EXHIBIT 10.39


THE SECURITIES  EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),  OR APPLICABLE STATE LAW, AND NO
INTEREST  THEREIN  MAY BE  SOLD,  DISTRIBUTED,  ASSIGNED,  OFFERED,  PLEDGED  OR
OTHERWISE  TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION
INVOLVING  SAID  SECURITIES  OR (ii) THE  COMPANY  RECEIVES  AN OPINION OF LEGAL
COUNSEL FOR THE HOLDER OF THESE  SECURITIES  STATING  THAT SUCH  TRANSACTION  IS
EXEMPT FROM  REGISTRATION OR THE COMPANY  OTHERWISE  SATISFIES  ITSELF THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION.

No. W-2                                     Warrant to Purchase 1,193,546 Shares
                                                                 of Common Stock



                        WARRANT TO PURCHASE COMMON STOCK
                                       OF
                                  BRIAZZ, INC.

     THIS CERTIFIES that, for value  received,  SPINNAKER  INVESTMENT  PARTNERS,
L.P., a Delaware limited partnership ("Spinnaker"),  is entitled, upon the terms
and  subject to the  conditions  hereinafter  set forth,  to  subscribe  for and
purchase from BRIAZZ, INC., a Washington corporation (the "Company"),  1,193,546
shares (the "Shares") of Common Stock of the Company (the "Common Stock"), which
is approximately 19.9% of the outstanding Common Stock as of the date hereof, at
a purchase price per Share of $0.50.  The purchase price per Share upon exercise
of this Warrant is  sometimes  referred to herein as the  "Exercise  Price." The
number and exercise  price,  if any, of the Shares are subject to  adjustment as
provided in Section 8 hereof.

     1.   Term of Warrant. Subject to the terms and conditions set forth herein,
this Warrant will be exercisable  during the term  commencing on the date hereof
and ending at the earliest to occur of:

          (a)  11:59 p.m. Pacific Time on the date immediately prior to the date
               on which the Company receives shareholder approval, in accordance
               with the applicable rules of the Nasdaq Stock Market  ("Nasdaq"),
               of the issuance of the Series E Preferred  Stock (the  "Preferred
               Stock")  issued  pursuant to the Purchase  Agreement  between the
               Company  and  Spinnaker,  dated  April 10,  2003  (the  "Purchase
               Agreement")   and  the  shares  of  Common  Stock  issuable  upon
               conversion thereof;

          (b)  11:59 p.m. Pacific Time on the date immediately prior to the date
               on which Nasdaq  provides the Company with a formal  exception to
               Nasdaq's shareholder approval requirements in connection with the
               Preferred  Stock and the Common  Stock as described in (a) above;
               and


<PAGE>

          (c)  5:00  p.m.  Pacific  Time on the  fifth  anniversary  of the date
               hereof.

     2.   Exercise of Warrant.

          (a) The purchase rights represented by this Warrant are exercisable by
the registered  holder hereof, in whole or in part, at any time, or from time to
time,  during the term hereof as described in Section 1 above,  by the surrender
of this Warrant and the Notice of Exercise  annexed  hereto duly  completed  and
executed  on behalf of the  holder  hereof,  at the  office  of the  Company  in
Seattle,  Washington  (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), and upon payment pursuant to
the  cancellation of indebtedness or payment in cash or check  acceptable to the
Company of the purchase  price of the Shares  thereby  purchased,  whereupon the
holder of this Warrant will be entitled to receive a certificate  for the Shares
so  purchased  and, if this  Warrant is exercised in part, a new Warrant for the
unexercised  portion of this Warrant.  The Company agrees that any shares issued
upon the exercise of this Warrant  shall be deemed to have been issued as of the
close of business on the date on which this Warrant shall have been exercised as
aforesaid.

          (b)  Certificates  for  Shares  purchased  hereunder  and,  on partial
exercise of this  Warrant,  a new Warrant  for the  unexercised  portion of this
Warrant will be delivered to the holder hereof promptly as practicable after the
date on which this Warrant shall have been exercised as aforesaid.

