WARRANT NO.: PA [_________]


                                 FORM OF WARRANT

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED,  OR THE  SECURITIES  LAWS OF ANY STATE.  THE SECURITIES
REPRESENTED  HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT,  AND
WITHOUT  A VIEW  TO  RESALE  OR  DISTRIBUTION  THEREOF,  AND  MAY  NOT BE  SOLD,
TRANSFERRED  OR  DISPOSED OF WITHOUT AN OPINION OF COUNSEL  SATISFACTORY  TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION  DOES NOT VIOLATE THE SECURITIES ACT OF
1933,  AS AMENDED,  THE RULES AND  REGULATIONS  THEREUNDER  OR OTHER  APPLICABLE
SECURITIES LAWS.


                               WARRANT TO PURCHASE
                                 COMMON STOCK OF
                         TOUCHSTONE RESOURCES USA, INC.

      This  warrant   ("Warrant")  is  to  verify  that,  FOR  VALUE   RECEIVED,
_________________________  ("Holder")  is entitled to  purchase,  subject to the
terms and conditions  hereof,  from  TOUCHSTONE  RESOURCES USA, INC., a Delaware
corporation (the "Company"), ___________ shares of common stock, $.001 par value
per share,  of the Company (the "Common  Stock"),  at any time during the period
commencing  at  9:00  a.m.,  Eastern  Standard  Time  on the  date  hereof  (the
"Commencement  Date") and ending at 5:00 p.m. Eastern Standard Time on the third
(3rd)  anniversary of the  Commencement  Date (the  "Termination  Date"),  at an
exercise  price (the "Exercise  Price") of $1.50 per share of Common Stock.  The
number of shares of Common Stock  purchasable  upon exercise of this Warrant and
the Exercise  Price per share shall be subject to  adjustment  from time to time
upon the occurrence of certain events as set forth below.

      The shares of Common  Stock or any other shares or other units of stock or
other securities or property,  or any combination thereof,  then receivable upon
exercise of this Warrant,  as adjusted from time to time, are sometimes referred
to hereinafter  as "Exercise  Shares." The exercise price per share as from time
to time in effect is referred to hereinafter as the "Exercise Price."

1. Exercise of Warrant; Issuance of Exercise Shares.

      (a) Exercise of Warrant.  Subject to the terms hereof, the purchase rights
represented  by this Warrant are  exercisable by the Holder in whole or in part,
at any time,  or from time to time,  by the  surrender  of this  Warrant and the
Notice of Exercise  annexed  hereto duly completed and executed on behalf of the
Holder,  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 Holder at the address of
the Holder appearing on the books of the Company)  accompanied by payment of the
Exercise Price in full either: (i) in cash or by bank or certified check for the
Exercise  Shares  with  respect to which  this  Warrant  is  exercised;  (ii) by
delivery to the Company of shares of the  Company's  Common  Stock having a Fair
Market Value (as defined  below) equal to the  aggregate  Exercise  Price of the
Exercise Shares being  purchased that Holder is the record and beneficial  owner
of and that have  been held by the  Holder  for at least six (6)  months;  (iii)
provided  that the sale of the  Exercise  Shares  are  covered  by an  effective
registration  statement,  by  delivering  to the  Company a Notice  of  Exercise
together with an irrevocable  direction to a broker-dealer  registered under the
Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act"),  to sell a
sufficient  portion  of the  Exercise  Shares  and  deliver  the sales  proceeds
directly to the Company to pay the Exercise Price; or (iv) by any combination of
the  procedures  set forth in  subsections  (i),  (ii) and (iii) of this Section
1(a).  For the purposes of this Section  1(a),  "Fair Market  Value" shall be an
amount equal to the average of the Current  Market Value (as defined  below) for
the ten (10) days preceding the Company's receipt of the duly executed Notice of
Exercise form attached hereto as Appendix A.


<PAGE>

      In the event that this  Warrant  shall be duly  exercised in part prior to
the Termination  Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.

