Document:

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                                                                     EXHIBIT 4.4

                            SETTLEMENT AND RELEASE

This SETTLEMENT AND RELEASE AGREEMENT (the "Agreement"), executed this 10/th/
day of September, 2001, is entered into by and among Constellation 3D, Inc., a
Delaware corporation (the "Company"), and G.L.A.S. Trading, Ltd. ("Releasor").

WHEREAS, Releasor has provided services for the Company of which $ 300,000
remains unpaid for by the Company;

WHEREAS, the Company and Releasor desire to settle fully and finally any and all
matters between them as of the date hereof, including, but not limited to, any
issues or claims that may arise out of the services performed by Releasor on
behalf of the Company;

WHEREAS, the Company desires and Releasor agrees to accept full payment for the
services rendered in shares of the Company's common stock and in exchange for a
full release by Releasor in favor of the Company;

NOW, THEREFORE, in consideration of the mutual agreements and understandings set
forth herein, intending to be legally bound, the parties hereto hereby agree as
follows:

A.   Payment for Services. Releasor hereby accepts a warrant with piggyback
     --------------------
registration rights (the form of which is annexed hereto) for 302,000 shares of
the Company's common stock in full and complete satisfaction of any and all
obligations and/or debt owed to Releasor by the Company. In addition, Releasor
grants the Company a full and general release as set forth in paragraph B.

B.   The Release. Releasor knowingly and voluntarily does hereby release and
     ------------
forever discharges CONSTELLATION 3D, INC. and its subsidiaries and affiliates,
together with all of their respective past and present directors, managers,
officers, partners, employees and attorneys, and each of their predecessors,
successors and assigns, and any of the foregoing in their capacity as a
shareholder or agent of Constellation 3D, Inc. (collectively, "Releasees") from
any and all claims, charges, complaints, promises, agreements, controversies,
liens, demands, causes of action, obligations, damages and liabilities of any
nature whatsoever, known or unknown, suspected or unsuspected, which against
them the Releasor or subsidiaries and affiliates, together with all of their
respective past and present directors, managers, officers, partners, employees
and attorneys, and each of their predecessors, successors and assigns, and any
of the foregoing in their capacity as a shareholder or agent of the Company ever
had, now have, or may hereafter claim to have against any of the Releasees by
reason of any matter, cause or thing whatsoever arising on or before the date
hereof and whether or not previously asserted before any state or federal court
or before any state or federal agency or governmental entity (the "Release").
The Release includes, without limitation, any rights or claims relating in any
way to debts due to Releasor for services rendered or any other federal, state
or local law, regulation, ordinance or common law, or under any policy,
agreement, understanding or promise, whether written or oral, formal or
informal, between any of the Releasees, and Releasor.
<PAGE>

C.   Miscellaneous.
     -------------

     (i)   Enforcement; Governing Law; Jurisdiction.  This Agreement shall be
           ----------------------------------------
governed by and construed in accordance with the laws of the State of New York
without regard to its conflicts of law principles.  The parties irrevocably
consent to the exclusive jurisidiction of the state and federal courts located
in New York, New York for any disputes which may arise hereunder.

     (ii)  Headings.  The section and paragraph headings contained in this
           --------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

     (iii) Counterparts.  This Agreement may be executed in two or more
           ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     (iv)  Entire Agreement.  This Agreement constitutes the entire agreement,
           ----------------
and supersedes any and all prior agreements, and understandings, both written
and oral, between the parties hereto with respect to the subject matter hereof
except as otherwise provided herein.

     (v)   Severability.  If any term or other provision of this Agreement is
           ------------
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect.

     (vi)  Successors.  This Agreement shall be binding upon and shall inure
           ----------
to the benefit of each of the parties hereto, and their respective heirs,
legatees, executors, administrators, legal representatives, successors and
assigns.  The provisions of Section B hereof are intended to be for the benefit
of, and shall be enforceable by, each Releasee and his, her or its, heirs and
representatives.

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

                              CONSTELLATION 3D, INC.

