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NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  EXERCISABLE  HAVE BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR
THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (B) AN OPINION
OF COUNSEL  (WHICH  COUNSEL  SHALL BE  SELECTED BY THE  HOLDER),  IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD  PURSUANT  TO RULE 144 OR RULE 144A  UNDER  SAID ACT.  NOTWITHSTANDING  THE
FOREGOING,  THE SECURITIES MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

                          AMERICAN UNITED GLOBAL, INC.

                    SERIES A WARRANT TO PURCHASE COMMON STOCK

Warrant No.: ___
Number of Shares of Common Stock: ________
Date of Issuance: June 14, 2006 ("Issuance Date")

            American   United  Global,   Inc.,  a  Delaware   corporation   (the
"Company"),  hereby  certifies  that, for good and valuable  consideration,  the
receipt    and     sufficiency    of    which    are    hereby     acknowledged,
___________________________,  the  registered  holder  hereof  or its  permitted
assigns (the  "Holder"),  is entitled,  subject to the terms set forth below, to
purchase  from the  Company,  at the Exercise  Price (as defined  below) then in
effect,  upon surrender of this Warrant to Purchase Common Stock  (including any
Warrants to Purchase  Common Stock issued in exchange,  transfer or  replacement
hereof,  the "Warrant"),  at any time or times on or after the date hereof,  but
not after 11:59 p.m., New York Time, on the Expiration  Date (as defined below),
_____________________  (_______) fully paid nonassessable shares of Common Stock
(as defined below) (the "Warrant  Shares").  Except as otherwise defined herein,
capitalized  terms in this Warrant  shall have the meanings set forth in Section
15.  This  Warrant is one of the  Warrants to  purchase  Common  Stock (the "SPA
Warrants")  issued  pursuant to Section 1 of that  certain  Securities  Purchase
Agreement, dated as of June 14, 2006 (the "Subscription Date"), by and among the
Company and the investors  (the "Buyers")  referred to therein (the  "Securities
Purchase Agreement").

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            1. EXERCISE OF WARRANT.

                  (a) Mechanics of Exercise. Subject to the terms and conditions
hereof  (including,  without  limitation,  the  limitations set forth in Section
1(f)) and the Amendment Date (as defined in the Securities  Purchase  Agreement)
or  the  Stockholder  Approval  Date  (as  defined  in the  Securities  Purchase
Agreement)  shall have occurred,  this Warrant may be exercised by the Holder on
any day on or after the date hereof,  in whole or in part,  by (i) delivery of a
written  notice,  in the  form  attached  hereto  as  Exhibit  A (the  "Exercise
Notice"), of the Holder's election to exercise this Warrant and (ii) (A) payment
to the Company of an amount equal to the applicable Exercise Price multiplied by
the number of Warrant  Shares as to which this Warrant is being  exercised  (the
"Aggregate Exercise Price") in cash or by wire transfer of immediately available
funds or (B) by  notifying  the  Company  that this  Warrant is being  exercised
pursuant to a Cashless  Exercise (as defined in Section 1(d)).  The Holder shall
not be required to deliver the  original  Warrant in order to effect an exercise
hereunder.  Execution  and delivery of the Exercise  Notice with respect to less
than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant  evidencing the right to purchase
the remaining  number of Warrant  Shares.  On or before the first (1st) Business
Day  following  the date on which the Company has received  each of the Exercise
Notice and the Aggregate  Exercise Price (or notice of a Cashless Exercise) (the
"Exercise  Delivery  Documents"),  the Company  shall  transmit by  facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery  Documents to
the Holder and the Company's transfer agent (the "Transfer Agent"). On or before
the  third  (3rd)  Business  Day  following  the date on which the  Company  has
received all of the Exercise Delivery Documents (the "Share Delivery Date"), the
Company  shall (X) provided  that the  Transfer  Agent is  participating  in The
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  Program,
upon the request of the Holder, credit such aggregate number of shares of Common
Stock to which the Holder is entitled  pursuant to such exercise to the Holder's
or its designee's  balance account with DTC through its Deposit Withdrawal Agent
Commission  system, or (Y) if the Transfer Agent is not participating in the DTC
Fast  Automated  Securities  Transfer  Program,  issue and dispatch by overnight
courier to the address as  specified  in the  Exercise  Notice,  a  certificate,
registered  in the  Company's  share  register  in the name of the Holder or its
designee,  for the  number  of shares  of  Common  Stock to which the  Holder is
entitled  pursuant to such  exercise.  Upon delivery of the Exercise  Notice and
Aggregate  Exercise Price referred to in clause (ii)(A) above or notification to
the Company of a Cashless Exercise referred to in Section 1(d), the Holder shall
be deemed for all corporate  purposes to have become the holder of record of the
Warrant  Shares  with  respect  to  which  this  Warrant  has  been   exercised,
irrespective of the date of delivery of the certificates evidencing such Warrant
Shares. If this Warrant is submitted in connection with any exercise pursuant to
this Section 1(a) and the number of Warrant  Shares  represented by this Warrant
submitted  for  exercise  is greater  than the number of  Warrant  Shares  being
acquired upon an exercise,  then the Company shall as soon as practicable and in
no event  later  than three  Business  Days  after any  exercise  and at its own
expense,  issue a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares purchasable  immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant,  but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole  number.  The
Company  shall pay any and all taxes  which may be payable  with  respect to the
issuance and delivery of Warrant Shares upon exercise of this Warrant.

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                  (b) Exercise  Price.  For purposes of this Warrant,  "Exercise
Price" means $2.00, subject to adjustment as provided herein.

                  (c) Company's  Failure to Timely  Deliver  Securities.  If the
Company shall fail for any reason or for no reason to issue to the Holder within
three  (3)  Trading  Days of  receipt  of the  Exercise  Delivery  Documents,  a
certificate  for the  number of shares  of Common  Stock to which the  Holder is
entitled  and  register  such  shares of  Common  Stock on the  Company's  share
register or to credit the Holder's  balance  account with DTC for such number of
shares  of Common  Stock to which  the  Holder  is  entitled  upon the  Holder's
exercise of this Warrant,  then, in addition to all other remedies  available to
the Holder,  the Company  shall pay in cash to the Holder on each day after such
third  Business  Day that the  issuance  of such  shares of Common  Stock is not
timely  effected  an amount  equal to 2.0% of the  product  of (A) the number of
shares of Common  Stock not issued to the Holder on a timely  basis and to which
the Holder is entitled  and (B) the  Closing  Sale Price of the shares of Common
Stock on the Trading Day immediately  preceding the last possible date which the
Company  could have  issued such  shares of Common  Stock to the Holder  without
violating  Section  1(a).  In addition  to the  foregoing,  if within  three (3)
Trading Days after the  Company's  receipt of the  facsimile  copy of a Exercise
Notice the Company shall fail to issue and deliver a  certificate  to the Holder
and register  such shares of Common  Stock on the  Company's  share  register or
credit the Holder's  balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder's exercise hereunder,  and
if on or  after  such  Trading  Day the  Holder  purchases  (in an  open  market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock  issuable  upon such  exercise that
the Holder anticipated receiving from the Company (a "Buy-In"), then the Company
shall,  within  three (3)  Trading  Days after the  Holder's  request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions,  if any) for the
shares of Common Stock so purchased  (the  "Buy-In  Price"),  at which point the
Company's  obligation to deliver such  certificate  (and to issue such shares of
Common Stock) shall terminate,  or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates  representing  such shares of Common
Stock and pay cash to the  Holder in an amount  equal to the  excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common  Stock,
times (B) the Closing Bid Price on the date of exercise.

                  (d)  Cashless  Exercise.  Notwithstanding  anything  contained
herein to the contrary,  at any time on or after the one (1) year anniversary of
the Issuance Date, if a Registration  Statement (as defined in the  Registration
Rights  Agreement)  covering  the  Warrant  Shares  that are the  subject of the
Exercise  Notice (the  "Unavailable  Warrant  Shares") is not  available for the
resale  of  such  Unavailable  Warrant  Shares,  the  Holder  may,  in its  sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate  Exercise Price,  elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined  according to the
following formula (a "Cashless Exercise"):

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                     Net Number = (A x B) - (A x C)
                                  -----------------
                                          B

                     For purposes of the foregoing formula:

            A= the total  number of shares with respect to which this Warrant is
            then being exercised.

            B= the Closing Sale Price of the shares of Common Stock (as reported
            by  Bloomberg)  on the date  immediately  preceding  the date of the
            Exercise Notice.

            C= the  Exercise  Price  then in effect for the  applicable  Warrant
            Shares at the time of such exercise.

                  (e) Disputes. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic  calculation of the Warrant Shares,  the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 12.

                  (f)  Limitations  on  Exercises;   Beneficial  Ownership.  The
Company shall not effect the exercise of this Warrant,  and the Holder shall not
have the right to exercise this Warrant,  to the extent that after giving effect
to such exercise,  such Person  (together with such Person's  affiliates)  would
beneficially own in excess of 4.99% (the "Maximum  Percentage") of the shares of
Common Stock outstanding  immediately after giving effect to such exercise.  For
purposes of the foregoing  sentence,  the  aggregate  number of shares of Common
Stock  beneficially  owned by such Person and its  affiliates  shall include the
number of shares of Common  Stock  issuable  upon  exercise of this Warrant with
respect to which the  determination  of such  sentence is being made,  but shall
exclude  shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such Person
and its  affiliates  and (ii)  exercise  or  conversion  of the  unexercised  or
unconverted portion of any other securities of the Company beneficially owned by
such Person and its affiliates (including,  without limitation,  any convertible
notes or  convertible  preferred  stock or warrants)  subject to a limitation on
conversion or exercise analogous to the limitation  contained herein.  Except as
set forth in the preceding sentence, for purposes of this paragraph,  beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.  For purposes of this Warrant,  in determining
the number of  outstanding  shares of Common  Stock,  the Holder may rely on the
number of  outstanding  shares of Common Stock as reflected in (1) the Company's
most recent Form 10-K,  Form 10-Q,  Current  Report on Form 8-K or other  public
filing with the  Securities and Exchange  Commission,  as the case may be, (2) a
more recent  public  announcement  by the Company or (3) any other notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the
Holder,  the Company shall within one Business Day confirm orally and in writing
to the  Holder the number of shares of Common  Stock  then  outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving  effect to the  conversion  or exercise  of  securities  of the  Company,
including  the SPA  Securities  and  the SPA  Warrants,  by the  Holder  and its
affiliates  since  the date as of which  such  number of  outstanding  shares of
Common Stock was reported. By written notice to the Company, the Holder may from
time to time increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99%  specified  in such  notice;  provided  that (i) any such
increase  will not be  effective  until the  sixty-first  (61st)  day after such
notice is delivered to the Company,  and (ii) any such increase or decrease will
apply only to the Holder and not to any other holder of SPA Warrants.