      (b)  Issuance of Exercise  Shares:  Delivery of Warrant  Certificate.  The
Company  shall,  within  ten  (10)  business  days or as soon  thereafter  as is
practicable  of the exercise of this Warrant,  issue in the name of and cause to
be delivered to the Holder one or more  certificates  representing  the Exercise
Shares to which the Holder shall be entitled upon such exercise  under the terms
hereof. Such certificate or certificates shall be deemed to have been issued and
the Holder  shall be deemed to have  become the  record  holder of the  Exercise
Shares as of the date of the due exercise of this Warrant.

      (c) Exercise Shares Fully Paid and Non-assessable.  The Company agrees and
covenants that all Exercise Shares issuable upon the due exercise of the Warrant
represented  by this Warrant  certificate  ("Warrant  Certificate")  will,  upon
issuance  and payment  therefor in  accordance  with the terms  hereof,  be duly
authorized,  validly issued, fully paid and non-assessable and free and clear of
all taxes  (other than taxes  which,  pursuant to Section 2 hereof,  the Company
shall not be obligated to pay) or liens, charges, and security interests created
by the Company with respect to the issuance thereof.

      (d) Reservation of Exercise Shares.  The Company covenants that during the
term that this  Warrant  is  exercisable,  the  Company  will  reserve  from its
authorized  and unissued  Common Stock a sufficient  number of shares to provide
for the issuance of the Exercise  Shares upon the exercise of this Warrant,  and
from  time to time  will  take all steps  necessary  to amend  its  articles  of
incorporation to provide sufficient  reserves of shares of Common Stock issuable
upon the exercise of the Warrant.

      (e)  Fractional  Shares.  The  Company  shall  not be  required  to  issue
fractional  shares of capital  stock  upon the  exercise  of this  Warrant or to
deliver Warrant  Certificates that evidence  fractional shares of capital stock.
In the event  that any  fraction  of an  Exercise  Share  would,  except for the
provisions  of this  subsection  (e),  be  issuable  upon the  exercise  of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash  equal to such  fraction  multiplied  by the  Current  Market  Value of the
Exercise  Share on the last business day prior to the date on which this Warrant
is exercised.  For purposes of this  subsection  (e), the "Current Market Value"
for any day shall be determined as follows:


<PAGE>

            (i) if the Exercise Shares are traded in the over-the-counter market
and not on any  national  securities  exchange  and not on the  NASDAQ  National
Market  System or NASDAQ  Small Cap  Market  (together,  the  "NASDAQ  Reporting
System"),  the  average of the mean  between  the last bid and asked  prices per
share,  as reported by the National  Quotation  Bureau,  Inc.,  or an equivalent
generally accepted reporting service, or if not so reported,  the average of the
closing bid and asked  prices for an Exercise  Share as furnished to the Company
by any member of the National Association of Securities Dealers,  Inc., selected
by the Company for that purpose; or

            (ii) if the  Exercise  Shares  are  listed or  traded on a  national
securities  exchange or the NASDAQ  Reporting  System,  the closing price on the
principal national securities exchange on which they are so listed or traded, on
the NASDAQ Reporting  System, as the case may be, on the last business day prior
to the date of the exercise of this Warrant.  The closing  price  referred to in
this  clause  (ii) shall be the last  reported  sales  price or, in case no such
reported  sale takes place on such day, the average of the reported  closing bid
and asked prices,  in either case on the national  securities  exchange on which
the Exercise Shares are then listed or in the NASDAQ Reporting System; or

            (iii) if no such  closing  price or closing bid and asked prices are
available,  as determined in any  reasonable  manner as may be prescribed by the
Board of Directors of the Company.

2. Payment of Taxes.

      (a) Stamp Taxes. The Company will pay all documentary stamp taxes, if any,
attributable  to the initial  issuance of Exercise  Shares upon the  exercise of
this Warrant;  provided,  however, 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
issue of any Warrant  Certificates or any  certificates for Exercise Shares in a
name other than that of the Holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, 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.

