<PAGE>

                                                                     EXHIBIT 4.3

                                    EXHIBIT C

                                 FORM OF WARRANT

[THE FOLLOWING PARAGRAPH SHALL APPEAR ON THE FACE OF EACH RESTRICTED WARRANT:]

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION THEREFROM. THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE SECURITIES.

[THE COMPANY SHALL PLACE THE FOLLOWING PARAGRAPH ON THE FACE OF ANY WARRANT HELD
BY OR TRANSFERRED TO AN "AFFILIATE" (AS DEFINED IN RULE 501(B) OF REGULATION D
UNDER THE SECURITIES ACT) OF THE COMPANY:]

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO MAY BE
DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY BE
SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A VALID EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.

                                ELECTROGLAS, INC.

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:  [     ]                                  Number of Shares: [     ]
CUSIP No.:    285324117                                (subject to adjustment)



Date of Issuance:  June 21, 2002

            ELECTROGLAS, INC., a Delaware corporation (the "Company"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [____________], the registered holder hereof
or its permitted assigns, is entitled, subject to the terms and conditions set
forth below, to purchase from the Company upon surrender of this Warrant (as
defined below), at any time or times on or after the date hereof, but not after
5:00


<PAGE>

p.m., Eastern Time, on the Expiration Date (as defined below), [______________]
fully paid nonassessable shares of Common Stock (as defined below) of the
Company at the Exercise Price per share provided in Section 1(c) of this
Warrant, subject to adjustment as provided below. Capitalized terms used herein
but not defined shall have the same meanings assigned to them in the Securities
Purchase Agreement dated as of June 19, 2002, by and between the Company and the
parties listed on the Schedule of Buyers attached thereto as Exhibit A (as such
agreement may be amended, supplemented and modified from time to time as
provided in such agreement, the "Securities Purchase Agreement").

      This Warrant (as defined below) is one of a series of Warrants issued in
connection with the transactions described in that certain (i) Securities
Purchase Agreement, (ii) the Company's 5.25% Convertible Subordinated Note Due
2007 (the "Note") issued pursuant to the Securities Purchase Agreement to the
holder hereof, and (iii) certain other related documents and agreements
including, without limitation, the Transaction Documents (as defined in the
Securities Purchase Agreement). The Warrant Shares (as defined below) issued
upon exercise of this Warrant and the holder hereof and thereof shall be
entitled to all of the rights and privileges set forth in the Transaction
Documents.

SECTION 1. DEFINITIONS. The following terms as used in this Warrant shall have
the following meanings:

      (a) "Business Day" means any day other than Saturday, Sunday or other day
on which commercial banks in The City of New York are required by law to remain
closed.

      (b) "Common Stock" means (i) the common stock, $0.01 par value per share,
of the Company, and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.

      (c) "Exercise Price" shall be equal to $15.4440, subject to further
adjustment as hereinafter provided.

      (d) "Expiration Date" means June 15, 2007 or, if such date does not fall
on a Business Day or on a Trading Day, then the next Business Day.

      (e) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization or association and a government or any department or agency
thereof.

      (f) "Principal Market" means The Nasdaq National Market ("NASDAQ") or if
the Common Stock is not traded on NASDAQ, then the principal securities exchange
or trading market for the Common Stock.

      (g) "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of June 19, 2002, among the Company, Robertson and the
initial purchasers of the Notes and the Warrants as such agreement may be
amended, supplemented and modified from time to time in a writing signed by all
of the signatories thereto.


                                      -2-
<PAGE>

      (h) "Securities Act " means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

      (i) "Trading Day" shall mean (x) a day on which the Principal Market is
open for business or (y) if the applicable security is not so listed on a
Principal Market or admitted for trading or quotation, a Business Day.

      (j) "Warrant" means this Warrant and the other warrants to purchase shares
of Common Stock issued pursuant to the Securities Purchase Agreement and all
warrants issued in exchange, transfer or replacement thereof.

      (k) "Warrant Shares" means all shares of Common Stock issuable upon
exercise of the Warrants.

SECTION 2. EXERCISE OF WARRANT.

      (a) Subject to the terms and conditions hereof, including the early
termination of this Warrant pursuant to Section 3(b) of this Warrant, this
Warrant may be exercised by the holder hereof then registered on the books of
the Company, in whole or in part, at any time on any Business Day on or after
the opening of business on the date hereof and prior to 5:00 p.m., Eastern Time,
on the Expiration Date by (i) delivery of a written notice, in the form of the
subscription notice attached as Exhibit A hereto or a reasonable facsimile
thereof (the "Exercise Notice"), to the Company and the Company's designated
transfer agent (the "Transfer Agent"), of such holder's election to exercise all
or a portion of this Warrant, which notice shall specify the number of Warrant
Shares to be purchased, (ii) (A) payment to the Company of an amount equal to
the Exercise Price multiplied by the number of Warrant Shares as to which this
Warrant is being exercised (the "Aggregate Exercise Price") in cash or delivery
of a certified check or bank draft payable to the order of the Company or wire
transfer of immediately available funds or (B) notification to the Company that
this Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 2(e) of this Warrant), and (iii) the surrender of this Warrant to a
common carrier for overnight delivery to the Company as soon as practicable
following such date (or an indemnification undertaking or other form of security
reasonably satisfactory to the Company with respect to this Warrant in the case
of its loss, theft or destruction); provided, however, that if such Warrant
Shares are to be issued in any name other than that of the registered holder of
this Warrant, such issuance shall be deemed a transfer and the provisions of
Section 8 of this Warrant shall be applicable. In the event of any exercise of
the rights represented by this Warrant in compliance with this Section 2(a), the
Company shall use its best efforts on or before the third Business Day, but in
no event later than the fifth Business Day (the "Warrant Share Delivery Date")
following the date of its receipt of the Exercise Notice, the Aggregate Exercise
Price (or notice of Cashless Exercise) and this Warrant (or an indemnification
undertaking or other form of security reasonably satisfactory to the Company
with respect to this Warrant in the case of its loss, theft or destruction) (the
"Exercise Delivery Documents"), (A) in the case of a public resale of such
Warrant Shares, at the holder's request, credit such aggregate number of shares
of Common Stock to which the holder shall be entitled to the holder's or its
designee's balance account with the Company's designated  warrant agent (the
"Warrant Agent") through its Deposit Withdrawal Agent Commission system or (B)
issue and deliver to the address as specified in the


