<PAGE>

                                                                     EXHIBIT 4.6

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933 OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
         TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
         THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.



                       WARRANT TO PURCHASE A MAXIMUM OF

                  3,429 SHARES OF SERIES H PREFERRED STOCK OF
                          TERRAPIN TECHNOLOGIES, INC.
                        (Void after September 19, 2003)



          This certifies that VENTURE LENDING & LEASING, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from TERRAPIN TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), 3,429 fully paid and nonassessable shares of the Company's Series H
Preferred Stock ("Preferred Stock") for cash at a price of $50.00 per share (the
"Stock Purchase Price") at any time or from time to time up to and including
5:00 p.m. (Pacific time) on the earliest of (i) the business day immediately
prior to the date of closing of the initial public offering of the Company's
Common Stock, (ii) the business day immediately prior to the effective date of
any consolidation or merger of the Company with or into another corporation
other than a Control Merger (as defined in Section 4.3 hereof) or (iii) August
31, 2003 (such earliest date being referred to in this Warrant as (the
"Expiration Date"), upon surrender to the Company at its principal office at 750
Gateway Blvd., Suite H, South San Francisco, CA  94080 (or at such other
location as the Company may advise Holder in writing) of this Warrant properly
endorsed with the Form of Subscription attached hereto duly filled in and signed
and upon payment in cash or by check of the aggregate Stock Purchase Price for
the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof.  The Stock Purchase Price and the number
of shares purchasable hereunder are subject to adjustment as provided in Section
4 of this Warrant.

                  This Warrant is subject to the following terms and conditions:

               1. Exercise; Issuance of Certificates; Payment for Shares
                  ------------------------------------------------------

                  (a)  Unless an election is made pursuant to clause (b) of this
          Section 1, this Warrant shall be exercisable at the option of the
          Holder, at any time or from time to time, on or before the Expiration
          Date for all or any portion of
<PAGE>

the shares of Preferred Stock (but not for a fraction of a share) which may be
purchased hereunder for the Stock Purchase Price multiplied by the number of
shares to be purchased.  In the event, however, that pursuant to the Company's
Certificate of Incorporation, as amended, an event causing automatic conversion
of the Company's Preferred Stock shall have occurred prior to the exercise of
this Warrant, in whole or in part, then this Warrant shall be exercisable for
the number of shares of Common Stock of the Company into which the Preferred
Stock not purchased upon any prior exercise of the Warrant would have been so
converted (and, where the context requires, reference to "Preferred Stock" shall
be deemed to include such Common Stock).  The Company agrees that the shares of
Preferred Stock purchased under this Warrant shall be and are deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for such shares. Subject to the provisions of Section 2,
certificates for the shares of Preferred Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by this
Warrant have been so exercised.  Except as provided in clause (b) of this
Section 1, in case of a purchase of less than all the shares which may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time.  Each stock certificate so delivered
shall be in such denominations of Preferred Stock as may be requested by the
Holder hereof and shall be registered in the name of such Holder or such other
name as shall be designated by such Holder, subject to the limitations contained
in Section 2.

          (b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect, at
any time on or before the Expiration Date, to receive that number of shares of
Preferred Stock equal to the quotient of: (i) the difference between (A) the Per
Share Price (as hereinafter defined) of the Preferred Stock, less (B) the Stock
Purchase Price then in effect, multiplied by the number of shares of Preferred
Stock the Holder would otherwise have been entitled to purchase hereunder
pursuant to clause (a) of this Section 1 (or such lesser number of shares as the
Holder may designate in the case of a partial exercise of this Warrant) ; over
(ii) the Per Share Price.

          (c) For purposes of clause (b) of this Section 1, "Per Share Price"
means the product of: (A) the closing sale price of the Company's Common Stock
as quoted by NASDAQ or listed on any exchange, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the five (5)
trading days prior to the date of the Holder's election hereunder or, (B) if
exercised in connection with a registered public offering the gross sales price
of one share of the Company's Common Stock pursuant to a registered public
offering or if exercised in connection with a merger, reorganization or sale of
assets that amount which shareholders of the Company will receive for each share
of Common Stock pursuant to a merger, reorganization or sale of assets; and that
number of shares of Common Stock into which each share of Preferred Stock is
convertible or has been converted, as the case may be. If the Company's Common
Stock is not quoted by NASDAQ or listed on an exchange, the Per Share Price of
the Preferred Stock (or the equivalent number of shares of Common Stock into
which such Preferred Stock is convertible or has been converted, as the case may
be) shall be determined by the Board of Directors of the Company in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder advises
the Board of Directors in writing that Holder disagrees with such determination,
then the Company and Holder shall promptly agree upon a reputable investment
banking firm to undertake such valuation. If the valuation of such investment
banking firm is more than ten percent (10%) greater than that determined by the
Board of Directors, then all fees and expenses of such investment banking firm
shall be paid by the Company. In all other circumstances, such fees
<PAGE>

                             FORM OF SUBSCRIPTION
                             --------------------

and expenses shall be paid by Holder.

