CONSULTING AGREEMENT


     THIS CONSULTING  AGREEMENT (herein after the "AGREEMENT"),  dated as of the
13th day of April, 1998 by and between:

     FRISBY  TECHNOLOGIES,  INC., a Delaware  corporation  having its  executive
offices  at 77  East  Main  Street,  Suite  2000,  Bay  Shore,  New  York  11706
(hereinafter referred to as the "COMPANY");

                                      a n d

     GGC,  INC., a Connecticut  corporation  having its executive  office at One
Lafayette  Place,  Greenwich,  Connecticut  06830  (hereinafter  referred  to as
"GGC").

     WITNESSETH THAT:

     WHEREAS,  GGC is agreeable to being retained by the COMPANY as a consultant
and is  willing  to provide  consulting  services  to the  COMPANY  through  its
Chairman, Robert C. Grayson (hereinafter referred to as "Grayson");

     WHEREAS, Grayson has certain education, experience, background and contacts
which would be useful and helpful to the COMPANY in its business and the COMPANY
is desirous of retaining  GGC as a consultant in order to obtain the benefits of
Grayson's education, experience,  background and contacts in accordance with the
terms and provisions of this Agreement; and

     WHEREAS,  the parties  have agreed upon the terms of GGC's  retention  as a
consultant and desire a written, formal contract to evidence their agreement;

     N0W,  THEREFORE,  in consideration  of the mutual  promises,  covenants and
forbearances  contained  herein,  and intending to be legally bound, the parties
have agreed as follows:

     1. Retention.

     For the term provided in paragraph 2, the COMPANY  hereby  retains GGC as a
consultant, and GGC hereby accepts that retention, upon the terms and conditions
hereinafter set forth.

<PAGE>

     2. Term.

     A. This Agreement shall become effective on the first day of the month (the
"Effective Date") following the closing of the offering by the COMPANY of shares
of its Common Stock to the public, and, subject to the provisions of paragraph 8
below,  shall  continue  for an initial  period  expiring on the last day of the
month  preceding  the second  anniversary  of the  Effective  Date (the "Initial
Termination Date"), thereby providing for an initial term of two (2) years.

     B. The COMPANY  shall have the option  during the period  commencing on the
first day of the third month  preceding the second  anniversary of the Effective
Date,  and ending on the 15th day of such third  month,  provided  that  neither
party hereto is then in default under this Agreement, to extend the term of this
Agreement  for an  additional  one (1) year  period,  subject  to GGC's  written
acceptance of such  extension.  GGC's written  acceptance  must be mailed to the
COMPANY within ten (10) days of receipt of the notice from the COMPANY.  Failing
an effective extension of this Agreement,  this Agreement shall terminate on the
Initial Termination Date.

     C. This  Agreement  shall be subject to successive  additional one (1) year
extensions under the procedure provided in subparagraph B. above.

     3. Compensation

     A. (i) For services rendered under this Agreement, the COMPANY shall pay to
Robert C. Grayson  &Associates,  Inc.,  an  affiliate  of GGC,  $5,000 per month
during the term, commencing the Effective Date.

     (ii) In addition to the payments  provided in Section 3.A(i),  the COMPANY,
as part of the  compensation for services  rendered under this Agreement,  shall
issue to GGC upon the  Effective  Date:  (a) Warrant  No.1 of the COMPANY in the
form of Exhibit A hereto;  and (b)  Warrant  No.2 of the  COMPANY in the form of
Exhibit B hereto.

     4. Duties.

     GGC is engaged as a business,  management  and financial  consultant to the
COMPANY  and shall make the  services  of Grayson  available  to the  COMPANY in
discharge of GGC's consulting  obligations  hereunder.  Such consulting services
shall include  providing  advice to the Chairman of the Board of the Company and
such other members of management as the Chairman shall from time to time direct.
GGC shall render such  consulting  services for a reasonable  period of time per
month as mutually agreed between the parties.  The precise  consulting scope and
the  specific  services  to be  rendered  by GGC  may be  defined,  interpreted,
curtailed,  or  extended,  from time to time by mutual  agreement of GGC and the
Chairman of the COMPANY, provided, however, that any definition, interpretation,
curtailment,  or extension is consistent with the status of, and/or  educational
experience required for, the  responsibilities  for which GGC has been initially
engaged hereunder.

