<PAGE>   1
                                                                   EXHIBIT 10.3
                                                                           

                             VOID AFTER 5:00 P.M.,
                    NEW YORK CITY TIME, ON NOVEMBER 3, 2000.


         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THUS MAY
         NOT BE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT OR UNLESS AN
         EXEMPTION FROM REGISTRATION IS AVAILABLE.


NO. W-003

                   SERIES C WARRANT TO PURCHASE COMMON STOCK
                                       OF
                            DECORA INDUSTRIES, INC.



         This is to Certify that, FOR VALUE RECEIVED, ROBERT W. JOHNSON IV, his
heirs, executors, personal representatives and assigns (the "Holder"), is
entitled to purchase, subject to the provisions of this Series C Warrant
("Warrant"), from Decora Industries, Inc., a Delaware corporation (the
"Company"), 1,700,000 shares of fully paid and nonassessable shares of common
stock of the Company, par value $0.01 per share ("Common Stock"), at a price of
$0.78 per share (the "Initial Exercise Price") at any time during the period
from the date hereof to November 3, 2000 (the "Expiration Date"), but not later
than 5:00 p.m., New York City Time, on the Expiration Date, provided that this
Warrant shall be exercisable only (i) if at any time the Note (as hereinafter
defined) is paid in full by the Company; or (ii) if after May 3, 1998, the
Company has not paid the Note in full.  Notwithstanding the foregoing, this
Warrant shall not be exercisable if at any time the Holder exercises its
conversion rights under the Note.  The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for each
share of Common Stock may be adjusted from time to time as hereinafter set
forth.  The shares of Common Stock deliverable upon such exercise, and as
adjusted from time to time, are hereinafter sometimes referred to as the
"Series C Warrant Shares" and the exercise price of each share of Common Stock
in effect at any time and as adjusted from time to time is hereinafter
sometimes referred to as the "Exercise Price".

         (a)     EXERCISE OF WARRANT.  This Warrant may be exercised by the
Holder in whole or in part at any time or from time to time on or after the
date hereof and until the Expiration Date, or if either such day is a day on
which banking institutions in the State of New York are authorized by law to
close, then on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its principal office with
the Purchase Form annexed hereto duly executed and accompanied by payment of
the Exercise Price for the number of Series C Warrant Shares specified in such
form.  If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and
<PAGE>   2
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the Series C Warrant Shares.  Upon receipt by the Company of
this Warrant at its office in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Common
Stock shall not then be actually delivered to the Holder.  Certificates for the
shares so purchased shall be delivered to the Holder within a reasonable time,
not exceeding ten (10) days, after rights represented by this Warrant shall
have been exercised.

         (b)     SHARES TO BE FULLY PAID: RESERVATION OF SHARES. The Company
covenants and agrees:

                 (1)      that all Series C Warrant Shares shall, upon
         issuance, be fully paid and nonassessable and free from all taxes,
         liens and charges with respect to the issue thereof;

                 (2)      without limiting the generality of the foregoing,
         that the Company will, from time to time, take all such action as may
         be required to assure that the par value per share of the Common Stock
         is at all times equal to or less than the then effective Exercise
         Price per share of the Series C Warrant Shares;

                 (3)      that, during the period within which the rights
         represented by this Warrant may be exercised, the Company shall at all
         times have authorized, and reserved for the purpose of issue upon
         exercise of the rights evidenced by this Warrant, a sufficient number
         of shares of Common Stock to provide for the exercise of the rights
         represented by this Warrant;

                 (4)      that the Company will take all such action as may be
         necessary to assure that the Series C Warrant Shares may be issued
         without violation of any applicable law or regulation or of any
         requirements of any domestic securities exchange or the National
         Association of Securities Dealers Automatic Quotation ("NASDAQ")
         system upon which any capital stock of the Company may be listed,
         provided the Holder provides the Company with such information as the
         Company shall reasonably request and that is necessary to comply with
         the requirements of any such exchange or system;

                 (5)      that no person has any preemptive or other right with
         respect to the issuance of this Warrant or any Series C Warrant
         Shares; and

                 (6)      that the Company will not take any action which would
         result in any adjustment of the Exercise Price if the total number of
         shares of Common Stock issuable after such action upon exercise of all
         warrants, together with all shares of Common Stock then outstanding
         and all shares of Common Stock then issuable upon exercise of any
         Options (as hereinafter defined) and upon conversion of all
         Convertible Securities (as hereinafter defined) then outstanding,
         would exceed the total number of shares of Common





                                     - 2 -
<PAGE>   3
         Stock then authorized by the Company's certificate of incorporation
         (as then amended or restated).  In the event any stock or securities
         of the Company other than the Common Stock are issuable upon the
         exercise hereof, the Company will take or refrain from taking any
         action referred to in clauses (1) through (6) of this Section (b) as
         though such clauses applied to such other shares or securities then
         issuable upon the exercise hereof.

         (c)     FRACTIONAL SHARES.  No fractional shares or script
representing fractional shares shall be issued upon the exercise of this
Warrant.  With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to such
fraction multiplied by the current market value of a share, determined as
follows:

                 (1)      If the Common Stock is listed on a domestic
         securities exchange or admitted to unlisted trading privileges on such
         exchange or listed for trading on the NASDAQ system, the current
         market value shall be the last reported sale price of the Common Stock
         on such exchange or system on the last business day prior to the date
         of exercise of this Warrant or if no such sale is made on such day,
         the average closing bid and asked prices for such day on such exchange
         or system;

                 (2)      If the Common Stock is not so listed or admitted to
         unlisted trading privileges, the current market value shall be the
         mean of the last reported bid and asked prices reported by the
         National Quotation Bureau, Inc., or any similar successor
         organization, on the last business day prior to the date of exercise
         of this Warrant; or

                 (3)      If the Common Stock is not so listed or admitted to
         unlisted trading privileges and bid and asked prices are not so
         reported, the current market value shall be an amount not less than
         the book value thereof as at the end of the most recent fiscal year of
         the Company ending prior to the date of the exercise of the Warrant,
         determined in such reasonable manner as may be prescribed by the Board
         of Directors of the Company.