                                      -3-
<PAGE>

Exercise Notice, a certificate or certificates in such denominations as may be
requested by the holder in the Exercise Notice, registered in the name of the
holder or its designee, for the number of shares of Common Stock to which the
holder shall be entitled upon such exercise. Upon delivery of the Exercise
Notice, this Warrant and Aggregate Exercise Price referred to in clause (ii)(A)
above or notification to the Company of a Cashless Exercise referred to in
Section 2(e) of this Warrant, the holder of this Warrant shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
of delivery of this Warrant as required by clause (iii) above or the
certificates evidencing such Warrant Shares. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares, the Company shall promptly issue to the holder the number of
shares of Common Stock that is not disputed and shall submit the disputed
determination or arithmetic calculation to the holder via facsimile within two
(2) Business Days after receipt of the holder's Exercise Notice. If the holder
and the Company are unable to agree upon the determination of the Exercise Price
or arithmetic calculation of the number of Warrant Shares within two (2)
Business Days of such disputed determination or arithmetic calculation being
submitted to the holder, then the Company shall immediately submit via facsimile
(i) the disputed determination of the Exercise Price or the Closing Sale Price
(as defined in Section 9(f) of this Warrant) to an independent, reputable
investment banking firm selected jointly by the Company and the holder or (ii)
the disputed arithmetic calculation of the number of Warrant Shares to its
independent, outside auditor. The Company shall cause the investment banking
firm or the auditor, as the case may be, to perform the determination or
calculation and notify the Company and the holder of the results no later than
ten (10) Business Days from the time it receives the disputed determination or
calculation. Such investment banking firm's or auditor's determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error. All fees and expenses of such determinations shall be borne solely by the
Company.

      (b) Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, as soon as practicable but
in no event later than five (5) Business Days after any exercise (the "Warrant
Delivery Date") and at its own expense, issue a new Warrant identical in all
respects to this Warrant exercised except it shall represent rights to purchase
the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this
Warrant is exercised.

      (c) Notwithstanding anything contained in this Warrant to the contrary,
the Company shall not be required to issue fractions of shares of Common Stock
upon exercise of this Warrant or to distribute certificates which evidence such
fractional shares. If more than one Warrant shall be presented for exercise in
full at the same time by the same holder, the number of full shares of Common
Stock which shall be issuable upon the exercise thereof shall be computed on the
basis of the aggregate number of shares of Common Stock purchasable on exercise
of all Warrants so presented. In lieu of any fractional shares, there shall be
paid to the holder an amount of cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of this Section 2(c) of
this Warrant, the current market value of a share of Common Stock shall be the
Closing Sale Price of a share of Common Stock for the Trading Day immediately
prior to the date of such exercise or if not listed on a Principal Market, then
as determined by the holders of Warrants


                                      -4-
<PAGE>

representing a majority of the shares of Common Stock issuable upon exercise of
all of the Warrants then outstanding.

      (d) If the Company shall fail for any reason or for no reason (except in
the case of a dispute as to the Exercise Price or the Closing Sale Price which
is being resolved in accordance with Section 2(a) of this Warrant) to issue to
the holder within five (5) Business Days of receipt of the Exercise Delivery
Documents, a certificate for the number of shares of Common Stock to which the
holder is entitled or to credit the holder's or its designee's balance account
with the Warrant Agent, in accordance with Section 2 of this Warrant, for such
number of shares of Common Stock to which the holder is entitled upon the
holder's exercise of this Warrant or a new Warrant for the number of shares of
Common Stock to which such holder is entitled pursuant to Section 2(b) of this
Warrant, the Company shall, in addition to any other remedies under this Warrant
or the Securities Purchase Agreement or otherwise available to such holder,
including any indemnification under Section 8 of the Securities Purchase
Agreement, pay as additional damages in cash to such holder on each day after
the Warrant Share Delivery Date if such exercise is not timely effected and/or
each day after the Warrant Delivery Date if such Warrant is not delivered, as
the case may be, in an amount equal to one-half percent (0.5%) per month
multiplied by the product of (I) the sum of the number of shares of Common Stock
not issued to the holder on or prior to the Warrant Share Delivery Date and to
which such holder is entitled and, in the event the Company has failed to
deliver a Warrant to the holder on or prior to the Warrant Delivery Date and to
which such holder is entitled, the number of shares of Common Stock issuable
upon exercise of the Warrant as of the Warrant Delivery Date and (II) the
Closing Sale Price of the Common Stock on the Warrant Share Delivery Date, in
the case of failure to deliver Common Stock, or on the Warrant Delivery Date, in
the case of failure to deliver a Warrant, provided that if the Common Stock is
not listed on a Principal Market, then the Closing Sale Price shall be as
determined in good faith by a majority of the Company's Board of Directors,
whose determination shall be final, binding and conclusive.