    2.    Limitation on Transfer.
          ----------------------

          (a) The Warrant and the Preferred Stock shall not be transferable
except upon the conditions specified in this Section 2, which conditions are
intended to insure compliance with the provisions of the Securities Act.  Each
holder of this Warrant or the Preferred Stock issuable hereunder will cause any
proposed transferee of the Warrant or Preferred Stock to agree to take and hold
such securities subject to the provisions and upon the conditions specified in
this Section 2.

          (b) Each certificate representing (i) this Warrant, (ii) the Preferred
Stock, (iii) shares of the Company's Common Stock issued upon conversion of the
Preferred Stock and (iv) any other securities issued in respect of the Preferred
Stock or Common Stock issued upon conversion of the Preferred Stock upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of this Section 2 or
unless such securities have been registered under the Securities Act or sold
under Rule 144) be stamped or otherwise imprinted with a legend substantially in
the following form (in addition to any legend required under applicable state
securities laws):

              THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
     BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
     STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE SOLD
     OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
     AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
     APPLICABLE STATE SECURITIES LAWS.

          (c) The Holder of this Warrant and each person to whom this Warrant is
subsequently transferred makes the representations and warranties set forth in
Section 17 hereof and further represents and warrants to the Company (by
acceptance of such transfer) that it will not transfer the Warrant (or
securities issuable upon exercise hereof unless a registration statement under
the Securities Act was in effect with respect to such securities at the time of
issuance thereof) except pursuant to (i) an effective registration statement
under the Securities Act, (ii) Rule 144 under the Securities Act (or any other
rule under the Securities Act relating to the disposition of securities), or
(iii) an opinion of counsel, reasonably satisfactory to counsel for the Company,
that an exemption from such registration is available. The Company shall not be
obligated to process any transfer without documentation to the satisfaction of
the Company evidencing compliance with clauses (ii) or (iii) above.

     3.   Shares to be Fully Paid; Reservation of Shares. The Company covenants
          ----------------------------------------------
and agrees that all shares of Preferred Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as required
to provide for the exercise of the rights represented by this Warrant.  The
Company will take all such action as may be necessary to assure that such shares
of Preferred Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Preferred Stock may be listed.  The Company will not
take any action which would result in any adjustment of the Stock Purchase Price
(as defined in Section 4 hereof) (i) if the total number of shares of Preferred
Stock issuable after such action upon exercise of all outstanding
<PAGE>

warrants, together with all shares of Preferred Stock then outstanding and all
shares of Preferred Stock then issuable upon exercise of all options and upon
the conversion of all convertible securities then outstanding, would exceed the
total number of shares of Preferred Stock then authorized by the Company's
Articles of Incorporation, or (ii) if the total number of shares of Common Stock
issuable after such action upon the conversion of all such shares of Preferred
Stock together with all shares of Common Stock then outstanding and then
issuable upon exercise of all options and upon the conversion of all convertible
securities then outstanding would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation.

     4.   Adjustment of Stock Purchase Price Number of Shares.  The Stock
          ---------------------------------------------------
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4.  Upon each adjustment of the Stock
Purchase Price the Holder of this Warrant shall thereafter be entitled to
purchase at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Stock Purchase Price resulting from such adjustment.

          4.1  Subdivision or Combination of Stock.  In case the Company shall
               -----------------------------------
at any time subdivide its outstanding shares of Preferred Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Preferred Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

           4.2  Dividends in Preferred Stock. Other Stock. Property,
                ----------------------------------------------------
Reclassification.  If at any time or from
----------------

time to time the holders of Preferred Stock (or any shares of stock or other
securities at the time receivable upon the exercise of this Warrant) shall have
received or become entitled to receive, without payment therefor,

               (a)  Preferred Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or (b)  any cash paid or payable otherwise than
as a cash dividend, or

               (c) Preferred Stock or other or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Preferred Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 4.1 above)

then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of
Preferred Stock receivable thereupon, and without payment of any additional
consideration therefore, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (b) and (c) above) which
such Holder would hold on the date of such exercise had he been the holder of
record of such Preferred Stock as of the date on which holders of Preferred
Stock received or became entitled to receive such shares and/or all other
additional stock and other securities and property.

