Document:

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                                                                    Exhibit 4.10

                                                                [Execution Copy]

                               SECURITY AGREEMENT

          SECURITY AGREEMENT, dated as of November 16, 2001, between
CONSTELLATION 3D TECHNOLOGY LIMITED, a corporation organized under the laws of
the British Virgin Islands (the "Company"), and TIC TARGET INVEST CONSULTING,
                                 -------
LLC, a financing corporation organized under the laws of St. Kitts & Nevis with
its principal office located at Churer Strasse 35, CH-9470, Buchs, SG,
Switzerland, (the "Lender").
                   ------

          WHEREAS, it is a condition precedent to the Lender's obligation to
make the loan to the Company under the Loan Agreement, of even date herewith, by
and between the Lender and the Company (the "Loan Agreement") that the Company
                                             --------------
execute and deliver to the Lender, for the benefit of the Lender, a security
agreement in the form hereof; and

          WHEREAS, the Company wishes to grant a security interest in favor of
the Lender, for the benefit of the Lender, as herein provided;

          NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     1.   Definitions. All capitalized terms used herein without definitions
          -----------
shall have the respective meanings provided therefor in the Loan Agreement. The
term "State", as used herein, means the District of Columbia. All terms defined
      -----
in the Uniform Commercial Code of the State and used herein shall have the same
definitions herein as specified therein. However, if a term is defined in
Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in Article 9.

     2.   Grant of Security Interest. The Company hereby grants to the Lender,
          --------------------------
for the benefit of the Lender, to secure the payment and performance in full of
all of the Obligations, a security interest in and so pledges and assigns to the
Lender, for the benefit of the Lender, the Loan Agreement, of even date
herewith, by and between the Company and Constellation 3D, Inc. (the "Loan
                                                                      ----
Agreement"), the Loan Documents (as defined in the Loan Agreement), including,
---------
without limitation, the promissory note, of even date herewith, made by
Constellation 3D, Inc. in favor of the Company pursuant to the Loan Agreement
(the "Company Note"), and the Option Agreement, of even date herewith, by and
      ------------
between the Company and Constellation 3D, Inc. (the "Option Agreement") and all
                                                     ----------------
proceeds and products thereof and supporting obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, and all
general intangibles (including all payment intangibles) related thereto;
provided, however, that "Collateral" shall not include the Designated
--------  -------
Securities. A reasonably detailed list of the Collateral existing as of the date
hereof is set forth on Schedule A attached hereto. For each item of Collateral,
                       ----------
Schedule A provides the location, description and ownership and, for items of
----------
Collateral which have a certificate of title, the jurisdiction of such
certificates, and for those items of Collateral which are mobile goods (goods
that are mobile and generally used in more than one jurisdiction such as motor
vehicles, trailers and similar items) the present

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location of such goods. Schedule A also identifies any liens and encumbrances
                        ----------
with respect to any items of Collateral.

     3.   Authorization to File Financing Statements. The Company hereby
          ------------------------------------------
irrevocably authorizes the Lender at any time and from time to time to file in
any filing office in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto meeting the requirements of the
Uniform Commercial Code of the State in such manner and in such jurisdictions as
are necessary to perfect the first priority security interest of the Lender in
the Collateral. The Company agrees to furnish any information necessary to such
filings to the Lender promptly upon the Lender's request.

     4.   Company Note. Further to insure the attachment, perfection and first
          ------------
priority of, and the ability of the Lender to enforce, the Lender's security
interest in the Company Note, the Company shall, on or prior to the Funding
Date, endorse, assign and deliver the Company Note to the Lender, accompanied by
such instruments of transfer or assignment duly executed in blank as the Lender
may from time to time specify.

     5.   Collateral in the Possession of a Bailee. If any Collateral is at any
          ----------------------------------------
time in the possession of a bailee, the Company shall promptly notify the Lender
thereof and, at the Lender's request and option, shall promptly obtain an
acknowledgement from the bailee, in form and substance reasonably satisfactory
to the Lender, that the bailee holds such Collateral for the benefit of the
Lender and such bailee's agreement to comply, without further consent of the
Company, at any time with instructions of the Lender as to such Collateral. The
Lender agrees with the Company that the Lender shall not give any such
instructions unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by the Company with respect to the
bailee.

     6.   Other Actions. The Company further agrees, upon the request of the
          -------------
Lender and at the Lender's option, to take any and all other actions as the
Lender may reasonably determine to be necessary or useful for the attachment,
perfection and first priority of (subject to Permitted Liens), and the ability
of the Lender to enforce, the Lender's security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Uniform Commercial Code, to the extent, if any, that the Company's signature
thereon is required therefor, (b) causing the Lender's name to be noted as
secured party on any certificate of title for a titled good if such notation is
a condition to attachment, perfection or priority of, or ability of the Lender
to enforce, the Lender's security interest in such Collateral, (c) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of the Lender to enforce, the
Lender's security interest in such Collateral, (d) using all reasonable efforts
in obtaining governmental and other third party waivers, consents and approvals,
in form and substance satisfactory to the Lender and (e) taking all actions
under any earlier versions of the Uniform Commercial Code or under any other
law, as reasonably determined by the Lender to be applicable in any relevant
Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction.

                                       2

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     7.   Representations and Warranties of the Company Legal Status. The
          ----------------------------------------------------------
representations and warranties made by the Company in the Loan Agreement are
hereby incorporated by reference herein.

     8.   Covenants Concerning Company's Legal Status. The Company covenants
          -------------------------------------------
with the Lender as follows: (a) without providing at least thirty (30) days
prior written notice to the Lender, the Company will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one, (b) if the
Company does not have an organizational identification number and later obtains
one, the Company will forthwith notify the Lender of such organizational
identification number, and (c) the Company will not change its type of
organization, jurisdiction of organization or other legal structure.

     9.   Covenants Concerning Collateral, Etc. The Company further covenants
          ------------------------------------
with the Lender as follows: (a) the Collateral, to the extent not delivered to
the Lender pursuant to Section 4, will be kept at those locations where it is
presently located and previously disclosed to the Lender and the Company will
not remove the Collateral from such locations, without providing at least 30
days prior written notice to the Lender, (b) except for the security interest
herein granted and Permitted Liens, the Company shall be the owner of or have
other rights in the Collateral free from any right or claim of any other person
or any Lien, and the Company shall defend the same against all claims and
demands of all persons at any time claiming the same or any interests therein
adverse to the Lender, (c) the Company shall not pledge, mortgage or create, or
suffer to exist any right of any person in or claim by any person to the
Collateral, or any Lien in the Collateral in favor of any person, other than the
Lender except for Permitted Liens, (d) the Company will keep the Collateral in
good order and repair and will not use the same in material violation of law or
any policy of insurance thereon, (e) as provided in the Loan Agreement, the
Company will permit the Lender, or its designee, to inspect the Collateral at
any reasonable time, wherever located, (f) the Company will pay promptly when
due all taxes, assessments, governmental charges and levies upon the Collateral
or incurred in connection with the use or operation of the Collateral or
incurred in connection with this Agreement, and (g) the Company will not sell or
otherwise dispose of, or offer to sell or otherwise dispose of, the Collateral
or any interest therein except as provided in Section 10.5.2 of the Loan
Agreement.