         (d)     EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.  This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company, for other warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder.
This Warrant is freely transferable and may be assigned or hypothecated from
the date hereof.  Upon surrender of this Warrant to the Company at its
principal office with the Assignment Form annexed hereto duly executed, the
Company shall, without charge, execute and deliver a new Warrant in the name of
the assignee named in the Assignment Form and this Warrant shall promptly be
cancelled.  This Warrant may be divided or combined with other warrants which
carry the same rights upon presentation hereof at the principal office of the
Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued and signed by the Holder hereof.  The
term "Warrant" as used herein includes any warrants into which this Warrant may
be divided or exchanged.  Upon receipt by the Company of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant,





                                     - 3 -
<PAGE>   4
and in the case of loss, theft or destruction, of reasonably satisfactory
indemnification and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor and
date.  Any such new Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the Company, whether or not
this Warrant so lost, stolen, destroyed, or mutilated shall be at any time
enforceable by anyone.

         (e)     RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.  Furthermore, Holder by acceptance hereof, consents to and agrees
to be bound by and to comply with all the provisions of this Warrant,
including, without limitation, all the obligations imposed upon the Holder by
Section (m) hereof.  In addition, the holder of this Warrant, by accepting the
same, agrees that the Company may deem and treat the person in whose name this
Warrant is registered as the absolute, true and lawful owner for all purposes
whatsoever, and the Company shall not be affected by any notice to the
contrary.

         (f)     ANTI-DILUTION PROVISIONS. The Exercise Price and the number
and kind of securities purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time upon the happening of certain events as
hereinafter provided.  The Exercise Price in effect at any time and the number
and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:

                 (1)      Issuance of Common Stock.  If and whenever after the
         date hereof the Company shall issue or sell (or be deemed to issue or
         sell as provided hereunder) any shares of its Common Stock for a
         consideration per share less than the Exercise Price in effect
         immediately prior to the time of such issue or sale (other than
         shares of Common Stock issued pursuant to this Warrant, the Series A
         and Series B Warrants as amended by the Company and the Holder on even
         date herewith and the Company's Amended Convertible Negotiable
         Promissory Note of even date herewith (the "Note"), the shares issued
         as a closing fee with respect to the Note and the shares issued as
         interest for the Note), then, forthwith upon such issue or sale, the
         Exercise Price shall be reduced to the price, calculated to the
         nearest cent, determined by dividing (i) the sum of (A) the number of
         shares of Common Stock outstanding immediately prior to such issue or
         sale multiplied by the then existing Exercise Price and (B) the
         consideration, if any, received by the Company upon such issue or
         sale, by (ii) the total number of shares of Common Stock outstanding
         immediately after such issue or sale.

                          (i)     Issuance of Rights or Options.  In case at
                 any time the Company shall in any manner grant (whether
                 directly or by assumption in a merger or otherwise), after the
                 date hereof, any rights to subscribe for or to purchase, or
                 any options for the purchase of (such rights or options being
                 herein called "Options"), Common Stock or any stock or
                 securities convertible into or exchangeable for Common Stock
                 (such convertible or exchangeable stock or securities being
                 herein





                                     - 4 -
<PAGE>   5
                 called "Convertible Securities") whether or not such Options
                 or the right to convert or exchange any such Convertible
                 Securities are immediately exercisable, and the price per
                 share for which Common Stock is issuable upon the exercise of
                 such options or upon conversion or exchange of such
                 Convertible Securities (determined as provided in the
                 following sentence) shall be less than the Exercise Price in
                 effect immediately prior to the time of granting such Options,
                 then the total maximum number of shares of Common Stock
                 issuable upon the exercise of all such Options or upon
                 conversion or exchange of the total maximum amount of such
                 Convertible Securities issuable upon the exercise of such
                 Options shall be deemed to have been issued for such price per
                 share as of the date of granting of such Options and
                 thereafter shall be deemed to be outstanding.  The price per
                 share for which Common Stock is issuable, as referred to in
                 the preceding sentence, shall be determined by dividing (A)
                 the sum of (1) the total amount, if any, received or
                 receivable by the Company as consideration for the granting of
                 such Options, plus (2) the minimum aggregate amount of
                 additional consideration payable to the Company upon the
                 exercise of all such Options, plus (3) in the case of all such
                 Options that relate to Convertible Securities, the minimum
                 aggregate amount of additional consideration, if any, payable
                 upon the issue or sale of all such Convertible Securities (to
                 the extent not counted in clause (2) above) and upon the
                 conversion or exchange of all such Convertible Securities into
                 Common Stock, by (B) the total maximum number of shares of
                 Common Stock issuable upon the exercise of such Options or
                 upon the conversion or exchange of all such Convertible
                 Securities issuable upon the exercise of such Options; the
                 consideration received or receivable by the Company shall in
                 each case be determined in accordance with Section (f)(l)(v)
                 hereof.  Except as otherwise provided in Section (f)(1)(iii)
                 hereof, no adjustment of the Exercise Price shall be made upon
                 the actual issue of such Common Stock or of such Convertible
                 Securities upon exercise of such Options or upon the actual
                 issue of such Common Stock upon conversion or exchange of such
                 Convertible Securities.