      (b) Withholding. The Holder shall pay to the Company, or make arrangements
satisfactory  to the Company  regarding  payment of, any federal,  state,  local
and/or  payroll taxes of any kind required by law to be withheld with respect to
the grant of this Warrant or the issuance of the  Exercise  Shares.  The Company
may, to the extent  permitted by law,  deduct any such taxes from any payment of
any kind  otherwise  due to the Holder  whether or not pursuant to this Warrant.
The  Holder  may  elect,  with the  consent  of the  Company,  to have  such tax
withholding  obligation satisfied,  in whole or in part, by: (i) authorizing the
Company to withhold from the Exercise  Shares a number of shares of Common Stock
having an aggregate Fair Market Value that would satisfy the minimum withholding
amount due, or (ii) delivering to the Company a number of shares of Common Stock
of which the Holder is the record and  beneficial  owner and that have been held
by the Holder for at least six (6) months with an  aggregate  Fair Market  Value
that would satisfy the minimum  withholding  amount due. The Company may require
that any  fractional  share amount be settled in cash.  For the purposes of this
Section 2, Fair  Market  Value shall be  determined  as of the date on which the
amount of tax to be withheld is determined.


<PAGE>

3.  Mutilated  or Missing  Warrant  Certificates.  In case any Warrant  shall be
mutilated,  lost, stolen or destroyed,  the Company may in its discretion issue,
in exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and in substitution for the Warrant lost,  stolen or destroyed,  a
new Warrant or Warrants  of like tenor and in the same  aggregate  denomination,
but only (i) in the case of loss, theft or destruction, upon receipt of evidence
satisfactory  to the Company of such loss,  theft or destruction of such Warrant
and indemnity or bond, if requested,  also  satisfactory to them and (ii) in the
case of mutilation, upon surrender of the mutilated Warrant. Applicants for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company or its counsel may prescribe.

4. Rights of Holder.  The Holder  shall not, by virtue of anything  contained in
this Warrant or otherwise, be entitled to any right whatsoever, either in law or
equity, of a stockholder of the Company, including without limitation, the right
to  receive  dividends  or to vote  or to  consent  or to  receive  notice  as a
shareholder  in respect of the  meetings  of  shareholders  or the  election  of
directors of the Company or any other matter.

5.  Registration of Transfers and Exchanges.  The Warrant shall be transferable,
subject  to the  provisions  of  Section  7  hereof,  only upon the books of the
Company, if any, to be maintained by it for that purpose,  upon surrender of the
Warrant  Certificate to the Company at its principal  office  accompanied (if so
required by the Company) by a written  instrument or  instruments of transfer in
form  satisfactory  to the Company and duly executed by the Holder thereof or by
the duly appointed legal representative thereof or by a duly authorized attorney
and upon  payment of any  necessary  transfer tax or other  governmental  charge
imposed  upon  such  transfer.  In all cases of  transfer  by an  attorney,  the
original letter of attorney,  duly approved,  or an official copy thereof,  duly
certified,  shall be deposited and remain with the Company.  In case of transfer
by executors,  administrators,  guardians or other legal  representatives,  duly
authenticated evidence of their authority shall be produced, and may be required
to be  deposited  and remain with the Company in its  discretion.  Upon any such
registration of transfer,  a new Warrant shall be issued to the transferee named
in such instrument of transfer, and the surrendered Warrant shall be canceled by
the Company.

      Any  Warrant  may be  exchanged,  at the option of the Holder  thereof and
without change,  when surrendered to the Company at its principal  office, or at
the office of its transfer  agent, if any, for another Warrant or other Warrants
of like tenor and  representing  in the aggregate the right to purchase from the
Company a like number and kind of Exercise Shares as the Warrant surrendered for
exchange or transfer,  and the Warrant so  surrendered  shall be canceled by the
Company or transfer agent, as the case may be.