          4.3  Adjustment for Reclassifications.  In case, at any time prior to
               --------------------------------
the Expiration Date of this Warrant, the Company undertakes a capital
reorganization (other than a consolidation or merger), reclassification of its
capital stock or the consolidation or merger of the Company with or into another
corporation in which the stockholders (or former stockholders) of the Company
hold, immediately after the
<PAGE>

consummation of such merger or consolidation, a majority of the voting power of
the outstanding capital stock of the surviving corporation or any parent (a
"Control Merger") this Warrant shall, after such reorganization,
reclassification, consolidation or merger (a "Reclassification"), be exercisable
so that upon exercise the Holder shall procure, in lieu of each share of
Preferred stock, the kind and amount of shares of stock, other securities, money
or property receivable upon such Reclassification by the holder of one share
issuable upon exercise of this Warrant had this Warrant been exercised
immediately prior to such Reclassification at the price that would have been
effective prior to such Reclassification. The provisions of this Section 4.3
shall similarly apply to successive Reclassifications.

          4.4  Notice of Adjustment.  Upon any adjustment of the Stock Purchase
               --------------------
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company.  The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

           4.5 Other Notices.  If at any time:

               (a) the Company shall declare any cash dividend upon its
Preferred Stock;

               (b) the Company shall declare any dividend upon its Preferred
Stock payable in stock or make any special dividend or other distribution to the
holders of its Preferred Stock;

               (c) the Company shall offer for subscription pro rata to the
holders of its Preferred Stock any additional shares of stock of any class or
other rights;

               (d) there shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;

               (e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or

               (f) the Company shall take or propose to take any other action,
notice of which is actually provided to holders of the Preferred Stock;

then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (i) at least 20 day's prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights
(ii) in the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding- up, or other action, at least
20 day's written notice of the date when the same shall take place.  Any notice
given in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Preferred Stock shall be entitled thereto.
<PAGE>

          5.  Issue Tax.  The issuance of certificates for shares of Preferred
              ---------
Stock upon the exercise of the Warrant shall be made without charge to the
Holder of the Warrant for any issue tax in respect thereof; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Holder of the Warrant being exercised.

     6.   Closing of Books.   The Company will at no time close its transfer
          ----------------
books against the transfer of any Warrant or of any shares of Preferred  Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.

     7    No Voting or Dividend Rights; Limitation of Liability.  Nothing
          -----------------------------------------------------
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of meetings
of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares of
Preferred Stock, and no mere enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a shareholder of the Company, whether such liability is
asserted by the Company or by its creditors.

     8.   Intentionally Deleted.

     9.   Registration Rights. The Holder hereof shall be entitled, with respect
          -------------------
to the shares of Preferred Stock issued upon exercise hereof or the shares of
Common Stock or other securities issued upon conversion of such Preferred Stock
as the case may be, to all of the registration rights set forth in the Investor
Rights Agreement dated as of May 6, 1996 to the same extent and on the same
terms and conditions as possessed by the Investors.  The Company shall take such
action as may be reasonably necessary to assure that the granting of such
registration rights to the Holder does not violate the provisions of such
agreement or any of the Company's charter documents or rights of prior Grantees
of registration rights.

     10.  Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, contained in
Sections 6 and 9 shall survive the exercise of this Warrant.

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

     12.  Notices.  Any notice, request or other document required or permitted
          -------
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier (ii) upon
confirmation of receipt if by telecopy or (iii) three business days after
deposit in the US mail, with postage prepaid and certified or registered, to
each such holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor in the first paragraph of this
Warrant.

     13.  Binding Effect on Successors.  This Warrant shall be binding upon
          ----------------------------

                                     2
<PAGE>

any corporation succeeding the Company in a Control Merger, consolidation or
acquisition of all or substantially all of the Company's assets. All of the
obligations of the Company relating to the Preferred Stock issuable upon the
exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Company shall inure to the
benefit of the successors and assign of the holder hereof. The Company will, at
the time of the exercise of this Warrant, in whole or in part, upon request of
the Holder hereof but at the Company's expense, acknowledge in writing its
continuing obligation to the Holder hereof in respect of any rights (including,
without limitation, any right to registration of the shares of Common Stock) to
which the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing obligation of the Company
to the Holder hereof in respect of such rights.