                          (ii)    Issuance of Convertible Securities.  In case
                 the Company shall in any manner issue (whether directly or by
                 assumption in a merger or otherwise) or sell, after the date
                 hereof, any Convertible Securities, whether or not the rights
                 to exchange or convert thereunder are immediately exercisable,
                 and the price per share for which Common Stock is issuable
                 upon such conversion or exchange (determined as provided in
                 the following sentence) shall be less than the Exercise Price
                 in effect immediately prior to the time of such issue or sale,
                 then the total maximum number of shares of Common Stock
                 issuable upon conversion or exchange of all such Convertible
                 Securities shall be deemed to have been issued for such price
                 per share as of the date of the issue or sale of such
                 Convertible Securities and thereafter shall be deemed to be
                 outstanding, provided that (A) except as otherwise provided in
                 Section (f)(1)(iii) below, no adjustment of the Exercise Price
                 shall be made upon the actual issue of such Common Stock upon





                                     - 5 -
<PAGE>   6
                 conversion or exchange of such Convertible Securities, and (B)
                 if any such issue or sale of such Convertible Securities is
                 made upon exercise of any Options for which adjustments of the
                 Exercise Price have been or are to be made pursuant to Section
                 (f)(1)(i) hereof, no further adjustment of the Exercise Price
                 shall be made by reason of such issue or sale.  The price per
                 share for which Common Stock is issuable, as referred to in
                 the preceding sentence, shall be determined by dividing (A)
                 the sum of (1) the total amount received or receivable by the
                 Company as consideration for the issue or sale of such
                 Convertible Securities, plus (2) the minimum aggregate amount
                 of additional consideration, if any, payable upon the
                 conversion or exchange of such Convertible Securities into
                 Common Stock, by (B) the total maximum number of shares of
                 Common Stock issuable upon the conversion or exchange of such
                 Convertible Securities; the consideration received or
                 receivable by the Company shall in each case be determined in
                 accordance with Section (f)(l)(v) hereof.

                          (iii)   Change in Option Price or Conversion Rate.
                 Upon the happening of any of the following events, namely, if
                 the purchase price provided for in any outstanding Option
                 referred to in Section (f)(1)(i) hereof, the additional
                 consideration, if any, payable upon the conversion or exchange
                 of any outstanding Convertible Securities referred to in
                 Section (f)(1)(i) or (f)(1)(ii) hereof, or the rate at which
                 any such Convertible Securities are convertible into or
                 exchangeable for Common Stock shall change at any time (other
                 than under or by reason of provisions designed to protect
                 against dilution), the Exercise Price in effect at the time of
                 such event shall forthwith be readjusted to the Exercise Price
                 that would have been in effect at such time had such Options
                 or Convertible Securities provided for such changed
                 purchase price, additional consideration or conversion rate,
                 as the case may be, at the time initially granted, issued or
                 sold.  On the expiration of any Option referred to in Section
                 (f)(1)(i) hereof prior to the exercise thereof or the
                 termination of any right to convert or exchange any
                 Convertible Securities referred to in Section (f)(1)(i) or
                 (f)(l)(ii) hereof prior to the exercise of such rights, the
                 Exercise Price then in effect hereunder shall forthwith be
                 increased (but in no case shall such Exercise Price be
                 increased to a price greater than the Initial Exercise Price)
                 to the Exercise Price that would have been in effect at the
                 time of such expiration or termination had such Option or
                 Convertible Security, to the extent outstanding immediately
                 prior to such expiration or termination never been issued, and
                 the Common Stock issuable thereunder shall no longer be deemed
                 to be outstanding for the purposes of any calculation under
                 Section (f)(1)(i) or (f)(1)(ii) hereof.  If the purchase price
                 provided for in any Option referred to in Section (f)(1)(i)
                 hereof or the additional consideration, if any, payable upon
                 the conversion or exchange of any Convertible Securities
                 issuable upon the exercise of any such Options or upon the
                 conversion or exchange of any Convertible Securities referred
                 to in Section (f)(1)(ii) hereof and still outstanding shall
                 decrease, or the number of shares of Common Stock issuable
                 upon conversion or exchange of any





                                     - 6 -
<PAGE>   7
                 such Convertible Securities shall increase, at any time under
                 or by reason of provisions with respect thereto designed to
                 protect against dilution, then in case of the delivery of
                 Common Stock upon the exercise of any such Option or upon
                 conversion or exchange of any such Convertible Security, the
                 Exercise Price then in effect hereunder shall forthwith be
                 adjusted to the Exercise Price which would have obtained had
                 sections (f)(l)(i) and (f)(l)(ii) hereof and the provisions of
                 this Section (f)(l)(iii) never been given effect in relation
                 to such Option or Convertible Securities and had the Exercise
                 Price been adjusted pursuant to Section (f)(1) hereof at the
                 time of delivery of such shares of Common Stock based on the
                 consideration received (or deemed received under Section
                 (f)(l)(v) hereof) for such Common Stock, determined as of the
                 date of such delivery, provided that such adjustment of the
                 Exercise Price shall be made only if as a result thereof the
                 Exercise Price then in effect hereunder is thereby reduced.

                          (iv)    Stock Dividends.  In case the Company shall
                 declare a dividend or make any other distribution upon any
                 stock of the Company payable in Common Stock, Options or
                 Convertible Securities, any Common Stock, Options or
                 Convertible Securities, as the case may be, issuable in
                 payment of such dividend or distribution shall be deemed to
                 have been issued or sold without consideration for purposes of
                 the calculations to be made under this Section (f).  If the
                 Company shall at any time prior to the expiration of this
                 Warrant declare a dividend payable in cash on its Common Stock
                 and at substantially the same time offer its stockholders a
                 right to purchase Common Stock from the proceeds of such
                 dividend or for an amount substantially equal to such
                 dividend, then, in such case, all Common Stock so issued
                 shall, for purpose of this Warrant, be deemed to have been
                 issued as a stock dividend.

                          (v)     Consideration for Securities.  In case any
                 shares of Common Stock, Options or Convertible Securities
                 shall be issued or sold by the Company for cash, the
                 consideration received therefor shall be deemed to be the
                 amount received by the Company thereof, provided that in no
                 case shall any deduction be made for any commissions,
                 discounts or other expenses incurred by the Company for any
                 underwriting of the issue or otherwise in connection
                 therewith.  In case any shares of Common Stock, Options or
                 Convertible Securities shall be issued or sold for a
                 consideration other than cash, the amount of the consideration
                 other than cash received by the Company shall be deemed to be
                 the fair value of such consideration as determined reasonably
                 and in good faith by the Board of Directors of the Company
                 (irrespective of the accounting treatment thereof).  In case
                 any Common Stock, Option or Convertible Securities shall be
                 issued in connection with any merger or consolidation in which
                 the Company is the surviving corporation (other than any
                 consolidation or merger in which the previously outstanding
                 shares of Common Stock of the Company shall be changed into or
                 exchanged for the stock or other securities of another
                 corporation) the amount of consideration therefor





