________.

          The undersigned represents that it is acquiring such Preferred Stock
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition

thereof shall at all times be within its control.

                                                 DATED:________________________

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

                                                           (Address)

                                                 ______________________________

                                                 ______________________________

(1)  Insert here the number of shares called for on the face of the Warrant (or,
     in the case of a partial exercise, the portion thereof as to which the
     Warrant is being exercised), in either case without making any adjustment
     for additional Preferred Stock or any other stock or other securities or
     property or cash which, pursuant to the adjustment provisions of the
     Warrant, may be deliverable upon exercise.

                                       14
<PAGE>

                                  ASSIGNMENT
                                  ----------

          FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant,
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Warrant, with respect to the number of shares of Preferred Stock
covered thereby set forth hereinbelow, unto:

Name of Assignee    Address   No. of Shares
----------------    -------   -------------

                                               Dated:__________________________

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

                                       15

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