WARRANT B


Dated: January 9, 1998                                   Warrant No. WA-1997-246
                               **216,272** Shares


         NEITHER  THESE  WARRANTS NOR THE SHARES OF COMMON STOCK  ISSUABLE  UPON
EXERCISE OF THESE  WARRANTS HAVE BEEN  REGISTERED  WITH THE U.S.  SECURITIES AND
EXCHANGE  COMMISSION OR THE SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON
AN  EXEMPTION  FROM  REGISTRATION  UNDER  REGULATION  D  PROMULGATED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE WARRANTS AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE RESTRICTED AND MAY NOT
BE OFFERED OR SOLD EXCEPT  PURSUANT TO  REGULATION D UNDER THE ACT, AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER THE ACT OR  PURSUANT TO AN  APPLICABLE  EXEMPTION
THEREFROM.

            These  Warrants  shall  cease to be  exercisable  and  shall be void
                   after January 10, 2000, at 5:00 p.m.,
                           Salt Lake City, Utah time.


                         COMMON STOCK PURCHASE WARRANTS
                                       OF
                            COVOL TECHNOLOGIES, INC.


         FOR  VALUE  RECEIVED,  Covol  Technologies,  Inc.  (the  "Company"),  a
Delaware corporation, hereby certifies that AJG Financial Services, Inc., or its
permitted  assigns,  is entitled to purchase  from the  Company,  subject to the
conditions and upon the terms of this Warrant,  at any time or from time to time
after the date  hereof  and prior to 5:00 p.m.  Salt Lake City,  Utah  time,  on
January 10, 2000, an aggregate of 216,272 fully paid and nonassessable shares of
Common Stock, par value $.001, of the Company (subject to adjustment as provided
herein),  at a per  share  exercise  price  of  $20.00  per  share  (subject  to
adjustment as provided herein). This Warrant is issued pursuant to the terms set
forth in a letter  agreement  dated  October 22, 1997, by and between the Holder
(as defined below) and the Company (the "Letter Agreement").

         1.       Definitions.

         As used in this  Warrant,  the  following  terms  have  the  respective
meanings set forth below:

         "Additional  Shares of Common  Stock"  shall  mean all shares of Common
Stock issued by the Company after the Closing Date, other than Warrant Shares.

                                        1

<PAGE>



         "Affiliate"  of  any  Person  shall  mean a  Person  that  directly  or
indirectly, through one or more intermediaries,  controls or is controlled by or
is under common control with, such Person.

         "Appraised  Value" shall mean,  in respect of any share of Common Stock
on any date  herein  specified,  the fair  market  value of such share of Common
Stock  (determined  without  giving  effect to the  discount  for (i) a minority
interest,  or (ii) any lack of liquidity of the Common Stock or to the fact that
the Company may have no class of equity registered under the Exchange Act, based
on the quotient obtained by dividing (x) the value of the Company, as determined
by an investment  banking firm selected in accordance  with the terms of Section
12, by (y) the number of Fully Diluted Outstanding shares of Common Stock.

         "Book Value" shall mean, in respect of any share of Common Stock on any
date  herein  specified,  the  consolidated  book  value  of the  Company  (with
inventory valued on a first-in-first-out basis) applicable to Common Stock as of
the last day of any month immediately preceding such date, divided by the number
of Fully Diluted  Outstanding shares of Common Stock as determined in accordance
with  GAAP by Price  Waterhouse  Coopers  LLP or any other  firm of  independent
certified public  accountants of recognized  national  standing  selected by the
Company and  reasonably  acceptable to the Majority  Holders,  determined in any
event  without any  adjustment  or reduction  for the amount,  if any, that may,
under  modifications  to GAAP adopted after the Closing Date, be required either
as an offset to or  reserve  against  earnings  or  retained  earnings,  or as a
deduction  from book  value or net  worth,  in  either  event as a result of the
exercise,  issuance,  anticipated exercise or anticipated cost to the Company of
any stock option, right or convertible security or any provision of the Warrants
or any other warrant issued by the Company.

         "Business Day" shall mean any day that is not a Saturday or Sunday or a
day on which banks are  required or  permitted to be closed in the State of Utah
or the State of Illinois.

         "Closing Date" shall mean January 9, 1998.

         "Commission"  shall mean the Securities and Exchange  Commission or any
other federal  agency then  administering  the  Securities Act and other federal
securities laws.

         "Common   Stock"  shall  mean  (except  where  the  context   otherwise
indicates) the Common Stock,  $0.001 par value, of the Company as constituted on
the  Closing  Date,  and any  capital  stock into which  such  Common  Stock may
thereafter  be changed,  and shall also include (i) capital stock of the Company
of any other  class  (regardless  of how  denominated)  issued to the holders of
shares of  Common  Stock  upon any  reclassification  thereof  which is also not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to  redemption  and (ii) shares of common  stock of any
successor or acquiring  corporation  (as defined in Section 4.8)  received by or
distributed  to the holders of Common Stock of the Company in the  circumstances
contemplated by Section 4.8.


                                        2

<PAGE>



         "Convertible  Securities" shall mean evidences of indebtedness,  shares
of stock or other securities which are convertible into or exchangeable, with or
without payment of additional  consideration in cash or property, for Additional
Shares of Common Stock, either immediately or upon the occurrence of a specified
date or a specified event.

         "Current  Market  Price" shall mean,  in respect of any share of Common
Stock on any date herein specified,  the highest of (a) the Book Value per share
of Common Stock at such date, (b) the Appraised  Value per share of Common Stock
as of a date which is within 120 days of such date,  (c) the fair  market  value
thereof as  determined in good faith by the Board of Directors of the Company as
of a date which is within 15 days of such date,  or (d) if there shall then be a
public market for the Common  Stock,  the average of the daily market prices for
the 30  consecutive  Business Days  immediately  preceding  such date. The daily
market price for each such Business Day shall be (i) the last sale price on such
day on the principal stock exchange on which such Common Stock is then listed or
admitted  to  trading,  (ii) if no sale  takes  place  on such  day on any  such
exchange,  the  last  reported  sale  price  as  officially  quoted  on any such
exchange, (iii) if the Common Stock is not then listed or admitted to trading on
any  stock  exchange,  the last sale  price on such day in the  over-the-counter
market, as reported by the National  Association of Securities Dealers Automatic
Quotation  System  ("NASDAQ"),  or if such sale price is not  available  on such
date,  the average of the closing bid and asked  prices on such date as reported
by NASDAQ,  or if not so reported,  then as reported by the  National  Quotation
Bureau,  Inc.,  (iv) if neither such firm at the time is engaged in the business
of reporting such prices,  as furnished by any similar firm then engaged in such
business,  or (v) if there is no such firm,  as  furnished  by any member of the
NASD  selected  mutually  by the  Majority  Holders  and the Company or, if they
cannot agree upon such  selection,  as selected by two such members of the NASD,
one of which shall be selected by the Majority Holders and one of which shall be
selected by the Company.

         "Current  Warrant  Price"  shall mean,  in respect of a share of Common
Stock at any date herein  specified,  the price at which a share of Common Stock
may be purchased pursuant to this Warrant on such date. On the Closing Date, the
Current Warrant Price is $10.00 per share of Common Stock.