     3.   No Fractional  Securities  or  Scrip.  No fractional  shares  or scrip
representing fractional shares will be issued upon the exercise of this Warrant.
In lieu of any fractional share to which the holder would otherwise be entitled,
the Company shall make a cash payment equal to the Exercise Price  multiplied by
such fraction.

     4.   No Rights as Shareholders.  This  Warrant does not  entitle the holder
hereof to any voting rights, dividends,  participation rights or other rights as
a shareholder of the Company prior to the exercise hereof.

     5.   Exchange and Registry of Warrant. The Company will maintain a registry
showing  the name and address of the  registered  holder of this  Warrant.  This
Warrant may be  surrendered  for exchange,  transfer or exercise,  in accordance
with its terms,  at the office of the Company,  and the Company will be entitled
to rely in all  respects,  prior to written  notice to the  contrary,  upon such
registry.

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



                                      -2-

<PAGE>

     7.   Saturdays, Sundays and Holidays.  If the last or appointed day for the
taking of any action or the  expiration of any right  required or granted herein
is a Saturday or a Sunday or will be a legal holiday or the equivalent for banks
generally  in the State of  Washington,  then such  action  may be taken or such
right may be exercised  on the next  succeeding  day not a legal  holiday or the
equivalent for banks generally in the State of Washington.

     8.  Adjustment  Rights.  The  Exercise  Price  and  the  number  of  shares
purchasable hereunder are subject to adjustment from time to time, as follows:

          (a) Recapitalization, Merger, Sale of Assets. If at any time, there is
a capital reorganization (other than a combination,  reclassification,  exchange
or  subdivision  of  shares  otherwise  provided  for  herein),  or a merger  or
consolidation  of the  Company  with or into  another  corporation  in which the
Company  is not  the  surviving  corporation,  or  the  sale  of  the  Company's
properties and assets as, or substantially  as, an entirety to any other person,
then, as a part of such  reorganization,  merger,  consolidation or sale, lawful
provision  will be made so that the holder of this Warrant  shall  thereafter be
entitled to receive upon exercise of this Warrant,  during a period specified in
Section 1(c) and upon payment of the exercise  price then in effect,  the number
of shares of stock or other securities or property of the successor  corporation
resulting  from such  merger or  consolidation,  to which a holder of the Common
Stock deliverable upon exercise of this Warrant would have been entitled in such
capital reorganization,  merger,  consolidation or sale if this Warrant had been
exercised immediately before such reorganization, merger, consolidation or sale.
The Company shall notify the holder hereof of any such  reorganization,  merger,
consolidation  or sale not later than the effective  date  thereof.  In any such
case, appropriate adjustment (as determined in good faith by the Company's Board
of Directors)  will be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder after the reorganization,
merger,  consolidation  or sale to the end that the  provisions  of this Warrant
(including  adjustment  of the Exercise  Price and number of shares  purchasable
upon exercise of this Warrant) will be applicable  after that event,  as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.

          (b)  Reclassification.  If the  Company at any time  reclassifies  the
Common Stock or otherwise  changes any of the  securities  as to which  purchase
rights  under  this  Warrant  exist  into  the  same or a  different  number  of
securities  of any  different  class or classes,  this Warrant  will  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  which
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change.

          (c) Split,  Subdivision  or  Combination.  If the  Company at any time
while this Warrant  remains  outstanding  and  unexpired  splits,  subdivides or
combines the  securities as to which  purchase  rights under this Warrant exist,
the Exercise Price will be  proportionately  decreased in the case of a split or
subdivision or proportionately increased in the case of a combination. Upon each
adjustment  in the Exercise  Price,  the number of such  securities  purchasable
hereunder will be adjusted,  to the nearest whole share, to the product obtained
by  multiplying  the  number of  Shares  purchasable  immediately  prior to such
adjustment  in the



                                      -3-

<PAGE>

Exercise  Price by a fraction  (i) the  numerator  of which will be the Exercise
Price  immediately  prior to such adjustment,  and (ii) the denominator of which
will be the Exercise Price immediately after such adjustment.