                              By: /s/ Lev Zaidenberg
                                 -------------------------------
                              Name:
                              Title: Officer and Director

                              G.L.A.S. Trading, Ltd. (RELEASOR)

                              By: /s/ Pavel Merkoulov
                                 -------------------------------
                              Name:
                              Title: Officer
<PAGE>

                                   EXHIBIT A
                          FORM OF WARRANT CERTIFICATE

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

                         COMMON STOCK PURCHASE WARRANT

                          Number of Shares:  302,000

                             CONSTELLATION 3D, INC.
                             ----------------------

                          Void after December 1, 2004

1.   Issuance. This Warrant is issued to G.L.A.S. Trading Ltd. by Constellation
     --------
3D, Inc., a Delaware corporation (hereinafter with its successors called the
"Company").

2.   Purchase Price; Number of Shares.  Subject to the terms and conditions
     --------------------------------
hereinafter set forth, the registered holder of this Warrant (the "Holder"), is
entitled upon surrender of this Warrant with the subscription form annexed
hereto duly executed, at the office of the Company, at 805 Third Avenue - 14/th/
Floor, New York, NY 10022, or such other office as the Company shall notify the
Holder of in writing, to purchase from the Company at a price per share (the
"Purchase Price") of  $0.0001, of up to ____________ fully paid and
nonassessable shares of Common Stock, $ .00001 par value, of the Company (the
"Common Stock").

3.   Exercisability.  This Warrant will become exercisable upon the execution
     --------------
hereof by the Company.

4.   Payment of Purchase Price; Cashless Exercise.  Payment of the Purchase
     --------------------------------------------
Price of the shares shall be by certified check or cashier's check or by wire
transfer (of same day funds) to an account designated by the Company in an
amount equal to the Exercise Price multiplied by the number of shares being
purchased. Notwithstanding anything to the contrary contained in this Warrant,
this Warrant may be exercised at any time during the Exercise Period by
presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the holder's intention to effect a
cashless exercise (a "Cashless Exercise").  In the event of a Cashless Exercise,
in lieu of
<PAGE>

paying the Exercise Price in cash, the holder shall surrender this Warrant for
that number of shares of Common Stock determined by the Company in good faith by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference, but not less than
zero between the then current Market Price per share of the Common Stock and the
Exercise Price, and the denominator of which shall be the then current Market
Price per share of Common Stock. "Market Price," as of any date, (i) means the
                                 -------------
average of the closing bid prices for the shares of Common Stock as reported on
the Nasdaq National Market by Bloomberg Financial Markets ("Bloomberg") for the
five (5) consecutive trading days immediately preceding such date, or (ii) if
the Nasdaq National Market is not the principal trading market for the shares of
Common Stock, the average of the closing bid prices reported by Bloomberg on the
principal trading market for the Common Stock during the same period, or, if
there is no bid price for such period, the last reported price reported by
Bloomberg for such period, or (iii) if the foregoing do not apply, the last
closing bid price of such security in the over-the-counter market on the pink
sheets or bulletin board for such security as reported by Bloomberg, or if no
closing bid price is so reported for such security, the last closing trade price
of such security as reported by Bloomberg, or (iv) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price shall
be the average fair market value as reasonably determined by an investment
banking firm selected by the Company and reasonably acceptable to the holder,
with the costs of the appraisal to be borne by the Company. The manner of
determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

5.   Partial Exercise.  This Warrant may not be exercised in part.
     ----------------

6.   Issuance Date. The person or persons in whose name or names any certificate
     -------------
representing shares of Common Stock is issued hereunder shall be deemed to have
become the holder of record of the shares represented thereby as at the close of
business on the date this Warrant is exercised with respect to such shares,
whether or not the transfer books of the Company shall be closed. Until such
time as this Warrant is exercised in whole or in part, the Holder hereof shall
have no rights as a shareholder of the Company.

7.   Expiration Date.  This Warrant shall expire at the close of business on
     ---------------
December 1, 2004, and shall be void thereafter.

8.   Reserved Shares; Valid Issuance.  The Company covenants that it will at
     -------------------------------
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock, free from all preemptive or similar
rights therein, as will be sufficient to permit the exercise of this Warrant in
full.  The Company further covenants that such shares as may be issued pursuant
to the exercise of this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issuance thereof.
<PAGE>

9.   Dividends.  If after September 10, 2001 (the "Original Issue Date") the
     ---------
Company shall subdivide the Common Stock, by split-up or otherwise, or combine
the Common Stock, or issue additional shares of Common Stock in payment of a
stock dividend on the Common Stock, the number of shares issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.