         "Debenture  Agreement" shall mean the Debenture  Agreement and Security
Agreement,  dated as of January 9, 1998,  between the Company and AJG  Financial
Services, Inc.

         "Default Rate" means eight percent (8%).

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended,  or any similar federal  statute,  and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

         "Exercise  Period"  shall mean the period  during which this Warrant is
exercisable pursuant to Section 2.


                                        3

<PAGE>



         "Fully  Diluted  Outstanding"  shall mean,  when used with reference to
Common  Stock,  at any date as of which the  number of shares  thereof  is to be
determined,  all shares of Common Stock  Outstanding at such date and all shares
of Common Stock issuable in respect of this Warrant outstanding on such date and
other options or warrants to purchase, or securities convertible into, shares of
common  stock  outstanding  on such date which  would be deemed  outstanding  in
accordance  with GAAP for purposes of  determining  book value or net income per
share.

         "GAAP"  shall mean  generally  accepted  accounting  principles  in the
United States of America as from time to time in effect.

         "Holder" shall mean, as the context requires,  the Person in whose name
this  Warrant or one of the other  Warrants  is  registered  on the books of the
Company  maintained for such purpose or the Person  holding any Warrant  Shares,
and "Holders" shall mean two or more such Persons.

         "Independent Counsel" shall mean counsel to the Company, unless counsel
to Holder  disagrees  in writing with the opinion or advice of such counsel with
respect to the issue in question  within fifteen (15) days after receipt of such
opinion or advice,  in which case the Company and Holder  shall  select  another
counsel, not the regular counsel of either, who is experienced in Securities Act
matters, who shall render an opinion with respect to the issue in question.  The
legal fees and expenses of such other counsel  incurred in  connection  with the
rendering of such opinion shall be borne equally by Holder and the Company.

         "Letter  Agreement"  shall  have the  meaning  set  forth in the  first
paragraph of this Warrant.

         "Majority  Holders" shall mean the Holders of Warrants  exercisable for
in  excess of 50% of the  aggregate  number  of  shares  of  Common  Stock  then
purchasable upon exercise of all Warrants, whether or not then exercisable.

         "NASD" shall mean the National Association of Securities Dealers, Inc.,
or any successor corporation thereto.

         "Other Property" shall have the meaning set forth in Section 4.8.

         "Outstanding"  shall mean, when used with reference to Common Stock, at
any date as of which the  number  of shares  thereof  is to be  determined,  all
issued  shares of Common  Stock,  except shares then owned or held by or for the
account of the Company or any Subsidiary,  and shall include all shares issuable
in respect of  outstanding  scrip or any  certificates  representing  fractional
interests in shares of Common Stock.

         "Permitted  Issuances"  shall mean [(i) the  issuance  of up to 800,000
shares of Common Stock pursuant to certain  outstanding  warrants of the Company
which are "out of the money" as of the Closing Date,  (ii) the issuance of up to
1,500,000  shares of Common  Stock  pursuant  to  certain  outstanding  options,
warrants or other securities of the Company convertible into Common Stock


                                        4

<PAGE>



which are "in the  money" as of the  Closing  Date,  (iii)  the  issuance  of or
granting of rights to acquire up to 790,000 shares of Common Stock to PacifiCorp
Financial  Services,  inc.  or any of its  affiliates  ('PacifiCorp"),  or their
respective  assigns,  pursuant to the Convertible  Loan and Security  Agreement,
dated,  between the Company and PacifiCorp,  (iv) the issuance of or granting of
rights to acquire up to 515,000 shares of Common Stock to be sold by the Company
pursuant to a private Placement  Memorandum,  (v) the issuance of or granting of
rights to acquire up to 100,000 shares of Common Stock to LKD Partnership or its
assigns  pursuant  to  a  Convertible  Debenture  in  the  principal  amount  of
approximately  $1,000,000  issued in  November,  1996,  (vi) the  issuance of or
granting  of rights  to  acquire  up to  2,000,000  shares  of  Common  Stock to
officers, directors,  consultants or employees of the Company, which rights vest
over the next 8 to 9 years,  (vii)  the  issuance  of or  granting  of rights to
acquire up to 400,000  additional shares of Common Stock to any third parties in
transactions  other than those referred to in the preceding  clauses (i) through
(vi)],  and (viii) the issuance of shares of Common  Stock upon  exercise of the
Warrants.

         "Person" shall mean any individual,  sole proprietorship,  partnership,
joint  venture,  trust,  incorporated  organization,  association,  corporation,
institution,  public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise,  including, without limitation, any
instrumentality, division, agency, body or department thereof).

         "Registration  Rights  Agreement"  shall mean the  Registration  Rights
Agreement,  dated as of January 9, 1998,  between the Company and AJG  Financial
Services, Inc.

         "Restricted  Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 8.1.

         "Securities Act" shall mean the Securities Act of 1933, as amended,  or
any similar  federal  statute,  and the rules and  regulations of the Commission
thereunder, all as the same shall be in effect at the time.

         "Subsidiary"  shall mean any  corporation of which an aggregate of more
than  50% of the  outstanding  stock  having  ordinary  voting  power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation  shall have
or might have voting power by reason of the happening of any  contingency) is at
the time,  directly or indirectly,  owned legally or beneficially by the Company
and/or one or more Subsidiaries of the Company.

         "Termination Date" shall have the meaning set forth in Section 2.

         "Transfer"  shall mean any disposition of any Warrant or Warrant Shares
or of any  interest in either  thereof,  which would  constitute  a sale thereof
within the meaning of the Securities Act.


                                        5

<PAGE>



         "Warrant  Price" shall mean an amount equal to (i) the number of shares
of Common  Stock  being  purchased  upon  exercise of this  Warrant  pursuant to
Section 2,  multiplied by (ii) the Current  Warrant Price as of the date of such
exercise.

         "Warrant  Shares"  shall mean the shares of Common  Stock  purchased by
Holders of the Warrants upon the exercise thereof.

         "Warrants"  shall mean the two Warrants (one  designated  Warrant A and
the other  designated  Warrant  B),  each dated  January 9, 1998,  issued by the
Company to AJG Financial Services,  Inc. evidencing rights to purchase initially
up to an aggregate of 432,544  shares of Common Stock,  and all warrants  issued
upon transfer,  division or combination  of, or in substitution or exchange for,
any thereof.

         2. Exercise of Warrant. This Warrant may be exercised,  in whole at any
time or in part from time to time  during the  period  (the  "Exercise  Period")
commending on the date hereof, and ending on January 10, 2000, at 5:00 p.m. Salt
Lake City, Utah time (the "Termination  Date"), by the Holder of this Warrant by
the  surrender  of this Warrant  (with the exercise  form at the end hereof duly
executed) at the address set forth in Section 13 hereof,  together  with payment
of the  Warrant  Price.  Payment  of the  Warrant  Price  shall be made first by
offset, in whole or in part, against any obligation of the Company to the Holder
pursuant to the Debenture issued pursuant to the Debenture  Agreement,  and then
any  balance by wire  transfer  to an  account  in a bank  located in the United
States  designated  for such  purpose by the Company or by certified or official
bank check.  The Warrant shall expire,  and exercise shall no longer be allowed,
to the  extent the  Warrant  has not been  exercised  by the  expiration  of the
Exercise Period.