<PAGE>

     5. Extent and Place of Services.

     GGC and  Grayson  are  engaged in various  business  activities,  including
consulting for other  companies.  Nothing  contained herein is intended to limit
GGC's  or  Grayson's  continuation  of  existing  business  activities  nor  the
commencement of new activities (including consulting).  To the best of GGC's and
Grayson's  knowledge,  none of their  respective  current  business  activities,
including  consulting will adversely affect the rendering of consulting services
hereunder.

     The COMPANY shall furnish GGC and Grayson with a suitably  equipped office,
clerical  help,  and  telephone/facsimile/copying   services  adequate  for  the
performance of the duties of Grayson when he is rendering  service  hereunder at
the executive office of the Company.

     6. Expenses.

     The COMPANY shall reimburse Robert C. Grayson &Associates,  Inc. within ten
(10) days of the date Robert C. Grayson & Associates, Inc. submits a request for
payment to the Company,  for all reasonable and  appropriate  business  expenses
incurred  by Robert C.  Grayson &  Associates  in the  discharge  of its  duties
herewith;  provided,  however,  that Robert C. Grayson & Associates,  Inc. shall
obtain the prior  consent  of the  Company  for any such  expense  greater  than
$1,000.

     7. Disability.

     GGC's  inability  to perform  its  duties  because  of  temporary  illness,
disability or incapacity of Grayson or for any other reasonable cause, shall not
constitute a failure to perform  GGC's  obligations  hereunder  and shall not be
deemed a breach or default by GGC. In the event that  Grayson is disabled  for a
period of more than  ninety  (90) days,  the Company  may,  commencing  upon the
expiration of such initial  ninety (90) days,  suspend  payment of  compensation
under paragraph 3(A)(i), above, during any period in which such disability shall
continue.

     8. Termination.

     A. The COMPANY may terminate GGC's  retention at any time for Cause.  Cause
shall mean:

     (1) Grayson's death; or

     (2) The occurrence of one of the following events:

     (i) Grayson is convicted of a felony or any crime involving moral turpitude
or unethical conduct which in the good faith opinion of the COMPANY could impair
his ability to perform his duties; or

     (ii) a material  breach by GGC of any  material  term or  provision of this
Agreement.

     B. The COMPANY may terminate GGC's retention at any time without cause upon
ninety (90) days' prior written notice to GGC.

     C. In the event of the bankruptcy (Chapter 7), reorganization  (Chapter 11)
or other  termination  of the  business of the COMPANY or of any  subsidiary  or
affiliate on which GGC's continued retention and compensation is dependent,  the
provisions  of paragraph 4 shall  continue in full force and effect only so long
as full  compensation,  as  provided in Section 31 above,  shall  continue to be
provided by the COMPANY.

     D. GGC may terminate this Agreement upon any of the following events: (1) a
material breach by the COMPANY of any material provision of this Agreement;  (2)
a change in control of the  COMPANY  which is not  consented  to by GGC;  (3) an
assignment of this Agreement by the COMPANY which is not consented to in writing
by GGC; or (4) upon ninety (90) days' prior written notice to the COMPANY.

<PAGE>

     9. Arbitration.

     Any controversy or claim arising out of, or relating to this Agreement,  or
the breach  thereof,  shall be settled by arbitration in New York City, New York
in  accordance  with the  Commercial  Arbitration  Rules then  pertaining of the
American Arbitration  Association,  but with all rights of discovery provided by
the New York Rules of Civil Procedure,  and judgment upon the award rendered may
be entered in any court having jurisdiction thereof.

     10. Waiver of Breach.

     The waiver by either party of a breach of any  provision of this  Agreement
by the  other  party  shall  not  operate  or be  construed  as a waiver  of any
subsequent  breach by such other party shall not  operate or be  construed  as a
waiver of any subsequent  breach by such other party.  The failure of a party to
exercise any rights or privileges under this Agreement shall not be deemed to be
a waiver or  extinguishment  of such  rights or  privileges,  all of which shall
continue to be exercisable.

     11. Benefit.

     The rights and obligations of the parties under this Agreement shall not be
assignable by either party hereto.

     12. Notices.

     Any notice  required or permitted to be given under this Agreement shall be
sufficient if in writing and sent by certified mail to the address of each party
as set forth on page 1 hereof.

