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                                 AQUAGENIX, INC




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                                WARRANT AGREEMENT
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                          DATED AS OF OCTOBER 15, 1996






                    100,000 WARRANTS TO PURCHASE COMMON STOCK


















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                               TABLE OF CONTENTS
                            (NOT PART OF AGREEMENT)

                                                                        Page
                                                                        ----


1.    FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES..............  1
      1.1   Form of Warrant Certificates................................  1
      1.2   Execution of Warrant Certificates; Registration Books.......  1
      1.3   Transfer, Split Up, Combination and Exchange of Warrant
            Certificates; Lost or Stolen Warrant Certificates...........  2
      1.4   Subsequent Issuance of Warrant Certificates.................  3
      1.5   Special Agreements of Warrant Certificate Holders...........  3

2.    EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE...................  3
      2.1   Exercise of Warrants........................................  3
      2.2   Issuance of Common Stock....................................  4
      2.3   Unexercised Warrants........................................  4
      2.4   Cancellation and Destruction of Warrant Certificates........  4
      2.5   Shares not Registered.......................................  4

3.    SPECIAL AGREEMENTS OF THE COMPANY.................................  5
      3.1   Reservation of Common Stock.................................  5
      3.2   Common Stock To Be Duly Authorized and Issued, Fully Paid and
            Nonassessable...............................................  5
      3.3   Transfer Taxes..............................................  5
      3.4   Common Stock Record Date....................................  6
      3.5   Rights in Respect of Common Stock...........................  6
      3.6   Right to Receive Consideration Upon Dividend or Distribution. 6
      3.7   Private Placement Number; CUSIP Number......................  8
      3.8   Right of Action.............................................  8
      3.9   Survival....................................................  8

4.    ADJUSTMENTS.......................................................  9
      4.1   Mechanical Adjustments......................................  9
      4.2   Fractional Shares........................................... 13
      4.3   Additional Agreements of the Company........................ 13

5.    FINANCIAL AND OTHER INFORMATION................................... 13

6.    REGISTRATION RIGHTS............................................... 13
      6.1   Incidental Registration..................................... 13
      6.3   Preparation; Reasonable Investigation....................... 18
      6.4   Registration Expenses....................................... 18
      6.5   Rights of Requesting Holders................................ 19
      6.6   Indemnification; Contribution............................... 19
      6.7   Holdback Agreements; Registration Rights to Others.......... 21






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      6.9   Availability of Information................................. 22

7.    INTERPRETATION OF THIS AGREEMENT.................................. 22
      7.2   Descriptive Headings........................................ 28
      7.3   Governing Law............................................... 28

8.    MISCELLANEOUS..................................................... 28
      8.1   Expenses.................................................... 28
      8.2   Amendment and Waiver........................................ 29
      8.3   No Rights or Liabilities as Stockholder..................... 30
      8.4   Directly or Indirectly...................................... 30
      8.5   Survival of Representations and Warranties; Entire Agreement.30
      8.6   Successors and Assigns...................................... 30
      8.7   Notices..................................................... 30
      8.8   Severability................................................ 31
      8.9   Counterparts................................................ 31
      8.10  Jurisdiction; Jury Trial.................................... 31
      8.11. Expiration.................................................. 32


































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                                WARRANT AGREEMENT


      WARRANT  AGREEMENT  ("Agreement"),  dated as of October 15, 1996,  between
AQUAGENIX,  INC.  (together with its successors and assigns,  the "Company"),  a
Delaware  corporation,  DABNEY/RESNICK  INCORPORATED,  a California  corporation
("DRI") and AQUAGENIX  WARRANT HOLDINGS II, a general  partnership  (hereinafter
referred to as the "Warrant Holder").

                                    RECITALS:

      WHEREAS,  DRI has provided  financial  consulting  services to the Company
pursuant to a letter agreement dated October 1, 1996 between DRI and the Company
and the Warrants  ("Warrants")  issued  pursuant to this Warrant  Agreement  are
being issued by the Company as consideration for such services; and

      WHEREAS,  DRI has  assigned  its right,  title and  interest in and to the
Warrants to the Warrant Holder; and

      WHEREAS, the Company proposes to issue, effective October 15, 1996, to the
Warrant  Holder,  assignee of DRI, a warrant (the  "Warrant" or  "Warrants")  to
purchase One Hundred Thousand (100,000) shares ("the Shares") of Common Stock of
the Company, par value $.01 per share (the "Common Stock").

                                  AGREEMENT:

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties to this Agreement hereby agree as follows:

1.    FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.

      1.1   FORM OF WARRANT CERTIFICATES.

      The warrant certificates ("Warrant Certificates")  evidencing the Warrants
and the forms of assignment and of election to purchase shares are substantially
in the form of Attachment A to this Agreement.

      1.2   EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS.

            (A)  EXECUTION  OF WARRANT  CERTIFICATES.  The Warrant  Certificates
shall be  executed  on  behalf  of the  Company  by an  officer  of the  Company
authorized  by the Board of  Directors.  In case the  officer of the Company who
shall have signed any Warrant  Certificate  shall cease to be such an officer of
the  Company  before  issuance  and  delivery  by the  Company  of such  Warrant
Certificate,  such Warrant Certificate  nevertheless may be issued and delivered
with the same force and effect s though the  individual  who signed such Warrant
Certificate had not ceased to be such an officer of the Company, and any Warrant
Certificate may be signed on behalf of the Company by any individual who, at the







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actual date of the  execution  of such  Warrant  Certificate,  shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Agreement any such individual was not such an officer.

            (B) REGISTRATION BOOKS. The Company will keep or cause to be kept at
its office maintained at the address of the Company set forth in Section 8.7, or
at such other office of the Company int he United States of America of which the
Company  shall have given notice to each holder of Warrant  Certificates,  books
for registration and transfer of the Warrant Certificates issued hereunder. Such
books  shall  show the names and  addresses  of the  respective  holders  of the
Warrant  Certificates,  the  registration  number  and the  number  of  Warrants
evidenced on its face by each of the Warrant  Certificates  and the date of each
of the Warrant Certificates.

      1.3 TRANSFER,  SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT CERTIFICATES;
LOST OR STOLEN WARRANT CERTIFICATES.

            (A)  TRANSFER,  SPLIT UP,  ETC.  Any  Warrant  Certificate,  with or
without other Warrant  Certificates,  may be transferred,  split up, combined or
exchanged for another Warrant Certificate or Warrant Certificates, entitling the
registered  holder or transferee  thereof to purchase a like number of shares of
Common Stock as the Warrant Certificate or Warrant Certificates surrendered then
entitled such registered  holder to purchase.  Any registered holder desiring to
transfer,  split up, combine or exchange any Warrant Certificate shall make such
request in writing  delivered to the Company,  and shall  surrender  the Warrant
Certificate or Warrant  Certificates  to be  transferred,  split up, combined or
exchanged at the office of the Company referred to in Section 1.2(b),  whereupon
the Company  shall  deliver  promptly to the Person  entitled  thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested.

            (B) LOSS,  THEFT,  ETC.  Upon  receipt by the  Company  of  evidence
reasonably  satisfactory  to it  of  the  ownership  of  and  the  loss,  theft,
destruction or mutilation of any Warrant  Certificate  (which evidence shall be,
in the  case  of an  institutional  investor,  notice  from  such  institutional
investor of such  ownership  (or of ownership by such  institutional  investor's
nominee) and such loss, theft, destruction or mutilation), and:

                  (i) in the case of loss,  theft or  destruction,  of indemnity
            reasonably satisfactory to the Company;  provided,  however, that if
            the holder of such Warrant Certificate is an institutional  investor
            or a  nominee  of  an  institutional  investor,  such  holder's  own
            unsecured agreement of indemnity shall be deemed to be satisfactory;
            or

                 (ii) in the case of mutilation, upon surrender and cancellation
            thereof;

the Company at its own expense will execute and deliver,  in lieu thereof, a new
Warrant Certificate, dated the date of such lost, stolen, destroyed or mutilated
Warrant Certificate and of like tenor.



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      1.4   SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES.

      Subsequent  to the original  issuance,  no Warrant  Certificates  shall be
issued, except:

            (A)   Warrant  Certificates  issued upon any transfer,  combination,
split up or exchange of Warrants pursuant to Section 1.3(a);

            (B)   Warrant  Certificates  issued  in  replacement  of  mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 1.3(b); and

            (C)  Warrant  Certificates  issued  pursuant to Section 2.3 upon the
partial exercise of any Warrant  Certificate to evidence the unexercised portion
of such Warrant Certificate.

      1.5   SPECIAL AGREEMENTS OF WARRANT CERTIFICATE HOLDERS.

      Every holder of a Warrant  Certificate  by accepting the same consents and
agrees with the Company  and with every  other  holder of a Warrant  Certificate
that:

            (A) the Warrant  Certificates are transferable  only on the registry
books of the Company if surrendered at the office of the Company  referred to in
Section  1.3(b),  duly endorsed or  accompanied by an instrument of transfer (in
the form attached hereto); and

            (B) the  Company  may deem and treat the  Person in whose  name each
Warrant  Certificate  is  registered  as the absolute  owner  thereof and of the
Warrants  evidenced  thereby  (notwithstanding  any  notations  of  ownership or
writing on the Warrant  Certificates  made by anyone other than the Company) for
all purposes whatsoever,  and the Company shall not be affected by any notice to
the contrary.

2.    EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.

      2.1   EXERCISE OF WARRANTS.

      At any time and from time to time on or prior to the Expiration  Date, the
holder of any Warrant  Certificate may exercise the Warrants  evidenced thereby,
in whole or in part, by surrender of such Warrant Certificate,  with an election
to purchase (a form of which is attached to each Warrant  Certificate)  attached
thereto duly  executed,  to the Company at its principal  office,  together with
payment of the  Purchase  Price for each share of Common  Stock with  respect to
which the  Warrants  are then being  exercised.  Such  Purchase  Price  shall be
payable:

            (A) in cash or by  certified or official  bank check  payable to the
order of the Company or by wire transfer of immediately  available  funds to the
account of the Company; or

            (B) at any time before the  Expiration  Date, the holder may, at its
option, exchange the Warrant, in whole or in part ("Warrant Exchange"), into the
number of shares of Common  Stock  determined  in  accordance  with this Section
2.1(b),  by  surrendering  the Warrant at the  principal  office of the Company,
accompanied  by a notice  stating such holder's  intent to effect such exchange,
the number of shares of Common Stock to  be exchanged  and the date on which the

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holder requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant  Exchange  shall  take  place on the date  specified  in the  Notice  of
Exchange  or, if later,  the date the  Notice of  Exchange  is  received  by the
Company  (the  "Exchange  Date").  Certificates  for the shares of Common  Stock
issuable upon such Warrant  Exchange and, if  applicable,  a new warrant of like
tenor evidencing the balance of the shares of Common Stock remaining  subject to
this Warrant shall be issued as of the Exchange Date and delivered to the holder
within  three (3) days  following  the Exchange  Date.  In  connection  with any
Warrant  Exchange,  the Warrant  shall  represent the right to subscribe for and
acquire without any cash outlay the number of shares of Common Stock (rounded to
the next  highest  integer)  equal to (A) the  number of shares of Common  Stock
specified  by the holder in its Notice of Exchange  (the "Total  Share  Number")
less (B) the number of shares of Common Stock equal to the quotient  obtained by
dividing  (i) the product of the Total Share  Number and the  existing  Exercise
Price by (ii) the Market Price of a share of Common Stock.