                                     - 7 -
<PAGE>   8
                 shall be deemed to be the fair value as determined reasonably
                 and in good faith by the Board of Directors of the Company
                 (irrespective of the accounting treatment thereof) of such
                 portion of the assets and business of the non-surviving
                 corporation as such Board may determine to be attributable to
                 such shares of Common Stock, Options or Convertible
                 Securities, as the case may be.  In the event of any
                 consolidation or merger of the Company in which the Company is
                 not the surviving corporation or in which the previously
                 outstanding shares of Common Stock of the Company shall be
                 changed into or exchanged for the stock or other securities of
                 another corporation, or in the event of any sale of all or
                 substantially all of the assets of the Company for stock or
                 other securities of any corporation, the Company shall be
                 deemed to have issued a number of shares of its Common Stock
                 equal to the number of shares of Common Stock used for
                 computing the actual exchange ratio on which the transaction
                 was predicated and for a consideration equal to the fair
                 market value on the date of transaction of all such stock or
                 securities of the other corporation received by the holders of
                 the capital stock of the Company or by the Company and if such
                 calculation results in adjustment of the Exercise Price, the
                 determination of the number of shares of Common Stock issuable
                 upon exercise of the Warrants immediately prior to such
                 merger, consolidation or sale, for purposes of Section (f)(4)
                 hereof shall be made after giving effect to such adjustment of
                 the Exercise Price.

                          (vi)    Record Date.  In case the Company shall take
                 a record of the holders of its Common Stock for the purpose of
                 entitling them to receive a dividend or other distribution
                 payable in Common Stock, Options or Convertible Securities,
                 then such record date shall be deemed to be the date of the
                 issue or sale of the shares of Common Stock deemed to have
                 been issued or sold upon the declaration of such dividend or
                 the making of such other distribution or the date of the
                 granting of such right of subscription or purchase, as the
                 case may be.

                          (vii)   Treasury Shares.  The number of shares of
                 Common Stock outstanding at any given time shall not include
                 shares owned or held by or for the account of the Company, and
                 the disposition or reissuance of any such shares shall be
                 considered an issue or sale of Common Stock for the purposes
                 of this Section (f).

                 (2)      Liquidating Dividends.  The Company will not declare
         a dividend upon the Common Stock payable otherwise than out of
         consolidated earnings or consolidated earned surplus, determined in
         accordance with generally accepted accounting principles, including
         the making of appropriate deductions for minority interests, if any,
         in subsidiaries, and otherwise than in Common Stock, unless the
         Company shall pay over to the Holder, on the dividend payment date,
         the cash, stock or other securities and other property that the Holder
         would have received if the Holder had exercised this Warrant in full
         to purchase Common Stock and had been the record holder of such Common
         Stock on the date on





                                     - 8 -
<PAGE>   9
         which a record is taken for the purpose of such dividend, or, if a
         record is not taken, the date as of which the holders of Common Stock
         of record entitled to such dividend are to be determined.  For the
         purposes of the foregoing, a dividend other than in cash shall be
         considered payable out of earnings or surplus (other than revaluation
         or paid in surplus) only to the extent that such earnings or surplus
         are charged an amount equal to the fair value of such dividend as
         determined reasonably and in good faith by the Board of Directors of
         the Company.

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

                 (4)      Merger, Sale, Reorganization, Reclassification, or
         Consolidation.  If any capital reorganization or reclassification of
         the capital stock of the Company, or any consolidation or merger of
         the Company with another corporation, or the sale of all or
         substantially all of its assets to another corporation shall be
         effected in such a way that holders of Common Stock shall be entitled
         to receive stock, securities or assets with respect to or in exchange
         for Common Stock, then, as a condition of such reorganization,
         reclassification, consolidation, merger or sale, lawful and adequate
         provisions shall be made whereby the Holder shall thereafter have the
         right to purchase and receive upon the basis and upon the terms and
         conditions specified in this Warrant and in lieu of the shares of the
         Common Stock immediately theretofore purchasable and receivable upon
         the exercise of the rights represented hereby, such shares of stock,
         securities or assets as may be issued or payable with respect to or in
         exchange for a number of outstanding shares of such Common Stock equal
         to the number of shares of such stock immediately theretofore
         purchasable and receivable upon the exercise of the rights represented
         hereby had such reorganization, reclassification, consolidation,
         merger or sale not taken place, and in any such case appropriate
         provision shall be made with respect to the rights and interests of
         the Holder to the end that the provisions hereof (including, without
         limitation, provisions for adjustment of the Exercise Price and Series
         C Warrant Shares issuable, upon the exercise of this Warrant) shall
         thereafter be applicable, as nearly as may be, in relation to any
         shares of stock, securities or assets thereafter deliverable upon the
         exercise of the rights represented hereby (including an immediate
         adjustment, by reason of such consolidation or merger, of the Exercise
         Price to the value for the Common Stock reflected by the terms of such
         consolidation or merger if the value so reflected is less than the
         Exercise Price in effect immediately prior to such consolidation or
         merger). In the event of a merger or consolidation of the Company with
         or into another corporation as a result of which a number of shares of
         common stock of the successor or surviving corporation greater or
         lesser than the number of shares of Common Stock of the Company
         outstanding immediately prior to such merger or consolidation are
         issuable to holders of Common