      (e) Notwithstanding anything contained herein to the contrary, the holder
of this Warrant may, at its election exercised in its sole discretion, exercise
this Warrant as to all or a portion of the Warrant Shares and, in lieu of making
the cash payment otherwise contemplated to be made to the Company upon such
exercise in payment of the Aggregate Exercise Price, elect instead to receive
upon such exercise the "Net Number" of shares of Common Stock determined
according to the following formula (a "Cashless Exercise"):

                      Net Number = (A x B) - (A x C)
                                   -----------------
                                             B

      For purposes of the foregoing formula:

            A=    the total number of shares with respect to which this Warrant
                  is then being exercised.

            B=    the Closing Sale Price of the Common Stock on the Trading Day
                  immediately preceding the date of the Exercise Notice.


                                      -5-
<PAGE>

            C=    the Exercise Price then in effect for the applicable Warrant
                  Shares at the time of such exercise.

SECTION 3. DATE; DURATION; EARLY TERMINATION OF WARRANTS.

      (a) The date of this Warrant is June 21, 2002 (the "Warrant Date"). This
Warrant, in all events, shall be wholly void and of no effect at 5:00 pm,
Eastern Time, on the Expiration Date, or the Termination Date (as defined
below), if applicable, as the case may be, except that notwithstanding any other
provisions hereof, the provisions of Section 8(c) of this Warrant shall continue
in full force and effect after such date as to any Warrant Shares or other
securities issued upon the exercise of this Warrant.

      (b) At any time after June 21, 2005, if (1) the Closing Sale Price per
share of the Common Stock has exceeded 175% of the Exercise Price then in effect
for any fifteen (15) Trading Days within a period of twenty (20) consecutive
Trading Days (the "Determination Period") and (2) a shelf registration statement
covering resales of the Common Stock issuable upon exercise of the Warrants is
effective and available for use at all times during the period beginning thirty
(30) days prior to the Notice Date (as defined below) and ending on the
Termination Date, and is expected to remain effective and available for use
until at least the earlier of thirty (30) days following the Termination Date or
the last date on which the shelf registration statement is required to be kept
effective under the terms of the Registration Rights Agreement, then the Company
may, at its option, terminate the Warrants. By following the procedures set
forth below, the Company may exercise this right of termination only if, within
ten (10) days following the Determination Period, the Company shall mail or
cause to be mailed a notice of such termination (the "Termination Notice," and
the date such Termination Notice is mailed, the "Notice Date") to the holders of
the Warrant at the address set forth for such holder in Section 12 of this
Warrant. Such mailing shall be by first class mail and the Company shall
contemporaneously issue a press release through PRNewswire or Bloomberg
Financial Markets containing substantially the same information as the
Termination Notice described below. Each Termination Notice shall specify the
CUSIP number of the Warrant, the Termination Date, that the Warrants may not be
exercised after 5:00 p.m., Eastern Time, on the Termination Date and the current
Exercise Price.

      If all of the conditions described in the preceding paragraph have been
met and if no Event of Default (as that term is defined in the Indenture) shall
have occurred and be continuing under the Indenture, dated as of June 21, 2002
between the Company and The Bank of New York, as trustee (the "Indenture"), any
Warrant not exercised before the close of business on the ninetieth (90th) day
after the mailing date of the Termination Notice (such ninetieth (90th) day, the
"Termination Date") shall automatically be deemed exercised in accordance with
Section 2(e) of this Warrant and the Company will deliver the Warrant Shares to
the holder upon receipt of a completed Exercise Notice along with the original
copy of the Warrant for cancellation (or an affidavit of lost Warrant in
accordance with Section 11).

SECTION 4. COVENANTS AS TO COMMON STOCK. The Company hereby covenants and agrees
as follows:


                                      -6-
<PAGE>

      (a) Issuance of Warrants and Warrant Shares. This Warrant is, and any
Warrants issued in substitution for or replacement of this Warrant will, upon
issuance, be, validly issued, fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issuance thereof, and shall not be
subject to preemptive rights or other similar rights of stockholders of the
Company. All Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance and payment hereof or cashless
exercise in accordance with the terms hereof, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges created by or through
the Company with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock.

      (b) Reservation of Shares. During the period within which the rights
represented by this Warrant may be exercised, the Company will take all actions
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, no less than one hundred five percent (105%) of the number
of shares of Common Stock needed to provide for the issuance of the Warrant
Shares upon exercise of all of the Warrants without regard to any limitations on
conversions or exercise.

      (c) Listing. The Company shall promptly use reasonable efforts to secure
the listing of the shares of Common Stock issuable upon exercise of this Warrant
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall use reasonable efforts to
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock issuable from time to time upon the
exercise of this Warrant; and the Company shall use reasonable efforts to list
on the Principal Market or automated quotation system, as the case may be, and
shall use reasonable efforts to maintain such listing of, any other shares of
capital stock of the Company issuable upon the exercise of this Warrant if and
so long as any shares of the same class shall be listed on such Principal Market
or automated quotation system. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(c).