          (d)  Sale of Securities Below Exercise Price.

               (A)  If, at any time or from time to time after the date  hereof,
the  Company  issues or sells,  or is deemed by the express  provisions  of this
Section  8(d) to have  issued or sold,  Additional  Stock (as defined in Section
8(d)(F) hereof),  other than as a  reclassification  as provided in Section 8(b)
above, and other than a split, subdivision or combination as provided in Section
8(c) above, without consideration or for a consideration per share less than the
Exercise  Price in effect  immediately  before the  issuance of such  Additional
Stock,  the  Exercise  Price in effect upon such  issuance  (except as otherwise
provided in this Section 8(d)) shall be adjusted to equal the  consideration per
share at which such Additional Stock was issued.

               (B)  No  adjustment  of the  Exercise  Price  shall be made in an
amount  less than $.01 per share,  provided  that any  adjustments  that are not
required  to be made by reason of this  sentence  shall be carried  forward  and
shall be taken into account in any  subsequent  adjustment  made to the Exercise
Price.  Except as provided in Sections  8(d)(E)(III)  and (IV), no adjustment of
the Exercise  Price shall have the effect of increasing the Exercise Price above
the Exercise Price in effect immediately before such adjustment.

               (C)  In the case of the  issuance of Common  Stock for cash,  the
consideration  shall be deemed to be the  amount  of cash paid  therefor  before
deducting any discounts, commissions or other expenses allowed, paid or incurred
by the Company for any underwriting or otherwise in connection with the issuance
and sale thereof.

               (D)  In  the  case  of  the   issuance   of   Common   Stock  for
consideration in whole or in part other than cash, the consideration  other than
cash shall be deemed to be the fair value thereof as determined in good faith by
the Company's Board of Directors irrespective of any accounting treatment.

               (E)  In the case of the issuance of options to purchase or rights
to subscribe for Common Stock,  securities  by their terms  convertible  into or
exchangeable for Common Stock, or options to purchase or rights to subscribe for
such  convertible  or  exchangeable   securities   (which  options,   rights  or
convertible or  exchangeable  securities are not excluded from the definition of
Additional  Stock),  in applying the  provisions of Section 8(A),  the following
provisions shall apply:

                    (I)  the aggregate  maximum number of shares of Common Stock
deliverable upon exercise of such options to purchase or rights to subscribe for
Common  Stock  shall be deemed to have been  issued at the time such  options or
rights were issued for a consideration equal to the consideration (determined in
the manner  provided in Sections  8(d)(C) and (D))  received by the Company upon
the issuance of such options or rights, plus the minimum purchase price provided
in such options or rights for the Common Stock covered  thereby,  but no further
adjustment to the Exercise Price shall be made for the actual



                                      -4-
<PAGE>

issuance  of  Common  Stock  upon the  exercise  of such  options  or  rights in
accordance  with  their  terms  (other  than  adjustments  pursuant  to  Section
8(d)(E)(III));

                    (II) the aggregate  maximum number of shares of Common Stock
deliverable  upon  conversion  of or in  exchange  for any such  convertible  or
exchangeable securities or upon the exercise of options to purchase or rights to
subscribe  for  such  convertible  or  exchangeable  securities  and  subsequent
conversion  or exchange  thereof shall be deemed to have been issued at the time
such  securities  were  issued or such  options  or  rights  were  issued  for a
consideration  equal to the  consideration  received by the Company for any such
securities and related options or rights, plus the additional consideration,  if
any,  to be  received by the  Company  upon the  conversion  or exchange of such
securities or the exercise of any related  options or rights (the  consideration
in each case to be  determined  in the manner  provided in Sections  8(d)(C) and
(D)),  but no further  adjustments  to the Exercise  Price shall be made for the
actual  issuance  of  Common  Stock  upon the  conversion  or  exchange  of such
securities in accordance  with their terms (other than  adjustments  pursuant to
Section 8(d)(E)(III));