         If this Warrant is  exercised  in part,  this Warrant must be exercised
for a minimum of 1,000 shares of Common Stock and if the Exercise Period has not
expired the Holder is entitled to receive a new Warrant  covering  the number of
Warrant  Shares in respect  of which this  Warrant  has not been  exercised  and
setting forth the  proportionate  part of the Warrant  Price  applicable to such
Warrant Shares. Upon such surrender of this Warrant,  the Company will (a) issue
a warrant or warrants in the name of the Holder for the largest  number of whole
shares of Common  Stock to which  the  Holder  shall be  entitled  and,  if this
Warrant is exercised  in whole,  in lieu of any  fractional  share of the Common
Stock to which the  Holder  shall be  entitled,  cash equal to the fair value of
such  fractional  share  (determined in such  reasonable  manner as the Board of
Directors of the Company  shall  determine),  and (b) deliver the  proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant. The Warrant shall expire, and exercise shall no longer be allowed,
to the  extent the  Warrant  has not been  exercised  by the  expiration  of the
Exercise Period.

         3. Reservation of Warrant Shares.  The Company will at all times during
the Exercise  Period have  authorized  and  reserved,  and will keep  available,
solely for issuance or delivery upon the exercise of this  Warrant,  the Warrant
Shares. All shares of Common Stock which shall be so issuable,  when issued upon
exercise of any Warrant and  payment  therefor in  accordance  with the terms of
such Warrant, shall be duly and validly issued, fully paid and nonassessable and
free and


                                        6

<PAGE>



clear of any liens,  claims and restrictions (other than as provided herein). No
stockholder of the Company has or shall have any preemptive  rights to subscribe
for such shares of Common Stock.

         Before taking any action which would cause an  adjustment  reducing the
Current  Warrant Price below the then par value, if any, of the shares of Common
Stock  issuable  upon  exercise  of the  Warrants,  the  Company  shall take any
corporate  action  which may be  necessary in order that the Company may validly
and legally  issue fully paid and  nonassessable  shares of such Common Stock at
such adjusted Current Warrant Price.

         Before  taking any action  which would result in an  adjustment  in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current  Warrant  Price,  the Company  shall obtain all such  authorizations  or
exemptions  thereof,  or consents  thereto,  as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

         If any shares of Common Stock required to be reserved for issuance upon
exercise of Warrants require registration or qualification with any governmental
authority  under any federal or state law (otherwise than as provided in Section
8) before  such shares may be so issued,  the Company  will in good faith and as
expeditiously as possible and at its expense endeavor to cause such shares to be
duly registered.

         4. Adjustments.

         The  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant,  shall be subject to adjustment  from time to time as set forth in
this  Section 4. The  Company  shall give Holder  notice of any event  described
below which  requires an  adjustment  pursuant to this  Section 4 at the time of
such event.

         4.1 Stock Dividends,  Subdivisions and Combinations. If at any time the
Company shall:

                  (a)      take a record of the holders of its Common  Stock for
                           the purpose of  entitling  them to receive a dividend
                           payable  in,  or other  distribution  of,  Additional
                           Shares of Common Stock,

                  (b)      subdivide its outstanding shares of Common Stock into
                           a larger number of shares of Common Stock, or

                  (c)      combine its outstanding shares of Common Stock into a
                           smaller number of shares of Common Stock,

then (i) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record  holder of the same
number of shares of Common Stock for which this Warrant


                                        7
<PAGE>

is exercisable immediately prior to the occurrence of such event would own or be
entitled to receive  after the  happening  of such  event,  and (ii) the Current
Warrant  Price  shall  be  adjusted  to  equal  (a) the  Current  Warrant  Price
multiplied  by the number of shares of Common  Stock for which  this  Warrant is
exercisable  immediately  prior to the  adjustment  divided by (b) the number of
shares for which this Warrant is exercisable immediately after such adjustment.

         4.2 Certain Other Distributions.  If at any time the Company shall take
a record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:

                  (a)      cash;

                  (b)      any evidences of its indebtedness,  any shares of its
                           stock or any  other  securities  or  property  of any
                           nature  whatsoever  (other  than  cash,   Convertible
                           Securities or Additional Shares of Common Stock); or

                  (c)      any  warrants  or other  rights to  subscribe  for or
                           purchase  any  evidences  of  its  indebtedness,  any
                           shares  of its  stock  or  any  other  securities  or
                           property of any nature  whatsoever  (other than cash,
                           Convertible Securities or Additional Shares of Common
                           Stock);

then (i) the  number  of  shares of Common  Stock  for  which  this  Warrant  is
exercisable  shall be adjusted to equal the product  obtained by multiplying the
number of  shares  of  Common  Stock  for  which  this  Warrant  is  exercisable
immediately  prior to such  adjustment  by a fraction (a) the numerator of which
shall be the  Current  Market  Price per  share of  Common  Stock at the date of
taking such record and (b) the denominator of which shall be such Current Market
Price per share of Common  Stock,  minus the  amount  allocable  to one share of
Common  Stock of (x) any such cash so  distributable  and (y) the fair value (as
determined  in good faith by the Board of Directors of the Company and supported
by an opinion from an investment  banking firm of recognized  national  standing
acceptable  to  the  Majority   Holders)  of  any  and  all  such  evidences  of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so  distributable,  and (ii) the Current Warrant
Price shall be adjusted to equal (a) the Current Warrant Price multiplied by the
number of  shares  of  Common  Stock  for  which  this  Warrant  is  exercisable
immediately  prior to the  adjustment  divided  by (b) the  number of shares for
which  this  Warrant  is  exercisable  immediately  after  such  adjustment.   A
reclassification  of the Common Stock (other than a change in par value, or from
par  value to no par  value or from no par value to par  value)  into  shares of
Common  Stock  and  shares  of any  other  class  of  stock  shall  be  deemed a
distribution by the Company to the holders of its Common Stock of such shares of
such other  class of stock  within the  meaning of this  Section 4.2 and, if the
outstanding  shares of Common  Stock  shall be changed  into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be  deemed  a  subdivision  or  combination,  as the  case may be,  of the
outstanding shares of Common Stock within the meaning of Section 4.1.


                                        8

<PAGE>



         4.3      Issuance of Additional Shares of Common Stock.

                  (a)      If  at  any   time  the  Company   shall  (except  as
                           hereinafter  provided in Sections  4.4 and 4.5) issue
                           or sell any Additional Shares of Common Stock,  other
                           than Permitted  Issuances,  for  consideration  in an
                           amount per Additional Share of Common Stock less than
                           the  greater  of the  Current  Warrant  Price  or the
                           Current Market Price,  then: (i) the number of shares
                           of Common Stock for which this Warrant is exercisable
                           shall be adjusted  to equal the  product  obtained by
                           multiplying  the number of shares of Common Stock for
                           which this Warrant is exercisable  immediately  prior
                           to such issue or sale by a fraction (W) the numerator
                           of which is the  number of  shares  of  Common  Stock
                           Outstanding immediately after the issuance or sale of
                           such Additional  Shares of Common Stock,  and (X) the
                           denominator  of which is  number  of shares of Common
                           Stock Outstanding  immediately prior to such issuance
                           or sale; and (ii) the Current  Warrant Price shall be
                           adjusted to a price  determined  by  dividing  (a) an
                           amount  equal to the sum of (X) the  number of shares
                           of Common Stock Outstanding immediately prior to such
                           issuance  or sale  multiplied  by the  then  existing
                           Current Warrant Price, plus (Y) the consideration, if
                           any,  received by the Company  upon such  issuance or
                           sale,  by (b) the  total  number  of shares of Common
                           Stock Outstanding  immediately after such issuance or
                           sale.