     10.Collateral Protection Expenses; Preservation of Collateral.
        ----------------------------------------------------------

          10.1. Expenses Incurred by Lender. In the Lender's discretion, if the
                ---------------------------
Company fails to do so, the Lender may discharge taxes and other encumbrances at
any time levied or placed on any of the Collateral, and pay any necessary filing
fees. The Company agrees to reimburse the Lender on demand for all commercially
reasonable expenditures so made. The Lender shall have no obligation to the
Company to make any such expenditures, nor shall the making thereof be construed
as a waiver or cure of any Default or Event of Default.

          10.2. Lender's Obligations and Duties. Anything herein to the contrary
                -------------------------------
notwithstanding, the Company shall remain obligated and liable under each
material contract or agreement comprised in the Collateral to be observed or
performed by the Company thereunder. The Lender shall not have any obligation or
liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by the Lender of any payment relating to

                                       3

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any of the Collateral, nor shall Lender be obligated in any manner to perform
any of the obligations of the Company under or pursuant to any such contract or
agreement, to make inquiry as to the nature or sufficiency of any payment
received by the Lender in respect of the Collateral or as to the sufficiency of
any performance by any party under any such contract or agreement, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to the Lender or to which
the Lender may be entitled at any time or times. The Lender's sole duty with
respect to the custody, safe keeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Uniform Commercial Code of the
State or otherwise, shall be to deal with such Collateral in the same manner as
the Lender deals with similar property for its own account.

     11.  Securities and Deposits. The Lender may at any time following and
          -----------------------
during the continuance of an Event of Default, at its option, transfer to itself
or any nominee the Company Note, receive any income thereon and hold such income
as additional Collateral or apply it to the Obligations. Regardless of the
adequacy of Collateral or any other security for the Obligations, any deposits
or other sums at any time credited by or due from the Lender to the Company may
at any time be applied to or set off against any of the Obligations.

     12.  Notification to Account Debtors and Other Persons Obligated on
          --------------------------------------------------------------
Collateral. If an Event of Default shall have occurred and be continuing, the
----------
Company shall, at the request and option of the Lender, notify Constellation 3D,
Inc. of the security interest of the Lender in the Company Note and that payment
thereof is to be made directly to the Lender or to any financial institution
designated by the Lender as the Lender's agent therefor, and the Lender may
itself, if an Event of Default shall have occurred and be continuing, without
notice to or demand upon the Company, so notify Constellation 3D, Inc. After the
making of such a request or the giving of any such notification, the Company
shall hold any proceeds received by the Company with respect to the Company Note
as trustee for the Lender, for the benefit of the Lender, without commingling
the same with other funds of the Company and shall turn the same over to the
Lender in the identical form received, together with any necessary endorsements
or assignments. The Lender shall apply the proceeds of the Company Note received
by the Lender to the Obligations, such proceeds to be immediately credited after
final payment in cash or other immediately available funds of the items giving
rise to them.

     13.  Power of Attorney.
          -----------------

          13.1. Appointment and Powers of Lender. The Company hereby irrevocably
                --------------------------------
constitutes and appoints the Lender and any officer or agent thereof, with full
power of substitution, as its true and lawful attorneys-in-fact with full
irrevocable power and authority in the place and stead of the Company or in the
Lender's own name, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or useful to accomplish the purposes of this
Agreement and, without limiting the generality of the foregoing, hereby gives
said attorneys the power and right, on behalf of the Company, without notice to
or assent by the Company, to do the following:

                (a)  upon the occurrence and during the continuance of an Event
          of Default, generally to sell, transfer, pledge, make any agreement
          with respect to or

                                       4

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          otherwise dispose of or deal with any of the Collateral in such manner
          as is consistent with the Uniform Commercial Code of the State and as
          fully and completely as though the Lender were the absolute owner
          thereof for all purposes, and to do, at the Company's expense, at any
          time, or from time to time, all acts and things which the Lender deems
          necessary or useful to protect, preserve or realize upon the
          Collateral and the Lender's security interest therein, in order to
          effect the intent of this Agreement, all no less fully and effectively
          as the Company might do, including, without limitation, upon written
          notice to the Company, the exercise of voting rights with respect to
          voting securities, which rights may be exercised, if the Lender so
          elects, with a view to causing the liquidation of assets of the issuer
          of any such securities and the execution, delivery and recording, in
          connection with any sale or other disposition of any Collateral, of
          the endorsements, assignments or other instruments of conveyance or
          transfer with respect to such Collateral; and

                (b) to the extent that the Company's authorization given in
          Section 3 is not sufficient, to file such financing statements with
          respect hereto, with or without the Company's signature, or a
          photocopy of this Agreement in substitution for a financing statement,
          as the Lender may deem appropriate and to execute in the Company's
          name such financing statements and amendments thereto and continuation
          statements which may require the Company's signature.

          13.2. Ratification by Company. To the extent permitted by law, the
                -----------------------
Company hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

          13.3. No Duty on Lender. The powers conferred on the Lender hereunder
                -----------------
are solely to protect the interests of the Lender in the Collateral and shall
not impose any duty upon the Lender to exercise any such powers. The Lender
shall be accountable only for the amounts that it actually receives as a result
of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Company for any act
or failure to act, except for the Lender's own gross negligence or willful
misconduct.

     14.  Rights and Remedies. If an Event of Default shall have occurred and be
          -------------------
continuing, the Lender, without any other notice to or demand upon the Company,
shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code of the State and any additional rights
and remedies as may be provided to a secured party in any jurisdiction in which
Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Lender may, so far as the
Company can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Lender may in its
discretion require the Company to assemble all or any part of the Collateral at
such location or locations within the jurisdiction(s) of the Company's principal
office(s) or at such other locations as the Lender may reasonably designate. The
Company waives any and all rights that it may have to a judicial hearing in
advance of the enforcement of any of the Lender's rights and remedies hereunder,
including, without limitation,

                                       5

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its right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect thereto.