      2.2   ISSUANCE OF COMMON STOCK.

      Upon timely receipt of a Warrant Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for each of
the shares to be purchased  in the manner  provided in Section 2.1 and an amount
equal to any applicable  transfer tax (if not payable by the Company as provided
in Section  3.3),  the  Company  shall  thereupon  promptly  cause  certificates
representing  the number of whole shares of Common Stock then being purchased to
be  delivered  to or upon the order of the  registered  holder  of such  Warrant
Certificate,  registered  in such  name or  names as may be  designated  by such
holder, and, promptly after such receipt deliver the cash, if any, to be paid in
lieu of  fractional  shares  pursuant  to  Section 4 to or upon the order of the
registered holder of such Warrant Certificate.

      2.3   UNEXERCISED WARRANTS.

      In case the registered  holder of any Warrant  Certificate  shall exercise
less  than  all  the  Warrants  evidenced  thereby,  a new  Warrant  Certificate
evidencing  Warrants  equal  in  number  to the  number  of  Warrants  remaining
unexercised  shall be issued by the  Company  to the  registered  holder of such
Warrant Certificate or to its duly authorized assigns.

      2.4   CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES.

      All  Warrant  Certificates  surrendered  to the Company for the purpose of
exercise,  exchange,  substitution  or transfer shall be cancelled by it, and no
Warrant  Certificates  shall be  issued  in lieu  thereof  except  as  expressly
permitted by any of the provisions of this  Agreement.  The Company shall cancel
and retire any other Warrant  Certificates  purchased or acquired by the Company
otherwise than upon the exercise thereof.

      2.5   SHARES NOT REGISTERED.

      The Purchaser  acknowledges  that the shares of Common Stock issuable upon
exercise of the Warrants have not been  registered  under the Securities Act and
may not be  transferred,  sold or  otherwise  disposed  of  unless  subsequently
registered  under the Securities Act or an exemption from such  registration  is
available.



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3.    SPECIAL AGREEMENTS OF THE COMPANY.

      3.1   RESERVATION OF COMMON STOCK.

      The  Company  covenants  and agrees  that it will at all times cause to be
reserved and kept available out of its authorized and unissued  shares of Common
Stock such number of shares of Common Stock as will be  sufficient to permit the
exercise in full of all Warrants issued hereunder and all other rights, warrants
or options  exercisable  into, and the conversion of all Securities  convertible
into, Common Stock.

      3.2   COMMON  STOCK  TO  BE  DULY  AUTHORIZED  AND  ISSUED, FULLY PAID AND
            NONASSESSABLE.

      The Company  covenants and agrees that it will take all such action as may
be  necessary  to ensure  that all  shares of Common  Stock  delivered  upon the
exercise  of  any  Warrants,  at  the  time  of  delivery  of  the  certificates
representing  such shares,  shall be duly and validly  authorized and issued and
fully paid and nonassessable, free of any preemptive rights and free of any Lien
created by, or arising out of actions of, the  Company,  any  Subsidiary  or any
Affiliate.

      3.3   TRANSFER TAXES.

      The Company covenants and agrees that it will pay when due and payable any
and all federal  and state  transfer  taxes and  charges  that may be payable in
respect of the initial issuance or delivery of:

            (A)   each Warrant Certificate;

            (B)   each  Warrant  Certificate  issued in  exchange  for any other
Warrant Certificate pursuant to Section 1.4(a) or Section 2.3; and

            (C)   each share of Common  Stock  issued  upon the  exercise of any
Warrant.

The Company shall not, however, be required to-

                  (i) pay any transfer tax that may be payable in respect of the
            transfer  or  delivery of Warrant  Certificates  or the  issuance or
            delivery of certificates  for shares of Common Stock in a name other
            than  that  of the  registered  holder  of the  Warrant  Certificate
            evidencing any Warrant  surrendered for exercise (any such tax being
            payable by the  holder of such  Warrant  Certificate  at the time of
            surrender); or

                  (ii) issue or deliver any such certificates referred to in the
            foregoing clause (i) for shares of Common Stock upon the exercise of
            any Warrant until any such tax referred to in the  foregoing  clause
            (i) shall have been paid.



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7

      3.4   COMMON STOCK RECORD DATE.

      Except in the event the Warrants are exercised pursuant to Section 2.1(b),
each Person in whose name any  certificate  for shares of Common Stock is issued
upon the  exercise of Warrants  shall for all  purposes be deemed to have become
the  holder of record of the  Common  Stock  represented  thereby  on,  and such
certificate  shall be  dated,  the  date  upon  which  the  Warrant  Certificate
evidencing  such  Warrants  was duly  surrendered  with an  election to purchase
attached thereto duly executed and payment of the aggregate  Purchase Price (and
any applicable transfer taxes, if payable by such Person) was made. In the event
the Warrants are exercised  pursuant to Section 2.1(b), the holder thereof shall
for all  purposes  be deemed to have  become  the holder of record of the Common
Stock represented thereby on the date the Warrants were issued.

      3.5   RIGHTS IN RESPECT OF COMMON STOCK.

      Prior to the exercise of the Warrants evidenced  thereby,  the holder of a
Warrant  Certificate shall not be entitled to any rights of a stockholder in the
Company  with  respect to shares for which the  Warrants  shall be  exercisable,
including,  without limitation,  the right to vote in respect of any matter upon
which the holders of Common Stock may vote or the right to receive  dividends or
other  distributions  (but the holders of the Warrants shall have the rights set
forth in Section 3.6 in respect of the declaration or payment of any dividend or
distribution),  and  shall  not  be  entitled  to  receive  any  notice  of  any
proceedings of the Company.

      3.6   RIGHT TO RECEIVE CONSIDERATION UPON DIVIDEND OR DISTRIBUTION.

            (A) RIGHT TO PAYMENT IN RESPECT OF CASH DIVIDENDS. In the event that
the Company shall pay any dividend in cash in respect of its Common  Stock,  the
Company  shall,  on the same date such dividend is paid,  pay to each Person who
was a  registered  holder of Warrants on the record date for the payment of such
dividend on the Common Stock, an amount equal to the product of:

                  (i) the aggregate  number of shares of Common Stock into which
            all Warrants then held by such holder are exercisable on the date of
            payment; times

                  (ii)  the amount per share of Common Stock of such dividend.

            (B) RIGHTS IN RESPECT OF OTHER DISTRIBUTIONS.  In the event that the
Company  shall  distribute  to  holders  of shares of Common  Stock  (including,
without   limitation,   any  such   distribution   made  in  connection  with  a
consolidation or merger in which the Company is the continuing corporation), any
Property (other than cash, shares of Common Stock or Rights) including,  without
limitation,   shares  of  stock  other  than  Common   Stock  or   evidences  of
indebtedness,  then,  in each case,  the  Company  shall,  on the same date such
distribution  is made,  deliver to each  Person who was a  registered  holder of
Warrants on the record date for the payment of such  distribution  on the Common
Stock, at the election of such holder, either:

                  (i) that amount of such Property which a holder of such number
            of shares of Common Stock as the holder of a Warrant  would have had
            the right to acquire upon the exercise  of such  Warrant immediately
            prior to such consolidation, merger, sale or conveyance; or

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                  (ii) the value,  in cash,  of the  Property  which such holder
            would be entitled to receive  pursuant to the foregoing  clause (i),
            as established by the Valuation Agent.

            (C) NOTICE OF DECLARATION OF DIVIDEND OR DISTRIBUTION.  In the event
that the Company  shall  declare any  dividend or make any  distribution  of any
Property  upon its Common Stock,  the Company shall give written  notice of such
declaration  to  each  holder  of  Warrants  within  five  (5)  days  after  the
declaration  of such dividend (but in no event later than thirty (30) days prior
to the making of such distribution), which notice shall state:

                  (i)   that the Company has declared a dividend or distribution
            in respect of its Common Stock;

                  (ii) the  amount of cash or other  consideration  per share of
            such  dividend or  distribution  and, in the case of a  distribution
            other  than  in  cash,  a  description  of  the  Property  to  be so
            distributed  if the  holder  were to elect the  option  set forth in
            Section  3.6(b)(i)  and the amount of cash to be paid to such holder
            should the holder elect the option set forth in Section 3.6(b)(ii);

                  (iii) the record date for the  determination of the registered
            holders of Common Stock for the purpose of  payment of such dividend
            or distribution;

                  (iv)  a  description of the  right described in Section 3.6(a)
            or Section 3.6(b), as the case may be;

                  (v)   the  number  of shares of  Common  Stock into which each
            Warrant is then exercisable; and

                 (vi)  in the case of a distribution pursuant to Section 3.6(b):

                        (A)   a statement  describing the election of the holder
                              to be made pursuant thereto;

                        (B)   a statement  describing  the  manner in  which the
                              holder  may  make  the  election  provided  for in
                              Section 3.6(b);

                        (C)   a  statement  that if a  holder  fails  to make an
                              election  pursuant to Section  3.6(b),  the holder
                              shall be  deemed  to have  made the  election  set
                              forth in Section 3.6(b)(ii); and

                        (D)   a copy of a report of the Valuation Agent relating
                              to the value of the Property to be so distributed,
                              reflecting  the  calculations  of  the  respective
                              amounts set forth in Section 3.6(c)(ii).



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In the event of a distribution  pursuant to Section 3.6(b),  any holder may make
the election set forth therein by notifying the Company in writing of whether it
is making the election pursuant to Section 3.6(b)(i) or the election pursuant to
Section  3.6(b)(ii)  not later  than five (5) days  prior to the date  fixed for
making such distribution. In the event that any holder fails to make an election
pursuant to Section 3.6(b), the holder shall be deemed to have made the election
set forth in Section 3.6(b)(ii).

            (D) DIVIDENDS PAID PARTLY IN CASH. For purposes of this Section 3.6,
any dividend  declared or paid partly in cash and partly in Common Stock,  other
Securities or other Property shall be deemed to be:

                  (i)   a dividend of cash  subject to the provisions of Section
            3.6(a) in the amount payable in cash;

                  (ii)  a dividend  of  Property  subject  to  the provisions of
            Section 3.6(b) to the extent payable in Property;

                  (iii) a dividend of  Common Stock subject to the provisions of
            Section 4.1(a) to the extent payable in Common Stock; and

                  (iv) an issuance,  for no consideration,  of Rights subject to
            the provisions of Section 4.1(c) to the extent payable in Rights.

      3.7   PRIVATE PLACEMENT NUMBER; CUSIP NUMBER.

      The Company covenants and agrees to maintain a private placement number in
respect of the  Warrants and a CUSIP number (so long as the Common Stock is then
listed on a national  securities exchange or admitted to trading on any national
securities market  (including,  without  limitation,  the NASDAQ National Market
System)) or a private  placement  number (in the event that the Common  Stock is
not then so listed) in respect of the Common Stock, in each case, from the CUSIP
Service Bureau of Standard & Poor's, a division of McGraw-Hill, Inc.

      3.8   RIGHT OF ACTION.

      All  rights  of  action  in  respect  of the  Warrants  are  vested in the
respective  registered holders of the Warrant  Certificates,  and any registered
holder of any  Warrant  Certificate,  without  the  consent of the holder of any
other  Warrant  Certificate,  may,  in its own behalf  and for its own  benefit,
enforce,  and may institute and maintain any suit, action or proceeding  against
the Company to enforce,  or  otherwise  act in respect of, its right to exercise
the Warrants  evidenced by such Warrant  Certificate  in the manner  provided in
such Warrant Certificate and in this Agreement.

