THIS WARRANT HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933,
         AS AMENDED OR ANY STATE  SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE
         EFFECTED  WITHOUT  (i)  AN  EFFECTIVE  REGISTRATION  STATEMENT  RELATED
         THERETO,  (ii)  AN  OPINION  OF  COUNSEL  FOR  THE  HOLDER,  REASONABLY
         SATISFACTORY  TO THE COMPANY,  THAT SUCH  REGISTRATION IS NOT REQUIRED,
         (iii)   RECEIPT  OF  A  NO-ACTION   LETTER(S)   FROM  THE   APPROPRIATE
         GOVERNMENTAL  AUTHORITY(IES),  OR (iv)  OTHERWISE  COMPLYING  WITH  THE
         PROVISIONS OF SECTION 7 OF THIS WARRANT.


                             LASERSIGHT INCORPORATED
                             -----------------------

                       WARRANT TO PURCHASE 500,000 SHARES
                        OF COMMON STOCK (this "Warrant")



     LASERSIGHT  INCORPORATED,  a Delaware  corporation (the "Company"),  hereby
certifies that, for value received,  Foothill Capital Corporation,  a California
corporation,  or registered  assigns,  is the registered holder of warrants (the
"Warrants") to subscribe for and purchase Five Hundred Thousand (500,000) shares
of the fully  paid and  nonassessable  Common  Stock (as  adjusted  pursuant  to
Section 4 hereof, the "Shares") of the Company,  at a price equal to $6.0667 per
share (such price and such other price as shall result,  from time to time, from
the  adjustments  specified  in  Section 4 hereof is herein  referred  to as the
"Warrant  Price"),  subject to the  provisions and upon the terms and conditions
hereinafter  set forth.  As used herein,  (a) the term "Common Stock" shall mean
the Company's presently authorized Common Stock, $0.001 par value per share, and
any stock into or for which such Common  Stock may  hereafter  be  converted  or
exchanged,  (b) the term "Date of Grant" shall mean March 31, 1997,  and (c) the
term "Other  Warrants"  shall mean any warrant  issued upon  transfer or partial
exercise of this Warrant.  The term  "Warrant" as used herein shall be deemed to
include Other  Warrants  unless the context hereof or thereof  clearly  requires
otherwise.

     1. Term. The purchase right represented by this Warrant is exercisable,  in
whole or in part,  at any time and from time to time from the first  anniversary
of the Date of Grant  through and including the fifth  anniversary  thereof,  at
which  time  the  Warrant  (to the  extent  unexercised  at such  time)  will be
repurchased by the Company in accordance with Section 10.4(a) hereof;  provided,
however,  that  from  and  after  the date of the  Company's  giving  notice  in
accordance  with the terms of  Section  10.4(c)  of its  repurchase  of  certain
unexercised Warrants in accordance with the terms of Section 10.4(b), so long as
there is not  default in the  payment of the  repurchase  price  therefor,  this
Warrant shall cease to be exercisable as to the number of shares of Common Stock
specified  in such  notice  (or,  if  different,  such  number  of shares as are
actually repurchased).


     2. Method of Exercise; Payment; Issuance of New Warrant. Subject to Section
1 hereof, the purchase right represented by this Warrant may be exercised by the
holder  hereof,  in whole or in part and from time to time,  by the surrender of
this Warrant (with the notice of exercise form attached hereto as Exhibit A duly
executed)  at the  principal  office of the  Company  and by the  payment to the
Company of an amount equal to the then  applicable  Warrant Price  multiplied by
the  number of Shares  then  being  purchased.  The  person or  persons in whose
name(s) any certificate(s) representing shares of Common Stock shall be issuable
upon  exercise of this Warrant  shall be deemed to have become the  holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the
shares represented thereby (and such shares shall be deemed to have been issued)
immediately  prior to the close of business on the date or dates upon which this
Warrant is exercised.  In the event of any exercise of the rights represented by
this  Warrant,  certificates  for the  shares  of  stock so  purchased  shall be
delivered  to the  holder  hereof as soon as  possible  and in any event  within
thirty (30) days after such  exercise  and,  unless this  Warrant has been fully
exercised or expired,  a new Warrant  representing the portion of the Shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be issued to the holder  hereof as soon as possible and in any event within
such thirty-day period.

     3. Stock Fully Paid;  Reservation of Shares.  All Shares that may be issued
upon the exercise of the rights  represented by this Warrant will, upon issuance
pursuant to the terms and conditions  herein,  be fully paid and  nonassessable,
and free from all taxes, liens,  charges, and pre-emptive rights with respect to
the  issue  thereof.   The  Company  shall  pay  all  transfer  taxes,  if  any,
attributable to the issuance of Shares upon the exercise of the Warrants. During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have  authorized,  and reserved for the purpose of
the issue upon  exercise of the purchase  rights  evidenced by this  Warrant,  a
sufficient  number of shares of its Common  Stock to provide for the exercise of
the rights represented by this Warrant.

     4. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities  purchasable  upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment  from time to time upon the occurrence of certain
events on and after the Date of Grant, as follows:

          a. Reclassification or Merger. In case of any reclassification, change
or conversion of securities of the class  issuable upon exercise of this Warrant
(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),  or in
case of any merger of the Company with or into another corporation (other than a
merger with another  corporation  in which the Company is the  acquiring and the
surviving  corporation  and which  does not  result in any  reclassification  or
change of outstanding  securities issuable upon exercise of this Warrant), or in
case of any sale of all or substantially  all of the assets of the Company,  the
Company, or such successor or purchasing corporation,  as the case may be, shall
duly  execute and  deliver to the holder of this  Warrant a new Warrant (in form
and substance  reasonably  satisfactory to the holder of this Warrant),  so that
the holder of this Warrant shall have the right to receive,  at a total purchase
price not to exceed  that  payable or to be  payable  upon the  exercise  of the
unexercised  portion of this Warrant,  and in lieu of the shares of Common Stock
theretofore  issuable  upon  exercise  of this  Warrant,  the kind and amount of
shares of stock,  other  securities,  money and  property  receivable  upon such
reclassification, change or merger by a holder of the number of shares of Common
Stock then  purchasable  under this Warrant.  Such new Warrant shall provide for
adjustments  that shall be as nearly  equivalent  as may be  practicable  to the
adjustments  provided for in this Section 4. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications,  changes, mergers and
transfers.

          b.  Subdivision or  Combination of Shares.  If the Company at any time
while this Warrant remains  outstanding and unexpired shall subdivide or combine
its   outstanding   shares  of  Common   Stock,   the  Warrant  Price  shall  be
proportionately  decreased in the case of a subdivision or increased in the case
of a combination, effective at the close of business on the date the subdivision
or combination becomes effective.

          c. Stock Dividends and Other Distributions. If the Company at any time
while this Warrant is  outstanding  and unexpired  shall (i) pay a dividend with
respect  to  Common  Stock  payable  in  Common  Stock,  or (ii)  make any other
distribution with respect to Common Stock (except any distribution  specifically
provided for in the foregoing  subparagraphs  (a) and (b)) of Common Stock, then
the Warrant Price shall be adjusted, from and after the date of determination of
shareholders  entitled to receive such dividend or  distribution,  to that price
determined by multiplying the Warrant Price in effect  immediately prior to such
date of  determination  by a fraction  (i) the  numerator  of which shall be the
total number of shares of Common  Stock  outstanding  immediately  prior to such
dividend or  distribution,  and (ii) the denominator of which shall be the total
number of shares of Common Stock outstanding  immediately after such dividend or
distribution.

          d. Rights Offerings.  In case the Company shall issue rights,  options
or warrants to any person or persons  who are at the time of such  issuance  the
holders of equity securities of the Company,  entitling them to subscribe for or
purchase shares of Common Stock (or securities  convertible or exchangeable into
Common  Stock) at a price per share of Common Stock (or having a  conversion  or
exchange  price  per  share  of  Common  Stock  if  a  security  convertible  or
exchangeable  into Common  Stock)  less than the fair market  value per share of
Common Stock on the record date for such  issuance (or the date of issuance,  if
there is no record  date),  the Warrant  Price to be in effect on and after such
record  date (or  issuance  date,  as the case may be)  shall be  determined  by
multiplying  the Warrant Price in effect  immediately  prior to such record date
(or issuance  date, as the case may be) by a fraction (i) the numerator of which
shall be the number of shares of Common  Stock  outstanding  on such record date
(or issuance date, as the case may be) plus the number of shares of Common Stock
which the aggregate  offering price of the total number of shares of such Common
Stock so to be offered (or the aggregate initial exchange or conversion price of
the  exchangeable or convertible  securities so to be offered) would purchase at
such fair market  value on such record date (or issuance  date,  as the case may
be) and (ii) the  denominator  of which  shall be the number of shares of Common
Stock  outstanding  on such record date (or issuance  date,  as the case may be)
plus  the  number  of  additional  shares  of  Common  Stock to be  offered  for
subscription or purchase (or into which the convertible securities to be offered
are initially exchangeable or convertible).  In case such subscription price may
be paid in part or in whole in a form other  than  cash,  the fair value of such
consideration  shall be  determined  by the Board of Directors of the Company in
good faith as set forth in a duly  adopted  board  resolution  certified  by the
Company's  Secretary  or  Assistant  Secretary.  Such  adjustment  shall be made
successively  whenever  such an  issuance  occurs;  and in the  event  that such
rights, options,  warrants, or convertible or exchangeable securities are not so
issued or expire or cease to be  convertible  or  exchangeable  before  they are
exercised,  converted, or exchanged (as the case may be), then the Warrant Price
shall again be adjusted to be the Warrant  Price that would then be in effect if
such issuance had not occurred,  but such subsequent adjustment shall not affect
the number of Shares issued upon any exercise of Warrants prior to the date such
subsequent adjustment is made.