10.  Fractional Shares.  In no event shall any fractional share of Common Stock
     -----------------
be issued upon any exercise of this Warrant. If, upon exercise of this Warrant,
the Holder would, except as provided in this Section 12, be entitled to receive
a fractional share of Common Stock, then the Company shall make a cash payment
to the Holder equal to the quotient of (a) such fraction multiplied by (b) the
fair market value of a share of Common Stock as determined by the Company's
Board of Directors, in its sole discretion.

11.  Notices of Record Date, Etc.  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,

     b.   any reclassification of the capital stock of the Company, capital
     reorganization of the Company, consolidation or merger involving the
     Company, or sale or conveyance of all or substantially all of its assets,
     or

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

then and in each such event the Company will mail or cause to be mailed to the
Holder a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the date on which
any such reclassification, reorganization, consolidation, merger, sale or
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any, is to be fixed, as of which the holders of record in respect of
such event are to be determined.  Such notice shall be mailed at least 20 days
prior to the date specified in such notice on which any such action is to be
taken.  Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any dividend or distribution, or of any such
transaction.

12.  Amendment.  The terms of this Warrant may be amended, modified or waived
     ---------
only with the written consent of the Company and the holders of Warrants
representing at least two-thirds of the number of shares of Common Stock then
issuable upon the exercise of the Warrants.  No such amendment, modification or
waiver shall be effective
<PAGE>

as to this Warrant unless the terms of such amendment, modification or waiver
shall apply with the same force and effect to all of the other Warrants then
outstanding.

13.  Warrant Register; Transfers, Etc.
     ---------------------------------

     a.   The Company will maintain a register containing the names and
     addresses of the registered holders of the Warrants. The Holder may change
     its address as shown on the warrant register by written notice to the
     Company requesting such change. Any notice or written communication
     required or permitted to be given to the Holder may be given by certified
     mail or delivered to the Holder at its address as shown on the warrant
     register.

     b.   This Warrant may not be transferred or assigned in whole or in part
     without the prior written consent of the Company, and without compliance
     with all applicable federal and state securities laws by the transferor and
     the transferee.  Subject to all of the restrictions of the prior sentence,
     title to this Warrant may be transferred by endorsement (by the Holder
     executing the Assignment form annexed hereto) and delivery in the same
     manner as a negotiable instrument transferable by endorsement and delivery.
     Upon surrender of this Warrant to the Company, together with the assignment
     hereof properly endorsed, for a permitted transfer of this Warrant as an
     entirety by the Holder, the Company shall issue a new warrant of the same
     denomination to the assignee.  Upon surrender of this Warrant to the
     Company, together with the assignment hereof properly endorsed, by the
     Holder for transfer with respect to a portion of the shares of Common Stock
     purchasable hereunder, the Company shall issue a new warrant to the
     assignee, in such denomination as shall be requested by the Holder hereof,
     and shall issue to such Holder a new warrant covering the number of shares
     in respect of which this Warrant shall not have been transferred.

     c.  In case this Warrant shall be mutilated, lost, stolen or destroyed, the
     Company shall issue a new warrant of like tenor and denomination and
     deliver the same (i) in exchange and substitution for and upon surrender
     and cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant
     lost, stolen or destroyed, upon receipt of evidence reasonably satisfactory
     to the Company of the loss, theft or destruction of such Warrant (including
     a reasonably detailed affidavit with respect to the circumstances of any
     loss, theft or destruction) and of indemnity reasonably satisfactory to the
     Company, provided, however, that so long as the original holder of this
     Warrant is the registered holder of this Warrant, no indemnity shall be
     required other than its written agreement to indemnify the Company against
     any loss arising from the issuance of such new warrant.

14.  No Impairment.  The Company will not, by amendment of its Articles of
     -------------
Incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any
<PAGE>

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.

15.  Governing Law.  The provisions and terms of this Warrant shall be governed
     -------------
by and construed in accordance with the internal laws of the State of New York.

16.  Successors and Assigns.  This Warrant shall be binding upon the Company's
     ----------------------
successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.

17.  Business Days.  If the last or appointed day for the taking of any action
     -------------
required or the expiration of any right granted herein shall be a Saturday or
Sunday or a legal holiday in the State of Delaware, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.

18.  Consolidation or Merger.  In case of any consolidation of the Company with,
     -----------------------
or merger of the Company into, any other corporation, or in case of any sale or
conveyance of all or substantially all of the assets of the Company at any time
during the Exercise Period, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities, cash or assets
as may be issued or payable with respect to or in exchange for the number of
shares of Common Stock immediately theretofore acquirable and receivable upon
exercise of this Warrant had such consolidation, merger, sale or conveyance not
taken place. In any such case, the Company will make appropriate provision to
insure that the provisions of this Section 19 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Warrant.