                    (III) if such options, rights or convertible or exchangeable
securities by their terms  provide,  with the passage of time or otherwise,  for
any increase in the  consideration  payable to the  Company,  or decrease in the
number of shares of Common Stock  issuable,  upon the  exercise,  conversion  or
exchange  thereof,  the Exercise Price computed upon the original issue thereof,
and any  subsequent  adjustments  based  thereon,  shall,  upon such increase or
decrease becoming effective,  be recomputed to reflect such increase or decrease
with  respect to such  options,  rights and  securities  not already  exercised,
converted or exchanged before such increase or decrease became effective, but no
further  adjustment to the Exercise Price shall be made for the actual  issuance
of  Common  Stock  upon  the  exercise  of any such  options  or  rights  or the
conversion or exchange of such securities in accordance with their terms;

                    (IV) upon the expiration of any such options or rights,  the
termination of any such rights to convert or exchange,  or the expiration of any
options or rights related to such  convertible or exchangeable  securities,  the
Exercise  Price shall  forthwith be readjusted  to such Exercise  Price as would
have been  obtained had the  adjustment  that was made upon the issuance of such
options, rights or securities,  or options or rights related to such securities,
been made upon the basis of the  issuance of only the number of shares of Common
Stock  actually  issued upon the  exercise of such  options or rights,  upon the
conversion or exchange of such securities or upon the exercise of the options or
rights related to such securities, and

                    (V)  if any  such  options  or  rights  shall be  issued  in
connection  with  the  issuance  and sale of other  securities  of the  Company,
together comprising one integral transaction in which no specific  consideration
is allocated to such options or rights by the parties  thereto,  such options or
rights shall be deemed to have been issued for such  consideration as determined
in good faith by the Company's Board of Directors.

               (F) Additional Stock. "Additional Stock" shall mean any shares of
Common Stock or securities  convertible  into or exchangeable or exercisable for
shares of



                                      -5-

<PAGE>

Common Stock issued (or deemed to have been issued pursuant to Section  8(d)(E))
by the Company other than:

                    (I)  Common  Stock  issued  or  issuable  upon   conversion,
exercise  or exchange of  securities  outstanding  as of the date of issuance of
this Warrant;

                    (II) shares  of  Common  Stock  issued  after  the  date  of
issuance of this Warrant  pursuant to or issuable under stock option  agreements
and stock option, incentive and purchase plans of the Company (the "Compensation
Shares"),  up to a maximum  number of  Compensation  Shares  equal to 15% of the
Company's  outstanding  common stock  measured as of the date that the Company's
shares  of Series D  Preferred  Stock  becomes  convertible  into  shares of the
Company's Common Stock pursuant to Section 2.6.3(a)(i) of the Company's Articles
of Amendment dated March 3, 2003,  assuming  conversion of the Series D stock on
such date;  provided,  that the exercise price of any Compensation Shares issued
pursuant to stock  options  shall be no less than fair market  value at the time
the option for these shares is granted;

                    (III) Common Stock issued or issuable upon conversion of the
Series D Preferred Stock or Series E Preferred Stock; and

                    (IV) Common  Stock  issued or issuable  upon  conversion  or
exercise of any securities  convertible  into or exchangeable or exercisable for
shares of Common Stock provided that such  securities are designated as excluded
from the definition of Additional  Stock by the prior vote or written consent of
the holder of this Warrant.

               (G)  Notwithstanding  the  foregoing,   in  the  event  that  any
adjustment  pursuant to this Section  8(d) would cause the Exercise  Price to be
less than the closing  price of the  Company's  Common  Stock on the most recent
date  prior  to the  date  of the  Purchase  Agreement  on  which  a sale of the
Company's Common Stock occurred on the Nasdaq SmallCap Market (as  appropriately
adjusted  for any stock  splits,  stock  dividends  or  similar  changes  in the
Company's  Common  Stock which occur  after the date of such  closing  price and
prior to the event causing the adjustment under this Section 8(d)) (such closing
price, as appropriately  adjusted,  the "Floor Price"),  then the Exercise Price
shall instead be adjusted to equal the Floor Price then in effect.