                  (b)      If  at  any  time   the  Company  shall   (except  as
                           hereinafter  provided in Sections  4.4 and 4.5) issue
                           or sell any Additional Shares of Common Stock,  other
                           than Permitted  Issuances,  for  consideration  in an
                           amount per Additional  Share of Common Stock equal to
                           or greater  than the greater of the  Current  Warrant
                           Price or the Current Market Price, then the number of
                           shares for which this  Warrant is  exercisable  shall
                           not change,  but the Company  shall issue to Holder a
                           new Warrant for the number of shares of Common  Stock
                           equal to (i) the product  obtained by multiplying the
                           number  of shares  of  Common  Stock  for which  this
                           Warrant  is  exercisable  immediately  prior  to such
                           issuance or sale by a fraction  (W) the  numerator of
                           which  is  the  number  of  shares  of  Common  Stock
                           Outstanding immediately after the issuance or sale of
                           such Additional  Shares of Common Stock,  and (X) the
                           denominator  of  which is the  number  of  shares  of
                           Common Stock  Outstanding  immediately  prior to such
                           issuance or sale,  less (ii) the number of shares for
                           which this Warrant is exercisable  immediately  prior
                           to such issuance or sale.  The new Warrant shall have
                           the same terms and  provisions as this Warrant except
                           with  respect to the number of shares for which it is
                           exercisable and except that the Current Warrant Price
                           (as  defined  in the new  Warrant)  for each share of
                           Common   Stock  for  which   such  new   Warrant   is
                           exercisable  shall be equal to the fair  value of the
                           consideration per Additional Share of Common Stock.


                                        9

<PAGE>



                  (c)      The provisions of this Section 4.3 shall not apply to
                           any issuance of Additional Shares of Common Stock for
                           which an adjustment is provided  under Section 4.1 or
                           4.2. No  adjustment  shall be made under this Section
                           4.3 upon the  issuance  of any  Additional  Shares of
                           Common  Stock  which  are  issued   pursuant  to  the
                           exercise  of any  warrants or other  subscription  or
                           purchase  rights or pursuant  to the  exercise of any
                           conversion  or  exchange  rights  in any  Convertible
                           Securities,  if any such adjustment  shall previously
                           have been made upon the issuance of such  warrants or
                           other rights or upon the issuance of such Convertible
                           Securities  (or upon the  issuance  of any warrant or
                           other  rights  therefor)  pursuant  to Section 4.4 or
                           Section 4.5.

         4.4  Issuance of Warrants or Other  Rights.  If at any time the Company
shall  take a record of the  holders  of its  Common  Stock for the  purpose  of
entitling  them to receive a  distribution  of, or shall in any manner  (whether
directly  or by  assumption  in a merger in which the  Company is the  surviving
corporation)  issue or sell,  any  warrants  (other than the  Warrants) or other
rights to subscribe for or purchase any Additional Shares of Common Stock or any
Convertible  Securities,  whether  or not the  rights  to  exchange  or  convert
thereunder are immediately exercisable, and the price per share for which Common
Stock is issuable  upon the  exercise of such  warrants or other  rights or upon
conversion  or exchange of such  Convertible  Securities  shall be less than the
greater of the  Current  Warrant  Price or the  Current  Market  Price in effect
immediately  prior to the  time of such  distribution,  issue or sale,  then the
number of shares of Common Stock for which this Warrant is  exercisable  and the
Current  Warrant  Price shall be  adjusted as provided in Section  4.3(a) on the
basis that (i) the maximum number of Additional  Shares of Common Stock issuable
pursuant  to all such  warrants  or other  rights or  necessary  to  effect  the
conversion  or exchange of all such  Convertible  Securities  shall be deemed to
have been issued and  outstanding,  (ii) the price per share for such Additional
Shares of Common Stock shall be deemed to be the lowest price per share at which
such Additional Shares of Common Stock are available to such holders,  and (iii)
the Company shall have received all of the  consideration,  if any,  payable for
such warrants or other rights as of the date of the actual issuance thereof.  No
further  adjustments  of the  number of shares  of Common  Stock for which  this
Warrant is  exercisable  or of the Current  Warrant Price shall be made upon the
actual  issue  of such  Common  Stock  or of such  Convertible  Securities  upon
exercise  of such  warrants  or other  rights or upon the  actual  issue of such
Common Stock upon such conversion or exchange of such Convertible Securities.

         4.5  Issuance  of  Convertible  Securities.  If at any time the Company
shall  take a record of the  holders  of its  Common  Stock for the  purpose  of
entitling  them to receive a  distribution  of, or shall in any manner  (whether
directly  or by  assumption  in a merger in which the  Company is the  surviving
corporation)  issue or sell,  any  Convertible  Securities,  whether  or not the
rights to exchange or convert  thereunder are immediately  exercisable,  and the
price per share for which  Common  Stock is  issuable  upon such  conversion  or
exchange  shall be less than the  greater of the  Current  Warrant  Price or the
Current  Market Price in effect  immediately  prior to the time of such issue or
sale,  then the  number  of shares of Common  Stock for which  this  Warrant  is
exercisable  and the  Current  Warrant  Price  shall be  adjusted as provided in
Section 4.3(a) on the basis that (i) the maximum

                                       10

<PAGE>



number of  Additional  Shares of Common Stock  issuable  upon the  conversion or
exchange of all such Convertible  Securities shall be deemed to have been issued
and  outstanding,  (ii) the price per share of such Additional  Shares of Common
Stock shall be deemed to be the lowest  possible price in any range of prices at
which such Additional Shares of Common Stock are available to such holders,  and
(iii) the Company shall have received all of the consideration payable therefor,
if any, as of the date of actual  issuance of such  Convertible  Securities.  No
further  adjustment  of the  number of shares  of  Common  Stock for which  this
Warrant is exercisable or of the Current  Warrant Price shall be made under this
Section 4.5 upon the  issuance of any  Convertible  Securities  which are issued
pursuant to the  exercise  of any  warrants  or other  subscription  or purchase
rights therefor, if any such adjustment shall previously have been made upon the
issuance of such  warrants or other  rights  pursuant to Section 4.4. No further
adjustments  of the number of shares of Common  Stock for which this  Warrant is
exercisable or of the Current  Warrant Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible  Securities
and, if any issue or sale of such  Convertible  Securities is made upon exercise
of any warrant or other right to subscribe  for or to purchase or any warrant or
other right to purchase any such  Convertible  Securities for which  adjustments
thereof have been or are to be made pursuant to other provisions of this Section
4, no further adjustments shall be made by reason of such issue or sale.