                                     - 4 -
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                  (g)  Insufficient  Authorized  Shares.  At any time  after the
Amendment  Date or the  Stockholder  Approval Date has occurred,  if at any time
while  any of the  Warrants  remain  outstanding  the  Company  does  not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy
its  obligation to reserve for issuance upon exercise of the Warrants at least a
number  of  shares of Common  Stock  equal to the 130%  (the  "Required  Reserve
Amount")  of the number of shares of Common  Stock as shall from time to time be
necessary  to effect the  exercise of the SPA  Warrants  (an  "Authorized  Share
Failure"),  then the Company  shall  immediately  take all action  necessary  to
increase the Company's authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the  Required  Reserve  Amount for the  Warrants
then outstanding.  Without limiting the generality of the foregoing sentence, as
soon as  practicable  after the date of the  occurrence of an  Authorized  Share
Failure, but in no event later than sixty (60) days after the occurrence of such
Authorized  Share Failure,  the Company shall hold a meeting of its stockholders
for the  approval of an increase  in the number of  authorized  shares of Common
Stock.  In  connection  with  such  meeting,  the  Company  shall  provide  each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of  directors  to  recommend  to the  stockholders  that they
approve such proposal.

            2.  ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT  SHARES.  The
Exercise  Price and the number of Warrant  Shares shall be adjusted from time to
time as follows:

                  (a) Adjustment upon Issuance of shares of Common Stock. If and
whenever on or after the  Subscription  Date the Company issues or sells,  or in
accordance  with this Section 2 is deemed to have issued or sold,  any shares of
Common Stock  (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company,  but excluding shares of Common Stock
deemed to have been  issued  by the  Company  in  connection  with any  Excluded
Securities (as defined in the SPA Securities) for a consideration per share (the
"New Issuance  Price") less than a price (the  "Applicable  Price") equal to the
Exercise  Price in  effect  immediately  prior to such  issue or sale or  deemed
issuance or sale (the foregoing a "Dilutive  Issuance"),  then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount  equal to the New  Issuance  Price.  Upon  each  such  adjustment  of the
Exercise Price hereunder,  the number of Warrant Shares shall be adjusted to the
number of shares of Common Stock determined by multiplying the Exercise Price in
effect  immediately  prior to such  adjustment  by the number of Warrant  Shares
issuable upon exercise of this Warrant  immediately prior to such adjustment and
dividing  the  product  thereof  by  the  Exercise  Price  resulting  from  such
adjustment.  For purposes of determining the adjusted  Exercise Price under this
Section 2(a), the following shall be applicable:

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                  (i) Issuance of Options.  If the Company in any manner  grants
                  any Options and the lowest price per share for which one share
                  of Common  Stock is  issuable  upon the  exercise  of any such
                  Option  or  upon  conversion,  exercise  or  exchange  of  any
                  Convertible  Securities  issuable  upon  exercise  of any such
                  Option is less than the Applicable  Price,  then such share of
                  Common  Stock  shall be deemed to be  outstanding  and to have
                  been  issued  and  sold  by the  Company  at the  time  of the
                  granting or sale of such Option for such price per share.  For
                  purposes of this Section 2(a)(i),  the "lowest price per share
                  for which one share of Common Stock is issuable  upon exercise
                  of such  Options or upon  conversion,  exercise or exchange of
                  such Convertible  Securities" shall be equal to the sum of the
                  lowest   amounts  of   consideration   (if  any)  received  or
                  receivable  by the  Company  with  respect to any one share of
                  Common  Stock upon the  granting or sale of the  Option,  upon
                  exercise  of the  Option  and  upon  conversion,  exercise  or
                  exchange of any Convertible Security issuable upon exercise of
                  such Option.  No further  adjustment of the Exercise  Price or
                  number  of  Warrant  Shares  shall  be made  upon  the  actual
                  issuance of such shares of Common Stock or of such Convertible
                  Securities  upon  the  exercise  of such  Options  or upon the
                  actual   issuance  of  such   shares  of  Common   Stock  upon
                  conversion,   exercise  or   exchange   of  such   Convertible
                  Securities.

                  (ii) Issuance of Convertible Securities. If the Company in any
                  manner  issues or sells  any  Convertible  Securities  and the
                  lowest  price per share for which one share of Common Stock is
                  issuable upon the conversion,  exercise or exchange thereof is
                  less than the  Applicable  Price,  then  such  share of Common
                  Stock  shall be  deemed  to be  outstanding  and to have  been
                  issued and sold by the Company at the time of the  issuance or
                  sale of such Convertible  Securities for such price per share.
                  For the purposes of this Section  2(a)(ii),  the "lowest price
                  per share for which one share of Common Stock is issuable upon
                  the  conversion,  exercise or exchange"  shall be equal to the
                  sum of the lowest amounts of  consideration  (if any) received
                  or  receivable  by the  Company  with  respect to one share of
                  Common  Stock  upon the  issuance  or sale of the  Convertible
                  Security  and upon  conversion,  exercise  or exchange of such
                  Convertible  Security.  No further  adjustment of the Exercise
                  Price or  number  of  Warrant  Shares  shall be made  upon the
                  actual   issuance  of  such   shares  of  Common   Stock  upon
                  conversion,   exercise  or   exchange   of  such   Convertible
                  Securities,  and if any such issue or sale of such Convertible
                  Securities  is made upon  exercise  of any  Options  for which
                  adjustment  of this Warrant has been or is to be made pursuant
                  to  other   provisions   of  this  Section  2(a),  no  further
                  adjustment of the Exercise  Price or number of Warrant  Shares
                  shall be made by reason of such issue or sale.

                                     - 6 -
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                  (iii)  Change in Option  Price or Rate of  Conversion.  If the
                  purchase  price  provided for in any Options,  the  additional
                  consideration,  if any,  payable  upon the issue,  conversion,
                  exercise  or exchange of any  Convertible  Securities,  or the
                  rate at which any Convertible  Securities are convertible into
                  or  exercisable  or  exchangeable  for shares of Common  Stock
                  increases or decreases at any time, the Exercise Price and the
                  number  of  Warrant  Shares  in  effect  at the  time  of such
                  increase or decrease  shall be adjusted to the Exercise  Price
                  and the  number of  Warrant  Shares  which  would have been in
                  effect at such time had such Options or Convertible Securities
                  provided  for such  increased  or  decreased  purchase  price,
                  additional  consideration or increased or decreased conversion
                  rate,  as the case  may be,  at the  time  initially  granted,
                  issued or sold. For purposes of this Section 2(a)(iii), if the
                  terms  of  any  Option  or   Convertible   Security  that  was
                  outstanding  as of the date of  issuance  of this  Warrant are
                  increased  or  decreased  in  the  manner   described  in  the
                  immediately   preceding   sentence,   then   such   Option  or
                  Convertible  Security  and the shares of Common  Stock  deemed
                  issuable upon exercise,  conversion or exchange  thereof shall
                  be deemed to have been issued as of the date of such  increase
                  or decrease. No adjustment pursuant to this Section 2(a) shall
                  be made if such adjustment  would result in an increase of the
                  Exercise  Price then in effect or a decrease  in the number of
                  Warrant Shares.

                  (iv) Calculation of Consideration Received. In case any Option
                  is  issued  in  connection  with  the  issue  or sale of other
                  securities of the Company,  together comprising one integrated
                  transaction in which no specific consideration is allocated to
                  such  Options by the  parties  thereto,  the  Options  will be
                  deemed to have been issued for a  consideration  of $0.01.  If
                  any shares of Common Stock, Options or Convertible  Securities
                  are  issued or sold or deemed to have been  issued or sold for
                  cash, the consideration received therefor will be deemed to be
                  the net amount received by the Company therefor. If any shares
                  of Common Stock, Options or Convertible  Securities are issued
                  or sold for a  consideration  other than  cash,  the amount of
                  such  consideration  received by the Company  will be the fair
                  value of such  consideration,  except where such consideration
                  consists   of   securities,   in  which  case  the  amount  of
                  consideration received by the Company will be the Closing Sale
                  Price of such  security on the date of receipt.  If any shares
                  of Common Stock, Options or Convertible  Securities are issued
                  to the owners of the  non-surviving  entity in connection with
                  any merger in which the Company is the surviving  entity,  the
                  amount of consideration therefor will be deemed to be the fair
                  value of such  portion of the net assets and  business  of the
                  non-surviving  entity  as is  attributable  to such  shares of
                  Common Stock, Options or Convertible  Securities,  as the case
                  may be. The fair value of any consideration other than cash or
                  securities  will be determined  jointly by the Company and the
                  Required  Holders.   If  such  parties  are  unable  to  reach
                  agreement  within  ten (10) days  after the  occurrence  of an
                  event requiring  valuation (the "Valuation  Event"),  the fair
                  value of such consideration will be determined within five (5)
                  Business  Days  after the tenth day  following  the  Valuation
                  Event by an independent,  reputable appraiser jointly selected
                  by the Company and the Required Holders.  The determination of
                  such  appraiser  shall be final and  binding  upon all parties
                  absent  manifest  error  and the  fees  and  expenses  of such
                  appraiser shall be borne by the Company.

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                  (v) Record Date.  If the Company takes a record of the holders
                  of shares of Common  Stock for the purpose of  entitling  them
                  (A) to receive a  dividend  or other  distribution  payable in
                  shares of Common Stock,  Options or in Convertible  Securities
                  or (B) to subscribe  for or purchase  shares of Common  Stock,
                  Options or Convertible Securities,  then such record date will
                  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.

                  (b)  Adjustment  upon  Subdivision  or  Combination  of Common
Stock. If the Company at any time on or after the  Subscription  Date subdivides
(by any stock split, stock dividend,  recapitalization or otherwise) one or more
classes  of its  outstanding  shares of Common  Stock  into a greater  number of
shares,  the Exercise Price in effect immediately prior to such subdivision will
be   proportionately   reduced  and  the  number  of  Warrant   Shares  will  be
proportionately  increased.  If  the  Company  at  any  time  on  or  after  the
Subscription  Date combines (by  combination,  reverse stock split or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a smaller
number  of  shares,  the  Exercise  Price in  effect  immediately  prior to such
combination will be  proportionately  increased and the number of Warrant Shares
will be proportionately  decreased. Any adjustment under this Section 2(b) shall
become  effective  at the  close of  business  on the date  the  subdivision  or
combination becomes effective.  Notwithstanding anything herein to the contrary,
the  Company  shall not adjust the  Exercise  Price  hereunder  or the number of
Warrant  Shares  issuable  upon  exercise of this Warrant for any reverse  stock
split of one or more  classes of the  Company's  Common  Stock at any time on or
after the Subscription Date.

                  (c) Other Events. If any event occurs of the type contemplated
by the  provisions  of this  Section 2 but not  expressly  provided  for by such
provisions  (including,  without limitation,  the granting of stock appreciation
rights,  phantom  stock rights or other rights with equity  features),  then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price  and the  number of  Warrant  Shares so as to  protect  the  rights of the
Holder;  provided  that no such  adjustment  pursuant to this  Section 2(c) will
increase  the  Exercise  Price or  decrease  the  number  of  Warrant  Shares as
otherwise determined pursuant to this Section 2.