          e. Special Distributions.  In case the Company shall fix a record date
for the  making of a  distribution  to all  holders  of  shares of Common  Stock
(including any such  distribution  made in connection  with a  consolidation  or
merger in which the  Company  is the  surviving  corporation)  of  evidences  of
indebtedness  or assets (other than dividends and  distributions  referred to in
subparagraphs   (b)  and  (c)  above  and  other  than  cash  dividends)  or  of
subscription  rights,   options,   warrants,   or  exchangeable  or  convertible
securities containing the right to subscribe for or purchase shares of any class
of equity securities of the Company (excluding those referred to in subparagraph
(d)  above),  the  Warrant  Price to be in effect on and after such  record date
shall be adjusted by multiplying the Warrant Price in effect  immediately  prior
to such record date by a fraction  (i) the  numerator of which shall be the fair
market value per share of Common Stock on such record date,  less the fair value
(as  determined  by the Board of  Directors  of the Company in good faith as set
forth in a duly adopted board resolution certified by the Company's Secretary or
Assistant  Secretary) of the portion of the assets or evidences of  indebtedness
so to be distributed  or of such  subscription  rights,  options,  warrants,  or
exchangeable or convertible securities applicable to one (1) share of the Common
Stock  outstanding  as of such record date,  and (ii) the  denominator  of which
shall be such fair market value per share of Common Stock. Such adjustment shall
be made successively whenever such a record date is fixed; and in the event that
such  distribution  is not so made, the Warrant Price shall again be adjusted to
be the  Warrant  Price which would then be in effect if such record date had not
been fixed, but such subsequent adjustment shall not affect the number of Shares
issued  upon  any  exercise  of  Warrants  prior  to the  date  such  subsequent
adjustment was made.

          f.  Other  Issuances  of  Securities.  In  case  the  Company  or  any
subsidiary shall issue shares of Common Stock, or rights,  options,  warrants or
convertible or exchangeable  securities containing the right to subscribe for or
purchase  shares  of  Common  Stock  (excluding  (i)  shares,  rights,  options,
warrants,  or convertible or exchangeable  securities described in subparagraphs
(f) or (g) of Section 11 hereof or issued in any of the  transactions  described
in  subparagraphs  (b),  (c),  (d) or (e) above,  (ii)  shares  issued  upon the
exercise of such rights,  options or warrants or upon  conversion or exchange of
such  convertible  or  exchangeable  securities,  and (iii) the Warrants and any
shares  issued  upon  exercise  thereof),  at a price per share of Common  Stock
(determined  in the case of such rights,  options,  warrants,  or convertible or
exchangeable  securities  by dividing  (x) the total  amount  receivable  by the
Company in  consideration  of the sale and  issuance  of such  rights,  options,
warrants,  or convertible  or  exchangeable  securities,  plus the total minimum
consideration  payable to the Company  upon  exercise,  conversion,  or exchange
thereof by (y) the total  maximum  number of shares of Common  Stock  covered by
such rights, options, warrants, or convertible or exchangeable securities) lower
than the fair  market  value per share of Common  Stock on the date the  Company
fixes  the  offering  price  of  such  shares,  rights,  options,  warrants,  or
convertible or exchangeable securities, then the Warrant Price shall be adjusted
so that it shall equal the price  determined by multiplying the Warrant Price in
effect  immediately prior thereto by a fraction (i) the numerator of which shall
be the sum of (A) the number of shares of Common Stock  outstanding  immediately
prior to such sale and  issuance  plus (B) the number of shares of Common  Stock
which the aggregate  consideration  received  (determined as provided below) for
such sale or issuance  would  purchase at such fair market value per share,  and
(ii) the  denominator  of which  shall be the  total  number of shares of Common
Stock  outstanding  immediately  after such sale and issuance.  Such  adjustment
shall be made  successively  whenever such an issuance is made. For the purposes
of such  adjustment,  the  maximum  number of shares of Common  Stock  which the
holder of any such rights,  options,  warrants or  convertible  or  exchangeable
securities  shall be entitled to subscribe for or purchase shall be deemed to be
issued  and  outstanding  as of the  date  of such  sale  and  issuance  and the
consideration  received  by the  Company  therefor  shall  be  deemed  to be the
consideration  received by the Company for such rights,  options,  warrants,  or
convertible  or  exchangeable  securities,  plus the  minimum  consideration  or
premium stated in such rights, options, warrants, or convertible or exchangeable
securities  to be paid for the shares of Common Stock covered  thereby.  In case
the Company  shall sell and issue shares of Common  Stock,  or rights,  options,
warrants,  or convertible  or  exchangeable  securities  containing the right to
subscribe for or purchase shares of Common Stock for a consideration consisting,
in whole or in part,  of  property  other than cash or its  equivalent,  then in
determining the price per share of Common Stock and the  consideration  received
by the Company for purposes of the first sentence of this  subparagraph (f), the
Board of Directors of the Company shall determine, in good faith, the fair value
of said property,  and such  determination  shall be described in a duly adopted
board resolution certified by the Company's Secretary or Assistant Secretary. In
case the Company shall sell and issue rights, options,  warrants, or convertible
or  exchangeable  securities  containing  the right to subscribe for or purchase
shares of Common Stock together with one or more other securities as a part of a
unit at a price  per  unit,  then in  determining  the price per share of Common
Stock and the  consideration  received by the Company for  purposes of the first
sentence of this  subparagraph  (f), the Board of Directors of the Company shall
determine,  in good faith,  which  determination  shall be  described  in a duly
adopted  board  resolution  certified  by the  Company's  Secretary or Assistant
Secretary,  the fair value of the rights,  options,  warrants, or convertible or
exchangeable  securities  then being sold as part of such unit.  Such adjustment
shall be made  successively  whenever such an issuance occurs,  and in the event
that such rights,  options,  warrants, or convertible or exchangeable securities
expire or cease to be  convertible  or  exchangeable  before they are exercised,
converted, or exchanged (as the case may be), then the Warrant Price shall again
be adjusted  to the Warrant  Price that would then be in effect if such sale and
issuance had not occurred,  but such subsequent  adjustment shall not affect the
number of Shares  issued upon any  exercise  of Warrants  prior to the date such
subsequent adjustment is made.  Notwithstanding the foregoing, the provisions of
this Section  4(f) shall not apply with respect to director or employee  benefit
plans of the Company,  to the extent (i)  authorized  and in existence as of the
Date of Grant,  which (except in the case of certain  tax-qualified  plans) have
been approved by the  Company's  stockholders  as of the Date of Grant,  or (ii)
securities   are  granted  under  a  director  or  employee   benefit  plan  for
consideration  (or at an exercise  price) equal to 100% of the fair market value
of such  securities  on the date of grant,  as  determined  in good faith by the
Board of Directors of the Company  without giving effect to Section 4(h) hereof;
provided that for the purposes of this clause (ii) such consideration must equal
at least  95% of the fair  market  value of the  Common  Stock as of the date of
grant as determined pursuant to Section 4(h).

          g. Adjustment of Number of Shares. Upon each adjustment in the Warrant
Price  (other  than  pursuant to Section  4(a)),  the number of Shares of Common
Stock  purchasable  hereunder shall 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 Warrant  Price by a fraction,  the numerator of
which shall be the Warrant Price  immediately  prior to such  adjustment and the
denominator of which shall be the Warrant Price immediately thereafter.

          h. Determination of Fair Market Value. For purposes of this Section 4,
for  determining  the Warrant  Price of this  Warrant,  and for the  purposes of
Section  10.4  hereof,  "fair  market  value" of a share of Common Stock as of a
particular  date (the  "Determination  Date") shall mean (i) if shares of Common
Stock are traded as a national securities exchange (an "Exchange"),  the average
of the closing  prices of a share of the Common  Stock of the Company on each of
the fifteen (15) trading days prior to the  Determination  Date reported on such
Exchange as reported  in The Wall  Street  Journal,  or (ii) if shares of Common
Stock are not traded on an Exchange but trade in the over-the-counter market and
such  shares  are  quoted on the  National  Association  of  Securities  Dealers
Automated Quotations System ("NASDAQ"),  (A) the average of the last sale prices
reported on NASDAQ or (B) if such shares are an issue for which last sale prices
are not  reported on NASDAQ,  the average of the closing bid and ask prices,  in
each case on each of the fifteen (15) trading days (or if the relevant  price or
quotation did not exist on any of such days,  the relevant price or quotation on
the next  preceding  business day on which there was such a price or  quotation)
prior to the Determination Date as reported in The Wall Street Journal.

          i. De Minimis Adjustments.  In the event any adjustment to the Warrant
Price pursuant to this Section 4 (without regard to this  subparagraph  (i)), if
combined with any other adjustments to the Warrant Price not made as a result of
the operation of this  subparagraph  (i) (such other  adjustments,  the "Carried
Forward Adjustments"), would result in a change in the Warrant Price of less the
$.01,  then  notwithstanding  any other provision of this Section 4, neither the
Warrant  Price nor the number of Shares of Common  Stock  purchasable  hereunder
shall be adjusted;  provided,  however,  that in the event an  adjustment to the
Warrant Price  pursuant to this Section 4 (without  regard to this  subparagraph
(i)) would,  when combined  with the Carried  Forward  Adjustments,  result in a
change in the  Warrant  Price of $.01 or more,  then the  Warrant  Price and the
number of Shares of Common  Stock  purchasable  hereunder  shall be  adjusted to
reflect  such  adjustment  and  the  Carried  Forward  Adjustments  as  if  this
subparagraph (i) had not applied to any such adjustments.