      3.9   SURVIVAL.

      The  agreements  of the Company  contained  in this  Section 3 (other than
those set forth in Sections  3.1, 3.6 and 3.7) shall survive the exercise of and
the expiration of the Warrants.



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4.    ADJUSTMENTS

      4.1   MECHANICAL ADJUSTMENTS.

      The number of shares of Common Stock purchasable upon the exercise of each
Warrant, and the Purchase Price, shall be subject to adjustment as follows:

            (A) STOCK  DIVIDENDS,  SUBDIVISIONS AND  COMBINATIONS.  In the event
that the Company shall, on or after the date hereof:

                  (i)   pay a  dividend in  shares of Additional Common Stock or
            make a distribution in shares of Additional Common Stock;

                  (ii)  reclassify  by  subdivision  its  outstanding  shares of
            Common Stock into a greater number of shares; or

                  (iii) reclassify by  combination  its  outstanding  shares  of
            Common Stock into a smaller number of shares;

then,  and in each such case,  the  Purchase  Price in effect at the time of the
record date for such dividend or of the effective  date of such  subdivision  or
combination  shall be  adjusted  to that price  determined  by  multiplying  the
Purchase Price in effect immediately prior to such event by the quotient of:

                        (A)   the total number of  outstanding  shares of Common
                              Stock immediately prior to such event; divided by

                        (B)   the total number of  outstanding  shares of Common
                              Stock immediately after such event.

An adjustment  made  pursuant to this Section 4.1 (a) shall become  effective on
the effective date of such event.

            (B)  DISTRIBUTIONS OF PROPERTY.  In the event that the Company shall
make any dividend or  distribution  in cash or other Property (other than Common
Stock ) in respect of its Common Stock,  no adjustment to the Purchase  Price or
the number of shares  issuable upon exercise of a Warrant shall be made, but the
holders of the Warrants  instead  shall have the rights set forth in Section 3.6
with respect to such dividend or distribution.

            (C)  ISSUANCES  OF COMMON STOCK AND OTHER  SECURITIES.  In the event
that the Company shall issue or sell shares of Additional Common Stock or Rights
(other than Excluded  Securities)  at a  Consideration  Per Share lower than the
Reference Price in effect on the date of such issuance or sale or if the Company
should amend any  provisions  of any Rights such as to reduce the  consideration
per share  applicable  thereto,  then the Purchase  Price in effect  immediately
after such event shall be adjusted by  multiplying  the Purchase Price in effect
immediately prior to such event by the quotient of:



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                  (i)   the sum of:

                        (A)   the number of shares of  Common Stock  outstanding
                              immediately prior to such event; plus

                        (B)   the  quotient of (I) the  Aggregate  Consideration
                              Receivable,  divided by (Il) the Reference  Price,
                              in each case immediately prior to such event;


                        divided by

                  (ii)  the sum of:

                        (A)   the number of shares of  Common Stock  outstanding
                              immediately prior to such event; plus

                        (B)   the number of shares of Additional Common Stock so
                              issued or sold (or then issuable  pursuant to such
                              Rights).

In the event that the Company  shall  issue and sell  shares of Common  Stock or
Rights for a  consideration  consisting,  in whole or in part, of Property other
than cash or its equivalent,  then in determining  the "Aggregate  Consideration
Receivable,"  the Board of  Directors  shall  determine,  in good faith and on a
reasonable basis, the fair value of such Property, and such determination, If so
made, shall be binding upon all holders of Warrants.

            (D)   CONSOLIDATION; MERGER; SALE; RECLASSIFICATION.  In  the  event
that there is:

                  (i) any  consolidation  of the Company  with, or merger of the
            Company with or into,  another  corporation  (other than a merger in
            which the  Company is the  surviving  corporation  and that does not
            result in any reclassification of shares of Common Stock outstanding
            immediately prior to such merger);

                  (ii)  any  sale or  conveyance  to  another corporation of the
            Property of the Company substantially as an entirety; or

                  (iii) any reclassification of the Common Stock that results in
            the issuance of other Securities of the Company;

then, in each such case,  lawful  provision shall be made as a part of the terms
of such  transaction so that the holders of Warrants shall  thereafter  have the
right to  purchase  the  number and kind of shares of stock,  other  Securities,
cash,  Property and rights  receivable upon such  consolidation,  merger,  sale,
conveyance  or  reclassification  by a holder of such number of shares of Common
Stock as the holder of a Warrant  would  have had the right to acquire  upon the
exercise of such Warrant immediately prior to such  consolidation,  merger, sale
or conveyance, at the Purchase Price then in effect.



                                      10


<PAGE>
            (E) DE MINIMIS  CHANGES IN  PURCHASE  PRICE.  No  adjustment  in the
Purchase  Price  shall be  required  unless  such  adjustment  would  require an
increase  or  decrease  of at least one  percent  (1 %) in the  Purchase  Price;
provided that any adjustments that, at the time of the calculation  thereof, are
less than one percent (1%) of the  Purchase  Price at such time and by reason of
this  Section 4.1 (e) are not  required to be made at such time shall be carried
forward and added to any subsequent  adjustment or  adjustments  for purposes of
determining   whether  such  subsequent   adjustment  or   adjustments,   as  so
supplemented,  exceed the one  percent  (1 %) amount  set forth in this  Section
4.1(e) and, if any such subsequent adjustment,  as so supplemented or otherwise,
should  exceed such one percent (1 %) amount,  all  adjustments  deferred  prior
thereto  and not  previously  made  shall  then be  made.  In any  case all such
adjustments  being  carried  forward  pursuant to this  Section 4.1 (e) shall be
given  effect  upon the  exercise  of any  Warrants  by any holder  thereof  for
purposes of determining the Purchase Price thereof.  All  calculations  shall be
made to the nearest ten-thousandth of a dollar ($0.0001 ).

            (F)  ADJUSTMENT OF NUMBER OF SHARES  LSSUABLE  PURSUANT TO WARRANTS.
Upon each adjustment of the Purchase Price as a result of the calculations  made
in this Section 4.1, each Warrant outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock (calculated to the nearest
one-hundredth  (.01))  obtained  by  multiplying  the number of shares of Common
Stock  covered  by such  Warrant  immediately  prior to such  adjustment  by the
quotient of:
                  (i)   the  Purchase  Price in effect immediately prior to such
            adjustment,

                  (ii)  the  Purchase  Price in effect  immediately  after  such
            adjustment.

All Warrants originally issued by the Company hereunder shall, subsequent to any
adjustment made to the Purchase Price hereunder, evidence the right to purchase,
at the adjusted  Purchase Price, the number of shares of Common Stock determined
to be  purchasable  from time to time  hereunder upon exercise of such Warrants,
all subject to further adjustment as provided herein. Each such adjustment shall
be valid and binding  upon the Company and the holders of Warrants  irrespective
of whether the Warrant  Certificates  theretofore and thereafter  issued express
the Purchase  Price per share of Common Stock and the number of shares of Common
Stock  that  were  expressed  upon  the  initial  Warrant   Certificates  issued
hereunder.

            (G)   MISCELLANEOUS.

                  (i)  Adjustments  shall be made  pursuant to this  Section 4.1
            successively  whenever  any of the  events  referred  to in  Section
            4.1(a) through Section 4.1 (d), inclusive, and Section 4.1(1), shall
            occur.

                  (ii) If any  Warrant  shall  be  exercised  subsequent  to the
            record date for any of the events  referred to in this  Section 4.1,
            but prior to the  effective  date thereof,  appropriate  adjustments
            shall be made  immediately  after  such  effective  date so that the
            holder of such Warrant on such record date shall have  received,  in
            the  aggregate,  the kind and  number of  shares of Common  Stock or
            other Securities or Property  that  it  would  have  owned  or  been
            entitled  to  receive on such  effective  date had such Warrant been
            exercised prior to such record date.

                                      11

<PAGE>

                  (iii)  Shares of Common Stock owned by or held for the account
            of the  Company or any  Subsidiary  shall not,  for  purposes of the
            adjustments set forth in this Section 4.1, be deemed outstanding.

            (H) OTHER SECURITIES.  In the event that at any time, as a result of
an adjustment  made pursuant to this Section 4.1, each holder of Warrants  shall
become  entitled to purchase any  Securities of the Company other than shares of
Common Stock,  the number or amount of such other  Securities so purchasable and
the Purchase Price of such  Securities  shall be subject to adjustment from time
to time in a manner  and on terms as nearly  equivalent  as  practicable  to the
provisions contained in Section 4.1 (a) through Section 4.1 (d), inclusive,  and
all other relevant  provisions of this Section 4.1 that are applicable to shares
of Common Stock shall be applicable to such other Securities.

            (I) NOTICE OF  ADJUSTMENT.  Whenever  the number of shares of Common
Stock  issuable upon the exercise of Warrants is adjusted or the Purchase  Price
in respect thereof is adjusted,  as herein provided,  the Company shall promptly
give to each holder of Warrants  notice of such  adjustment or  adjustments  and
shall promptly deliver to each holder of Warrants a certificate of the Company's
chief financial officer setting forth:

                  (i) the  number of shares of Common  Stock  issuable  upon the
            exercise of each Warrant and the Purchase Price of such shares after
            such adjustment;

                  (ii) a brief statement of the facts requiring such adjustment;
            and

                  (iii) the computation by which such adjustment was made.

So long as any  Warrant is  outstanding,  within  ninety (90) days of the end of
each fiscal year of the  Company,  the Company  shall  deliver to each holder of
Warrants a certificate of the Company setting forth:

                        (A) the number of shares of Common Stock  issuable  upon
                  the exercise of each  Warrant and the  Purchase  Price of such
                  shares as of the end of such fiscal year;

                        (B) a  brief  statement  of  the  facts  requiring  each
                  adjustment required to be made in such fiscal year; and

                        (C) the  computation  by which each such  adjustment was
                  made.

            (J) NOTICE OF CERTAIN  EVENTS.  Whenever the Company shall  publicly
announce the authorization of any Notice Event, the Company shall, not less than
twenty  (20) days after the record  date with  respect to such event (or,  if no
record  date for the same shall be fixed,  not less than  twenty (20) days after
the  occurrence of such Notice Event),  give to each holder of Warrants  written
notice of such event  setting forth any change in the number of shares of Common



                                      12


<PAGE>


Stock the Company  estimates will be issuable upon the exercise of such holder's
Warrants,  the  estimated  Purchase  Price of such shares  after any  adjustment
required to be made hereunder and a brief  statement of the facts requiring such
adjustment and the computation by which the Company expects such adjustment will
be made.  Notwithstanding  the foregoing,  no failure of the Company to give any
such notice  shall  affect the  validity of the action taken unless such failure
was in bad faith.

      4.2   FRACTIONAL SHARES.

      The Company  shall not be required  to issue  fractional  shares of Common
Stock upon the exercise of any Warrant. Upon the exercise of any Warrant,  there
shall be paid to the holder thereof,  in lieu of any fractional  share of Common
Stock resulting therefrom, an amount of cash equal to the product of:

            (A)   the fractional amount of such share; times

            (B) the Market Price,  as determined on the trading day  immediately
prior to the date of exercise of such Warrant.