19.  Registration.  If lawful, the Company shall include the Warrant shares on
     ------------
its next filed  registration statement.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers thereunto duly authorized:

Issued: New York, New York              Constellation 3D, Inc.
        September 10, 2001
                                        /s/ Lev Zaidenberg
                                        By: Officer and Director
<PAGE>

ASSIGNMENT

  For value received __________________ hereby sells, assigns and transfers unto
_____ ___________________ assigns and transfers unto
____________________________________

_____________________________________________________________________________
[Please print or typewrite name and address of Assignee]
_____________________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoint
_________________
its attorney to transfer the within Warrant on the books of the within named
Company with full power of substitution on the premises.

Dated: __________________

In the presence of:

________________________
<PAGE>

SUBSCRIPTION

To: ____________________        Date: ___________________

  The undersigned hereby subscribes for _______ shares of Common Stock covered
by this Warrant.  The certificate(s) for such shares shall be issued in the name
of the undersigned or as otherwise indicated below:

                                   ________________________
                                   Signature

                                   ________________________
                                   Name for Registration

                                   ________________________
                                   Mailing Address<PAGE>

                                                                     Exhibit 4.5

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AS EVIDENCED A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.

                  AQUATIC CELLULOSE INTERNATIONAL CORPORATION

                                    WARRANT
                                    -------

Warrant No.3                                             Dated: March [  ], 2001

     Aquatic Cellulose International Corporation, a Nevada corporation (the
"Company"), hereby certifies that, for value received, New Millennium Capital
--------
Partners II, LLC or its registered assigns ("Holder"), is entitled, subject to
                                             ------
the terms set forth below, to purchase from the Company up to a total of 25,000
shares of common stock, $.001 par value per share (the "Common Stock"), of the
                                                        ------------
Company (each such share, a "Warrant Share" and all such shares, the "Warrant
                             -------------                            -------
Shares") at an exercise price equal to [$.35] per share (as adjusted from time
------
to time as provided in Section 8, the "Exercise Price"), at any time and from
                                       --------------
time to time from and after the date hereof and through and including March [ ],
2003 (the "Expiration Date"), and subject to the following terms and conditions
           ---------------
(all references to $ (dollars) shall be to US$ (United States Dollars)):

          1.   Registration of Warrant.  The Company shall register this
               -----------------------
Warrant, upon records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from time to time.
-----------------
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.

          2.   Registration of Transfers and Exchanges.
               ---------------------------------------

               (a)  The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment
<PAGE>

attached hereto duly completed and signed, to the Transfer Agent or to the
Company at its address for notice set forth in Section 12. Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "New Warrant"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance of such transferee of all of the rights and obligations of a holder
of a Warrant.

          (b)  This Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company at its address for notice set forth in
Section 12 for one or more New Warrants, evidencing in the aggregate the right
to purchase the number of Warrant Shares which may then be purchased hereunder.
Any such New Warrant will be dated the date of such exchange.

          3.   Duration and Exercise of Warrants.
               ---------------------------------

               (a)  This Warrant shall be exercisable by the registered Holder
on any business day before 6:30 P.M., New York City time, at any time and from
time to time on or after the date hereof to and including the Expiration Date.
At 6:30 P.M., New York City time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value.
Prior to the Expiration Date, the Company may not call or otherwise redeem this
Warrant.

               (b)  Upon delivery to the Company of an executed Form of Election
to Purchase, together with the grid attached hereto as Annex A duly completed
                                                       -------
and signed, to the Company at its address for notice set forth in Section 12 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, in the manner provided hereunder,
all as specified by the Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 3 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate, a certificate for the Warrant Shares issuable upon
such exercise, free of restrictive legends except (i) either in the event that a
registration statement covering the resale of the Warrant Shares and naming the
Holder as a selling stockholder thereunder is not then effective or the Warrant
Shares are not freely transferable without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act of 1933, as amended (the "Securities
                                                                      ----------
Act"), or (ii) if this Warrant shall have been issued pursuant to a written
---
agreement between the original Holder and the Company, as required by such
agreement. Any person so designated by the Holder to receive Warrant Shares
shall be deemed to have become holder of record of such Warrant Shares as of the
Date of Exercise of this Warrant. The Company shall, upon request of the Holder,
if available, use its best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established
clearing corporation performing similar functions. To effect an exercise
hereunder, the Holder shall not be required to physically surrender this Warrant
to the Company unless all the Warrant Shares have been exercised. Exercises
hereunder shall have
<PAGE>