         4.6 Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common  Stock for which this  Warrant is  exercisable  shall
have been made  pursuant  to  Section  4.4 or  Section  4.5 as the result of any
issuance of warrants, rights or Convertible Securities, and either

                  (a)      such  warrants or rights,  or the right of conversion
                           or  exchange  in such other  Convertible  Securities,
                           shall  expire,  and all or a portion of such warrants
                           or rights,  or the right of  conversion  or  exchange
                           with  respect  to  all or a  portion  of  such  other
                           Convertible Securities, as the case may be, shall not
                           have been exercised, or

                  (b)      the  consideration  per  share  for  which  shares of
                           Common Stock are issuable  pursuant to such  warrants
                           or  rights,  or the terms of such  other  Convertible
                           Securities,  shall be  increased  solely by virtue of
                           provisions   therein   contained   for  an  automatic
                           increase  in such  consideration  per share  upon the
                           occurrence of a specified date or event,

then such previous adjustment shall be rescinded and annulled and the Additional
Shares of Common  Stock  which were  deemed to have been issued by virtue of the
computation  made in  connection  with the  adjustment so rescinded and annulled
shall no longer be  deemed  to have been  issued by virtue of such  computation.
Thereupon, a recomputation shall be made of the effect of such rights or options
or other Convertible Securities on the then outstanding Warrants, but not on any
then outstanding Warrant Shares, on the basis of


                                       11

<PAGE>



                  (c)      treating  the number of  Additional  Shares of Common
                           Stock or other property, if any, theretofore actually
                           issued or issuable  pursuant to the previous exercise
                           of any such  warrants  or rights or any such right of
                           conversion or exchange,  as having been issued on the
                           date  or  dates  of any  such  exercise  and  for the
                           consideration   actually   received  and   receivable
                           therefor, and

                  (d)      treating  any such  warrants  or  rights  or any such
                           other   Convertible   Securities  which  then  remain
                           outstanding   as  having   been   granted  or  issued
                           immediately  after the time of such  increase  of the
                           consideration  per share  for which  shares of Common
                           Stock or  other  property  are  issuable  under  such
                           warrants or rights or other Convertible Securities.

         4.7 Other Provisions  Applicable to Adjustments under this Section. The
following  provisions shall be applicable to the making of adjustments  provided
for in this Section 4:

                  (a)      Computation of Consideration.  To the extent that any
                           Additional  Shares of Common Stock or any Convertible
                           Securities   or  any  warrants  or  other  rights  to
                           subscribe  for or purchase any  Additional  Shares of
                           Common Stock or any Convertible  Securities  shall be
                           issued  for  cash  consideration,  the  consideration
                           received by the Company  therefor shall be the amount
                           of the cash received by the Company therefor,  or, if
                           such Additional Shares of Common Stock or Convertible
                           Securities   are   offered   by   the   Company   for
                           subscription,  the  subscription  price,  or, if such
                           Additional  Shares  of  Common  Stock or  Convertible
                           Securities  are sold to  underwriters  or dealers for
                           public offering without a subscription  offering, the
                           initial  public  offering  price  (in any  such  case
                           subtracting   any  amounts  paid  or  receivable  for
                           accrued  interest  or  accrued  dividends,   but  not
                           subtracting any  compensation,  discounts or expenses
                           paid  or  incurred  by  the  Company  for  and in the
                           underwriting of, or otherwise in connection with, the
                           issuance  thereof).  To the extent that such issuance
                           shall be for a consideration  other than cash,  then,
                           except as herein otherwise  expressly  provided,  the
                           amount  of such  consideration  shall be deemed to be
                           the fair value of such  consideration  at the time of
                           such  issuance  as  determined  in good  faith by the
                           Board  of  Directors  of the  Company.  In  case  any
                           Additional  Shares of Common Stock or any Convertible
                           Securities   or  any  warrants  or  other  rights  to
                           subscribe for or purchase such  Additional  Shares of
                           Common  Stock  or  Convertible  Securities  shall  be
                           issued  in  connection  with any  merger in which the
                           Company   issues  any   securities,   the  amount  of
                           consideration therefor shall be deemed to be the fair
                           value,  as  determined  in good faith by the Board of
                           Directors  of the  Company,  of such  portion  of the
                           assets and business of the  nonsurviving  corporation
                           as such Board in good  faith  shall  determine  to be
                           attributable  to such  Additional  Shares  of  Common
                           Stock,  Convertible  Securities,  warrants  or  other
                           rights, as the case may be. The consideration for any
                           Additional Shares of Common


                                       12

<PAGE>



                           Stock  issuable  pursuant  to any  warrants  or other
                           rights to subscribe for or purchase the same shall be
                           the consideration received by the Company for issuing
                           such  warrants or other  rights  plus the  additional
                           consideration payable to the Company upon exercise of
                           such warrants or other rights.  The consideration for
                           any  Additional   Shares  of  Common  Stock  issuable
                           pursuant to the terms of any  Convertible  Securities
                           shall be the  consideration,  if any, received by the
                           Company  for  issuing  warrants  or other  rights  to
                           subscribe   for   or   purchase   such    Convertible
                           Securities, plus the consideration paid or payable to
                           the  Company in respect  of the  subscription  for or
                           purchase  of such  Convertible  Securities,  plus the
                           additional  consideration,  if  any,  payable  to the
                           Company upon the exercise of the right of  conversion
                           or exchange in such Convertible  Securities.  In case
                           of the issuance at any time of any Additional  Shares
                           of Common Stock or Convertible  Securities in payment
                           or  satisfaction  of any dividends  upon any class of
                           stock other than Common  Stock,  the Company shall be
                           deemed to have received for such Additional Shares of
                           Common    Stock   or    Convertible    Securities   a
                           consideration equal to the amount of such dividend so
                           paid or satisfied.

                  (b)      When Adjustments to Be Made. The adjustments required
                           by this Section 4 shall be made whenever and as often
                           as any specified event requiring an adjustment  shall
                           occur,  except that any  adjustment  of the number of
                           shares of Common  Stock for  which  this  Warrant  is
                           exercisable  that would  otherwise be required may be
                           postponed  (except  in the case of a  subdivision  or
                           combination  of  shares  of  the  Common  Stock,   as
                           provided  for in  Section  4.1) up to, but not beyond
                           the date of  exercise  if such  adjustment  either by
                           itself or with other  adjustments not previously made
                           adds  or  subtracts  less  than 1% of the  shares  of
                           Common  Stock for which this  Warrant is  exercisable
                           immediately  prior to the making of such  adjustment.
                           Any  adjustment  representing  a change  of less than
                           such minimum  amount  (except as aforesaid)  which is
                           postponed  shall be carried forward and made upon the
                           earlier of (i) the date upon  which such  adjustment,
                           together  with  other  adjustments  required  by this
                           Section 4 and not previously  made, would result in a
                           minimum  adjustment,  and (ii) the date of  exercise.
                           For the  purpose  of any  adjustment,  any  specified
                           event  shall be deemed to have  occurred at the close
                           of business on the date of its occurrence.

                  (c)      Fractional Interests.  In computing adjustments under
                           this Section 4, fractional  interests in Common Stock
                           shall be taken into account to the nearest  1/10th of
                           a share.