          (e)  Authorized  Shares.  The Company covenants that during the period
the Warrant is  outstanding,  it will reserve from its  authorized  and unissued
Common  Stock a  sufficient  number of shares of Common Stock to provide for the
issuance  of the Shares  upon the  exercise of any  purchase  rights  under this
Warrant.  The Company  further  covenants that its issuance of this Warrant will
constitute  full  authority  to its  officers  who are charged  with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Shares upon the exercise of the purchase rights under this Warrant.

     9.   Notice of Adjustments. Whenever the Exercise Price or number of Shares
purchasable hereunder will be adjusted pursuant to Section 8 hereof, the Company
shall issue a certificate  signed by its Chief Financial  Officer setting forth,
in reasonable  detail,  the event  requiring the  adjustment,  the amount of the
adjustment,  the method by which such adjustment was calculated and the Exercise
Price and number of shares  purchasable  hereunder  after giving



                                      -6-
<PAGE>

effect to such  adjustment,  and shall  cause a copy of such  Certificate  to be
transmitted to the holder of this Warrant within 10 days of such event.

    10.  Warranties and Covenants. The Company warrants and covenants that this
Warrant and all shares to be issued  hereunder,  when issued in accordance  with
the  terms   hereof  will  be,  duly  and   validly   issued,   fully  paid  and
non-assessable,  and free of all liens,  claims and  encumbrances.  The  Company
further warrants and covenants that this Warrant constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its terms. The
Company further  covenants that it will promptly submit an application to Nasdaq
for listing of the shares  issuable  upon exercise of this Warrant on the Nasdaq
Stock Market, if required.

     11.  Transferability; Compliance with Securities Laws.

          (a)  The holder  acknowledges that this Warrant is non-transferable in
accordance with Section 5(c) of the Purchase Agreement.  The holder acknowledges
and agrees that this Warrant and the  certificates  evidencing the Shares issued
upon exercise hereof shall contain legends to the foregoing effect.

          (b)  The holder of this Warrant,  by acceptance  hereof,  acknowledges
that this  Warrant  and the  Shares  issuable  upon  exercise  hereof  are being
acquired  solely for the holder's own account and not as a nominee for any other
party, and for investment, and covenants that the holder will not offer, sell or
otherwise  dispose of this Warrant or any Shares issuable upon exercise  hereof,
except  under  circumstances  that will not result in a violation of the Act, or
any state securities  laws. Upon exercise of this Warrant,  the holder shall, if
requested  by the Company,  confirm in writing,  in a form  satisfactory  to the
Company, that the Shares so purchased are being acquired solely for holder's own
account and not as a nominee for any other party, for investment, and not with a
present view toward distribution or resale.

          (c)  The offer and sale of the  Warrant  and the Shares  have not been
registered  under the Act or applicable  state  securities laws and this Warrant
may not be  exercised  except by an  "accredited  investor"  as  defined in Rule
501(a)  under the Act if such  exercise  does not result in a  violation  of the
registration  provisions of the Act or applicable  state  securities  laws. Each
certificate  representing the Shares,  or other securities  issued in respect of
the Shares upon any conversion,  stock split, stock dividend,  recapitalization,
merger,  consolidation or similar event, will be stamped or otherwise  imprinted
with a legend  substantially  in the  following  form (in addition to any legend
required under applicable securities laws):

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),  OR APPLICABLE STATE LAW, AND NO
INTEREST  THEREIN  MAY BE  SOLD,  DISTRIBUTED,  ASSIGNED,  OFFERED,  PLEDGED  OR
OTHERWISE  TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION
INVOLVING SAID SECURITIES OR (ii) THE COMPANY RECEIVED EVIDENCE  SATISFACTORY TO
IT,  WHICH MAY INCLUDE AN OPINION OF LEGAL  COUNSEL  FOR THE  HOLDER,  THAT SUCH
TRANSACTION  IS EXEMPT  FROM  REGISTRATION



                                      -7-

<PAGE>



OR THE COMPANY  OTHERWISE  SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION."