the effect of lowering the number of Warrant Shares in an amount equal to the
applicable exercise, which shall be evidenced by entries set forth in the
Exercise Schedule. The Holder and the Company shall maintain records showing the
number of Warrant Shares exercised and the date of such exercises. In the event
of any dispute or discrepancy, the records of the Holder shall be controlling
and determinative in the absence of manifest error. The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following exercise of a portion of this Warrant,
the number of shares issuable upon exercise of this Warrant may be less than the
amount stated on the face hereof.

          A "Date of Exercise" means the date on which the Company shall have
             ----------------
received (i) the Form of Election to Purchase completed and duly signed, and
(ii) payment of the Exercise Price for the number of Warrant Shares so indicated
by the Holder to be purchased.

          (c)  This Warrant shall be exercisable, either in its entirety or,
from time to time, for a portion of the number of Warrant Shares.

     4.   Piggyback Registration Rights. This Warrant is subject to the
          -----------------------------
piggyback registration rights granted under the Registration Rights Agreement of
even date herewith between the Company and original Holder and such piggyback
registration rights shall continue until all of the Warrant Shares have been
sold in accordance with an effective registration statement or upon the
Expiration Date. The Company will pay all registration expenses in connection
therewith.

     5.   Payment of Taxes. The Company will pay all documentary stamp taxes
          ----------------
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; 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 registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

     6.   Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
          ----------------------
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and indemnity, if
requested, satisfactory to it. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable charges as the Company may prescribe.

     7.   Reservation of Warrant Shares. The Company covenants that it will at
          -----------------------------
all times reserve and keep available out of the aggregate of its authorized but
unissued Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other actual contingent purchase
rights of persons other than the Holder (taking into account the adjustments and
<PAGE>

restrictions of Section 8). The Company covenants that all Warrant Shares that
shall be so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and nonassessable.

          8.   Certain Adjustments.  The Exercise Price and number of Warrant
               -------------------
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 8.

               (a)  If the Company, at any time while this Warrant is
outstanding, (i) shall pay a stock dividend (except scheduled dividends paid on
outstanding preferred stock as of the date hereof which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of
its Common Stock or on any other class of capital stock payable in shares of
Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger
number of shares, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding after such event. In such event, the number of
Warrant shares issuable under this Warrant shall be equitably adjusted to
reflect such event (e.g. in the event of a 2:1 stock split of the Common Stock,
the number of the Warrant shares shall be increased to twice the number
available for purchase prior to the record date for such stock split). Any
adjustment made pursuant to this Section shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination, and shall apply to
successive subdivisions and combinations.

          (b)  In case of any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, then the Holder shall have the right
thereafter to exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of
Common Stock following such reclassification or share exchange, and the Holder
shall be entitled upon such event to receive such amount of securities or
property equal to the amount of Warrant Shares such Holder would have been
entitled to had such Holder exercised this Warrant immediately prior to such
reclassification or share exchange. The terms of any such reclassification or
share exchange shall include such terms so as to continue to give to the Holder
the right to receive the securities or property set forth in this Section 8(b)
upon any exercise following any such reclassification or share exchange.

          (c)  If the Company, at any time while this Warrant is outstanding,
shall distribute to all holders of Common Stock (and not to holders of this
Warrant) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security (excluding those referred to in Sections
8(a), (b) and (d)), then in each such case the Exercise Price shall be
determined by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Exercise Price
determined as of the record date
<PAGE>

mentioned above, and of which the numerator shall be such Exercise Price on such
record date less the then fair market value at such record date of the portion
of such assets or evidence of indebtedness so distributed applicable to one
outstanding share of Common Stock as determined by the Company's independent
certified public accountants that regularly examines the financial statements of
the Company (an "Appraiser").
                 ---------