     13. Entire Agreement

     This  instrument  contains  the entire  agreement of the parties and may be
modified  only  by  agreement  in  writing  signed  by the  party  against  whom
enforcement  of any waiver,  change;  modification,  extension  or  discharge is
sought

     14. Applicable Law.

     This Agreement  shall be governed for all purposes by the laws of the State
of New York. If any provision of this Agreement is declared void, such provision
shall be deemed severed from this  Agreement,  which shall  otherwise  remain in
full force and effect.

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto set their hands and seals as of the day and year herein above written.

                                        FRISBY TECHNOLOGIES, INC.


                                   By:  /s/Greg Frisby
                                        ------------------------------
                                        Greg Frisby, Chairman


Dated: April 13, 1998

                                        GGC, INC.


                                  By:  /s/Robert C. Grayson
                                       -----------------------------
                                       Robert C. Grayson, Chairman

Dated: April 13, 1998



<PAGE>


                                                                     EXHIBIT A


     Name of Holder:

          GGC, Inc.

     Address of Holder:

           One Lafayette Place
           Greenwich, CT 06830

     Number of Shares Purchasable Pursuant to this Warrant: 

           55,000

     Issue Date:
   
           April 13, 1998



                            FRISBY TECHNOLOGIES, INC.
                    WARRANT NO.1 FOR PURCHASE OF COMMON STOCK

                               (Non-transferable)

     This Is to  certify  that,  for  value  received,  the above  named  person
("Holder")  is the owner of this  Warrant No.1 of Frisby  Technologies.  Inc., a
Delaware  corporation  (the "Company") and is entitled,  subject to the terms of
this Warrant, to purchase from the Company at any time, but not after 5:00 p.m.,
Eastern  Standard  Time on April 13, 2003 (the  "Expiration  Date"),  subject to
Section 7 hereof, that number of fully paid and non-assessable  shares of common
Stock (the "Common  Stock") of the Company (the  "Shares")  set forth above at a
purchase  price of Seven Dollars and 25/100 ($7.25) per share in lawful money of
the United States. The number of Shares to be received upon the exercise of this
Warrant and the purchase  price for a Share may be adjusted from time to time as
hereinafter set forth. The Shares  deliverable  upon such exercise,  as adjusted
from time to time, are hereinafter sometimes referred to as "Warrant Securities"
and the  exercise  price of a Share in effect at any time and as  adjusted  from
time to time, is hereinafter sometimes referred to as the "Purchase Price."

     1. Exercise of Warrant.  In case the Holder of this Warrant shall desire to
exercise  all or any part of the rights  evidenced by this  Warrant,  the Holder
shall  surrender  this  Warrant with the form of exercise at the end hereof duly
executed by the Holder,  to the Company at the principal  office of the Company,
accompanied by payment of the Purchase  Price in a bank check,  or other readily
available funds.  This Warrant may be exercised in whole or in part from time to
time prior to the Expiration Date. In case of exercise in part only, the Company
will deliver to the Holder a new Warrant of like tenor in the name of the Holder
evidencing  the right to purchase the number of Warrant  Securities  as to which
this Warrant has not been  exercised.  In the event of the Holder's  death,  the
Estate or other legal representative of the Holder shall have a period of ninety
(90) days after such death to exercise  this Warrant in whole or in part. At the
end of such ninety (90) day period, this Warrant shall expire.

     2.  Issuance  of  Shares.  Upon  surrender  of this  Warrant  with the duly
executed form of exercise and payment of the Purchase  Price,  the Company shall
immediately  issue and deliver to the Holder a stock  certificate,  representing
the number of Shares purchased, which Shares shall be validly issued, fully paid
and non-assessable.  Any such stock certificate shall bear an appropriate legend
in the  usual  and  customary  form to  reflect  that the  shares  have not been
registered under the Securities Act of 1933, as amended.

<PAGE>

     3. No  Transfer  of Warrant.  This  Warrant  may not be sold,  transferred,
assigned or  hypothecated  by the Holder other than to an  "affiliate"  (as such
term is defined in the rules and  regulations  of the  Securities  and  Exchange
Commission  pursuant to the Securities  Exchange Act of 1934, as amended) of the
Holder, and such affiliate shall be deemed the Holder thereafter.