                                     - 9 -
<PAGE>   10
         Stock of the Company, then the Exercise Price in effect immediately
         prior to such merger or consolidation shall be adjusted in the same
         manner as though there were a subdivision or combination of the
         outstanding shares of Common Stock of the Company outstanding
         immediately prior to such merger or consolidation.  The Company shall
         not effect any such consolidation, merger or sale, unless prior to the
         consummation thereof the successor or surviving corporation (if other
         than the Company) resulting from such consolidation or merger or the
         corporation purchasing such assets, as the case may be, shall assume
         by written instrument executed and mailed or delivered to the Holder
         hereof at the last address of the Holder appearing on the books of the
         Company, the obligation to deliver to the Holder such shares of stock,
         securities or assets as, in accordance with the foregoing provisions,
         the Holder may be entitled to purchase.  If a purchase, tender or
         exchange offer is made to and accepted by the holders of more than
         fifty percent (50%) of the outstanding shares of Common Stock of the
         Company, the Company shall not effect any consolidation, merger or
         sale with the Person (as hereinafter defined) having made such offer
         or with any Affiliate (as hereinafter defined) of such Person, unless
         prior to the consummation of such consolidation, merger or sale the
         Holder shall have been given a reasonable opportunity to then elect to
         receive either the stock, securities or assets then issuable upon the
         exercise of this Warrant or, if different, the stock, securities or
         assets, or the equivalent, issued to previous holders of the Common
         Stock in accordance with such offer, computed as though the Holder
         hereof had been, at the time of such offer, a holder of the stock,
         securities or assets then purchasable upon the exercise of this
         Warrant.  As used in this Section (f)(4), the term "Person" shall
         include an individual, a partnership, a corporation, a trust, a joint
         venture, an unincorporated organization and a government or any
         department or agency thereof, and an "Affiliate" of any Person shall
         mean any Person directly or indirectly controlling, controlled by or
         under direct or indirect common control with, such other Person.  A
         Person shall be deemed to control a corporation if such Person
         possesses, directly or indirectly, the power to direct or cause the
         direction of the management and policies of such corporation, whether
         through the ownership of voting securities, by contract or otherwise.

                 (5)      Notice of Adjustment.  Whenever the Exercise Price is
         adjusted, as herein provided, the Company shall promptly cause a
         notice setting forth the adjusted Exercise Price and adjusted number
         of Series C Warrant Shares issuable upon exercise of this Warrant,
         setting forth in reasonable detail the method of calculation and the
         facts upon which such calculation is based, to be mailed to the Holder
         of this Warrant at the Holder's last address appearing in the Warrant
         Register.  The Company may retain a firm of independent certified
         public accountants selected by the Board of Directors (who may be the
         regular accountants employed by the Company) to make any computation
         required by this Section (f), and a certificate signed by such firm
         shall be conclusive evidence of the correctness of such adjustment.

                 (6)      Other Notices.  In case at any time:





                                     - 10 -
<PAGE>   11
                          (i)     the Company shall declare any cash dividend 
                 upon its Common Stock;

                          (ii)    the Company shall declare any dividend upon
                 its Common Stock payable in stock or make any special dividend
                 or other distribution (other than regular cash dividends) to
                 the holders of its Common Stock;

                          (iii)   the Company shall offer for subscription to
                 the holders of any of its Common Stock any additional shares
                 of stock of any class or other rights;

                          (iv)    there shall be any capital reorganization,
                 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;

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

                          (vi)    there shall be any subdivision or combination
                 of the outstanding shares of Common Stock into, respectively,
                 a greater or lesser number of shares of Common Stock;

         then, in any one or more of said cases, the Company shall give, by
         first class mail, postage prepaid, addressed to the Holder at the
         address of such Holder as shown on the books of the Company, (i) at
         least twenty (20) days' 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 or for determining
         rights to vote in respect of any such reorganization,
         reclassification, consolidation, merger, sale, dissolution,
         liquidation or winding up and (ii) in the case of such reorganization,
         reclassification, consolidation, merger, sale, dissolution,
         liquidation or winding up, at least twenty (20) days' prior written
         notice of the date when the same shall take place.  Any notice
         required by clause (i) above shall also specify, in the case of any
         such dividend, distribution or subscription rights, the date on which
         the holders of Common Stock shall be entitled thereto, and any notice
         required by clause (ii) above shall also specify the date on which the
         holders of Common Stock shall be entitled to exchange their Common
         Stock for securities or other property deliverable upon such
         reorganization, reclassification, consolidation, merger, sale,
         dissolution, liquidation or winding up, as the case may be.

                 (7)      Duty to Make Fair Adjustments in Certain Cases.  If
         any event occurs as to which in the opinion of either the Board of
         Directors of the Company or the holders of a majority of the warrants
         outstanding at such time of which this Warrant forms a part the other
         provisions of this Section (f) are not strictly applicable or if
         strictly applicable would not fairly protect the purchase rights of
         the warrants in accordance with the essential intent and principles of
         such provisions, then the Board of Directors and the holders of a
         majority





                                     - 11 -
<PAGE>   12
         of the warrants outstanding at such time of which this Warrant forms a
         part shall mutually agree upon an adjustment in the application of
         such provisions, in accordance with such essential intent and
         principles, so as to protect such purchase rights as aforesaid, but in
         no event shall any such adjustment have the effect of increasing the
         Exercise Price as otherwise determined pursuant to this Section (f)
         except in the event of an increase in option price, additional
         consideration or conversion rate as contemplated by Section
         (f)(1)(iii) hereof, or a combination of shares of the type
         contemplated in Section (f)(3) hereof and then in no event to an
         amount larger than the Exercise Price as adjusted pursuant to Section
         (f)(1)(iii) or Section (f)(3) hereof.

                 (8)      Share Adjustment.   Whenever the Exercise Price
         payable upon exercise of any Warrant is adjusted pursuant to Sections
         (f)(1), (f)(3), (f)(4), (f)(7) and (f)(9) hereof, the number of Series
         C Warrant Shares purchasable upon exercise of this Warrant shall
         simultaneously be adjusted by multiplying the number of Series C
         Warrant Shares initially issuable upon exercise of this Warrant by the
         Exercise Price in effect on the date hereof and dividing the product
         so obtained by the Exercise Price, as adjusted.