      4.3   ADDITIONAL AGREEMENTS OF THE COMPANY.

      The Company  covenants  and agrees that it shall not, by  amendment to its
certificate of  incorporation,  as in effect on the date hereof,  or through any
reorganization,   transfer  of  assets,   consolidation,   merger,  dissolution,
liquidation, issuance or sale of Securities or any other voluntary action, avoid
or seek to  avoid  the  observance  or  performance  of any of the  terms  to be
observed or performed  hereunder by the Company,  but shall at all times in good
faith assist in the carrying out of all the  provisions of this Section 4 and in
the taking of all such actions as may be necessary  or  appropriate  in order to
protect the rights of the holders of the Warrant  Certificates  against dilution
or other impairment.

5.    FINANCIAL AND OTHER INFORMATION.

      The Company shall,  at all times,  and whether or not the Company shall be
required to do so by law, deliver to each holder of Registrable Securities:

            (A) copies of all  quarterly,  annual and current  reports and other
information,  documents and reports (or copies of such portions of the foregoing
as the SEC may from time to time by rules or  regulations  prescribe)  which the
Company may be  required to file with the SEC  pursuant to Section 13 or Section
15(d) of the Exchange Act or the rules and  regulations  of the SEC  thereunder;
or, if the Company is not  required to file  information,  documents  or reports
pursuant to either  Section 13 or Section 1 5(d) of the  Exchange  Act,  then it
will deliver to each holder of Registrable Securities such annual, quarterly and
current  reports and such of the  information,  documents  and  reports  which a
Person  subject to Section 13 of the Exchange Act and the rules and  regulations
of the SEC  thereunder  would be  required  to file with the SEC in respect of a
security listed and registered on a national securities exchange; and



                                      13


<PAGE>



            (B)   all other information actually delivered to the holders of the
Common Stock generally.

6.    REGISTRATION RIGHTS.

      6.1   INCIDENTAL REGISTRATION.

            (A) FILING OF  REGISTRATION  STATEMENT.  If the  Company at any time
proposes  to register  any of its Common  Stock (an  "Incidental  Registration")
under the  Securities  Act (other than pursuant to a  registration  statement on
Form S-4 or Form S-8 or any successor forms thereto) for sale to the public in a
public  offering,  it will  each such time  give  prompt  written  notice to all
holders of Registrable  Securities of its intention to do so, which notice shall
be given to all such  holders at least  thirty (30)  Business  Days prior to the
date that a registration  statement relating to such registration is proposed to
be filed with the SEC.  Upon the  written  request of any such holder to include
its shares under such registration statement (which request shall be made within
fifteen  (15)  Business  Days  after the  receipt  of any such  notice and shall
specify the Registrable  Securities  intended to be disposed of by such holder),
the  Company  will  use its best  efforts  to  effect  the  registration  of all
Registrable  Securities  that the Company has been so  requested  to register by
such holder; provided,  however, that if at any time after giving written notice
of its intention to register any  Securities  and prior to the effective date of
the  registration  statement  filed in connection  with such  registration,  the
Company  shall  determine  for any  reason not to  proceed  with the  Incidental
Registration,  the Company may, at its  election,  give  written  notice of such
determination to each holder of Registrable Securities and, thereupon,  shall be
relieved  of its  obligation  to register  any  Registrable  Securities  of such
Persons in connection with such registration.

            (B)  SELECTION  OF  UNDERWRITERS.   Each  notice  of  the  Company's
intention  to  register  such  Securities  given to the  holders of  Registrable
Securities pursuant to Section 6.1(a) shall designate the proposed  underwriters
of such offering  (which shall be one or more  underwriting  firms of recognized
standing) and shall contain the Company's  agreement to use its best efforts, if
requested  to do so,  to  arrange  for  such  underwriters  to  include  in such
underwriting  the Registrable  Securities that the Company has been so requested
to sell  pursuant to this Section 6.1, it being  understood  that the holders of
Registrable  Securities shall have no right to select different underwriters for
the disposition of their Registrable Securities.

            (C)   PRIORITY  ON   INCIDENTAL   REGISTRATIONS.   If  the  managing
underwriter  shall advise the Company in writing  (with a copy to each holder of
Registrable Securities requesting sale) that, in such underwriter's opinion, the
number of shares of  Securities  requested  to be  included  in such  Incidental
Registration exceeds the number that can be sold in such offering within a price
range acceptable to the Company (such writing to state the basis of such opinion
and the approximate  number of shares of Securities that may be included in such
offering  without such  effect),  the Company  will  include in such  Incidental
Registration,  to the  extent of the  number of  shares of  Securities  that the
Company is so advised can be sold in such offering:

                  (i)   in the case of any registration initiated by the Company
            for the purpose of selling Securities for its own account:

                                      14

<PAGE>



                        (A)   first, Securities  that  the  Company  proposes to
                              issue and sell for its own account; and

                        (B)   second,  Registrable  Securities  requested  to be
                              sold  by the  holders  thereof  pursuant  to  this
                              Section  6.1 and  all  Securities  proposed  to be
                              registered by any other selling stockholders,  pro
                              rata among such holders on the basis of the number
                              of shares  requested to be so  registered  by such
                              holders; and

                  (ii) in the  case of a  registration  initiated  by any  other
            stockholder  pursuant to demand or required  registration  rights in
            favor of such other stockholder:

                        (A)   FIRST, all Securities proposed to be registered by
                              any  other   stockholders   exercising  demand  or
                              required  registration rights with respect to such
                              registration   pursuant  to  registration   rights
                              agreements  in  existence  on  the  date  of  this
                              agreement;

                        (B)   SECOND, to the extent allowed by Section 7.5(g) of
                              the  Underwriter  Warrant  Agreement,  Registrable
                              Securities  requested  to be sold  by the  holders
                              thereof pursuant to this Section 6.1 and all other
                              Securities  proposed to be registered by any other
                              stockholders,  pro rata among such  holders on the
                              basis of the number of shares  requested  to be so
                              registered by such holders; and

                        (C)   THIRD,  Securities  that the  Company  proposes to
                              issue and sell for its own account.

      6.2   REGISTRATION PROCEDURES.

      The Company will use its best efforts to effect the Required  Registration
and  each  Incidental  Registration  of any  Registrable  Securities  under  the
Securities  Act as provided in Sections  6.1, and to cooperate  with the sale of
such   Registrable   Securities  in  accordance  with  the  intended  method  of
disposition  thereof  as  quickly  as  practicable,  and  the  Company  will  as
expeditiously as possible:

            (A)  subject,  in the  case of an  Incidental  Registration,  to the
proviso  to  Section  6.1(a),  prepare  and file  with the SEC the  registration
statement  and  use its  best  efforts  to  cause  the  Registration  to  become
effective;  provided,  however, that before filing any registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
the  holders  of  the  Registrable   Securities  covered  by  such  registration
statement,  their  counsel,  and the  underwriters,  if any, and their  counsel,
copies of all such  documents  proposed to be filed at least  fifteen  (15) days
prior thereto,  which documents will be subject to the reasonable review, within
such period, of such holders, their counsel and the underwriters;


                                      15

<PAGE>
            (B)  subject,  in the  case of an  Incidental  Registration,  to the
proviso to Section  6.1(a),  prepare and file with the SEC such  amendments  and
post-effective  amendments to any registration statement and any prospectus used
in connection therewith as may be necessary to keep such registration  statement
effective and to comply with the  provisions of the  Securities Act with respect
to the disposition of all Registrable  Securities  covered by such  registration
statement  until such time as all of such  Securities  have been  disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof set forth in such registration  statement and cause the prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act;

            (C) furnish to each  holder of  Registrable  Securities  included in
such  Registration and the underwriter or underwriters,  if any, without charge,
at least one signed copy of the  registration  statement and any  post-effective
amendment thereto, upon request, and such number of conformed copies thereof and
such number of copies of the prospectus  (including each preliminary  prospectus
and each  prospectus  filed  under  Rule 424  under  the  Securities  Act),  any
amendments or supplements  thereto and any documents  incorporated  by reference
therein,  as such  holder or  underwriter  may  reasonably  request  in order to
facilitate the  disposition  of the  Registrable  Securities  being sold by such
holder  (it  being  understood  that  the  Company  consents  to the  use of the
prospectus and any amendment or supplement thereto by each holder of Registrable
Securities  covered  by  such  registration  statement  and the  underwriter  or
underwriters,  if  any,  in  connection  with  the  offering  and  sale  of  the
Registrable  Securities covered by the prospectus or any amendment or supplement
thereto);

            (D) notify each  holder of the  Registrable  Securities  of any stop
order or other order suspending the effectiveness of any registration statement,
issued or threatened by the SEC in connection therewith, and take all reasonable
actions  required  to  prevent  the entry of such stop  order or to remove it or
obtain withdrawal of it at the earliest possible moment if entered;

            (E) if requested by the managing  underwriter or underwriters or any
holder of  Registrable  Securities  in  connection  with any sale  pursuant to a
registration  statement,  promptly  incorporate  in a prospectus  supplement  or
post-effective  amendment such information  relating to such underwriting as the
managing  underwriter or underwriters or such holder  reasonably  requests to be
included therein; and make all required filings of such prospectus supplement or
post-effective  amendment  as soon as  practicable  after being  notified of the
matters incorporated in such prospectus supplement or post-effective amendment;

            (F) on or  prior to the date on  which a  Registration  is  declared
effective,  use its best efforts to register or qualify,  and cooperate with the
holders of Registrable Securities included in such Registration, the underwriter
or underwriters,  if any, and their counsel, in connection with the registration
or qualification of the Registrable  Securities covered by such Registration for
offer and sale under the  securities  or "blue sky" laws of each state and other
jurisdiction  of the United States as any such holder or underwriter  reasonably
requests  in writing;  use its best  efforts to keep each such  registration  or
qualification  effective,  including  through  new  filings,  or  amendments  or
renewals,  during the period such registration  statement is required to be kept
effective;  and do any and all other acts or things  necessary  or  advisable to
enable the  disposition in all such  jurisdictions  reasonably  requested of the
Registrable Securities covered by such Registration; provided, however, that the
Company  will  not  be  required  to  qualify  generally  to  do business in any

                                      16

<PAGE>

jurisdiction where it is not then so qualified or to take any action which would
subject it to general  service of process in any such  jurisdiction  where it is
not then so subject;

            (G)  in  connection  with  any  sale  pursuant  to  a  Registration,
cooperate  with  the  holders  of   Registrable   Securities  and  the  managing
underwriter or  underwriters,  if any, to facilitate the timely  preparation and
delivery of  certificates  (not bearing any  restrictive  legends)  representing
Securities to be sold under such Registration,  and enable such Securities to be
in such  denominations and registered in such names as the managing  underwriter
or underwriters, if any, or such holders may reasonably request;

            (H) use its best efforts to cause the  Registrable  Securities to be
registered with or approved by such other  governmental  agencies or authorities
within  the  United  States  and  having  jurisdiction  over the  Company or any
Subsidiary  as may  reasonably  be  necessary  to enable  the  seller or sellers
thereof  or  the  underwriter  or  underwriters,   if  any,  to  consummate  the
disposition of such Securities;

            (I) make  available  for  inspection  by any  holder of  Registrable
Securities  included in any Registration,  any underwriter  participating in any
disposition pursuant to any Registration,  and any attorney, accountant or other
agent  retained  by any such  seller or  underwriter,  all  financial  and other
records,  pertinent  corporate documents and properties of the Company, as shall
be  reasonably  necessary  to  enable  them  to  exercise  their  due  diligence
responsibility,  and cause the  Company's  officers,  directors and employees to
supply all  information  reasonably  requested by any such Person in  connection
with such Registration;