     4. Adjustment. In case, prior to the expiration of this Warrant by exercise
or by its  terms,  the  Company  shall at any  time  issue  Common  Stock to its
shareholders as a distribution  with respect to their existing Common Stock ("In
Kind  Distribution")  or subdivide  the number of  outstanding  shares of Common
Stock into a greater number of shares thereof, then, in either of such cases the
Purchase Price per Share of the Warrant Securities in effect at the time of such
action shall be proportionately  reduced and the number of Warrant Securities at
that  time  purchasable  pursuant  to  this  Warrant  shall  be  proportionately
increased and conversely,  in the event the Company shall contract the number of
outstanding shares of Common Stock by combining such Common Stock into a smaller
number of shares  thereof,  then, in such case,  the Purchase Price per Share of
the  Warrant  Securities  in  effect  at  the  time  of  such  action  shall  be
proportionately  increased  and the  number of Warrant  Securities  at that time
purchasable pursuant to this Warrant shall be proportionately decreased.

     5.   Reorganization,   Reclassification.   etc.  In  case  of  any  capital
reorganization,  recapitalization,  reclassification  or  other  change  of  the
outstanding  shares of the Company  which does not result in a change in control
of the Company,  then, and in each such case, the Company shall cause  effective
provision to be made so that the Holder of this Warrant  shall have the right to
receive, upon the exercise of this Warrant as provided in Section 1 hereof, upon
the consummation of such reorganization,  recapitalization,  reclassification or
other change of the  outstanding  shares of the Company,  the kind and amount of
shares or other  securities  or property  receivable  upon such  reorganization,
recapitalization,  reclassification,  or other  such  change  by an owner of the
number of Shares issuable upon exercise of the Warrant immediately prior to such
reorganization,  recapitalization,  reclassification,  or other such change. Any
such provision shall include  provision for adjustments which shall be as nearly
equivalent  as may  be  practicable  to the  adjustments  provided  for in  this
Warrant.  A copy of such  provision  shall  be  furnished  to the  Holder(s)  of
Warrants  within  ten (10) days after  execution  of the  appropriate  agreement
pertaining  to  same  and,  in any  event,  prior  to any  such  reorganization,
recapitalization,   reclassification   or  other  such  change  subject  to  the
provisions of this Section 5. The  foregoing  provisions of this Section 5 shall
similarly    apply    to    successive    reorganizations,    recapitalizations,
reclassifications  and changes of shares,  additional  shares shall be issued in
exchange, conversion,  substitution or payment, in whole or in part, for or of a
security of the Company other than shares and any such issue shall be treated as
an In Kind Distribution.

     6.  Determination of Adjusted  Purchase Price.  Upon the occurrence of each
event requiring an adjustment of the Purchase Price and of the number of Warrant
Securities  purchasable  pursuant to this  Warrant in  accordance  with,  and as
required by, the term of this Warrant,  the Company's  chief  financial  officer
shall  forthwith  compute the adjusted  Purchase  Price and/or number of Warrant
Securities  in accordance  with the  provisions  hereof.  The Company shall mail
forthwith to the Holder of this Warrant a copy of such computation.

<PAGE>

     7.   Merger,   Consolidation,   Sale,   Reorganization,   Liquidation   and
Dissolution.  In case of any merger or consolidation of the Company with or into
another  entity,  any  sale  or  conveyance  to  any  other  entity  of  all  or
substantially  all of the  assets  of the  Company,  a  capital  reorganization,
recapitalization,  reclassification or other change of the outstanding shares of
the  Company  which  results in a change  in'  control  of the  Company,  or the
dissolution,  liquidation  or winding up of the Company,  the Company shall give
the Holder at least  forty-five (45) days,  prior written notice of such merger,
consolidation, sale or conveyance, reorganization or dissolution, liquidation or
winding up in order to afford the Holder sufficient time to exercise the Warrant
prior  to or on the  effective  date  of  such  merger,  consolidation,  sale or
conveyance,  reorganization or dissolution,  liquidation or winding up. Upon the
effective  date of such  transaction,  if the  Holder has not so  exercised  the
Warrant, the Warrant shall expire.

     8.  Reservation  of Shares.  The Company will reserve and have at all times
available sufficient Shares deliverable against the due exercise of this Warrant
to satisfy the rights and privileges contained herein.

