Interactive Systems Worldwide, Inc. Signs Letter of Intent with Shantech, Inc. for Strategic International Marketing Agreement

Business Wire, March 6, 2007

- Proposed Agreement Would Include Strategic Investment in ISWI -

WEST PATERSON, N.J. -- Interactive Systems Worldwide, Inc. (NASDAQ: ISWI), has signed a Letter of Intent ("LOI") with Shantech Inc. Under the terms of the agreement, the two companies are to enter into a non-exclusive marketing and business development agreement under which Shantech would market ISWI's products internationally with a particular emphasis on certain Asian gaming markets.

As part of the contemplated transaction, Shantech, and/or parties identified by Shantech, would make a strategic investment of $2 million in ISWI and would receive Common Stock at a 20% discount to the closing market price, with a maximum of 2.4 million shares of Common Stock. In addition, Shantech would receive 50% warrant coverage, which will be exercisable at a 5% premium to the closing market price. These warrants will have a term of 5 years and will not be exercisable until 6 months after issuance.

Under the terms of the LOI, Shantech would provide marketing and business development services, and would receive commission fees based on the revenue resulting from its efforts. All marketing expenses would be borne by Shantech. In addition to the commission fees, Shantech would receive incentive bonuses in ISWI equity, subject to shareholder approval, for achieving certain revenue targets during the term of the marketing and business development arrangement. These revenue targets are the generation of a minimum of $10 million of revenue with at least 25% net profit during the first 12 months after the agreement is signed and the transaction closes, and/or for the generation of a minimum of $30 million of revenue with at least 25% net profit during the first 24 months after the agreement is signed and the transaction closes. The combination of strategic investments and incentive bonuses, if achieved, would likely result in Shantech becoming a controlling shareholder of ISWI.

Bernard Albanese, CEO of ISWI, said: "This is an exciting day for ISWI. The proposed agreement is an opportunity to enter Asia's substantial and growing gaming marketplace. Suneel Sawant, the founder and CEO of Shantech, has an impressive track record of creating value through the development of meaningful strategic relationships in Asia."

Suneel Sawant, CEO of Shantech, said: "We are excited at the prospects of establishing a relationship with Interactive Systems and the opportunities presented by this relationship. We believe that our network in certain Asian markets complements Interactive Systems' unique product line and that by working together, we will be able to expand ISWI's geographic reach."

The transaction contemplated by this non-binding LOI is subject to several conditions precedent, including the entering into a definitive agreement by the parties, completion of mutually satisfactory due diligence, satisfaction of appropriate representations and warranties, obtaining shareholder approval and other considerations. The term of the marketing agreement will be for 24 months. The definitive agreement is expected to be signed within 60-90 days.

About Interactive Systems Worldwide Inc.

Interactive Systems Worldwide Inc. (NASDAQ: ISWI) has designed, developed and patented a proprietary software system, the SportXction System, which enables play-by-play wagering during the course of live sporting events. ISWI, through its wholly owned subsidiary Global Interactive Gaming (GIG), operates the SportXction[R] System in the U.K., in conjunction with established media and traditional wagering partners. The system can accept wagers from the Internet, handheld wireless devices, interactive televisions, and standalone kiosks. The system can be used for any live broadcast event worldwide.

About Shantech Inc. and Suneel Sawant

Shantech Inc. was formed by Suneel Sawant to pursue opportunities in the international gaming marketplace. Mr. Sawant is an entrepreneur who has founded several companies. He is currently the founder and current Chairman of Software International, Inc. and also the founder, Chairman, and CEO of Sentinel World, a Homeland Security Company. Mr. Sawant is a seasoned senior technology advisor in the United States and overseas to Fortune 1000 companies.

FORWARD-LOOKING STATEMENTS: The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements, including, but not limited to, whether the described agreement will actually be signed and consummated in 60-90 days, or ever; whether the revenue targets described will be achieved; whether shareholder approval will be obtained; whether Nasdaq will consider that the Company's plan adequately addresses the issues raised by the Nasdaq Staff deficiency letter; and whether the Company will experience increased revenues, or any significant Asian revenues, from this marketing agreement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date thereof. Readers should carefully review the risks described in other documents the company files from time to time with the Securities and Exchange Commission, including Annual Reports, Quarterly Reports and Current Reports on Form 8-K.