         15. Standards for Exercising Rights and Remedies. To the extent that
             --------------------------------------------
applicable law imposes duties on the Lender to exercise remedies in a
commercially reasonable manner, the Company acknowledges and agrees that it is
not commercially unreasonable for the Lender (a) to fail to obtain third party
consents for access to Collateral, or to obtain or, if not required by other
law, to fail to obtain governmental or third party consents for the collection
of Collateral to be collected, (b) to fail to exercise collection remedies
against account debtors or other persons obligated on Collateral or to fail to
remove Liens on or any adverse claims against Collateral or (c) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists. The Company acknowledges that the purpose of this
Section 15 is to provide non-exhaustive indications of what actions or omissions
by the Lender would fulfill the Lender's duties under the Uniform Commercial
Code of the State or any other relevant jurisdiction in the Lender's exercise of
remedies against the Collateral and that other actions or omissions by the
Lender shall not be deemed to fail to fulfill such duties solely on account of
not being indicated in this Section 15. Without limitation upon the foregoing,
nothing contained in this Section 15 shall be construed to grant any rights to
the Company or to impose any duties on the Lender that would not have been
granted or imposed by this Agreement or by applicable law in the absence of this
Section 15.

         16. No Waiver by Lender, etc. The Lender shall not be deemed to have
             ------------------------
waived any of its rights and remedies in respect of the Obligations or the
Collateral unless such waiver shall be in writing and signed by the Lender. No
delay or omission on the part of the Lender in exercising any right or remedy
shall operate as a waiver of such right or remedy or any other right or remedy.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion. All rights and remedies of the Lender
with respect to the Obligations or the Collateral, whether evidenced hereby or
by any other instrument or papers, shall be cumulative and may be exercised
singularly, alternatively, successively or concurrently at such time or at such
times as the Lender deems expedient.

         17. Suretyship Waivers by Company. The Company waives demand, notice,
             -----------------------------
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Company assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Lender may deem advisable. The Lender shall have no
duty as to the collection or protection of the Collateral or any income
therefrom, the preservation of rights against prior parties, or the preservation
of any rights pertaining thereto beyond the safe custody thereof as set forth in
Section 10.2. The Company further waives any and all other suretyship defenses.

                                       6

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         18. Marshalling. The Lender shall not be required to marshal any
             -----------
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of the rights and remedies of the Lender hereunder
and of the Lender in respect of such collateral security and other assurances of
payment shall be cumulative and in addition to all other rights and remedies,
however existing or arising. To the extent that it lawfully may, the Company
hereby agrees that it will not invoke any law relating to the marshalling of
collateral which might cause delay in or impede the enforcement of the Lender's
rights and remedies under this Agreement or under any other instrument creating
or evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Company hereby
irrevocably waives the benefits of all such laws.

         19. Proceeds of Dispositions; Expenses. The Company shall pay to the
             ----------------------------------
Lender on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Lender in protecting, preserving or
enforcing the Lender's rights and remedies under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses, the
residue of any proceeds of collection or sale or other disposition of Collateral
shall, to the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as is provided in the Loan Agreement,
proper allowance and provision being made for any Obligations not then due. Upon
the final payment and satisfaction in full of all of the Obligations and after
making any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the
Uniform Commercial Code of the State, any excess shall be returned to the
Company. In the absence of final payment and satisfaction in full of all of the
Obligations, the Company shall remain liable for any deficiency.

         20. Overdue Amounts. Until paid, all amounts due and payable by the
             ---------------
Company hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Loan Agreement.

         21. Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
             --------------------------------------
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY: (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK; (B) CONSENTS THAT
ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (C) AGREES THAT
SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY REGISTERED

                                       7

<PAGE>

OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE COMPANY AT ITS ADDRESS SET FORTH IN SECTION 8.1 OF THE LOAN
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO; (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND (E) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.

         22. Waiver of Jury Trial. EACH OF THE COMPANY AND THE LENDER HEREBY
             --------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

         23. Effectiveness; Termination. This Agreement shall become effective
             --------------------------
upon the advance of the Loan on the Funding Date. This Agreement shall terminate
automatically upon the earlier to occur of the (x) the Effective Date (as such
term is defined in the Assignment Agreement, of even date herewith, by and
between Lender, the Company and Constellation C3D, Inc. and (y) November 18,
2002; provided, however, that the Company shall have no further Obligations to
      --------  -------
the Lender under the Loan Agreement. Upon the termination of this Agreement, the
security interest in the Collateral created hereby by immediately cease, the
Lender shall promptly return any Collateral held by the Lender pursuant to the
terms hereof, and the Lender shall promptly file in any filing office where
financing statements have been filed in respect of the Collateral pursuant to
Section 3 hereof, an amended to such financing statements terminating their
effectiveness.

         24. Miscellaneous. The headings of each section of this Agreement are
             -------------
for convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of the
Lender, and its successors and assigns. If any term of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity of all other terms
hereof shall in no way be affected thereby, and this Agreement shall be
construed and be enforceable as if such invalid, illegal or unenforceable term
had not been included herein. The Company acknowledges receipt of a copy of this
Agreement.

                  [remainder of page intentionally left blank]

                                       8

<PAGE>

         IN WITNESS WHEREOF, intending to be legally bound, the Company has
caused this Agreement to be duly executed as of the date first above written.

                                            CONSTELLATION 3D TECHNOLOGY LIMITED

                                            By:/s/ Eugene Levich
                                               ---------------------------------
                                               Name:  Eugene Levich
                                               Title: Director

ACCEPTED:

TIC TARGET INVEST CONSULTING, LLC

By: /s/ Andre Khayyam
    ------------------------------
Name:   Andre Khayyam
Title:  Managing Director

                                       9

<PAGE>

                                   SCHEDULE A

              Identification, Ownership and Location of Collateral
              ----------------------------------------------------<PAGE>
                                                                    Exhibit 4.11

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

              AMENDED AND RESTATED COMMON STOCK ADJUSTMENT WARRANT

No. AW4

             To Receive Shares of $.00001 Par Value Common Stock of

                             CONSTELLATION 3D, INC.

     THIS CERTIFIES that, for value received, The Gleneagles Fund Company II
(the "Purchaser") is entitled, upon the terms, at the times and subject to the
conditions hereinafter set forth, at any time following the issuance of this
Adjustment Warrant but prior to 11:59 p.m. New York City time on August 20, 2006
(the "Termination Date"), to subscribe for and receive from time to time from
CONSTELLATION 3D, INC., a Delaware corporation (the "Company"), all or any
portion of an aggregate number of shares of the Company's Common Stock of the
Company determined pursuant to Section 3 hereof (the "Adjustment Shares"). The
"Exercise Price" of this Adjustment Warrant is $0. This Adjustment Warrant is
being issued in connection with the Amended and Restated Common Stock Purchase
Agreement dated as of August 16, 2001 (the "Purchase Agreement") entered into by
the Company and the Purchaser and the Amended and Restated Registration Rights
Agreement dated as of August 16, 2001 (the "Registration Rights Agreement")
entered into by the Company and the Purchaser. Any capitalized terms used but
not defined in this Adjustment Warrant shall have the meaning specified in the
Purchase Agreement.