                 (9)      Minimum Adjustment.  No adjustment in the Exercise
         Price shall be required unless such adjustment would require an
         increase or decrease of at least five cents ($0.05) in such price;
         provided, however, that any adjustments which by reason of this
         Section (f)(9) are not required to be made shall be carried forward
         and taken into account in any subsequent adjustment required to be
         made hereunder.  All calculations under this Section (f) shall be made
         to the nearest cent or to the nearest one-hundredth of a share, as the
         case may be.  Anything in this Section (f) to the contrary
         notwithstanding, the Company shall be entitled, but shall not be
         required, to make such changes in the Exercise Price, in addition to
         those required by this Section (f), as it, in its sole discretion,
         shall determine to be advisable in order that any dividend or
         distribution in shares of Common Stock, subdivision, reclassification
         or combination of Common Stock, issuance of warrants to purchase
         Common Stock or liquidating dividends referred to hereinabove in this
         Section (f) hereafter made by the Company to the holders of its Common
         Stock shall not result in any tax to the holders of its Common Stock
         or securities convertible into Common Stock.

         (g)     OFFICER'S CERTIFICATE.  Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section (f), the
Company shall forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office an officer's certificate showing the adjusted
Exercise Price determined as herein provided, setting forth in reasonable
detail the facts requiring such adjustment, including a statement of the number
of additional shares of Common Stock, if any, and such other facts as shall be
necessary to show the reason for and the manner of computing such adjustment.
Each such officer's certificate shall be made available at all reasonable times
for inspection by the Holder or any holder of a Warrant executed and delivered
pursuant to Section (a) hereof and the Company shall, forthwith after each such
adjustment, mail a copy by certified mail of such certificate to the Holder or
any such holder.





                                     - 12 -
<PAGE>   13
         (h)     REGISTRATION UNDER THE SECURITIES ACT OF 1933.

                 (1)      Piggyback Registration.  The shares of Common Stock
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), the New York Martin
Act, as amended, or under the laws of any other state.  If the Company proposes
to register any security under the Securities Act on any registration form
(otherwise than for the registration of securities to be offered and sold
pursuant to (i) an employee benefit plan, (ii) a dividend or interest
reinvestment plan, (iii) other similar plans or (iv) reclassifications of
securities, mergers, consolidations and acquisitions of assets on Form S-4 or
any successor thereto) prescribed by the Securities and Exchange Commission
(the "Commission") permitting a secondary offering or distribution, not less
than sixty days prior to each such registration, the Company shall give to the
holders of the Warrants or Series C Warrant Shares written notice of such
proposal which shall describe in detail the proposed registration and
distribution (including those jurisdictions where registration or qualification
under the securities or blue sky laws is intended) and, upon the written
request of any holder of a Warrant or Series C Warrant Shares given within
thirty (30) days after the date of any such notice, proceed to include in such
registration such shares of Common Stock as have been requested by any such
holder to be included in such registration.  Any holder of a Warrant or Series
C Warrant Shares shall in its request describe briefly the proposed disposition
of such shares of Common Stock.  The Company will in each instance use its best
efforts to cause any Series C Warrant Shares (the holders of which shall have
so requested registration thereof) to be registered under the Securities Act
and qualified under the securities or blue sky laws of any jurisdiction
requested by a prospective seller, all to the extent necessary to permit the
sale or other disposition thereof (in the manner stated in such request) by a
prospective seller of the securities so registered.  The Company agrees that
any Series C Warrant Shares so registered shall be offered on terms no less
favorable than those applicable to the shares offered by the Company or other
selling stockholders.

                 If the managing underwriter, who shall be selected by the
Company to manage the distribution of the shares of Common Stock being
registered, advises the Company in writing that, in its opinion, the inclusion
of the shares of Common Stock requested to be included in such registration by
a holder of a Warrant or Series C Warrant Shares with the securities being
registered by the Company and other prospective sellers would have a materially
adverse affect on the distribution of all such securities, then (i) the Company
shall include in such registration the Series C Warrant Shares on a pari passu
basis with shares of other selling stockholders or (ii) any holder of a Warrant
or Series C Warrant Shares may, at its sole option, delay its offering and sale
for a period not to exceed 120 days after the effective date of such
registration as such managing underwriter shall reasonably request.  In the
event of such delay, the Company shall use its best efforts to effect any
registration or qualification under the Securities Act and the securities or
blue sky laws of any jurisdiction as may be necessary to permit such
prospective seller to make its proposed offering and sale following the end of
such period of delay.

                 The holder of a Warrant or Series C Warrant Shares who has
requested shares of Common Stock to be included in a registration pursuant to
this Section (h)(1) by acceptance hereof





                                     - 13 -
<PAGE>   14
or thereof, agrees to execute an underwriting agreement with such underwriter
that is (i) reasonably satisfactory to such holder and (ii) in customary form.

                 Nothing in this Section (h)(1) shall be deemed to require the
Company to proceed with any registration of its securities after giving the
notice herein provided.

                 (2)      Demand Registration.  At any time that the Company is
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the holders of Warrants
and the holder of any Series C Warrant Shares may, on up to two (2) separate
occasions, require the Company to effect the registration of the Series C
Warrant Shares pursuant to the provisions of this Section (h)(2).  If the
holders of Warrants and the holders of any Series C Warrant Shares representing
a total of more than fifty percent (50%) of the shares of Common Stock issuable
upon the exercise of the Warrants shall give notice to the Company to the
effect that such holders intend to (i) transfer all or any part of the Series C
Warrant Shares or (ii) exercise all or any part of the Warrant and transfer all
or any part of the Series C Warrant Shares under such circumstances that a
public distribution (within the meaning of the Securities Act) of the Series C
Warrant Shares will be involved, and the aggregate number of Series C Warrant
Shares to be transferred as described in the foregoing clauses (i) and (ii) is
equal to at least twenty-five percent (25%) of the aggregate number of Series C
Warrant Shares then issuable upon exercise of Warrants, then the Company shall,
within thirty (30) days after receipt of such notice, file a registration
statement pursuant to the Securities Act to the end that such shares may be
sold under the Securities Act as promptly as is practicable thereafter and the
Company will use its best efforts to cause any such registration statement to
become effective and to keep the prospectus included therein current for 135
days after the effective date thereof or until the distribution shall have been
completed, whichever first occurs; provided that such holders shall furnish the
Company with appropriate information (relating to the intention of such
holders) in connection therewith as the Company may reasonably request in
writing.  If at the time the Company receives notice pursuant to this Section
(h)(2) it would be impossible or impracticable to include the Company's most
recent fiscal year-end financial statements as the most recent certified
financial statements required to be included therein and provided that the
Company is not then in default on its obligations under Article VI of the
Purchase Agreement, the Company's obligation to effect a registration pursuant
to this Section (h)(2) shall be suspended until the Company's next fiscal
year-end financial statements must be filed with the Commission in accordance
with the Commission's rules.  The managing underwriter for any offering made
pursuant to this Section (h)(2) shall be selected by the holders of a majority
of the Warrants or Series C Warrant Shares requiring registration hereunder,
subject to the consent, not unreasonably withheld, of the Company.