     5.  Notice of  Adjustments.  Whenever  the  Warrant  Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the
Company shall make 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
Warrant Price and the number of Shares purchasable hereunder after giving effect
to such adjustment,  which shall be mailed (without regard to Section 13 hereof,
by first class mail, postage prepaid) to the holder of this Warrant.

     6. Fractional  Shares.  No fractional shares of Common Stock will be issued
in connection with any exercise hereunder, but in lieu of such fractional shares
the Company  shall make a cash payment  therefor  based on the fair market value
(as determined in accordance with Section 4(h) above) of a share of Common Stock
on the date of exercise.

     7.  Compliance  with  Securities  Act;  Disposition of Warrant or Shares of
Common Stock.

          a.  Compliance  with  Securities  Act. The holder of this Warrant,  by
acceptance hereof, agrees that this Warrant and the shares of Common Stock to be
issued upon  exercise  hereof are being  acquired for  investment  and that such
holder will not offer, sell or otherwise dispose of this Warrant,  or any shares
of Common Stock to be issued upon  exercise  hereof  except under  circumstances
which will not result in a violation of the  Securities  Act of 1933, as amended
(the "Act").  Upon exercise of this Warrant,  the holder hereof shall confirm in
writing,  by executing the form attached as Schedule 1 to Exhibit A hereto, that
the shares of Common Stock so purchased are being  acquired for  investment  and
not with a view toward  distribution  or resale.  This Warrant and all shares of
Common Stock issued upon exercise of this Warrant (unless  registered  under the
Act) shall be stamped or imprinted with a legend in substantially  the following
form:

         "THE SECURITIES  EVIDENCED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED,  OR ANY STATE  SECURITIES  LAWS. NO
         SALE  OR  DISPOSITION   MAY  BE  EFFECTED   WITHOUT  (i)  AN  EFFECTIVE
         REGISTRATION  STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR
         THE  HOLDER,   REASONABLY   SATISFACTORY  TO  THE  COMPANY,  THAT  SUCH
         REGISTRATION  IS NOT REQUIRED,  (iii) RECEIPT OF A NO-ACTION  LETTER(S)
         FROM THE  APPROPRIATE  GOVERNMENTAL  AUTHORITY(IES),  OR (iv) OTHERWISE
         COMPLYING  WITH THE  PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH
         THESE SECURITIES WERE ISSUED DIRECTLY OR INDIRECTLY."

               In addition, in connection with the issuance of this Warrant, the
holder specifically  represents to the Company by  acceptance of this Warrant as
follows:

                    (1) The holder is aware of the  Company's  business  affairs
and  financial  condition,  and  has  acquired  information  about  the  Company
sufficient  to reach an informed  and  knowledgeable  decision  to acquire  this
Warrant. The holder is acquiring this Warrant for its own account for investment
purposes only and not with a view to, or for the resale in connection  with, any
"distribution" thereof for purposes of the Act.

                    (2) The holder  understands that this Warrant and the Shares
have not been  registered  under the Act in reliance  upon a specific  exemption
therefrom,  which  exemption  depends upon,  among other  things,  the bona fide
nature  of  the  holder's   investment  intent  as  expressed  herein.  In  this
connection,  the holder  understands  that,  in the view of the  Securities  and
Exchange  Commission (the "SEC"),  the statutory basis for such exemption may be
unavailable if the holder's  representation was predicated solely upon a present
intention  to hold the  Warrant  and the Shares for the  minimum  capital  gains
period specified under applicable tax laws, for a deferred sale, for or until an
increase or decrease in the market price of the Warrant and the Shares, or for a
period of one (1) year or any other fixed period in the future.

                    (3) The holder further understands that this Warrant and the
Shares must be held indefinitely  unless  subsequently  registered under the Act
and any applicable state securities laws, or unless exemptions from registration
are otherwise available.

                    (4) The  holder is aware of the  provisions  of Rule 144 and
144A,  promulgated  under the Act,  which,  in substance,  permit limited public
resale of "restricted  securities"  acquired,  directly or indirectly,  from the
issuer thereof (or from an affiliate of such issuer),  in a non-public  offering
subject to the  satisfaction of certain  conditions,  if applicable,  including,
among other things:  the  availability of certain public  information  about the
Company,  the resale  occurring  not less than two (2) years after the party has
purchased and paid for the  securities to be sold; the sale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market  maker (as said term is defined  under the  Securities  Exchange Act of
1934, as amended) and the amount of securities being sold during any three-month
period not exceeding the specified limitations stated therein.

                    (5) The  holder  further  understands  that  at the  time it
wishes to sell this  Warrant and the Shares  there may be no public  market upon
which to make such a sale,  and that,  even if such a public market then exists,
the Company may not be satisfying the current public information requirements of
Rule 144 and 144A,  and that,  in such event,  the holder may be precluded  from
selling this Warrant and the Shares under Rule 144 and 144A even if the two-year
minimum holding period had been satisfied.

                    (6) The holder further  understands that in the event all of
the requirements of Rule 144 and 144A are not satisfied,  registration under the
Act, compliance with Regulation A, or some other registration  exemption will be
required;  and  that,  notwithstanding  the fact  that  Rule 144 and 144A is not
exclusive, the Staff of the SEC has expressed its opinion that persons proposing
to sell private  placement  securities  other than in a registered  offering and
otherwise  than pursuant to Rule 144 and 144A will have a substantial  burden of
proof in establishing  that an exemption from registration is available for such
offers or  sales,  and that  such  persons  and  their  respective  brokers  who
participate in such transactions do so at their own risk.

          b. Disposition of Warrant or Shares.  With respect to any offer,  sale
or other  disposition of this Warrant,  or any Shares  acquired  pursuant to the
exercise of this Warrant prior to  registration  of such Warrant or Shares,  the
holder hereof and each subsequent  holder of this Warrant agrees to give written
notice to the Company  prior  thereto,  describing  briefly the manner  thereof,
together with a written opinion of such holder's  counsel (in form and substance
reasonably satisfactory to the Company), if reasonably requested by the Company,
to the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Act as then in effect or any federal or
state law then in effect) of this Warrant or such Shares and indicating  whether
or not under the Act  certificates for this Warrant or such Shares to be sold or
otherwise   disposed  of  require  any  restrictive   legend  as  to  applicable
restrictions on  transferability  in order to ensure  compliance with applicable
law.  Promptly upon receiving  such written  notice and reasonably  satisfactory
opinion, if so requested, the Company, as promptly as practicable,  shall notify
such holder that such holder may sell or  otherwise  dispose of this  Warrant or
such Shares,  all in  accordance  with the terms of the notice  delivered to the
Company.  If a determination  has been made pursuant to this subsection (b) that
the  opinion of counsel  for the holder is not  reasonably  satisfactory  to the
Company,   the  Company  shall  so  notify  the  holder   promptly   after  such
determination has been made. The foregoing notwithstanding, this Warrant or such
Shares may, as to such federal laws, be offered,  sold or otherwise  disposed of
in  accordance  with Rule 144 and 144A under the Act,  provided that the Company
shall have been  furnished  with such  information as the Company may reasonably
request to provide a reasonable  assurance  that the  provisions of Rule 144 and
144A have been  satisfied.  Each  certificate  representing  this Warrant or the
Shares thus  transferred  (except a transfer  pursuant to Rule 144) shall bear a
legend as to the applicable  restrictions on  transferability in order to ensure
compliance  with such laws,  unless in the aforesaid  opinion of counsel for the
holder,  such  legend is not  required in order to ensure  compliance  with such
laws. The Company may issue stop transfer instructions to its transfer agent or,
if acting as its own  transfer  agent,  the  Company  may stop  transfer  on its
corporate books, in connection with such restrictions.

     8. Rights as Shareholders; Information. No holder of this Warrant, as such,
shall be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other  securities  of the Company which may at any time be issuable
on the exercise hereof for any purpose,  nor shall anything  contained herein be
construed to confer upon the holder of this Warrant,  as such, any of the rights
of a  shareholder  of the  Company or any right to vote for the  election of the
directors or upon any matter  submitted to shareholders at any meeting  thereof,
or to receive notice of meetings, or to receive dividends or subscription rights
or  otherwise  until  this  Warrant  shall  have been  exercised  and the Shares
purchasable upon the exercise hereof shall have become deliverable,  as provided
herein. The foregoing  notwithstanding,  the Company will transmit to the holder
of this  Warrant  such  information,  documents  and  reports  as are  generally
distributed  to the  holders  of any class or series  of the  securities  of the
Company concurrently with the distribution thereof to the shareholders.

