Document:

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                                                                    EXHIBIT 10.2

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS.

                               WARRANT AGREEMENT

             To Purchase Shares of the Series C Preferred Stock of

                          ARGONAUT TECHNOLOGIES, INC.

                Dated as of July 7, 1997 (the "Effective Date")

      WHEREAS, Argonaut Technologies, Inc., a Delaware corporation (the
"Company") has entered into a Master Lease Agreement dated as of July 7, 1997,
and Equipment Schedule No. VL-1 dated as of July 7, 1997 and related Summary
Equipment Schedules (collectively, the "Leases") with Comdisco, Inc., a
Delaware corporation (the "Warrantholder"); and

      WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Leases, the right to purchase shares of its Series C Preferred Stock:

      NOW THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:

1.    GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.

      The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth,
to subscribe for and purchase, from the Company, 6,802 fully paid and
non-assessable shares of the Company's Series C Preferred Stock ("Preferred
Stock") at a purchase price of $6.00 per share (the "Exercise Price"). The
number and purchase price of such shares are subject to adjustment as provided
in Section 8 hereof.

2.    TERM OF THE WARRANT AGREEMENT.

      Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Preferred Stock as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i)
seven (7) years or (ii) three (3) years from the effective date of the
Company's initial public offering ("IPO"), whichever is longer.

      Notwithstanding the foregoing, upon receipt by Warrantholder of a written
request by the Company's underwriters, the Warrantholder shall exercise its
rights to purchase Preferred Stock hereunder as of the effective date of the
IPO so long as the purchase price per share is equal to or greater than the
Exercise Price. The foregoing exercise at IPO is contingent upon the
underwriter's notice being received by Warrantholder a minimum of ten (10)
business days prior to the effective date of the IPO and if the underwriters
fail to deliver such notice within the aforementioned time period, then
notwithstanding anything to the contrary in this Warrant Agreement, the rights
to purchase the Company's Preferred Stock shall not expire until the
underwriters comply with such notice provisions. Such notice shall also contain
such details of the IPO as are reasonable in the circumstances. If the IPO does
not take place, the Company shall promptly notify the Warrantholder and the
Warrantholder may rescind any exercise of its purchase rights promptly after
such notice. In the event of such rescission, the Warrant Agreement will
continue to be exercisable on the same terms and conditions contained herein.

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3.    EXERCISE OF THE PURCHASE RIGHTS.

      The purchase rights set forth in this Warrant Agreement are exercisable
by the Warrantholder, in whole or in part, at any time, or from time to time,
prior to the expiration of the term set forth in Section 2 above, by tendering
to the Company at its principal office a notice of exercise in the form
attached hereto as Exhibit 1 (the "Notice of Exercise"), duly completed and
executed, along with this Warrant Agreement. Promptly upon receipt of the
Notice of Exercise, this Warrant Agreement and the payment of the purchase
price in accordance with the terms set forth below, the Company shall issue to
the Warrantholder a certificate for the number of shares of Preferred Stock
purchased.

      The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of the right to purchase such number of
shares equal in value (as determined below) to the aggregate exercise price of
the number of shares to be purchased by the Warrantholder ("Net Issuance"). If
the Warrantholder elects the Net Issuance method, the Company will issue
Preferred Stock in accordance with the following formula:

                  X = Y(A-B)
                      ------
                        A

      Where: X =  the number of shares of Preferred Stock to be issued to the
                  Warrantholder.

                  Y =   the number of shares of Preferred Stock requested to be
                        exercised under this Warrant Agreement.

                  A =   the fair market value of one (1) share of Preferred
                        Stock.

                  B =   the Exercise Price.

      For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:

            (i)   if the exercise is in connection with an initial public
      offering of the Company's Common Stock, and if the Company's Registration
      Statement relating to such public offering has been declared effective by
      the SEC, then the fair market value per share shall be the product of (x)
      the initial "Price to Public" specified in the final prospectus with
      respect to the offering and (y) the number of shares of Common Stock into
      which each share of Preferred Stock is convertible at the time of such
      exercise;

            (ii)  if this Warrant is exercised after, and not on connection
      with the Company's initial public offering, and:

                  (a)   if the Company's Common Stock is traded on a securities
            exchange, the fair market value shall be deemed to be the product
            of (x) the average of the closing prices over a twenty-one (21) day
            period ending three days before the day the current fair market
            value of the securities is being determined and (y) the number of
            shares of Common Stock into which each share of Preferred Stock is
            convertible at the time of such exercise; or

                  (b)   if the Company's Common Stock is actively traded
            over-the-counter, the fair market value shall be deemed to be the
            product of (x) the average of the closing bid and asked prices
            quoted on the Nasdaq National Market System (or similar system)
            over the twenty-one (21) day period ending three days before the
            day the current fair market value of the securities is being
            determined and (y) the number of shares of Common Stock into which
            each share of Preferred Stock is convertible at the time of such
            exercise;

            (iii) if at any time the Common Stock is not listed on any
      securities exchange or quoted in the Nasdaq National Market System or the
      over-the-counter market, the current fair market value of Preferred Stock
      shall be the product of (x) the highest price per share which the Company
      could obtain from a willing buyer (not a current employee or director)
      for shares of Common Stock sold by the Company, from authorized but
      unissued shares, as determined in good faith by its Board of Directors
      and (y) the number of shares of Common Stock into which each share of
      Preferred Stock is convertible at the time of such

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      exercise, unless the exercise is in connection with a merger, acquisition
      or other consolidation of the Company pursuant to which the Company is
      not the surviving party, in which case the fair market value of Preferred
      Stock shall be deemed to be the value received by the holders of the
      Company's Preferred Stock on a common equivalent basis pursuant to such
      merger or acquisition.

      Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number
of shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.

4.    RESERVATION OF SHARES.

      (a)   Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.

      (b)   Registration of Listing. If any shares of Preferred Stock required
to be reserved for purposes of the exercise of this Warrant Agreement hereunder
require registration with or approval of any governmental authority under any
Federal or State law (other than any registration under the Securities Act of
1933, as amended ("1933 Act"), as then in effect, or any similar Federal
statute then enforced, or any state securities law, required by reason of any
transfer involved in such conversion), or listing on any domestic securities
exchange, before such shares may be issued upon conversion, the Company will,
at its expense and as expeditiously as possible, use its best efforts to cause
such shares to be duly registered, listed or approved for listing on such
domestic securities exchange, as the case may be.

5.    NO FRACTIONAL SHARES OR SCRIP.

      No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrantholder's rights to purchase Preferred
Stock, but in lieu of such fractional shares the Company shall make a cash
payment therefor upon the basis of the Exercise Price then in effect.

6.    NO RIGHTS AS SHAREHOLDER.

      This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrantholder's rights to purchase Preferred Stock as provided for herein.

7.    WARRANTHOLDER REGISTRY.

      The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.

8.    ADJUSTMENT RIGHTS.

      The purchase price per share and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:

      (a)   Merger and Sale of Assets. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of its rights to purchase
Preferred Stock, the number of shares of Preferred Stock or other securities of
the successor corporation resulting from such Merger Event, to which a holder of
the Preferred Stock deliverable upon exercise of the right to purchase Preferred
Stock hereunder would have been entitled in such Merger Event if the right to
purchase such Preferred Stock hereunder had been exercised immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end that the
provisions of this Warrant Agreement (including adjustments of the

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Exercise Price and number of shares of Preferred Stock purchasable) shall be
applicable to the greatest extent reasonably possible.

      (b)   Reclassification of Shares. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of
any other class or classes, this Warrant Agreement shall thereafter represent
the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities which were
subject to the purchase rights under this Warrant Agreement immediately prior
to such combination, reclassification, exchange, subdivision or other change.

      (c)   Subdivision or Combination of Shares. If the Company at any time
shall combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision or proportionately
increased in the case of a combination.

      (d)   Right to Purchase Additional Stock. If, the Warrantholder's total
cost of equipment leased pursuant to the Leases exceeds $1,100,000.00,
Warrantholder shall have the right to purchase from the Company, at the
Exercise Price (adjusted as set forth herein), an additional number of shares,
which number shall be determined by (i) multiplying the amount by which the
Warrantholder's total equipment cost exceeds $1,100,000.00 by 4%, and (ii)
dividing the product thereof by the Exercise Price per share referenced above.

      (e)   Antidilution Rights. The Preferred Stock purchasable hereunder
shall have the benefit of the same antidilution rights applicable to such
Preferred Stock as designated in the Company's Certificate of Incorporation, as
such may be amended from time to time, and the Company shall provide
Warrantholder with all notices and information at the times and to the extent
it is required to do so to the holders of such Preferred Stock.

      (f)   Notice of Adjustments. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any Merger
Event; (iv) there shall be any voluntary dissolution, liquidation or winding up
of the Company; then, in connection with each such event, the Company shall
send to the Warrantholder: (A) 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, subscription rights (specifying the date
on which the holders of Preferred Stock shall be entitled thereto) or for
determining rights to vote in respect of such Merger Event, dissolution
liquidation or winding up; and (B) in the case of any such Merger Event,
dissolution, liquidation or winding up, at least twenty (20) days' prior
written notice of the date when the same shall take place (and specifying the
date on which the holders of Preferred Stock shall be entitled to exchange
their Preferred Stock for securities or other property deliverable upon such
Merger Event, dissolution, liquidation or winding up).

      Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and
(v) the number of shares subject to the purchase hereunder after giving effect
to such adjustment, and shall be given by first class mail, postage prepaid,
addressed to the Warrantholder, at the address as shown on the books of the
Company.

      (g)   Timely Notice. Failure to timely provide such notice required by
subsection (f) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder.

3.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

      (a)   Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will
be validly issued, fully paid and non-assessable, and will be free of any
taxes, liens, charges or encumbrances of any nature whatsoever, provided,
however, that the Preferred Stock issuable pursuant to this Warrant Agreement
may be subject to restrictions on transfer under state and/or Federal
securities laws. The Company has made available to the Warrantholder true,
correct and complete copies of its Certificate of Incorporation (the "Charter")
and Bylaws, as amended. The issuance of certificates for shares of Preferred
Stock upon exercise of the Warrant Agreement shall be made without charge to
the Warrantholder for any issuance tax in respect thereof, or other cost
incurred by the Company in connection with such exercise and the related
issuance of

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shares of Preferred Stock; provided that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved and the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.

      (b)   Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock set forth in Section 1, have been duly authorized by
all necessary corporate action on the part of the Company, and the Leases and
this Warrant Agreement are not inconsistent with the Company's Charter or
Bylaws, do not contravene any law or governmental rule, regulation or order
applicable to it, do not and will not contravene any provision of, or
constitute a default under any indenture, mortgage, contract or other
instrument to which it is a party or by which it is bound, and the Leases and
this Warrant Agreement constitute legal, valid and binding agreements of the
Company, enforceable in accordance with their respective terms subject only to
bankruptcy, insolvency or other similar laws affecting the enforceability to
the rights of creditors generally and the general principles of equity.

      (c)   Consents and Approvals. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and any filing required by applicable state securities
law, which filings will be effective by the time required thereby.

      (d)   Issued Securities. All issued and outstanding shares of Common
Stock, Preferred Stock or any other securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock, and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition:

            (i)   The authorized capital stock of the Company consists of
      28,800,000 shares of Common Stock and 20,800,000 shares of preferred
      stock, of which 5,000,000 are designated as Series A Preferred Stock,
      5,000,000 shares are designated Series A-1 Preferred Stock, 3,000,000
      shares are designated Series B Preferred Stock, 3,000,000 shares are
      designated Series B-1 Preferred Stock, 1,600,000 shares are designated
      Series C Preferred Stock, and 1,600,000 shares are designated Series C-1
      Preferred Stock. The issued and outstanding stock of the Company consists
      1,903,708 shares of Common Stock, 4,627,500 shares of Series A Preferred
      Stock, no shares of Series A-1 Preferred Stock, 2,923,073 shares of Series
      B Preferred Stock, no shares of Series B-1 Preferred Stock, 1,180,000
      shares of Series C Preferred Stock and no shares of Series C-1 Preferred
      Stock. The Series A Preferred, Series A-1 Preferred, Series B Preferred,
      Series B-1 Preferred, Series C Preferred, and Series C-1 Preferred shall
      have the rights, preferences, privileges and restrictions set forth in the
      Charter.

      (ii)  The Company has reserved 1,685,308 shares of its Common Stock for
      issuance to officers, directors, employees, sales representatives and
      consultants of the Company pursuant to the Company's 1995 Incentive Stock
      Plan. There are stock options outstanding for the purchase of 1,215,575
      shares of Common Stock. There are also warrants outstanding for the
      purchase of 55,000 shares of Common Stock. Except as referenced herein,
      there are no options, warrants, conversion privileges or other rights
      presently outstanding to purchase or otherwise acquire any authorized but
      unissued shares of the capital stock or other securities of the Company.

      (e)   Insurance. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.

      (f)   Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of the Warrantholder's right to purchase such Preferred Stock will
constitute a transaction exempt from (i) the registration requirements of
Section 5 of the 1933 Act, in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the applicable state securities laws.

      (g)   Compliance with Rule 144. At the written request of the
Warrantholder, who proposes to sell Preferred Stock issuable upon the exercise
of the Warrant in compliance with Rule 144 promulgated by the Securities and
Exchange Commission under the 1933 Act, the Company shall furnish to the
Warrantholder, within

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ten days after receipt of such request, a written statement confirming the
Company's compliance with the filing requirements of the Securities and
Exchange Commission as set forth in such Rule as then applicable to the
Company, as such Rule may be amended from time to time.

10.   REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

      This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder which by
its execution hereof the Warrantholder hereby confirms:

      (a)   Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present
intention of selling or engaging in any public distribution of the same except
pursuant to a registration or exemption.

      (b)   Private Issue. The Warrantholder understands (i) that the Preferred
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.

      (c)   Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an option of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.

      (d)   Financial Risk. The Warrantholder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.

      (e)   Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1934 Act (the "1934 Act"), or file reports pursuant to
Section 15(d), of the 1934 Act, or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i) the
rights to purchase Preferred Stock pursuant to this Warrant Agreement, or (ii)
the Preferred Stock issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. The Warrantholder
also understands that any sale of its rights of the Warrantholder to purchase
Preferred Stock or Preferred Stock which might be made by it in reliance upon
Rule 144 under the 1933 Act may be made only in accordance with the terms and
conditions of that Rule.

      (f)   Accredited Investor. Warrantholder is an "accredited investor"
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.

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11.   LOCKUP AGREEMENT.

      Warrantholder agrees that, if, in connection with the Company's IPO of
the Company's securities, the Company or the underwriters managing the offering
so request, the Warrantholder shall not sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any right to
purchase Preferred Stock hereunder or any Preferred Stock issuable upon
exercise of its rights hereunder without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) from the effective date of the IPO as
may be requested by the Company or the underwriters; provided that each officer
and director of the Company who own stock of the Company also agrees to such
restrictions. This Section 11 shall be binding on all transferees or assignees
of Warrantholder.

12.   TRANSFERS.

      Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3) transfers. The transfer shall be recorded on the
books of the Company upon receipt by the Company of a notice of transfer in the
form attached hereto as Exhibit III (the "Transfer Notice"), at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer.

13.   MISCELLANEOUS.

      (a)   Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall
be binding upon any successors or assigns of the Company.

      (b)   Attorney's Fees. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.

      (c)   Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State
of Illinois.

      (d)   Counterparts. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      (e)   Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
facsimile transmission (provided that the original is sent by personal delivery
or mail as hereinafter set forth) or seven (7) days after deposit in the United
States mail, by registered or certified mail, addressed (i) to the
Warrantholder at 6111 North River Road, Rosemont, Illinois 60018, attention:
James Labe, Venture Group, cc: Legal Department, attention: General Counsel,
(and/or, if by facsimile, (847) 518-5465 and (847) 518-5088, and (ii) to the
Company at 887 Industrial Road, Suite G, San Carlos, CA 94070, (and/or if by
facsimile, (415) 598-1359 or at such other address as any such party may
subsequently designate by written notice to the other party.

      (f)   Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as
a result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.

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

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      (h)    Survival. The representations, warranties, covenants and
conditions of the respective parties contained herein or made pursuant to this
Warrant Agreement shall survive the execution and delivery of this Warrant
Agreement.

      (i)   Severability. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal
or unenforceable provision.

      (j)   Amendments. Any provision of this Warrant Agreement may be amended
by a written instrument signed by the Company and by the Warrantholder.

      (k)   Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. The Company shall
also supply such other documents as the Warrantholder may from time to time
reasonably request.

      IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.

                                    Company: ARGONAUT TECHNOLOGIES, INC.

                                    By:    /s/ D.P. Binkley
                                           -----------------------------
                                    Title: President & CEO
                                           -----------------------------

                                    WARRANTHOLDER: COMDISCO, INC.

                                    By:    /s/ JAMES P. LABE
                                           -----------------------------
                                    Title: JAMES P. LABE, PRESIDENT
                                           COMDISCO VENTURES DIVISION
                                           -----------------------------

Warrant Lease                         -8-
<PAGE>   9
                                   EXHIBIT I

                               NOTICE OF EXERCISE

To:   _____________________________

(1)   The undersigned Warrantholder hereby elects to purchase _________ shares
      of the Series ___ Preferred Stock of ____________________, pursuant to
      the terms of the Warrant Agreement dated the ______ day of _____________,
      19__ (the "Warrant Agreement") between _________________________________
      and the Warrantholder, and tenders herein with payment of the purchase
      price for such shares in full, together with all applicable transfer
      taxes, if any, as set forth below:

            (a)   by cash or check ________________

                        or

            (b)   by Net Issuance as defined in the Warrant Agreement
                  __________________________

(2)   In exercising its rights to purchase the Series ___ Preferred Stock of
      __________________________________, the undersigned hereby confirms and
      acknowledges the investment representations and warranties made in
      Section 10 of the Warrant Agreement.

(3)   Please issue a certificate or certificates representing said shares of
      Series ___ Preferred Stock in the name of the undersigned or in such
      other name as is specified below.

________________________________
(Name)

________________________________
(Address)

WARRANTHOLDER: COMDISCO, INC.

By: ____________________________

Title: _________________________

Date: __________________________

Warrant Lease                         -9-
<PAGE>   10
                                   EXHIBIT II

                                TRANSFER NOTICE

(To transfer or assign the foregoing Warrant Agreement execute this form and
supply required information. Do not use this form to purchase shares.)

     FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to

__________________________________________________
(Please Print)

whose address is _________________________________

__________________________________________________

          Dated: _________________________________

          Holder's Signature: ____________________

          Holder's Address: ______________________

          ________________________________________

Signature Guaranteed: ____________________________

NOTE: The signature to this Transfer Notice must correspond with the name as it
appears on the face of the Warrant Agreement, without alteration or enlargement
or any change whatever. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant Agreement.<PAGE>   1
                                                                    EXHIBIT 10.3

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS.

                               WARRANT AGREEMENT

             To Purchase Shares of the Series C Preferred Stock of

                          ARGONAUT TECHNOLOGIES, INC.

               Dated as of August 12, 1997 (the "Effective Date")

        in connection with the Subordinated Loan and Security Agreement

     WHEREAS, Argonaut Technologies, Inc., a Delaware corporation (the
"Company") has entered into a Subordinated Loan and Security Agreement dated as
of July 7, 1997, and a Subordinated Promissory Note (collectively, the
"Subordinated Loan") with Comdisco, Inc., a Delaware corporation (the
"Warrantholder"); and

     WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Subordinated Loan, the right to purchase shares of its Series C
Preferred Stock;

     NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Subordinated Loan and in consideration of mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows:

1.   GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.

     The Company hereby grants to Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe for and purchase, from the Company, 25,000 fully paid and
non-assessable shares of the Company's Series C Preferred Stock ("Preferred
Stock") at a purchase price of $6.00 per share (the "Exercise Price").

     Notwithstanding the foregoing, in the event the Company has repaid the
Subordinated Loan on or prior to the twelfth (12th) month such is outstanding,
the number of shares which Warrantholder is entitled to subscribe for and
purchase hereunder shall be reduced to 15,000 shares of Preferred Stock at the
Exercise Price. Further, in the event the Company has repaid the Subordinated
Loan on or prior to the twenty-fourth (24th) month such is outstanding, the
number of shares which Warrantholder is entitled to subscribe for and purchase
hereunder shall be reduced to 20,000 shares of Preferred Stock at the Exercise
Price.

     The number and purchase price of such shares are subject to adjustment as
provided in Section B hereof.

2.   TERM OF THE WARRANT AGREEMENT.

     Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the Effective Date and shall be exercisable for a period of (i) seven (7) years
or (ii) three (3) years from the effective date of the Company's initial public
offering ("IPO"), whichever is longer.

     Notwithstanding the foregoing, upon receipt by Warrantholder of a written
request by the Company's underwriters, the Warrantholder shall exercise its
rights to purchase Preferred Stock hereunder as of the effective date of the
IPO so long as the purchase price per share is equal to or greater than the
Exercise Price. The foregoing exercise at IPO is contingent upon the
underwriter's notice being received by Warrantholder a minimum of ten (10)
business days prior to the effective date of the IPO and if the underwriters
fail to deliver such notice within the aforementioned time period, then
notwithstanding anything to the contrary in this Warrant Agreement, the rights
to purchase the Company's Preferred Stock shall not expire until the
underwriters comply with such notice provisions.

                                      -1-
<PAGE>   2
Such notice shall also contain such details of the IPO as are reasonable in the
circumstances. If the IPO does not take place, the Company shall promptly
notify the Warrantholder and the Warrantholder may rescind any exercise of its
purchase rights promptly after such notice. In the event of such rescission,
the Warrant Agreement will continue to be exercisable on the same terms and
conditions contained herein.

3.   EXERCISE OF THE PURCHASE RIGHTS.

     The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached
hereto as Exhibit 1 (the "Notice of Exercise"), duly completed and executed,
along with this Warrant Agreement. Promptly upon receipt of the Notice of
Exercise, this Warrant Agreement and the payment of the purchase price in
accordance with the terms set forth below, the Company shall issue to the
Warrantholder a certificate for the number of shares of Preferred Stock
purchased.

     The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, (ii) forgiveness of the indebtedness under the Subordinated
Loan, or (iii) by surrender of the right to purchase such number of shares
equal in value (as determined below) to the aggregate exercise price of the
number of shares to be purchased by the Warrantholder ("Net Issuance"). If the
Warrantholder elects the Net Issuance method, the Company will issue Preferred
Stock in accordance with the following formula:

          X = Y(A-B)
             -------
                A

Where: X = the number of shares of Preferred Stock to be issued to the
           Warrantholder.

               Y = the number of shares of Preferred Stock requested to be
                   exercised under this Warrant Agreement.

               A = the fair market value of one (1) share of Preferred Stock.

               B = the Exercise Price.

     For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:

     (i)  If the exercise is in connection with an initial public offering of
the Company's Common Stock, and if the Company's Registration Statement
relating to such public offering has been declared effective by the SEC, then
the fair market value per share shall be the product of (x) the initial "Price
to Public" specified in the final prospectus with respect to the offering and
(y) the number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise;

     (ii) If this Warrant is exercised after, and not in connection with the
Company's initial public offering, and;

          (a)  If the Company's Common Stock is traded on a securities
exchange, the fair market value shall be deemed to be the product of (x) the
average of the closing prices over a twenty-one (21) day period ending three
days before the day the current fair market value of the securities is being
determined and (y) the number of shares of Common Stock into which each share
of Preferred Stock is convertible at the time of such exercise; or

          (b)  If the Company's Common Stock is actively traded
over-the-counter, the fair market value shall be deemed to be the product of
(x) the average of the closing bid and asked prices quoted on the Nasdaq
National Market system (or similar system) over the twenty-one (21) day period
ending three days before the day the current fair market value of the
securities is being determined and (y) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time of such
exercise;

     (iii) If at any time the Common Stock is not listed on any securities
exchange or quoted in the Nasdaq National Market System or the over-the-counter
market, the current fair market value of Preferred

                                      -2-
<PAGE>   3
      Stock shall be the product of (x) the highest price per share which the
      Company could obtain from a willing buyer (not a current employee or
      director) for shares of Common Stock sold by the Company, from authorized
      but unissued shares, as determined in good faith by its Board of
      Directors and (y) the number of shares of Common Stock into which each
      share of Preferred Stock is convertible at the time of such exercise,
      unless the exercise is in connection with a merger, acquisition or other
      consolidation of the Company pursuant to which the Company is not the
      surviving party, in which case the fair market value of Preferred Stock
      shall be deemed to be the value received by the holders of the Company's
      Preferred Stock on a common equivalent basis pursuant to such merger or
      acquisition.

      Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number
of shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.

4.    RESERVATION OF SHARES.

      (a)   Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.

      (b)   Registration or Listing. If any shares of Preferred Stock required
to be reserved for purposes of the exercise of this Warrant Agreement hereunder
require registration with or approval of any governmental authority under any
Federal or State law (other than any registration under the Securities Act of
1933, as amended ("1933 Act"), as then in effect, or any similar Federal
statute then enforced, or any state securities law, required by reason of any
transfer involved in such conversion), or listing on any domestic securities
exchange, before such shares may be issued upon conversion, the Company will,
at its expense and as expeditiously as possible, use its best efforts to cause
such shares to be duly registered, listed or approved for listing on such
domestic securities exchange, as the case may be.

5.    NO FRACTIONAL SHARES OR SCRIP.

      No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrantholder's rights to purchase Preferred
Stock, but in lieu of such fractional shares the Company shall make a cash
payment therefor upon the basis of the Exercise Price then in effect.

6.    NO RIGHTS AS SHAREHOLDER.

      This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrantholder's rights to purchase Preferred Stock as provided for herein.

7.    WARRANTHOLDER REGISTRY.

      The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.

8.    ADJUSTMENT RIGHTS.

      The purchase price per share and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:

      (a)   Merger and Sale of Assets. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger of consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of its rights to purchase
Preferred Stock, the number of shares of Preferred Stock or other securities of
the successor corporation resulting from such Merger Event, to which a holder
of the Preferred Stock deliverable upon exercise of the right to purchase
Preferred Stock hereunder would have been entitled in such Merger Event if the
right to purchase such

                                      -3-
<PAGE>   4
Preferred Stock hereunder had been exercised immediately prior to the Merger
Event. In any such case, appropriate adjustment (as determined in good faith by
the Company's Board of Directors) shall be made in the application of the
provisions of this Warrant Agreement with respect to the rights and interest of
the Warrantholder after the Merger Event to the end that the provisions of this
Warrant Agreement (including adjustments of the Exercise Price and number of
shares of Preferred Stock purchasable) shall be applicable to the greatest
extent reasonably possible.

     (b)  Reclassification of Shares. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of
any other class or classes, this Warrant Agreement shall thereafter represent
the right to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities which were
subject to the purchase rights under this Warrant Agreement immediately prior
to such combination, reclassification, exchange, subdivision or other change.

     (c)  Subdivision or Combination of Shares. If the Company at any time
shall combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

     (d)  Antidilution Rights. The Preferred Stock purchasable hereunder shall
have the benefit of the same antidilution rights applicable to such Preferred
Stock as designed in the Company's Certificate of Incorporation, as such may be
amended from time to time, and the Company shall provide Warrantholder with all
notices and information at the times and to the extent it is required to do so
to the holders of such Preferred Stock.

     (e)  Notice of Adjustments. If: (i) the Company shall declare any dividend
or distribution upon its stock, whether in cash, property, stock or other
securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any Merger
Event: (iv) there shall be any voluntary dissolution, liquidation or winding up
of the Company; then, in connection with each such event, the Company shall
send to the Warrantholder: (A) 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, subscription rights (specifying the date
on which the holders of Preferred Stock shall be entitled thereto) or for
determining rights to vote in respect of such Merger Event, dissolution,
liquidation or winding up: and (B) in the case of any such Merger Event,
dissolution, liquidation or winding up, at least twenty (20) days' prior written
notice of the date when the same shall take place (and specifying the date on
which the holders of Preferred Stock shall be entitled to exchange their
Preferred Stock for securities or other property deliverable upon such Merger
Event, dissolution, liquidation or winding up).

     Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and
(v) the number of shares subject to purchase hereunder after giving effect to
such adjustment, and shall be given by first class mail, postage prepaid,
addressed to the Warrantholder, at the address as shown on the books of the
Company.

     (f)  Timely Notice. Failure to timely provide such notice required by
subsection (e) above shall entitled Warrantholder to retail the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder.

9.   REPRESENTATIVES, WARRANTIES AND COVENANTS OF THE COMPANY.

     (a)  Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will
be validly issued, fully paid and non-assessable, and will be free of any
taxes, liens, charges or encumbrances of any nature whatsoever; provided,
however, that the Preferred Stock issuable pursuant to this Warrant Agreement
may be subject to restrictions on transfer under state and/or Federal
securities laws. The Company has made available to the Warrantholder true,
correct and complete copies of its Certificate of Incorporation (the "Charter")
and Bylaws, as amended. The issuance of certificates for shares of Preferred
Stock upon exercise of the Warrant Agreement shall be made without charge to
the Warrantholder for any issuance tax in respect thereof, or other cost
incurred by the Company in connection with such exercise and the related
issuance of shares of Preferred Stock; provided that the Company shall not be
required to pay any tax which may be payable in

                                      -4-
<PAGE>   5
respect of any transfer involved and the issuance and delivery of any
certificate in a name other than that of the Warrantholder.

     (b) Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock set forth in Section 1, have been duly authorized by
all necessary corporate action on the part of the Company, and the Subordinated
Loan and this Warrant Agreement are not inconsistent with the Company's Charter
or Bylaws, do not contravene any law or governmental rule, regulation or order
applicable to it, do not and will not contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other instrument to which
it is a party or by which it is bound, and the Subordinated Loan and this
Warrant Agreement constitute legal, valid and binding agreements of the Company,
enforceable in accordance with their respective terms subject only to
bankruptcy, insolvency or other similar laws affecting the enforceability of the
rights of creditors generally and the general principles of equity.

     (c)  Consents and Approvals. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of notices pursuant to Regulation
D under the 1933 Act and any filing required by applicable state securities law,
which filings will be effective by the time required thereby.

     (d)  Issued Securities. All issued and outstanding shares of Common Stock,
Preferred Stock or any other securities of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. All outstanding shares
of Common Stock, Preferred Stock and any other securities were issued in full
compliance with all Federal and state securities laws. In addition:

          (i)  The authorized capital stock of the Company consists of
26,800,000 shares of Common Stock and 20,800,000 shares of Preferred Stock, of
which 5,000,000 are designated as Series A Preferred Stock, 5,000,000 shares are
designated Series A-1 Preferred Stock, 3,000,000 shares are designated Series B
Preferred Stock, 3,000,000 shares are designated Series B-1 Preferred Stock,
1,600,000 shares are designated Series C Preferred Stock, and 1,600,000 shares
are designated Series C-1 Preferred Stock. The issued and outstanding stock of
the Company consists of 1,903,708 shares of Common Stock, 4,627,500 shares of
Series A Preferred Stock, no shares of Series A-1 Preferred Stock, 2,923,073
shares of Series B Preferred Stock, no shares of Series B-1 Preferred Stock,
1,180,000 shares of Series C Preferred Stock and no shares of Series C-1
Preferred Stock. The Series A Preferred, Series A-1 Preferred, Series B
Preferred, Series B-1 Preferred, Series C Preferred, and Series C-1 Preferred
shall have the rights, preferences, privileges and restrictions set forth in the
Charter.

          (ii) The Company has reserved 1,685,308 shares of its Common Stock for
issuance to officers, directors, employees, sales representatives and
consultants of the Company pursuant to the Company's 1995 Incentive Stock Plan.
There are stock options outstanding for the purchase of 1,215,575 shares of
Common Stock. There are also warrants outstanding for the purchase of 55,000
shares of Common Stock. Except as referenced herein, there are no options,
warrants, conversion privileges or other rights presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the capital
stock or other securities of the Company.

     (e)  Insurance. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.

     (f)  Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of the Warrantholder's right to purchase such Preferred Stock will
constitute a transaction exempt from (i) the registration requirements of
Section 5 of the 1933 Act, in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the applicable state securities laws.

     (g)  Compliance with Rule 144. At the written request of the Warrantholder,
who proposes to sell Preferred Stock issuable upon the exercise of the Warrant
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission under the 1933 Act, the Company shall furnish to the Warrantholder,
within ten days after receipt of such request, a written statement confirming
the Company's compliance with the filing

                                      -5-
<PAGE>   6
requirements of the Securities and Exchange Commission as set forth in such Rule
as then applicable to the Company, as such Rule may be amended from time to
time.

10.  REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.

     This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder which by
its execution hereof the Warrantholder hereby confirms:

     (a)  Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.

     (b)  Private Issue. The Warrantholder understands (i) that the Preferred
Stock issuable upon exercise of this Warrant is not registered under the 1933
Act or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.

     (c)  Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.

     (d)  Financial Risk. The Warrantholder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.

     (e)  Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1934 Act (the "1934 Act"), or file reports pursuant to
Section 15(d), of the 1934 Act, or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i) the
rights to purchase Preferred Stock pursuant to this Warrant Agreement, or (ii)
the Preferred Stock issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. The Warrantholder
also understands that any sale of its rights of the Warrantholder to purchase
Preferred Stock or Preferred Stock which might be made by it in reliance upon
Rule 144 under the 1933 Act may be made only in accordance with the terms and
conditions of that Rule.

     (f)  Accredited Investor. Warrantholder is an "accredited investor" within
the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.

                                      -6-
<PAGE>   7
11.  ADDITIONAL WARRANTS.

     In the event the Company has not repaid the Subordinated Loan in its
entirety by the maturity date as set forth in the Subordinated Promissory Note,
Warrantholder shall have the right to purchase from the Company, at the
Exercise Price (adjusted as set forth herein) an additional number of shares of
Preferred Stock determined by (i) multiplying the outstanding principal amount
of the Subordinated Loan by one percent (1%) for each month such amount is
outstanding, and (ii) dividing the product thereof by the Exercise Price per
share.

12.  LOCKUP AGREEMENT.

     Warrantholder agrees that, if, in connection with the Company's IPO of the
Company's securities, the Company of the underwriters managing the offering so
request, the Warrantholder shall not sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any right to purchase
Preferred Stock hereunder or any Preferred Stock issuable upon exercise of its
rights hereunder without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of the IPO as may be
requested by the Company or the underwriters; provided that each officer and
director of the Company who own stock of the Company also agrees to such
restrictions. This Section 11 shall be binding on all transferees or assignees
of Warrantholder.

13.  TRANSFERS.

     Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3) transfers. The transfer shall be recorded on the books
of the Company upon receipt by the Company of a notice of transfer in the form
attached hereto as Exhibit III (the "Transfer Notice"), at its principal
offices and the payment to the Company of all transfer taxes and other
governmental charges imposed on such transfer.

14.  MISCELLANEOUS.

     (a)  Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall
be binding upon any successors or assigns of the Company.

     (b)  Attorney's Fees. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to attorneys' fees and expenses and all costs of proceedings
incurred in enforcing this Warrant Agreement.

     (c)  Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State
of Illinois.

     (d)  Counterparts. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     (e)  Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, facsimile
transmission (provided that the original is sent by personal delivery or mail
as hereinafter set forth) or seven (7) days after deposit in the United States
mail, by registered or certified mail, addressed (1) to the Warrantholder at
6111 North River Road, Rosemont, Illinois 60018, attention: James Labe, Venture
Group, cc: Legal Department, attention: General Counsel, (and/or, if by
facsimile, (847) 518-5465 and (847) 518-5088, and (ii) to the Company at 887
Industrial Road, Suite G, San Carlos, CA. 94070 (and/or if by facsimile, (415)
598-1359 or at such other address as any such party may subsequently designate
by written notice to the other party.

     (f)  Remedies. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as
a result of any such default, and/or an action for specific performance for any
default where Warrantholder will not have an adequate remedy at law and where
damages will not be readily ascertainable. The Company expressly agrees that it
shall not oppose an application by the Warrantholder or any other person
entitled

                                      -7-

<PAGE>   8
to the benefit of this Agreement requiring specific performance of any or all
provisions hereof or enjoining the Company from continuing to commit any such
breach of this Agreement.

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

     (h)  Survival. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.

     (i)  Severability. In the event any one or more of the provisions of this
Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal
or unenforceable provision.

     (j)  Amendments. Any provision of this Warrant Agreement may be amended by
a written instrument signed by the Company and by the Warrantholder.

     (k)  Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. The Company
shall also supply such other documents as the Warrantholder may from time to
time reasonably request.

     IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.

                                        COMPANY: ARGONAUT TECHNOLOGIES, INC.

                                        By: /s/ D.P. Binkley

                                        Title: President & CEO

                                        WARRANTHOLDER: COMDISCO, INC.

                                        By: JAMES F. LABE,

                                        Title: PRESIDENT COMDISCO VENTURES
                                               DIVISION

                                      -8-
<PAGE>   9
                                   EXHIBIT I

                               NOTICE OF EXERCISE

TO:  _______________________

(1)  The undersigned Warrantholder hereby elects to purchase _______ shares of
     the Series _____ Preferred Stock of _______________, pursuant to the terms
     of the Warrant Agreement dated the _______ day of ____________, 19__ (the
     "Warrant Agreement") between ________________________ and the
     Warrantholder, and tenders herewith payment of the purchase price for such
     shares in full, together with all applicable transfer taxes, if any, as set
     forth below:

          (a)  by cash or check __________

                       or

          (b)  by Net Issuance as defined in the Warrant Agreement __________

(2)  In exercising its rights to purchase the Series _____ Preferred Stock of
     __________________________, the undersigned hereby confirms and
     acknowledges the investment representations and warranties made in Section
     10 of the Warrant Agreement.

(3)  Please issue a certificate or certificates representing said shares of
     Series _____ Preferred Stock in the name of the undersigned or in such
     other name as is specified below.

________________________
(Name)

________________________
(Address)

WARRANTHOLDER: COMDISCO, INC.

By:    ______________________

Title: ______________________

Date:  ______________________
<PAGE>   10
                                   EXHIBIT II

                                TRANSFER NOTICE

(To transfer or assign the foregoing Warrant Agreement execute this form and
supply required information. Do not use this form to purchase shares.)

     FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to

__________________________________________________
(Please Print)

whose address is _________________________________

__________________________________________________

          Dated: _________________________________

          Holder's Signature: ____________________

          Holder's Address: ______________________

          ________________________________________

Signature Guaranteed: ____________________________

NOTE: The signature to this Transfer Notice must correspond with the name as it
appears on the face of the Warrant Agreement, without alteration or enlargement
or any change whatever. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant Agreement.

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