      (d) Certain Actions. The Company will not, by amendment of 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 to be observed or performed by it hereunder. Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any shares of Common Stock issuable upon the exercise of this Warrant above the
Exercise Price then in effect, (ii) will take all such actions as may be
reasonably necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant and (iii) will not take any action which results in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock then authorized by the Company's
certificate of incorporation and available for the purpose of issue upon such
exercise.


                                      -7-
<PAGE>

      (e) Obligations Binding on Successors. This Warrant will be binding upon
any entity succeeding to the Company in one or a series of transactions by
merger, consolidation or acquisition of all or substantially all of the
Company's assets or other similar transactions.

SECTION 5. TAXES.

      (a) The Company shall pay any and all documentary, stamp, transfer and
other similar taxes which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

      (b) Notwithstanding any other provision of this Warrant or any other
Transaction Document, for income tax purposes, any assignee or transferee shall
agree that the Company and the Transfer Agent shall be permitted to withhold
from any amounts payable to such assignee or transferee any taxes required by
law to be withheld from such amounts. Unless exempt from the obligation to do
so, each assignee or transferee shall execute and deliver to the Company or the
Transfer Agent, as applicable, a properly completed Form W-8 or W-9, indicating
that such assignee or transferee is not subject to back-up withholding for
United States Federal income tax purposes. Each assignee or transferee that does
not deliver such a form pursuant to the preceding sentence shall have the burden
of proving to the Company's reasonable satisfaction that it is exempt from such
requirement.

SECTION 6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, prior to the exercise of the Warrants represented
hereby, the holder of this Warrant shall not be entitled, as such, to any rights
of a stockholder of the Company, including, without limitation, the right to
vote or to consent to any action of the stockholders of the Company, to receive
dividends or other distributions, to exercise any preemptive right or to receive
dividends or other distributions, to exercise any preemptive right or to receive
any notice of meetings of stockholders of the Company, and shall not be entitled
to receive any notice of any proceedings of the Company. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on such
holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company.

SECTION 7. COMPLIANCE WITH SECURITIES LAWS.

      (a) The holder of this Warrant, by the acceptance hereof, represents and
warrants that (i) it is acquiring this Warrant and (ii) upon exercise of this
Warrant will acquire the Warrant Shares then issuable upon exercise thereof for
its own account for investment only and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the Securities Act;
provided, however, that by making the representations herein, the holder does
not agree to hold this Warrant or any of the Warrant Shares for any minimum or
other specific term and reserves the right to dispose of this Warrant and the
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The holder of this Warrant
further represents, by acceptance hereof, that, as of this date, such holder is
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
promulgated by the Securities and Exchange Commission


                                      -8-
<PAGE>

under the Securities Act and was not organized for the specific purpose of
acquiring the Warrants or Warrant Shares.

      (b) This Warrant and all the Warrant Shares issued upon exercise hereof or
conversion thereof shall be stamped or imprinted with a legend in substantially
the following form (in addition to any legend required by state securities laws
or any securities exchange upon which such Warrant Shares may, at the time of
such exercise, be listed) on the face thereof unless at the time of exercise
such Warrant Shares shall be registered under the Securities Act:

      THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
      APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
      SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
      APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE SECURITIES
      MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
      SECURED BY THE SECURITIES.

      In addition, any Warrants or Warrant Shares held by or transferred to an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities Act)
of the Company shall be stamped or imprinted with a legend substantially in the
following form:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
      MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
      PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144, PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A
      VALID EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

      The legends set forth above shall be removed and the Company (in the case
of Warrants) or the Transfer Agent (in the case of Warrant Shares) shall issue a
new Warrant or Warrant(s) of like tenor and aggregate principal amount, or a
certificate or certificates representing Warrant Shares, as appropriate, without
such legends to the holder of the Warrant(s) or Warrant Shares upon which they
are stamped, (i) if such Warrant(s) or Warrant Shares are registered for resale
under the Securities Act and are transferred or sold pursuant to such
registration, (ii) if, pursuant to a sale transaction, such holder provides the
Company with an opinion of counsel reasonably acceptable to the Company to the
effect that a public sale, assignment or transfer of the Warrant(s) or Warrant
Shares may be made without registration under the Securities Act, or (iii) if
the holder of the Securities has not been an "affiliate" (as defined in Rule
501(b) of Regulation D under the Securities Act) during the preceding three (3)
months, upon expiration of the two- (2) year period under Rule 144(k)
promulgated under the Securities Act (or any successor rule). In the event Rule
144(k) (or any successor rule) is amended to change the two- (2) year or three-
(3) month periods, the reference(s) in the preceding sentence shall be deemed to
be a reference to such changed period(s), provided that


                                      -9-
<PAGE>

such change shall not become effective if it is otherwise prohibited by, or
would otherwise cause a violation of, the then applicable federal securities
laws. The Company shall not require such opinion of counsel for the sale of
Warrant(s) or Warrant Shares in accordance with Rule 144 of the Securities Act,
provided the seller provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144.

SECTION 8. OWNERSHIP AND TRANSFER.

      (a) The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant (the "Warrant Register"), in which
the Company shall record the name and address of the Person in whose name this
Warrant has been issued, as well as the name and address of each transferee. The
Company may treat the Person in whose name any Warrant is registered on the
Warrant Register as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events recognizing any
transfers made in accordance with the terms of this Warrant.

      (b) This Warrant and all rights hereunder shall be assignable and
transferable by the holder hereof without the consent of the Company upon
surrender of this Warrant with a properly executed assignment (in the form of
Exhibit B attached hereto) at the principal executive offices of the Company (or
such other office or agency of the Company as it may designate in writing to the
holder hereof).