            3. RIGHTS UPON  DISTRIBUTION OF ASSETS. If the Company shall declare
or make any dividend or other  distribution  of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or
otherwise  (including,  without  limitation,  any distribution of cash, stock or
other  securities,  property  or  options  by  way  of  a  dividend,  spin  off,
reclassification,  corporate  rearrangement,  scheme  of  arrangement  or  other
similar transaction) (a "Distribution"),  at any time after the issuance of this
Warrant, then, in each such case:

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                  (a) any  Exercise  Price in  effect  immediately  prior to the
close of business on the record date fixed for the  determination  of holders of
shares of Common Stock  entitled to receive the  Distribution  shall be reduced,
effective as of the close of business on such record date, to a price determined
by  multiplying  such  Exercise  Price by a fraction of which (i) the  numerator
shall be the Closing Bid Price of the shares of Common  Stock on the trading day
immediately  preceding such record date minus the value of the  Distribution (as
determined in good faith by the Company's Board of Directors)  applicable to one
share of shares of Common Stock,  and (ii) the denominator  shall be the Closing
Bid Price of the shares of Common Stock on the trading day immediately preceding
such record date; and

                  (b) the  number of  Warrant  Shares  shall be  increased  to a
number of shares  equal to the  number  of  shares  of Common  Stock  obtainable
immediately  prior to the close of  business  on the  record  date fixed for the
determination  of  holders of shares of Common  Stock  entitled  to receive  the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  paragraph  (a);  provided  that in the  event  that  the
Distribution  is of shares of Common Stock (or common stock)  ("Other  Shares of
Common  Stock")  of a company  whose  common  shares  are  traded on a  national
securities  exchange or a national automated  quotation system,  then the Holder
may elect to receive a warrant to purchase  Other Shares of Common Stock in lieu
of an  increase  in the number of Warrant  Shares,  the terms of which  shall be
identical  to  those  of  this  Warrant,  except  that  such  warrant  shall  be
exercisable into the number of shares of Other Shares of Common Stock that would
have been  payable to the Holder  pursuant  to the  Distribution  had the Holder
exercised  this  Warrant  immediately  prior  to such  record  date  and with an
aggregate  exercise  price  equal to the  product  of the  amount  by which  the
exercise  price of this Warrant was decreased  with respect to the  Distribution
pursuant to the terms of the immediately  preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).

            4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

                  (a) Purchase Rights.  In addition to any adjustments  pursuant
to  Section  2 above,  if at any time the  Company  grants,  issues or sells any
Options,   Convertible   Securities  or  rights  to  purchase  stock,  warrants,
securities  or other  property  pro rata to the  record  holders of any class of
shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled
to acquire,  upon the terms  applicable to such Purchase  Rights,  the aggregate
Purchase  Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock issuable upon exercise of this Warrant (without
regard to any  limitations on the exercise of this Warrant)  immediately  before
the date on which a record  is taken  for the  grant,  issuance  or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined  for the grant,  issue or
sale of such Purchase Rights.

                                     - 9 -
<PAGE>

                  (b) Fundamental Transactions. The Company shall not enter into
or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing  all of the  obligations  of the Company  under this  Warrant and the
other  Transaction  Documents in accordance  with the provisions of this Section
(4)(b) pursuant to written agreements in form and substance  satisfactory to the
Required  Holders and approved by the Required Holders prior to such Fundamental
Transaction,  including  agreements  to deliver to each  holder of  Warrants  in
exchange for such  Warrants a security of the  Successor  Entity  evidenced by a
written instrument  substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the  shares  of  Common  Stock  reflected  by  the  terms  of  such  Fundamental
Transaction,  and exercisable  for a  corresponding  number of shares of capital
stock  equivalent  to the shares of Common Stock  issuable upon exercise of this
Warrant  (without  regard to any  limitations  on the exercise of this  Warrant)
prior to such Fundamental Transaction,  and satisfactory to the Required Holders
and (ii) the  Successor  Entity is a publicly  traded  corporation  whose common
stock is  quoted  on or listed  for  trading  on an  Eligible  Market.  Upon the
occurrence of any Fundamental  Transaction,  the Successor  Entity shall succeed
to, and be substituted for (so that from and after the date of such  Fundamental
Transaction,  the  provisions of this Warrant  referring to the "Company"  shall
refer instead to the Successor  Entity),  and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such  Successor  Entity had been named as the
Company herein. Upon consummation of the Fundamental Transaction,  the Successor
Entity shall deliver to the Holder  confirmation that there shall be issued upon
exercise of this Warrant at any time after the  consummation  of the Fundamental
Transaction,  in lieu of the  shares of the Common  Stock (or other  securities,
cash, assets or other property)  issuable upon the exercise of the Warrant prior
to such Fundamental Transaction,  such shares of stock, securities, cash, assets
or any other  property  whatsoever  (including  warrants  or other  purchase  or
subscription  rights)  which the Holder would have been entitled to receive upon
the happening of such  Fundamental  Transaction  had this Warrant been converted
immediately  prior to such  Fundamental  Transaction,  as adjusted in accordance
with the provisions of this Warrant.  In addition to and not in substitution for
any  other  rights  hereunder,  prior  to the  consummation  of any  Fundamental
Transaction  pursuant to which holders of shares of Common Stock are entitled to
receive  securities or other assets with respect to or in exchange for shares of
Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure  that the Holder  will  thereafter  have the right to receive  upon an
exercise of this Warrant at any time after the  consummation  of the Fundamental
Transaction  but  prior to the  Expiration  Date,  in lieu of the  shares of the
Common Stock (or other securities, cash, assets or other property) issuable upon
the exercise of the Warrant prior to such Fundamental  Transaction,  such shares
of stock,  securities,  cash, assets or any other property whatsoever (including
warrants or other purchase or  subscription  rights) which the Holder would have
been entitled to receive upon the happening of such Fundamental  Transaction had
the Warrant been exercised  immediately  prior to such Fundamental  Transaction.
Provision  made  pursuant  to the  preceding  sentence  shall  be in a form  and
substance  reasonably  satisfactory to the Required  Holders.  The provisions of
this  Section  shall  apply  similarly  and  equally to  successive  Fundamental
Transactions  and Corporate  Events and shall be applied  without  regard to any
limitations on the exercise of this Warrant.  Notwithstanding the foregoing,  in
the event of a Fundamental  Transaction,  at the request of the Holder delivered
before the 90th day after such  Fundamental  Transaction,  the  Company  (or the
Successor  Entity) shall  purchase this Warrant from the Holder by paying to the
Holder,  within five  Business  Days after such  request  (or, if later,  on the
effective date of the Fundamental  Transaction),  cash in an amount equal to the
value of the remaining  unexercised  portion of this Warrant on the date of such
Fundamental  Transaction,  which  value  shall  be  determined  by  use  of  the
Black-Scholes option pricing model.

                                     - 10 -
<PAGE>

            5.  NONCIRCUMVENTION.  The Company hereby  covenants and agrees that
the Company will not, by amendment of its Certificate of  Incorporation,  Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of  this  Warrant,  and  will  at all  times  in good  faith  carry  out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder.  Without  limiting the  generality of the  foregoing,  the
Company  (i) shall not  increase  the par  value of any  shares of Common  Stock
receivable  upon the exercise of this Warrant  above the Exercise  Price then in
effect,  (ii) shall take all such actions as may be necessary or  appropriate in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable  shares of Common  Stock upon the  exercise of this  Warrant,  and
(iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary  to reserve and keep  available  out of its  authorized  and  unissued
shares of Common Stock,  solely for the purpose of effecting the exercise of the
SPA Warrants, 130% of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of the SPA Warrants  (without regard to
any limitations on exercise).

            6.  WARRANT  HOLDER NOT DEEMED A  STOCKHOLDER.  Except as  otherwise
specifically  provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share  capital of the  Company for any  purpose,  nor shall
anything  contained  in this  Warrant be  construed  to confer  upon the Holder,
solely in such  Person's  capacity  as the  Holder of this  Warrant,  any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the issuance to the Holder of the Warrant Shares which such
Person is then  entitled to receive  upon the due exercise of this  Warrant.  In
addition,  nothing  contained in this Warrant shall be construed as imposing any
liabilities  on the Holder to purchase  any  securities  (upon  exercise of this
Warrant  or  otherwise)  or  as a  stockholder  of  the  Company,  whether  such
liabilities  are  asserted  by the  Company  or by  creditors  of  the  Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same  notices  and other  information  given to the  stockholders  of the
Company   generally,   contemporaneously   with  the   giving   thereof  to  the
stockholders.

                                     - 11 -
<PAGE>

            7. REISSUANCE OF WARRANTS.

                  (a) Transfer of Warrant. If this Warrant is to be transferred,
the Holder shall  surrender  this Warrant to the Company,  whereupon the Company
will forthwith  issue and deliver upon the order of the Holder a new Warrant (in
accordance   with  Section   7(d)),   registered  as  the  Holder  may  request,
representing   the  right  to  purchase  the  number  of  Warrant  Shares  being
transferred  by the Holder and, if less then the total number of Warrant  Shares
then underlying this Warrant is being transferred,  a new Warrant (in accordance
with Section 7(d)) to the Holder  representing  the right to purchase the number
of Warrant Shares not being transferred.

                  (b) Lost,  Stolen or  Mutilated  Warrant.  Upon receipt by the
Company of evidence  reasonably  satisfactory to the Company of the loss, theft,
destruction  or mutilation of this Warrant,  and, in the case of loss,  theft or
destruction,  of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this  Warrant,  the  Company  shall  execute  and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

                  (c)  Exchangeable  for  Multiple  Warrants.  This  Warrant  is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company,  for a new Warrant or Warrants (in  accordance  with Section  7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase  such portion of such Warrant  Shares as is designated by the Holder
at the time of such surrender.

                  (d) Issuance of New Warrants. Whenever the Company is required
to issue a new Warrant  pursuant to the terms of this Warrant,  such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated
on the face of such new Warrant,  the right to purchase the Warrant  Shares then
underlying  this Warrant (or in the case of a new Warrant being issued  pursuant
to Section 7(a) or Section  7(c),  the Warrant  Shares  designated by the Holder
which,  when added to the number of shares of Common Stock  underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then  underlying  this Warrant),  (iii) shall have an issuance
date,  as  indicated  on the face of such new  Warrant  which is the same as the
Issuance  Date,  and (iv) shall  have the same  rights  and  conditions  as this
Warrant.

            8.  NOTICES.  Whenever  notice is  required  to be given  under this
Warrant,  unless  otherwise  provided  herein,  such  notice  shall  be given in
accordance with Section 9(f) of the Securities Purchase  Agreement.  The Company
shall  provide  the Holder  with  prompt  written  notice of all  actions  taken
pursuant to this Warrant,  including in reasonable  detail a description of such
action  and  the  reason  therefore.  Without  limiting  the  generality  of the
foregoing,  the Company will give written  notice to the Holder (i)  immediately
upon any adjustment of the Exercise Price,  setting forth in reasonable  detail,
and  certifying,  the  calculation of such  adjustment and (ii) at least fifteen
days prior to the date on which the  Company  closes its books or takes a record
(A) with  respect  to any  dividend  or  distribution  upon the shares of Common
Stock,  (B) with  respect  to any  grants,  issuances  or sales of any  Options,
Convertible  Securities  or rights to purchase  stock,  warrants,  securities or
other  property  to  holders  of shares of Common  Stock or (C) for  determining
rights to vote with  respect  to any  Fundamental  Transaction,  dissolution  or
liquidation,  provided in each case that such information shall be made known to
the public prior to or in  conjunction  with such notice  being  provided to the
Holder.