                                      -8-
<PAGE>


     12.  Miscellaneous.

          (a)  Issue Date.  The provisions of this Warrant will be construed and
will be given effect in all  respects as if it had been issued and  delivered by
the Company on the date hereof. This Warrant will be binding upon any successors
or assigns of the Company.  This Warrant shall  constitute a contract  under the
laws of the  State of  Washington  and for all  purposes  will be  construed  in
accordance with and governed by the laws of said state.

          (b)  Notices.  All  notices  and other  communications  called  for or
required by this Warrant shall be in writing to the parties at their  respective
addresses stated in the Purchase Agreement,  or to such other address as a party
may  subsequently  specify  and shall be deemed to have been  received  (i) upon
delivery in person,  (ii) upon the passage of seventy-two  (72) hours  following
post by first class registered or certified mail, return receipt requested, with
postage prepaid, (iii) upon the passage of twenty-four (24) hours following post
by overnight  receipted  courier service,  or (iv) upon transmittal by confirmed
telex or  facsimile  provided  that if sent by  facsimile a copy of such receipt
requested and postage  prepaid,  with an indication that the original was set by
facsimile and the date of its transmittal.

          (c)  Attorneys'   Fees.  In  any  litigation,   arbitration  or  court
proceeding  between the Company and the holder relating  hereto,  the prevailing
party will be entitled to  reasonable  attorneys'  fees and  expenses  and court
costs incurred in enforcing this Warrant.

          (d)  Charges, Taxes and Expenses.  Issuance of certificates for any of
the Shares upon the exercise of this Warrant will 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
will be paid by the Company, and such certificates will be issued in the name of
the holder of this  Warrant or in such name or names as may be  directed  by the
holder of this Warrant;  provided,  however,  that in the event certificates for
the  Shares are to be issued in a name other than the name of the holder of this
Warrant,  this Warrant when  surrendered for exercise will be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof.

     IN WITNESS WHEREOF, BRIAZZ, INC., has caused this Warrant to be executed by
the undersigned officer thereunto duly authorized.


Dated:   April 10, 2003


                                    BRIAZZ, INC.



                                    By:  /s/ Victor D. Alhadeff
                                         ---------------------------------------
                                         Victor D. Alhadeff
                                         Chief Executive Officer





                                      -9-



<PAGE>

                               NOTICE OF EXERCISE

To:  BRIAZZ, INC.

     (1)  The undersigned hereby elects to purchase  __________ shares of Common
Stock  ("Shares") of BRIAZZ,  INC. (the "Company")  pursuant to the terms of the
attached  Warrant,  and tenders  herewith payment of the purchase price in full,
together with all applicable transfer taxes, if any.

     (2)  In exercising the attached Warrant, the undersigned hereby represents,
warrants, confirms and acknowledges as follows:

          (a)  the  undersigned  has such  knowledge and experience in financial
               and business  matters as to be capable of  evaluating  the merits
               and risks of the  investment  and it is able to bear the economic
               risk  of loss  of an  investment  in any  Shares  subscribed  for
               pursuant to the attached Warrant;

          (b)  the undersigned has had the opportunity to speak with officers of
               the Company and to ask them questions about the Company;

          (c)  the  undersigned  is acquiring the Shares for its own account for
               investment  purposes  only  and  not  with a view  to  resale  or
               distribution; provided, however, that the undersigned may sell or
               otherwise  dispose of Shares  pursuant  to  registration  thereof
               pursuant  to  the   Securities  Act  of  1933,  as  amended  (the
               "Securities  Act"),  and any applicable  state securities laws or
               under an exemption from such registration requirements;

          (d)  the  undersigned  understands  that  the  Shares  have  not  been
               registered  under the Securities Act and that the issuance of the
               Shares  is being  made in  reliance  on an  exemption  from  such
               registration requirement;

          (e)  the undersigned is, and was at all times that it purchased Shares
               or received an offer to purchase Shares an "accredited  investor"
               within  the  meaning  of  Rule  501 of  Regulation  D  under  the
               Securities Act.