      (c) The Company is obligated to register all of the Warrants and the
Warrant Shares for resale under the Securities Act pursuant to the Registration
Rights Agreement. The Warrants and the shares of Common Stock issuable upon
exercise of this Warrant shall constitute Registrable Securities (as such term
is defined in the Registration Rights Agreement). Each holder of this Warrant
shall be entitled to all of the benefits afforded to a holder of any such
Registrable Securities under the Registration Rights Agreement and such holder,
by its acceptance of this Warrant, agrees and shall agree to be bound by and to
comply with the terms and conditions of the Registration Rights Agreement
applicable to such holder as a holder of such Registrable Securities.

SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES ISSUABLE. The
Exercise Price, the number of Warrant Shares issuable upon the exercise of each
Warrant and the number of Warrants outstanding are subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 9.

      (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Exercise Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 9(f) of this Warrant) fixed for such determination and
(ii) the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction in the


                                      -10-
<PAGE>

Exercise Price to become effective immediately after the opening of business on
the day following the Record Date. If any dividend or distribution of the type
described in this Section 9(a) of this Warrant is declared but not so paid or
made, the Exercise Price shall again be adjusted to the Exercise Price which
would then be in effect if such dividend or distribution had not been declared.

      (b) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Exercise Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

      (c) In case the Company shall issue rights or warrants to all holders of
its outstanding shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined in Section 9(f) of this Warrant) on the Record Date
fixed for the determination of stockholders entitled to receive such rights or
warrants, the Exercise Price shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect at the opening of
business on the date after such Record Date by a fraction (i) the numerator of
which shall be the sum of the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the number of shares that the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price and (ii)
the denominator of which shall be the sum of the number of shares of Common
Stock outstanding at the close of business on the Record Date plus the total
number of additional shares of Common Stock so offered for subscription or
purchase. Such adjustment shall become effective immediately after the opening
of business on the day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered pursuant to such rights or warrants,
upon the expiration or termination of such rights or warrants, the Exercise
Price shall be readjusted to the Exercise Price that would then be in effect had
the adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Exercise Price shall again be adjusted to be the Exercise Price that would then
be in effect if such date fixed for the determination of stockholders entitled
to receive such rights or warrants had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at less than the Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants, the value
of such consideration, if other than cash, to be determined in good faith by the
Company's Board of Directors.

      (d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
(other than any dividends or


                                      -11-
<PAGE>

distributions to which Section 9(a) of this Warrant applies) or evidences of its
indebtedness or other assets (including securities, but excluding (1) any rights
or warrants referred to in Section 9(c) of this Warrant and (2) dividends and
distributions paid exclusively in cash (except as set forth in Sections 9(e) and
9(f) of this Warrant, (the foregoing hereinafter in this Section 9(d) called the
"Securities")), unless the Company elects to reserve such Securities for
distribution to the holders upon exercise of the Warrants so that any such
holder converting Warrants will receive upon such exercise, in addition to the
shares of Common Stock to which such holder is entitled, the amount and kind of
such Securities which such holder would have received if such holder had
exercised its Warrants into Common Stock immediately prior to the Record Date
for such distribution of the Securities, then, in each such case, the Exercise
Price shall be reduced so that the same shall be equal to the price determined
by multiplying the Exercise Price in effect immediately prior to the close of
business on the Record Date with respect to such distribution by a fraction the
numerator of which shall be the Current Market Price (as defined in Section 9(f)
of this Warrant) on such date less the fair market value (as determined in good
faith by the Company's Board of Directors, whose determination shall be
conclusive) on such date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator of which shall be
such Current Market Price, such reduction to become effective immediately prior
to the opening of business on the day following the Record Date; provided,
however, that in the event the then fair market value (as determined in good
faith by the Company's Board of Directors, whose determination shall be
conclusive) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price on
the Record Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each holder shall have the right to receive upon conversion of a
Warrant (or any portion thereof) the amount of Securities such holder would have
received had such holder converted such Warrant (or portion thereof) immediately
prior to such Record Date.

      In the event that such dividend or distribution is not so paid or made,
the Exercise Price shall again be adjusted to be the Exercise Price which would
then be in effect if such dividend or distribution had not been declared. If a
majority of the independent members of the Company's Board of Directors
determines the fair market value of any distribution for purposes of this
Section 9(d) by reference to the actual or when issued trading market for any
securities comprising all or part of such distribution, it must in doing so
consider the prices in such market over the same period (the "Reference Period")
used in computing the Current Market Price pursuant to Section 9(f) of this
Warrant to the extent possible, unless a majority of the independent members of
the Company's Board of Directors determines in good faith that determining the
fair market value during the Reference Period would not be in the best interest
of the holders.

      In the event that the Company implements a new stockholder rights plan,
such rights plan shall provide that upon exercise of the Warrants the holders
will receive, in addition to the Common Stock issuable upon such exercise, the
rights issued under such rights plan (as if the holder had exercised the Warrant
prior to implementing the rights plan and notwithstanding the occurrence of an
event causing such rights to separate from the Common Stock at or prior to the
time of exercise). Any distribution of rights or warrants pursuant to a
stockholder rights plan complying with the


                                      -12-
<PAGE>

requirements set forth in the immediately preceding sentence of this paragraph
shall not constitute a distribution of rights or warrants for the purposes of
this Section 9(d).

      Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"), (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable, and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 9(d) (and no adjustment to the Exercise Price under
this Section 9(d) will be required) until the occurrence of the earliest Trigger
Event. If such right or warrant is subject to subsequent events, upon the
occurrence of which such right or warrant shall become exercisable to purchase
different securities, evidences of indebtedness or other assets or entitle the
holder to purchase a different number or amount of the foregoing or to purchase
any of the foregoing at a different purchase price, then the occurrence of each
such event shall be deemed to be the date of issuance and record date with
respect to a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof). In addition,
in the event of any distribution (or deemed distribution) of rights or warrants,
or any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto, that resulted in an adjustment to the Exercise
Price under this Section 9(d), (1) in the case of any such rights or warrants
that shall all have been redeemed or repurchased without exercise by any holders
thereof, the Exercise Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants all of which shall
have expired or been terminated without exercise, the Exercise Price shall be
readjusted as if such rights and warrants had never been issued.

      For purposes of this Section 9(d) and Sections 9(a) and (c) of this
Warrant, any dividend or distribution to which this Section 9(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock to which Section 9(a) or (c) of this
Warrant applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets, shares of capital stock,
rights or warrants other than such shares of Common Stock or rights or warrants
to which Section 9(c) of this Warrant applies (and any Exercise Price reduction
required by this Section 9(e) with respect to such dividend or distribution
shall then be made) immediately followed by (2) a dividend or distribution of
such shares of Common Stock or such rights or warrants (and any further Exercise
Price reduction required by Sections 9(a) and (c) of this Warrant with respect
to such dividend or distribution shall then be made), except (A) the Record Date
of such dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution," "Record Date fixed for such determination" and "Record Date"
within the meaning of Section 9(a) of this Warrant and as "the date fixed for
the determination of stockholders entitled to receive such rights or warrants,"
"the Record Date fixed for the determination of the stockholders


                                      -13-
<PAGE>

entitled to receive such rights or warrants" and "such Record Date" within the
meaning of Section 9(c) of this Warrant and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 9(a) of this Warrant.

      (e) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 10 of this Warrant applies or as part
of a distribution referred to in Section 9(d) of this Warrant), in an aggregate
amount that, combined together with (1) the aggregate amount of any other such
distributions to all holders of its Common Stock made exclusively in cash within
the twelve (12) months preceding the date of payment of such distribution, and
in respect of which no adjustment pursuant to this Section 9(e) has been made,
and (2) the aggregate of any cash plus the fair market value (as determined in
good faith by the Company's Board of Directors, whose determination shall be
final, binding and conclusive) of consideration payable in respect of any tender
offer by the Company or any of its subsidiaries for all or any portion of the
Common Stock concluded within the twelve (12) months preceding the date of
payment of such distribution exceeds six percent (6%) of the product of the
Current Market Price (determined as provided in Section 9(f) of this Warrant) on
the Record Date with respect to such distribution times the number of shares of
Common Stock outstanding on such date, then, and in each such case, immediately
after the close of business on such date, the Exercise Price shall be reduced so
that the same shall equal the price determined by multiplying the Exercise Price
in effect immediately prior to the close of business on such Record Date by a
fraction (i) the numerator of which shall be equal to the Current Market Price
on the Record Date less an amount equal to the quotient of (x) such combined
amount and (y) the number of shares of Common Stock outstanding on the Record
Date and (ii) the denominator of which shall be equal to the Current Market
Price on such date; provided, however, that in the event the portion of the cash
so distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price of the Common Stock on the Record Date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each holder
shall have the right to receive upon exercise of a Warrant (or any portion
thereof) the amount of cash such holder would have received had such holder
exercised such Warrant (or portion thereof) immediately prior to such Record
Date. In the event that such dividend or distribution is not so paid or made,
the Exercise Price shall again be adjusted to be the Exercise Price that would
then be in effect if such dividend or distribution had not been declared.

      (f) For purposes of this Section 9, the following terms shall have the
meanings indicated:

            (1) "Closing Sale Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the Principal Market, or, if not quoted or
listed or admitted to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by


                                      -14-
<PAGE>

any New York Stock Exchange member firm selected from time to time by the
Company's Board of Directors for that purpose, whose determination shall be
conclusive.

            (2) "Current Market Price" shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten (10) consecutive
Trading Days immediately prior to the date in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Exercise Price pursuant to Section 9(a), (b), (c), (d) or (e) of this
Warrant occurs during such ten (10) consecutive Trading Days, the Closing Sale
Price for each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Sale Price by the same fraction by which
the Exercise Price is so required to be adjusted as a result of such other
event, (2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Exercise Price pursuant to Section 9(a), (b), (c), (d) or (e) of this Warrant
occurs on or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Sale Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Sale Price by the reciprocal of the fraction by which
the Exercise Price is so required to be adjusted as a result of such other
event, and (3) if the "ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this proviso, the Closing
Sale Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as determined
in good faith by the Company's Board of Directors in a manner consistent with
any determination of such value for purposes of Section 9(d) of this Warrant,
whose determination shall be conclusive) of the evidences of indebtedness,
shares of capital stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex" date. For
purposes of this paragraph, the term "ex" date, (1) when used with respect to
any issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from which
the Closing Sale Price was obtained without the right to receive such issuance
or distribution and (2) when used with respect to any subdivision or combination
of shares of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective. Notwithstanding the foregoing,
whenever successive adjustments to the Exercise Price are called for pursuant to
this Section 9, such adjustments shall be made to the Current Market Price as
may be necessary or appropriate to effectuate the intent of this Section 9 and
to avoid unjust or inequitable results as determined in good faith by the
Company's Board of Directors.