     9. Registration Rights.

          9.1.     Demand Registration.

               a. The  Company  covenants  and  agrees  that at any  time  after
receipt of a written request (a "Demand Registration  Request") from the holders
of this Warrant and the Other  Warrants  and/or holders of Shares (this Warrant,
the Other Warrants, and the Shares are referred to herein, collectively,  as the
"Securities") (hereinafter,  the "Securityholders")  constituting at least fifty
percent  (50%) of the  Securities  outstanding  on such date  (determined  on an
as-exercised  basis) and then eligible for inclusion in a registration  pursuant
to this Section 9.1,  stating that the  Initiating  Securityholders  (as defined
below) desire and intend to transfer all or a portion of the Securities  held by
them under such circumstances,  the Company shall give notice (the "Registration
Notice") to all of the Securityholders within fifteen (15) days of the Company's
receipt of such registration request, and the Company shall cause to be included
in such requested  registration all Securities  requested to be included therein
by any such  Securityholder  within  fifteen  (15) days after such  Registration
Notice is effective  (subject to the  provisions  of the final  sentence of this
Section  9.1(a)).  After such second  15-day  period,  the Company shall file as
promptly as  practicable a registration  statement and use its  reasonable  best
efforts to cause such  registration  statement to become effective under the Act
and remain  effective  for one  hundred  and twenty  (120) days or such  shorter
period as may be required if all such  Securities  covered by such  registration
statement are sold prior to the expiration of such 120-day period; provided that
the Company shall not be obligated to effect any such  registration  pursuant to
this Section 9.1 (i) after the Company has  effected two (2) such  registrations
pursuant to this Section 9.1 or (ii) after the fifth  anniversary of the Date of
Grant (provided that a registration effective on or before such anniversary date
shall remain  effective for the full 120-day period (or such shorter  period) as
is provided for in this sentence above). Each Securityholder making a demand for
registration  under this  Section 9.1 is  referred  to herein as an  "Initiating
Securityholder."  For  purposes of this Section 9, a  registration  shall not be
deemed to have been effected unless a registration statement with regard thereto
has been declared  effective and remained  effective for a period of one hundred
and twenty  (120) days (or such  shorter  period as is  permitted  in the second
sentence of this Section 9.1). The foregoing notwithstanding, in the event of an
underwritten  offering pursuant to this Section 9.1, if the managing underwriter
of such  offering  shall  advise the  Securityholders  in writing  that,  in its
opinion,  the distribution of a specified portion of the securities requested to
be  included  in  the  registration   would  materially   adversely  affect  the
distribution  of such  securities  by  increasing  the  aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can reasonably be sold in the  contemplated  distribution,
then the securities to be included in the registration  shall be included in the
following  order:  (i) first,  all of the  Securities  requested  to be included
therein by the Initiating Securityholders, (ii) second, the Securities requested
to be  included  therein  by the  other  Securityholders,  pro rata  among  such
Securityholders  according to the number of Securities  requested to be included
by each such Securityholder  requesting  inclusion therein, and (iii) third, the
securities the Company  proposes to include therein and (iv) fourth,  such other
securities  requested to be included therein, pro rata among the holders of such
other securities  according to the number of securities requested to be included
by each such holder requesting inclusion therein.

               b. For purposes of this Section 9.1, the Securityholders who have
requested  registration of Warrants,  or Shares to be acquired upon the exercise
of Warrants  not  theretofore  exercised,  shall  furnish  the  Company  with an
undertaking that they or the underwriters or other persons to whom such Warrants
will be transferred  have  undertaken to exercise such Warrants within a 120-day
period determined in accordance with Section 9.1(a).

               c. In the  event of an  underwritten  offering  pursuant  to this
Section 9.1,  the  Initiating  Securityholders  requesting  registration  of the
Securities  being  registered  shall be  entitled  to  select  the  underwriter;
provided,  that the  underwriter so selected shall be subject to approval by the
Company, which approval shall not be withheld unreasonably.

               d. Notwithstanding the terms of Section 9.1(a), the Company shall
not be  required to  register  the  Securities  of  Securityholders  pursuant to
Section 9.1, if the Company elects, at its sole option and to the extent that it
may legally do so, to purchase  such  Securities  and  completes  such  purchase
pursuant to the  provisions  of this Section  9.1(d).  Within  fifteen (15) days
after  receipt  of a Demand  Registration  Request,  the  Company  may  elect to
purchase  all and not less than all of the  Securities  that would  otherwise be
subject to registration  pursuant to Section 9.1(a) by providing  written notice
(the  "Purchase  Notice") to all of the  Securityholders  setting  forth (i) its
election to purchase such Securities, (ii) the purchase price of the Securities,
and (iii) the  closing  date for such  purchase.  The Company  shall  thereafter
purchase all of the Securities  requested to be included in such purchase by the
Securityholders  within  fifteen  (15) days after the  Purchase  Notice  becomes
effective.  The purchase price for each Share shall be the fair market value (as
defined  in  Section  4) of a share of  Common  Stock on the date of the  Demand
Registration  Request; the purchase price for each Warrant shall be (x) the fair
market value (as defined in Section 4) of a share of Common Stock on the date of
the Demand Registration  Request less (y) the Warrant Price as of such date. The
closing of the purchase of the Securities shall take place on the date set forth
in the Purchase Notice,  which date shall be not less than fifteen (15) not more
than forty-five (45) days after the date of the Purchase Notice. At the closing,
the Company shall deliver to each  Securityholder,  in cash,  the purchase price
for the Securities surrendered by such Securityholder.

          9.2.     Piggy-Back Registration Rights.

               a. The Company covenants and agrees with the Securityholders that
in the  event,  and in each such  event,  that the  Company  proposes  to file a
registration  statement  under  the  Act  with  respect  to any  of  its  equity
securities  (other than pursuant to registration  statements on Form S-4 or Form
S-8 or any successor or similar forms), whether or not for its own account, then
the  Company  shall  give  written  notice  of  such  proposed   filing  to  all
Securityholders  promptly (and in any event at least twenty (20) days before the
anticipated  filing  date).  Such notice  shall  offer to such  Securityholders,
together with others who have similar rights, the opportunity to include in such
registration  statement  such  number of  Securities  as they may  request.  The
Company shall cause the managing underwriter of a proposed underwritten offering
(unless the  offering is an  underwritten  offering of a class of the  Company's
equity  securities  other than Common  Stock and the  managing  underwriter  has
advised the Company in writing  that,  in its  opinion,  the  inclusion  in such
offering of Common Stock would  materially  adversely affect the distribution of
such  offering) to permit the holders of Securities  requested to be included in
the  registration  to include such  Securities in the proposed  offering and the
Company shall use its reasonable best efforts to include such Securities in such
proposed offering on the same terms and conditions as any similar  securities of
the Company included therein.  If the offering of which the Company gives notice
is a public offering involving an underwriter,  the right of a Securityholder to
registration  pursuant  to this  Section  9.2  shall be  conditioned  upon  such
Securityholder's  participation  in such  underwriting  and the inclusion of the
Securities  to  be  sold  by  such  Securityholder  in  the  underwriting.   All
Securityholders  proposing to distribute  Securities  through such  underwriting
shall  enter  into  an  underwriting   agreement  in  customary  form  with  the
representative    of   the   underwriter   or   underwriters.    The   foregoing
notwithstanding, in the case of a firm commitment offering on underwriting terms
appropriate  for such a  transaction,  other than a  registration  requested  by
Securityholders  pursuant to Section 9.1, if any such  managing  underwriter  of
recognized  standing shall advise the Company and the Securityholders in writing
that,  in its opinion,  the  distribution  of all or a specified  portion of the
Securities  requested to be included in the registration  concurrently  with the
securities being registered by the Company would materially adversely affect the
distribution  of such  securities  by  increasing  the  aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can reasonably be sold in the  contemplated  distribution,
then  the  securities  to be  included  in a  registration  which  is a  primary
underwritten  offering  on  behalf  of the  Company  shall  be  included  in the
following  order:  (i) first,  the  securities  the Company  proposes to include
therein  and (ii)  second,  such other  securities  (including  the  Securities)
requested  to  be  included,   pro  rata  among  the  holders   (including   the
Securityholders)  of such other securities  according to the aggregate number of
securities held by each such holder requesting inclusion therein.

               b.  In the  event  that a  holder  or  holders  of the  Company's
securities (other than a Securityholder or Securityholders)  requests,  pursuant
to  rights  granted  to  such  holder  or  holders,  that  the  Company  file  a
registration statement for the public offering of securities and the Company and
the other holders of the Company's  securities  (including the  Securityholders)
who have rights to be included in such  registration,  request to be included in
such registration and the managing underwriter of such offering shall advise the
Company  and the holders  requesting  inclusion  in the  offering  that,  in its
opinion,  the distribution of a specified portion of the securities requested to
be  included  in  the  registration   would  materially   adversely  affect  the
distribution  of such  securities  by  increasing  the  aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can  reasonably be sold in the  contemplated  distribution
then, the securities to be included in the registration shall be included in the
following  order:  (i) first,  all of the  securities  requested  to be included
therein  by  the  holder  or  holders   making  the  initial   request  for  the
registration,  and (ii) second,  such other securities  requested to be included
therein by the holders of such other  securities,  pro rata among the holders of
such other  securities  according to the aggregate  number of securities held by
each such holder requesting inclusion therein.

          9.3.     Company Covenants; Registration Right Provisions.

               a. In connection with the registration of Securities on behalf of
the holders thereof (such Securityholders being referred to herein as "Sellers")
in accordance with Section 9.1 or Section 9.2 above, the Company agrees to:

                    (i) enter into a  cross-indemnity  agreement,  in  customary
form, with each underwriter, if any, and each Seller;

                    (ii) subject to the provisions of Section 9.1(a) and Section
9.2(a)  regarding  reductions  by  the  managing  underwriter,  include  in  the
registration statement filed with the SEC, the Securities for which requests for
registration  have been made;  provided,  however,  that promptly after filing a
registration  statement or prospectus or any amendments or supplements  thereto,
the Company  shall  furnish to each Seller  copies of all such  documents  filed
including documents incorporated by reference in the registration statement; and
notify each Seller of any stop order issued or threatened by the SEC and use its
best efforts to prevent the entry of such stop order or to remove it if entered;

                    (iii)  prepare and file with the SEC such  amendments of and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration  statement effective (A)
in the case of a  registration  pursuant  to  Section  9.1,  for a period of one
hundred and twenty  (120) days,  or, in the case of a  registration  pursuant to
Section  9.2,  for a period of ninety (90) days or such  shorter  period as such
registration may be required of or desired by the Company to be effective or (B)
such shorter  period as may be required if all such  Securities  covered by such
registration  statement are sold prior to the  expiration  of such periods,  and
comply with the  provisions  of the Act with respect to the  disposition  of all
securities  covered  by  such  registration  statement  during  such  period  in
accordance with the intended  methods of disposition by the Sellers set forth in
such registration  statement;  provided,  however, that the Company shall not be
required to file any  registration  statement  in  accordance  with  Section 9.1
hereof before the first anniversary of the Date of Grant;