          (d)  If the Company or any subsidiary thereof, as applicable with
respect to Common Stock Equivalents (as defined below), at any time while this
Warrant is outstanding, shall issue shares of Common Stock or rights, warrants,
options or other securities or debt that is convertible into or exchangeable for
shares of Common Stock ("Common Stock Equivalents") entitling any Person to
                         ------------------------
acquire shares of Common Stock, at a price per share less than the Exercise
Price (if the holder of the Common Stock or Common Stock Equivalent so issued
shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights issued in connection with such issuance, be
entitled to receive shares of Common Stock at a price less than the Exercise
Price, such issuance shall be deemed to have occurred for less than the Exercise
Price), then, at the option of the Holder, the Exercise Price shall be replaced
with the conversion, exchange or purchase price for such Common Stock or Common
Stock Equivalents (including any reset provisions thereof) at issue.  Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued.  The Company shall notify the Holder in writing, no later than the
business day following the issuance of any Common Stock or Common Stock
Equivalent subject to this section, indicating therein the applicable issuance
price, or of applicable reset price, exchange price, conversion price and other
pricing terms.

          (e)  In case of any (1) merger or consolidation of the Company with or
into another Person, or (2) sale by the Company of more than one-half of the
assets of the Company (on a book value basis) in one or a series of related
transactions, the Holder shall have the right thereafter to (A) exercise this
Warrant for the shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common Stock following such
merger, consolidation or sale, and the Holder shall be entitled upon such event
or series of related events to receive such amount of securities, cash and
property as the Common Stock for which this Warrant could have been exercised
immediately prior to such merger, consolidation or sales would have been
entitled or (B) in the case of a merger or consolidation, (x) require the
surviving entity to issue common stock purchase warrants equal to the number
Warrant Shares to which this Warrant then permits, which newly warrant shall be
identical to this Warrant, and (y) simultaneously with the issuance of such
warrant, the Holder of such warrant shall have the right to exercise such
warrant only into shares of stock and other securities, cash and property
receivable upon or deemed to be held by holders of Common Stock following such
merger or consolidation or (C) require the surviving entity from such merger,
acquisition or business combination to pay to the Holder, in cash, the Black
Scholes value of this Warrant. In the case of clause (B), the exercise price for
such new warrant shall be based upon the amount of securities, cash and property
that each share of Common Stock would receive in such transaction and the
Exercise Price of this Warrant immediately prior to the effectiveness or closing
date for such transaction. The terms of any such merger, sale or consolidation
shall include such terms so
<PAGE>

as continue to give the Holder the right to receive the securities, cash and
property set forth in this Section upon any conversion or redemption following
such event. This provision shall similarly apply to successive such events.

               (f)  For the purposes of this Section 8, the following clauses
shall also be applicable:

                    (i)   Record Date. In case the Company shall take a record
                          -----------
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
securities convertible or exchangeable into shares of Common Stock, or (B) to
subscribe for or purchase Common Stock or securities convertible or exchangeable
into shares of Common Stock, then such record date shall be deemed to be the
date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

                    (ii)  Treasury Shares. The number of shares of Common Stock
                          ---------------
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.

               (g)  All calculations under this Section 8 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

               (h)  Whenever the Exercise Price is adjusted pursuant to Section
8(c) above, the Holder, after receipt of the determination by the Appraiser,
shall have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case the adjustment shall be
equal to the average of the adjustments recommended by each of the Appraiser and
such appraiser. The Holder shall promptly mail or cause to be mailed to the
Company, a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Such
adjustment shall become effective immediately after the record date mentioned
above.

               (i)  If:

                         (i)   the Company shall declare a dividend (or any
                               other distribution) on its Common Stock; or

                         (ii)  the Company shall declare a special nonrecurring
                               cash dividend on or a redemption of its Common
                               Stock; or

                         (iii) the Company shall authorize the granting to all
                               holders of the Common Stock rights or warrants to
<PAGE>

                               subscribe for or purchase any shares of capital
                               stock of any class or of any rights; or

                         (iv)  the approval of any stockholders of the Company
                               shall be required in connection with any
                               reclassification of the Common Stock, any
                               consolidation or merger to which the Company is a
                               party, any sale or transfer of all or
                               substantially all of the assets of the Company,
                               or any compulsory share exchange whereby the
                               Common Stock is converted into other securities,
                               cash or property; or

                         (v)   the Company shall authorize the voluntary
                               dissolution, liquidation or winding up of the
                               affairs of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; provided, however, that the failure to mail such notice or any
               --------  -------
defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

          (j)  Upon each adjustment of the Exercise Price pursuant to Section 8
hereof, the number of shares of Common Stock purchasable upon exercise of this
Warrant shall be adjusted to the number of shares of Common Stock, calculated to
the nearest one-hundredth of a share, obtained by (i) multiplying the number of
shares of Common Stock purchasable immediately prior to such adjustment upon the
exercise of this Warrant by the Exercise Price in effect prior to such
adjustment, and (ii) dividing the product so obtained by the Exercise Price in
effect after such adjustment of the Exercise Price.