<PAGE>

6. Adjustment of Exercise Shares and Exercise Price.  The Exercise Price and the
number and kind of Exercise Shares purchasable upon the exercise of this Warrant
shall be subject to  adjustment  from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:

      (a) In case of any  consolidation  or merger of the Company  with  another
corporation  (other than a merger with another  corporation in which the Company
is the surviving  corporation and which does not result in any  reclassification
or  change  -- other  than a change  in par  value,  or from par value to no par
value,  or from no par value to par value,  or as a result of a  subdivision  or
combination -- of outstanding  Common Stock  issuable upon such  exercise),  the
rights of the Holder of this Warrant  shall be adjusted in the manner  described
below:

            (i) In the event that the Company is the surviving corporation or is
merged  into a wholly  owned  subsidiary  for the purpose of  incorporating  the
Company in a different  jurisdiction,  this Warrant  shall,  without  payment of
additional  consideration therefor, be deemed modified so as to provide that the
Holder of this Warrant,  upon the exercise  thereof,  shall procure,  in lieu of
each share of Common Stock theretofore issuable upon such exercise, the kind and
amount of shares of stock, other securities,  money and property receivable upon
such  reclassification,  change,  consolidation  or merger by the holder of each
share of Common Stock, had exercise of this Warrant occurred  immediately  prior
to such  reclassification,  change,  consolidation  or merger.  This Warrant (as
adjusted)  shall be deemed to provide for further  adjustments  that shall be as
nearly equivalent as may be practicable to the adjustments  provided for in this
Section 6. The provisions of this clause (i) shall similarly apply to successive
reclassifications, changes, consolidations and mergers.

            (ii) In the event that the Company is not the surviving  corporation
(except in the case of a merger of the Company  into a wholly  owned  subsidiary
for the  purpose of  incorporating  the  Company in a  different  jurisdiction),
Holder shall be given at least  fifteen (15) days prior  written  notice of such
transaction and shall be permitted to exercise this Warrant, to the extent it is
exercisable as of the date of such notice,  during this fifteen (15) day period.
Upon  expiration  of such  fifteen  (15) day  period,  this  Warrant  and all of
Holder's rights hereunder shall terminate.

      (b) If the  Company,  at any  time  while  this  Warrant,  or any  portion
thereof, remains outstanding and unexpired, by reclassification of securities or
otherwise,  shall change any of the securities as to which purchase rights under
this  Warrant  exist into the same or a different  number of  securities  of any
other class or classes,  this Warrant  shall  thereafter  represent the right to
acquire such number and kind of  securities  as would have been  issuable as the
result of such change with  respect to the  securities  that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor  shall be  appropriately  adjusted,
all subject to further adjustment as provided in this Section 6.

      (c) In case the Company shall (i) pay a dividend or make a distribution on
its shares of Common Stock in shares of Common Stock, (ii) subdivide or classify
its outstanding  Common Stock into a greater number of shares,  or (iii) combine
or reclassify its outstanding  Common Stock into a smaller number of shares, the
Exercise  Price in effect at the time of the record  date for such  dividend  or
distribution  or of the  effective  date of  such  subdivision,  combination  or
reclassification,  shall be  proportionally  adjusted so that the Holder of this
Warrant  exercised  after such date shall be entitled  to receive the  aggregate
number and kind of shares  that,  if this  Warrant  had been  exercised  by such
Holder  immediately  prior to such date,  he would have owned upon such exercise
and been entitled to receive upon such  dividend,  subdivision,  combination  or
reclassification.  For example, if the Company declares a 2 for 1 stock dividend
or stock split and the Exercise Price  immediately prior to such event was $2.00
per share,  the adjusted  Exercise Price  immediately  after such event would be
$1.00 per share. Such adjustment shall be made  successively  whenever any event
listed above shall occur.  Whenever the Exercise  Price payable upon exercise of
each Warrant is adjusted pursuant to this subsection (c), the number of Exercise
Shares  purchasable  upon  exercise  of this  Warrant  shall  simultaneously  be
adjusted by multiplying  the number of Exercise Shares  initially  issuable upon
exercise of this Warrant by the Exercise  Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.