                    (iv)  furnish to each Seller and each  underwriter,  if any,
without  charge,  such  number  of copies of the  registration  statement,  each
amendment and supplement  thereto (in each case including all exhibits thereto),
the  prospectus  included  in  such  registration   statement   (including  each
preliminary  prospectus)  and such other documents as such Seller may reasonably
request in order to facilitate the disposition of the Securities  proposed to be
sold by such Seller;

                    (v) use its  reasonable  best efforts to register or qualify
such  Securities   under  such  other  securities  or  Blue  Sky  laws  of  such
jurisdictions as any Seller or any such underwriter reasonably requests and keep
such  registrations or qualifications in effect for so long as such registration
statement  remains  in effect  and do any and all acts and  things  which may be
reasonably  necessary  or  advisable  to enable  such Seller to  consummate  the
disposition  in such  jurisdictions  of the  Securities  owned  by such  Seller;
provided,  however,  that the  Company  shall  not be  required  to (i)  qualify
generally  to do business in any  jurisdiction  where it would not  otherwise be
required to qualify but for this subsection (v), (ii) subject itself to taxation
in any such jurisdiction,  or (iii) consent to general service of process in any
jurisdiction;

                    (vi)  notify  each  Seller,  at any time  when a  prospectus
relating to such Seller's  Securities is required to be delivered under the Act,
of the occurrence of any event as a result of which the  prospectus  included in
such registration  statement  contains an untrue statement of a material fact or
omits to state any material fact  necessary to make the  statements  therein not
misleading, and as soon as practicable prepare a supplement or amendment to such
prospectus  so  that,  as  thereafter   delivered  to  the  purchasers  of  such
Securities,  such prospectus will not contain an untrue  statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading;

                    (vii) cause all such Securities to be listed on any Exchange
on which similar  securities  issued by the Company are then listed (which shall
not apply to the Warrants unless similar warrants are then listed);

                    (viii) provide a transfer agent,  registrar and CUSIP number
for all such  Securities not later than the effective date of such  registration
statement;

                    (ix)  enter into such  customary  agreements  (including  an
underwriting  agreement in customary  form) and take all such other actions that
the Sellers or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Securities;

                    (x) make  available for  inspection by the Sellers and their
counsel,  any  underwriter  participating  in any  disposition  pursuant to such
registration  statement,  and any counsel retained by any such underwriter,  all
pertinent  financial  and  other  information  and  corporate  documents  of the
Company, and cause the Company's officers, directors and employees to supply all
information  reasonably requested by any such Seller,  underwriter or counsel in
connection with such registration statement;

                    (xi)  use its  reasonable  best  efforts  to  obtain a "cold
comfort" letter from the Company's  independent  public accountants in customary
form and covering such matters of the type customarily covered by "cold comfort"
letters as the Sellers or any underwriter may reasonably request;

                    (xii) in the event of an underwritten  registration,  obtain
an  opinion  of  counsel  to the  Company,  addressed  to the  Sellers  and  any
underwriter,  in customary  form and including  such matters as are  customarily
covered  by  such  opinions  in  underwritten  registered  offerings  of  equity
securities  as the  Sellers or any  underwriter  may  reasonably  request,  such
opinion to be reasonably satisfactory in form and substance to each Seller; and

                    (xiii)  otherwise  use its best  efforts to comply  with all
applicable  rules  and  regulations  of  the  SEC,  and  make  available  to its
securityholders,  as soon  as  reasonably  practicable,  an  earnings  statement
covering the period of at least twelve (12) months  subsequent  to the effective
date of the registration  statement,  which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.

               b. Any other provisions of this Section 9  notwithstanding,  upon
receipt by the Securityholders of a written notice signed by the chief executive
officer,  chief operating  officer or chief financial  officer of the Company to
the  effect  set  forth  below,  the  Company  shall not be  obligated  during a
reasonable  period of time  thereafter to effect any  registrations  pursuant to
this Section 9, and the Securityholders agree that they will immediately suspend
sales of shares  under any  effective  registration  statement  for a reasonable
period of time,  in either case not to exceed  ninety (90) days,  at any time at
which,  in  the  Company's  reasonable  judgment,  (i)  there  is a  development
involving the Company or any of its  affiliates  which is material but which has
not yet been  publicly  disclosed  or (ii) sales  pursuant  to the  registration
statement would materially and adversely affect an underwritten  public offering
for the  account of the  Company or any other  material  financing  project or a
proposed or pending  material  merger or other material  acquisition or material
business  combination or material  disposition of the Company's assets, to which
the Company or any of its affiliates  is, or is expected to be, a party.  In the
event a registration is postponed or sales by the Securityholders pursuant to an
effective  registration  statement are suspended in accordance with this Section
9.3(b),  there  shall be added (i) to the  period  during  which the  Company is
obligated to keep a  registration  effective and (ii) to the period in which the
Sellers  may  request  the  Company  effect a  registration  pursuant to Section
9.1(a),  the number of days for which the  registration  was  postponed or sales
were suspended pursuant to this Section 9.3(b).

               c. The Company may require  each Seller to furnish to the Company
such  information  regarding the  distribution of the Securities  proposed to be
sold by such Seller and the  ownership  of the  Securities  by the Seller as the
Company may from time to time reasonably request in writing.

               d. Each Seller  agrees that,  upon receipt of any notice from the
Company of the occurrence of any event of the kind described in subsection  (vi)
of Section 9.3(a) above, such Seller shall forthwith discontinue  disposition of
Securities pursuant to the registration statement covering such Securities until
such  Seller's  receipt  of copies of the  supplemented  or  amended  prospectus
contemplated  by Section  9.3(a)(vi)  above and, if so directed by the  Company,
such Seller will deliver to the Company (at the  Company's  expense) all copies,
other than permanent file copies in such Seller's possession,  of the prospectus
covering such Securities  current at the time of receipt of such notice.  In the
event the Company  shall give any such notice,  the period  mentioned in Section
9.3(a)(iii) above shall be extended by the number of days during the period from
and  including  the date of giving of such notice to and including the date when
each  Seller  shall  have  received  the copies of the  supplemented  or amended
prospectus contemplated by Section 9.3(a)(vi) above.

               e.  The  Company  shall  not file or  permit  the  filing  of any
registration  or  comparable  statement  which  refers to any  Seller by name or
otherwise as the Seller of any  securities of the Company  unless such reference
to such  Seller  is  specifically  required  by the Act or any  similar  federal
statute, rules or regulation then in force.

          9.4 Expenses. All expenses incident to the Company's performance of or
compliance with this Warrant,  including without limitation all registration and
filing fees, fees and expenses  relating to filings with any Exchange,  fees and
expenses  of  compliance  with  securities  or Blue  Sky  laws in  jurisdictions
reasonably  requested by any Seller or underwriter pursuant to Section 9.3(a)(v)
(including  reasonable fees and disbursements of counsel in connection with Blue
Sky  qualifications  of the Securities),  all word  processing,  duplicating and
printing expenses,  messenger and delivery  expenses,  fees and disbursements of
counsel for the Company and one (1) counsel for the Sellers,  independent public
accountants  (including  the  expenses  of any special  audit or "cold  comfort"
letters required by or incident to such performance) and underwriters (excluding
discounts, commissions or fees of underwriters, selling brokers, dealer managers
or similar  securities  industry  professionals  attributable  to the securities
being registered, or legal expenses of any person other than the Company and the
Sellers,  but including liability insurance if the Company so desires),  all the
Company's internal expenses  (including,  without  limitation,  all salaries and
expenses of its officers and employees  performing legal or accounting  duties),
the expense of any annual audit, the expense of any liability  insurance (if the
Company  determines to obtain such insurance) and the fees and expenses incurred
in  connection  with the  listing of the  securities  to be  registered  on each
Exchange on which such  securities  issued by the Company are then  listed,  the
reasonable  fees and  expenses  of any  special  experts  (including  attorneys)
retained by the Company (if it so desires) in connection with such  registration
and fees and  expenses  of other  persons  retained  by the  Company  (all  such
expenses  being herein called  "Registration  Expenses"),  shall be borne by the
Company.  Notwithstanding  the  foregoing,  the Company shall bear the expenses,
fees and  disbursements of one (1) counsel for all of the Sellers to the extent,
and only to the extent, such expenses, fees and disbursements are reasonable.

          9.5 Registration Statement Preparation;  Investigation.  In connection
with the  preparation  and filing of each  registration  statement under the Act
pursuant to this Section 9, upon the reasonable  request of the original  holder
of the  Warrant,  the  Company  shall give such holder  under such  registration
statement,  its  underwriters,  if any,  and its  counsel and  accountants,  the
opportunity to participate in the  preparation of such  registration  statement,
each  prospectus  included  therein  or  filed  with  the  Commission,  and each
amendment thereof or supplement thereto,  and will give each of them such access
to its books and records and such  opportunities  to discuss the business of the
Company  with its  officers  and the  independent  public  accountants  who have
certified its financial statements as shall be necessary, in the opinion of such
holders'  and such  underwriters'  respective  counsel,  to conduct a reasonable
investigation within the meaning of the Act.