     9.   Payment of Exercise Price. The Holder shall pay the Exercise Price in
          -------------------------
one of the following manners:

          (a)  Cash Exercise. The Holder may deliver immediately available
               -------------
funds; or

          (b)  Cashless Exercise. At any time after the earlier to occur of the
               -----------------
Effectiveness Date (as defined in the Registration Rights Agreement) and the
date the initial
<PAGE>

registration statement filed pursuant to the Registration Rights Agreement is
declared effective by the Commission, when a registration statement covering the
resale of the Warrant Shares and naming the Holder as a selling stockholder
thereunder is not then effective, then the Holder may indicate in the Form of
Election to Purchase its election to utilize a "net" or "cashless" exercise to
pay for Warrant Shares, and the Company shall issue to the Holder the number of
Warrant Shares determined as follows:

                    X = Y [(A-B)/A]
     where:
                    X = the number of Warrant Shares to be issued

     to the Holder.

                    Y = the number of Warrant Shares with respect to which this
                    Warrant is being exercised.

                    A = the average of the closing sale prices of the Common
                    Stock for the five (5) trading days immediately prior to
                    (but not including) the Date of Exercise.

                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have been
commenced, on the issue date.

          10.  Certain Exercise Restrictions.
               -----------------------------

               (a)  A Holder may not exercise this Warrant to the extent such
exercise would result in the Holder, together with any affiliate thereof,
beneficially owning (as determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
                                                  ------------
promulgated thereunder) in excess of 4.999% of the then issued and outstanding
shares of Common Stock, including shares issuable upon such exercise and held by
such Holder after application of this Section. Since the Holder will not be
obligated to report to the Company the number of shares of Common Stock it may
hold at the time of an exercise hereunder, unless the exercise at issue would
result in the issuance of shares of Common Stock in excess of 4.999% of the then
outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular exercise hereunder and to the extent
that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of this Warrant is exercisable shall
be the responsibility and obligation of the Holder. If the Holder has delivered
a Form of Election to Purchase for a number of Warrant Shares that, without
regard to any other shares that the Holder or its affiliates may beneficially
own, would result in the issuance in excess of the permitted amount hereunder,
the Company shall notify the
<PAGE>

Holder of this fact and shall honor the exercise for the maximum portion of this
Warrant permitted to be exercised on such Date of Exercise in accordance with
the periods described herein and, at the option of the Holder, either keep the
portion of the Warrant tendered for exercise in excess of the permitted amount
hereunder for future exercises or return such excess portion of the Warrant to
the Holder. The provisions of this Section may be waived by a Holder (but only
as to itself and not to any other Holder) upon not less than 61 days prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

          (b)  A Holder may not exercise this Warrant to the extent such
exercise would result in the Holder, together with any affiliate thereof,
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules promulgated thereunder) in excess of 9.999% of the
then issued and outstanding shares of Common Stock, including shares issuable
upon such exercise and held by such Holder after application of this Section.
Since the Holder will not be obligated to report to the Company the number of
shares of Common Stock it may hold at the time of an exercise hereunder, unless
the exercise at issue would result in the issuance of shares of Common Stock in
excess of 9.999% of the then outstanding shares of Common Stock without regard
to any other shares which may be beneficially owned by the Holder or an
affiliate thereof, the Holder shall have the authority and obligation to
determine whether the restriction contained in this Section will limit any
particular exercise hereunder and to the extent that the Holder determines that
the limitation contained in this Section applies, the determination of which
portion of this Warrant is exercisable shall be the responsibility and
obligation of the Holder. If the Holder has delivered a Form of Election to
Purchase for a number of Warrant Shares that, without regard to any other shares
that the Holder or its affiliates may beneficially own, would result in the
issuance in excess of the permitted amount hereunder, the Company shall notify
the Holder of this fact and shall honor the exercise for the maximum portion of
this Warrant permitted to be exercised on such Date of Exercise in accordance
with the periods described herein and, at the option of the Holder, either keep
the portion of the Warrant tendered for exercise in excess of the permitted
amount hereunder for future exercises or return such excess portion of the
Warrant to the Holder. The provisions of this Section may be waived by a Holder
(but only as to itself and not to any other Holder) upon not less than 61 days
prior notice to the Company. Other Holders shall be unaffected by any such
waiver.