                  (d)      When  Adjustment  Not Required.  If the Company shall
                           take a record of the holders of its Common  Stock for
                           the purpose of  entitling  them to receive a dividend
                           or  distribution  or  subscription or purchase rights
                           and shall,


                                       13

<PAGE>

                           thereafter   and   before   the    distribution    to
                           stockholders thereof, legally abandon its plan to pay
                           or deliver such dividend, distribution,  subscription
                           or purchase  rights,  then  thereafter  no adjustment
                           shall be  required  by reason  of the  taking of such
                           record  and any such  adjustment  previously  made in
                           respect thereof shall be rescinded and annulled.

                  (e)      Escrow  of  Warrant  Shares.  If  after  any property
                           becomes  distributable  pursuant to this Section 4 by
                           reason of the taking of any record of the  holders of
                           Common  Stock,  but  prior to the  occurrence  of the
                           event  for  which  such   record  is  taken,   Holder
                           exercises  this  Warrant,  any  Additional  Shares of
                           Common   Stock    issuable    and   other    property
                           distributable   upon   exercise  by  reason  of  such
                           adjustment  shall be held in escrow for Holder by the
                           Company to be issued to Holder upon and to the extent
                           that the event actually takes place,  upon payment of
                           the then Current Warrant Price.  Notwithstanding  any
                           other provision to the contrary herein,  if the event
                           for which such  record was taken fails to occur or is
                           rescinded,   then  such  escrowed   shares  shall  be
                           canceled  by  the  Company  and   escrowed   property
                           returned.

                  (f)      Challenge to Good Faith  Determination.  Whenever the
                           Board of Directors  of the Company  shall be required
                           to make a  determination  in good  faith  of the fair
                           value  of  any  item  under  this   Section  4,  such
                           determination  may  be  challenged  in good  faith by
                           Holder,  and any  dispute  shall  be  resolved  by an
                           investment   banking  firm  of  recognized   national
                           standing  selected by the Company and  acceptable  to
                           such Holder.

         4.8   Reorganization,   Reclassification,   Merger,   Consolidation  or
Disposition  of  Assets.  In case the  Company  shall  reorganize  its  capital,
reclassify  its  capital  stock,  consolidate  or  merge  with or  into  another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation (hereinafter, a "Reorganization") and,
pursuant  to the terms of such  Reorganization,  shares  of common  stock of the
successor  or  acquiring  corporation,  or any  cash,  shares  of stock or other
securities  or property of any nature  whatsoever  (including  warrants or other
subscription  or purchase  rights) in addition to or in lieu of common  stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed  to the holders of Common Stock of the Company,  then each Holder
shall have the right  following  the  effectiveness  of such  Reorganization  to
receive,  upon exercise of such Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation,  and  Other  Property  receivable  upon  or  as a  result  of  such
Reorganization  by a holder of the  number  of shares of Common  Stock for which
this Warrant is exercisable immediately prior to such event. In case of any such
Reorganization,  the  successor  or  acquiring  corporation  (if other  than the
Company) shall expressly assume the due and punctual  observance and performance
of each and every  covenant and  condition  of this Warrant to be performed  and
observed by the Company and all the obligations and liabilities


                                       14

<PAGE>

hereunder,  subject to such appropriate modifications as are satisfactory to the
Majority  Holders in order to provide  for  adjustments  of shares of the Common
Stock for which this Warrant is exercisable  which shall be as nearly equivalent
as practicable to the  adjustments  provided for in this Section 4. For purposes
of this Section 4.8 "common  stock of the  successor  or acquiring  corporation"
shall include stock of such  corporation  of any class which is not preferred as
to  dividends  or assets over any other class of stock of such  corporation  and
which is not  subject to  redemption  and shall also  include any  evidences  of
indebtedness,  shares of stock or other securities which are convertible into or
exchangeable  for any such stock,  either  immediately  or upon the arrival of a
specified  date or the happening of a specified  event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing  provisions of
this Section 4.8 shall similarly apply to successive Reorganizations.

         4.9 Other Action  Affecting  Common Stock.  In case at any time or from
time to time the Company  shall take any action in respect of its Common  Stock,
other than the payment of  dividends  permitted  by Section  4.2(a) or any other
action  described  in this  Section 4, then,  unless such action will not have a
materially  adverse effect upon the rights of the Holders,  the number of shares
of Common Stock or other stock for which this Warrant is exercisable  and/or the
purchase  price  thereof shall be adjusted in such manner as may be equitable in
the circumstances.

         4.10  Certain  Limitations.  Notwithstanding  anything  herein  to  the
contrary,  the Company agrees not to enter into any transaction which, by reason
of any adjustment  hereunder,  would cause the Current  Warrant Price to be less
than the par value per share of Common Stock.

         5. Notices to Warrant Holders.

         5.1  Notice of  Adjustments.  Whenever  the  number of shares of Common
Stock for which this  Warrant is  exercisable,  or whenever the price at which a
share of such Common Stock may be purchased upon exercise of this Warrant, shall
be  adjusted  pursuant  to  Section 4, the  Company  shall  forthwith  prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable  detail,  the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which the Board of  Directors  of the Company  determined  the fair value of any
evidences of  indebtedness,  shares of stock,  other  securities  or property or
warrants or other  subscription or purchase rights referred to in Section 4.2 or
4.7(a)),  specifying the number of shares of Common Stock for which this Warrant
is exercisable  and (if such adjustment was made pursuant to Section 4.8 or 4.9)
describing  the number and kind of any other  shares of stock or Other  Property
for which this Warrant is  exercisable,  and any change in the purchase price or
prices thereof,  after giving effect to such  adjustment or change.  The Company
shall promptly cause a signed copy of such certificate to be delivered to Holder
in  accordance  with Section 13. The Company  shall keep at its chief  executive
office  copies of all such  certificates  and cause the same to be available for
inspection  at said  office  during  normal  business  hours  by  Holder  or any
prospective purchaser of a Warrant designated by Holder.


                                       15

<PAGE>


         5.2 Notice of Certain Corporate Action. Holder shall be entitled to the
same rights to receive notice of corporate action as any holder of Common Stock.

         6. No Impairment.

         The  Company  shall not by any action  including,  without  limitation,
amending  its  certificate  of  incorporation  or  through  any  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue  or  sale of
securities or any other voluntary action,  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 actions as may be necessary or  appropriate to protect the rights of Holder
against  impairment.  Without  limiting the  generality  of the  foregoing,  the
Company  will (a) not  increase  the par value of any  shares  of  Common  Stock
receivable  upon the exercise of this Warrant above the amount payable  therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be  necessary  or  appropriate  in order that the Company may
validly and legally issue fully paid and  nonassessable  shares of Common Stock,
free and clear of any liens,  claims,  encumbrances and restrictions (other than
as provided  herein)  upon the  exercise of this  Warrant,  and (c) use its best
efforts to obtain  all such  authorizations,  exemptions  or  consents  from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

         7. Fully Paid Stock;  Taxes. The shares of the Common Stock represented
by each and every  certificate  for Warrant Shares  delivered on the exercise of
this  Warrant  shall,  at the  time of such  delivery,  be  validly  issued  and
outstanding,  fully paid and non-assessable,  and not subject to any pre-emptive
rights. The Company shall pay all expenses in connection with, and all taxes and
other  governmental  charges  that may be imposed  with respect to, the issue or
delivery  thereof,  unless such tax or charge is imposed by law upon Holder,  in
which case such taxes or charges shall be paid by Holder.  The Company shall not
be required,  however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Common Stock
issuable  upon  exercise of this  Warrant in any name other than that of Holder,
and in such case the Company shall not be required to issue or deliver any stock
certificate  until  such  tax or  other  charge  has  been  paid or it has  been
established to the  satisfaction of the Company that no such tax or other charge
is due.