     14.  Descriptive Headings and Governing Law.  The descriptive headings of
          --------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant.  This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.

     15.  Lost Warrants or Stock Certificates.  The company represents and
          -----------------------------------
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at the expense of Holder will
make and deliver a new Warrant or stock certificate, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Warrant or stock certificate.

     16.  Fractional Shares.  No fractional shares shall be issued upon exercise
          -----------------
of this Warrant. The Company shall in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.

     17.  Representations of Holder.   With respect to this Warrant, Holder
          -------------------------
represents and warrants to the Company as follows:

          17.1  Experience:  It is experienced in evaluating and investing in
                ----------
companies engaged in businesses similar to that of the Company;  it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.

          17.2  Investment.   It is acquiring the Warrant for investment for its
                ----------
own account and not with a view to, or for resale in connection with, any
distribution thereof.  It understands that the Warrant, the shares of Preferred
Stock issuable upon exercise thereof and the shares of Common Stock issuable
upon conversion of the Preferred Stock, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.

          17.3  Rule 144.  It acknowledges that the Warrant, the Preferred Stock
                --------
and the Common Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available.  It has been advised or is aware of the provisions of
<PAGE>

Rule 144 promulgated under the Securities Act.

          17.4  Access to Data.  It has had an opportunity to discuss the
                --------------
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.

     18.  Additional representations and Covenants of the Company.  The Company
          -------------------------------------------------------
hereby represents, warrants and agrees as follows:

          18.1  Corporate Power.  The Company has all requisite corporate power
                ---------------
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.

          18.2  Authorization.  All corporate action on the part of the Company,
                -------------
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken.  This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.

          18.3  Offering.  Subject in part to the truth and accuracy of Holder's
                --------
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Preferred Stock upon exercise of the Warrant
and the issuance of Common Stock upon conversion of the Preferred Stock will be
exempt from the registration requirements of the Securities Act, and are exempt
from the qualification requirements of any applicable state securities laws; and
neither the Company nor anyone acting on its behalf will take any action
hereafter that would cause the loss of such exemptions.

          18.4  Stock Issuance.  Upon exercise of the Warrant, the Company will
                --------------
use its best efforts to cause stock certificates representing the shares of
Preferred Stock purchased pursuant to the exercise to be issued in the
individual names of Holder, its nominees or assignees, as appropriate at the
time of such exercise.  Upon conversion of the shares of Preferred Stock to
shares of Common Stock, the Company will issue the Common Stock in the
individual names of Holder, its nominees or assignees, as appropriate.

          18.5  Articles and By-Laws.  The Company has, or upon request will,
                --------------------
provide Holder with true and complete copies of the Company's Certificate of
Incorporation, By-Laws, and each Certificate of Determination or other charter
document setting, forth any rights, preferences and privileges of Company's
capital stock, each as amended and in effect on the date of issuance of this
Warrant.

          18.6  Conversion of Preferred Stock.  As of the date hereof, each
                -----------------------------
share of the Preferred Stock is convertible into one share of the Common Stock.

          18.7  Financial and Other Reports.  From time to time up to the
                ---------------------------
earlier of the Expiration Date or the complete exercise of this Warrant, the
Company shall furnish to Holder (i) within 120 days after the close of each
fiscal year of the Company an audited balance sheet and statement of changes in
financial position at and as of the end of such fiscal year, together with an
audited statement of income for such fiscal year; (ii) within 45 days after the
close of each fiscal quarter of the Company, an unaudited balance sheet and
statement of cash flows at and as of the end of such quarter, together with an
unaudited statement of income for such quarter; and (iii) promptly after
sending, making available, or filing, copies of all reports, proxy statements,
and financial statements that the Company sends or makes available to its
shareholders and all registration statements and reports that the Company files
with the SEC or any other governmental or regulatory authority.
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 23 day of September,
1996.



TERRAPIN TECHNOLOGIES, INC.

By: /s/ Sharon Tetlow
Title: /s/ Chief Financial Officer


Accepted and Agreed:


By: /s/ Salvador O. Gutierrez
Title: /s/ President