            (3) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.

            (4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed


                                      -15-
<PAGE>

for determination of stockholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Company's Board of Directors
or by statute, contract or otherwise).

      (g) The Company may make such reductions in the Exercise Price, in
addition to those required by Section 9(a), (b), (c), (d) or (e) of this
Warrant, as the Company's Board of Directors considers to be advisable to avoid
or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.

      (h) To the extent permitted by applicable law, the Company from time to
time may reduce the Exercise Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during such
period and the Company's Board of Directors shall have made a determination that
such reduction would be in the best interests of the Company, which
determination shall be conclusive and described in a Board Resolution. Whenever
the Exercise Price is reduced pursuant to the preceding sentence, the Company
shall mail to the holder of each Warrant at his last address in the Warrant
Register a notice of the reduction at least fifteen (15) days prior to the date
the reduced Exercise Price is to take effect, and such notice shall state the
reduced Exercise Price and the period during which it will be in effect.

      (i) No adjustment in the Exercise Price shall be required under this
Section 9 unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 9(i) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 9 shall be made by the Company and shall be
made to the nearest cent or to the nearest one hundredth of a share, as the case
may be. No adjustment need be made for a change in the par value of the Common
Stock.

      (j) Notice to Holders of Warrants Prior to Certain Actions. In case:

            (1) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Exercise Price
pursuant to this Section 9; or

            (2) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants; or

            (3) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, or a
change from par value to no par value), or of any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the
Company is required, or of the sale and transfer of all or substantially all of
the assets of the Company; or

            (4) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;


                                      -16-
<PAGE>

      the Company shall mail to the holder at such address appearing in the
Warrant Register as promptly as possible but in any event at least fifteen (15)
days prior to the applicable date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up and the Company shall contemporaneously
issue a press release through PRNewswire or Bloomberg Financial Markets
containing substantially the same information as the notice described above.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
In addition, whenever the Exercise Price is adjusted as provided in this Section
9, the Company shall prepare a notice of such adjustment of the Exercise Price
setting forth the adjusted Exercise Price and the date on which each adjustment
becomes effective and shall mail such notice of such adjustment of the Exercise
Price to the holder of each Warrant at his last address in the Warrant Register
within twenty (20) days of the effective date of such adjustment. Failure to
deliver such notice shall not effect the legality or validity of any such
adjustment.

      (k) In any case in which this Section 9 provides that an adjustment shall
become effective immediately after a Record Date for an event, the Company may
defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such Record Date and before the occurrence of such event
the additional shares of Common Stock issuable upon such exercise by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fractions of shares of Common
Stock pursuant to Section 2(c) of this Warrant.

      (l) For purposes of this Section 9, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

      (m) Upon each adjustment of the Exercise Price pursuant to this Section 9,
each Warrant shall thereupon evidence the right to purchase that number of
shares of Common Stock (calculated to the nearest hundredth of a share) obtained
by multiplying the number of shares of Common Stock purchasable immediately
prior to such adjustment upon exercise of the Warrant by the Exercise Price in
effect immediately prior to such adjustment and dividing the product so obtained
by the Exercise Price in effect immediately after such adjustment. The
adjustment pursuant to this Section 9(m) to the number of shares of Common Stock
purchasable upon exercise of a Warrant shall be made each time an adjustment of
the Exercise Price is made pursuant to this Section 9 (or would be made but for
Section 9(k) of this Warrant).


                                      -17-
<PAGE>

SECTION 10. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If any of
the following events occur, namely (i) any reclassification or change of the
outstanding shares of 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, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock (other
than as a result of a change in name, a change in par value or a change in the
jurisdiction of incorporation), (iii) any statutory exchange, as a result of
which holders of Common Stock generally shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock (such transaction, a "Statutory Exchange"), (iv)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other person as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing person, as the case may be,
shall issue a replacement Warrant providing that such Warrant shall be
exercisable for the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, Statutory Exchange, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
exercise of such Warrants (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available for issuance upon exercise of all
such Warrants) immediately prior to such reclassification, change,
consolidation, merger, combination, Statutory Exchange, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, that holders of Common Stock who were entitled to vote or consent to such
transaction had as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, combination, Statutory Exchange,
sale or conveyance (provided that, if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, combination,
Statutory Exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 10, the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, combination, Statutory Exchange, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Such replacement Warrant shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 9 of this Warrant. If, in
the case of any such reclassification, change, consolidation, merger,
combination, Statutory Exchange, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
shall include shares of stock or other securities and assets of a corporation
other than the successor or purchasing person, as the case may be, in such
reclassification, change, consolidate, merger, combination, Statutory Exchange,
sale or conveyance, then such replacement Warrant shall also be executed by such
other person and shall contain such additional provisions to protect the
interests of the holder of the Warrants as the Company's Board of Directors
shall reasonably consider necessary by reason of the foregoing. The Exercise
Price for the stock and other securities, property and assets (including cash)
so receivable upon such event shall be an amount equal to the Exercise Price
immediately prior to such event.


                                      -18-
<PAGE>

      The Company shall mail such replacement Warrant to each holder of
Warrants, at such holder's address appearing in the Warrant Register within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such replacement Warrant.

      The above provisions of this Section 10 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

      If this Section 10 applies to any event or occurrence, Section 9 of this
Warrant shall not apply.