                 (3)      Registration and Qualification Procedures.  Whenever
the Company is required by the provisions of this Section (h) to use its best
efforts to effect the registration of any of its securities under the
Securities Act, the Company will, as expeditiously as is possible:





                                     - 14 -
<PAGE>   15
                          (i)     prepare and file with the Commission a 
         registration statement with respect to such securities;

                          (ii)    prepare and file with the Commission such
         amendments and supplements to such registration statement and the
         prospectus used in connection therewith as may be necessary to keep
         such registration statement effective and the prospectus current and
         to comply with the provisions of the Securities Act with respect to
         the sale of all securities covered by such registration statement
         whenever the seller of such securities shall desire to sell the
         same; provided, however, that the Company shall have no obligation to
         file any amendment or supplement at its own expense more than nine (9)
         months after the effective date of such registration statement;

                          (iii)   furnish to each seller such number of copies
         of preliminary prospectuses and prospectuses and each supplement or
         amendment thereto and such other documents as each seller may
         reasonably request in order to facilitate the sale or other
         disposition of the securities owned by such seller in conformity with
         (A) the requirements of the Securities Act and (B) the seller's
         proposed method of distribution;

                          (iv)    register or qualify the securities covered by
         such registration statement under the securities or blue sky laws of
         such jurisdictions within the United States as each seller shall
         reasonably request, and do such other reasonable acts and things as
         may be required of it to enable each seller to consummate the sale or
         other disposition in such jurisdictions of the securities owned by
         such seller; provided, however, that the Company shall not be required
         to (A) qualify as a foreign corporation or consent to a general and
         unlimited service of process in any such jurisdictions, (B) qualify as
         a dealer in securities, or (C) in the case of a registration described
         in Section (h)(1) hereof, register or qualify at its own expense
         securities of such seller in any jurisdiction not described in the
         notice of the Company referred to in the first paragraph of Section
         (h)(1) hereof, in any case in order to accomplish any of the
         foregoing;

                          (v)     furnish, at the request of any seller on the
         date such securities are delivered to the underwriters for sale
         pursuant to such registration or, if such securities are not being
         sold through underwriters, on the date the registration statement with
         respect to such securities becomes effective, (A) an opinion, dated
         such date, of the counsel representing the Company for the purposes of
         such registration, addressed to the underwriters, if any, and to the
         seller making such request, covering such legal matters with respect
         to the registration in respect of which such opinion is being given as
         the seller of such securities may reasonably request and are
         customarily included in such opinions, at such times as such opinions
         are customarily given, and (B) letters dated, respectively, (1) the
         effective date of the registration statement and (2) the date such
         securities are delivered to the underwriters, if any, for sale
         pursuant to such registration, from a firm of independent certified
         public accountants of recognized standing selected by the Company,
         addressed to the underwriters, if any, and to the seller making such
         request,





                                     - 15 -
<PAGE>   16
         covering such financial, statistical and accounting matters with
         respect to the registration statement in respect of which such letters
         are being given as the seller of such securities may reasonably
         request and are customarily included in such letters and at such times
         as such letters are customarily given;

                          (vi)    otherwise use its best efforts to comply with
         all applicable rules and regulations of the Commission, and make
         available to its security holders as soon as reasonably practicable,
         but not later than sixteen (16) months after the effective date of the
         registration statement, an earnings statement covering a period of at
         least twelve (12) months beginning after the effective date of the
         registration statement, which earnings statement shall satisfy the
         provisions of Section 11(a) of the Securities Act;

                          (vii)   enter into and perform an underwriting
         agreement with the managing underwriter, if any, selected as provided
         in Section (h) hereof, as the case may be, containing customary terms
         of offer and sale of the securities, payment provisions, underwriting
         discounts and commissions, representatives, warranties, covenants,
         indemnities, terms and conditions; and

                          (viii)  keep each seller advised in writing as to the
         initiation and progress of any registration under Section (h) hereof,
         as the case may be.

                 (4)      Allocation of Expenses.  If the Company is required
by the provisions of Section (h) hereof to use its best efforts to effect the
registration or qualification under the Securities Act or any state securities
or blue sky laws of any of the Series C Warrant Shares, the Company will pay
all expenses in connection therewith, including, without limitation, (i) all
expenses incident to filing with the National Association of Securities
Dealers, Inc., (ii) registration or listing fees, (iii) printing expenses, (iv)
accounting and legal fees and expenses, (v) expenses of any special audits
incident to or required by any such registration or qualification, (vi)
premiums for insurance in such amount, if any, deemed appropriate by the
managing underwriter, (vii) expenses of complying with the securities or blue
sky laws of any jurisdictions in connection with such registration or
qualification and (viii) stamp and stock transfer taxes; provided, however, the
Company shall not be liable for any discounts or commissions to any
underwriter.