            (J)   use its best efforts to obtain:

                  (i) at the  time  of  effectiveness  of each  Registration,  a
            "comfort  letter" from the Company's  independent  certified  public
            accountants covering such matters of the type customarily covered by
            "cold comfort letters" as the Requisite Holders and the underwriters
            reasonably request; and

                  (ii) at the  time of any  underwritten  sale  pursuant  to the
            registration  statement,  a "bring-down comfort letter," dated as of
            the date of such  sale,  from the  Company's  independent  certified
            public  accountants  covering  such matters of the type  customarily
            covered  by  comfort  letters  as  the  Requisite  Holders  and  the
            underwriters reasonably request;

            (K)  obtain,  at  the  time  of  effectiveness  of  each  Incidental
Registration  and at the  time of any sale  pursuant  to each  Registration,  an
opinion or opinions,  reasonably acceptable to the Requisite Holders in form and
scope, from counsel for the Company in customary form;

            (L) so long as such  Registration  remains  effective,  notify  each
seller of Registrable  Securities covered by such  Registration,  upon discovery
that,  or upon the happening of any event as a result of which,  the  prospectus
included in such Registration,  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, and promptly
prepare,  file with the SEC and  furnish to such  seller or holder a  reasonable

                                       17

<PAGE>


number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as  thereafter  delivered to the  purchasers  or  prospective
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 under which they are made;

            (M) otherwise  comply with all applicable  rules and  regulations of
the SEC, and make generally  available to its security  holders (as contemplated
by Section 11 (a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the  Securities  Act no later than ninety (90) days
after the end of the twelve (12) month period  beginning with the first month of
the Company's  first fiscal quarter  commencing  after the effective date of the
registration  statement,  which  statement  shall  cover said  twelve (12) month
period;

            (N)  provide  and  cause  to be  maintained  a  transfer  agent  and
registrar for all Registrable  Securities  covered by each Registration from and
after a date not later than the effective date of such Registration;

            (O) use its best efforts to cause all Registrable Securities covered
by each  Registration  to be listed subject to notice of issuance,  prior to the
date of first sale of such Registrable Securities pursuant to such Registration,
on each  securities  exchange  on which the  Common  Stock (or other  Securities
issuable upon  exercise of the Warrants)  issued by the Company are then listed,
and  admitted  to  trading  on  NASDAQ,  if the  Common  Stock or any such other
Securities are then admitted to trading on NASDAQ; and

            (P) enter into such agreements (including underwriting agreements in
customary  form) and take such other  actions  as the  Requisite  Holders  shall
reasonably  request in order to expedite or facilitate  the  disposition of such
Registrable Securities.

The  obligation  of the Company to include  Registrable  Securities  in any such
Registration is expressly  subject to the condition that such holder furnish the
Company  with such  information  in  respect of such  holder of its  Registrable
Securities  that  will be  included  in such  Registration  as the  Company  may
reasonably  request  in  writing  and  as is  required  by  applicable  laws  or
regulations.

      6.3   PREPARATION; REASONABLE INVESTIGATION.

      In  connection  with  the  preparation  and  filing  of each  registration
statement  registering  Registrable  Securities  under the  Securities  Act, the
Company  will give the holders of such  Registrable  Securities  so  registered,
their  underwriters,  if any, and their  respective  counsel and accountants the
opportunity  to participate in the  preparation of such  registration  statement
(other than reports and proxy statements  incorporated  therein by reference and
lawfully and properly filed with the SEC) and each prospectus  included  therein
or filed with the SEC, and each  amendment  thereof or supplement  thereto,  and
will  give  each  of  them  such  access  to its  books  and  records  and  such
opportunities  to discuss the  business of the Company with its officers and the
independent  public  accountants who have certified its financial  statements as
shall be  necessary,  in the opinion of such holders' or such  underwriters'  to
conduct a reasonable  investigation  within the meaning of the Section 11 (b)(3)
of the Securities Act.
                                       18

<PAGE>
      6.4   REGISTRATION EXPENSES.

      The Company will pay all  Registration  Expenses in  connection  with each
registration of Registrable Securities,  including, without limitation, any such
registration not effected by the Company.

      6.5   RIGHTS OF REQUESTING HOLDERS.

      Each  holder of  Registrable  Securities  which  makes a  written  request
therefor  within thirty (30) days after the notice to such holders  provided for
in Section 6.1,  shall have the right to receive the copies of the  information,
notices and other  documents  described in Section  6.2(c),  Section  6.2(l) and
Section 6.2(m) in connection with any proposed Registration by the Company under
the Securities Act.

      6.6   INDEMNIFICATION; CONTRIBUTION.

            (A) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify,  to
the fullest extent permitted by law, each holder of Registrable Securities,  its
officers,  directors and agents,  if any, and each Person,  if any, who controls
such holder within the meaning of section 15 of the Securities Act,  against all
losses,  claims,  damages,  liabilities (or proceedings in respect  thereof) and
expenses  (under  the  Securities  Act or  common  law or  otherwise),  joint or
several,  resulting  from any violation by the Company of the  provisions of the
Securities Act or any untrue statement or alleged untrue statement of a material
fact contained in any registration statement filed pursuant to this Agreement or
prospectus (and as amended or supplemented  if amended or  supplemented)  or any
preliminary  prospectus  included  therein or caused by 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 any  prospectus,  in
light of the circumstances under which they were made) not misleading, except to
the extent that such losses,  claims,  damages,  liabilities  (or proceedings in
respect  thereof)  or  expenses  are caused by any untrue  statement  or alleged
untrue  statement  contained  in or by any  omission  or alleged  omission  from
information  concerning  any holder  furnished in writing to the Company by such
holder expressly for use therein.  If the offering  pursuant to any registration
statement  provided for under this Section 6 is made  through  underwriters,  no
action or failure to act on the part of such  underwriters  (whether or not such
underwriter  is an  Affiliate  of any holder of  Registrable  Securities)  shall
affect the  obligations  of the Company to indemnify  any holder of  Registrable
Securities  or any other  Person  pursuant  to the  preceding  sentence.  If the
offering pursuant to any registration  statement provided for under this Section
6 is made through  underwriters,  the Company agrees,  to the extent required by
such  underwriters,  to enter into an  underwriting  agreement in customary form
with such  underwriters  and to indemnify  such  underwriters,  their  officers,
directors  and agents,  if any,  and each  Person,  if any,  who  controls  such
underwriters  within the meaning of section 15 of the Securities Act to the same
extent as  hereinbefore  provided  with  respect to the  indemnification  of the
holders  of  Registrable  Securities;  provided  that the  Company  shall not be
required to indemnify any such  underwriter,  or any officer or director of such
underwriter  or any Person who controls such  underwriter  within the meaning of
section 15 of the  Securities  Act, to the extent that the loss,  claim,  damage
liability   (or   proceedings   in  respect   thereof)   or  expense  for  which
indemnification  is claimed results from such  underwriter's  failure to send or
give a copy  of an  amended  or  supplemented  final  prospectus  to the  Person
asserting an untrue statement or alleged untrue statement or omission or alleged

                                       19

<PAGE>


omission  at or prior to the  written  confirmation  of the sale of  Registrable
Securities  to such Person if such  statement or omission was  corrected in such
amended or supplemented final prospectus prior to such written  confirmation and
the underwriter was provided with such amended or supplemented final prospectus.

            (B)   INDEMNIFICATION  BY  THE  HOLDERS.   In  connection  with  any
registration   statement  in  which  a  holder  of  Registrable   Securities  is
participating,  each such holder, severally and not jointly, shall indemnify, to
the fullest extent  permitted by law, the Company,  each  underwriter  and their
respective officers,  directors and agents, if any, and each Person, if any, who
controls the Company or such underwriter within the meaning of section 15 of the
Securities Act, against any losses, claims, damages, liabilities (or proceedings
in respect thereof) and expenses  resulting from any untrue statement or alleged
untrue  statement of a material  fact or any  omission or alleged  omission of a
material fact required to be stated in the registration  statement or prospectus
or  preliminary  prospectus  or any amendment  thereof or supplement  thereto or
necessary  to make the  statements  therein (in the case of any  prospectus,  in
light of the circumstances under which they were made) not misleading,  but only
to the extent that such untrue  statement is  contained  in or such  omission is
from  information  so  concerning  a holder  furnished in writing by such holder
expressly for use therein;  provided,  however,  that such holder's  obligations
hereunder shall be limited to an amount equal to the net proceeds to such holder
of the Registrable Securities sold pursuant to such registration statement;  and
provided, further, that no holder of Registrable Securities shall be required to
indemnify any such  underwriter,  or any officer or director of such underwriter
or any Person who controls such underwriter  within the meaning of section 15 of
the Securities Act, to the extent that the loss,  claim,  damage,  liability (or
proceedings in respect thereof) or expense for which  indemnification is claimed
results from such underwriter's  failure to send or give a copy of an amended or
supplemented  final  prospectus to the Person  asserting an untrue  statement or
alleged  untrue  statement  or omission  or alleged  omission at or prior to the
written  confirmation  of the sale of  Registrable  Securities to such Person if
such statement or omission was corrected in such amended or  supplemented  final
prospectus  prior to such written  confirmation and the underwriter was provided
with such amended or supplemented final prospectus.

            (C) CONTROL OF DEFENSE. Any Person entitled to indemnification under
the provisions of this Section 6.6 shall give prompt notice to the  indemnifying
party of any claim with respect to which it seeks  indemnification and unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying  parties may exist in respect of such claim, permit
such  indemnifying  party to assume the  defense  of such  claim,  with  counsel
reasonably  satisfactory  to the  indemnified  party;  and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement  attributes liability to the
indemnified  party  and such  indemnifying  party  shall not be  subject  to any
liability  for any  settlement  made  without  its consent  (which  shall not be
unreasonably withheld); and any underwriting agreement entered into with respect
to any  registration  statement  provided  for  under  this  Section  6 shall so
provide.  In the event an  indemnifying  party shall not be entitled,  or elects
not,  to assume the  defense of a claim,  such  indemnifying  party shall not be
obligated  to pay the fees and  expenses  of more  than one  counsel  or firm of
counsel for all parties  indemnified  by such  indemnifying  party in respect of
such claim,  unless in the reasonable  judgment of any such indemnified  party a
conflict of interest may exist between such  indemnified  party and any other of
such indemnified parties in respect to such claim.

                                      20

<PAGE>



            (D)  CONTRIBUTION.  If for any reason  the  foregoing  indemnity  is
unavailable,  then the indemnifying party shall contribute to the amount paid or
payable by the indemnified  party as a result of such losses,  claims,  damages,
liabilities  or expenses,  in such  proportion as is  appropriate to reflect not
only the relative  benefits  received by the indemnifying  party on the one hand
and the  indemnified  party on the  other  but also  the  relative  fault of the
indemnifying  party  and the  indemnified  party as well as any  other  relevant
equitable   considerations.   Notwithstanding   the  foregoing,   no  holder  of
Registrable  Securities  shall be required to contribute any amount in excess of
the amount such holder would have been required to pay to an  indemnified  party
if the  indemnity  under  Section  6.6(b)  was  available.  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.  The  obligation of any Person to
contribute pursuant to this Section 6.6 shall be several and not joint.

            (E) TIMING OF PAYMENTS. An indemnifying party shall make payments of
all amounts  required to be made  pursuant to the  foregoing  provisions of this
Section  6.6 to or for the  account of the  indemnified  party from time to time
promptly upon receipt of bills or invoices  relating  thereto or when  otherwise
due or payable.