                                     - 12 -
<PAGE>

            9. AMENDMENT AND WAIVER.  Except as otherwise  provided herein,  the
provisions  of this  Warrant  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company  has  obtained  the  written  consent of the  Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrant,  change the expiration date of any SPA Warrant to any date prior to the
Expiration  Date or  decrease  the number of shares or change the class of stock
obtainable  upon exercise of any SPA Warrant  without the written consent of the
Holder.  No such  amendment  shall be effective to the extent that it applies to
less than all of the holders of the SPA Warrants then outstanding.

            10.  GOVERNING  LAW. This Warrant shall be governed by and construed
and enforced in accordance with, and all questions  concerning the construction,
validity,  interpretation  and performance of this Warrant shall be governed by,
the internal laws of the State of New York,  without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions other than the State of New York.

            11.  CONSTRUCTION;  HEADINGS.  This  Warrant  shall be  deemed to be
jointly  drafted by the  Company  and all the Buyers and shall not be  construed
against any person as the drafter  hereof.  The headings of this Warrant are for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Warrant.

            12.  DISPUTE  RESOLUTION.  In  the  case  of a  dispute  as  to  the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares,  the Company  shall submit the  disputed  determinations  or  arithmetic
calculations  via facsimile  within two Business Days of receipt of the Exercise
Notice  giving rise to such dispute,  as the case may be, to the Holder.  If the
Holder  and  the  Company  are  unable  to  agree  upon  such  determination  or
calculation  of the Exercise  Price or the Warrant  Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the  Holder,  then the  Company  shall,  within  two  Business  Days  submit via
facsimile  (a)  the  disputed   determination   of  the  Exercise  Price  to  an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed  arithmetic  calculation of the Warrant Shares to
the Company's  independent,  outside accountant.  The Company shall cause at its
expense the investment  bank or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the Holder of the
results no later than ten  Business  Days from the time it receives the disputed
determinations   or  calculations.   Such  investment   bank's  or  accountant's
determination  or  calculation,  as the case may be,  shall be binding  upon all
parties absent demonstrable error.

            13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies  provided in this Warrant  shall be  cumulative  and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity  (including  a decree of specific  performance  and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by the Company to comply with the terms
of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause  irreparable  harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened  breach, the holder of this Warrant shall
be  entitled,  in addition to all other  available  remedies,  to an  injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.

                                     - 13 -
<PAGE>

            14.   TRANSFER.   This  Warrant  may  be  offered  for  sale,  sold,
transferred  or  assigned,  in whole  or in part,  without  the  consent  of the
Company,  except as may otherwise be required by Section 2(f) of the  Securities
Purchase Agreement.

            15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

                  (a) "Bloomberg" means Bloomberg Financial Markets.

                  (b) "Business Day" means any day other than  Saturday,  Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

                  (c) "Closing Bid Price" and "Closing  Sale Price"  means,  for
any security as of any date,  the last closing bid price and last closing  trade
price,  respectively,  for such security on the Principal Market, as reported by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade  price,  respectively,
of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported in the "pink  sheets" by Pink
Sheets LLC (formerly the National  Quotation  Bureau,  Inc.). If the Closing Bid
Price or the  Closing  Sale  Price  cannot be  calculated  for a  security  on a
particular  date on any of the  foregoing  bases,  the  Closing Bid Price or the
Closing Sale Price,  as the case may be, of such  security on such date shall be
the fair market value as mutually  determined by the Company and the Holder.  If
the  Company  and the Holder are unable to agree upon the fair  market  value of
such security,  then such dispute shall be resolved  pursuant to Section 12. All
such determinations to be appropriately  adjusted for any stock dividend,  stock
split,  stock  combination  or other similar  transaction  during the applicable
calculation period.

                                     - 14 -
<PAGE>

                  (d) "Common  Stock" means (i) the  Company's  shares of Common
Stock,  par value $0.01 per share,  and (ii) any share  capital  into which such
Common  Stock  shall have been  changed or any share  capital  resulting  from a
reclassification of such Common Stock.

                  (e) "Common  Stock  Deemed  Outstanding"  means,  at any given
time,  the number of shares of Common Stock  actually  outstanding at such time,
plus the number of shares of Common Stock deemed to be  outstanding  pursuant to
Sections  2(a)(i)  and  2(a)(ii)  hereof  regardless  of whether  the Options or
Convertible  Securities are actually exercisable at such time, but excluding any
shares of Common  Stock  owned or held by or for the  account of the  Company or
issuable upon conversion and exercise, as applicable,  of the SPA Securities and
the SPA Warrants.

                  (f)  "Convertible  Securities"  means any stock or  securities
(other than Options)  directly or indirectly  convertible into or exercisable or
exchangeable for shares of Common Stock.

                  (g) "Eligible Market" means the Principal Market, the American
Stock Exchange, The New York Stock Exchange, Inc., the Nasdaq National Market or
the Nasdaq Capital Market.

                  (h) "Expiration Date" means the thirty sixth month anniversary
of the  Issuance  Date or, if such date falls on a day other than a Business Day
or on which trading does not take place on the Principal  Market (a  "Holiday"),
the next date that is not a Holiday.

                  (i)  "Fundamental  Transaction"  means that the Company shall,
directly or indirectly, in one or more related transactions,  (i) consolidate or
merge with or into  (whether  or not the Company is the  surviving  corporation)
another Person, or (ii) sell, assign,  transfer,  convey or otherwise dispose of
all or  substantially  all of the properties or assets of the Company to another
Person,  or (iii) allow  another  Person to make a purchase,  tender or exchange
offer  that is  accepted  by the  holders  of more  than the 50% of  either  the
outstanding  shares of Common  Stock (not  including  any shares of Common Stock
held by the Person or Persons  making or party to, or  associated  or affiliated
with the Persons making or party to, such purchase,  tender or exchange  offer),
or (iv)  consummate a stock  purchase  agreement or other  business  combination
(including, without limitation, a reorganization,  recapitalization, spin-off or
scheme of  arrangement)  with another Person whereby such other Person  acquires
more than the 50% of the  outstanding  shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated  with the other Persons making or party to, such
stock purchase  agreement or other  business  combination),  or (v)  reorganize,
recapitalize or reclassify its Common Stock.

                  (j)  "Options"  means  any  rights,  warrants  or  options  to
subscribe for or purchase shares of Common Stock or Convertible Securities.

                  (k) "Parent Entity" of a Person means an entity that, directly
or  indirectly,  controls  the  applicable  Person  and  whose  common  stock or
equivalent  equity  security is quoted or listed on an Eligible  Market,  or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market  capitalization as of the date of consummation of
the Fundamental Transaction.

                                     - 15 -
<PAGE>

                  (l) "Person" means an individual, a limited liability company,
a  partnership,  a joint  venture,  a corporation,  a trust,  an  unincorporated
organization,  any other entity and a  government  or any  department  or agency
thereof.

                  (m) "Principal Market" means the Pink Sheets.

                  (n)   "Registration   Rights  Agreement"  means  that  certain
registration rights agreement by and among the Company and the Buyers.

                  (o) "Required  Holders"  means the holders of the SPA Warrants
representing  at least a majority of shares of Common Stock  underlying  the SPA
Warrants  then  outstanding;  provided,  however  that any such  holders  of SPA
Warrants  must  include  the  Collateral  Agent (as  defined  in the  Securities
Purchase Agreement).

                  (p) "SPA  Securities"  means the Notes issued  pursuant to the
Securities Purchase Agreement.

                  (q) "Successor  Entity" means the Person (or, if so elected by
the Required Holders,  the Parent Entity) formed by, resulting from or surviving
any  Fundamental  Transaction  or the Person (or, if so elected by the  Required
Holders,  the Parent Entity) with which such Fundamental  Transaction shall have
been entered into.

                            [Signature Page Follows]

                                     - 16 -
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.

                                        AMERICAN UNITED GLOBAL, INC.

                                        By: ____________________________________
                                            Name:
                                            Title:

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE
            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

                          AMERICAN UNITED GLOBAL, INC.
         The undersigned holder hereby exercises the right to purchase
      _________________  of the shares of Common  Stock  ("Warrant  Shares")  of
American United Global, Inc., a Delaware corporation (the "Company"),  evidenced
by the
attached Warrant to Purchase Common Stock (the "Warrant"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

      1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

            ____________  a "Cash  Exercise"  with respect to  _________________
                          Warrant Shares; and/or

            ____________  a "Cashless  Exercise" with respect to _______________
                          Warrant Shares.

      2. Payment of Exercise  Price.  In the event that the holder has elected a
Cash  Exercise  with  respect to some or all of the Warrant  Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

      3.  Delivery of Warrant  Shares.  The Company  shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

_________________________________
   Name of Registered Holder

By: _____________________________________
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby  acknowledges  this Exercise  Notice and hereby directs
[Insert Name of Transfer Agent] to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent  Instructions dated _____ __,
20__ from the Company and acknowledged and agreed to by [Insert Name of Transfer
Agent].

                                        AMERICAN UNITED GLOBAL, INC.

                                        By: ____________________________________
                                            Name:
                                            Title:NEITHER THE ISSUANCE AND SALE OF THE SECURITIES  REPRESENTED BY THIS CERTIFICATE
NOR THE  SECURITIES  INTO  WHICH  THESE  SECURITIES  ARE  EXERCISABLE  HAVE BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE  REGISTRATION  STATEMENT  FOR
THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR (B) AN OPINION
OF COUNSEL  (WHICH  COUNSEL  SHALL BE  SELECTED BY THE  HOLDER),  IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD  PURSUANT  TO RULE 144 OR RULE 144A  UNDER  SAID ACT.  NOTWITHSTANDING  THE
FOREGOING,  THE SECURITIES MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

                          AMERICAN UNITED GLOBAL, INC.

                    SERIES B WARRANT TO PURCHASE COMMON STOCK

Warrant No.: ____
Number of Shares of Common Stock: ___________
Date of Issuance: June 14, 2006 ("Issuance Date")

            American   United  Global,   Inc.,  a  Delaware   corporation   (the
"Company"),  hereby  certifies  that, for good and valuable  consideration,  the
receipt and sufficiency of which are hereby acknowledged, _____________________,
the  registered  holder  hereof or its  permitted  assigns  (the  "Holder"),  is
entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise  Price (as defined  below) then in effect,  upon  surrender of this
Warrant to Purchase  Common Stock  (including  any  Warrants to Purchase  Common
Stock issued in exchange, transfer or replacement hereof, the "Warrant"), at any
time or times on or after the date  hereof,  but not after 11:59 p.m.,  New York
Time, on the Expiration Date (as defined below), ______________________ (______)
fully paid nonassessable shares of Common Stock (as defined below) (the "Warrant
Shares"). Except as otherwise defined herein,  capitalized terms in this Warrant
shall have the  meanings  set forth in Section  15.  This  Warrant is one of the
Warrants  to  purchase  Common  Stock (the "SPA  Warrants")  issued  pursuant to
Section 1 of that certain Securities  Purchase  Agreement,  dated as of June 14,
2006 (the "Subscription  Date"), by and among the Company and the investors (the
"Buyers") referred to therein (the "Securities Purchase Agreement").