1.   Title of Adjustment Warrant. Prior to the expiration hereof and subject to
     ---------------------------
     compliance with applicable laws, this Adjustment Warrant and all rights
     hereunder are transferable, in whole or in respect of the right to receive
     any part of the Adjustment Shares, at the office or agency of the Company
     by the holder hereof in person or by duly authorized attorney, upon
     surrender of this Adjustment Warrant together with (a) the Assignment Form
     annexed hereto properly endorsed, and (b) any other documentation
     reasonably necessary to satisfy the Company that such transfer is in
     compliance with all applicable securities laws.

2.   Authorization of Shares. The Company covenants that all shares of Common
     -----------------------
     Stock which may be issued upon the exercise from time to time of rights
     represented by this Adjustment Warrant will be duly authorized, validly
     issued, fully paid and nonassessable and free from all taxes, liens and
     charges in respect of the issue thereof (other than taxes

<PAGE>

     in respect of any transfer occurring contemporaneously with such issue or
     otherwise specified herein).

3.   Exercise of Adjustment Warrant for Adjustment Shares.
     ----------------------------------------------------

(a)  Definitions.
     -----------

     "Adjusted Available Period" for a particular Trading Day during the Pricing
     Period shall mean the full Trading Day less any time during such Trading
     Day that (A) the Registration Statement or any prospectus or prospectus
     supplement is not available for the sale of shares of Common Stock by the
     Purchaser, (B) trading of the Common Stock on the Principal Market is
     suspended or halted while the Principal Market is open for trading, (C)
     trading on the Principal Market in general is suspended or halted, and (D)
     the Common Stock is not listed or included for quotation on an Approved
     Market.

     "Adjusted Dollar Amount" shall mean, for any Trading Day during the Pricing
     Period the lesser of (a) $50,000 minus the Pro Rated Recoupment Amount and
     (b) the product of (I) the Adjusted Volume Limit for such Trading Day and
     (II) 94% of the VWAP during the Adjusted Available Period of such Trading
     Day; provided, that the Adjusted Dollar Amount for the final Trading Day of
     the Pricing Period shall equal (I) $1,000,000 minus (II) the sum of the
     Adjusted Dollar Amounts for each prior Trading Day during the Pricing
     Period plus the Recoupment Amount. For the avoidance of doubt, the Adjusted
     Dollar Amount shall be zero for any Trading Day on which the Adjusted
     Volume Limit is zero or on which any one or more of the events described in
     subsections (A), (B), (C) and (D) of the definition of Adjusted Available
     Period lasts for the entire duration of such Trading Day.

     "Adjusted Share Amount" for a particular Trading Day during the Pricing
     Period shall equal (a) the Adjusted Dollar Amount for such Trading Day
     divided by (b) 94% of the VWAP for such Trading Day. For the avoidance of
     doubt, the Adjusted Share Amount shall be zero for any Trading Day on which
     the Adjusted Volume Limit is zero or on which any one or more of the events
     described in subsections (A), (B), (C) and (D) of the definition of
     Adjusted Available Period lasts for the entire duration of such Trading
     Day.

     "Adjusted Volume Limit" for a particular Trading Day during the Pricing
     Period shall mean 10% of the trading volume for the Common Stock on the
     Principal Market during the Adjusted Available Period, as reported by
     Bloomberg Financial L.P. (provided, that for the purpose of determining the
     trading volume (I) individual trades of 20,000 shares or more of Common
     Stock shall not be counted and (II) all transactions other than bona fide,
     arm's length transactions between or among unaffiliated and unrelated
     persons and entities shall not be counted).

     "Approved Market" shall have the meaning given to such term in the Purchase
     Agreement.

                                       2

<PAGE>

     "Daily Recoupment Amount" shall mean, with respect to any Trading Day
     during the Notice Period, the dollar amount determined by multiplying (I)
     the number of shares of Common Stock priced for such Trading Day pursuant
     to the delivery of a Pricing Notice by (II) 94% of the VWAP for that
     Trading Day.

     "Effective Date" shall have the meaning given to such term in the Purchase
     Agreement.

     "Initial Shares" shall mean the 714,286 shares of the Company's common
     stock purchased by the Purchaser from the Company in connection with the
     execution of the Purchase Agreement.

     "Initial Shares Repurchase Price" shall equal $1,150,000 minus the
     Recoupment Amount.

     "Notice Period" shall mean the period commencing at the time this
     Adjustment Warrant is issued to the Purchaser and terminating on (and
     including) the calendar day prior to the start of the Pricing Period.

     "Pricing Period" shall mean the period commencing on the first to occur of
     (a) the third Trading Day following the Effective Date or (b) December 15,
     2001, and expiring on the date on which the sum of the Adjusted Dollar
     Amounts from and including the date on which the Pricing Period commenced
     equals $1,000,000 minus the Recoupment Amount.

     "Pro Rated Recoupment Amount" shall mean product of (I) .05 and (II) the
     Recoupment Amount.

     "Recoupment Amount" shall mean the sum of the Daily Recoupment Amounts;
     provided, however, that the Recoupment Amount shall in no event exceed
     --------
     $1,000,000.

     "Registration Statement" shall have the meaning given to such term in the
     Purchase Agreement.

     "Resale Notice" shall have the meaning given to such term in the Purchase
     Agreement.

     "Trading Day" shall have the meaning given to such term in the Purchase
     Agreement.

     "VWAP" shall have the meaning given to such term in the Purchase Agreement.

     "Warrant Repurchase Price" shall equal the product of (a) the number of
     Adjustment Shares for which this Warrant is exercisable and (b) the greater
     of (I) 115% of the VWAP on the Trading Day prior to the date on which the
     Adjustment Repurchase Notice is delivered to the Company and (II) 115% of
     the average of the VWAPs for each Trading Day of the Pricing Period. If the
     Warrant Repurchase Price determined according to this formula would be a
     negative number, the Warrant Repurchase Price shall instead be equal to
     zero.

                                       3

<PAGE>

(b)  Pricing Notices. At any time and from time to time during the Notice
     ---------------
     Period, the Purchaser may deliver one or more written notices to the
     Company (each a "Pricing Notice") specifying a number of shares of common
     stock to be "priced" with respect to the particular Trading Day identified
     in the Pricing Notice (such number of shares being a component of the Daily
     Recoupment Amount for such Trading Day). A Pricing Notice with respect to a
     particular Trading Day must be given by 11:59 p.m. New York City time on
     the immediately following Trading Day.