         8. Transfer.

         8.1  Securities  Laws.  Neither  this  Warrant nor the  Warrant  Shares
issuable  upon the exercise  hereof have been  registered in reliance on Section
4(2) of the  Securities  Act or under any state  securities  laws and  unless so
registered may not be  transferred,  sold,  pledged,  hypothecated  or otherwise
disposed of unless an exemption  from  registration  pursuant to Rule 144 of the
Securities  Act is  available.  Except as provided in Section 8.6,  this Warrant
shall bear the following legend:


                                       16

<PAGE>



         NEITHER  THESE  WARRANTS NOR THE SHARES OF COMMON STOCK  ISSUABLE  UPON
EXERCISE OF THESE  WARRANTS HAVE BEEN  REGISTERED  WITH THE U.S.  SECURITIES AND
EXCHANGE  COMMISSION OR THE SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON
AN  EXEMPTION  FROM  REGISTRATION  UNDER  REGULATION  D  PROMULGATED  UNDER  THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE WARRANTS AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS ARE RESTRICTED AND MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER
THE ACT OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM.

         8.2  Conditions  to Transfer.  In the event Holder  desires to transfer
this Warrant or any of the Warrant Shares issued (in the absence of registration
under the Securities Act), the Holder must give the Company prior written notice
of such  proposed  transfer  including  the name  and  address  of the  proposed
transferee.  Such transfer may be made only either (i) upon  publication  by the
Commission of a ruling, interpretation, opinion or "no action letter" based upon
facts  presented to said  Commission,  or (ii) upon receipt by the Company of an
opinion of Holder's  counsel  acceptable  to the Company,  in either case to the
effect  that the  proposed  transfer  will not  violate  the  provisions  of the
Securities Act, the Exchange Act, or the rules and regulations promulgated under
either  such  act  (collectively,  the  "Securities  Laws").  Prior  to any such
proposed  transfer,  and as a condition  thereto,  if such  transfer is not made
pursuant to an effective  registration  statement  under the Securities Act, the
Holder  will,  if  requested  by  the  Company,   deliver  to  the  Company  any
representation or agreement  reasonably  requested to determine  compliance with
the Securities Laws.

         8.3 Indemnity.  The Holder acknowledges that the Holder understands the
meaning and legal  consequences  of this  Section 8 and the Holder  hereby shall
indemnify and hold harmless the Company,  its  representatives and each officer,
director and control person thereof from and against any and all loss, damage or
liability  (including all  attorneys'  fees and costs incurred in enforcing this
indemnity provision) due to or arising out of (i) any transfer of the Warrant or
any of the Warrant Shares in violation of the Securities  Act, the Exchange Act,
or the rules and regulations  promulgated under either of such acts, or (ii) any
transfer of the Warrant or any of the Warrant Shares not in accordance with this
Warrant or any of the Warrant Shares not in accordance with this Warrant.

         8.4  Transfer.  Except as provided in this  Section 8, this Warrant and
the Warrant  Shares issued may be  transferred by the Holder in whole or in part
at any time or from time to time.  Upon surrender of this Warrant to the Company
or at the office of its stock transfer  agent,  if any, with the Assignment Form
annexed  hereto duly executed and funds  sufficient to pay any transfer tax, and
upon  compliance  with the  foregoing  provisions,  the Company  shall,  without
charge,  execute  and  deliver  a new  Warrant  or  Warrants  in the name of the
assignee or assignees named in such Assignment Form (and if the entire amount of
the  Warrant  is not being  transferred,  in the name of the  Holder),  and this
Warrant  shall  promptly  be  canceled.   Any  assignment,   transfer,   pledge,
hypothecation  or other  disposition of this Warrant  attempted  contrary to the
provisions of this


                                       17

<PAGE>



Warrant,  or any levy of execution,  attachment or other process  attempted upon
the Warrant, shall be null and void and without effect.

         8.5 Registration. The Holders of Warrants and Warrant Shares shall have
the  right to  request  registration  of such  Warrant  Shares  pursuant  to the
Registration Rights Agreement.

         8.6  Termination  of   Restrictions.   Notwithstanding   the  foregoing
provisions  of Section 8, the  restrictions  imposed  by this  Section  upon the
transferability  of the Warrants,  the War rant Shares and the Restricted Common
Stock (or Common  Stock  issuable  upon the  exercise of the  Warrants)  and the
legend  requirements of Section 8.1 shall terminate as to any particular Warrant
or Warrant Share or Restricted  Common Stock (or Common Stock  issuable upon the
exercise of the Warrants) (i) when and so long as such security  shall have been
effectively  registered  under  the  Securities  Act and  disposed  of  pursuant
thereto,  or (ii) when the Company shall have delivered to the Holder or Holders
of Warrants,  Warrant Shares or Restricted  Common Stock the written  opinion of
Independent  Counsel stating that such legend is not required in order to ensure
compliance with the Securities Act. Whenever the restrictions imposed by Section
8 shall  terminate  as to this War rant,  as  hereinabove  provided,  the Holder
hereof  shall be entitled  to receive  from the  Company,  at the expense of the
Company,  a new Warrant bearing the following legend in place of the restrictive
legend set forth hereon:

                  "THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT
         CONTAINED IN SECTION 8 HEREOF TERMINATED ON ____________, 19__, AND
         ARE OF NO FURTHER FORCE AND EFFECT."

All Warrants issued upon  registration of transfer,  division or combination of,
or in  substitution  for,  any Warrant or Warrants  entitled to bear such legend
shall have a similar legend endorsed thereon.  Whenever the restrictions imposed
by this Section shall  terminate as to any share of Restricted  Common Stock, as
hereinabove  provided,  the Holder thereof shall be entitled to receive from the
Company,  at the Company's expense,  a new certificate  representing such Common
Stock not bearing the restrictive legend set forth in Section 8.1.

         9. Loss, etc. of Warrant.  Upon receipt of evidence satisfactory to the
Company of the loss,  theft,  destruction or mutilation of this Warrant,  and of
indemnity  reasonably  satisfactory to the Company (it being understood that the
written indemnity agreement of AJG Financial Services,  Inc. shall be sufficient
indemnity), if lost, stolen or destroyed, and upon surrender and cancellation of
this Warrant, if mutilated,  the Company shall execute and deliver to the Holder
a new Warrant of like date, tenor, and denomination.

         10. Warrant Holder Not Shareholder.  Except as otherwise provided here,
this  Warrant does not confer upon the Holder any right to vote or to consent to
or receive  notice as a shareholder  of the Company,  as such, in respect of any
matters  whatsoever,  or any other rights or liabilities as a shareholder of the
Company, either at law or in equity, and the rights of the Holder are limited to
those expressed in this Warrant.