<PAGE>

            1. EXERCISE OF WARRANT.

                  (a) Mechanics of Exercise. Subject to the terms and conditions
hereof  (including,  without  limitation,  the  limitations set forth in Section
1(f)) and the Amendment Date (as defined in the Securities  Purchase  Agreement)
or  the  Stockholder  Approval  Date  (as  defined  in the  Securities  Purchase
Agreement)  shall have occurred,  this Warrant may be exercised by the Holder on
any day on or after the date hereof,  in whole or in part,  by (i) delivery of a
written  notice,  in the  form  attached  hereto  as  Exhibit  A (the  "Exercise
Notice"), of the Holder's election to exercise this Warrant and (ii) (A) payment
to the Company of an amount equal to the applicable Exercise Price multiplied by
the number of Warrant  Shares as to which this Warrant is being  exercised  (the
"Aggregate Exercise Price") in cash or by wire transfer of immediately available
funds or (B) by  notifying  the  Company  that this  Warrant is being  exercised
pursuant to a Cashless  Exercise (as defined in Section 1(d)).  The Holder shall
not be required to deliver the  original  Warrant in order to effect an exercise
hereunder.  Execution  and delivery of the Exercise  Notice with respect to less
than all of the Warrant Shares shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant  evidencing the right to purchase
the remaining  number of Warrant  Shares.  On or before the first (1st) Business
Day  following  the date on which the Company has received  each of the Exercise
Notice and the Aggregate  Exercise Price (or notice of a Cashless Exercise) (the
"Exercise  Delivery  Documents"),  the Company  shall  transmit by  facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery  Documents to
the Holder and the Company's transfer agent (the "Transfer Agent"). On or before
the  third  (3rd)  Business  Day  following  the date on which the  Company  has
received all of the Exercise Delivery Documents (the "Share Delivery Date"), the
Company  shall (X) provided  that the  Transfer  Agent is  participating  in The
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  Program,
upon the request of the Holder, credit such aggregate number of shares of Common
Stock to which the Holder is entitled  pursuant to such exercise to the Holder's
or its designee's  balance account with DTC through its Deposit Withdrawal Agent
Commission  system, or (Y) if the Transfer Agent is not participating in the DTC
Fast  Automated  Securities  Transfer  Program,  issue and dispatch by overnight
courier to the address as  specified  in the  Exercise  Notice,  a  certificate,
registered  in the  Company's  share  register  in the name of the Holder or its
designee,  for the  number  of shares  of  Common  Stock to which the  Holder is
entitled  pursuant to such  exercise.  Upon delivery of the Exercise  Notice and
Aggregate  Exercise Price referred to in clause (ii)(A) above or notification to
the Company of a Cashless Exercise referred to in Section 1(d), the Holder shall
be deemed for all corporate  purposes to have become the holder of record of the
Warrant  Shares  with  respect  to  which  this  Warrant  has  been   exercised,
irrespective of the date of delivery of the certificates evidencing such Warrant
Shares. If this Warrant is submitted in connection with any exercise pursuant to
this Section 1(a) and the number of Warrant  Shares  represented by this Warrant
submitted  for  exercise  is greater  than the number of  Warrant  Shares  being
acquired upon an exercise,  then the Company shall as soon as practicable and in
no event  later  than three  Business  Days  after any  exercise  and at its own
expense,  issue a new Warrant (in accordance with Section 7(d)) representing the
right to purchase the number of Warrant Shares purchasable  immediately prior to
such exercise under this Warrant, less the number of Warrant Shares with respect
to which this Warrant is exercised.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant,  but rather the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole  number.  The
Company  shall pay any and all taxes  which may be payable  with  respect to the
issuance  and  delivery  of  Warrant  Shares  upon  exercise  of  this  Warrant.
Notwithstanding  the foregoing,  on any given date the maximum number of Warrant
Shares  issuable upon exercise of this Warrant on such date shall equal (i) such
number of Warrant  Shares  issued on or prior to such date upon  exercise of the
Holder's  Series A Warrant,  less (ii) such number of Warrant  Shares  exercised
hereunder prior to such date.

                                     - 2 -
<PAGE>

                  (b) Exercise  Price.  For purposes of this Warrant,  "Exercise
Price" means $2.20, subject to adjustment as provided herein.

                  (c) Company's  Failure to Timely  Deliver  Securities.  If the
Company shall fail for any reason or for no reason to issue to the Holder within
three  (3)  Trading  Days of  receipt  of the  Exercise  Delivery  Documents,  a
certificate  for the  number of shares  of Common  Stock to which the  Holder is
entitled  and  register  such  shares of  Common  Stock on the  Company's  share
register or to credit the Holder's  balance  account with DTC for such number of
shares  of Common  Stock to which  the  Holder  is  entitled  upon the  Holder's
exercise of this Warrant,  then, in addition to all other remedies  available to
the Holder,  the Company  shall pay in cash to the Holder on each day after such
third  Business  Day that the  issuance  of such  shares of Common  Stock is not
timely  effected  an amount  equal to 2.0% of the  product  of (A) the number of
shares of Common  Stock not issued to the Holder on a timely  basis and to which
the Holder is entitled  and (B) the  Closing  Sale Price of the shares of Common
Stock on the Trading Day immediately  preceding the last possible date which the
Company  could have  issued such  shares of Common  Stock to the Holder  without
violating  Section  1(a).  In addition  to the  foregoing,  if within  three (3)
Trading Days after the  Company's  receipt of the  facsimile  copy of a Exercise
Notice the Company shall fail to issue and deliver a  certificate  to the Holder
and register  such shares of Common  Stock on the  Company's  share  register or
credit the Holder's  balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder's exercise hereunder,  and
if on or  after  such  Trading  Day the  Holder  purchases  (in an  open  market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of shares of Common Stock  issuable  upon such  exercise that
the Holder anticipated receiving from the Company (a "Buy-In"), then the Company
shall,  within  three (3)  Trading  Days after the  Holder's  request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount equal to the
Holder's total purchase price (including brokerage commissions,  if any) for the
shares of Common Stock so purchased  (the  "Buy-In  Price"),  at which point the
Company's  obligation to deliver such  certificate  (and to issue such shares of
Common Stock) shall terminate,  or (ii) promptly honor its obligation to deliver
to the Holder a certificate or certificates  representing  such shares of Common
Stock and pay cash to the  Holder in an amount  equal to the  excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common  Stock,
times (B) the Closing Bid Price on the date of exercise.

                  (d)  Cashless  Exercise.  Notwithstanding  anything  contained
herein to the contrary,  at any time on or after the one (1) year anniversary of
the Issuance Date, if a Registration  Statement (as defined in the  Registration
Rights  Agreement)  covering  the  Warrant  Shares  that are the  subject of the
Exercise  Notice (the  "Unavailable  Warrant  Shares") is not  available for the
resale  of  such  Unavailable  Warrant  Shares,  the  Holder  may,  in its  sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the
cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate  Exercise Price,  elect instead to receive upon such
exercise the "Net Number" of shares of Common Stock determined  according to the
following formula (a "Cashless Exercise"):

                                     - 3 -
<PAGE>

                      Net Number = (A x B) - (A x C)
                                   -----------------
                                           B

                     For purposes of the foregoing formula:

            A= the total  number of shares with respect to which this Warrant is
            then being exercised.

            B= the Closing Sale Price of the shares of Common Stock (as reported
            by  Bloomberg)  on the date  immediately  preceding  the date of the
            Exercise Notice.

            C= the  Exercise  Price  then in effect for the  applicable  Warrant
            Shares at the time of such exercise.

                  (e) Disputes. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic  calculation of the Warrant Shares,  the
Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 12.

                  (f)  Limitations  on  Exercises;   Beneficial  Ownership.  The
Company shall not effect the exercise of this Warrant,  and the Holder shall not
have the right to exercise this Warrant,  to the extent that after giving effect
to such exercise,  such Person  (together with such Person's  affiliates)  would
beneficially own in excess of 4.99% (the "Maximum  Percentage") of the shares of
Common Stock outstanding  immediately after giving effect to such exercise.  For
purposes of the foregoing  sentence,  the  aggregate  number of shares of Common
Stock  beneficially  owned by such Person and its  affiliates  shall include the
number of shares of Common  Stock  issuable  upon  exercise of this Warrant with
respect to which the  determination  of such  sentence is being made,  but shall
exclude  shares of Common Stock which would be issuable upon (i) exercise of the
remaining, unexercised portion of this Warrant beneficially owned by such Person
and its  affiliates  and (ii)  exercise  or  conversion  of the  unexercised  or
unconverted portion of any other securities of the Company beneficially owned by
such Person and its affiliates (including,  without limitation,  any convertible
notes or  convertible  preferred  stock or warrants)  subject to a limitation on
conversion or exercise analogous to the limitation  contained herein.  Except as
set forth in the preceding sentence, for purposes of this paragraph,  beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.  For purposes of this Warrant,  in determining
the number of  outstanding  shares of Common  Stock,  the Holder may rely on the
number of  outstanding  shares of Common Stock as reflected in (1) the Company's
most recent Form 10-K,  Form 10-Q,  Current  Report on Form 8-K or other  public
filing with the  Securities and Exchange  Commission,  as the case may be, (2) a
more recent  public  announcement  by the Company or (3) any other notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock
outstanding. For any reason at any time, upon the written or oral request of the
Holder,  the Company shall within one Business Day confirm orally and in writing
to the  Holder the number of shares of Common  Stock  then  outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving  effect to the  conversion  or exercise  of  securities  of the  Company,
including  the SPA  Securities  and  the SPA  Warrants,  by the  Holder  and its
affiliates  since  the date as of which  such  number of  outstanding  shares of
Common Stock was reported. By written notice to the Company, the Holder may from
time to time increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99%  specified  in such  notice;  provided  that (i) any such
increase  will not be  effective  until the  sixty-first  (61st)  day after such
notice is delivered to the Company,  and (ii) any such increase or decrease will
apply only to the Holder and not to any other holder of SPA Warrants.

                                     - 4 -
<PAGE>

                  (g)  Insufficient  Authorized  Shares.  At any time  after the
Amendment  Date or the  Stockholder  Approval Date has occurred,  if at any time
while  any of the  Warrants  remain  outstanding  the  Company  does  not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy
its  obligation to reserve for issuance upon exercise of the Warrants at least a
number  of  shares of Common  Stock  equal to the 130%  (the  "Required  Reserve
Amount")  of the number of shares of Common  Stock as shall from time to time be
necessary  to effect the  exercise of the SPA  Warrants  (an  "Authorized  Share
Failure"),  then the Company  shall  immediately  take all action  necessary  to
increase the Company's authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the  Required  Reserve  Amount for the  Warrants
then outstanding.  Without limiting the generality of the foregoing sentence, as
soon as  practicable  after the date of the  occurrence of an  Authorized  Share
Failure, but in no event later than sixty (60) days after the occurrence of such
Authorized  Share Failure,  the Company shall hold a meeting of its stockholders
for the  approval of an increase  in the number of  authorized  shares of Common
Stock.  In  connection  with  such  meeting,  the  Company  shall  provide  each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of  directors  to  recommend  to the  stockholders  that they
approve such proposal.