            (F) SURVIVAL. The indemnity and contribution agreements contained in
this  Section  6.6 shall  remain  in full  force and  effect  regardless  of any
investigation  made by or on behalf  of a  participating  holder of  Registrable
Securities, its officers,  directors, agents or any Person, if any, who controls
such holder as aforesaid,  and shall survive the transfer of such  Securities by
such holder.

      6.7   HOLDBACK AGREEMENTS; REGISTRATION RIGHTS TO OTHERS.

            (A)  In  connection  with  each  underwritten  sale  of  Registrable
Securities,  the Company  agrees,  and each holder of Registrable  Securities by
acquisition  of such  Registrable  Securities  agrees,  to enter into  customary
holdback agreements for a period not exceeding two hundred (200) days concerning
sale or  distribution of Registrable  Securities and other equity  Securities of
the Company, except, in the case of any holder of Registrable Securities, to the
extent that such holder is prohibited by applicable law or exercise of fiduciary
duties from agreeing to withhold  Registrable  Securities from sale or is acting
in its capacity as a fiduciary or investment adviser. In the event that any such
holder is so prohibited from making any such agreement, then, in the case of any
Incidental  Registration only, the Company, at the discretion of the underwriter
of such  offering,  may  refuse  to  include  such  holder  in  such  Incidental
Registration. Without limiting the scope of the term "fiduciary," a holder shall
be deemed to be acting as a fiduciary or an investment adviser if its actions or
the  Registrable  Securities  proposed  to be sold are  subject to the  Employee
Retirement  Income Security Act of 1974, as amended,  or the Investment  Company
Act of  1940,  as  amended,  or if such  Registrable  Securities  are  held in a
separate account under applicable insurance law or regulation.

            (B) If the Company  shall at any time after the date hereof grant to
any  holder  of any  Securities  of  the  Company  rights  with  respect  to the
registration of such Securities  under the Securities Act, such rights shall not
be in  conflict  with or  adversely  affect any of the rights  provided  in this
Section 6 to the holders of Registrable Securities.

                                       21

<PAGE>



      6.8   OTHER REGISTRATION OF COMMON STOCK.

      If any shares of Common  Stock  required  to be reserved  for  purposes of
exercise of Warrants or  conversion  of any class of Common Stock into any other
class of Common Stock require  registration with or approval of any governmental
authority  under any federal or state law (other than the Securities Act) before
such shares may be issued upon conversion,  the Company will, at its expense and
as  expeditiously  as possible,  use its  reasonable  best efforts to cause such
shares to be duly registered or approved, as the case may be.

      6.9   AVAILABILITY OF INFORMATION.

      The  Company  will use its  best  efforts  to  comply  with the  reporting
requirements  of Sections 13 and 15(d) of the Exchange Act and will use its best
efforts to comply with all other public  information  reporting  requirements of
the SEC as from  time to time in  effect,  and  cooperate  with the  holders  of
Registrable  Securities,   so  as  to  permit  disposition  of  the  Registrable
Securities  pursuant to an exemption from the Securities Act for the sale of any
Registrable  Securities  (including,  without  limitation,  the  current  public
information requirements of Rule 144(c) and Rule 144A under the Securities Act).
The Company will also cooperate with each holder of any  Registrable  Securities
in supplying  such  information  as may be necessary for such holder to complete
and file any information  reporting forms presently or hereafter required by the
SEC as a condition to the  availability  of an exemption from the Securities Act
for the sale of any Registrable Securities.

7.    INTERPRETATION OF THIS AGREEMENT.

      7.1   CERTAIN DEFINED TERMS.

      For the  purpose of this  Agreement,  the  following  terms shall have the
meanings specified with respect thereto below:

      ADDITIONAL COMMON STOCK - Common Stock of the Company,  including treasury
shares,  issued after the date  hereof,  except (a) Common Stock issued upon the
exercise of any one or more Warrants, and (b) Excluded Securities.

      AFFILIATE - means,  at any time, a Person  (other than a Subsidiary or the
Purchaser):

            (A)   that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company;

            (B)   that  beneficially  owns or holds five percent (5%) or more of
any class of the Voting Stock of the Company; or

            (C)   five  percent (5%) or more of the Voting Stock (or in the case
of a Person that is not a  corporation,  five percent (5%) or more of the equity
interest) of which is beneficially owned or held by the Company or a Subsidiary;

at such time.

                                       22


<PAGE>



As used in this definition,

      CONTROL - means the  possession,  directly or indirectly,  of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through the ownership of voting securities, by contract or otherwise.

      AGGREGATE  CONSIDERATION  RECEIVABLE  -  means,  in the  case of a sale of
shares of Additional  Common Stock,  the aggregate amount paid to the Company in
connection therewith,  and, in the case of an issuance or sale of Rights, or any
amendment thereto, the sum of:

            (a)   the aggregate amount paid to the Company for such Rights; plus

            (b)   the aggregate  consideration or premiums stated in such Rights
       to be payable for the shares of Additional Common Stock  covered thereby;

in each case without deduction for any fees, expenses or underwriters  discounts
or commissions.

      AGREEMENT,  THIS - and references  thereto shall mean this Agreement as it
may from time to time be amended or supplemented.

      BOARD OF  DIRECTORS - means the board of  directors  of the Company or any
committee thereof that, in the instance, shall have the lawful power to exercise
the power and authority of such board of directors.

      BUSINESS  DAY - means a day other  than a  Saturday,  a Sunday or a day on
which banks in the State of Florida are required or permitted by law (other than
a  general  banking  moratorium  or  holiday  for a  period  exceeding  four (4)
consecutive days) to be closed.

      CLOSING PRICE - means,  per share of Common Stock,  on any date  specified
herein:

            (a) the last sale  price,  regular  way, on such date or, if no such
      sale takes  place on such date,  the  average of the closing bid and asked
      prices on such date, in each case as officially  reported on the principal
      national  securities  exchange on which the Common Stock is then listed or
      admitted to trading; and

            (b) if the Common Stock is not then listed or admitted to trading on
      any national securities  exchange,  but is designated as a national market
      system security by the National  Association of Securities Dealers,  Inc.,
      the last trading price of the Common Stock on such date, or if there shall
      have  been no  trading  on  such  date or if the  Common  Stock  is not so
      designated,  the average of the  reported  closing bid and asked prices on
      such date as shown by the NASDAQ.

      COMMON STOCK - the common stock,  par value $.01 per share, of the Company
and any other equity  securities of the Company which are not limited to a fixed
sum or a fixed  percentage of par value in respect of participation in dividends
and distributions in liquidation.

      COMPANY - shall have the meaning  specified in the introductory  paragraph
hereof.
                                       23

<PAGE>



      CONSIDERATION PER SHARE - means, with respect to shares of Common Stock or
Rights, the quotient of:

            (a)   the  Aggregate  Consideration  Receivable  in  respect of such
      shares of Common Stock or such Rights; divided by

            (b) the total  number of such shares of Common Stock or, in the case
      of  Rights,  the total  number of shares of Common  Stock  covered by such
      Rights.

      EFFECTIVE DATE - means October 15, 1996.

      EXCHANGE ACT - means the Securities Exchange Act of 1934, as amended.

      EXCLUDED SECURITIES - means and includes:

            (a) shares of Common Stock or Rights issued (i) upon the exercise or
      conversion  of a  Right  (an  "Underlying  Right")  if at the  time of the
      issuance of the Underlying Right either no adjustment  pursuant to Section
      4.1 was necessary or any necessary  adjustment pursuant to Section 4.1 was
      made, or (ii) in a transaction described in Section 4.1(a), Section 4.1(c)
      or Section 4.1(d) in respect of which any necessary adjustment pursuant to
      Section 4.1 was made;

            (b)   shares of Common Stock issuable upon exercise of the Warrants;

            (c) up to  2,233,288  shares  of  Common  Stock  issuable  upon  the
      exercise of presently  outstanding rights and warrants which are listed on
      Part  2.20 of the  Disclosure  Letter  referred  to in the  Note  Purchase
      Agreement by and between the Company and Equitable Life Assurance  Society
      of the United States dated December 15, 1995;

            (d) up to 500,000  shares of Common Stock issuable upon the exercise
      of options  granted after the Effective Date pursuant to the Company Stock
      Option Plan, provided that the exercise price of each such option shall be
      not less than the Market Price as of the date such option is granted; and

            (e) up to 50,000  shares of Common Stock  issuable upon the exercise
      of options  granted  after the  Effective  Date  pursuant to the Company's
      Directors Stock Option Plan, provided that the exercise price of each such
      option  shall not be less than the Market Price as of the date such option
      is granted.

      EXPIRATION DATE - means 5:00 p.m.  (Eastern  Standard Time) on October 15,
2001.

      FAIR  VALUE - means,  with  respect  to any  share of  Common  Stock,  the
quotient of:

            (a)   the sum of

                  (i) the fair salable value of the Company, as a going concern,
            giving effect to all Property thereof and subject to all liabilities


                                      24

<PAGE>


            thereof,  that would be realized in an arm's  length sale between an
            informed and willing buyer and an informed and willing seller, under
            no  compulsion  to buy or sell,  respectively,  as of a date that is
            within  fifteen (15) days of the date as of which the  determination
            is to be made, determined by the Valuation Agent, such determination
            to be made without regard to any absence of a liquid or ready market
            for such Common Stock; plus

                  (ii)  the aggregate exercise or conversion price of all Rights
            in existence and remaining unexercised on such date;

divided by

            (b) the total number of shares of Common Stock  outstanding  at such
      time on a fully diluted basis.

      INCIDENTAL REGISTRATION - Section 6.1.

      INITIAL PURCHASE PRICE - means $4.875 per share.

      LIEN - means any mortgage,  pledge, security interest,  encumbrance,  lien
(statutory or otherwise) or charge of any kind  (including any agreement to give
any of the  foregoing  (but  excluding  negative  pledge  clauses in  agreements
related  to the  borrowing  of  money),  any  conditional  sale or  other  title
retention  agreement,  any lease in the  nature  thereof,  and the  filing of or
agreement to give any financing  statement under the Uniform  Commercial Code of
any jurisdiction (but excluding informational filings made in respect of leases)
or any other type of  preferential  arrangement  for the purpose,  or having the
effect,  of  protecting  a creditor  against  loss or  securing  the  payment or
performance of an obligation. The term "Lien" includes encumbrances with respect
to stock, including,  without limitation,  stockholder agreements,  voting trust
agreements, buy-back agreements and all similar arrangements.

      MARKET  PRICE -  means,  per  share  of  Common  Stock,  as of any date of
determination,  the  arithmetic  mean of the daily Closing Prices for the twenty
(20) consecutive  trading days before such date of determination;  provided that
if the Common  Stock is not then listed or  admitted to trading on any  national
securities  exchange  or quoted in the  over-the-counter  market,  then  "Market
Price" means the greater of:

            (a)   the book value of one share of Common Stock,  as determined in
      accordance with generally accepted accounting  principles by the Valuation
      Agent, as of the date of determination; and

            (b)   the Fair Value of one share of Common Stock, as of the date of
      determination .

      NASDAQ - means the National  Association of Securities  Dealers  Automated
      Quotation

      NOTICE EVENT - means any of the following:



                                       25


<PAGE>



            (a)   any event that would  require an  adjustment  in the  Purchase
      Price pursuant to Section 4.1; or

            (b)   any distribution of Property in respect of Common Stock.