(c)  Adjustment Share Calculations. The number of Adjustment Shares for which
     -----------------------------
     this Adjustment Warrant is exercisable shall be determined by subtracting
     (I) the number of Initial Shares from (II) the sum of (A) the sum of the
     Adjusted Share Amounts for each Trading Day during the Pricing Period and
     (B) the number of shares for which Pricing Notices were delivered in
     accordance with Section 3(b) above (each such amount as appropriately
     adjusted for any stock splits, reverse stock splits, recapitalizations,
     stock dividends and other like events). If the result of this calculation
     is zero or a negative number, this Adjustment Warrant shall not be
     exercisable at all. Notwithstanding the forgoing, the number of Adjustment
     Shares for which this Adjustment Warrant is exercisable shall not exceed
     9,200,000 minus the number of shares of common stock previously issued to
     the Purchaser under the Purchase Agreement.

(d)  Exercise of Adjustment Warrant. Exercise of the rights represented by this
     ------------------------------
     Adjustment Warrant may be made at any time or times following the end of
     the Pricing Period, in whole or in part, by the delivery of a Notice of
     Exercise in the form annexed hereto duly completed and executed, at the
     principal office of the Company (or such other office or agency of the
     Company as it may designate by notice in writing to the registered holder
     hereof at the address of such holder appearing on the books of the
     Company); whereupon the holder of this Adjustment Warrant shall be entitled
     to receive a certificate for the number of Adjustment Shares for which this
     Adjustment Warrant has been so exercised. Certificates for Adjustment
     Shares shall be delivered to the holder hereof within three (3) Trading
     Days after the date on which this Adjustment Warrant shall have been
     exercised as aforesaid. An exercise of this Adjustment Warrant shall be
     deemed for all purposes a "cashless" exercise. It shall not be necessary
     for the Purchaser to deliver this Adjustment Warrant to the Company upon
     any exercise hereof.

(e)  Failure to Deliver Adjustment Shares. If the Company fails to deliver the
     ------------------------------------
     specified number of Adjustment Shares to the Purchaser within 10 Trading
     Days of the time and at the place specified herein therefore, then the
     Purchaser may, without reducing its other rights at law or in equity, at
     any time following such 10th Trading Day (and regardless of whether such
     Adjustment Shares are subsequently delivered by the Company) deliver one or
     more written notices to the Company (each such notice being an "Adjustment
     Repurchase Notice") specifying a date and time not sooner than one Trading
     Day following the date of such notice on which there shall be a closing
     with respect to such Adjustment Repurchase Notice. At such closing, the
     Company shall repurchase from the Purchaser for cash all or such portion of
     the Adjustment Shares specified by the Purchaser in the Repurchase Notice
     at a per share price equal to the greater of (I) 115% of the VWAP on the
     Trading Day prior to the date on which the Adjustment Repurchase

                                       4

<PAGE>

     Notice is delivered to the Company and (II) 115% of the VWAP on the Trading
     Day on which such Adjustment Shares were required to be delivered to the
     Purchaser pursuant hereto.

(f)  Failure to Register Adjustment Shares. If the Company fails to have a
     -------------------------------------
     Registration Statement covering the resale by the Purchaser of all of the
     Adjustment Shares declared effective by the SEC in accordance with the
     Registration Rights Agreement by December 15, 2001, the Purchaser may at
     any time thereafter (regardless of whether such a Registration Statement is
     declared effective subsequent to December 15, 2001) deliver an Adjustment
     Repurchase Notice to the Company specifying a date and time not sooner than
     one Trading Day following the date of such notice on which there shall be a
     closing with respect to such Adjustment Repurchase Notice. At such closing,
     the Company shall repurchase from the Purchaser for cash this Adjustment
     Warrant at a price equal to the Warrant Repurchase Price.

(g)  Repurchase of Initial Shares. If (A) the Adjusted Volume Limit on five or
     ----------------------------
     more consecutive Trading Days during the Pricing Period is equal to zero,
     or (B) the Initial Shares are not effectively registered and available for
     public resale by the Purchaser in accordance with the terms of the
     Registration Rights Agreement by December 15, 2001, the Purchaser may at
     any time following either such event (and regardless of whether the Initial
     Shares are subsequently so registered and available for resale) deliver one
     or more written notices to the Company (each such notice being an "Initial
     Shares Repurchase Notice") specifying a date and time not sooner than one
     Trading Day following the date of such notice on which there shall be a
     closing with respect to such Initial Shares Repurchase Notice. At such
     closing, the Company shall repurchase from the Purchaser for cash all of
     the Initial Shares at an aggregate price equal to the Initial Shares
     Repurchase Price.

(h)  Adjustments. The number of Adjustment Shares shall be appropriately
     -----------
     adjusted to reflect any stock split, reverse stock split, stock dividend,
     recapitalization or similar event so that the Purchaser receives the same
     economically equivalent value of Adjustment Shares as it would in the
     absence of such event.

(i)  Miscellaneous. The Adjustment Shares shall upon delivery to the Purchaser
     -------------
     be fully-paid, nonassessable, shares of Common Stock, and, provided that
     (I) the Purchaser has delivered a Resale Notice to the Company or the
     Company's transfer agent prior to or on the date of delivery of such
     Adjustment Shares and (II) there was an effective Registration Statement
     covering the resale of such Adjustment Shares at the time they were resold
     by the Purchaser, such Adjustment Shares shall be freely tradable and the
     certificates representing such Adjustment Shares shall be free of any
     legends or stop transfer restrictions.

(j)  Transfer or Resale. The Purchaser understands that the sale of the
     ------------------
     Adjustment Shares to the Purchaser has not been registered under the 1933
     Act or any state securities laws, and such shares may not be offered for
     sale, sold, assigned or transferred unless (1) subsequently registered
     thereunder pursuant to the Registration Rights Agreement or

                                       5

<PAGE>

     otherwise or (2) an exemption exists permitting such shares to be sold,
     assigned or transferred without such registration. Accordingly, absent such
     registration, the Adjustment Shares will be issued to the Purchaser with a
     legend to such effect.

4.   Non-Certificated Shares, In lieu of delivering physical certificates
     -----------------------
     representing the Adjustment Shares, provided the Company's transfer agent
     is participating in the Depository Trust Company ("DTC") Fast Automated
     Securities Transfer ("FAST") program, upon request of the Adjustment
     Warrant holder, the Company shall use its best efforts to cause its
     transfer agent to electronically transmit the Adjustment Shares to the
     Adjustment Warrant holder by crediting the account of the Adjustment
     Warrant holder's prime broker with DTC through its Deposit Withdrawal Agent
     Commission ("DWAC") system. The time periods for delivery described in the
     immediately preceding paragraph shall apply to the electronic transmittals
     described herein.