            2.  ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT  SHARES.  The
Exercise  Price and the number of Warrant  Shares shall be adjusted from time to
time as follows:

                  (a) Adjustment upon Issuance of shares of Common Stock. If and
whenever on or after the  Subscription  Date the Company issues or sells,  or in
accordance  with this Section 2 is deemed to have issued or sold,  any shares of
Common Stock  (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company,  but excluding shares of Common Stock
deemed to have been  issued  by the  Company  in  connection  with any  Excluded
Securities (as defined in the SPA Securities) for a consideration per share (the
"New Issuance  Price") less than a price (the  "Applicable  Price") equal to the
Exercise  Price in  effect  immediately  prior to such  issue or sale or  deemed
issuance or sale (the foregoing a "Dilutive  Issuance"),  then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount  equal to the New  Issuance  Price.  Upon  each  such  adjustment  of the
Exercise Price hereunder,  the number of Warrant Shares shall be adjusted to the
number of shares of Common Stock determined by multiplying the Exercise Price in
effect  immediately  prior to such  adjustment  by the number of Warrant  Shares
issuable upon exercise of this Warrant  immediately prior to such adjustment and
dividing  the  product  thereof  by  the  Exercise  Price  resulting  from  such
adjustment.  For purposes of determining the adjusted  Exercise Price under this
Section 2(a), the following shall be applicable:

                                     - 5 -
<PAGE>

                  (i) Issuance of Options.  If the Company in any manner  grants
                  any Options and the lowest price per share for which one share
                  of Common  Stock is  issuable  upon the  exercise  of any such
                  Option  or  upon  conversion,  exercise  or  exchange  of  any
                  Convertible  Securities  issuable  upon  exercise  of any such
                  Option is less than the Applicable  Price,  then such share of
                  Common  Stock  shall be deemed to be  outstanding  and to have
                  been  issued  and  sold  by the  Company  at the  time  of the
                  granting or sale of such Option for such price per share.  For
                  purposes of this Section 2(a)(i),  the "lowest price per share
                  for which one share of Common Stock is issuable  upon exercise
                  of such  Options or upon  conversion,  exercise or exchange of
                  such Convertible  Securities" shall be equal to the sum of the
                  lowest   amounts  of   consideration   (if  any)  received  or
                  receivable  by the  Company  with  respect to any one share of
                  Common  Stock upon the  granting or sale of the  Option,  upon
                  exercise  of the  Option  and  upon  conversion,  exercise  or
                  exchange of any Convertible Security issuable upon exercise of
                  such Option.  No further  adjustment of the Exercise  Price or
                  number  of  Warrant  Shares  shall  be made  upon  the  actual
                  issuance of such shares of Common Stock or of such Convertible
                  Securities  upon  the  exercise  of such  Options  or upon the
                  actual   issuance  of  such   shares  of  Common   Stock  upon
                  conversion,   exercise  or   exchange   of  such   Convertible
                  Securities.

                  (ii) Issuance of Convertible Securities. If the Company in any
                  manner  issues or sells  any  Convertible  Securities  and the
                  lowest  price per share for which one share of Common Stock is
                  issuable upon the conversion,  exercise or exchange thereof is
                  less than the  Applicable  Price,  then  such  share of Common
                  Stock  shall be  deemed  to be  outstanding  and to have  been
                  issued and sold by the Company at the time of the  issuance or
                  sale of such Convertible  Securities for such price per share.
                  For the purposes of this Section  2(a)(ii),  the "lowest price
                  per share for which one share of Common Stock is issuable upon
                  the  conversion,  exercise or exchange"  shall be equal to the
                  sum of the lowest amounts of  consideration  (if any) received
                  or  receivable  by the  Company  with  respect to one share of
                  Common  Stock  upon the  issuance  or sale of the  Convertible
                  Security  and upon  conversion,  exercise  or exchange of such
                  Convertible  Security.  No further  adjustment of the Exercise
                  Price or  number  of  Warrant  Shares  shall be made  upon the
                  actual   issuance  of  such   shares  of  Common   Stock  upon
                  conversion,   exercise  or   exchange   of  such   Convertible
                  Securities,  and if any such issue or sale of such Convertible
                  Securities  is made upon  exercise  of any  Options  for which
                  adjustment  of this Warrant has been or is to be made pursuant
                  to  other   provisions   of  this  Section  2(a),  no  further
                  adjustment of the Exercise  Price or number of Warrant  Shares
                  shall be made by reason of such issue or sale.

                                     - 6 -
<PAGE>

                  (iii)  Change in Option  Price or Rate of  Conversion.  If the
                  purchase  price  provided for in any Options,  the  additional
                  consideration,  if any,  payable  upon the issue,  conversion,
                  exercise  or exchange of any  Convertible  Securities,  or the
                  rate at which any Convertible  Securities are convertible into
                  or  exercisable  or  exchangeable  for shares of Common  Stock
                  increases or decreases at any time, the Exercise Price and the
                  number  of  Warrant  Shares  in  effect  at the  time  of such
                  increase or decrease  shall be adjusted to the Exercise  Price
                  and the  number of  Warrant  Shares  which  would have been in
                  effect at such time had such Options or Convertible Securities
                  provided  for such  increased  or  decreased  purchase  price,
                  additional  consideration or increased or decreased conversion
                  rate,  as the case  may be,  at the  time  initially  granted,
                  issued or sold. For purposes of this Section 2(a)(iii), if the
                  terms  of  any  Option  or   Convertible   Security  that  was
                  outstanding  as of the date of  issuance  of this  Warrant are
                  increased  or  decreased  in  the  manner   described  in  the
                  immediately   preceding   sentence,   then   such   Option  or
                  Convertible  Security  and the shares of Common  Stock  deemed
                  issuable upon exercise,  conversion or exchange  thereof shall
                  be deemed to have been issued as of the date of such  increase
                  or decrease. No adjustment pursuant to this Section 2(a) shall
                  be made if such adjustment  would result in an increase of the
                  Exercise  Price then in effect or a decrease  in the number of
                  Warrant Shares.

                  (iv) Calculation of Consideration Received. In case any Option
                  is  issued  in  connection  with  the  issue  or sale of other
                  securities of the Company,  together comprising one integrated
                  transaction in which no specific consideration is allocated to
                  such  Options by the  parties  thereto,  the  Options  will be
                  deemed to have been issued for a  consideration  of $0.01.  If
                  any shares of Common Stock, Options or Convertible  Securities
                  are  issued or sold or deemed to have been  issued or sold for
                  cash, the consideration received therefor will be deemed to be
                  the net amount received by the Company therefor. If any shares
                  of Common Stock, Options or Convertible  Securities are issued
                  or sold for a  consideration  other than  cash,  the amount of
                  such  consideration  received by the Company  will be the fair
                  value of such  consideration,  except where such consideration
                  consists   of   securities,   in  which  case  the  amount  of
                  consideration received by the Company will be the Closing Sale
                  Price of such  security on the date of receipt.  If any shares
                  of Common Stock, Options or Convertible  Securities are issued
                  to the owners of the  non-surviving  entity in connection with
                  any merger in which the Company is the surviving  entity,  the
                  amount of consideration therefor will be deemed to be the fair
                  value of such  portion of the net assets and  business  of the
                  non-surviving  entity  as is  attributable  to such  shares of
                  Common Stock, Options or Convertible  Securities,  as the case
                  may be. The fair value of any consideration other than cash or
                  securities  will be determined  jointly by the Company and the
                  Required  Holders.   If  such  parties  are  unable  to  reach
                  agreement  within  ten (10) days  after the  occurrence  of an
                  event requiring  valuation (the "Valuation  Event"),  the fair
                  value of such consideration will be determined within five (5)
                  Business  Days  after the tenth day  following  the  Valuation
                  Event by an independent,  reputable appraiser jointly selected
                  by the Company and the Required Holders.  The determination of
                  such  appraiser  shall be final and  binding  upon all parties
                  absent  manifest  error  and the  fees  and  expenses  of such
                  appraiser shall be borne by the Company.

                                     - 7 -
<PAGE>

                  (v) Record Date.  If the Company takes a record of the holders
                  of shares of Common  Stock for the purpose of  entitling  them
                  (A) to receive a  dividend  or other  distribution  payable in
                  shares of Common Stock,  Options or in Convertible  Securities
                  or (B) to subscribe  for or purchase  shares of Common  Stock,
                  Options or Convertible Securities,  then such record date will
                  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.

                  (b)  Adjustment  upon  Subdivision  or  Combination  of Common
Stock. If the Company at any time on or after the  Subscription  Date subdivides
(by any stock split, stock dividend,  recapitalization or otherwise) one or more
classes  of its  outstanding  shares of Common  Stock  into a greater  number of
shares,  the Exercise Price in effect immediately prior to such subdivision will
be   proportionately   reduced  and  the  number  of  Warrant   Shares  will  be
proportionately  increased.  If  the  Company  at  any  time  on  or  after  the
Subscription  Date combines (by  combination,  reverse stock split or otherwise)
one or more  classes of its  outstanding  shares of Common  Stock into a smaller
number  of  shares,  the  Exercise  Price in  effect  immediately  prior to such
combination will be  proportionately  increased and the number of Warrant Shares
will be proportionately  decreased. Any adjustment under this Section 2(b) shall
become  effective  at the  close of  business  on the date  the  subdivision  or
combination becomes effective.  Notwithstanding anything herein to the contrary,
the  Company  shall not adjust the  Exercise  Price  hereunder  or the number of
Warrant  Shares  issuable  upon  exercise of this Warrant for any reverse  stock
split of one or more  classes of the  Company's  Common  Stock at any time on or
after the Subscription Date.

                  (c) Other Events. If any event occurs of the type contemplated
by the  provisions  of this  Section 2 but not  expressly  provided  for by such
provisions  (including,  without limitation,  the granting of stock appreciation
rights,  phantom  stock rights or other rights with equity  features),  then the
Company's Board of Directors will make an appropriate adjustment in the Exercise
Price  and the  number of  Warrant  Shares so as to  protect  the  rights of the
Holder;  provided  that no such  adjustment  pursuant to this  Section 2(c) will
increase  the  Exercise  Price or  decrease  the  number  of  Warrant  Shares as
otherwise determined pursuant to this Section 2.