      PERSON - means an individual, partnership,  corporation, limited liability
company, joint venture, trust, unincorporated  organization,  or a government or
agency or political subdivision thereof.

      PROPERTY - means any  interest in any kind of  property or asset,  whether
real, personal or mixed, and whether tangible or intangible.

      PURCHASE PRICE - means the Initial Purchase Price.

      REFERENCE  PRICE - means,  per  share of Common  Stock,  as of any date of
determination,  the Market Price as of such date; provided,  however,  that with
respect to each of the first three  Significant  Equity Infusions to occur after
the date hereof and prior to May 1, 1997,  the  Reference  Price shall be 85% of
the Market Price on the date of such transaction.

      REGISTRABLE SECURITIES - means, at any time:

            (a)   any  shares of Common  Stock  that have been  issued  upon the
     exercise of any Warrant; and

            (b)   any shares of Common Stock that are issuable upon the exercise
      of the Warrants.

For purposes of Section 6 and the  definition  of  "Requisite  Holders"  herein,
holders of  Warrants  at any time  shall be deemed to be holders of  Registrable
Securities  described  in clause  (b) of this  definition  that are at such time
issuable upon exercise in full of such Warrants, whether or not such holders are
then entitled so to exercise such Warrants pursuant to the terms thereof.

As to any particular  Registrable  Securities once issued, such Securities shall
cease to be Registrable Securities:

                  (i) when a registration  statement with respect to the sale of
            such Securities shall have become effective under the Securities Act
            and such  Securities  shall have been disposed of in accordance with
            such registration statement;

                  (ii)  when they  shall  have been  distributed  to the  public
            pursuant  to  Rule  144  (or  any  successor  provision)  under  the
            Securities Act;

                  (iii)  when they  shall have been  otherwise  transferred  and
            subsequent  disposition  of them shall not require  registration  or
            qualification under the Securities Act or any similar state law then
            in force; or



                                      26


<PAGE>



                  (iv) when they shall have  ceased to be  outstanding  or (with
            respect to  Registrable  Securities  described in clause (b) of this
            definition) issuable upon exercise of the Warrants.

      REGISTRATION - means the Incidental Registration.

      REGISTRATION  EXPENSES  - means all  expenses  incident  to the  Company's
performance of or compliance  with Section 6.1 through  Section 6.5,  inclusive,
including,  without limitation,  all registration and filing fees (except to the
extent required by the National  Association of Securities Dealers to be paid by
the holders of  Registrable  Securities),  fees and expenses of compliance  with
securities or blue sky laws  (including  reasonable  fees and  disbursements  of
counsel  in  connection  with  blue  sky   qualifications   of  the  Registrable
Securities), expenses of printing certificates for the Registrable Securities in
a form  eligible  for deposit  with  Depositary  Trust  Company,  messenger  and
delivery  expenses,  internal  expenses  (including,   without  limitation,  all
salaries  and  expenses  of its  officers  and  employees  performing  legal  or
accounting  duties),  and fees and  disbursements of counsel for the Company and
its  independent  certified  public  accountants  (including the expenses of any
management  review,  cold comfort  letters or any special audits  required by or
incident  to  such  performance  and  compliance),   securities  acts  liability
insurance (if the Company elects to obtain such insurance),  the reasonable fees
and expenses of any special  experts  retained by the Company in connection with
such  registration,  fees and expenses of other Persons  retained by the Company
and fees and expenses of counsel for holders of Registrable Securities, selected
by the Requisite Holders;  but not including any underwriting fees, discounts or
commissions  attributable  to the  sale of  Registrable  Securities  or fees and
expenses  of more than one  counsel  representing  the  holders  of  Registrable
Securities or any other selling expenses,  discounts or commissions  incurred in
connection with the sale of Registrable Securities.

      REQUIRED  WARRANTHOLDERS  - means,  at any time,  the  holders of at least
fifty-one  percent  (51%) of all Warrants  outstanding  (excluding  any Warrants
directly or indirectly held by the Company,  any Subsidiary or any Affiliate) at
such time.

      REQUISITE  HOLDERS - means,  with respect to any  registration or proposed
registration  of  Registrable  Securities  pursuant  to Section 6, any holder or
holders (other than the Company or any Affiliate or Subsidiary) holding at least
seventy-five  percent (75%) of the shares of Registrable  Securities  (excluding
any shares of Registrable  Securities directly or indirectly held by the Company
or any Affiliate or Subsidiary) to be so registered.

      RIGHT - means and includes:

            (a) any warrant (including,  without limitation, any Warrant) or any
      option (including, without limitation,  employee stock options) to acquire
      Common Stock;

            (b) any right  issued to holders of the Common  Stock,  or any class
      thereof,  permitting the holders  thereof to subscribe to shares of Common
      Stock (pursuant to a rights offering or otherwise);

            (c) any right to acquire  Common Stock pursuant to the provisions of
      any Security convertible or exchangeable into Common Stock; and

                                       27

<PAGE>



            (d) any similar right permitting the holder thereof to subscribe for
      or purchase shares of Common Stock.

      SEC - means,  at any time, the  Securities and Exchange  Commission or any
other federal agency at such time administering the Securities Act.

      SECURITIES ACT - means the Securities Act of 1933, as amended.

      SECURITY  - shall  have  the  meaning  specified  in  section  2(1) of the
Securities Act.

      SIGNIFICANT  EQUITY  INFUSION - means,  a transaction in which the Company
issues  Common Stock or preferred  stock and in which the gross  proceeds to the
Company are at least Two Million Dollars ($2,000,000).

      SUBSIDIARY - means, as to any Person, any corporation in which such Person
or one or more  Subsidiaries  of such  Person  or  such  Person  and one or more
Subsidiaries  of such Person owns sufficient  voting  securities to enable it or
them  (as a group)  ordinarily,  in the  absence  of  contingencies,  to elect a
majority of the  directors  (or Persons  performing  similar  functions) of such
corporation;  the term  "Subsidiary,"  as used herein  without  reference to any
Person, shall mean a Subsidiary of the Company.

      TRANSFEREE  - means any  registered  transferee  of all or any part of any
Warrant Certificate issued to the Purchaser under this Agreement.

      UNDERWRITER  WARRANT AGREEMENT - that certain Warrant Agreement,  dated as
of September 12, 1994, between the Company and Whale Securities Co., L.P.

      VALUATION   AGENT  -  means  a  firm  of  independent   certified   public
accountants,  an investment banking firm or appraisal firm (which firm shall own
no Securities of, and shall not be an Affiliate,  Subsidiary or a related Person
of, the Company) of  recognized  national  standing  retained by the Company and
reasonably acceptable to the Required Warrantholders.

      VOTING STOCK - means, with respect to any corporation, any shares of stock
of such corporation  whose holders are entitled under ordinary  circumstances to
vote for the election of directors of such corporation  (irrespective of whether
at the time any stock of any other  class or  classes  shall  have or might have
voting power by reason of the happening of any contingency).

      WARRANT - shall have the meaning specified in the Recitals hereof.

      WARRANT  CERTIFICATE  - shall have the  meaning  specified  in Section 1.1
hereof.

      7.2   DESCRIPTIVE HEADINGS.

      The  descriptive  headings of the several  Sections of this  Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

      7.3   GOVERNING LAW.


                                       28


<PAGE>



      THIS  AGREEMENT  AND THE  WARRANT  CERTIFICATES  SHALL  BE  CONSTRUED  AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF FLORIDA.

8.    MISCELLANEOUS.

      8.1   EXPENSES.

      The  Company  agrees to pay,  and save the  Warrant  Holder  and any other
holders of Warrant  Certificates  harmless against liability for the payment of,
all  out-of-pocket  expenses arising in connection with the transactions  herein
contemplated, including, without limitation:

            (a)   the cost, if any, of complying with Section 3.8;

            (b) any subsequent  proposed  modification  of, or proposed  consent
      requested  or  initiated  by or on  behalf  of  the  Company  under,  this
      Agreement,  the Warrant  Certificate or the Warrants,  whether or not such
      proposed  modification  shall be  effected  or  proposed  consent  granted
      (including,  without  limitation,  all document production and duplication
      charges and the fees and  expenses of one special  counsel  engaged by the
      holders of Warrant Certificates in connection therewith); and

            (c)  the  enforcement  of (or  determination  of  whether  or how to
      enforce) any rights under this Agreement,  the Warrant Certificates or the
      Warrants  or in  responding  to any  subpoena  or other  legal  process or
      informal  investigative demand issued in connection with this Agreement or
      the transactions contemplated hereby or by reason of the Warrant Holder or
      any  Transferee's  having  acquired  any Warrant  Certificate,  including,
      without  limitation,  the fees and  disbursements  of one special  counsel
      engaged by the  holders  of  Warrant  Certificates  and  incurred  by such
      holders  and the  costs  and  expenses  incurred  in any  bankruptcy  case
      involving the Company or any Subsidiary.

The obligations of the Company under this Section 8.1 shall survive the transfer
of any Warrant Certificate or portion thereof or interest therein by the Warrant
Holder or any Transferee and the exercise or expiration of any Warrant.

      8.2   AMENDMENT AND WAIVER.

      This  Agreement  may be amended,  and the  observance  of any term of this
Agreement may be waived,  with and only with the written  consent of the Company
and:

            (a) in the case of  Sections 1 through 5,  inclusive,  Section  7.2,
      Section  7.3,  Section 8 (other than this  Section  8.2),  and of any term
      defined in Section 7.1 used in any of such Sections,  the written  consent
      of the Required Warrantholders;

            (b) in the case of Section 6 and of any term  defined in Section 7.1
      used in Section 6, the written consent of the Requisite Holders; and



                                       29


<PAGE>



            (c)  in  the  case of this  Section 8.2,  the written consent of all
      holders of Warrants then outstanding;

provided, however, that:

                  (i) no such  amendment or waiver of any of the  provisions  of
            this  Agreement  pertaining  to the Purchase  Price or the number or
            kind of shares of Common Stock that may be purchased  upon  exercise
            of each Warrant; and

                  (ii)  no change in the definition of "Expiration Date";

shall be  effective  as to the  holder of any  Warrant  unless  consented  to in
writing by such holder.

      8.3   NO RIGHTS OR LIABILITIES AS STOCKHOLDER.

      Nothing  contained in this Agreement shall be construed as conferring upon
the holder of any  Warrant  any  rights as a  stockholder  of the  Company or as
imposing any obligation on such holder to purchase any Securities or as imposing
any  liabilities  on such holder as a stockholder  of the Company,  whether such
obligation  or  liabilities  are  asserted by the Company or by creditors of the
Company. Although a holder of the Warrants shall not be considered a stockholder
of the Company for any  purposes,  the holders of the Warrants  shall have those
rights provided by agreement in Section 3.6 of this Agreement.

      8.4   DIRECTLY OR INDIRECTLY.

      Where any provision in this Agreement  refers to any action to be taken by
any Person, or that such Person is prohibited from taking,  such provision shall
be  applicable  whether  such  action is taken  directly or  indirectly  by such
Person, including actions taken by or on behalf of any partnership in which such
Person is a general partner.