5.   No Fractional Shares or Scrip. No fractional shares or scrip representing
     -----------------------------
     fractional shares shall be issued upon the issuance of the Adjustment
     Shares

6.   Charges, Taxes and Expenses. Issuance of certificates for shares of Common
     ---------------------------
     Stock upon the exercise of this Adjustment Warrant shall be made without
     charge to the holder hereof for any issue or transfer tax or other
     incidental expense in respect of the issuance of such certificate, all of
     which taxes and expenses shall be paid by the Company, and such
     certificates shall be issued in the name of the holder of this Adjustment
     Warrant or in such name or names as may be directed by the holder of this
     Adjustment Warrant; provided, however, that in the event certificates for
                         --------   -------
     shares of Common Stock are to be issued in a name other than the name of
     the holder of this Adjustment Warrant, this Adjustment Warrant when
     surrendered for exercise shall be accompanied by the Assignment Form
     attached hereto duly executed by the holder hereof; and provided further,
                                                             -------- -------
     that the Company shall not be required to pay any tax or taxes which may be
     payable in respect of any transfer involved in the issuance of any
     Adjustment Warrant certificates or any certificates for the Adjustment
     Shares other than the issuance of a Adjustment Warrant certificate to the
     Purchaser in connection with its surrender of a Adjustment Warrant
     certificate upon the exercise of less than all of the Adjustment Warrants
     evidenced thereby, and the Company shall not be required to issue or
     deliver such certificates unless or until the person or persons requesting
     the issuance thereof shall have paid to the Company the amount of such tax
     or shall have established to the satisfaction of the Company that such tax
     has been paid.

7.   Closing of Books. The Company will at no time close its shareholder books
     ----------------
     or records in any manner which interferes with the timely exercise of this
     Adjustment Warrant.

8.   No Rights as Shareholder until Exercise. Subject to Section 13 of this
     ---------------------------------------
     Adjustment Warrant and the provisions of any other written agreement
     between the Company and the Purchaser, the Purchaser shall not be entitled
     to vote or receive dividends or be deemed the holder of Adjustment Shares
     or any other securities of the Company that may at any time be issuable on
     the exercise hereof for any purpose, nor shall anything contained herein be
     construed to confer upon the Purchaser, as such, any of the rights of a

                                       6

<PAGE>

     stockholder of the Company or any right to vote for the election of
     directors or upon any matter submitted to stockholders at any meeting
     thereof, or to give or withhold consent to any corporate action (whether
     upon any recapitalization, issuance of stock, reclassification of stock,
     change of par value, or change of stock to no par value, consolidation,
     merger, conveyance or otherwise) or to receive notice of meetings, or to
     receive dividends or subscription rights or otherwise until the Adjustment
     Warrant shall have been exercised as provided herein. However, at the time
     of the exercise of this Adjustment Warrant pursuant to Section 3 hereof,
     the Adjustment Shares received hereunder shall be deemed to be issued to
     such holder as the record owner of such shares as of the close of business
     on the date on which this Adjustment Warrant shall have been exercised.

9.   Assignment and Transfer of Adjustment Warrant. This Adjustment Warrant may
     ---------------------------------------------
     be assigned in whole or in part by the surrender of this Adjustment Warrant
     and the Assignment Form annexed hereto duly executed at the office of the
     Company (or such other office or agency of the Company as it may designate
     by notice in writing to the registered holder hereof at the address of such
     holder appearing on the books of the Company); provided, however, that this
                                                    --------   -------
     Adjustment Warrant may not be resold or otherwise transferred except (i) in
     a transaction registered under the Securities Act of 1933, as amended (the
     "Act"), or (ii) in a transaction pursuant to an exemption, if available,
     from registration under the Act and whereby, if requested by the Company,
     an opinion of counsel reasonably satisfactory to the Company is obtained by
     the holder of this Adjustment Warrant to the effect that the transaction is
     so exempt.

10.  Loss, Theft, Destruction or Mutilation of Adjustment Warrant. Upon receipt
     ------------------------------------------------------------
     by the Company of evidence reasonably satisfactory to it of the loss,
     theft, destruction or mutilation of any Adjustment Warrant or stock
     certificate representing the Adjustment Shares, and in case of loss, theft
     or destruction, of indemnity reasonably satisfactory to it, and upon
     reimbursement to the Company of all reasonable expenses incidental thereto.
     Upon surrender and cancellation of such Adjustment Warrant or stock
     certificate, if mutilated, the Company will make and deliver a new
     Adjustment Warrant or stock certificate of like tenor and dated as of such
     cancellation, in lieu of this Adjustment Warrant or stock certificate.

11.  Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
     ---------------------------------
     taking of any action or the expiration of any right required or granted
     herein shall be a Saturday, Sunday or a legal holiday, then such action may
     be taken or such right may be exercised on the next succeeding day not a
     legal holiday.

12.  Effect of Certain Events. If at any time after the date hereof there shall
     ------------------------
     be a merger or consolidation of the Company with or into, or a transfer of
     all or substantially all of the assets of the Company to, another entity
     (collectively, a "Sale or Merger Transaction"), the holder of this
     Adjustment Warrant shall have the right thereafter to purchase, by exercise
     of this Adjustment Warrant, the kind and amount of cash, shares and other
     securities and property which it would have owned or have been entitled to
     receive after the happening of such transaction had this Adjustment Warrant
     been exercised
                                       7

<PAGE>

     immediately prior thereto, subject to further adjustment as provided in
     Section 13. Notwithstanding the above, a Sale or Merger Transaction shall
     not be deemed to occur in the event the Company is the acquiring entity in
     connection with an acquisition by the Company.

13.  Adjustment of Number of Adjustment Warrant Shares. The number of and kind
     -------------------------------------------------
     of securities purchasable upon exercise of this Adjustment Warrant shall be
     subject to adjustment from time to time as follows:

(a)  Subdivisions, Combinations and other Issuances. If the Company shall at any
     ----------------------------------------------
     time after the date hereof but prior to the expiration of this Adjustment
     Warrant subdivide its outstanding securities as to which purchase rights
     under this Adjustment Warrant exist, by split-up, spin-off, or otherwise,
     or combine its outstanding securities as to which purchase rights under
     this Adjustment Warrant exist, the number of Adjustment Shares as to which
     this Adjustment Warrant is exercisable as of the date of such subdivision,
     split-up, spin-off or combination shall forthwith be proportionately
     increased in the case of a subdivision, or proportionately decreased in the
     case of a combination.