            3. RIGHTS UPON  DISTRIBUTION OF ASSETS. If the Company shall declare
or make any dividend or other  distribution  of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or
otherwise  (including,  without  limitation,  any distribution of cash, stock or
other  securities,  property  or  options  by  way  of  a  dividend,  spin  off,
reclassification,  corporate  rearrangement,  scheme  of  arrangement  or  other
similar transaction) (a "Distribution"),  at any time after the issuance of this
Warrant, then, in each such case:

                                     - 8 -
<PAGE>

                  (a) any  Exercise  Price in  effect  immediately  prior to the
close of business on the record date fixed for the  determination  of holders of
shares of Common Stock  entitled to receive the  Distribution  shall be reduced,
effective as of the close of business on such record date, to a price determined
by  multiplying  such  Exercise  Price by a fraction of which (i) the  numerator
shall be the Closing Bid Price of the shares of Common  Stock on the trading day
immediately  preceding such record date minus the value of the  Distribution (as
determined in good faith by the Company's Board of Directors)  applicable to one
share of shares of Common Stock,  and (ii) the denominator  shall be the Closing
Bid Price of the shares of Common Stock on the trading day immediately preceding
such record date; and

                  (b) the  number of  Warrant  Shares  shall be  increased  to a
number of shares  equal to the  number  of  shares  of Common  Stock  obtainable
immediately  prior to the close of  business  on the  record  date fixed for the
determination  of  holders of shares of Common  Stock  entitled  to receive  the
Distribution  multiplied  by the  reciprocal  of the  fraction  set forth in the
immediately  preceding  paragraph  (a);  provided  that in the  event  that  the
Distribution  is of shares of Common Stock (or common stock)  ("Other  Shares of
Common  Stock")  of a company  whose  common  shares  are  traded on a  national
securities  exchange or a national automated  quotation system,  then the Holder
may elect to receive a warrant to purchase  Other Shares of Common Stock in lieu
of an  increase  in the number of Warrant  Shares,  the terms of which  shall be
identical  to  those  of  this  Warrant,  except  that  such  warrant  shall  be
exercisable into the number of shares of Other Shares of Common Stock that would
have been  payable to the Holder  pursuant  to the  Distribution  had the Holder
exercised  this  Warrant  immediately  prior  to such  record  date  and with an
aggregate  exercise  price  equal to the  product  of the  amount  by which  the
exercise  price of this Warrant was decreased  with respect to the  Distribution
pursuant to the terms of the immediately  preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).

            4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

                  (a) Purchase Rights.  In addition to any adjustments  pursuant
to  Section  2 above,  if at any time the  Company  grants,  issues or sells any
Options,   Convertible   Securities  or  rights  to  purchase  stock,  warrants,
securities  or other  property  pro rata to the  record  holders of any class of
shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled
to acquire,  upon the terms  applicable to such Purchase  Rights,  the aggregate
Purchase  Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock issuable upon exercise of this Warrant (without
regard to any  limitations on the exercise of this Warrant)  immediately  before
the date on which a record  is taken  for the  grant,  issuance  or sale of such
Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined  for the grant,  issue or
sale of such Purchase Rights.

                                     - 9 -
<PAGE>

                  (b) Fundamental Transactions. The Company shall not enter into
or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing  all of the  obligations  of the Company  under this  Warrant and the
other  Transaction  Documents in accordance  with the provisions of this Section
(4)(b) pursuant to written agreements in form and substance  satisfactory to the
Required  Holders and approved by the Required Holders prior to such Fundamental
Transaction,  including  agreements  to deliver to each  holder of  Warrants  in
exchange for such  Warrants a security of the  Successor  Entity  evidenced by a
written instrument  substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the  shares  of  Common  Stock  reflected  by  the  terms  of  such  Fundamental
Transaction,  and exercisable  for a  corresponding  number of shares of capital
stock  equivalent  to the shares of Common Stock  issuable upon exercise of this
Warrant  (without  regard to any  limitations  on the exercise of this  Warrant)
prior to such Fundamental Transaction,  and satisfactory to the Required Holders
and (ii) the  Successor  Entity is a publicly  traded  corporation  whose common
stock is  quoted  on or listed  for  trading  on an  Eligible  Market.  Upon the
occurrence of any Fundamental  Transaction,  the Successor  Entity shall succeed
to, and be substituted for (so that from and after the date of such  Fundamental
Transaction,  the  provisions of this Warrant  referring to the "Company"  shall
refer instead to the Successor  Entity),  and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such  Successor  Entity had been named as the
Company herein. Upon consummation of the Fundamental Transaction,  the Successor
Entity shall deliver to the Holder  confirmation that there shall be issued upon
exercise of this Warrant at any time after the  consummation  of the Fundamental
Transaction,  in lieu of the  shares of the Common  Stock (or other  securities,
cash, assets or other property)  issuable upon the exercise of the Warrant prior
to such Fundamental Transaction,  such shares of stock, securities, cash, assets
or any other  property  whatsoever  (including  warrants  or other  purchase  or
subscription  rights)  which the Holder would have been entitled to receive upon
the happening of such  Fundamental  Transaction  had this Warrant been converted
immediately  prior to such  Fundamental  Transaction,  as adjusted in accordance
with the provisions of this Warrant.  In addition to and not in substitution for
any  other  rights  hereunder,  prior  to the  consummation  of any  Fundamental
Transaction  pursuant to which holders of shares of Common Stock are entitled to
receive  securities or other assets with respect to or in exchange for shares of
Common Stock (a "Corporate Event"), the Company shall make appropriate provision
to insure  that the Holder  will  thereafter  have the right to receive  upon an
exercise of this Warrant at any time after the  consummation  of the Fundamental
Transaction  but  prior to the  Expiration  Date,  in lieu of the  shares of the
Common Stock (or other securities, cash, assets or other property) issuable upon
the exercise of the Warrant prior to such Fundamental  Transaction,  such shares
of stock,  securities,  cash, assets or any other property whatsoever (including
warrants or other purchase or  subscription  rights) which the Holder would have
been entitled to receive upon the happening of such Fundamental  Transaction had
the Warrant been exercised  immediately  prior to such Fundamental  Transaction.
Provision  made  pursuant  to the  preceding  sentence  shall  be in a form  and
substance  reasonably  satisfactory to the Required  Holders.  The provisions of
this  Section  shall  apply  similarly  and  equally to  successive  Fundamental
Transactions  and Corporate  Events and shall be applied  without  regard to any
limitations on the exercise of this Warrant.  Notwithstanding the foregoing,  in
the event of a Fundamental  Transaction,  at the request of the Holder delivered
before the 90th day after such  Fundamental  Transaction,  the  Company  (or the
Successor  Entity) shall  purchase this Warrant from the Holder by paying to the
Holder,  within five  Business  Days after such  request  (or, if later,  on the
effective date of the Fundamental  Transaction),  cash in an amount equal to the
value of the remaining  unexercised  portion of this Warrant on the date of such
Fundamental  Transaction,  which  value  shall  be  determined  by  use  of  the
Black-Scholes option pricing model.

                                     - 10 -
<PAGE>

            5.  NONCIRCUMVENTION.  The Company hereby  covenants and agrees that
the Company will not, by amendment of its Certificate of  Incorporation,  Bylaws
or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of  this  Warrant,  and  will  at all  times  in good  faith  carry  out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder.  Without  limiting the  generality of the  foregoing,  the
Company  (i) shall not  increase  the par  value of any  shares of Common  Stock
receivable  upon the exercise of this Warrant  above the Exercise  Price then in
effect,  (ii) shall take all such actions as may be necessary or  appropriate in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable  shares of Common  Stock upon the  exercise of this  Warrant,  and
(iii) shall, so long as any of the SPA Warrants are outstanding, take all action
necessary  to reserve and keep  available  out of its  authorized  and  unissued
shares of Common Stock,  solely for the purpose of effecting the exercise of the
SPA Warrants, 130% of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of the SPA Warrants  (without regard to
any limitations on exercise).

            6.  WARRANT  HOLDER NOT DEEMED A  STOCKHOLDER.  Except as  otherwise
specifically  provided herein, the Holder, solely in such Person's capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be
deemed the holder of share  capital of the  Company for any  purpose,  nor shall
anything  contained  in this  Warrant be  construed  to confer  upon the Holder,
solely in such  Person's  capacity  as the  Holder of this  Warrant,  any of the
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action  (whether any  reorganization,  issue of stock,
reclassification  of stock,  consolidation,  merger,  conveyance or  otherwise),
receive  notice of  meetings,  receive  dividends  or  subscription  rights,  or
otherwise,  prior to the issuance to the Holder of the Warrant Shares which such
Person is then  entitled to receive  upon the due exercise of this  Warrant.  In
addition,  nothing  contained in this Warrant shall be construed as imposing any
liabilities  on the Holder to purchase  any  securities  (upon  exercise of this
Warrant  or  otherwise)  or  as a  stockholder  of  the  Company,  whether  such
liabilities  are  asserted  by the  Company  or by  creditors  of  the  Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies
of the same  notices  and other  information  given to the  stockholders  of the
Company   generally,   contemporaneously   with  the   giving   thereof  to  the
stockholders.

                                     - 11 -
<PAGE>

            7. REISSUANCE OF WARRANTS.

                  (a) Transfer of Warrant. If this Warrant is to be transferred,
the Holder shall  surrender  this Warrant to the Company,  whereupon the Company
will forthwith  issue and deliver upon the order of the Holder a new Warrant (in
accordance   with  Section   7(d)),   registered  as  the  Holder  may  request,
representing   the  right  to  purchase  the  number  of  Warrant  Shares  being
transferred  by the Holder and, if less then the total number of Warrant  Shares
then underlying this Warrant is being transferred,  a new Warrant (in accordance
with Section 7(d)) to the Holder  representing  the right to purchase the number
of Warrant Shares not being transferred.

                  (b) Lost,  Stolen or  Mutilated  Warrant.  Upon receipt by the
Company of evidence  reasonably  satisfactory to the Company of the loss, theft,
destruction  or mutilation of this Warrant,  and, in the case of loss,  theft or
destruction,  of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation,  upon surrender and  cancellation
of this  Warrant,  the  Company  shall  execute  and deliver to the Holder a new
Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Warrant.

                  (c)  Exchangeable  for  Multiple  Warrants.  This  Warrant  is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company,  for a new Warrant or Warrants (in  accordance  with Section  7(d))
representing in the aggregate the right to purchase the number of Warrant Shares
then underlying this Warrant, and each such new Warrant will represent the right
to purchase  such portion of such Warrant  Shares as is designated by the Holder
at the time of such surrender.

                  (d) Issuance of New Warrants. Whenever the Company is required
to issue a new Warrant  pursuant to the terms of this Warrant,  such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated
on the face of such new Warrant,  the right to purchase the Warrant  Shares then
underlying  this Warrant (or in the case of a new Warrant being issued  pursuant
to Section 7(a) or Section  7(c),  the Warrant  Shares  designated by the Holder
which,  when added to the number of shares of Common Stock  underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then  underlying  this Warrant),  (iii) shall have an issuance
date,  as  indicated  on the face of such new  Warrant  which is the same as the
Issuance  Date,  and (iv) shall  have the same  rights  and  conditions  as this
Warrant.

            8.  NOTICES.  Whenever  notice is  required  to be given  under this
Warrant,  unless  otherwise  provided  herein,  such  notice  shall  be given in
accordance with Section 9(f) of the Securities Purchase  Agreement.  The Company
shall  provide  the Holder  with  prompt  written  notice of all  actions  taken
pursuant to this Warrant,  including in reasonable  detail a description of such
action  and  the  reason  therefore.  Without  limiting  the  generality  of the
foregoing,  the Company will give written  notice to the Holder (i)  immediately
upon any adjustment of the Exercise Price,  setting forth in reasonable  detail,
and  certifying,  the  calculation of such  adjustment and (ii) at least fifteen
days prior to the date on which the  Company  closes its books or takes a record
(A) with  respect  to any  dividend  or  distribution  upon the shares of Common
Stock,  (B) with  respect  to any  grants,  issuances  or sales of any  Options,
Convertible  Securities  or rights to purchase  stock,  warrants,  securities or
other  property  to  holders  of shares of Common  Stock or (C) for  determining
rights to vote with  respect  to any  Fundamental  Transaction,  dissolution  or
liquidation,  provided in each case that such information shall be made known to
the public prior to or in  conjunction  with such notice  being  provided to the
Holder.