     9. Expiration. This Warrant shall be void after 5:00 p.m., Eastern Standard
Time, on April 13, 2003, or earlier upon the exercise and purchase of all of the
Warrant  Securities,  or  pursuant  to Section 1 hereof,  after  which no rights
herein given to the Holder of this Warrant shall exist.

     10. Notices. All communications  hereunder shall be in writing and shall be
deemed duly given when delivered personally or three (3) days after being mailed
by first class mail, postage prepaid,  properly addressed, if to the Company, at
77 East Main Street,  Suite 2000, Bay Shore, New York 11706, or if to the Holder
hereof, the Holder's address set forth on the first page hereof.

     11.  Applicable  Law. This  Agreement  shall be governed by the laws of the
State  of  Delaware.  The  invalidity,  illegality  or  unenforceability  of any
particular  provision of this Agreement  shall not affect the other  provisions,
and this  Agreement  shall be  construed  in all  respects  as if such  invalid,
illegal or unenforceable provision had been omitted.


     Dated: April 13,1998

                                          FRISBY TECHNOLOGIES, INC.


                                      By:/s/ Greg Frisby
                                        ----------------------
                                         Greg Frisby, Chairman

<PAGE>


                                FORM OF EXERCISE

                              TO BE EXECUTED BY THE
                         HOLDER TO EXERCISE THIS WARRANT

                            FRISBY TECHNOLOGIES, INC.


     The  undersigned  hereby  exercises the right to purchase  ______ shares of
Common  Stock  covered by the  Warrant  dated  April 13,  1998 from the  Company
according to the  conditions  thereof and herewith makes payment of the Purchase
Price for such Shares in full.


                                          GGC, INC.


                                     By: ________________________________


Dated:


<PAGE>


                                                                    EXHIBIT B


     Name of Holder:

          GGC, Inc.

     Address of Holder:

          One Lafayette Place
          Greenwich, CT 06830

     Number of Shares Purchasable Pursuant to this Warrant: 

          55,000

     Issue Date: 
          
          April 13, 1998


                            FRISBY TECHNOLOGIES, INC.
                    WARRANT NO.2 FOR PURCHASE OF COMMON STOCK

                               (Non-transferable)

     This is to  certify  that,  for  value  received,  the above  named  person
("Holder")  is the owner of this  Warrant No.2 of Frisby  Technologies,  Inc., a
Delaware corporation (the "Company"),  and is entitled,  subject to the terms of
this Warrant to purchase  from the Company an aggregate of 55,000 fully paid and
non-assessable  shares of common stock (the "Common  Stock") of the Company (the
"Shares") at a purchase  price of Seven Dollars and 25/100  ($7.25) per share in
lawful money of the United States, vesting as follows, subject to the provisions
of Section 8 hereof in respect of earlier vesting:

     One year from the Issue Date hereof (April 13, 1999) (the "Vesting  Date"),
the right to  purchase  such 55,000  Shares  shall vest and at any time and from
time to time  thereafter  until the Expiration Date the Holder may purchase such
Shares in accordance with the provisions hereof; provided,  however, that if the
Consulting Agreement,  dated as of April 13, 1998 (the "Consulting  Agreement"),
between  the  Company  and GGC,  Inc.  has been  terminated  pursuant to Section
8(A)(2) or Section 8(D)(4) thereof prior to the Vesting Date,  vesting shall not
take place after such termination. In the event that the Consulting Agreement is
terminated  pursuant to Section 8(B)  thereof  prior to the Vesting  Date,  such
55,000 Shares shall vest on the Vesting Date above. No vesting shall occur after
termination  of the  Consulting  Agreement  pursuant  to  Section  8(A)(1)  (the
Holder's  death)  thereof.  Vesting shall still occur on the Vesting Date in the
event of termination of the Consulting  Agreement  pursuant to Section 8(13)(1),
(2) and (3)  thereof.  The number of Shares to be received  upon the exercise of
this  Warrant and the  purchase  price for a Share may be adjusted  from time to
time as hereinafter set forth.  The Shares  deliverable  upon such exercise,  as
adjusted from time to time, are  hereinafter  sometimes  referred to as "Warrant
Securities"  and the  exercise  price  of a Share in  effect  at any time and as
adjusted  from  time  to  time,  is  hereinafter  sometimes  referred  to as the
"Purchase Price."

     This Warrant No.2 expires on and no Shares may be purchased hereunder after
5:00 p.m.,  Eastern  Standard Time, on April 13, 2003 (the  "Expiration  Date"),
subject to Section 7 hereof.