<PAGE>

      (d) In the event  that at any  time,  as a result  of an  adjustment  made
pursuant  to  subsection  (a),  (b) or (c)  above,  the  Holder of this  Warrant
thereafter  shall become entitled to receive any Exercise Shares of the Company,
other  than  Common  Stock,  thereafter  the  number  of such  other  shares  so
receivable  upon exercise of this Warrant  shall be subject to  adjustment  from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.

      (e) Irrespective of any adjustments in the Exercise Price or the number or
kind of Exercise  Shares  purchasable  upon exercise of this  Warrant,  Warrants
theretofore  or  thereafter  issued may  continue  to express the same price and
number  and kind of  shares  as are  stated in the  similar  Warrants  initially
issuable pursuant to this Warrant.

      (f)  Whenever  the  Exercise  Price  shall be  adjusted as required by the
provisions of the foregoing  Section 6, the Company shall  forthwith file in the
custody of its Secretary or an Assistant  Secretary at its principal  office and
with its stock  transfer  agent,  if any, an officer's  certificate  showing the
adjusted  Exercise  Price  determined  as  herein  provided,  setting  forth  in
reasonable detail the facts requiring such adjustment,  including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be  necessary  to show the  reason for and the  manner of  computing  such
adjustment.  Each such  officer's  certificate  shall be made  available  at all
reasonable  times for inspection by the holder and the Company shall,  forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Holder.

      (g) All  calculations  under this  Section 6 shall be made to the  nearest
cent or to the nearest one  one-hundredth  (1/100th) of a share, as the case may
be.

7. Restrictions on Transferability: Restrictive Legend. Neither this Warrant nor
the  Exercise  Shares  shall  be  transferable  except  in  accordance  with the
provisions of this Section.

      (a)  Restrictions on Transfer;  Indemnification.  Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise  transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the  Securities  Act of 1933,  as amended (the "1933  Act"),  unless (i) such
security  has been  registered  for sale  under the 1933 Act and  registered  or
qualified under  applicable state securities laws relating to the offer and sale
of securities, or (ii) exemptions from the registration requirements of the 1933
Act and  the  registration  or  qualification  requirements  of all  such  state
securities  laws are available and the Company shall have received an opinion of
counsel  satisfactory to the Company that the proposed sale or other disposition
of such securities may be effected without  registration  under the 1933 Act and
would not  result in any  violation  of any  applicable  state  securities  laws
relating to the  registration  or  qualification  of securities  for sale,  such
counsel and such opinion to be satisfactory to the Company.


<PAGE>

      The Holder agrees to indemnify  and hold harmless the Company  against any
loss, damage, claim or liability arising from the disposition of this Warrant or
any Exercise  Share held by such holder or any interest  therein in violation of
the provisions of this Section 7.

      (b)  Restrictive  Legends.  Unless and until  otherwise  permitted by this
Section 7, this  Warrant  Certificate,  each Warrant  Certificate  issued to the
Holder or to any  transferee or assignee of this Warrant  Certificate,  and each
certificate representing Exercise Shares issued upon exercise of this Warrant or
to any transferee of the person to whom the Exercise  Shares were issued,  shall
bear a legend setting forth the  requirements  of subsection (a) of this Section
7,  together  with such  other  legend or  legends  as may  otherwise  be deemed
necessary or appropriate by counsel to the Company.

      (c) Removal of Legend. The Company shall, at the request of any registered
holder of a Warrant or Exercise  Share,  exchange the  certificate  representing
such security for a certificate  representing  the same security not bearing the
restrictive  legend  required  by  subsection  (b) if, in the opinion of counsel
acceptable to the Company, such restrictive legend is no longer necessary.

8. Registration  Rights.  The Holder shall be entitled to the rights and subject
to the  obligations  set forth in Section 6 of that certain  Form of  Securities
Purchase  Agreement related to the sale of up to 14,000,000 Units by and between
the Company and the purchasers of such Units.