          9.6 Indemnification.

               a. In the  event of any  registration  of any  securities  of the
Company under the Act, the Company  shall,  and hereby does,  indemnify and hold
harmless in the case of any registration statement filed pursuant to Section 9.1
or Section  9.2,  the  Seller of any  Securities  covered  by such  registration
statement,  its  directors,  officers  and  employees,  each  other  person  who
participates  as an underwriter  in the offering or sale of such  Securities and
each other  person,  if any,  who controls  such Seller or any such  underwriter
within  the  meaning  of  the  Act  against  any  losses,  claims,  damages,  or
liabilities  (or actions or  proceedings  whether  commenced  or  threatened  in
respect thereof), joint or several, to which such Seller or any such director or
officer or underwriter or controlling person may become subject under the Act or
otherwise,  insofar as such losses, claims,  damages, or liabilities (or actions
or proceedings,  whether commenced or threatened,  in respect thereof) arise out
of or are based upon any untrue  statement  or alleged  untrue  statement of any
material  fact  contained  in  any  registration   statement  under  which  such
Securities were  registered  under the Act, any  preliminary  prospectus,  final
prospectus  or  summary  prospectus  contained  therein,  or  any  amendment  or
supplement  thereto,  or any  omission or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading,  and the Company shall  reimburse  such Seller and each
such director,  officer,  employee,  underwriter and controlling  person for any
legal or any other  expenses  reasonably  incurred  by them in  connection  with
investigating  or  defending  any  such  loss,  claim,  liability,   action,  or
proceeding;  provided, however, that the Company shall not be liable in any such
case to the extent that any such loss,  claim,  damage,  liability (or action or
proceeding,  whether  commenced or  threatened in respect  thereof),  or expense
arises out of or is based upon an untrue  statement or alleged untrue  statement
or omission or alleged omission made in such  registration  statement,  any such
preliminary  prospectus,  final prospectus,  summary prospectus,  amendment,  or
supplement in reliance upon and in conformity with written information furnished
to the Company through an instrument  duly executed by such Seller  specifically
stating it is for use in the preparation  thereof and, provided,  further,  that
the  Company  shall not be liable in any such case to the  extent  that any such
loss, claim,  damage,  liability (or action or proceeding,  whether commenced or
threatened,  in respect thereof), or expense arises out of such person's failure
to  send  or  give a copy  of the  final  prospectus,  as the  same  may be then
supplemented  or  amended,  within  the time  required  by the Act to the person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission if such  statement or omission was corrected in such final  prospectus.
Such  indemnity  shall  remain  in  full  force  and  effect  regardless  of any
investigation made by or on behalf of such Seller or any such director, officer,
underwriter  or  controlling  person  and shall  survive  the  transfer  of such
Securities by such Seller.

               b. The  Company may  require,  as a condition  to  including  any
Securities in any registration statement filed pursuant to Section 9.3, that the
Company  shall  have  received  an  undertaking  satisfactory  to  it  from  the
prospective  Seller,  to indemnify  and hold harmless (in the same manner and to
the same extent as set forth in Section  9.6(a))  the  Company,  each  director,
officer and employee of the Company, and each other person, if any, who controls
the Company  within the meaning of the Act,  with  respect to any  statement  or
alleged  statement  in or omission or alleged  omission  from such  registration
statement, any preliminary prospectus,  final prospectus,  or summary prospectus
contained therein,  or any amendment or supplement thereto, if such statement or
alleged  statement or omission or alleged omission was made in reliance upon and
in  conformity  with written  information  furnished  to the Company  through an
instrument duly executed by such Seller specifically  stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus,  summary prospectus,  amendment, or supplement. Such indemnity shall
remain in full force and effect,  regardless of any investigation  made by or on
behalf of the Company or any such director,  officer,  or controlling person and
shall survive the transfer of such Securities by such Seller.  In no event shall
the liability of any selling  Seller  hereunder  (including  without  limitation
indemnification  liability in connection  with Section  9.6(d) hereof) be in the
aggregate  greater in amount  than the dollar  amount,  if any, by which (1) the
proceeds  received by such Seller upon the sale of the Securities giving rise to
such  indemnification  obligation exceed (2) the purchase or exercise price paid
by such Seller for such  Securities.  The  Company  shall be entitled to receive
indemnities from  underwriters,  selling brokers,  dealer managers,  and similar
securities industry professionals  participating in the distribution to the same
extent as provided  above with respect to information so furnished in writing by
such persons  specifically  for  inclusion  in any  prospectus  or  registration
statement.

               c. Promptly  after receipt by an  indemnified  party of notice of
the  commencement  of any action or proceeding  involving a claim referred to in
this Section 9.6, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying  party,  give written notice to the latter of
the  commencement  of such action;  provided,  however,  that the failure of any
indemnified  party to give  notice as  provided  herein  shall not  relieve  the
indemnifying  party of its obligations under the preceding  subdivisions of this
Section  9.6,  except to the  extent  that the  indemnifying  party is  actually
prejudiced  by such failure to give  notice.  In case any such action is brought
against an indemnified  party,  unless in such  indemnified  party's  reasonable
judgment a conflict  of  interest  between  such  indemnified  and  indemnifying
parties  may exist in respect of such  claim,  the  indemnifying  party shall be
entitled to participate in and to assume the defense  thereof,  jointly with any
other indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably  satisfactory to such indemnified party,
and after notice from the indemnifying  party to such  indemnified  party of its
election so to assume the defense thereof,  the indemnifying  party shall not be
liable to such  indemnified  party for any legal or other expenses  subsequently
incurred  by the  latter in  connection  with the  defense  thereof  other  than
reasonable costs of  investigation.  If, in the indemnified  party's  reasonable
judgment a conflict  of  interest  between  such  indemnified  and  indemnifying
parties may exist in respect of such claim, the indemnified party may assume the
defense of such claim,  jointly with any other indemnified party that reasonably
determines such conflict of interest to exist, and the indemnifying  party shall
be liable to such indemnified parties for the reasonable legal fees and expenses
of one  counsel  for  all  such  indemnified  parties  and  for  other  expenses
reasonably  incurred  in  connection  with the defense  thereof  incurred by the
indemnified  party.  No  indemnifying  party  shall,  without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an  unconditional  term thereof the
giving by the claimant or plaintiff to such indemnified  party of a release from
all liability, or a covenant not to sue, in respect of such claim or litigation.
No  indemnified  party shall  consent to entry of any judgment or enter into any
settlement  of any such  action  the  defense  of which has been  assumed  by an
indemnifying party without the consent of such indemnifying party.

               d.  Indemnification and contribution similar to that specified in
this Section 9.6 (with appropriate  modifications) shall be given by the Company
and may be required of each Seller with respect to any required  registration or
other  qualification  of Securities under any Federal or state law or regulation
of any governmental authority, other than the Act.

               e. The indemnification required by this Section 9.6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation  or defense,  as and when bills are  received  or  expense,  loss,
damage or liability is incurred.

               f. If the  indemnification  provided for in this Section 9.6 from
the  indemnifying  party is  unavailable to an  indemnified  party  hereunder in
respect of any losses,  claims,  damages,  liabilities,  or expenses referred to
herein,  then the indemnifying  party, in lieu of indemnifying  such indemnified
party,  shall contribute to the amount paid or payable by such indemnified party
as a result  of  losses,  claims,  damages,  liabilities,  or  expenses  in such
proportion as is appropriate  to reflect the relative fault of the  indemnifying
party and  indemnified  party in connection  with the actions which  resulted in
such losses,  claims,  damages,  liabilities,  or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and  indemnified  party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information  supplied by, such indemnifying party or
indemnified  party,  and the  parties'  relative  intent,  knowledge,  access to
information,  and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims,  damages,  liabilities,
and  expenses  referred  to above  shall be deemed to include any legal or other
fees or  expenses  reasonably  incurred  by such  party in  connection  with any
investigation  or  proceeding.  In no event  shall the  liability  of any Seller
hereunder  (including  without limitation  contribution  liability in connection
with  Section  9.6(d)  hereof) be in the  aggregate  greater in amount  than the
dollar  amount,  if any, by which (1) the proceeds  received by such Seller upon
the sale of the Securities  giving rise to such  contribution  obligation exceed
(2) the purchase or exercise price paid by such Seller for such Securities.  The
parties  hereto agree that it would not be just and  equitable  if  contribution
pursuant to this Section 9.6(f) were determined by pro rata allocation or by any
other  method of  allocation  which  does not take into  account  the  equitable
considerations  referred  to  in  this  Section  9.6(f).  No  person  guilty  of
fraudulent  misrepresentation  (within the meaning of Section  11(f) of the Act)
shall be entitled to  contribution  from any person or entity who was not guilty
of such fraudulent misrepresentation.

          9.7 Conflicting  Rights.  The Company hereby  represents and covenants
that,  prior to and as of the Date of Grant the  Company  has not  granted,  and
after the Date of Grant the Company  shall not grant,  any  registration  rights
which conflict with the rights under this Section 9.

          9.8 Lock-up  Period.  If requested by the managing  underwriter  of an
offering  for  which  Shares of such  Securityholder  have  been  registered,  a
Securityholder shall not sell or otherwise transfer or dispose of any Securities
held by such  Securityholder  (other than those  included  in the  registration)
during such period following the effective date of such registration as is usual
and customary at such time in similar  public  offerings of similar  securities;
provided,  however,  that the Company shall use its  reasonable  best efforts to
cause each holder of a material  number of shares of Common  Stock to enter into
similar  "lock-up"  agreements  in respect  of such  offering.  The  obligations
described  in this  Section  9.8  shall  not apply to  offerings  pursuant  to a
registration statement on Form S-4 or Form S-8 or any successor or similar form.