                                     - 12 -
<PAGE>

            9. AMENDMENT AND WAIVER.  Except as otherwise  provided herein,  the
provisions  of this  Warrant  may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only if the  Company  has  obtained  the  written  consent of the  Required
Holders; provided that no such action may increase the exercise price of any SPA
Warrant,  change the expiration date of any SPA Warrant to any date prior to the
Expiration  Date or  decrease  the number of shares or change the class of stock
obtainable  upon exercise of any SPA Warrant  without the written consent of the
Holder.  No such  amendment  shall be effective to the extent that it applies to
less than all of the holders of the SPA Warrants then outstanding.

            10.  GOVERNING  LAW. This Warrant shall be governed by and construed
and enforced in accordance with, and all questions  concerning the construction,
validity,  interpretation  and performance of this Warrant shall be governed by,
the internal laws of the State of New York,  without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other  jurisdictions)  that would cause the  application  of the laws of any
jurisdictions other than the State of New York.

            11.  CONSTRUCTION;  HEADINGS.  This  Warrant  shall be  deemed to be
jointly  drafted by the  Company  and all the Buyers and shall not be  construed
against any person as the drafter  hereof.  The headings of this Warrant are for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Warrant.

            12.  DISPUTE  RESOLUTION.  In  the  case  of a  dispute  as  to  the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares,  the Company  shall submit the  disputed  determinations  or  arithmetic
calculations  via facsimile  within two Business Days of receipt of the Exercise
Notice  giving rise to such dispute,  as the case may be, to the Holder.  If the
Holder  and  the  Company  are  unable  to  agree  upon  such  determination  or
calculation  of the Exercise  Price or the Warrant  Shares within three Business
Days of such disputed determination or arithmetic calculation being submitted to
the  Holder,  then the  Company  shall,  within  two  Business  Days  submit via
facsimile  (a)  the  disputed   determination   of  the  Exercise  Price  to  an
independent,  reputable  investment bank selected by the Company and approved by
the Holder or (b) the disputed  arithmetic  calculation of the Warrant Shares to
the Company's  independent,  outside accountant.  The Company shall cause at its
expense the investment  bank or the  accountant,  as the case may be, to perform
the  determinations or calculations and notify the Company and the Holder of the
results no later than ten  Business  Days from the time it receives the disputed
determinations   or  calculations.   Such  investment   bank's  or  accountant's
determination  or  calculation,  as the case may be,  shall be binding  upon all
parties absent demonstrable error.

                                     - 13 -
<PAGE>

            13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies  provided in this Warrant  shall be  cumulative  and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity  (including  a decree of specific  performance  and/or other
injunctive relief), and nothing herein shall limit the right of the Holder right
to pursue actual damages for any failure by the Company to comply with the terms
of this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause  irreparable  harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened  breach, the holder of this Warrant shall
be  entitled,  in addition to all other  available  remedies,  to an  injunction
restraining  any breach,  without the  necessity  of showing  economic  loss and
without any bond or other security being required.

            14.   TRANSFER.   This  Warrant  may  be  offered  for  sale,  sold,
transferred  or  assigned,  in whole  or in part,  without  the  consent  of the
Company,  except as may otherwise be required by Section 2(f) of the  Securities
Purchase Agreement.

            15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following
terms shall have the following meanings:

                  (a) "Bloomberg" means Bloomberg Financial Markets.

                  (b) "Business Day" means any day other than  Saturday,  Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

                  (c) "Closing Bid Price" and "Closing  Sale Price"  means,  for
any security as of any date,  the last closing bid price and last closing  trade
price,  respectively,  for such security on the Principal Market, as reported by
Bloomberg,  or, if the Principal  Market begins to operate on an extended  hours
basis and does not  designate  the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade  price,  respectively,
of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal  securities exchange or trading
market  for such  security,  the last  closing  bid price or last  trade  price,
respectively,  of such security on the principal  securities exchange or trading
market where such security is listed or traded as reported by  Bloomberg,  or if
the  foregoing  do not apply,  the last  closing bid price or last trade  price,
respectively,  of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade  price,  respectively,  is  reported  for such  security  by
Bloomberg,  the average of the bid prices, or the ask prices,  respectively,  of
any market  makers for such  security as  reported in the "pink  sheets" by Pink
Sheets LLC (formerly the National  Quotation  Bureau,  Inc.). If the Closing Bid
Price or the  Closing  Sale  Price  cannot be  calculated  for a  security  on a
particular  date on any of the  foregoing  bases,  the  Closing Bid Price or the
Closing Sale Price,  as the case may be, of such  security on such date shall be
the fair market value as mutually  determined by the Company and the Holder.  If
the  Company  and the Holder are unable to agree upon the fair  market  value of
such security,  then such dispute shall be resolved  pursuant to Section 12. All
such determinations to be appropriately  adjusted for any stock dividend,  stock
split,  stock  combination  or other similar  transaction  during the applicable
calculation period.

                                     - 14 -
<PAGE>

                  (d) "Common  Stock" means (i) the  Company's  shares of Common
Stock,  par value $0.01 per share,  and (ii) any share  capital  into which such
Common  Stock  shall have been  changed or any share  capital  resulting  from a
reclassification of such Common Stock.

                  (e) "Common  Stock  Deemed  Outstanding"  means,  at any given
time,  the number of shares of Common Stock  actually  outstanding at such time,
plus the number of shares of Common Stock deemed to be  outstanding  pursuant to
Sections  2(a)(i)  and  2(a)(ii)  hereof  regardless  of whether  the Options or
Convertible  Securities are actually exercisable at such time, but excluding any
shares of Common  Stock  owned or held by or for the  account of the  Company or
issuable upon conversion and exercise, as applicable,  of the SPA Securities and
the SPA Warrants.

                  (f)  "Convertible  Securities"  means any stock or  securities
(other than Options)  directly or indirectly  convertible into or exercisable or
exchangeable for shares of Common Stock.

                  (g) "Eligible Market" means the Principal Market, the American
Stock Exchange, The New York Stock Exchange, Inc., the Nasdaq National Market or
the Nasdaq Capital Market.

                  (h) "Expiration  Date" means the forty-eight month anniversary
of the  Issuance  Date or, if such date falls on a day other than a Business Day
or on which trading does not take place on the Principal  Market (a  "Holiday"),
the next date that is not a Holiday.

                  (i)  "Fundamental  Transaction"  means that the Company shall,
directly or indirectly, in one or more related transactions,  (i) consolidate or
merge with or into  (whether  or not the Company is the  surviving  corporation)
another Person, or (ii) sell, assign,  transfer,  convey or otherwise dispose of
all or  substantially  all of the properties or assets of the Company to another
Person,  or (iii) allow  another  Person to make a purchase,  tender or exchange
offer  that is  accepted  by the  holders  of more  than the 50% of  either  the
outstanding  shares of Common  Stock (not  including  any shares of Common Stock
held by the Person or Persons  making or party to, or  associated  or affiliated
with the Persons making or party to, such purchase,  tender or exchange  offer),
or (iv)  consummate a stock  purchase  agreement or other  business  combination
(including, without limitation, a reorganization,  recapitalization, spin-off or
scheme of  arrangement)  with another Person whereby such other Person  acquires
more than the 50% of the  outstanding  shares of Common Stock (not including any
shares of Common Stock held by the other Person or other Persons making or party
to, or associated or affiliated  with the other Persons making or party to, such
stock purchase  agreement or other  business  combination),  or (v)  reorganize,
recapitalize or reclassify its Common Stock.

                  (j)  "Options"  means  any  rights,  warrants  or  options  to
subscribe for or purchase shares of Common Stock or Convertible Securities.

                  (k) "Parent Entity" of a Person means an entity that, directly
or  indirectly,  controls  the  applicable  Person  and  whose  common  stock or
equivalent  equity  security is quoted or listed on an Eligible  Market,  or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market  capitalization as of the date of consummation of
the Fundamental Transaction.

                                     - 15 -
<PAGE>

                  (l) "Person" means an individual, a limited liability company,
a  partnership,  a joint  venture,  a corporation,  a trust,  an  unincorporated
organization,  any other entity and a  government  or any  department  or agency
thereof.

                  (m) "Principal Market" means the Pink Sheets.

                  (n)   "Registration   Rights  Agreement"  means  that  certain
registration rights agreement by and among the Company and the Buyers.

                  (o) "Required  Holders"  means the holders of the SPA Warrants
representing  at least a majority of shares of Common Stock  underlying  the SPA
Warrants  then  outstanding;  provided,  however  that any such  holders  of SPA
Warrants  must  include  the  Collateral  Agent (as  defined  in the  Securities
Purchase Agreement).

                  (p) "SPA  Securities"  means the Notes issued  pursuant to the
Securities Purchase  Agreement.

                  (q) "Successor  Entity" means the Person (or, if so elected by
the Required Holders,  the Parent Entity) formed by, resulting from or surviving
any  Fundamental  Transaction  or the Person (or, if so elected by the  Required
Holders,  the Parent Entity) with which such Fundamental  Transaction shall have
been entered into.

                            [Signature Page Follows]

                                     - 16 -
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.

                                        AMERICAN UNITED GLOBAL, INC.

                                        By: ____________________________________
                                        Name:
                                        Title:

<PAGE>

                                                                       EXHIBIT A

                                 EXERCISE NOTICE
            TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
                        WARRANT TO PURCHASE COMMON STOCK

      AMERICAN UNITED GLOBAL,  INC. The undersigned  holder hereby exercises the
right to  purchase  _________________  of the shares of Common  Stock  ("Warrant
Shares")  of  American  United  Global,   Inc.,  a  Delaware   corporation  (the
"Company"),  evidenced  by the  attached  Warrant to Purchase  Common Stock (the
"Warrant").  Capitalized  terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

      1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

            ____________  a "Cash  Exercise"  with respect to  _________________
            Warrant Shares; and/or

            ____________ a "Cashless  Exercise" with respect to  _______________
            Warrant Shares.

      2. Payment of Exercise  Price.  In the event that the holder has elected a
Cash  Exercise  with  respect to some or all of the Warrant  Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

      3.  Delivery of Warrant  Shares.  The Company  shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.

Date: _______________ __, ______

__________________________________
   Name of Registered Holder

By: ________________________________
    Name:
    Title:

<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby  acknowledges  this Exercise  Notice and hereby directs
[Insert Name of Transfer Agent] to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent  Instructions  dated ____ __,
20__ from the Company and acknowledged and agreed to by [Insert Name of Transfer
Agent].

                                        AMERICAN UNITED GLOBAL, INC.

                                        By: ____________________________________
                                            Name:
                                            Title:

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