(b)  Stock Dividend. If at any time after the date hereof the Company declares a
     ---------------
     dividend or other distribution on Common Stock payable in Common Stock or
     other securities or rights convertible into Common Stock ("Common Stock
     Equivalents") without payment of any consideration by holders of Common
     Stock for the additional shares of Common Stock or the Common Stock
     Equivalents (including the additional shares of Common Stock issuable upon
     exercise or conversion thereof), then the number of shares of Common Stock
     for which this Adjustment Warrant may be exercised shall be increased as of
     the record date (or the date of such dividend distribution if no record
     date is set) for determining which holders of Common Stock shall be
     entitled to receive such dividends, in proportion to the increase in the
     number of outstanding shares (and shares of Common Stock issuable upon
     conversion of all such securities convertible into Common Stock) of Common
     Stock as a result of such dividend.

(c)  Other Distributions. If at any time after the date hereof the Company
     -------------------
     distributes to holders of Common Stock, other than as part of its
     dissolution, liquidation or the winding up of its affairs, any shares of
     its capital stock, any evidence of indebtedness or any of its assets (other
     than Common Stock), then the number of Adjustment Shares for which this
     Adjustment Warrant is exercisable shall be increased to equal: (i) the
     number of Adjustment Shares for which this Adjustment Warrant is
     exercisable immediately prior to such event, (ii) multiplied by a fraction,
     (A) the numerator of which shall be the Fair Market Value (as defined
     below) per share of Common Stock on the record date for the dividend or
     distribution, and (B) the denominator of which shall be the Fair Market
     Value price per share of Common Stock on the record date for the dividend
     or distribution minus the amount allocable to one share of Common Stock of
     the value (as jointly determined in good faith by the Board of Directors of
     the Company and the Adjustment Warrant holder) of any and all such
     evidences of indebtedness, shares of capital stock, other securities or
     property, so distributed. In lieu of such change to the number of
     Adjustment Shares for which this Adjustment Warrant is exercisable, the
     Purchaser may

                                       8

<PAGE>

     elect, in its sole discretion, to participate in such distribution and
     receive the shares of capital stock, evidence of indebtedness or other
     assets on an "as exercised" basis as if the Adjustment Warrant had been
     exercised in full for Adjustment Shares as of the record date for such
     distribution, without regard to the restrictions contained in Section 14.

     For purposes of this Adjustment Warrant, "Fair Market Value" shall equal
     the 10 Trading Day average closing trading price of the Common Stock on the
     Principal Market for the 10 Trading Days preceding the date of
     determination or, if the Common Stock is not listed or admitted to trading
     on any Principal Market, the average of the closing bid and asked prices on
     the over-the-counter market as furnished by any New York Stock Exchange
     member firm reasonably selected from time to time by the Company for that
     purpose and reasonably acceptable to the Holder, or, if the Common Stock is
     not listed or admitted to trading on the Principal Market or traded
     over-the-counter and the average price cannot be determined as contemplated
     above, the Fair Market Value of the Common Stock shall be as reasonably
     determined in good faith by the Company's Board of Directors with the
     concurrence of the Holder.

(d)  Merger. The Company will not merge or consolidate with or into any other
     ------
     corporation, or sell or otherwise transfer its property, assets and
     business substantially as an entirety to another corporation, unless the
     corporation resulting from such merger or consolidation (if not the
     Company), or such transferee corporation, as the case may be, shall
     expressly assume in writing the due and punctual performance and observance
     of each and every covenant and condition of this Adjustment Warrant to be
     performed and observed by the Company.

(e)  Reclassification, etc. If at any time after the date hereof there shall be
     ---------------------
     a reorganization or reclassification of the securities as to which purchase
     rights under this Adjustment Warrant exist into the same or a different
     number of securities of any other class or classes, then the Adjustment
     Warrant Holder shall thereafter be entitled to receive upon exercise of
     this Adjustment Warrant, during the period specified herein, the number of
     shares or other securities or property resulting from such reorganization
     or reclassification, which would have been received by the Adjustment
     Warrant Holder for the shares of stock subject to this Adjustment Warrant
     had this Adjustment Warrant at such time been exercised.

14.  9.99% Limitation.
     ----------------

(a)  Notwithstanding anything to the contrary contained herein, the number of
     shares of Common Stock that may be acquired by the holder upon exercise
     pursuant to the terms hereof shall not exceed a number that, when added to
     the total number of shares of Common Stock deemed beneficially owned by
     such holder (other than by virtue of the ownership of securities or rights
     to acquire securities (including the Warrants) that have limitations on the
     holder's right to convert, exercise or purchase similar to the limitation
     set forth herein), together with all shares of Common Stock deemed
     beneficially owned (other than by virtue of the ownership of securities or
     rights to acquire securities that have limitations on the right to convert,
     exercise or purchase similar to the limitation set forth

                                       9

<PAGE>

     herein) by the holder's "affiliates" (as defined Rule 144 of the Act)
     ("Aggregation Parties") that would be aggregated for purposes of
     determining whether a group under Section 13(d) of the Securities Exchange
     Act of 1934, as amended, exists, would exceed 9.99% of the total issued and
     outstanding shares of the Company's Common Stock (the "Restricted Ownership
     Percentage"). Each holder shall have the right (w) at any time and from
     time to time to reduce its Restricted Ownership Percentage immediately upon
     notice to the Company and (x) at any time and from time to time, to
     increase its Restricted Ownership Percentage immediately in the event of
     the announcement as pending or planned of an event of:

          (i) any consolidation or merger of the Company with or into any other
     corporation or other entity or person (whether or not the Company is the
     surviving corporation), or any other corporate reorganization or
     transaction or series of related transactions in which in excess of 50% of
     the Company's voting power is transferred through a merger, consolidation,
     tender offer or similar transaction,

          (ii) any person (as defined in Section 13(d) of the Exchange Act),
     together with its affiliates and associates (as such terms are defined in
     Rule 405 under the 1933 Act), beneficially owns or is deemed to
     beneficially own (as described in Rule 13d-3 under the Exchange Act without
     regard to the 60-day exercise period) in excess of 50% of the Company's
     voting power,

          (iii) there is a replacement of more than one-half of the members of
     the Company's Board of Directors which is not approved by those individuals
     who are members of the Company's Board of Directors on the date thereof, in
     one or a series of related transactions, or

          (iv) a sale or transfer of all or substantially all of the assets of
     the Company, determined on a consolidated basis.