9. Notices.  All notices or other  communications under this Warrant shall be in
writing  and  shall be  deemed  to have  been  given on the day of  delivery  if
delivered  by hand,  on the  fifth day  after  deposit  in the mail if mailed by
certified  mail,  postage  prepaid,  return  receipt  requested,  or on the next
business day after mailing if sent by a nationally  recognized overnight courier
such as federal express, addressed as follows:

            If to the Company:

                           Touchstone Resources USA, Inc.
                           1600 Smith Street
                           Suite 5100
                           Houston, Texas 77002
                           Attention:  Chief Executive Officer


<PAGE>

            with a copy to:
            --------------

                           Fox Rothschild LLP
                           997 Lenox Drive
                           Building 3
                           Lawrenceville, NJ 08648-2311
                           Attention:  Vincent A. Vietti, Esquire

            and to the  Holder at the  address of the  Holder  appearing  on the
            books of the Company or the Company's transfer agent, if any.

      Either of the  Company  or the  Holder  may from time to time  change  the
address  to  which  notices  to it are  to be  mailed  hereunder  by  notice  in
accordance with the provisions of this Section 9.

10. Supplements and Amendments.  The Company may from time to time supplement or
amend this  Warrant  without the approval of any holders of Warrants in order to
cure any ambiguity or to correct or supplement  any provision  contained  herein
which may be defective or inconsistent with any other provision,  or to make any
other  provisions  in regard to matters or questions  herein  arising  hereunder
which the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the Holder.

11.  Successors  and Assigns.  This Warrant shall inure to the benefit of and be
binding on the respective  successors,  assigns and legal representatives of the
Holder and the Company.

12.  Severability.  If for any reason any provision,  paragraph or terms of this
Warrant is held to be  invalid  or  unenforceable,  all other  valid  provisions
herein  shall  remain in full force and effect  and all  terms,  provisions  and
paragraphs of this Warrant shall be deemed to be severable.

13.  Governing  Law.  This  Agreement  shall be  governed  by and  construed  in
accordance with the laws of the Commonwealth of Pennsylvania,  without regard to
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except to the extent that the General Corporation Law of the State
of Delaware shall apply to the internal corporate governance of the Company.

14.  Headings.  Section and subsection  headings used herein are included herein
for convenience of reference only and shall not affect the  construction of this
Warrant nor constitute a part of this Warrant for any other purpose.

                  [Remainder of page intentionally left blank]


<PAGE>


      IN WITNESS  WHEREOF,  the  Company  has caused  these  presents to be duly
executed as of the _____ day of ______________, 200_.


                                        TOUCHSTONE RESOURCES USA, INC.



                                        By: /s/
                                            ------------------------------------
                                            Name:  Roger Abel
                                            Title: Chief Executive Officer


<PAGE>

                                   APPENDIX A

                               NOTICE OF EXERCISE

To:      Touchstone Resources USA, Inc.
         1600 Smith Street, Suite 5100
         Houston, TX 77002
         Attention:  Chief Executive Officer

      (1) The  undersigned  hereby  elects to  purchase  ____________  shares of
Common Stock of Touchstone Resources USA, Inc., a Delaware corporation, pursuant
to the terms of the  attached  Warrant,  and  tenders  herewith  payment  of the
Exercise  Price  for such  shares  in full in  accordance  with the terms of the
Warrant  in the  following  manner  (please  check one or more of the  following
choices):

      |_|   In cash;

      |_|   Cashless exercise through a broker; or

      |_|   Delivery of previously owned shares of Common Stock.

      (2) In  exercising  this  Warrant,  the  undersigned  hereby  confirms and
acknowledges that the shares of Common Stock to be issued upon conversion hereof
are being acquired solely for the account of the  undersigned,  not as a nominee
for any other party,  and for  investment  purposes only (unless such shares are
subject to resale pursuant to an effective prospectus), and that the undersigned
will not offer,  sell or  otherwise  dispose of any such shares of Common  Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.

      (3) Terms not otherwise  defined in this Notice of Exercise shall have the
meanings ascribed to such terms in the attached Warrant.

      (4) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned.




                                        HOLDER



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