SECTION 11. LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If this Warrant is
lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of
an indemnification undertaking or other form of security reasonably acceptable
to the Company (or in the case of a mutilated Warrant, the Warrant), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed. Notwithstanding the foregoing, if this Warrant is lost
by, stolen from or destroyed by the original holder hereof, the affidavit of
such original holder setting forth the circumstances of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof, and no
indemnification bond or other security shall be required by the Company as a
condition to the execution and delivery by the Company of a new Warrant to such
original holder other than such original holder's unsecured written agreement to
indemnify the Company solely for losses actually incurred by the Company as a
direct consequence of the loss, theft or destruction of the Warrant.

SECTION 12. NOTICE. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile; or (iii) one
(1) Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. If
notice is to be sent to the Company, the holder shall use its reasonable best
efforts to provide additional copies to the individuals listed below; provided,
however, that the failure of such holder to send such additional copies shall in
no way limit the effectiveness of any notice sent to the Company to the
attention of Chief Financial Officer as provided for below. The addresses and
facsimile numbers for such communications shall be:

            If to the Company:
                                         Electroglas, Inc.
                                         6024 Silver Creek Valley Road
                                         San Jose, California  95138-10111
                                         Telephone: (408) 528-3000
                                         Facsimile: (408) 528-3542
                                         Attention: Curtis Wozniak


                                      -19-
<PAGE>

                             with a copy to:

                                         Morrison & Foerster LLP
                                         755 Page Mill Road
                                         Palo Alto, California
                                         Telephone: (650) 813-5600
                                         Facsimile: (650) 494-0792
                                         Attention: Justin Bastian, Esq.


            If to the Transfer Agent:


                             EquiServe Trust Company, N.A.
                             150 Royall Street
                             Mail Stop 45-02-62
                             Canton, MA 92021
                             Telephone: (781) 575-4489
                             Facsimile: (781) 575-2550
                             Attention: Paul Alfano

      If to a holder of this Warrant, to it at the address and facsimile number
set forth on the Schedule of Buyers to the Securities Purchase Agreement, with
copies to such holder's representatives as set forth on such Schedule of Buyers,
or at such other address and facsimile as shall be delivered to the Company upon
the issuance or transfer of this Warrant. Each party shall provide five days'
prior written notice to the other party of any change in address or facsimile
number. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

SECTION 13. AMENDMENTS. This Warrant and any term hereof may be amended,
changed, waived, discharged, or terminated only by an instrument in writing
signed by the Company and holders of a majority of Warrant Shares represented by
all Warrants. Such amendment, change, waiver, discharge or termination shall be
binding on the Company and all of the Warrant holder's assignees and
transferees; provided, however, that no such action may increase the Exercise
Price, including by a waiver of or an amendment to Section 9 of this Agreement,
or decrease the number of shares or class of stock issuable upon exercise of any
Warrants without the written consent of the holder of such Warrant. No waivers
of any term, condition or provision of this Warrant in any one or more instances
shall be deemed to be or construed as a further or continuing waiver of any such
term, condition or provision.


                                      -20-
<PAGE>

SECTION 14. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL. The corporate
laws of the State of California shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Warrant shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Warrant in that jurisdiction or the validity or enforceability
of any provision of this Warrant in any other jurisdiction. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

SECTION 15. DESCRIPTIVE HEADINGS. The headings of this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


                                      -21-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of day and year first above written.

                                        "COMPANY"

                                        ELECTROGLAS, INC.


                                        By:
                                             -----------------------------------
                                        Its:
                                             -----------------------------------


                                      S-1
<PAGE>

                              EXHIBIT A TO WARRANT

                             FORM OF EXERCISE NOTICE

      The undersigned holder hereby exercises the right to purchase
______________ shares of Common Stock ("Warrant Shares") of ELECTROGLAS, INC., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

      1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:

            ______      "Cash Exercise" with respect to ________ Warrant Shares;
                        and/or

            ______      "Cashless Exercise" with respect to ______ Warrant
                        Shares (to the extent permitted by the terms of the
                        Warrant).

      2. Payment of Exercise Price. In the event that the holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the sum of $___________________ to the
Company in accordance with the terms of the Warrant.

      3. Delivery of Warrant Shares. The holder of this warrant has sold or will
sell the shares of common stock issuable pursuant to this Notice pursuant to a
registration statement or an exemption from registration under the Securities
Act of 1933, as amended.

      4. Private Placement Representations. The holder of this Warrant confirms
the continuing validity of, and reaffirms as of the date hereof, its
representations and warranties set forth in Section 7 of the Warrant.

Date: _______________, ____


------------------------------------    ----------------------------------------
Name of Registered Holder               Tax ID of Registered Holder
                                        (if applicable)



By:
     -------------------------------
Its:
     -------------------------------


                                      A-1
<PAGE>

                                 ACKNOWLEDGMENT

      The Company hereby acknowledges this Exercise Notice and hereby directs
EquiServe Trust Company, N.A. to issue the above indicated number of shares of
Common Stock in accordance with the Irrevocable Transfer Agent Instructions
dated ________, 2002 from the Company and acknowledged and agreed to by
[_____________].

                                        ELECTROGLAS, INC.



                                        By:
                                             -----------------------------------
                                        Its:
                                             -----------------------------------


                                      A-2
<PAGE>

                              EXHIBIT B TO WARRANT

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of ELECTROGLAS, INC., a Delaware
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.

Dated:  _________, 200_


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

                                        By:
                                             -----------------------------------
                                        Its:
                                             -----------------------------------