          (f)  the  undersigned  agrees  that if it  decides  to offer,  sell or
               otherwise  transfer  any  Shares,  it  will  not  offer,  sell or
               otherwise transfer any of such securities directly or indirectly,
               unless:

               (i)  the sale is to the Company;

               (ii) the sale is made in compliance  with the exemption  from the
                    registration  requirements under the Securities Act provided
                    by Rule 144 or Rule 144A  thereunder,  if available,  and in
                    accordance  with any  applicable  state  securities or "Blue
                    Sky" laws;



<PAGE>


               (iii) the securities  are  sold in a  transaction  that  does not
                    require   registration  under  the  Securities  Act  or  any
                    applicable  state laws and  regulations  governing the offer
                    and sale of securities; or

               (iv) the  sale  is made  pursuant  to an  effective  registration
                    statement filed under the Securities Act;

               and, with respect to subparagraphs  (ii) and (iii) hereof, it has
               prior to such sale furnished to the Company evidence satisfactory
               to the Company that the sale complies with  subparagraphs (ii) or
               (iii),   which   evidence  may  include  an  opinion  of  counsel
               reasonably   satisfactory  to  the  Company  opining  as  to  the
               exemption from  registration  under applicable  federal and state
               securities laws;

          (g)  the undersigned  acknowledges that upon the issuance thereof, and
               until  such  time as the same is no  longer  required  under  the
               applicable requirements of the Securities Act or applicable state
               laws and regulations,  the  certificates  representing the Shares
               will bear a legend in substantially the following form:

                    "THE SECURITIES  EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
                    REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                    "ACT"), OR APPLICABLE STATE LAW, AND NO INTEREST THEREIN MAY
                    BE  SOLD,  DISTRIBUTED,   ASSIGNED,   OFFERED,   PLEDGED  OR
                    OTHERWISE  TRANSFERRED  UNLESS  (i)  THERE  IS AN  EFFECTIVE
                    REGISTRATION  STATEMENT  UNDER THE ACT AND APPLICABLE  STATE
                    SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID
                    SECURITIES OR (ii) THE COMPANY  RECEIVES AN OPINION OF LEGAL
                    COUNSEL FOR THE HOLDER OF THESE SECURITIES STATING THAT SUCH
                    TRANSACTION  IS  EXEMPT  FROM  REGISTRATION  OR THE  COMPANY
                    OTHERWISE  SATISFIES  ITSELF THAT SUCH TRANSACTION IS EXEMPT
                    FROM REGISTRATION."

          (h)  the  undersigned  understands  that the Company may  instruct the
               transfer  agent for the Shares not to record any  transfer of the
               Shares  without  first being  notified by the Company  that it is
               satisfied that such transfer is exempt from or not subject to the
               registration requirements of the Securities Act;

          (i)  the undersigned  consents to the Company making a notation on its
               records or giving instruction to the registrar and transfer agent
               of the Company in order to implement the restrictions on transfer
               set forth and described herein;

          (j)  the undersigned  received the attached  Warrant,  any term sheet,
               agreement or other offering materials in connection with his, her
               or its acquisition of the Shares,  and


                                      -11-

<PAGE>

               the form of this  Notice of  Exercise,  at the  address set forth
               below, and is a resident of the state set forth in such address.

     (3)  Please issue a certificate or certificates representing said Shares in
the name of the undersigned.

Date                                    Signature

                                        Address:

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

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

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




                                      -12-