     10. Additional Rights of the Company and Warrant Holder.


          10.1 Secondary  Sales. The Company agrees that it will make reasonable
efforts to cooperate  with the holder of this Warrant in obtaining  liquidity if
opportunities  to  make  secondary  sales  of the  Company's  securities  become
available.  To this end,  the Company will  promptly  provide the holder of this
Warrant with notice of any offer to acquire from the Company's  security holders
more than five  percent  (5%) of the total  voting power of the Company and will
make  reasonable  efforts to cooperate  with the holder in arranging the sale of
this  Warrant to the person or persons  making  such offer;  provided  that such
notice may be delayed as  necessary to comply with state  corporate  and Federal
securities laws.

          10.2  Mergers.  In the event that the Company  undertakes to (i) sell,
lease, exchange,  convey or otherwise dispose of all or substantially all of its
property  or  business,  or  (ii)  merge  into or  consolidate  with  any  other
corporation (other than a wholly-owned subsidiary of the Company), or effect any
transaction  (including a merger or other  reorganization)  or series of related
transactions,  in which  more than 50% of the  voting  power of the  Company  is
disposed  of, the Company  will use its  reasonable  best  efforts to provide at
least  thirty  (30) days  notice of the terms  and  conditions  of the  proposed
transaction.  The Company will make  reasonable  efforts to  cooperate  with the
holder in  consummating  the sale of this  Warrant in  connection  with any such
transaction.

          10.3 Right to Convert Warrant into Common Stock; Net Issuance.

               a. Right to Convert.  In addition  to and  without  limiting  the
rights of the holder under the terms of this Warrant,  the holder shall have the
right  (the  "Conversion  Right"),  at any time and from time to time  while the
Warrant is exercisable,  to convert this Warrant (but only as to an aggregate of
one half (or any  lesser  portion  thereof)  of the  original  number  of Shares
represented by this Warrant (as adjusted pursuant to Section 4 hereof) (the "Net
Issuance  Warrant"))  into shares of Common  Stock as  provided in this  Section
10.3. Upon exercise of the Conversion Right with respect to a particular  number
of shares subject to this Warrant (the "Converted Warrant Shares"),  the Company
shall deliver to the holder (without payment by the holder of any exercise price
or any cash or other  consideration)  that  number of  shares of fully  paid and
nonassessable  Common Stock equal to the  quotient  obtained by dividing (i) the
value of the Net  Issuance  Warrant  (or the  specified  portion  hereof) on the
Conversion  Date (as defined in  subsection  (b)  hereof),  which value shall be
equal to (A) the  aggregate  fair market value of the Converted  Warrant  Shares
issuable  upon exercise of the Net Issuance  Warrant (or the  specified  portion
hereof)  on the  Conversion  Date less (B) the  aggregate  Warrant  Price of the
Converted  Warrant  Shares  immediately  prior to the exercise of the Conversion
Right  by (ii) the  fair  market  value  of one  share  of  Common  Stock on the
Conversion Date.
<PAGE>

     Expressed as a formula,  such conversion  shall be computed as follows:

     X = A - B
         -----
           Y

     Where:   X =  the  number of shares of  Common  Stock that may be issued to
                   holder

              Y =  the fair market value (FMV) of one share of Common Stock

              A =  the aggregate FMV (i.e., FMV x Converted Warrant Shares)

              B =  the aggregate  Warrant Price (i.e.,  Converted Warrant Shares
                   x Warrant Price)

     No  fractional  shares shall be issuable  upon  exercise of the  Conversion
Right,  and, if the number of shares to be issued  determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder  an  amount  in cash  equal to the  fair  market  value of the  resulting
fractional  share on the  Conversion  Date.  For  purposes  of Section 9 of this
Warrant,  shares issued pursuant to the Conversion  Right shall be treated as if
they were issued upon the exercise of this Warrant.

               b. Method of Exercise.  The Conversion  Right may be exercised by
the  holder by the  surrender  of this  Warrant at the  principal  office of the
Company  together with a written  statement  specifying  that the holder thereby
intends to exercise the  Conversion  Right and  indicating  the number of shares
subject to the Net Issuance Warrant which are being surrendered  (referred to in
subsection  (a)  hereof as the  Converted  Warrant  Shares) in  exercise  of the
Conversion Right. Such conversion shall be effective upon receipt by the Company
of this Warrant together with the aforesaid written statement,  or on such later
date as is  specified  therein (the  "Conversion  Date").  Certificates  for the
shares issuable upon exercise of the Conversion Right and, if applicable,  a new
warrant  evidencing the balance of the shares remaining subject to this Warrant,
shall be issued as of the  Conversion  Date and shall be delivered to the holder
within thirty (30) days following the Conversion Date.

               c.  Determination  of Fair  Market  Value.  For  purposes of this
Section  10.3,  "fair  market  value" of a share of Common  Stock shall have the
meaning set forth in Section 4(h) above.

               d. Determination of Net Issuance Warrant;  Exercise-Only Warrant.
The portion of the Warrant that is not the Net  Issuance  Warrant is referred to
herein as the Exercise-Only  Warrant,  with respect to which Section 10.3 hereof
shall not apply.  In the event a Warrant  holder  exercises  any  portion of its
Warrant, or if same is repurchased,  such exercise or repurchase shall be deemed
to consist of the  exercise or  repurchase  of  Exercise-Only  Warrants,  to the
maximum extent possible, unless the Company is otherwise notified by such holder
prior to such exercise or repurchase.  In the event a Warrant  holder  transfers
any  portion of its  Warrant,  such  transfer  shall be deemed to consist of the
transfer of Exercise-Only  Warrants, to the maximum extent possible,  unless the
Company is otherwise notified by such holder prior to such transfer.  In case of
any  transfer,  partial  repurchase  or partial  exercise of this  Warrant,  the
Company shall be entitled to include in any new Warrant a provisions  indicating
the extent to which, in accordance with the provisions of this Section  10.3(d),
such new Warrant is deemed a Net Issuance Warrant or an Exercise-Only Warrant.

          10.4  Warrant Repurchase by the Company.

               a. Mandatory  Repurchase.  The Company will repurchase,  from any
source of funds legally  available  therefore,  all  outstanding and unexercised
Warrants at 5:00 pm (Los Angeles time) on the fifth  anniversary  of the Date of
Grant, in accordance  with the provisions of Section 10.4(c) below.  The Company
shall effect such repurchase by paying to the holder of each unexercised Warrant
an amount in cash equal to $1.50  (subject to  adjustment  pursuant to Section 4
hereof as if such  amount  were a Warrant  Price)  multiplied  by the  number of
shares of Common Stock for which such Warrant could be exercised (by the payment
of the Warrant Price  therefor) as of such date (such product,  the  "Repurchase
Price").

               b. Optional  Repurchase.  Prior to the second  anniversary of the
Date of Grant, at the option of the Company,  the Company may repurchase certain
of the unexercised  Warrants at a repurchase price (the "Repurchase  Price") set
forth in the table below,  in the event that the fair market value of a share of
Common  Stock at the time of the  exercise  of such  optional  repurchase  right
exceeds the "Minimum Fair Market  Value" (as set forth in the table  below),  in
accordance with the provisions of Section  10.4(c) below.  The maximum number of
Warrants  repurchasable pursuant to this Section 10.4(b) shall be such number as
could be exercised  (by the payment of the Warrant  Price  therefor) for 250,000
shares of Common Stock  (subject to adjustment  pursuant to Section 4 hereof) as
of the date of such  repurchase.  The Company  shall effect such  repurchase  by
paying to the holder of each repurchased  unexercised  Warrant an amount in cash
equal to the  applicable  Repurchase  Price (set forth below)  multiplied by the
number of shares of Common Stock for which such Warrant  could be exercised  (by
the payment of the Warrant Price therefor) as of the date of such repurchase:

Minimum Fair Market Value     Number of Shares Purchasable
 Vablue of Common Stock             upon Exercise of
  on Repurchase Date*            Repurchasable Warrants*       Repurchase Price*
  -------------------            -----------------------       -----------------
                                                                 
        $12.00                           62,500                     $1.50
        $15.00                           62,500                     $2.00
        $18.00                           62,500                     $2.50
        $21.00                           62,500                     $3.00

* As adjusted by the application of Section 4 hereof.

               c.  Method  of  Repurchase.  At least 10 but no more than 20 days
prior to the  repurchase  of any  unexercised  Warrant  pursuant to this Section
10.4,  written  notice shall be mailed,  first class  postage  prepaid,  to each
holder of record (at the close of business on the  business  day next  preceding
the day on which notice is given) of any unexercised  Warrant to be repurchased,
at the  address  last  shown on the  records  of the  Company  for such  holder,
notifying such holder of the repurchase to be effected, specifying the number of
shares  of  Common  Stock  for which  the  Warrant  being  repurchased  could be
exercised  (by the payment of the Warrant Price  therefor) as of such date,  the
date and time of such repurchase,  the Repurchase  Price, and the place at which
payment may be  obtained,  calling upon such holder to surrender to the Company,
in the manner and place designated,  such unexercised Warrants being repurchased
pursuant to this Section 10.4; provided,  however, that (i) the number of shares
of Common Stock for which the Warrant being  repurchased  could be exercised (by
the  payment  of the  Warrant  Price  therefor)  as of such  date  and  (ii) the
Repurchase Price, as each is set forth in such notice,  shall be estimates only,
the actual amounts being determined  pursuant to Section 10.4(a) or 10.4(b),  as
applicable, on and as of the date set forth for such repurchase. With respect to
Section  10.4(b)  above,  the  fair  market  value of a share  of  Common  Stock
(purchasable  upon  exercise of the Warrants  proposed to be  repurchased)  must
equal or exceeded  the Minimum  Fair Market  Value on the date of such notice as
well as on the date of the noticed  repurchase for such  repurchase to occur. On
or after the date  designated  for  repurchase,  each  holder of  Warrants to be
repurchased  shall  surrender  to the Company  certificates  or other  documents
representing  such  Warrants,  in the manner and at the place  designated in the
repurchase  notice,  and thereupon (i) the Repurchase Price with respect to such
repurchased  Warrant  shall be  payable  to the order of the holder of record of
such Warrant, and each repurchased Warrant shall be cancelled. In the event less
than all of the  unexercised  Warrants  represented  by any such  certificate or
other  document is  repurchased,  a new  certificate or document shall be issued
representing  the  Warrants  to the extent not  repurchased.  From and after the
designated  repurchase  date,  unless  there  shall  have been a default  in the
payment  of the  Repurchase  Price,  all rights of the  holders  of  unexercised
Warrants  designated for  repurchase,  as holders of such Warrants,  shall cease
except with respect to the right to receive the Repurchase  Price therefor.  Any
repurchase of Warrants pursuant to this Section 10.4 shall be made pro rata with
respect  to all  holders  of record of  unexercised  Warrants  as of the date of
repurchase.