<PAGE>


     1. Exercise of Warrant.  In case the Holder of this Warrant shall desire to
exercise all or any part of the vested  rights  evidenced by this  Warrant,  the
Holder shall  surrender this Warrant with the form of exercise at the end hereof
duly  executed by the  Holder,  to the  Company at the  principal  office of the
Company,  accompanied by payment of the Purchase Price in a bank check, or other
readily  available funds. This Warrant may be exercised in whole or in part from
time to time. In case of exercise in part only,  the Company will deliver to the
Holder a new  Warrant  of like tenor in the name of the  Holder  evidencing  the
right to purchase the number of Warrant  Securities as to which this Warrant has
not been  exercised.  In the event of the  Holder's  death,  the Estate or other
legal representative of the Holder shall have a period of ninety (90) days after
such death to exercise  this Warrant in whole or in part as to the Shares vested
at the time of such  death.  At the end of such  ninety  (90) day  period,  this
Warrant shall expire.

     2.  Issuance  of  Shares.  Upon  surrender  of this  Warrant  with the duly
executed form of exercise and payment of the Purchase  Price,  the Company shall
immediately  issue and deliver to the Holder a stock  certificate,  representing
the number of Shares purchased, which Shares shall be validly issued, fully paid
and non-assessable.  Any such stock certificate shall bear an appropriate legend
in the  usual  and  customary  form to  reflect  that the  shares  have not been
registered under the Securities Act of 1933, as amended.

     3. No  Transfer  of Warrant.  This  Warrant  may not be sold,  transferred,
assigned or  hypothecated  by the Holder other than to an  "affiliate"  (as such
term is defined in the rules and  regulations  of the  Securities  and  Exchange
Commission  pursuant to the Securities  Exchange Act of 1934, as amended) of the
Holder, and such affiliate shall be deemed the Holder thereafter.

     4. Adjustment. In case, prior to the expiration of this Warrant by exercise
or by its  terms,  the  Company  shall at any  time  issue  Common  Stock to its
shareholders as a distribution  with respect to their existing Common Stock ("In
Kind  Distribution")  or subdivide  the number of  outstanding  shares of Common
Stock into a greater number of shares thereof, then, in either of such cases the
Purchase Price per Share of the Warrant Securities in effect at the time of such
action shall be proportionately  reduced and the number of Warrant Securities at
that  time  purchasable  pursuant  to  this  Warrant  shall  be  proportionately
increased and conversely,  in the event the Company shall contract the number of
outstanding shares of Common stock by combining such Common Stock into a smaller
number of shares  thereof,  then, in such case,  the Purchase Price per Share of
the  Warrant  Securities  in  effect  at  the  time  of  such  action  shall  be
proportionately  increased  and the  number of Warrant  Securities  at that time
purchasable pursuant to this Warrant shall be proportionately decreased.

<PAGE>

     5.   Reorganization,   Reclassification,   etc.  In  case  of  any  capital
reorganization,  recapitalization,  reclassification  or  other  change  of  the
outstanding  shares of the  Company,  then,  and in each such case,  the Company
shall cause  effective  provision  to be made so that the Holder of this Warrant
shall have the right to receive,  upon the  exercise of this Warrant as provided
In   Section  1  hereof,   upon  the   consummation   of  such   reorganization,
recapitalization,  reclassification  or other change of the outstanding share of
the  Company,  the kind and  amount of shares or other  securities  or  property
receivable  upon such  reorganization,  recapitalization,  reclassification,  or
other such change by an owner of the number of Shares  issuable upon exercise of
the  Warrant  immediately  prior  to  such   reorganization,   recapitalization,
reclassification,  or other  such  change.  Any  such  provision  shall  include
provision  for  adjustments  which  shall  be as  nearly  equivalent  as  may be
practicable  to the  adjustments  provided for in this  Warrant.  A copy of such
provision  shall be furnished to the Holder(s) of Warrants  within ten (10) days
after  execution of the  appropriate  agreement  pertaining  to same and, in any
event, prior to any such reorganization,  recapitalization,  reclassification or
other such change  subject to the  provisions  of this Section 5. The  foregoing
provisions   of  this   Section   5  shall   similarly   apply   to   successive
reorganizations,  recapitalizations,  reclassifications  and  changes of shares,
additional  shares  shall be issued in  exchange,  conversion,  substitution  or
payment,  in whole or in part,  for or of a security of the  Company  other than
shares and any such issue shall be treated as an In Kind Distribution.