                                       18

<PAGE>



         11. Liquidated Damages. In the event the Company fails to comply in all
material respects with any provision of the Registration Rights Agreement,  upon
written  request of the Holder of this  Warrant or Warrant  Shares,  the Company
shall promptly obtain from an independent  investment banking firm acceptable to
such Holder an opinion  estimating the net proceeds which such Holder would have
received (after deducting  underwriting  commissions and discounts and any other
expenses  that  would  have been  solely  attributable  to the  registration  or
qualification  of such  shares  of  Warrant  Shares)  upon the sale of shares of
Warrant  Shares   proposed  to  be  sold  pursuant  to  such   registration   or
qualification.  Such opinion of the independent investment banking firm shall be
(a)  delivered  in writing to the Company,  with a copy to such  Holder,  within
thirty (30) days after the date of the request of such Holder to the Company and
(b) conclusive and binding on the Company and such Holder.

         Within 30 days of receipt by the Company of such estimate,  the Company
shall pay to such  Holder an amount  equal to (a) such  estimated  net  proceeds
minus (b) the  aggregate  Warrant  Price  paid or payable  with  respect to such
shares of Warrant Shares. Payment of such amount shall be made by, at the option
of such person,  (i) wire transfer to an account in a bank located in the United
States  designated  by such  Holder  for such  purpose  or (ii) a  certified  or
official bank check drawn on a member of the Chicago or New York Clearing  House
payable  to the  order of such  Holder.  Upon  payment  to such  Holder  of such
liquidated damages, such Holder shall assign to the Company this Warrant and the
Warrant Shares proposed to be sold pursuant to the registration or qualification
in question without any  representation or warranty (other than that such Holder
has  good and  marketable  title  thereto,  free and  clear  of  liens,  claims,
encumbrances  and  restrictions  of any kind). If less than all of the shares of
Common Stock issuable upon the exercise hereof were proposed to be sold pursuant
to the registration or qualification in question,  the Company shall cancel this
Warrant  and issue in the name of, and  deliver  to,  the  Holder,  pursuant  to
Section  2, a new  Warrant  for the  shares of Common  Stock  issuable  upon the
exercise  hereof not  required to be  assigned  to the  Company  pursuant to the
provisions  of the  preceding  sentence.  The Company  agrees that the amount of
actual damages that would be sustained by such Holder as a result of the failure
of the  Company  to  comply  with  any  provisions  of the  Registration  Rights
Agreement is not capable of ascertainment on any other basis.

         12.  Appraisal.  The  determination of the Appraised Value per share of
Common  Stock  shall  be  made  by an  investment  banking  firm  of  nationally
recognized  standing  selected by the  Majority  Holders and  acceptable  to the
Company.  If the investment banking firm selected by the Majority Holders is not
acceptable to the Company and the Company and the Majority  Holders cannot agree
on a mutually acceptable  investment banking firm, then the Majority Holders and
the  Company  shall  each  choose  one  such  investment  banking  firm  and the
respective  chosen  firms shall agree on another  investment  banking firm which
shall make the determination.  The Company shall, at its sole cost, pay all fees
of such  investment  banking firm as may be necessary for the  determination  of
Appraised Value required by the terms of this Warrant.

         13. Communication.  No notice or other communication under this Warrant
shall be  effective  unless the same is in  writing  and is either (i) mailed by
first-class mail, postage prepaid,


                                       19

<PAGE>



in which event the notice shall be deemed  effective three days after deposit in
the mails, or (ii) delivered by established  delivery  service which  guarantees
three business days or less delivery,  in which event the notice shall be deemed
effective  on the date of  guaranteed  delivery.  Regardless  of the  method  of
delivery, the notice or communication shall be addressed to:

                  (a)      the Company at 3280 North  Frontage Road,  Lehi, Utah
                           84043,  Attention:  Chief  Executive  Officer or such
                           other  address  as  the  Company  has  designated  in
                           writing to the Holder, or

                  (b)      the Holder at the  address  indicated  in the opening
                           paragraph hereof, or such other address as the Holder
                           has designated in writing to the Company.

         14.  Headings.  The headings of this  Warrant  have been  inserted as a
matter of convenience and shall not affect the construction hereof.

         15.  Applicable Law. This Warrant shall be governed by and construed in
accordance  with the law of the State of Delaware  without  giving effect to the
principles of conflicts of law thereof.

         16.  Warrant  Register.  The Company will  register this Warrant in the
Warrant  Register  in  the  name  of the  record  holder  to  whom  it has  been
distributed  or assigned in accordance  with the terms  hereof.  The Company may
deem and treat the  registered  Holder of this  Warrant  as the  absolute  owner
hereof  (notwithstanding  any notation of ownership or other writing hereon made
by anyone) for the purpose of any  exercise  hereof or any  distribution  to the
Holder and for all other purposes,  and the Company shall not be affected by any
notice to the contrary.

         17.  Successors.  All of the  provisions  of this Warrant by or for the
benefit  of the  Company or the  Holder  shall bind and inure to the  benefit of
their respective successors and assigns.

         IN WITNESS WHEREOF, Covol Technologies, Inc. has caused this Warrant to
be signed by its  President and its  corporate  seal to be hereunto  affixed and
attested by its Secretary this 9th day of January, 1998.


ATTEST:                                               COVOL TECHNOLOGIES, INC.


/Asael T. Sorensen, Jr./                              By: /Stanley M. Kimball/
------------------------                                 ----------------------
Secretary                                                    President





                                       20

<PAGE>



                                  EXERCISE FORM

                          To be executed by the Holder
                          in Order to Exercise Warrants


         The undersigned  Holder hereby  irrevocably elects to exercise Warrants
represented by this Warrant,  and to purchase the  securities  issuable upon the
exercise of such Warrants,  and requests that  certificates  for such securities
shall be issued in the Holder's name and be delivered to






                         [please print or type address]

and if such number of Warrants  shall not be all the Warrants  evidenced by this
Warrant,  that a new Warrant for the balance of such  Warrants be  registered in
the name of, and delivered to, the Holder at the address stated above.

         The undersigned  acknowledges  that, if this Exercise Form is submitted
prior to the Company having given notice that the issuance of the Warrant Shares
has been  registered  under the  Securities  Act, the Warrant  Shares  issued on
exercise will be "restricted  securities" and will bear appropriate  restrictive
legends.


Dated:
                                                     Signature of Holder






                                                     Signature Guaranteed






                                       21

<PAGE>


                                   ASSIGNMENT

                          To Be Executed by the Holder
                           in Order to Assign Warrants


         THE WARRANTS  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER FEDERAL
OR STATE SECURITIES LAWS AND TRANSFER THEREOF HAS BEEN RESTRICTED.  ANY TRANSFER
OR  PURPORTED  TRANSFER  DESCRIBED  IN THIS  FORM  OF  ASSIGNMENT  SHALL  NOT BE
EFFECTIVE   UNTIL  AND  UNLESS  THE  PROPOSED   TRANSFEREE   COMPLIES  WITH  THE
RESTRICTIONS ON TRANSFER DESCRIBED IN THE WARRANT CERTIFICATE.

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

Name:
                           [please print or type]

Address:



Social Security:
or Taxpayer
I.D. No.

the undersigned's right to purchase up to ______________  Shares of Common Stock
represented by this Warrant,  and hereby  irrevocably  constitutes  and appoints
______________________________________  attorney  to  transfer  the  same on the
books of the Company, with full power of substitution in the premises.


Dated:
                              Signature Guaranteed



                                       22