          11.  Representations  and  Warranties.   The  Company  represents  and
warrants to the holder of this Warrant as follows, as of the Date of Grant:


               a. This  Warrant  has been duly  authorized  and  executed by the
Company and is a valid and binding  obligation  of the  Company  enforceable  in
accordance with its terms,  subject to laws of general  application  relating to
bankruptcy,  insolvency  and the  relief  of  debtors  and the  rules  of law or
principles at equity governing specific performance, injunctive relief and other
equitable remedies;

               b. The Shares have been duly authorized and reserved for issuance
by the Company and,  when issued in accordance  with the terms  hereof,  will be
validly issued, fully paid and nonassessable;

               c. The rights,  preferences,  privileges and restrictions granted
to or imposed upon the Common Stock and the holders  thereof are as set forth in
the articles or certificate of incorporation  of the Company,  as amended to the
Date of Grant (as so amended, the "Charter"),  a true and complete copy of which
has been delivered to the original holder of this Warrant;

               d. (1) The  execution  and  delivery of this Warrant are not, and
the  issuance  of the Shares upon  exercise of this  Warrant (to the extent such
Warrant is then held by Foothill  Capital  Corporation)  in accordance  with the
terms  hereof  will not be,  inconsistent  with the  Charter  or  by-laws of the
Company,  do  not  and  will  not  contravene,  in  any  material  respect,  any
governmental  rule or regulation,  judgment or order  applicable to the Company,
and do not and will  not  conflict  with or  contravene  any  provision  of,  or
constitute  a  default  under,  any  indenture,   mortgage,  contract  or  other
instrument  of which the  Company  is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the  registration or filing
with or the taking of any action in  respect  of or by,  any  Federal,  state or
local government  authority or agency or other person,  except for the filing of
notices  pursuant to federal and state  securities  laws,  which filings will be
effected by the time required thereby;

                  (1) The  issuance of the Shares upon  exercise of this Warrant
(to  the  extent  such  Warrant  has  been   transferred  by  Foothill   Capital
Corporation) in accordance  with the terms hereof will not be inconsistent  with
the Charter or by-laws of the Company,  do not and will not  contravene,  in any
material  respect,  any  governmental  rule or  regulation,  judgment  or  order
applicable  to the Company,  and do not and will not conflict with or contravene
any  provision  of, or  constitute a default  under,  any  indenture,  mortgage,
contract or other  instrument  of which the Company is a party or by which it is
bound or  require  the  consent  or  approval  of,  the giving of notice to, the
registration or filing with or the taking of any action in respect of or by, any
Federal,  state or local government authority or agency or other person,  except
for the filing of notices  (which  filings will be effected by the time required
thereby),  or  the  filing  of  registration  statements  and  the  delivery  of
prospectuses, pursuant to federal and state securities laws;

               e.  There  are  no  actions,  suits,  audits,  investigations  or
proceedings pending or, to the knowledge of the Company,  threatened against the
Company in any court or before any governmental  commission,  board or authority
which,  if  adversely  determined,  will have a material  adverse  effect on the
ability of the Company to perform its obligations under this Warrant;

               f. The authorized capital stock of the Company consists of Twenty
Million  (20,000,000)  shares of Common  Stock,  $0.001 par value per share,  of
which  approximately  Eight Million Nine Hundred Fourteen  Thousand Five Hundred
Fifty-Seven  (8,914,557)  shares were issued and  outstanding as of the close of
business on the Date of Grant, and Ten Million  (10,000,000) shares of Preferred
Stock,  $0.001  par  value per  share,  of which  Eight  (8)  shares of Series A
Convertible Preferred Stock were issued and outstanding as of the Date of Grant.
All such  outstanding  shares  have been  validly  issued  and are  fully  paid,
nonassessable shares free of preemptive rights;

               g. Other than the  Warrants,  pursuant  to  director  or employee
benefit plans of the Company which (except in the case of certain  tax-qualified
plans) have been approved by the Company's stockholders,  or as disclosed in the
Company's most recent Proxy Statement and Form 10-K, there are no subscriptions,
rights,  options,  warrants,  or calls  relating to any shares of the  Company's
capital  stock,  including  any  right  of  conversion  or  exchange  under  any
outstanding security or other instrument; and

               h.  Other  than  the  Warrants  or  except  as  disclosed  in the
Company's most recent Proxy  Statement and Form 10-K, the Company is not subject
to any obligation  (contingent or otherwise) to repurchase or otherwise  acquire
or retire any shares of its capital  stock or any security  convertible  into or
exchangeable for any of its capital stock.

     12.  Modification and Waiver.  This Warrant and any provision hereof may be
changed,  waived,  discharged  or  terminated  only by an  instrument in writing
signed by the party against which enforcement of the same is sought.

     13. Notices. Any notice, request,  communication or other document required
or permitted to be given or delivered to the holder  hereof or the Company shall
be  delivered,  or shall be sent by private  courier or certified or  registered
mail, postage prepaid,  to each such holder at its address as shown on the books
of the  Company  or to the  Company at the  address  indicated  therefor  on the
signature page of this Warrant.

     14. Binding  Effect on  Successors.  This Warrant shall be binding upon any
corporation  succeeding the Company by merger,  consolidation  or acquisition of
all or substantially all of the Company's assets,  and all of the obligations of
the  Company  relating  to the  Common  Stock  issuable  upon  the  exercise  or
conversion  of  this  Warrant  shall  survive  the  exercise,   conversion   and
termination  of this  Warrant and all of the  covenants  and  agreements  of the
Company shall inure to the benefit of the  successors  and assigns of the holder
hereof.  The Company  will,  at the time of the exercise or  conversion  of this
Warrant,  in whole or in part,  upon  request  of the  holder  hereof but at the
Company's  expense,  acknowledge  in writing its  continuing  obligation  to the
holder hereof in respect of any rights to which the holder hereof shall continue
to be  entitled  after such  exercise  or  conversion  in  accordance  with this
Warrant;  provided,  that the  failure  of the  holder  hereof  to make any such
request shall not affect the continuing  obligation of the Company to the holder
hereof in respect of such rights.

     15. Lost  Warrants or Stock  Certificates.  The  Company  covenants  to the
holder  hereof that,  upon receipt of evidence  reasonably  satisfactory  to the
Company of the loss,  theft,  destruction  or  mutilation of this Warrant or any
stock  certificate  and,  in the case of any loss,  theft or  destruction,  upon
receipt of an executed lost securities bond or indemnity reasonably satisfactory
to the  Company,  or in the  case of any  such  mutilation  upon  surrender  and
cancellation  of such  Warrant or stock  certificate,  the Company will make and
deliver a new Warrant or stock certificate,  of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.

     16.  Descriptive   Headings.   The  descriptive  headings  of  the  several
paragraphs  of  this  Warrant  are  inserted  for  convenience  only  and do not
constitute a part of this Warrant.

     17.  Governing  Law.  This  Warrant  shall be  construed  and  enforced  in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware.

     18.   Survival  of   Representations,   Warranties  and   Agreements.   All
representations  and  warranties of the Company and the holder hereof  contained
herein  shall  survive the Date of Grant,  the  exercise or  conversion  of this
Warrant  (or any  part  hereof)  or the  termination  or  expiration  of  rights
hereunder.  All agreements of the Company and the holder hereof contained herein
shall survive  indefinitely until, by their respective terms, they are no longer
operative.

     19.  Remedies.  In case  any one or more of the  covenants  and  agreements
contained in this Warrant shall have been  breached,  the holders hereof (in the
case of a breach by the  Company),  or the Company (in the case of a breach by a
holder),  may proceed to protect and enforce  their or its rights either by suit
in equity and/or by action at law, including,  but not limited to, an action for
damages as a result of any such breach and/or an action for specific performance
of any such covenant or agreement contained in this Warrant.

     20.  Acceptance.  Receipt  of  this  Warrant  by the  holder  hereof  shall
constitute acceptance of and agreement to the foregoing terms and conditions.

     21. No  Impairment  of Rights.  The Company  will not, by  amendment of its
Charter or through any other  means,  avoid or seek to avoid the  observance  or
performance  of any of the terms of this Warrant,  but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or  appropriate in order to protect the rights of the
holder of this Warrant against impairment.

                            [SIGNATURE PAGE FOLLOWS]


<PAGE>



          IN WITNESS  WHEREOF,  LaserSight  Incorporated has caused this
Warrant to be  executed  on its  behalf by one of its  officers  thereunto  duly
authorized.


                                      LASERSIGHT INCORPORATED



                                      By:  /s/ Michael R. Farris
                                         ------------------------
                                        Name: Michael Farris
                                        Title: President/Chief Executive Officer

                                        Address: 12161 Lackland Road
                                                 St. Louis, Missouri 63146

Date: March 31, 1997