                 (5)      Indemnification.  In connection with any registration
or qualification of securities under Section (h) hereof, the Company hereby
indemnities the Holder and the holders of any Series C Warrant Shares and each
underwriter thereof, including each person, if any, who controls the Holder or
such stockholder or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon (i) any untrue, or alleged untrue, statement of a
material fact contained in any registration statement, preliminary prospectus,
prospectus or notification or offering circular or other similar document (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto); (ii) any omission, or alleged omission, to state therein
a material fact





                                     - 16 -
<PAGE>   17
required to be stated therein or necessary to make the statements therein not
misleading; or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
or inaction required of the Company in connection with any such registration,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or alleged untrue statement or
omission or alleged omission based solely upon information furnished in writing
to the Company by the Holder or any such stockholder or underwriter expressly
for use therein.  The Company and each officer, director and controlling person
of the Company or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act are hereby indemnified by the
Holder and by the holders of any shares of Common Stock issuable upon the
exercise hereof against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement, preliminary prospectus or notification or offering
circular (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or are based upon any
omission, or alleged omission, to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission, was based solely upon information furnished in
writing to the Company by the Holder or any such stockholder expressly for use
therein; provided, however, that, with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus, the indemnity agreement contained in this sentence shall not apply
to the extent that any loss, claim, damage, liability or expense results from
the fact that a current copy of the prospectus was not sent or given to the
person asserting any loss, claim, damage, liability or expense at or prior to
the written confirmation of the sale of the Common Stock concerned to such
person if it is determined that it was the responsibility of the Company or any
of its directors, officers or agents, or any underwriter to provide such Person
with a current copy of the prospectus and such current copy of the prospectus
would have cured the defect giving rise to such loss, claim, damage, liability
or expense.

                 Promptly upon receipt by a party indemnified under this
Section (h)(5) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section (h)(5), such indemnified
party shall notify the indemnifying party in writing of the commencement of
such action, but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may have to any indemnified party, unless
such failure shall materially adversely affect the defense of such action.  In
case notice of commencement of any such action shall be given to the
indemnifying party as above provided, the indemnifying party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and satisfactory to such indemnified
party.  The indemnified party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall
be paid by the indemnified party unless (i) the indemnifying party agrees to
pay the same, (ii) the indemnifying party fails to assume the defense





                                     - 17 -
<PAGE>   18
of such action with counsel reasonably satisfactory to the indemnified party or
(iii) the named parties to any such action (including any impleaded parties)
have been advised by such counsel that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of such indemnified party).  No indemnifying party shall be liable for any
settlement entered into without its consent.

                 If the indemnification provided in this Section (h)(5) shall
for any reason be unenforceable by an indemnified party, although otherwise
available in accordance with its terms, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages,
liabilities or expenses with respect to which such indemnified party has
claimed indemnification, in such proportion as is appropriate to reflect the
relative fault of the indemnified party on the one hand and the indemnifying
party on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
other relevant equitable considerations.  The Company, each Holder and each
holder of Series C Warrant Shares issued upon the exercise hereof agree that it
would not be just and equitable if contribution pursuant hereto were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account such equitable considerations.  The amount paid or
payable by an indemnified party as a result of losses, claims, damages,
liabilities or expenses referred to herein shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending against any action or claim which is the
subject hereof.  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.

                 Each Holder of this Warrant and each holder of Series C
Warrant Shares issued upon the exercise hereof and bearing the legend required
by Section (1) hereof, by acceptance hereof or thereof, as the case may be,
agrees to the indemnification provisions of this Section (h).

         (i)     LISTING. If any Series C Warrant Shares required to be
reserved for issue upon the exercise hereof require registration with or
approval of any governmental authority under any federal or state law, or
listing on any domestic securities exchange or the NASDAQ system, before such
shares may be issued upon such exercise or conversion, as the case may be, the
Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered or approved or listed on the
relevant domestic securities exchange or system, as the case may be.

         (j)     CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of any Warrant or of any Series C Warrant
Shares in any manner which interferes with the timely exercise of this Warrant.





                                     - 18 -
<PAGE>   19
         (k)     INVESTMENT REPRESENTATIONS. The Holder, by acceptance hereof,
and with reference to this Warrant and the shares of Common Stock issuable upon
exercise of this Warrant, represents and warrants to the Company that: the
Holder is acquiring such securities for investment and not with a view to or in
connection with any offering or distribution, and the Holder has no present
intention of selling or otherwise disposing of such securities.

         (l)     SECURITIES LEGEND. This Warrant as well as, if necessary, the
securities issued in the event of the exercise of this Warrant for shares of
Common Stock, will bear substantially the following legend:

                 "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                 REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
                 THUS MAY NOT BE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT
                 OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE."


         (m)     TRANSFERABILITY. Any Series C Warrant Shares acquired
hereunder can be sold or disposed of when the Company shall have received a
copy of an opinion of counsel to the Holder (which opinion is reasonably
acceptable to the Company) which states that the sale or other disposition
thereof may be effected without registration under the Securities Act in
accordance with any rules or regulations promulgated thereunder then obtaining
to which such shares are subject; provided, that any such sale or disposition
is made in accordance with the terms of the opinion of counsel.

         (n)     DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Warrant are inserted for convenience of reference only and do
not constitute a part of this Warrant.





                                     - 19 -
<PAGE>   20
         (o)     LEGAL EFFECT. This warrant is being executed and delivered
within the State of New York and shall be construed and enforced in accordance
with the laws of such State.


                                            DECORA INDUSTRIES, INC.



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


Dated:   November 3, 1995





                                     - 20 -
<PAGE>   21
                                 PURCHASE FORM



         The undersigned hereby irrevocably elects to exercise the within
Series C Warrant to the extent of purchasing ________ shares of Common Stock
and hereby makes payment of $___________ in payment of the actual exercise
price thereof, and requests that the certificates for such shares be issued in
the name of and be delivered to:


Name:
     --------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

Address:
        -----------------------------------------------------------------------
                  (Please typewrite or print in block letters)


and if such shares shall not be all of the shares purchasable hereunder, that a
new warrant of like tenor for the balance of the shares purchasable hereunder
be delivered to the undersigned.



                                           ------------------------------------
                                           Signature


Dated:
      ---------------------------
<PAGE>   22
                                ASSIGNMENT FORM



         FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns and transfers unto:


Name:
     --------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

Address:
        -----------------------------------------------------------------------
                  (Please typewrite or print in block letters)

the right to purchase Common Stock represented by this Series C Warrant to the
extent of shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint Attorney, to transfer the same on the books
of the Company with full power of substitution in the premises.



                                           ------------------------------------
                                           Signature


Dated:
      ---------------------------