(b)  The Company's obligation to issue shares of Common Stock which would exceed
     such limits referred to in this Section 14 shall be suspended to the extent
     necessary until such time, if any, as shares of Common Stock may be issued
     in compliance with such restrictions.

15.  Miscellaneous.
     -------------

(a)  Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS ADJUSTMENT
     ----------------------------------
     WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS IF
     IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF. THIS
     ADJUSTMENT WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE
     COMPANY. THIS ADJUSTMENT WARRANT WILL BE CONSTRUED AND ENFORCED IN
     ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT
     FOR MATTERS ARISING UNDER THE ACT, WITHOUT REFERENCE TO PRINCIPLES OF
     CONFLICTS OF LAW. EACH OF THE PARTIES

                                       10

<PAGE>

     CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE U.S. DISTRICT COURT SITTING
     IN THE STATE OF CITY OF NEW YORK IN THE STATE OF NEW YORK IN CONNECTION
     WITH ANY DISPUTE ARISING UNDER THIS ADJUSTMENT WARRANT AND HEREBY WAIVES,
     TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY
     OBJECTION BASED ON FORUM NON CONVENIENS, TO THE BRINGING OF ANY SUCH
                        ----- ---  ----------
     PROCEEDING IN SUCH JURISDICTION. EACH PARTY HEREBY AGREES THAT IF THE OTHER
     PARTY TO THIS ADJUSTMENT WARRANT OBTAINS A JUDGMENT AGAINST IT IN SUCH A
     PROCEEDING, THE PARTY WHICH OBTAINED SUCH JUDGMENT MAY ENFORCE SAME BY
     SUMMARY JUDGMENT IN THE COURTS OF ANY COUNTRY HAVING JURISDICTION OVER THE
     PARTY AGAINST WHOM SUCH JUDGMENT WAS OBTAINED, AND EACH PARTY HEREBY WAIVES
     ANY DEFENSES AVAILABLE TO IT UNDER LOCAL LAW AND AGREES TO THE ENFORCEMENT
     OF SUCH A JUDGMENT. EACH PARTY TO THIS ADJUSTMENT WARRANT IRREVOCABLY
     CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY THE MAILING OF
     COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
     PARTY AT ITS ADDRESS IN ACCORDANCE WITH SECTION 15(C). NOTHING HEREIN SHALL
     AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER
     PERMITTED BY LAW. EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.

(b)  Modification and Waiver. This Adjustment Warrant and any provisions hereof
     -----------------------
     may be changed, waived, discharged or terminated only by an instrument in
     writing signed by the party against which enforcement of the same is
     sought. Any amendment effected in accordance with this paragraph shall be
     binding upon the Purchaser, each future holder of this Adjustment Warrant
     and the Company. No waivers of, or exceptions to, any term, condition or
     provision of this Adjustment Warrant, in any one or more instances, shall
     be deemed to be, or construed as, a further or continuing waiver of any
     such term, condition or provision.

(c)  Notices. Any notice, request or other document required or permitted to be
     -------
     given or delivered to the Purchaser or future holders hereof or the Company
     shall be personally delivered or shall be sent by certified or registered
     mail, postage prepaid, to the Purchaser or each such holder at its address
     as shown on the books of the Company or to the Company at the address set
     forth in the Purchase Agreement. All notices under this Adjustment Warrant
     shall be deemed to have been given when received.

     A party may from time to time change the address to which notices to it are
     to be delivered or mailed hereunder by notice in accordance with the
     provisions of this Section 15(c).

(d)  Severability. Whenever possible, each provision of this Adjustment Warrant
     ------------
     shall be interpreted in such manner as to be effective and valid under
     applicable law, but if any provision of this Adjustment Warrant is held to
     be invalid, illegal or unenforceable in any respect under any applicable
     law or rule in any jurisdiction, such invalidity, illegality or

                                       11

<PAGE>

     unenforceability shall not affect the validity, legality or enforceability
     of any other provision of this Adjustment Warrant in such jurisdiction or
     affect the validity, legality or enforceability of any provision in any
     other jurisdiction, but this Adjustment Warrant shall be reformed,
     construed and enforced in such jurisdiction as if such invalid, illegal or
     unenforceable provision had never been contained herein.

(e)  No Impairment. The Company will not, by amendment of its Certificate of
     -------------
     Incorporation or through any reorganization, transfer of assets,
     consolidation, merger, 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 Adjustment Warrant, but will at all
     times in good faith assist in the carrying out of all such terms and in the
     taking of all such action as may be necessary or appropriate in order to
     protect the rights of the Adjustment Warrant holder against impairment.
     Without limiting the generality of the foregoing, the Company (a) will not
     increase the par value of any Adjustment Shares above the amount payable
     therefore on such exercise, and (b) will take all such action as may be
     reasonably necessary or appropriate in order that the Company may validly
     and legally issue fully paid and nonassessable Adjustment Shares on the
     exercise of this Adjustment Warrant.

                                       12

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Adjustment Warrant to be
executed by its officer thereunto duly authorized.

Dated:  November 15, 2001

                                     CONSTELLATION 3D, INC.

                                     By: /s/ Michael Goldberg
                                         --------------------
                                         Name: Michael Goldberg
                                         Title: Director of Legal Affairs

                                       13

<PAGE>

                               NOTICE OF EXERCISE
                               ------------------

To:  CONSTELLATION 3D, INC.

(1) The undersigned hereby elects to receive ________ shares of Common Stock of
CONSTELLATION 3D, INC. pursuant to the terms of the attached Adjustment Warrant
in a "cashless" exercise.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                                  -------------------------------
                                              (Name)

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

                                  -------------------------------
                                            (Address)

(3) (At option of Purchaser:)Please issue a new Adjustment Warrant for the
unexercised portion of the attached Adjustment Warrant in the name of the
undersigned or in such other name as is specified below:

                        Other Name:
                                    -------------------

                                       -----------------------------------
                                                     (Name)

--------------------                   -----------------------------------
      (Date)                                       (Signature)

                                       -----------------------------------
                                                    (Address)

<PAGE>

                                 ASSIGNMENT FORM

              (To assign the foregoing Adjustment Warrant, execute
                   this form and supply required information.
            Do not use this form to exercise the Adjustment Warrant.)

     FOR VALUE RECEIVED, the foregoing Adjustment Warrant of Constellation 3D,
Inc. and all rights evidenced thereby are hereby assigned to

                                               whose address is
-----------------------------------------------

---------------------------------------------------------------.

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

                               Dated:                    ,
                                      -------------------

                           Holder's Signature:
                                                ----------------------
                           Holder's Address:
                                                ----------------------

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

Signature Guaranteed:
                     -------------------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Adjustment Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in an fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Adjustment Warrant.

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