     6.  Determination of Adjusted  Purchase Price.  Upon the occurrence of each
event requiring an adjustment of the Purchase Price and of the number of Warrant
Securities  purchasable  pursuant to this  Warrant in  accordance  with,  and as
required by, the term of this Warrant,  the Company's  chief  financial  officer
shall  forthwith  compute the adjusted  Purchase  Price and/or number of Warrant
Securities  in accordance  with the  provisions  hereof.  The Company shall mall
forthwith to the Holder of this Warrant a copy of such computation.

     7.   Merger,   Consolidation,   Sale,   Reorganization,   Liquidation   and
Dissolution.  In case of any merger or consolidation of the Company with or into
another  entity,  any  sale  or  conveyance  to  any  other  entity  of  all  or
substantially  all of the  assets  of the  Company,  a  capital  reorganization,
recapitalization,  reclassification or other change of the outstanding shares of
the Company which results in a change in control of the Company,  reorganization
of the Company into another entity or the dissolution, liquidation or winding up
of the Company, the Company shall give the Holder at least forty-five (45) days'
prior  written  notice  of  such  merger,  consolidation,  sale  or  conveyance,
reorganization or dissolution,  liquidation or winding up in order to afford the
Holder sufficient time to exercise the Warrant prior to or on the effective date
of  such  merger,   consolidation,   sale  or  conveyance,   reorganization   or
dissolution,   liquidation   or  winding.   Upon  the  effective  date  of  such
transaction,  if the Holder has not so exercised the Warrant,  the Warrant shall
expire.

     8.  Acceleration of Vesting.  In case of a merger or  consolidation  of the
Company  into or with another  entity in which the Company is not the  surviving
entity, a sale or conveyance to any other entity of all or substantially  all of
the  assets  of  the  Company,  a  capital   reorganization,   recapitalization,
reclassification  or other change of the outstanding shares of the Company which
results in a change in control of the Company,  or the dissolution,  liquidation
or winding up of the Company, immediately prior to the closing or effective date
of any such  event,  the right of the Holder to purchase  any Shares  under this
Warrant  which has not yet vested  shall fully vest and the Holder may  purchase
all of the Shares covered by this Warrant immediately.

     9.  Reservation  of Shares.  The Company will reserve and have at all times
available sufficient Shares deliverable against the due exercise of this Warrant
to satisfy the rights and privileges contained herein.

<PAGE>

     10.  Expiration.  This  Warrant  shall be void  after  5:00  p.m.,  Eastern
Standard  Time,  on April 13, 2003, or earlier upon the exercise and purchase of
all of the Warrant Securities,  or pursuant to Section 1 hereof,  after which no
rights herein given to the Holder of this Warrant shall exist.

     11. Notices. All communications  hereunder shall be in writing and shall be
deemed duly given when delivered personally or three (3) days after being mailed
by first class mail, postage prepaid,  properly addressed, if to the Company, at
77 East Main Street,  Suite 2000, Bay Shore, New York 11706, or if to the Holder
hereof, the Holder's address set forth on the first page hereof.

     12.  Applicable  law. This  Agreement  shall be governed by the laws of the
State  of  Delaware.  The  invalidity,  illegality  or  unenforceability  of any
particular  provision of this Agreement  shall not affect the other  provisions,
and this  Agreement  shall be  construed  in all  respects  as if such  invalid,
illegal or unenforceable provision had been omitted.


     Dated: April 13,1998

                                       FRISBY TECHNOLOGIES, INC.


                                   By:/s/ Greg Frisby
                                      ---------------------
                                      Greg Frisby, Chairman


<PAGE>


                                FORM OF EXERCISE

                              TO BE EXECUTED BY THE
                         HOLDER TO EXERCISE THIS WARRANT

                            FRISBY TECHNOLOGIES, INC.


     The undersigned  hereby  exercises the right to purchase  _______ shares of
Common  Stock  covered by the  Warrant  dated  April 13,  1998 from the  Company
according to the  conditions  thereof and herewith makes payment of the Purchase
Price for such Shares in full.


                                       GGC, INC.


                                  By: ________________________________

Dated: