sec document




                                                                    EXHIBIT 10.6





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                                   NUCO2 INC.


                                       and


                           THE INVESTORS PARTY HERETO


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                            SPECIAL WARRANT AGREEMENT

                           Dated as of August 25, 2003



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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Section 1.  Definitions, Accounting Terms and Determinations...................1
        1.01  Definitions......................................................1
        1.02  Accounting Terms and Determinations..............................7

Section 2.  Purchase, Sale and Exercise of Warrants............................7
        2.01  Authorization and Issuance of Shares and Warrants................7
        2.02  The Closing......................................................7
        2.03  Initial Holder Representations, Warranties and Agreements........7
        2.04  Securities Act Compliance........................................8
        2.05  Exercise of Warrants.............................................8

Section 3.  Representations and Warranties....................................10
        3.01  Existence.......................................................10
        3.02  No Breach.......................................................10
        3.03  Corporate Action................................................10
        3.04  Approvals.......................................................10
        3.05  Investment Company Act..........................................11
        3.06  Public Utility Holding Company Act..............................11
        3.07  Capitalization..................................................11
        3.08  Private Offering................................................11
        3.09  SEC Documents; Financial Statements.............................11

Section 4.  Transfers Generally; Securities Act Compliance....................12
        4.01  Transfers Generally.............................................12
        4.02  Transfers of Restricted Securities Pursuant to
              Registration Statements and Rule 144, Etc.......................12
        4.03  Notice of Certain Transfers.....................................12
        4.04  Restrictive Legend..............................................12
        4.05  Termination of Restrictions.....................................13

Section 5.  Additional Provisions Relating to Transfers.......................13
        5.01  Disposition of Securities.......................................13
        5.02  Transfer Restriction............................................14
        5.03  Repurchase of Common Stock......................................14
        5.04  Transfer, Division and Combination..............................14

Section 6.  Adjustment of Stock Unit..........................................15
        6.01  Stock Dividends, Subdivisions and Combinations..................15
        6.02  Issuance of Additional Shares of Common Stock...................15
        6.03  Issuance of Options.............................................16
        6.04  Issuance of Convertible Securities..............................17
        6.05  Superseding Adjustment of Stock Unit............................17
        6.06  Other Provisions Applicable to Adjustments
              Under this Section 6............................................18

                                      (i)





Section 7.  Consolidation, Merger, Share Exchange, etc.; Distributions........20
        7.01  Consolidation, Merger, Share Exchange, etc......................20
        7.02  Distributions upon Declaration of Dividend or
              Other Distribution..............................................20
        7.03  Dilution in Case of Other Securities............................21

Section 8.  Notice to Warrant Holders.........................................21
        8.01  Notice of Adjustment of Stock Unit or Exercise Price............21
        8.02  Notice of Certain Corporate Actions.............................21
        8.03  Limitation on Holders' Rights...................................22

Section 9.  Reservation and Authorization of Common Stock.....................22

Section 10. Taking of Record; Stock and Warrant Transfer Books................23

Section 11. Holders' Special Rights...........................................23
        11.01  Replacement of Instruments.....................................23
        11.02  Restrictions on Certain Action.................................23
        11.03  Inspection Rights..............................................24
        11.04  Right to Purchase Equity Securities............................24

Section 12.  Registration.....................................................25
        12.01  Notice.........................................................25
        12.02  Proration......................................................25
        12.03  Registration Procedures........................................26
        12.04  Holdback on Sales..............................................27
        12.05  Expenses.......................................................28
        12.06  Indemnification................................................28
        12.07  No Other Registration Rights...................................30
        12.08  Rule 144.......................................................30

Section 13.  Miscellaneous....................................................30
        13.01  Waiver.........................................................30
        13.02  Notices........................................................30
        13.03  Office of the Company..........................................31
        13.04  Expenses, Transfer Taxes and Other Charges.....................31
        13.05  Amendments, Etc................................................32
        13.06  Successors and Assigns.........................................32
        13.07  Survival.......................................................32
        13.08  Regulation Y...................................................32
        13.09  Captions.......................................................32
        13.10  Counterparts...................................................32
        13.11  Governing Law..................................................32
        13.12  Severability...................................................32
        13.13  Entire Agreement...............................................32
        13.14  No Third Party Beneficiary.....................................33

                                      (ii)



SCHEDULE 1     -   Schedule of Warrants and Options
SCHEDULE 2     -   Authorized and Outstanding Capital Stock
SCHEDULE 3     -   Existing Registration Rights

ANNEX 1        -   Form of Special Warrant

                                     (iii)





                            SPECIAL WARRANT AGREEMENT

            SPECIAL WARRANT  AGREEMENT dated as of August 25, 2003 among:  NuCo2
INC., a corporation  duly  organized and validly  existing under the laws of the
State of Florida (the  "Company");  and each of the investors  signatory  hereto
(individually, an "Initial Holder" and, collectively, the "Initial Holders").

            NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and
agreements  set  forth  in this  Agreement,  and for  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

            Section 1. DEFINITIONS, ACCOUNTING TERMS AND DETERMINATIONS.

            1.01 DEFINITIONS. Except as expressly provided herein, the following
terms shall have the following meanings (all terms in this Section 1 or in other
provisions  of this  Agreement in the singular to have the same  meanings in the
plural and vice versa):

            "1995 STOCK OPTION PLAN" shall mean the Company's  1995 Stock Option
Plan for employees as the same may be amended from time to time.

            "ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares (including
treasury  shares) of Common  Stock issued or sold by the Company on or after the
date hereof, other than (i) the shares of Common Stock described as being issued
and  outstanding  in Section 3.07 hereof and (ii) the Option Stock,  Options and
Warrants listed on Schedule 1 hereto.

            "AFFILIATE" shall have the meaning assigned thereto in Rule 12b-2 of
the Exchange Act.  Notwithstanding  the  foregoing,  (a) no individual  shall be
deemed to be an Affiliate of a corporation  solely by reason of his or her being
an officer or director of such corporation,  and (b) none of the Initial Holders
(or any of their Affiliates) shall be an Affiliate of the Company.

            "BANK HOLDING  COMPANY  AFFILIATE"  shall mean,  with respect to any
Holder that is a BHCA Holder, (i) if such Holder is a bank holding company,  any
company controlled by such bank holding company or (ii) the bank holding company
that controls  such Holder and any other Person  controlled by such bank holding
company.

            "BHCA HOLDER" shall mean a bank holding company or a subsidiary of a
bank holding company.

            "BOARD" shall mean the Board of Directors of the Company.

            "BUSINESS DAY" shall mean any day on which  commercial banks are not
authorized or required to close in New York City.

            "CODE" shall mean the Internal Revenue Code of 1986, as amended.

                               Warrant Agreement
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                                      -2-

            "COMMISSION"  shall mean the Securities  and Exchange  Commission or
any other  similar or successor  agency of the Federal  government  with primary
responsibility for administering the Securities Act.

            "COMMON STOCK" shall mean the Company's authorized Common Stock, par
value $.001 per share, and any stock into which such Common Stock may thereafter
be  changed,  and also shall  include  stock of the  Company of any other  class
(including,  without  limitation,  any future  class(es) of such Common  Stock),
which is not  preferred as to dividends or assets over any class of stock of the
Company and which is not subject to redemption.

            "COMPANY" shall have the meaning  assigned to such term in the first
paragraph of this  Agreement,  and shall  include any  successors  and permitted
assigns of the Company.

            "CONVERTIBLE  SECURITIES"  shall  mean  evidences  of  indebtedness,
shares of stock or other  securities  which are convertible into or exchangeable
or exercisable for Additional Shares of Common Stock, either immediately or upon
the arrival of a specified date or the happening of a specified event.

            "CONVERTIBLE  SECURITY  VALUE" shall mean the fair market value of a
Convertible  Security on the date of  issuance,  reasonably  determined  in good
faith  by the  Board,  less  the  proceeds  received  by the  Company  for  such
conversion or exchange.

            "CURRENT MARKET PRICE",  per share of Common Stock, for the purposes
of any provision hereof or of a Warrant at the date herein or therein specified,
shall be deemed to be (a) with respect to any Additional  Shares of Common Stock
issued (or to be  issued) in a public  offering  (other  than a public  offering
effected as a part of a merger or other acquisition  transaction by the Company,
in which case  paragraph  (b) below shall  apply),  the  offering  price of such
Additional Shares and (b) otherwise,  the average of the daily market prices for
each day during the 20 consecutive trading days immediately  preceding such date
as of which such a price can be  established in the manner set forth in the next
sentence.  The  market  price for each such  trading  day shall be the last sale
price on such day as reported in the Consolidated  Last Sale Reporting System or
as quoted in the National  Association of Securities Dealers Automated Quotation
System, or if such last sale price is not available,  the average of the closing
bid and asked  prices as  reported in either such  system.  Notwithstanding  the
foregoing, the "Current Market Price" per share of Common stock for shares to be
issued in  connection  with an  acquisition  of  assets  or  stock,  a tender or
exchange offer, a merger or other business combination shall be deemed to be the
price per share as determined  in such  acquisition,  tender or exchange  offer,
merger or other business combination agreement.

            "CURRENT WARRANT PRICE",  for the purpose of any provision hereof or
of a Warrant at the date herein or therein specified,  shall mean the amount per
share of Common Stock equal to the quotient resulting from dividing the Exercise
Price per Stock Unit in effect on such date by the  number of shares  (including
any fractional share) of Common Stock comprising a Stock Unit on such date.

                               Warrant Agreement
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                                      -3-

            "DATE OF ISSUANCE"  shall have the meaning  assigned to such term in
Section 11.04 hereof.

            "DIRECTORS'  STOCK OPTION PLAN" shall mean the Company's  Directors'
Stock  Option Plan for  non-employee  directors  as the same may be amended from
time to time.

            "ELECTION  NOTICE"  shall have the meaning  assigned to such term in
Section 11.04 hereof.

            "ELECTION  PERIOD"  shall have the meaning  assigned to such term in
Section 11.04 hereof.

            "EQUITY  SECURITIES"  shall mean any  securities the rights of which
are in the nature of those of the  Company's  Common Stock,  including,  without
limitation,  common  stock,  any  securities  having  the  right to vote for the
election of directors,  stock appreciation  rights,  and securities  convertible
into any of the foregoing.

            "EXCHANGE  ACT" shall mean the  Securities  Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder,  all as the
same shall be in effect at the time or any replacement act.

            "EXERCISE  NOTICE"  shall have the meaning  assigned to such term in
Section 2.05 hereof.

            "EXERCISE PRICE" shall have the meaning assigned to such term in the
form of Warrant attached as Annex 1 hereto.

            "EXPIRATION  DATE" shall have the  meaning  assigned to such term in
the form of Warrant attached as Annex 1 hereto.

            "GAAP" shall mean generally accepted  accounting  principles applied
on a consistent basis.

            "GOVERNMENTAL  AUTHORITY"  shall mean any nation or government,  any
state  or  other  political  subdivision  thereof,  and  any  entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to any such government.

            "HOLDER"  shall  mean any Person who  acquires  Restricted  Warrants
pursuant to the provisions of this Agreement, including, without limitation, the
Initial  Holders,  any  Affiliate  of the  Initial  Holders,  and any  permitted
transferees of any of the foregoing.

            "INITIAL HOLDER" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

            "INDEMNIFIED  PARTY" shall have the meaning assigned to such term in
Section 12.06 hereof.

                               Warrant Agreement
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                                      -4-

            "INDEMNIFYING PARTY" shall have the meaning assigned to such term in
Section 12.06 hereof.

            "ISSUE  PRICE"  shall  have the  meaning  assigned  to such  term in
Section 11.04 hereof.

            "LIEN" shall mean any pledge, assignment,  hypothecation,  mortgage,
security  interest,  deposit  arrangement,  conditional  sale or title retaining
contract,  sale and leaseback  transaction,  financing  statement filing, or any
other type of lien, charge, encumbrance or preferential arrangement.

            "MAJORITY  HOLDERS"  shall mean Holders of a majority of the Warrant
Stock issued or issuable upon  exercise of the Warrants.  For purposes of giving
notices hereunder,  Holders of Warrants shall be deemed holders of Warrant Stock
issued upon the exercise thereof.

            "MAJORITY  INITIAL HOLDERS" shall mean Initial Holders of a majority
of the Warrant  Stock  issued or issuable  upon  exercise of the  Warrants.  For
purposes of giving  notices  hereunder,  Initial  Holders of  Warrants  shall be
deemed holders of Warrant Stock issued upon the exercise thereof.

            "NOTICE OF ISSUANCE" shall have the meaning assigned to such term in
Section 11.04 hereof.

            "ON A FULLY  DILUTED  BASIS" shall mean,  with respect to the Common
Stock of the  Company  outstanding  at any  time,  the  number of shares of such
Common Stock then issued and outstanding, assuming full conversion, exercise and
exchange of all issued and outstanding  Convertible  Securities and Options that
shall be (or may become)  exchangeable  for, or exercisable or convertible into,
such Common Stock,  including  Warrants with respect thereto;  provided that the
number of shares of Common Stock deemed to be  outstanding  "on a fully  diluted
basis" shall be reduced (without  duplication) by the number of shares of Common
Stock  purchasable  or issuable  upon  exercise,  conversion  or exchange of (i)
Options or Convertible Securities at the time of calculation that are Out of the
Money and (ii) Options issued under the Stock Option Plans.

            "OPTION" shall mean any warrant,  option or other right to subscribe
for or purchase  Additional  Shares of Common Stock or  Convertible  Securities,
including those listed on Schedule I hereto.

            "OPTION  STOCK" shall mean shares of Common Stock not to exceed,  in
the  aggregate,  1,950,000  shares  of  Common  Stock,  issued  or  issuable  in
accordance  with the Stock Option  Plans,  provided  that (i) in the case of the
1995 Stock Option Plan,  the option  exercise price at the time of such grant is
not less than 75% of the fair  market  value of such  shares on the date of such
grant as  reasonably  determined  in good  faith by the  Stock  Option  or other
administering  Committee  of the Board  and (ii) the  number of shares of Common

                               Warrant Agreement
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                                      -5-

Stock  specified  above shall be adjusted  as  appropriate  to reflect any stock
split,  stock  consolidation,  subdivision or  combination  affecting the Common
Stock.

            "OTHER  SECURITIES"  shall mean any stock (other than Warrant Stock)
and other securities of the Company or any other Person (corporate or otherwise)
which a Holder at any time shall be entitled to receive, or shall have received,
upon  exercise  of the  Warrants  held by such  Holder or  pursuant to Section 7
hereof,  in lieu of or in addition to Warrant Stock,  or which at any time shall
be  issuable  or shall have been issued in  exchange  for or in  replacement  of
Warrant Stock or Other Securities  received in an earlier exchange,  exercise or
replacement of Warrant Stock.

            "OUT OF THE MONEY" shall mean (a) in the case of an Option, that the
fair market value of the shares of any Common Stock which the holder  thereof is
entitled to purchase or subscribe  for is less than the  exercise  price of such
Option  and  (b) in the  case  of a  Convertible  Security,  that  the  quotient
resulting  from dividing the fair market value of such  Convertible  Security by
the  number of shares of any Common  Stock  into or for which  such  Convertible
Security is  exercisable,  convertible or  exchangeable is greater than the fair
market value of a share of such Common Stock.

            "PARTICIPATING  SECURITY" shall mean any security (other than Common
Stock) the rights of the  holders of which are not limited to (i) a fixed sum or
percentage of liquidation  preference or principal amount, (ii) a sum determined
by reference to a formula based on a published index of interest rates, (iii) an
interest rate publicly  announced by a financial  institution or a similar index
of interest  rates in respect of interest  or  dividends  or (iv) a fixed sum or
percentage of principal amount or liquidation  preference in any distribution of
assets.

            "PERSON"  shall  mean  a  corporation,  an  association,  a  limited
liability company, a partnership, a joint venture, an organization,  a business,
an individual or a Government Authority.

            "PREFERRED STOCK" shall mean, as to any Person, any capital stock of
such Person which is preferred as to dividends or assets over any other class of
any other stock of such Person.

            "REGULATED  HOLDER"  shall  mean a Holder  which  is a bank,  a bank
holding  company or an Affiliate  of any of the  foregoing.  A Regulated  Holder
shall be deemed to have a "Regulatory  Problem" when (i) such Regulated Holder's
investment in the Warrants  and/or Warrant Stock exceeds any limitation to which
it is subject, or is otherwise not permitted,  under any law, rule or regulation
of any  Governmental  Authority  (including any position to that effect taken by
such Governmental Authority), or (ii) restrictions are imposed on such Regulated
Holder which, in its reasonable  judgment,  make it illegal or unduly burdensome
for such  Regulated  Holder to continue  to hold such  Warrants  and/or  Warrant
Stock.

            "REGULATION  Y" shall mean  Regulation Y promulgated by the Board of
Governors  of the  Federal  Reserve  System  (12  C.F.R.  225) or any  successor
regulation.

                               Warrant Agreement
                               -----------------


                                      -6-

            "RESTRICTED  CERTIFICATE" shall mean a certificate for Common Stock,
Warrants or Other Securities bearing the restrictive legend set forth in Section
4.04 hereof.

            "RESTRICTED  SECURITIES"  shall mean Restricted Stock and Restricted
Warrants.

            "RESTRICTED STOCK" shall mean Common Stock evidenced by a Restricted
Certificate.

            "RESTRICTED  WARRANTS" shall mean Warrants evidenced by a Restricted
Certificate.

            "RULE  144"  shall mean Rule 144 as  promulgated  by the  Commission
under the Securities Act and any successor  provision  thereto,  all as the same
shall be in effect at the time.

            "SECURITIES  ACT" shall mean the Securities Act of 1933, as amended,
and the rules and  regulations  of the  Commission  thereunder,  all as the same
shall be in effect at the time or any replacement act.

            "SELLER"  shall have the  meaning  assigned  to such term in Section
12.01 hereof.

            "SELLER  NOTICE"  shall have the  meaning  assigned  to such term in
Section 12.01 hereof.

            "SHAREHOLDER"  shall mean any Person who directly or indirectly owns
any shares of Common Stock of the Company.

            "STOCK OPTION PLANS" shall mean the Company's 1995 Stock Option Plan
and the Company's Directors' Stock Option Plan.

            "STOCK  UNIT" shall mean one share of Common  Stock,  as such Common
Stock is constituted on the date hereof,  and thereafter  shall mean such number
of  shares  (including  any  fractional   shares)  of  Common  Stock  and  Other
Securities,  cash or  other  property  as  shall  result  from  the  adjustments
specified in Sections 6 and 7 hereof.

            "SUBSIDIARY"  shall mean, for any Person,  any  corporation or other
entity  of  which at  least a  majority  of the  securities  or other  ownership
interests  having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons  performing similar functions of such
corporation  or other  entity is at the time  directly  or  indirectly  owned or
controlled by such Person and/or one or more Subsidiaries of such Person.

            "TRANSFER" shall mean any disposition of any Restricted  Securities,
or of any interest in any thereof,  which would constitute a sale thereof within
the meaning of the Securities Act.

            "WARRANTS" shall mean the warrant certificates covering the purchase
of Stock Units, each in the form of Annex 1 to this Agreement, originally issued
by the  Company  pursuant  to Section 2 hereof,  and all  Warrants  issued  upon

                               Warrant Agreement
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                                      -7-

transfer,  division or combination of, or in substitution for, any thereof.  All
Warrants  shall at all times be identical as to terms and  conditions and expiry
date, except as to the number of Stock Units for which they may be exercised and
the Exercise Price.

            "WARRANT STOCK" shall mean the shares of Common Stock of the Company
purchasable  or purchased  upon the exercise of Warrants  issued by the Company,
including  any such Common Stock into which such Common Stock may  thereafter be
changed.

            1.02 ACCOUNTING TERMS AND DETERMINATIONS. Except as otherwise may be
expressly   provided   herein,   all  accounting  terms  used  herein  shall  be
interpreted,  and all certificates and reports as to financial  matters required
to be  delivered  to the  Holders  hereunder  and  under the  Warrants  shall be
prepared,  in  accordance  with GAAP.  All  calculations  made for  purposes  of
determining  compliance  with the terms of this Agreement and the Warrants shall
(except as may be expressly provided herein) be made by application of GAAP.

            Section 2. PURCHASE, SALE AND EXERCISE OF WARRANTS.

            2.01 AUTHORIZATION AND ISSUANCE OF SHARES AND WARRANTS.  The Company
has  authorized:  (a) the issue of the  Warrants  for  issuance  to the  Initial
Holders pursuant to this Agreement; and (b) the reservation for issuance of such
number of shares of its Common Stock as shall be issuable  upon  exercise of the
Warrants.

            2.02 THE CLOSING.

                 (a) The Company shall issue to each Initial Holder, on the date
hereof and for no cash  consideration,  Warrants  covering  such number of Stock
Units as is specified  opposite the name of such Initial Holder on the signature
page(s) hereto.  The number of shares of Common Stock comprising each Stock Unit
covered  by the  Warrants  issued  under  this  Agreement  shall be  subject  to
adjustment as provided in Sections 6 and 7 hereof.

                 (b) On the date  hereof,  the  Company  shall  deliver  to each
Initial  Holder a single  certificate  for the  Warrants  to be acquired by such
Initial Holder hereunder,  registered in the name of such Initial Holder, except
that,  if such Initial  Holder shall notify the Company in writing prior to such
issuance  that it  desires  certificates  for  Warrants  to be  issued  in other
denominations  or  registered  in the  name or names of any  Person  or  Persons
referred to in Section  5.01(a)(i) or (ii) hereof or any nominee or nominees for
its or their  benefit,  then the  certificates  for Warrants to be issued by the
Company  shall  be  issued  to such  Initial  Holder  in the  denominations  and
registered in the name or names specified in such notice.

                 (c) On the  date  hereof,  the  Company  will  deliver  to each
Initial Holder a legal opinion from counsel to the Company in form and substance
reasonably satisfactory to each Initial Holder.

            2.03 INITIAL HOLDER REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Each
Initial Holder  represents and warrants to, and agrees with the Company that (a)

                               Warrant Agreement
                               -----------------


                                      -8-

such Initial  Holder is purchasing  for its own account,  and not with a view to
the resale or  distribution  of such  Warrants or the Warrant  Stock or any part
thereof,  and such  Initial  Holder is  prepared  to bear the  economic  risk of
retaining  such  Warrants and the Warrant Stock for an  indefinite  period,  all
without prejudice,  however, to the right of such Initial Holder at any time, in
accordance with this Agreement,  lawfully to sell or otherwise to dispose of all
or any part of such  Warrants or the Warrant  Stock held by it, (b) such Initial
Holder is an  "accredited  investor"  (as  defined in Rule 501 of  Regulation  D
promulgated under the Securities Act), (c) such Initial Holder is experienced in
evaluating and investing in securities,  and  understands  that the Warrants and
the  Warrant  Stock  will be  restricted  securities,  and that a legend to that
effect shall be placed on the Restricted Securities,  and no public market shall
exist for the disposition or transfer of such Restricted Securities, and (d) the
acquisition, holding and any transfer of any Restricted Securities by an Initial
Holder shall be in compliance with all laws applicable to such Initial Holder.

            2.04 SECURITIES ACT COMPLIANCE. Each Initial Holder understands that
the Company has not  registered  or qualified  the Warrants or the Warrant Stock
under  the  Securities  Act or any  applicable  state  securities  laws and each
Initial  Holder  agrees that neither the Warrants nor the Warrant Stock shall be
sold or offered for sale without  registration  under the  Securities Act or the
availability of an exemption therefrom,  all as more fully provided in Section 4
hereof.

            2.05  EXERCISE OF  WARRANTS.  On and after the date hereof and until
5:00 p.m., New York City time, on the Expiration  Date,  each Holder may, on one
or more occasions, on any Business Day, in whole or in part:

                 (a) exercise  for cash all or some of the Warrants  held by it;
         and

                 (b)  convert  all or some of the  Warrants  held by it into the
         number of shares of Common Stock for each Stock Unit  evidenced by such
         Warrant which is being so converted, equal to (a)(i) the product of (x)
         the  number of shares of Common  Stock  comprising  a Stock Unit at the
         time of such  conversion  and (y) the Current Market Price per share of
         Common  Stock at the time of such  conversion  minus (ii) the  Exercise
         Price per Stock Unit at the time of such conversion, divided by (b) the
         Current  Market  Price per  share of  Common  Stock at the time of such
         conversion,

in each case by delivering  to the Company,  at its office  maintained  for such
purpose pursuant to Section 13.03 hereof:

                 (i) a written notice (the  "Exercise  Notice") of such Holder's
         election to exercise such Warrant or convert such Warrant,  as the case
         may be, in the form of the Exercise Form set out at the end thereof (or
         a reasonable facsimile thereof),  which notice shall specify the number
         of Stock Units to be purchased or converted, as the case may be; and

                 (ii) such Warrant,

                               Warrant Agreement
                               -----------------


                                      -9-

and, in the case of an exercise of such  Warrant,  a certified  or bank check or
checks  payable to the Company in an  aggregate  amount  equal to the  aggregate
Exercise  Price for the number of Stock Units as to which such  Warrant is being
exercised.  Upon receipt thereof,  the Company shall, as promptly as practicable
and in any event within five  Business Days  thereafter,  execute or cause to be
executed and deliver or cause to be delivered to such Holder a stock certificate
or certificates representing the aggregate number of shares of Warrant Stock and
Other  Securities  issuable  upon  such  exercise  or  conversion  and any other
property  to which such  Holder is  entitled  by virtue of the  exercise  of any
Warrants.

            If a Holder is a BHCA  Holder,  such Holder shall not, and shall not
permit any of its Bank Holding  Company  Affiliates to, exercise any Warrant if,
after  giving  effect to such  exercise,  (i) such  Holder and its Bank  Holding
Company  Affiliates  would own more than 5% of the total issued and  outstanding
shares of Common  Stock on a  fully-diluted  basis or (ii) such Holder  would be
deemed under Regulation Y to have the power to exercise, directly or indirectly,
a controlling  influence over the management or policies of, or would  otherwise
control,  the Company  unless such  Holder is a  financial  holding  company and
exercises  such Warrant in reliance  on, and in  compliance  with,  the merchant
banking  exemption set forth in Regulation Y. For purposes of clause (ii)of this
paragraph, a reasoned opinion of counsel to such Holder delivered to such Holder
(which is based on facts and circumstances  deemed  appropriate by such counsel)
to the  effect  that  such  Holder  does not have the power to  exercise  such a
controlling influence or otherwise control the Company shall be conclusive.

            The stock certificate or certificates for Warrant Stock so delivered
shall be in such  denominations  as may be specified in the Exercise  Notice and
shall be registered in the name of such Holder or such name or names as shall be
designated in such Exercise Notice. Such stock certificate or certificates shall
be deemed to have been issued and such Holder or any other Person so  designated
to be named  therein  shall be deemed to have  become a holder of record of such
shares, including, to the extent permitted by law, the right to vote such shares
or to consent or to receive notice as a Shareholder, as of the date on which the
last of the Exercise  Notice,  payment of the Exercise  Price and the Warrant to
which such  exercise  relates is received by the Company as  aforesaid,  and all
taxes  required  to be paid by Holder,  if any,  pursuant  to  Section  13.04(c)
hereof,  prior to the  issuance of such shares have been paid.  If such  Warrant
shall have been exercised or converted  only in part, the Company shall,  at the
time of delivery of the certificate or certificates  representing  Warrant Stock
and  other  securities,  execute  and  deliver  to  such  Holder  a new  Warrant
evidencing  the rights of such Holder to purchase (or  convert) the  unpurchased
(or unconverted) Stock Units called for by such Warrant, which new Warrant shall
in all other respects be identical with the surrendered Warrant.

            All shares of Common Stock  issuable upon the exercise or conversion
of a Warrant shall,  upon payment therefor in accordance  herewith,  be duly and
validly issued by the Company,  fully paid and  nonassessable and free and clear
of all Liens.

            The Company  shall not be required  to issue a  fractional  share of
Common Stock or Other Securities upon exercise or conversion of any Warrant.  As
to any  fraction of a share of Common Stock or Other  Securities  which a Holder
would  otherwise be entitled to purchase upon such exercise or  conversion,  the
Company may in lieu of the issuance of a fractional  share pay a cash adjustment

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


                                      -10-

in respect of such final fraction in an amount equal to the same fraction of the
Current  Market Price per share of Common Stock or Other  Securities on the date
of exercise.

            Section 3.  REPRESENTATIONS  AND WARRANTIES.  The Company represents
and warrants to the Initial Holders that:

            3.01 EXISTENCE. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.

            3.02 NO BREACH.  Except as described in Section 3.04 hereof, none of
the execution and delivery of this Agreement and the Warrants,  the consummation
of the  transactions  herein and therein  contemplated  and compliance  with the
terms and provisions hereof and thereof will conflict with or result in a breach
of, or require any consent  under,  the charter or by-laws of the Company or any
applicable law or regulation,  or any order,  writ,  injunction or decree of any
court or  Governmental  Authority,  or any  agreement or instrument to which the
Company or any of its  Subsidiaries  is a party or by which any of them is bound
or to which any of them is  subject,  or  constitute  a  default  under any such
agreement or instrument,  which conflict,  breach,  failure to obtain consent or
default would have a material  adverse effect on the financial  condition of the
Company and its Subsidiaries, taken as a whole, or on the ability of the Company
to perform its obligations hereunder.

            3.03 CORPORATE ACTION. The Company has all necessary corporate power
and  authority  to  execute,  deliver and  perform  its  obligations  under this
Agreement and the  Warrants;  the  execution,  delivery and  performance  by the
Company of this  Agreement  and the Warrants  have been duly  authorized  by all
necessary  corporate action (including all required  shareholder  action) on the
part of the Company;  this Agreement has been duly executed and delivered by the
Company and  constitutes,  and the Warrants when executed,  issued and delivered
pursuant  to  this  Agreement  will   constitute,   valid  and  legally  binding
obligations of the Company entitled to the benefits  provided  therein,  and the
Warrant Stock initially covered by the Warrants shall, when issued and delivered
against payment  therefor in accordance  with the Warrants,  be duly and validly
issued,  fully  paid and  nonassessable;  and the  Warrants  when  executed  and
delivered  by  the  Company  will  constitute,  its  legal,  valid  and  binding
obligations,  enforceable  against it in accordance with their terms,  except as
enforcement  may be limited by  bankruptcy,  insolvency  or other  similar  laws
affecting  creditors'  rights  generally,  and by general  principles  of equity
(regardless of whether enforcement is sought at equity or in law).

            3.04 APPROVALS. No authorizations,  approvals or consents of, and no
filings or registrations with, any Governmental  Authority are necessary for the
execution,  delivery or  performance  by the Company of this Agreement or of the
Warrants or for the  validity  or  enforceability  hereof or  thereof.  Any such
action required to be taken as a condition to the execution and delivery of this
Agreement and the Warrants, or the issuance of the Warrants, has been duly taken
by all such Governmental Authorities or other Persons, as the case may be.

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


                                      -11-

            3.05  INVESTMENT  COMPANY  ACT.  Neither  the Company nor any of its
Subsidiaries  is an  "investment  company",  or a  company  "controlled  by"  an
"investment company",  within the meaning of the Investment Company Act of 1940,
as amended.

            3.06 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company nor any
of its  Subsidiaries  is a "holding  company",  or an  "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

            3.07 CAPITALIZATION.

                 (a) Upon the issuance of the Warrants under this Agreement, the
total number of shares of capital stock which the Company has authority to issue
and the  outstanding  shares of the  Company  will be as set forth in Schedule 2
hereto.  Upon the issuance of the  Warrants  under this  Agreement,  the Company
shall  not  have  outstanding  any  stock  or  securities  convertible  into  or
exchangeable  for any shares of capital stock nor shall it have  outstanding any
rights to subscribe  for or to purchase,  or any Options for the purchase of, or
any agreements  providing for the issuance  (contingent or otherwise) of, or any
calls,  commitments or claims of any character relating to, any capital stock or
stock or securities convertible into or exchangeable for any capital stock other
than (i) the  Warrants  to be issued  pursuant to this  Agreement,  and (ii) the
Option Stock, Options and Warrants listed on Schedule 1.

                 (b) There is not in effect on the date hereof any  agreement by
the Company  pursuant to which any holders of  securities  of the Company have a
right to cause the Company to register such securities  under the Securities Act
other than (i) this Agreement and (ii) the agreements and instruments  listed on
Schedule 3.

            3.08  PRIVATE  OFFERING.  The  purchases  to be made by the  Initial
Holders pursuant to this Agreement are to be separate and several purchases. The
Company  agrees that  neither it nor anyone  acting on its behalf has offered or
will offer the  Warrants  or the  Warrant  Stock,  or any part  thereof,  or any
similar  securities  for issue or sale to, or has  solicited or will solicit any
offer to acquire any of the same from,  anyone so as to bring the  issuance  and
sale of the Warrants within the provisions of Section 5 of the Securities Act.

            3.09 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed in a
timely  manner all  documents  that the  Company  was  required to file with the
Commission  under  Sections 13, 14(a) and 15(d) of the Exchange  Act,  since its
initial public  offering.  As of their  respective  filing dates,  all documents
filed by the  Company  with the  Commission  ("SEC  Documents")  complied in all
material  respects with the  requirements  of the Exchange Act or the Securities
Act, as  applicable.  None of the SEC  Documents  as of their  respective  dates
contained any untrue statement of a material fact or omitted to state a material
fact  required to be stated  therein or  necessary to make the  statements  made
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  The  financial  statements  of the  Company  included  in  the  SEC
Documents  (the  "Financial  Statements")  comply  as to  form  in all  material
respects with applicable  accounting  requirements  and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance  with GAAP and fairly present the  consolidated

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


                                      -12-

financial  position of the Company and any Subsidiaries at the dates thereof and
the consolidated results of their operations and consolidated cash flows for the
periods then ended  (subject,  in the case of unaudited  statements,  to normal,
recurring adjustments).

            Section 4. TRANSFERS GENERALLY; SECURITIES ACT COMPLIANCE.

            4.01 TRANSFERS GENERALLY. Except as otherwise permitted by Section 5
hereof, the Restricted Securities shall only be transferable upon the conditions
specified in this Section 4, which conditions are intended,  among other things,
to insure  compliance with the provisions of Regulation Y and the Securities Act
in respect of the transfer of any Restricted  Securities.  Any Holder shall,  by
its  acceptance  of  any  Warrant   hereunder,   be  deemed  to  have  made  the
representations,  warranties  and agreements set forth in Section 2.03 hereof on
the date of such acceptance.

            4.02  TRANSFERS OF RESTRICTED  SECURITIES  PURSUANT TO  REGISTRATION
STATEMENTS AND RULE 144, ETC. The  Restricted  Securities may be offered or sold
by the Holder thereof pursuant to (a) an effective  registration statement under
the  Securities  Act, (b) to the extent  applicable,  Rule 144 or (c) subject to
Section 4.03 hereof, any other applicable exemption from the Securities Act.

            4.03 NOTICE OF CERTAIN  TRANSFERS.  If any Holder of any  Restricted
Security desires to transfer such Restricted  Security other than pursuant to an
effective  registration  statement,   Rule  144  under  the  Securities  Act  an
applicable  exemption  from the  Securities  Act or in  accordance  with Section
5.01(a)  hereof,  such Holder  shall  deliver to the Company at least 7 Business
Days' prior written notice with respect to the proposed transfer,  together with
an opinion (at such Holder's expense) of Milbank, Tweed, Hadley & McCloy LLP, or
such other counsel reasonably satisfactory to the Company, to the effect that an
exemption from registration under the Securities Act is available and specifying
the applicable exemption.

            4.04  RESTRICTIVE  LEGEND.  Unless and until otherwise  permitted by
this Section 4, each certificate for Warrants issued under this Agreement,  each
certificate  for any Warrants  issued to any  subsequent  transferee of any such
certificate,  each certificate for any Warrant Stock issued upon exercise of any
Warrant,  each  certificate  for any  Warrant  Stock  issued  to any  subsequent
transferee of any such  certificate,  each  certificate for any Other Securities
issued in connection  with the exercise of any Warrant and each  certificate for
any Other Securities issued to any subsequent transferee of any such certificate
in respect  thereof,  shall be stamped or otherwise  imprinted  with a legend in
substantially the following form:

            "THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT
            BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS
            AMENDED,   OR  APPLICABLE   STATE   SECURITIES  LAWS,  AND
            ACCORDINGLY,  SUCH SECURITIES MAY NOT BE TRANSFERRED, SOLD
            OR  OTHERWISE  DISPOSED OF EXCEPT IN  COMPLIANCE  WITH THE
            REGISTRATION  OR  QUALIFICATION  PROVISIONS  OF APPLICABLE
            FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
            THEREFROM."

                               Warrant Agreement
                               -----------------


                                 -13-

            "THE  TRANSFER  OF  THE  SECURITIES  REPRESENTED  BY  THIS
            CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THAT
            CERTAIN SPECIAL  WARRANT  AGREEMENT DATED AS OF AUGUST 25,
            2003,  BETWEEN  NUCO2  INC.,  A FLORIDA  CORPORATION,  AND
            CERTAIN INITIAL HOLDERS, AS SUCH SPECIAL WARRANT AGREEMENT
            MAY BE MODIFIED AND  SUPPLEMENTED  AND IN EFFECT FROM TIME
            TO TIME, AND NO TRANSFER OF THE SECURITIES  REPRESENTED BY
            THIS  CERTIFICATE  SHALL BE VALID OR EFFECTIVE  UNTIL SUCH
            CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE FORM OF SUCH
            SPECIAL WARRANT  AGREEMENT IS ON FILE AND MAY BE INSPECTED
            AT  THE  PRINCIPAL   EXECUTIVE  OFFICE  OF  THE  AFORESAID
            CORPORATION. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
            OF THIS CERTIFICATE,  AGREES TO BE BOUND BY THE PROVISIONS
            OF SUCH SPECIAL WARRANT AGREEMENT."

            4.05 TERMINATION OF RESTRICTIONS.  The restrictions  imposed by this
Section 4 upon the transferability of the Restricted  Securities shall cease and
terminate as to any particular Restricted Security when such Restricted Security
shall have been effectively  registered under the Securities Act and sold by the
Holder thereof in accordance  with such  registration or sold under and pursuant
to Rule 144 or are eligible to be sold  pursuant to  paragraph  (k) of Rule 144.
Whenever the  restrictions  imposed by this Section 4 shall  terminate as to any
Restricted  Security as hereinabove  provided,  the Holder  thereof shall,  upon
written request, be entitled to receive from the Company, without expense, a new
certificate  evidencing  such  Restricted  Security not bearing the  restrictive
legend  otherwise  required  to  be  borne  by  a  certificate  evidencing  such
Restricted Security.

            Section 5. ADDITIONAL PROVISIONS RELATING TO TRANSFERS.

            5.01  DISPOSITION OF SECURITIES.  Subject to compliance  with all of
the provisions of Section 4 hereof,  any Holder shall have the right to transfer
any Restricted Securities to any Person.

                 (a)  Subject to  compliance  with the  provisions  of Section 4
hereof,  except with respect to the requirement for an opinion of counsel to the
Holder, which shall not be required under this Section 5.01(a), any Holder shall
have the right to transfer any Restricted Securities:

                                   (i)  to any  Person  who  at  the  time  owns
                        (directly  or  indirectly)  at least a  majority  of the
                        voting  capital stock or other equity  interests of such
                        Holder;

                                   (ii) to any  Person  at least a  majority  of
                        whose  voting  capital  stock shall at the time be owned
                        (directly or indirectly) by such Holder or by any Person

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


                                      -14-

                        who owns (directly or indirectly) at least a majority of
                        the voting  capital  stock or other equity  interests of
                        such Holder; or

                                   (iii) to another Initial Holder.

                 (b) If, in the reasonable  judgment of a Holder,  a transfer is
required  to be effected by such Holder  because of a  Regulatory  Problem,  the
Company shall use  reasonable  efforts to assist such Holder in disposing of its
Warrants and Warrant Stock,  subject to and in accordance with the terms of this
Agreement and applicable law, to any prospective  purchaser which is a financial
institution  or other  institutional  investor  approved by the  Company  (which
approval  shall not be  unreasonably  withheld or  delayed)  of the  Warrants or
Warrant  Stock owned by such Holder as such  purchaser  may  reasonably  request
(provided  that,  the Company  shall not be required to make  available  to such
purchaser  any documents or  information  if doing so would,  in the  reasonable
judgment of counsel to the Company,  compromise  any  attorney-client  privilege
existing  with  respect  thereto) or to a direct or indirect  competitor  of the
Company.

                 (c) In  the  event  of  any  underwritten  public  offering  of
Restricted  Securities  in which a Holder which is subject to the  provisions of
Regulation Y is participating,  the Company shall use its reasonable  efforts to
assist the  underwriter in ensuring that any Warrants or Warrant Stock issued by
the Company and sold by such Holder are widely disseminated.

            5.02  TRANSFER   RESTRICTION.   Notwithstanding   anything  in  this
Agreement or the Warrants to the contrary,  no Holder  subject to the provisions
of Regulation Y shall transfer any Warrants or shares of Warrant Stock issued by
the  Company  and held by it, if, as a result of such  transfer  or the right to
effect such transfer, such Holder would be deemed under Regulation Y to have the
power to exercise,  directly or  indirectly,  a controlling  influence  over the
management or policies of, or otherwise control,  the Company (and, for purposes
of this  restriction,  a reasoned opinion of counsel to such Holder delivered to
such Holder (which is based on facts and  circumstances  deemed  appropriate  by
such counsel) to the effect that such Holder does not have the power to exercise
such  a  controlling  influence  or  otherwise  control  the  Company  shall  be
conclusive).

            5.03  REPURCHASE  OF COMMON  STOCK.  The Company  shall give 30 days
prior written notice to each Holder before  purchasing,  redeeming,  retiring or
otherwise acquiring any shares of Common Stock of the Company.

            5.04 TRANSFER, DIVISION AND COMBINATION. Subject to Sections 4 and 5
hereof,  transfer  of a Warrant and all rights  thereunder,  in whole or in part
(the "TRANSFERRED WARRANT"),  shall be registered on the books of the Company to
be maintained for such purpose,  upon surrender of such  Transferred  Warrant at
the office of the Company  maintained for such purpose pursuant to Section 13.03
hereof, together with a written assignment  substantially in the form set out at
the end of such  Transferred  Warrant,  duly executed by the relevant Holder and
payment of funds sufficient to pay any transfer taxes payable upon the making of
such transfer.  Upon such surrender and, if required,  such payment, the Company
shall,  subject  to  Sections  4 and 5  hereof  and  the  immediately  following
sentence,  (a)  execute and deliver a new Warrant or Warrants in the name of the

                               Warrant Agreement
                               -----------------


                                      -15-

assignee or assignees and in the  denominations  specified in such instrument of
assignment,  (b) issue to the assignor a new Warrant  evidencing  the portion of
such Transferred  Warrant not so assigned or transferred and (c) promptly cancel
such Transferred  Warrant.  A Warrant,  if properly  assigned in compliance with
Sections 4 and 5 hereof,  may be  exercised  by an assignee  for the purchase of
shares  of  Common  Stock  without  having a new  Warrant  or  Warrants  issued.
Notwithstanding  any provision herein to the contrary,  the Company shall not be
required to register  the  transfer of Warrants or Warrant  Stock in the name of
any Person who  acquired  such  Warrant (or part  thereof) or any Warrant  Stock
otherwise than in accordance with this Agreement.

            The  Company  shall  maintain  with  its  transfer  agent  or at its
aforesaid office, books for the registration and transfer of the Warrants.

            Section 6.  ADJUSTMENT OF STOCK UNIT. The number of shares of Common
Stock  comprising a Stock Unit shall be subject to adjustment  from time to time
as set  forth in this  Section  6. All of the  adjustments  referred  to in this
Section 6 shall only apply to Warrants  which have not yet been  exercised.  The
Company  shall not create any class of Common Stock which  carries any rights to
dividends or assets differing in any respect from the rights of the Common Stock
on the date hereof.

            6.01 STOCK DIVIDENDS,  SUBDIVISIONS AND COMBINATIONS. If at any time
the Company shall:

                 (a) declare or pay a dividend  payable in Additional  Shares of
            Common Stock, or

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

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

then the number of shares of Common Stock  comprising  a Stock Unit  immediately
after the  occurrence of any such event shall be adjusted to equal the number of
shares of Common  Stock which a record  holder of the number of shares of Common
Stock comprising a Stock Unit  immediately  prior to the happening of such event
would own or be entitled to receive after the happening of such event.

            6.02 ISSUANCE OF ADDITIONAL  SHARES OF COMMON STOCK.  If at any time
the Company shall (except as hereinafter  provided) issue or sell any Additional
Shares of Common Stock in exchange for consideration in an amount per Additional
Share of  Common  Stock  less  than  the  Current  Market  Price at the time the
Additional  Shares of  Common  Stock are  issued,  then the  number of shares of
Common Stock thereafter comprising a Stock Unit shall be adjusted to that number
determined  by  multiplying  the number of shares of Common  Stock  comprising a
Stock Unit immediately  prior to such adjustment by a fraction (a) the numerator
of which shall be the number of shares of Common Stock  outstanding  immediately
prior to the issuance of such Additional  Shares of Common Stock plus the number

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



                                      -16-

of such Additional Shares of Common Stock so issued,  and (b) the denominator of
which  shall be the  number of shares of Common  Stock  outstanding  immediately
prior to the issuance of such Additional  Shares of Common Stock plus the number
of shares of Common Stock which the aggregate consideration for the total number
of such  Additional  Shares of  Common  Stock so issued  would  purchase  at the
Current  Market Price.  For purposes of this Section 6.02,  for all issuances of
shares of Common  Stock  except for those shares  issued in  connection  with an
acquisition  of assets or stock,  a tender or exchange  offer, a merger or other
business  combination,  the date as of which the Current  Market  Price shall be
computed  shall be the earlier of (i) the date on which the Company  shall enter
into a firm contract for the issuance of such Additional  Shares of Common Stock
and (ii) the date of actual issuance of such Additional  Shares of Common Stock.
Subject to Section 6.05 hereof, no further adjustment of the number of shares of
Common Stock  comprising a Stock Unit shall be made under this Section 6.02 upon
the issuance of any Additional Shares of Common Stock:

                             (a) for  which  an  adjustment  is  provided  under
               Section 6.01 hereof;

                             (b) which are issued  pursuant  to the  exercise of
               any  Options  or the  conversion,  exchange  or  exercise  of any
               Convertible  Securities,  if any such adjustment shall previously
               have been made upon the issuance of such  Options or  Convertible
               Securities (or upon the issuance of any Option therefor) pursuant
               to Section 6.03 or 6.04 hereof; or

                             (c)  as a  distribution  or  a  dividend  which  is
               distributed or declared and paid in accordance  with Section 7.02
               hereof.

            6.03 ISSUANCE OF OPTIONS.  If at any time the Company shall issue or
sell, or shall fix a record date for the  determination  of holders of any class
of  securities  entitled to receive,  any Options,  whether or not the rights to
purchase thereunder are immediately exercisable,  and the consideration received
by the  Company in payment  for such  Options  (determined  in  accordance  with
Section 6.06(a) hereof) shall be less than the Current Market Price in effect on
the date of and immediately  prior to such issuance,  sale or fixing of a record
date,  then the number of shares of Common Stock  thereafter  comprising a Stock
Unit shall be adjusted as provided in Section  6.02 hereof on the basis that (a)
the maximum number of Additional Shares of Common Stock issuable pursuant to all
such Options  shall be deemed to have been issued as of (and,  accordingly,  the
date as of which  the  Current  Market  Price  shall be  computed  shall be) the
computation date specified in the next succeeding sentence of this Section 6.03,
and (b) the aggregate consideration for such maximum number of Additional Shares
of Common  Stock  shall be (subject to Section  6.05  hereof) the  consideration
received by the Company for the  issuance or sale of such  Additional  Shares of
Common  Stock  pursuant to the terms of such Options or pursuant to the terms of
such Convertible Securities.  For purposes of this Section 6.03, the computation
date for  clause  (a) above  shall be the  earlier  of (i) the date on which the
Company  shall take a record of the holders of its Common  Stock for the purpose
of  entitling  them to  receive  any such  Options,  (ii) the date on which  the
Company  shall  enter  into a firm  contract  for the  issuance  or sale of such
Options  and  (iii)  the date on which  the  Company  shall  issue or sell  such
Options.  No  further  adjustment  of the  number  of  shares  of  Common  Stock

                               Warrant Agreement
                               -----------------


                                      -17-

comprising  a Stock Unit shall be made under this Section 6.03 upon the issuance
or sale of any Options to  subscribe  for or purchase any  Additional  Shares of
Common Stock or any Convertible  Securities or upon the subsequent issue or sale
of Additional  Shares of Common Stock upon the exercise of such Options,  if any
such  adjustment  shall  previously  have been made upon the issuance or sale of
such Option or upon the setting of a record  date  therefor,  or upon any deemed
issuance or sale of such Additional Shares of Common Stock, as a distribution or
a dividend which is distributed or declared and paid in accordance  with Section
7.02 hereof.  Notwithstanding the foregoing,  any issuance of an Option which is
issued together with a debt security of the Company, as a unit, shall be treated
for the purpose of this Section 6 as the issuance of a Convertible Security.

            6.04 ISSUANCE OF CONVERTIBLE SECURITIES.  If at any time the Company
shall  issue or sell any  Convertible  Securities,  whether or not the rights to
exchange  or  convert   thereunder   are   immediately   exercisable,   and  the
consideration received by the Company in payment for such Convertible Securities
shall be less than the  Convertible  Security Value thereof,  then the number of
shares of Common Stock thereafter  comprising a Stock Unit shall be increased to
a number of shares of Common  Stock  having a value  immediately  following  the
computation  date (as  established  below)  equal to the value of the  number of
shares  comprising such Stock Unit  immediately  before such increase.  For this
purpose,  the value before the increase will be the Current  Market Price of the
Common Stock  (determined  as at the date  immediately  preceding such increase)
divided by the number of shares of Common Stock  outstanding  on a fully diluted
basis,  and the value  immediately  following the computation  date shall be the
foregoing  value,  except that the numerator  shall be the Current  Market Price
plus the cash amount paid to the Company for such  Convertible  Securities  less
the Convertible  Security Value of such  Convertible  Securities on issuance and
the denominator  shall be increased by the number of Additional Shares of Common
Stock issuable on exercise of such Convertible Securities.  For purposes of this
Section  6.04,  the  computation  date shall be the  earliest of (i) the date on
which the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive any such Convertible  Securities,  (ii) the
date on which the Company  shall enter into a firm  contract for the issuance or
sale of such  Convertible  Securities  and (iii) the date of actual  issuance or
sale of such  Convertible  Securities.  No further  adjustment  of the number of
shares of Common Stock  comprising a Stock Unit shall be made under this Section
6.04 upon the issuance or sale of any  Convertible  Securities or the conversion
or exchange of such  Convertible  Securities  into  Additional  Shares of Common
Stock:

                             (A)  which  are  issued  or  sold  pursuant  to the
               exercise of any Option  therefor,  if any such  adjustment  shall
               previously  have been made upon the issuance or sale of an Option
               relating to such Convertible  Securities pursuant to Section 6.03
               hereof; or

                             (B) if any such adjustment in respect thereof shall
               previously  have  been  made upon the  setting  of a record  date
               therefor, or upon any deemed issuance or sale of such Convertible
               Securities; or

                             (C)  as a  distribution  or  a  dividend  which  is
               distributed or declared and paid in accordance  with Section 7.02
               hereof.

            6.05 SUPERSEDING ADJUSTMENT OF STOCK UNIT. If, at any time after any
adjustment of the number of shares of Common Stock comprising a Stock Unit shall
have  been  made  pursuant  to  Section  6.03 or 6.04  hereof as a result of the
issuance of Options or  Convertible  Securities,  or after any new adjustment of

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



                                      -18-

the  number of shares of Common  Stock  comprising  a Stock Unit shall have been
made pursuant to this Section 6.05, (a) such Options or the right of conversion,
exchange or exercise of such Convertible  Securities shall expire,  and all or a
portion of such Options or the right of  conversion,  exchange or exercise  with
respect to all or a portion of such Convertible Securities,  as the case may be,
shall not have been  exercised or treated as having been  exercised or otherwise
canceled  or  acquired  by  the  Company  in  connection   with  any  settlement
(including,  without  limitation,  any cash  settlement)  of such Options or the
rights of conversion, or exchange or exercise of such convertible Securities, or
(b) there has been any change  (whether by the passage of time or  otherwise) in
the number of shares  issuable  upon  exercise,  conversion  or exchange of such
Options or  Convertible  Securities  (including  as a result of the operation of
antidilution provisions applicable thereto), or (c) the consideration per share,
for which  Additional  Shares of Common  Stock  are  issuable  pursuant  to such
Options or the terms of any Convertible Securities,  or the maturity of any such
Convertible  Security,  shall be  changed  (whether  by the  passage  of time or
otherwise) then such previous adjustment shall be rescinded and annulled and the
Additional  Shares of Common  Stock  which  were  deemed to have been  issued by
virtue of the  computation  made in connection  with the adjustment so rescinded
and  annulled  shall no longer  be deemed to have been  issued by virtue of such
computation.  Thereupon,  a  recomputation  shall be made of the  effect of such
Options or Convertible Securities on the basis of:

                        (i) treating the number of  Additional  Shares of Common
            Stock, if any,  theretofore  actually issued or sold pursuant to the
            previous  exercise of such  Options or such right of  conversion  or
            exchange, as having been issued or sold on the date or dates of such
            issuance as determined for purposes of such previous  adjustment and
            for the consideration actually received therefor;

                        (ii) treating the maximum number of Additional Shares of
            Common Stock (A) issuable  pursuant to all Options which then remain
            outstanding  and (B) necessary to effect the  conversion or exchange
            of all  Convertible  Securities  which then remain  outstanding,  as
            having been issued (subject,  however,  to further  adjustment under
            this Section 6.05); and

                        (iii) making the computations called for in Section 6.04
            hereof  on the  basis  of the  revised  terms  of  such  Convertible
            Securities as if the securities being subject to recomputation  were
            newly  issued as of the relevant  recomputation  date and, if and to
            the extent called for by the foregoing  provisions of this Section 6
            on the basis aforesaid,  a new adjustment of the number of shares of
            Common  Stock  comprising  a Stock Unit shall be made,  and such new
            adjustment shall supersede the previous  adjustment so rescinded and
            annulled.

            6.06 OTHER PROVISIONS  APPLICABLE TO ADJUSTMENTS  UNDER THIS SECTION
6. The following  provisions shall be applicable to the making of adjustments of
the  number of  shares of Common  Stock  comprising  a Stock  Unit  hereinbefore
provided for in this Section 6, irrespective of the accounting  treatment of any
consideration described below:

                             (a)  COMPUTATION  OF  CONSIDERATION.  To the extent
               that any  Additional  Shares of Common Stock,  any Options or any

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


                                      -19-

               Convertible  Securities  shall be issued for cash  consideration,
               the  consideration  received  by the  Company  therefor  shall be
               deemed to be the amount of cash received by the Company therefor,
               or,  if such  Additional  Shares  of  Common  Stock,  Options  or
               Convertible   Securities   are   offered  by  the   Company   for
               subscription,  the  subscription  price,  or, if such  Additional
               Shares of Common Stock,  Options or  Convertible  Securities  are
               sold to  underwriters  or dealers for public  offering  without a
               subscription  offering, the initial public offering price. To the
               extent  that such  issuance  or sale  shall be for  consideration
               other than cash, then the amount of such  consideration  shall be
               deemed to be the fair market value of such  consideration  at the
               time of such issuance, as reasonably determined by the Board. The
               consideration  for any Additional Shares of Common Stock issuable
               pursuant  to any Option to  subscribe  for or  purchase  the same
               shall be the consideration  received or receivable by the Company
               for the sale or  issuance  of such  Option  plus  the  additional
               consideration payable to the Company upon the exercise thereof in
               full. The consideration for any Additional Shares of Common Stock
               issuable  pursuant  to the  terms of any  Convertible  Securities
               shall be the  consideration  paid or  payable  to the  Company in
               respect  of the  subscription  for,  sale  or  issuance  of  such
               Convertible Securities plus the additional  consideration payable
               to the Company upon the  conversion or exchange  thereof in full.
               In case of the issuance at any time of any  Additional  Shares of
               Common Stock in payment or  satisfaction of any dividend upon any
               class of stock other than  Common  Stock,  the  Company  shall be
               deemed  to have  received  for such  Additional  Shares of Common
               Stock  consideration equal to the amount of such dividend so paid
               or satisfied.

                             (b) WHEN  ADJUSTMENTS TO BE MADE.  The  adjustments
               required by this Section 6 shall be made whenever and as often as
               any specified  event  requiring an adjustment  shall occur except
               that any  adjustment  of the  number of  shares  of Common  Stock
               comprising  a Stock Unit that would  otherwise be required may be
               postponed  (except in the case of a subdivision or combination of
               shares of the Common  Stock,  as  provided  for in  Section  6.01
               hereof)  up to but  not  beyond  the  date  of  exercise  if such
               adjustment  either  by  itself  or  with  other  adjustments  not
               previously  made adds or subtracts  less than 1% of the aggregate
               Exercise Price for all Warrants then outstanding.  Any adjustment
               representing a change of less than such minimum  percent  (except
               as aforesaid)  shall be carried  forward and made as soon as such
               adjustment,  together  with other  adjustments  required  by this
               Section  6 and not  previously  made,  would  result in a minimum
               adjustment  on the  date  of  exercise.  For the  purpose  of any
               adjustment,  any specified event shall be deemed to have occurred
               at the close of business on the date of its occurrence.

                             (c) FRACTIONAL INTERESTS.  In computing adjustments
               under this Section 6, fractional  interests in Common Stock shall
               be taken into account to the nearest one-hundredth of a share.

                             (d)  WHEN  ADJUSTMENT  NOT  REQUIRED.  (i)  If  the
               Company  shall take a record of the  holders of its Common  Stock
               for the  purpose  of  entitling  them to  receive a  dividend  or
               distribution  or  subscription  or  purchase  rights  and  shall,
               thereafter and before the  distribution  thereof to Shareholders,
               legally  abandon  its  plan  to pay  or  deliver  such  dividend,
               distribution, subscription or purchase rights, then no adjustment

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


                                      -20-

               shall be  required by reason of the taking of such record and any
               such  adjustment  previously  made in  respect  thereof  shall be
               rescinded and annulled, and no adjustment in the number of shares
               of Common Stock thereafter  comprising a Stock Unit under Section
               6.02,  6.03 or 6.04  hereof  shall  be  made  in  respect  of the
               Warrants held by such Holder.  (ii) No  adjustment  shall be made
               hereunder  in respect of the  issuance of Option Stock or options
               representing the right to acquire Option Stock.

            Section   7.   CONSOLIDATION,    MERGER,   SHARE   EXCHANGE,   ETC.;
DISTRIBUTIONS.  The  provisions  set forth in this Section 7 shall only apply to
Warrants which have not yet been exercised.

            7.01  CONSOLIDATION,   MERGER,  SHARE  EXCHANGE,   ETC.  In  case  a
consolidation,  merger or share  exchange of the Company  shall be effected with
another  Person after the date hereof and the Company shall not be the surviving
entity,  or the Company shall be the surviving entity but its Common Stock shall
be changed into  securities or other  property of another  Person,  or the sale,
lease or transfer of all or a substantial  part of its assets to another  Person
shall  be  effected  after  the  date  hereof,  then,  as a  condition  of  such
consolidation,  merger,  share  exchange,  sale,  lease or transfer,  lawful and
adequate  provision shall be made whereby each Holder shall  thereafter have the
right to purchase and receive,  upon the exercise of its Warrants,  on the basis
and the terms and  conditions  specified  herein (and in lieu of each Stock Unit
immediately  theretofore  purchasable  and  receivable  upon the exercise of the
Warrants),  such shares of stock, securities,  cash or other property receivable
upon such consolidation, merger, share exchange, sale, lease or transfer as such
Holder would have been  entitled to receive if its  Warrants had been  exercised
immediately  prior to such event.  In any such case,  appropriate  and equitable
provision  also shall be made with  respect to the rights and  interests of each
Holder to the end that the provisions hereof (including  Section 6 hereof) shall
thereafter  be  applicable,  as nearly as may be, in  relation  to any shares of
stock,  securities,  cash or  other  property  thereafter  deliverable  upon the
exercise of any Warrants.  The Company shall not effect any such  consolidation,
merger,   share   exchange,   sale,   lease  or  transfer  unless  prior  to  or
simultaneously with the consummation thereof the successor Person (if other than
the Company) resulting from such consolidation,  merger or share exchange or the
Person purchasing,  leasing or otherwise  acquiring such assets shall assume, by
written  instrument,  the  obligation  to deliver to such  Holder such shares of
stock,  securities,  cash or other property as, in accordance with the foregoing
provisions,  such Holder may be entitled to upon the  exercise of its  Warrants.
The above  provisions of this Section 7.01 shall  similarly  apply to successive
consolidations, mergers, share exchanges, sales, leases or transfers.

            7.02   DISTRIBUTIONS   UPON   DECLARATION   OF   DIVIDEND  OR  OTHER
DISTRIBUTION. So long as any Warrants remain outstanding, the Company shall pay,
upon the declaration  and payment of any dividend or distribution  (whether such
dividend  or  distribution  is in the  form of  cash,  debt  securities,  equity
securities or other  property) on any class of Common Stock,  to each Holder the
dividend or distribution that such Holder would be otherwise entitled to receive
had such Holder exercised the Warrants held by it in full  immediately  prior to
the  taking of record of those  holders  of Common  Stock  entitled  to any such
dividend or  distribution,  provided that,  this  provision  shall apply only to
dividends or  distributions  in respect of the Common Stock other than ordinary,
periodic  cash  dividends  paid out of earned  surplus of the  Company.  If such

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


                                      -21-

dividend or distribution is in the form of a voting equity security, such Holder
will be entitled  to receive,  at its  option,  in its stead  non-voting  equity
securities  otherwise  identical to and convertible at such Holder's option into
the equity securities to which such Holder is otherwise entitled  thereunder and
continuing benefiting from antidilution provisions similar to those herein. This
provision  shall not apply to stock  dividends  of  Additional  Shares of Common
Stock, or to a reclassification or  recapitalization,  provided that the Company
adjusts the number of shares of Common Stock comprising a Stock Unit pursuant to
Section 6.01 hereof.

            7.03  DILUTION  IN CASE OF  OTHER  SECURITIES.  In  case  any  Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other  Securities or any other Person  referred to in Section 7.01
hereof)  or to  subscription,  purchase  or other  acquisition  pursuant  to any
rights, options, warrants to subscribe for, purchase or otherwise acquire either
Additional  Shares  of  Common  Stock  or  securities   directly  or  indirectly
convertible into or exchangeable for Additional  Shares of Common Stock,  issued
or  granted  by  the  Company  (or  any  such  other  issuer  or  Person)  for a
consideration  such as to  dilute,  on a basis  consistent  with  the  standards
established  in the other  provisions of Section 6 hereof,  the purchase  rights
granted  by the  Warrants,  then,  and in  each  such  case,  the  computations,
adjustments and readjustments provided for in said Section 6 with respect to the
Stock Units  shall be made as nearly as  possible in the manner so provided  and
applied to determine the amount of Other Securities from time to time receivable
upon the  exercise of the  Warrants,  so as to protect  the Holders  against the
effect of such dilution.

            Section 8. NOTICE TO WARRANT HOLDERS.

            8.01 NOTICE OF ADJUSTMENT OF STOCK UNIT OR EXERCISE PRICE.  Whenever
the number of shares of Common  Stock  comprising a Stock Unit shall be adjusted
pursuant  to  Section  6 or 7  hereof,  the  Company  shall  forthwith  obtain a
certificate signed by the chief financial officer of the Company, setting forth,
in reasonable detail, the event requiring the adjustment and the method by which
such  adjustment was  calculated  (including a description of the basis on which
the Board determined the fair market value of Additional  Shares of Common Stock
issued  or sold and,  if the  consideration  therefor  was other  than  cash,  a
description  of how such  consideration  was valued),  specifying  the number of
shares of Common Stock  comprising a Stock Unit and (if such adjustment was made
pursuant  to  Section  7 hereof)  describing  the  number  and kind of any other
securities  comprising a Stock Unit, and any change in the Exercise Price, after
giving effect to such  adjustment or change.  The Company shall  promptly and in
any case within 10 days after the making of such adjustments cause a signed copy
of such  certificate  to be delivered to each Holder in accordance  with Section
13.02 hereof. The Company shall keep at its office or agency, maintained for the
purpose  pursuant to Section 13.03 hereof,  copies of all such  certificates and
cause the same to be  available  for  inspection  at said office  during  normal
business hours by any Holder or any prospective permitted purchaser of a Warrant
designated by a holder thereof.

            8.02 NOTICE OF CERTAIN CORPORATE ACTIONS.  In case the Company shall
propose (a) to pay any dividend (other than a regular periodic  dividend payable
in cash out of earned surplus) to the holders of its Common Stock or to make any

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


                                      -22-

other  distribution  to the holders of its Common Stock,  or (b) to offer to the
holders  of  its  Common  Stock  rights  to  subscribe  for or to  purchase  any
Additional Shares of Common Stock or Other Securities, rights or options, or (c)
to  effect  any   reclassification   of  its   Common   Stock   (other   than  a
reclassification involving only the subdivision,  or combination, of outstanding
shares of Common Stock), or (d) to effect any capital reorganization,  or (e) to
effect any  consolidation,  merger or share exchange in which the Company is not
the surviving  entity,  or is the surviving entity but its Common Stock shall be
changed into  securities or other property of another  Person,  or sale,  lease,
transfer or other  disposition  of all or a majority of its property,  assets or
business,  or (f) to effect the  liquidation,  dissolution  or winding up of the
Company,  then,  in each such case,  the Company  shall give to each Holder,  in
accordance with Section 13.02 hereof,  a notice of such proposed  action,  which
shall specify the date on which a record is to be taken for the purposes of such
stock dividend,  distribution  or offering of rights,  or the date on which such
reclassification,  reorganization,  consolidation, merger, share exchange, sale,
lease, transfer, disposition,  liquidation, dissolution or winding up is to take
place and the date of  participation  therein by the holders of Common Stock, if
any such date is to be fixed and shall also set forth  such  facts with  respect
thereto as shall be  reasonably  necessary to indicate the effect of such action
on the Common  Stock,  if any,  and the  number and kind of any other  shares of
stock  which  will  comprise  a Stock  Unit,  and the  purchase  price or prices
thereof,  after giving effect to any adjustment,  if any, which will be required
as a result of such  action.  Such  notice  shall be so given in the case of any
action  covered  by clause (a) or (b) above at least 20 days prior to the record
date for  determining  holders of the Common  Stock for purposes of such action,
and in the case of any other such action,  at least 20 days prior to the date of
the taking of such proposed action or the date of  participation  therein by the
holders of Common Stock, whichever shall be the earlier.

            8.03  LIMITATION  ON HOLDERS'  RIGHTS.  Prior to the exercise of any
Warrant, the Holder thereof shall not be entitled to any rights of a Shareholder
(subject to Section 7.02 hereof with respect to  dividends  and  distributions),
including,  without limitation,  the right to vote or receive dividends or other
distributions,  or any  notice  of any  proceedings  of the  Company  except  as
expressly provided in this Agreement.

            Section  9.  RESERVATION  AND  AUTHORIZATION  OF COMMON  STOCK.  The
Company  shall at all  times  reserve  and keep  available  for  issue  upon the
exercise or conversion of Warrants  such number of its  authorized  but unissued
shares of Common Stock as will be  sufficient  to permit the exercise in full of
all  outstanding  Warrants  from time to time.  All shares of Common Stock which
shall be so  issuable,  when issued upon  exercise of any Warrant and payment of
the applicable  Exercise Price therefor in accordance  with the terms hereof and
of the Warrants, shall be duly and validly issued by the Company, fully paid and
nonassessable and free and clear of all Liens.

            Before  taking any action which would result in an adjustment in the
number of shares of Common Stock comprising a Stock Unit or which would cause an
adjustment  reducing the Current  Warrant  Price per share of Common Stock below
the then par value, if any, of the shares of Common Stock issuable upon exercise
of the Warrants,  the Company shall take any corporate action which is necessary
in  order  that the  Company  may  validly  and  legally  issue  fully  paid and
nonassessable  shares of  Common  Stock  free and  clear of all  Liens  upon the
exercise of all the Warrants immediately after the taking of such action.

                               Warrant Agreement
                               -----------------


                                      -23-

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

            The Company will list on each national  securities exchange on which
any  Common  Stock may at any time be  listed,  subject  to  official  notice of
issuance upon  exercise of the Warrants,  and will maintain such listing of, all
shares of Common  Stock  from time to time  issuable  upon the  exercise  of the
Warrants.  The Company will also so list on each national  securities  exchange,
and will  maintain  such  listing  of, any Other  Securities  if at the time any
securities  of the  same  class  shall be  listed  on such  national  securities
exchange by the Company.

            Section 10. TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS.

                 (a) In the case of all dividends or other  distributions by the
Company to the holders of its Common Stock with  respect to which any  provision
of Section 6 and Section  7.02  hereof  refers to the taking of a record of such
holders,  the Company shall in each such case take such a record as of the close
of business on a Business Day.

                 (b) The  Company  shall not close its stock  transfer  books or
Warrant  transfer  books for the purpose of preventing or delaying the exercise,
conversion or transfer of any Warrant.

            Section 11. HOLDERS' SPECIAL RIGHTS.

            11.01  REPLACEMENT  OF  INSTRUMENTS.  Upon receipt by the Company of
evidence reasonably  satisfactory to it of the ownership of and the loss, theft,
destruction  or  mutilation of any  certificate  or  instrument  evidencing  any
Warrants issued by the Company, and

                             (a) in the case of loss,  theft or destruction,  of
               an indemnity reasonably satisfactory to it, provided that, if the
               owner of the same is an  Initial  Holder,  its own  agreement  of
               indemnity shall be deemed to be satisfactory,  or if the owner of
               the same is a Holder the Company may require a bond, or

                             (b) in the case of  mutilation,  upon  surrender or
               cancellation thereof,

the  Company,  at its expense,  shall  execute,  register  and deliver,  in lieu
thereof,  a new  certificate  or instrument for (or covering the purchase of) an
equal number of Warrants or Warrant Stock.

            11.02 RESTRICTIONS ON CERTAIN ACTION.

                 (a) The Company  shall not at any time enter into an  agreement
or other  instrument  limiting in any manner (other than in a de minimis manner)
its  ability to perform  its  obligations  under this  Agreement  or making such

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



                                      -24-

performance  or the  issuance of shares of Common Stock upon the exercise of any
Warrant issued by it a default under any such agreement or instrument.

                 (b) So long as at least  50% of all of the  Warrants  issued to
the Initial Holders hereunder shall remain outstanding,  neither the Company nor
any of its Subsidiaries  shall (i) issue any  Participating  Security or Options
for or Convertible  Securities convertible into a Participating  Security,  (ii)
issue any class of equity other than Common Stock outstanding on the date hereof
and any  Preferred  Stock of the Company or (iii) make or agree to make payments
to any Person, such as any "phantom" stock payments, where the amount thereof is
calculated  with  reference to fair market or equity value of the Company or any
of the Subsidiaries.

            11.03 INSPECTION  RIGHTS.  As and when requested,  the Company shall
provide  to any  Holder  or  Initial  Holder  of  more  than  15%  of the  total
outstanding  Warrants  or the  agents  or  representatives  of such  holder  all
information  and/or access to all  information in respect of the Company and its
Subsidiaries as the Company provides to members of the Board at the same time or
times and/or subject to the same conditions to which such  information or access
thereto is provided to such members of the Board

            11.04 RIGHT TO PURCHASE EQUITY SECURITIES.

            (a) So long as an Initial Holder owns any Warrants or Warrant Stock,
if the Company proposes to and does issue any Equity Securities (other than in a
registered  public  offering or in a transaction in which Equity  Securities are
exchanged  for the assets or  securities  of another  person;  provided that the
Board has determined in good faith that the assets or securities received by the
Company in such  exchange  have a fair value at least  equal to the value of the
Equity  Securities  of the Company  exchanged  therefor) the Company shall offer
each  such  Initial  Holder  the  right  to  participate  proportionately  in  a
percentage  amount equal to the  percentage of the Company's  Common Stock (on a
fully diluted basis)  represented  by the Warrants  and/or Warrant Stock held by
each  such  Initial  Holder  as of the  date  of  issuance  of any  such  Equity
Securities  (the "DATE OF ISSUANCE") and on the same terms and conditions and at
the same per unit price (the  "ISSUE  PRICE").  The Company  shall give  written
notice to each such  Initial  Holders of any such  issuance as far in advance of
the Date of Issuance as  possible,  but in no event less than 10 days in advance
of the Date of Issuance (a "Notice of  Issuance").  The Notice of Issuance  will
describe in reasonable detail the terms and conditions of the proposed issuance,
including the Issue Price,  the maximum  number of Equity  Securities  that each
Initial Holder will be entitled to purchase (assuming for this purpose only that
the  number of  Warrants  and/or  shares of Warrant  Stock held by each  Initial
Holder  does not change  between  the date of the giving of such  notice and the
Date of Issuance) on the Date of Issuance.

            (b) Each  such  Initial  Holder  shall  have the  option to elect to
purchase all or part of such Initial Holder's  portion of the Equity  Securities
described  in a Notice of  Issuance  at the Issue  Price and on the other  terms
contained  in the Notice of  Issuance  by  notifying  the Company in writing (an
"ELECTION NOTICE") at least two business days prior to the Date of Issuance (the
"ELECTION  PERIOD"),  at which time such Initial Holder shall become irrevocably

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


                                      -25-

bound (subject to the  satisfaction of all regulatory  requirements) to purchase
such Equity  Securities.  Each Election Notice will indicate the number of units
that each Initial Holder elects to purchase.

            (c) Any purchase and sale pursuant to the provisions of this Section
11.04  shall  occur on the Date of  Issuance  at the  principal  offices  of the
Company  unless  otherwise  agreed.  At any  closing of a  purchase  and sale in
accordance  with this  Section  11.04,  the Company  will  deliver  certificates
evidencing  the Equity  Securities to be so purchased  against  delivery by each
Initial  Holder of an amount  equal to the  number  of units  that each  Initial
Holder has elected to purchase  multiplied by the Issue Price.  Such amount will
be payable at such  closing.  Each  Initial  Holder  making a purchase of Equity
Securities  pursuant to this Section 11.04 shall be responsible  for the payment
of any  transfer or other taxes due as a result of such  purchase and such taxes
shall be payable at the closing (unless such Initial Holder provides evidence in
form satisfactory to the Company that such taxes have been paid).

            (d) The  failure  of any  Initial  Holder to  exercise  its right to
purchase Equity  Securities  under this Section 11.04 in connection with any one
issuance of Equity  Securities by the Company will not, in any manner,  waive or
otherwise  impair the rights of such  Initial  Holder to purchase  such  Initial
Holder's  share of Equity  Securities  in  connection  with any  other  proposed
issuance of Equity Securities to which this Section 11.04 is applicable.

            (e) Notwithstanding  anything contained in this Section 11.04 to the
contrary,  the Company may at any time, regardless of whether an Election Notice
has been given, prior to the Date of Issuance abandon an offering as to which it
has given a Notice of Issuance,  in which case the Initial Holders shall have no
further  right to purchase  the Equity  Securities  described  in such Notice of
Issuance.

            Section 12. REGISTRATION.

            12.01 NOTICE.  On and after the date of this Agreement  whenever the
Company  proposes  to effect  the  registration  of any Common  Stock  under the
Securities  Act, the Company shall  promptly,  and in any event at least 20 days
prior to the  anticipated  filing date of the proposed  registration  statement,
give written notice of such proposed  registration  to all Holders.  Each Holder
that  wishes to  register  its  Warrants  or shares of Warrant  Stock  (each,  a
"Seller")  shall,  within 15 days after receipt of such notice from the Company,
deliver to the  Company a notice (a "Seller  Notice")  stating  that such Seller
wishes to participate in such offering and setting forth the number of shares of
Warrant  Stock  that such  Seller  desires  to  include  in such  offering.  The
Company's  obligation  to effect  registration  of Warrants or shares of Warrant
Stock under this Section 12.01 shall be unlimited in number.

            12.02  PRORATION.  In the  case  of a  registration  to be  effected
pursuant to Section 12.01 hereof, if the underwriter (or, if the offering is not
underwritten,  an independent  financial advisor to the Company) determines that
marketing factors require a limitation on the number of securities to be offered
and sold in the offering,  including securities requested to be offered and sold
by  Sellers,  there  shall be  included  in the  offering  only  that  number of
securities  that the  underwriter,  or  financial  advisor,  as the case may be,
reasonably  believes  will not  jeopardize  the  success  of the  offering.  Any

                               Warrant Agreement
                               -----------------


                                      -26-

reduction in the number of securities  to be so offered shall be pro-rata  among
the  Shareholders,  the  Sellers  and  all  other  Persons,  proposing  to  sell
securities  pursuant  to  such  offering,  based  on the  number  of  securities
originally  proposed to be sold by each such Person.  Nothing  contained  herein
shall  be  construed  to  limit  in any way the  Company's  right,  in its  sole
discretion,  to withdraw any  registration  statement  before such  registration
statement  becomes  effective,   or  to  postpone  the  offering  of  securities
contemplated by any such registration statement.

            12.03  REGISTRATION  PROCEDURES.  If and  whenever  the  Company  is
required by the  provisions  of Section  12.01 hereof to use its best efforts to
effect the  registration of any of its securities  under the Securities Act, the
Company shall, as expeditiously as possible,

                             (i) furnish to each  Seller such  numbers of copies
               of  a  prospectus,   including  a  preliminary   prospectus,   in
               conformity with the  requirements of the Securities Act, and such
               other documents,  as such Seller may reasonably  request in order
               to  facilitate  the  public  sale  or  other  disposition  of the
               securities owned by such Seller;

                             (ii) notify each Seller of any  securities  covered
               by such  registration  statement,  at any time when a  prospectus
               relating thereto is required to be delivered under the Securities
               Act, of the Company's becoming aware that the prospectus included
               in such registration  statement,  as then in effect,  includes an
               untrue  statement  of a  material  fact or  omits  to  state  any
               material fact required to be stated  therein or necessary to make
               the  statements  therein  not  misleading  in  the  light  of the
               circumstances  then  existing  (upon receipt of which each Seller
               agrees  to  forthwith  cease  making  offers  and  sales  of such
               securities  pursuant  to such  prospectus  and to  deliver to the
               Company any copies of such  prospectus  then in the possession of
               such  Seller),  and at the  request of any such  Seller  promptly
               prepare and furnish to such Seller a reasonable  number of copies
               of a prospectus  supplemented  or amended so that,  as thereafter
               delivered to the purchasers of such  securities,  such prospectus
               shall not include an untrue  statement of a material fact or omit
               to  state a  material  fact  required  to be  stated  therein  or
               necessary to make the  statements  therein not  misleading in the
               light of the circumstances then existing;

                             (iii) make  available to its security  holders,  as
               soon as reasonably  practicable,  an earnings  statement covering
               the period of at least twelve months,  but not more than eighteen
               months,  beginning  with one of the first three  months after the
               effective  date of the  registration  statement,  which  earnings
               statement  shall  satisfy the  provisions of Section 11(a) of the
               Securities Act;

                             (iv)  otherwise use its best efforts to comply with
               all applicable rules and regulations of the Commission;

                             (v) use its best efforts to list such securities on
               any securities  exchange on which the Common Stock of the Company
               is then listed,  or, if not so listed,  on a national  securities
               exchange,  if the listing of such  securities  is then  permitted
               under the rules of such exchange;

                               Warrant Agreement
                               -----------------


                                      -27-

                             (vi) provide a transfer agent and registrar for all
               the securities  covered by such registration  statement not later
               than the effective date of such registration statement; and

                             (vii) make  available for  inspection by any Seller
               of  securities  covered by such  registration  statement,  by any
               underwriter  participating  in  any  disposition  to be  effected
               pursuant  to such  registration  statement  and by any  attorney,
               accountant or other agent retained by any such Seller or any such
               underwriter, all pertinent financial and other records, pertinent
               corporate documents and properties of the Company,  and cause all
               of the Company's officers,  directors and employees to supply all
               information reasonably requested by any such Seller, underwriter,
               attorney,   accountant   or  agent  in   connection   with   such
               registration statement.

If any such registration or comparable statement refers to any Seller by name or
otherwise as the holder of any securities of the Company, then such Seller shall
have the right to require (A) the  insertion  therein of  language,  in form and
substance  satisfactory  to such Seller,  to the effect that the holding by such
Seller of such  securities  is not to be construed as a  recommendation  by such
Seller of the investment quality of the Company's securities covered thereby and
that such  holding  does not imply that such  Seller  will assist in meeting any
future  financial  requirements  of the  Company,  or (B) in the event that such
reference to such Seller by name or otherwise is not required by the  Securities
Act, the deletion of the reference to such Seller.

            The Company may require each Holder of securities  to, and each such
Holder,  as a condition to including  Securities  in such  registration,  shall,
furnish the Company with such  information and affidavits  regarding such holder
and the  distribution  of such  securities  as the Company may from time to time
reasonably  request in writing in connection with such  registration.  No Seller
may participate in any  underwritten  registration  hereunder unless such Seller
(a)  agrees to sell  such  Seller's  securities  on the  basis  provided  in any
underwriting  arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all  questionnaires,  powers of
attorney,  indemnities,  lock-ups,  underwriting  agreements and other documents
reasonably required under the terms of such underwriting  arrangements and these
registration rights.

            Each Seller of  securities  agrees  that upon  receipt of any notice
from the Company of the happening of any event of the kind  described in Section
12.03(ii),  such Seller will forthwith  discontinue such Seller's disposition of
securities  pursuant to the registration  statement  relating to such securities
until  such  Seller's  receipt  of the  copies of the  supplemented  or  amended
prospectus contemplated by Section 12.03(ii) and, if so directed by the Company,
will deliver to the Company (at the  Company's  expense) all copies,  other than
permanent  file  copies,  then in such  Seller's  possession  of any  prospectus
relating to such securities at the time of receipt of such notice.

            12.04  HOLDBACK ON SALES.  The Company and the Holders  hereby agree
not to effect any public sale or distribution of any securities similar to those
registered  in  accordance  with Section  12.03 hereof  during the 14 day period
prior to, and during the 45 day period  beginning on, the effective  date of any
registration statement (except as part of such registration statement).

                               Warrant Agreement
                               -----------------


                                      -28-

            12.05 EXPENSES.  All reasonable  expenses incurred in complying with
this Section,  including,  without limitation, all registration and filing fees,
printing  expenses,  fees and  disbursements  of counsel  for the  Company,  the
reasonable fees and  disbursements  of one counsel for the Seller or the Sellers
(to be  chosen  by the  Seller  or by the  Sellers  holding  a  majority  of the
securities to be included by Sellers in a registration  statement),  expenses of
any special audits incident to or required by any such registration and expenses
of  complying  with  the  securities  or  blue  sky  laws  of any  jurisdictions
(provided,  however,  that the Company may delay such  registration for up to 30
days, if such delay will  eliminate the need for such special  audit),  shall be
paid by the Company; provided, that in no event shall the Company be required to
pay any underwriting discounts,  commissions or fees attributable to the sale of
Warrant Shares by a Seller hereunder.

            12.06 INDEMNIFICATION.

                (a) In the event of any  registration  of any of its  securities
under the  Securities  Act pursuant to this Section 12, the Company  shall,  and
hereby agrees to,  indemnify  and hold harmless each Seller of such  securities,
its  directors  and  officers,  partners,  and each other  Person,  if any,  who
controls  such Seller  within the meaning of Section 15 of the  Securities  Act,
against any losses to which such Seller or any such director,  officer,  partner
or Person may become subject under the Securities Act or any other statute or at
common law,  insofar as such losses (or actions in respect thereof) arise out of
or are based upon any alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities  Act, any  preliminary  prospectus or final  prospectus  with respect
thereto,  or any amendment or  supplement  thereto,  or any alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not misleading,  and shall reimburse such Seller or such
director, officer, partner or participating Person or controlling Person for any
legal or any other expenses reasonably incurred by such Seller or such director,
officer,  partner or  participating  Person or controlling  Person in connection
with  investigating  or defending  any such loss;  provided,  however,  that the
Company  shall not be liable in any such case to the  extent  that any such loss
arises out of or is based upon any alleged untrue  statement or alleged omission
made in such registration  statement,  preliminary  prospectus,  prospectus,  or
amendment  or  supplement  in  reliance  upon  and in  conformity  with  written
information furnished to the Company for inclusion therein through an instrument
duly executed by such Seller; provided further, 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  paragraph
shall not apply to the extent that any such 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 such loss,  claim,  damage,  liability or
expense at or prior to the written  confirmation  of the sale of the  securities
concerned to such Person if the Company had prior  thereto given such Seller the
notice  referred to in Section  12.03(ii)  hereof and  provided to such Seller a
supplemented or amended  prospectus as contemplated  by Section  12.03(ii),  and
such current copy of the  prospectus  would have cured the defect giving rise to
such loss, claim, damage,  liability or expense.  Such indemnity shall remain in

                               Warrant Agreement
                               -----------------


                                      -29-

full force and effect  regardless of any  investigation  made by or on behalf of
such Seller or such  director,  officer or  participating  Person or controlling
Person, and shall survive the transfer of such securities by such Seller.

                (b)  Each  Seller  of   securities   which  are  included  in  a
registration statement hereunder, as a condition to including securities in such
registration  statement,  shall, to the full extent permitted by law,  indemnify
and hold harmless the Company, its directors and officers and each other Person,
if any,  who  controls  the  Company  within  the  meaning  of Section 15 of the
Securities  Act,  against any losses to which the Company or any such  director,
officer or Person may become  subject  under the  Securities  Act or  otherwise,
insofar as such losses (or actions in respect thereof) arise out of or are based
upon any untrue  statement or alleged  untrue  statement  of any  material  fact
contained in such  registration  statement,  any preliminary  prospectus,  final
prospectus  or  summary  prospectus  contained  therein,  or  any  amendment  or
supplement  thereto,  or any  omission or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein (in the case of a prospectus,  in the light of the  circumstances  under
which they were made) not misleading, if such untrue statement or alleged untrue
statement  or omission  or alleged  omission  was made in  reliance  upon and in
conformity  with  written  information  furnished  to the Company by such Seller
specifically for use in the preparation  thereof;  provided,  however,  that the
obligation to provide indemnification pursuant to this Section 12.06(b) shall be
several,  and not joint and  several,  among  such  Sellers  on the basis of the
number of  securities  included by each in such  registration  statement and the
aggregate  amount which may be recovered from any holder of securities  pursuant
to the indemnification  provided for in this Section 12.06(b) in connection with
any sale of securities  shall be limited to the total proceeds  received by such
holder from the sale of such  securities.  Such  indemnity  shall remain in full
force and effect  regardless  of any  investigation  made by or on behalf of the
Company  or any such  other  Person  and  shall  survive  the  transfer  of such
securities by such Seller.

                (c) Promptly  after  receipt by any Person under this Section of
notice of the commencement of any action,  such Person (an "Indemnified  Party")
shall,  if a claim in respect thereof is to be made against any other Person (an
"Indemnifying Party") for indemnity under this Section,  notify the Indemnifying
Party in writing of the commencement  thereof; but the omission so to notify the
Indemnifying  Party shall not relieve it from any liability which it may have to
any  Indemnified  Party,  except to the extent  that the  Indemnifying  Party is
prejudiced  thereby.  The  Indemnifying  Party may, upon being  notified of such
action,   assume  the  defense  thereof,   with  counsel  satisfactory  to  such
Indemnified Party, and, after such assumption,  the Indemnifying Party shall not
be liable to such Indemnified Party under this Section for any legal expenses of
other counsel or any other expenses,  in each case subsequently incurred by such
Indemnified  Party, in connection with the defense thereof;  provided,  however,
that the Indemnifying  Party may not assume the defense of the action, and shall
remain  liable to the  Indemnified  Party for its legal  expenses of counsel and
other  expenses,  in the event that the  Indemnified  Party has been  advised in
writing by counsel who, in good faith determines that a conflict of interest may
exist between the Indemnified Party and the Indemnifying Party.

                (d) If the  indemnification  provided  for in  this  Section  is
unenforceable   although   available,   or  insufficient  to  hold  harmless  an
Indemnified  Party  hereunder for any losses (or actions in respect  thereof) in
respect of which the provisions of Section 12.06(a) or (b) would otherwise apply

                               Warrant Agreement
                               -----------------


                                      -30-

by their terms, then the Indemnifying  Party shall contribute to the amount paid
or payable by such  Indemnified  Party as a result of such losses (or actions in
respect  thereof) in such  proportion as is  appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other hand in connection with the statements or omissions which resulted in such
losses (or actions in respect thereof),  as well as any other relevant equitable
considerations.  The relative  fault shall be  determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
relates to  information  supplied by the  Indemnifying  Party on the one hand or
such  Indemnified  Party on the other  hand and the  parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if  contribution  pursuant  to  this  subsection  were  determined  by pro  rata
allocation or by any other method of  allocation  which does not take account of
the equitable considerations referred to in this subsection.  The amount paid or
payable as a result of the losses (or  actions in respect  thereof)  referred to
above in this subsection  shall be deemed to include any legal or other expenses
reasonably  incurred by such Indemnified Party in connection with  investigating
or defending any such action or claim.  In no event shall any Seller be required
to  contribute  in the  aggregate  an amount  exceeding  the amount of  proceeds
received by such Seller in  connection  with any  offering.  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 was not
guilty of such fraudulent misrepresentation.

            12.07 NO OTHER REGISTRATION  RIGHTS. The Company shall not grant any
registration  rights to any holder of  securities  of the  Company in respect of
such securities if such  registration  rights would rank senior to, or otherwise
adversely affect in any material  respect,  the  registration  rights granted in
this Section 12.

            12.08 RULE 144. The Company  covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act so long
as the Company is  registered  under the Exchange  Act.  Upon the request of any
Holders,  the  Company  will  deliver to such Holder a written  statement  as to
whether it has complied with such requirements.

            Section 13. MISCELLANEOUS.

            13.01  WAIVER.  No failure on the part of any Holder to exercise and
no delay in  exercising,  and no course of dealing  with  respect to, any right,
power or privilege under this Agreement  shall operate as a waiver thereof,  nor
shall any single or partial exercise of any right, power or privilege under this
Agreement  preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

            13.02  NOTICES.  All notices and other  communications  provided for
herein and the Warrants (including, without limitation, any modifications of, or
waivers or consents  under,  this  Agreement)  shall be given or made in writing
(including,  without  limitation,  by  telecopy),  if to (a) any  party  hereto,
delivered to the intended recipient at the "Address for Notices" specified below
its name on the  signature  pages  hereof;  or, as to any  party,  at such other
address as shall be designated  by such party in a written  notice to each other
party,  or (b) any other Person who is the registered  Holder of any Warrants or
Warrant  Stock,  to the  address  for such  Holder as it appears in the stock or
warrant ledger of the Company.  Except as otherwise  provided in this Agreement,

                               Warrant Agreement
                               -----------------


                                      -31-

all such communications shall be deemed to have been duly given when transmitted
by telecopier or personally delivered,  or, in the case of a mailed notice, upon
receipt,  in each case given or addressed as  aforesaid.  The Company  agrees to
deliver  to each  Holder in the  manner  prescribed  by this  Section  13.02 any
notices or other communications delivered to the shareholders of the Company.

            13.03 OFFICE OF THE COMPANY.  So long as any of the Warrants remains
outstanding,  the Company  shall  maintain an office in the  continental  United
States of America where the Warrants may be presented  for  exercise,  transfer,
division or combination  provided herein and in the Warrants.  Such office shall
be at 2800 Southeast  Market Place,  Stuart,  Florida 34997 unless and until the
Company  shall  designate  and maintain  some other office for such purposes and
give notice thereof to all Holders.

            13.04 EXPENSES, TRANSFER TAXES AND OTHER CHARGES.

                  (a) EXPENSES, ETC. The Company agrees to pay or reimburse each
of the Initial Holders for paying:  (i) all reasonable  out-of-pocket  costs and
expenses of the Initial Holders (including,  without limitation,  the reasonable
fees and expenses of Milbank, Tweed, Hadley & McCloy LLP, special counsel to the
Initial Holders), in connection with (x) the negotiation, preparation, execution
and delivery of this  Agreement  and the issuance of Warrants  hereunder and (y)
any amendment,  modification  or waiver of any of the terms of this Agreement or
the Warrants;  and (ii) all reasonable  fees,  costs and expenses of the Initial
Holders  (including  reasonable  fees of a single  counsel  for the  Holders) in
connection with any default by the Company  hereunder or under any Warrant or in
connection with any enforcement  action or other proceedings  relating hereto or
thereto (including, without limitation, the enforcement of this Section 13.04).

                  (b)  CERTAIN  TAXES,  ETC.  Except as  otherwise  provided  in
Section 13.04(c),  the Company shall pay all taxes (other than Federal, state or
local income  taxes) which may be payable in  connection  with the execution and
delivery of this Agreement or the issuance and sale of the Warrants hereunder or
in connection with any  modification of this Agreement or the Warrants and shall
hold each Holder  harmless  without  limitation  as to time  against any and all
liabilities with respect to all such taxes. The obligations of the Company under
this Section 13.04(b) shall survive any redemption, repurchase or acquisition of
Warrants by the Company and the termination of this Agreement.

                  (c) TRANSFER  TAXES,  ETC.  The Company  shall pay any and all
expenses,  transfer taxes and other charges, including all costs associated with
the preparation,  issue and delivery of stock or warrant certificates,  that are
incurred in respect of the  issuance or delivery of shares of Common  Stock upon
exercise  or  conversion  of the  Warrants  pursuant  to Section 2 thereof or in
connection  with any transfer,  division or combination of Warrants  pursuant to
Section 3 thereof.  The Company shall not,  however,  be required to pay any tax
which may be  payable  in  respect  of any  transfer  involved  in the issue and
delivery  of  shares  of  Common  Stock in a name  other  than that in which the
relevant  Warrant is  registered,  and no such issue or  delivery  shall be made
unless and until the Person  requesting  such issue has paid to the  Company the
amount of any such tax, or has established,  to the satisfaction of the Company,
that such tax has been paid.

                               Warrant Agreement
                               -----------------


                                      -32-

                  13.05 AMENDMENTS,  ETC. Except as otherwise expressly provided
in this  Agreement,  any provision of this  Agreement may be amended or modified
only by an  instrument  in writing  signed by the  Company and the Holders of at
least a majority of the  Restricted  Warrants;  provided that (a) the consent of
the Holders of  Restricted  Warrants  shall not be required  with respect to any
amendment or waiver which does not affect the rights or benefits of such Holders
under this Agreement,  (b) the consent of the Holders of Restricted  Stock shall
be required  with  respect to any  amendment or waiver of Section 12, and (c) no
such  amendment or waiver shall,  without the written  consent of all Holders of
Restricted  Stock and Restricted  Warrants at the time  outstanding,  amend this
Section 13.05.

                  13.06 SUCCESSORS AND ASSIGNS.  This Agreement shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors and permitted assigns.

                  13.07 SURVIVAL. All representations and warranties made by the
Company herein or in any certificate or other  instrument  delivered by it or on
its behalf under this Agreement  shall be considered to have been relied upon by
each  Initial  Holder and shall  survive  the  execution  and  delivery  of this
Agreement  and the issuance of the Warrants or the Warrant  Stock  regardless of
any   investigation   made  by  or  on  behalf  of  any  Initial   Holder.   All
representations  and  warranties  made by the Initial  Holders  herein  shall be
considered  to have  been  relied  upon by the  Company  and shall  survive  the
execution and delivery of this Agreement and the issuance to the Initial Holders
of the Warrants,  the Warrant Stock and any Other  Securities  regardless of any
investigation made by or on behalf of the Company.

                  13.08  REGULATION  Y. The Company  shall not be liable for any
Holder's breach of any of the provisions herein relating to Regulation Y.

                  13.09 CAPTIONS.  The captions and section  headings  appearing
herein are included  solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

                  13.10  COUNTERPARTS.  This  Agreement  may be  executed in any
number of counterparts, all of which taken together shall constitute one and the
same  instrument  and any of the parties  hereto may execute  this  Agreement by
signing any such counterpart.

                  13.11  GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

                  13.12  SEVERABILITY.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,  is
held   invalid,   illegal  or   unenforceable,   the   validity,   legality  and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

                  13.13 ENTIRE  AGREEMENT.  This Agreement  supersedes all prior
discussions  and  agreements  between  the parties  with  respect to the subject
matter  hereof,  and (together  with the Warrants)  contains the sole and entire
agreement among the parties hereto with respect to the subject matter hereof.

                               Warrant Agreement
                               -----------------



                  13.14 NO THIRD PARTY BENEFICIARY.  The terms and provisions of
this Agreement are intended  solely for the benefit of each party hereto,  their
respective  successors and permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person.

                               Warrant Agreement
                               -----------------




                                      -34-

            IN WITNESS  WHEREOF,  the  parties  hereto have duly  executed  this
Agreement as of the date first above written.

                                        COMPANY

                                        NUCO2 INC.


                                        By: /s/ Robert R. Galvin
                                            -----------------------------------
                                            Title: Chief Financial Officer

                                        Address for Notices:
                                        --------------------

                                        NUCO2 INC.
                                        2800 Southeast Market Place
                                        Stuart, Florida  34997
                                        Attention: Robert R. Galvin
                                        Telephone: 772-221-1754
                                        Fax: 772-221-1690

                               Warrant Agreement
                               -----------------




                                      -35-


Stock Units

76,859                                  J.P. MORGAN PARTNERS (BHCA). L.P.

                                        BY: JPMP MASTER FUND MANAGER, L.P.,
                                            ITS GENERAL PARTNER

                                        BY: JPMP CAPITAL CORP.,
                                            ITS GENERAL PARTNER

                                        By: /s/ Richard D. Waters
                                            -------------------------
                                            Name:
                                            Title:


13,518                                  J.P. MORGAN PARTNERS GLOBAL
                                        INVESTORS, L.P.

                                        BY: JPMP GLOBAL INVESTORS, L.P.,
                                            ITS GENERAL PARTNER

                                        BY: JPMP CAPITAL CORP.,
                                            ITS GENERAL PARTNER

                                        By: /s/ Richard D. Waters
                                            -----------------------------------
                                            Name:
                                            Title:


6,787                                   J.P. MORGAN PARTNERS GLOBAL
                                        INVESTORS (CAYMAN),  L.P.

                                        BY: JPMP GLOBAL INVESTORS, L.P.,
                                            ITS GENERAL PARTNER

                                        BY: JPMP CAPITAL CORP.,
                                            ITS GENERAL PARTNER

                                        By: /s/ Richard D. Waters
                                            ------------------------------------
                                            Name:
                                            Title:

                               Warrant Agreement
                               -----------------



                                      -36-


2,077                                   J.P. MORGAN PARTNERS GLOBAL
                                        INVESTORS A,  L.P.

                                        BY: JPMP GLOBAL INVESTORS, L.P.,
                                            ITS GENERAL PARTNER

                                        BY: JPMP CAPITAL CORP.,
                                            ITS GENERAL PARTNER

                                        By: /s/ Richard D. Waters
                                            -------------------------
                                            Name:
                                            Title:


759                                     J.P. MORGAN PARTNERS GLOBAL
                                        INVESTORS (CAYMAN) II,  L.P.

                                        BY: JPMP GLOBAL INVESTORS, L.P.,
                                            ITS GENERAL PARTNER

                                        BY: JPMP CAPITAL CORP.,
                                            ITS GENERAL PARTNER

                                        By: /s/ Richard D. Waters
                                            -------------------------
                                            Name:
                                            Title:


                                        Address for Notices for the foregoing holders:
                                        ----------------------------------------------

                                        J.P. MORGAN PARTNERS, LLC.
                                        1221 Avenue of the Americas
                                        New York, New York 10020-1080
                                        Attention: Richard D. Waters, Jr.
                                        Telephone: (212) 899-3663
                                        Fax: (212) 899-3661

                                        with a copy to:
                                        ---------------

                                        Milbank, Tweed, Hadley & McCloy LLP
                                        1 Chase Manhattan Plaza
                                        New York, New York  10005
                                        Attention:  William J. Mahoney
                                        Telephone:  (212) 530-5286
                                        Fax: (212) 530-5219

                               Warrant Agreement
                               -----------------



                                                                      Annex 1 to
                                                       Special Warrant Agreement

                            [Form of Special Warrant]

                                 SPECIAL WARRANT


               THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
               BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS
               AMENDED,  OR  APPLICABLE  STATE  SECURITIES  LAWS,  AND
               ACCORDINGLY,  SUCH  SECURITIES MAY NOT BE  TRANSFERRED,
               SOLD OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH
               THE   REGISTRATION  OR   QUALIFICATION   PROVISIONS  OF
               APPLICABLE   FEDERAL  AND  STATE   SECURITIES  LAWS  OR
               APPLICABLE EXEMPTIONS THEREFROM.

               THE  TRANSFER  OF THE  SECURITIES  REPRESENTED  BY THIS
               CERTIFICATE IS SUBJECT TO THE  CONDITIONS  SPECIFIED IN
               THAT  CERTAIN  SPECIAL  WARRANT  AGREEMENT  DATED AS OF
               AUGUST  25,  2003,   BETWEEN   NUCO2  INC.,  A  FLORIDA
               CORPORATION,  AND  CERTAIN  INITIAL  HOLDERS,  AS  SUCH
               SPECIAL   WARRANT   AGREEMENT   MAY  BE  MODIFIED   AND
               SUPPLEMENTED  AND IN EFFECT  FROM TIME TO TIME,  AND NO
               TRANSFER  OF  THE   SECURITIES   REPRESENTED   BY  THIS
               CERTIFICATE  SHALL  BE VALID OR  EFFECTIVE  UNTIL  SUCH
               CONDITIONS HAVE BEEN  FULFILLED.  A COPY OF THE FORM OF
               SUCH  SPECIAL  WARRANT  AGREEMENT IS ON FILE AND MAY BE
               INSPECTED  AT THE  PRINCIPAL  EXECUTIVE  OFFICE  OF THE
               AFORESAID CORPORATION.  THE HOLDER OF THIS CERTIFICATE,
               BY ACCEPTANCE OF THIS  CERTIFICATE,  AGREES TO BE BOUND
               BY THE PROVISIONS OF SUCH SPECIAL WARRANT AGREEMENT.


No. of Stock Units: ____                                         Warrant No. ___


                                     WARRANT
                           to Purchase Common Stock of
                                   NUCO2 INC.

            THIS IS TO CERTIFY THAT [NAME OF INITIAL HOLDER],  or its registered
assigns,  is entitled to purchase in whole or in part from NUCO2 INC., a Florida
corporation (the  "Company"),  at any time and from time to time on or after the
date  hereof,  but not later than 5:00 p.m.,  New York City time,  on August 25,
2013 (the  "Expiration  Date"),  [__] Stock  Units (as  defined  in the  Warrant
Agreement  referred  to below)  at a  purchase  price of $8.79  per Stock  Unit,
provided that such purchase price shall not be less than the aggregate par value
of the capital stock contained in a Stock Unit (the "EXERCISE  PRICE"),  subject
to the terms and conditions set forth herein and in the Warrant Agreement,  each
such  purchase of a Stock Unit to be made,  and to be deemed  effective  for the
purpose of determining the date of exercise, only upon surrender of this Warrant

                                Special Warrant
                                ---------------



                                      -2-

to the  Company  at its  office  referred  to in  Section  13.03 of the  Warrant
Agreement,  with the Form of Exercise attached hereto (or a reasonable facsimile
thereof) duly  completed and signed,  and upon payment in full to the Company of
the Exercise  Price (i) in cash or (ii) by  certified or official  bank check or
(iii) by any  combination  of the  foregoing,  all as  provided  in the  Warrant
Agreement  and upon  compliance  with and  subject to the  conditions  set forth
herein and in the Warrant Agreement.

            On and after the date hereof and prior to the Expiration  Date, this
Warrant may be converted,  in whole or in part, at the Holder's option, into the
number of shares of Common Stock for each Stock Unit  evidenced  hereby which is
being so  converted,  equal to (a)(i) the product of (x) the number of shares of
Common Stock  comprising a Stock Unit at the time of such conversion and (y) the
Current  Market Price per share of Common  Stock at the time of such  conversion
minus (ii) the  Exercise  Price per Stock  Unit at the time of such  conversion,
divided by (b) the Current Market Price per share of Common Stock at the time of
such  conversion,  all as provided in the Warrant  Agreement and upon compliance
with  and  subject  to the  conditions  set  forth  herein  and  in the  Warrant
Agreement.

            If a Holder is a BHCA  Holder,  such Holder shall not, and shall not
permit any of its Bank Holding Company  Affiliates to, exercise this Warrant if,
after  giving  effect to such  exercise,  (i) such  Holder and its Bank  Holding
Company  Affiliates  would own more than 5% of the total issued and  outstanding
shares of Common  Stock on a  fully-diluted  basis or (ii) such Holder  would be
deemed under Regulation Y to have the power to exercise, directly or indirectly,
a controlling  influence over the management or policies of, or would  otherwise
control,  the Company  unless such  Holder is a  financial  holding  company and
exercises  such Warrant in reliance  on, and in  compliance  with,  the merchant
banking  exemption set forth in Regulation Y. For purposes of clause (ii)of this
paragraph, a reasoned opinion of counsel to such Holder delivered to such Holder
(which is based on facts and circumstances  deemed  appropriate by such counsel)
to the  effect  that  such  Holder  does not have the power to  exercise  such a
controlling influence or otherwise control the Company shall be conclusive.

            This  Warrant is issued  under and in  accordance  with the  Special
Warrant  Agreement  dated as of August 25, 2003  between the Company and certain
investors (as the same may be modified and  supplemented  in accordance with its
terms  and as in effect  from time to time,  the  "WARRANT  AGREEMENT"),  and is
subject to the terms and  provisions of the Warrant  Agreement,  which terms and
provisions are hereby  incorporated by reference  herein and made a part hereof.
Every  Holder of this  Warrant  consents  to all of the terms  contained  in the
Warrant Agreement by acceptance hereof.

            The  number of shares of  Common  Stock or other  securities  of the
Company  constituting  one "Stock  Unit" are  subject to  adjustment  in certain
events as provided in the Warrant Agreement.

            The Company  shall not be required  to issue a  fractional  share of
Common Stock upon exercise of this Warrant.  As to any fraction of a share which
the Holder hereof would  otherwise be entitled to purchase  upon such  exercise,
the Company may pay a cash  adjustment  in respect of such final  fraction in an
amount  equal to the same  fraction  of the  Current  Market  Price per share of
Common Stock on the date of exercise.


                                Special Warrant
                                ---------------


                                      -3-

            This Warrant may be exchanged  either  separately or in  combination
with other Warrants at the office of the Company referred to in Section 12.03 of
the Warrant Agreement for new Warrants representing the same aggregate number of
Warrants evidenced by the Warrant or Warrants exchanged,  upon surrender of this
and any other Warrant being  exchanged and upon  compliance  with and subject to
the conditions set forth herein and in the Warrant Agreement.

            The Warrants and the Warrant Stock shall be  transferable  only upon
compliance with the conditions  specified in Sections 4, 5 and 12 of the Warrant
Agreement,  which  conditions  are  intended,  among  other  things,  to  ensure
compliance  with the provisions of the Securities Act in respect of the transfer
of any Warrant or any Warrant Stock, and any Holder hereof shall be bound by the
provisions  of (and entitled to the benefits of) said Sections 4, 5 and 12. Upon
any such transfer  effected in compliance  with said Sections 4, 5 and 12, a new
Warrant  or  new  Warrants  of  different  denominations,  representing  in  the
aggregate a like number of  Warrants,  will be issued to the  transferee.  Every
Holder hereof,  by accepting this Warrant,  consents and agrees with the Company
and with every subsequent Holder of this Warrant that until due presentation for
the registration of transfer of this Warrant on the Warrant register  maintained
by the  Company,  the  Company  may deem and treat the Person in whose name this
Warrant  is  registered  as the  absolute  and  lawful  owner  for all  purposes
whatsoever and the Company shall not be affected by any notice to the contrary.

            Nothing  contained in the Warrant Agreement or in this Warrant shall
be  construed  as  conferring  on  the  holder  of  any  Warrants  or his or her
transferee any rights whatsoever as a Shareholder of the Company.

            No provision  hereof,  in the absence of  affirmative  action by the
Holder hereof to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of such Holder,  shall give rise to any liability of
such Holder for the Exercise Price or as a Shareholder  of the Company,  whether
such liability is asserted by the Company, by any creditor of the Company or any
other Person.

            Any notices  and other  communications  pursuant  to the  provisions
hereof shall be sent in accordance with Section 13.02 of the Warrant Agreement.

            This Warrant  shall be deemed a contract  made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
laws of the  State  of New York  without  giving  effect  to the  principles  of
conflicts of laws thereof.

            Each term used  herein  without  definition  shall have the  meaning
assigned thereto in the Warrant Agreement.


                                Special Warrant
                                ---------------



                                      -4-

            IN WITNESS WHEREOF, the Company has duly executed this Warrant.


Dated:  _________ __, 2003


                                         NUCO2 INC.



                                         By___________________________
                                           Name:
                                           Title:


                                Special Warrant
                                ---------------




                                FORM OF EXERCISE

                (To be executed by the registered holder hereof)
                             The undersigned registered owner of this Warrant hereby

                    SELECT ONE OF THE FOLLOWING TWO CHOICES:

                             [irrevocably   exercises   this   Warrant  for  the
                             purchase of Stock  Units of NUCO2  INC.,  a Florida
                             corporation, and herewith makes payment therefor in
                             the amount of $_____________,  all at the price and
                             on the  terms  and  conditions  specified  in  this
                             Warrant,]

                                       OR

                             [irrevocably  converts  this Warrant into shares of
                             Common Stock of NUCO2 INC., a Florida  corporation,
                             all in the manner  and on the terms and  conditions
                             specified in this Warrant,]

            and requests that (i) certificates and/or other instruments covering
            such Stock Units be issued in accordance with the instructions given
            below and (ii) if such  Stock  Units  shall not  include  all of the
            Stock Units to which the Holder is entitled under this Warrant, that
            a new  Warrant of like  tenor and date for the  balance of the Stock
            Units issuable hereunder be delivered to the undersigned.


Dated:  ___________, ____


                                                --------------------------------
                                                (Signature of Registered Holder)


Instructions for issuance and registration of Stock Units:



Name of Registered Holder:____________________________________________
(Please print)

Social Security or Other Identifying Number:__________________________

Please deliver certificate to the following address:

                             ________________________________________
                             ________________________________________
                             ________________________________________


                                Special Warrant
                                ---------------




                               FORM OF ASSIGNMENT

            FOR VALUE RECEIVED the undersigned  registered owner of this Warrant
hereby sells, assigns and transfers unto the assignee named below all the rights
of the undersigned  under this Warrant with respect to the number of Stock Units
covered thereby set forth hereinbelow unto:

                                                                    Number of
Name of Assignee          Address           Stock Units
----------------          -------           -----------



Dated:__________________


                                             ______________________________
                                             Signature of Registered Holder

                                             ______________________________
                                             Name of Registered Holder
                                             (Please Print)


Witness:


___________________________