          11.  Fractional Shares.  The Company shall not be required to issue or
               -----------------
cause to be issued fractional Warrant Shares on the exercise of this Warrant.
The number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented.  If any fraction of
a Warrant Share would, except for the provisions of this Section, be issuable on
the exercise of this Warrant, the Company shall pay an amount in cash equal to
the Exercise Price multiplied by such fraction.

          12.  Notices.  Any and all notices or other communications or
               -------
deliveries hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 6:30 p.m. (New York City time) on a business
<PAGE>

day, (ii) the business day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 6:30 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
business day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be:
(i) if to the Company, to 3704 32/nd/ Street, Suite 301, Vernon, B.C. VIT SN6,
facsimile: (250) 558-5470, attention: Gary Ackles, or (ii) if to the Holder, to
the Holder at the address or facsimile number appearing on the Warrant Register
or such other address or facsimile number as the Holder may provide to the
Company in accordance with this Section.

          13.  Warrant Agent.  The Company shall serve as warrant agent under
               -------------
this Warrant.  Upon thirty (30) days' notice to the Holder, the Company may
appoint a new warrant agent.  Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act.  Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

          14.  Miscellaneous.
               -------------

               (a)  This Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and assigns. This Warrant may
be amended only in writing signed by the Company and the Holder and their
successors and assigns.

               (b)  Subject to Section 14(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under this Warrant.
This Warrant shall inure to the sole and exclusive benefit of the Company and
the Holder.

               (c)  The corporate laws of the State of Nevada shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. The Company and the Holder hereby
irrevocably submit to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, borough of Manhattan, for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, or that such suit,
action or proceeding is improper. Each of the Company and the Holder hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or
<PAGE>

proceeding by receiving a copy thereof sent to the Company at the address in
effect for notices to it under this instrument and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Warrant, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its'
attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

          (d)  The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

          (e)  In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

               AQUATIC CELLULOSE INTERNATIONAL CORPORATION

                    /s/ Gary Ackles
               By:-------------------------------------
                  Name: Gary Ackles
                  Title: Chief Executive Officer
<PAGE>

                          FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the Warrant to which this form applies, issued by Aquatic Cellulose
International Corporation ("Aquatic"))
                            -------

To Aquatic Cellulose International Corporation:

     The undersigned hereby irrevocably elects to purchase  _____________ shares
of common stock, $.001 par value per share, of Aquatic (the "Common Stock") and,
                                                             ------------
if such Holder is not utilizing the cashless exercise provisions set forth in
this Warrant, encloses herewith $________ in cash, certified or official bank
check or checks, which sum represents the aggregate Exercise Price (as defined
in the Warrant) for the number of shares of Common Stock to which this Form of
Election to Purchase relates, together with any applicable taxes payable by the
undersigned pursuant to the Warrant.

     The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                    PLEASE INSERT SOCIAL SECURITY
OR
                                    TAX IDENTIFICATION NUMBER

                                    ____________________________________________

________________________________________________________________________________
                        (Please print name and address)

Dated: _____,__             Name of Holder:

                                   (Print)______________________________________

                                   (By:)________________________________________
                                   (Name:)
                                   (Title:)
                                   (Signature must conform in all respects to
                                   name of holder as specified on the face of
                                   the Warrant)
<PAGE>

                              FORM OF ASSIGNMENT

          [To be completed and signed only upon transfer of Warrant]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase  ____________ shares of Common Stock of Aquatic Cellulose
International Corporation to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Aquatic
Cellulose International Corporation with full power of substitution in the
premises.

Dated:

____________, ____

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

                         _______________________________________
                         Address of Transferee

                         _______________________________________

                         _______________________________________

In the presence of:

__________________________
<PAGE>

                                    Annex A
                                    -------

--------------------------------------------------------------------------------
   Date         Number of Warrant    Number of Warrant Shares     Number of
             Shares Available to be        Exercised            Warrant Shares
                    Exercised                                    Remaining to
                                                                 be Exercised
--------------------------------------------------------------------------------

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

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