      8.5   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

      All  representations  and  warranties  contained  herein shall survive the
execution  and  delivery of this  Agreement  and the Warrant  Certificates,  the
transfer by the Warrant Holder of any Warrant  Certificate or portion thereof or
interest  therein and the  exercise or  expiration  of any  Warrant,  and may be
relied upon by the Warrant Holder or Transferee, regardless of any investigation
made at any time by or on behalf of the Warrant Holder or Transferee. Subject to
the preceding  sentence this Agreement and the Warrant  Certificates  embody the
entire agreement and  understanding  between the Warrant Holder and the Company,
and supersede all prior agreements and  understandings,  relating to the subject
matter hereof.

      8.6   SUCCESSORS AND ASSIGNS.

      All covenants and other  agreements in this  Agreement  contained by or on
behalf of any of the parties  hereto  shall bind and inure to the benefit of the
respective  successors  and assigns of the parties  hereto  (including,  without
limitation, any Transferee) whether so expressed or not.

                                       30

<PAGE>



      8.7   NOTICES.

      All written  communications  provided  for  hereunder  sent to the parties
hereto  shall  be  sufficiently  given  or made if sent by  United  States  mail
(registered or certified mail), postage prepaid, or sent by nationwide overnight
delivery  service  (with  charges  prepaid) and are  addressed to the  following
addresses:

            (a)   if to the Warrant Holder, addressed to it at:

                  Aquagenix Warrant Holdings II, a General Partnership
                  150 South Rodeo Drive - Suite 100
                  Beverly Hills, CA  90212
                  Attention:  Richard A. Bloom

or at such other  address as the  Warrant  Holder  shall have  specified  to the
Company in writing;

            (b) if to any other holder of any Warrant Certificate,  addressed to
      such  other  holder  at such  address  as such  other  holder  shall  have
      specified to the Company in writing or, if any such other holder shall not
      have so specified an address to the Company,  then addressed to such other
      holder in care of the last holder of such Warrant  Certificate  that shall
      have so specified an address to the Company; and

            (c)   if to the Company, addressed to it at:

                  Aquagenix, Inc.
                  6500 N.W. 15th Avenue
                  Fort Lauderdale, FL 33309
                  Attention: Mr. Andrew P. Chesler
                  TEL:  (305) 975-7771
                  FAX: (305) 969-7700

or at such other  address as the Company  shall have  specified to the holder of
each Warrant Certificate in writing.

Any communication so addressed and deposited in the United States mail,  postage
prepaid,  by registered  or certified  mail (in each case,  with return  receipt
requested) shall be deemed to be received on the third (3rd) succeeding Business
Day after the day of such deposit (not including the date of such deposit).  Any
notice so addressed and otherwise  delivered shall be deemed to be received when
actually received at the address of the addressee.

      8.8   SEVERABILITY.

      Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.


                                      31

<PAGE>



      8.9   COUNTERPARTS.

      This  Agreement  may be  executed in any number of  counterparts,  each of
which  shall be an  original  but all of which  together  shall  constitute  one
instrument.

      8.10  JURISDICTION; JURY TRIAL.

      EACH  OF THE  PARTIES  HERETO  IRREVOCABLY  SUBMITS  TO THE  NON-EXCLUSIVE
JURISDICTION  OF ANY UNITED  STATES  FEDERAL OR FLORIDA  STATE COURT  SITTING IN
BROWARD COUNTY,  FLORIDA ANY ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS AND INSTRUMENTS CONTEMPLATED HEREBY
AND EACH OF THE  PARTIES  HERETO  HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR  PROCEEDING  MAY BE HEARD AND  DETERMINED  IN ANY SUCH
COURT.  NONE OF THE  PARTIES  HERETO  SHALL  SEEK A JURY  TRIAL IN ANY  LAWSUIT,
PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT
OF OR OTHERWISE RELATED TO THIS AGREEMENT OR ANY OF THE WARRANTS AND EACH OF THE
PARTIES  HERETO HEREBY WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY AND
ALL RIGHT TO ANY SUCH  JURY  TRIAL  AND ANY  RIGHT  EACH MAY HAVE TO ASSERT  THE
DOCTRINE  OF FORUM NON  CONVENIENS  OR TO OBJECT TO VENUE TO THE EXTENT ANY SUCH
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.10.

      8.11. EXPIRATION.

      All  Warrants  that  have  not  been  exercised  in  accordance  with  the
provisions  of this  Agreement  shall  expire  and all rights of holders of such
Warrants shall terminate and cease on the Expiration Date.

      IN WITNESS  WHEREOF,  each of the parties hereto has caused this Agreement
to be duly  executed  and  delivered by one of its duly  authorized  officers or
representatives.

                                          AQUAGENIX, INC.

                                          By: /s/ Helen Chia
                                             -----------------------------------
                                             Helen Chia, Chief Financial Officer

                                          DABNEY/RESNICK INCORPORATED, a
                                          California corporation

                                          By: /s/ Richard A. Bloom
                                             -----------------------------------
                                             Richard A. Bloom, Managing Director

                                          AQUAGENIX WARRANT HOLDINGS II, a
                                          General Partnership

                                          By: /s/ Richard A. Bloom
                                             -----------------------------------
                                          Richard A. Bloom, Manager


                                       32


<PAGE>

                                                                  ATTACHMENT A
                          [FORM OF WARRANT CERTIFICATE]

                               WARRANT CERTIFICATE
                                 AQUAGENIX, INC.


No. WR-___                                                   [______] Warrants
Date:________                                                 PPN: 03838R 2# 8


      This  Warrant  Certificate  certifies  that  ___________,   or  registered
assigns,  is the registered holder of ___________ (____) Warrants.  Each Warrant
entitles  the owner  thereof to  purchase  at any time on or prior to 5:00 p.m.,
Eastern Time, on __________,  2001 (the "Expiration  Date"),  one (1) fully paid
and nonassessable  share of Common Stock of AQUAGENIX,  INC.  (together with its
successors and assigns, the "Company"),  a Delaware  corporation,  at a Purchase
Price of [ ($     )] per share, upon presentation and  surrender of this Warrant
Certificate  with a form of election to purchase  duly executed and delivered to
the  Company and  payment of the  Purchase  Price in the manner set forth in the
Warrant Agreement (defined below). The number of shares of Common Stock that may
be purchased upon exercise of each Warrant and the Purchase Price are the number
and the Purchase  Price as of the date hereof,  and are subject to adjustment as
referred to below.

      The Warrants are issued pursuant to that certain Warrant  Agreement (as it
may  from  time  to time be  amended,  the  "Warrant  Agreement"),  dated  as of
_____________,  1996,  between  the  Company,  Dabney/Resnick  Incorporated  and
Aquagenix  Warrant Holdings II, and are subject to all of the terms,  provisions
and conditions thereof, which Warrant Agreement is hereby incorporated herein by
reference  and made a part hereof and to which  Warrant  Agreement  reference is
hereby  made for a full  description  of the  rights,  obligations,  duties  and
immunities  of  the  Company  and  the  holders  of  the  Warrant  Certificates.
Capitalized  terms used, but not defined,  herein have the  respective  meanings
ascribed to them in the Warrant Agreement.

      This  Warrant  Certificate  shall be  exercisable,  at the election of the
holder,  either as an  entirety  or in part from time to time.  If this  Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof,  another Warrant Certificate or Warrant  Certificates for
the number of Warrants not exercised. This Warrant Certificate,  with or without
other  Warrant  Certificates,  upon  surrender  in the  manner  set forth in the
Warrant Agreement,  may be exchanged for another Warrant  Certificate or Warrant
Certificates of like tenor evidencing  Warrants entitling the holder to purchase
a like aggregate  number of shares of Common Stock as the Warrants  evidenced by
the Warrant Certificate or Warrant Certificates  surrendered shall have entitled
such holder to purchase.

      Except as expressly set forth in the Warrant Agreement,  no holder of this
Warrant  Certificate  shall be deemed  for any  purpose  the holder of shares of
Common Stock or of any other  Securities  of the Company that may at any time be
issued upon the exercise  hereof,  nor shall  anything  contained in the Warrant
Agreement or herein be construed to confer upon the holder hereof,  as such, any
of the rights of a holder of a share of Common Stock in the Company or any right
to vote upon any matter  submitted  to holders of shares of Common  Stock at any
meeting thereof, or to give or withhold consent to any corporate action (whether

                                 Attachment A-1

<PAGE>



upon any  recapitalization,  issuance of stock,  reclassification of Securities,
change of par value, consolidation, merger, conveyance, or otherwise) or, except
as provided in the  Warrant  Agreement,  to receive  notice of  meetings,  or to
receive  dividends  or  distributions  (except  that the holder of this  Warrant
Certificate  has  certain  rights to  receive  consideration  in  respect of the
payment thereof,  as further provided in the Warrant  Agreement) or subscription
rights,  or otherwise,  until the Warrant or Warrants  evidenced by this Warrant
Certificate shall have been exercised as provided in the Warrant Agreement.

      THIS WARRANT  CERTIFICATE  SHALL BE CONSTRUED  AND ENFORCED IN  ACCORDANCE
WITH,  AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF FLORIDA.

      WITNESS the  signature  of a proper  officer of the Company as of the date
first above written.

                                          AQUAGENIX, INC.




                                          By:_____________________________
                                             Name:
                                             Title:



























                                 Attachment A-2



<PAGE>



                              [FORM OF ASSIGNMENT]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
                   SUCH HOLDER DESIRES TO TRANSFER THE WARRANT


      FOR VALUE RECEIVED,______________________________hereby sells, assigns and
transfers unto


__________________________________________________________________ (Please print
name and address of transferee.)


the  accompanying  Warrant  Certificate,  together  with all  right,  title  and
interest therein, and does hereby irrevocably constitute and appoint:






________________________________________________________________________________
attorney,  to transfer the accompanying  Warrant Certificate on the books of the
Company, with full power of substitution.



Dated: ____________________, _________.




                                    AQUAGENIX WARRANT HOLDINGS II, A
                                    GENERAL PARTNERSHIP




                                    By:_________________________________
                                          Name:
                                          Title:




                                     NOTICE


      The signature to the foregoing  Assignment  must correspond to the name as
written  upon the face of the  accompanying  Warrant  Certificate  or any  prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.



                                  Attachment A-3


<PAGE>


                         [FORM OF ELECTION TO PURCHASE]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
            SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)


To  AQUAGENLX, INC.:

      The undersigned hereby irrevocably elects to exercise____________ Warrants
represented by the  accompanying  Warrant  Certificate to purchase the shares of
Common  Stock  issuable  upon the exercise of such  Warrants  and requests  that
certificates for such shares be issued in the name of:

___________________________________________________________________(Please print
name and address.)


_________________________________________________________
(Please insert social security or other identifying number.)


Payment  for the  share  of  Common  Stock  is made  therewith  pursuant  to the
provisions of Section 2.1(a) of the Agreement in the amount of  $__________,  or
Section 2.1(b) of the Agreement in the amount of ____________ Warrants.


If such  number of  Warrants  shall  not be all the  Warrants  evidenced  by the
accompanying  Warrant  Certificate,  a new Warrant  Certificate  for the balance
remaining of such Warrants shall be registered in the name of and delivered to:

___________________________________________________________________(Please print
name and address.)

_________________________________________________________
(Please insert social security or other identifying number.)

Dated:_______________________,___________.

                                          AQUAGENIX WARRANT HOLDINGS II, A
                                          GENERAL PARTNERSHIP



                                          By:___________________________________
                                          Richard A. Bloom, Manager

                                     NOTICE

      The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of the  accompanying  Warrant  Certificate  or any
prior assignment thereof in every particular,  without alteration or enlargement
or any change whatsoever.



                                  Attachment A-4