EXHIBIT 10.14











                                   NUCO2 INC.


                                       and


                          CHASE EQUITY ASSOCIATES L.P.
                            EMPIRE INSURANCE COMPANY,
                                    ORIX USA,
                          DK ACQUISITION PARTNERS, L.P.
                                       AND
                     NATIONSBANC MONTGOMERY SECURITIES, INC.



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





                                WARRANT AGREEMENT

                          Dated as of October 31, 1997




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







<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE



Section 1.       Definitions, Accounting Terms and
                 Determinations...............................................1
         1.1     Definitions..................................................1
         1.2     Accounting Terms and Determinations..........................9

Section 2.       Purchase, Sale and Exercise of Warrants......................9
         2.1     Authorization and Issuance of Shares
                 and Warrants.................................................9
         2.2     The Closing..................................................9
         2.3     Initial Holder Representations, Warranties
                 and Agreements..............................................10
         2.4     Securities Act Compliance...................................10
         2.5     Exercise of Warrants........................................10

Section 3.       Representations and Warranties..............................13
         3.1     Existence...................................................13
         3.2     No Breach...................................................13
         3.3     Corporate Action............................................13
         3.4     Approvals...................................................14
         3.5     Investment Company Act......................................14
         3.6     Public Utility Holding Company Act..........................14
         3.7     Capitalization..............................................14
         3.8     Private Offering............................................15
         3.9     SEC Documents; Financial Statements.........................15

Section 4.       Transfers Generally: Securities Act
                 Compliance..................................................16
         4.1     Transfers Generally.........................................16
         4.2     Transfers of Restricted Securities
                 Pursuant to Registration Statements
                 and Rule 144, Etc...........................................16
         4.3     Notice of Certain Transfers.................................16
         4.4     Restrictive Legend..........................................16
         4.5     Termination of Restrictions.................................17

Section 5.       Additional Provisions Relating
                 to Transfers................................................17


                                  (i)

<PAGE>


                                                                           PAGE

         5.1     Disposition of Securities...................................17
         5.2     Transfer Restriction........................................18
         5.3     Repurchase of Common Stock..................................19
         5.4     Cancellation and Reissuance.................................19
         5.5     Transfer, Division and Combination..........................19

Section 6.       Adjustment of Stock Unit....................................20
         6.1     Stock Dividends, Subdivisions and
                 Combinations................................................20
         6.2     Issuance of Additional Shares of
                 Common Stock................................................20
         6.3     Issuance of Options.........................................21
         6.4     Issuance of Convertible Securities..........................22
         6.5     Superseding Adjustment of Stock Unit........................23
         6.6     Other Provisions Applicable to
                 Adjustments Under this Section 6............................24

Section 7.       Consolidation, Merger, Share Exchange, etc.;
                 Distributions...............................................26
         7.1     Consolidation, Merger, Share Exchange, etc..................26
         7.2     Distributions upon Declaration of Dividend
                 or Other Distribution.......................................27
         7.3     Dilution in Case of Other Securities........................28

Section 8.       Notice to Warrant Holders...................................28
         8.1     Notice of Adjustment of Stock Unit
                 or Exercise Price...........................................28
         8.2     Notice of Certain Corporate Actions.........................29
         8.3     Limitation on Holders' Rights...............................29

Section 9.       Reservation and Authorization of
                 Common Stock................................................30

Section 10.      Taking of Record; Stock and Warrant
                 Transfer Books..............................................30

Section 11.      Holders' Special Rights.....................................31
         11.1    Replacement of Instruments..................................31
         11.2    Restrictions on Certain Action..............................31
         11.3    Inspection Rights...........................................32
         11.4    Board Attendance............................................32


                                 (ii)

<PAGE>


                                                                           PAGE

Section 12.      Registration................................................34
         12.1    Notice......................................................34
         12.2    Proration...................................................36
         12.3    Registration Procedures.....................................37
         12.4    Holdback on Sales...........................................40
         12.5    Expenses....................................................40
         12.6    Indemnification.............................................40
         12.7    No Other Registration Rights................................43
         12.8    Rule 144....................................................44

Section 13.      Miscellaneous...............................................44
         13.1    Waiver......................................................44
         13.2    Notices.....................................................44
         13.3    Office of the Company.......................................44
         13.4    Expenses, Transfer Taxes and
                 Other Charges...............................................45
         13.5    Amendments, Etc.............................................46
         13.6    Successors and Assigns......................................46
         13.7    Survival....................................................46
         13.8    Regulation Y................................................46
         13.9    Captions....................................................46
         13.10   Counterparts................................................46
         13.11   Governing Law...............................................47
         13.12   Severability................................................47
         13.13   Entire Agreement............................................47
         13.14   No Third Party Beneficiary..................................47


SCHEDULE 1       -    Schedule of Warrants and Options
SCHEDULE 2       -    Authorized and Outstanding Capital Stock

ANNEX 1          -    Form of Warrant



                                      (iii)

<PAGE>
                                WARRANT AGREEMENT

                      WARRANT  AGREEMENT  dated as of October  31,  1997  among:
NuCO2 INC., a corporation  duly organized and validly existing under the laws of
the State of Florida (the "COMPANY"); and each of the investors signatory hereto
(individually, an "INITIAL HOLDER" and, collectively, the "INITIAL HOLDERS").

                      WHEREAS, in connection with the issuance by the Company of
up to $25,000,000  aggregate  principal amount of Senior Subordinated Notes (the
"NOTES") and as an inducement  for the purchase by the Initial  Holders of up to
such $25,000,000 aggregate principal amount of the Notes, the Company has agreed
to issue Warrants to the Initial Holders providing for the purchase of shares of
Common Stock of the Company, in the manner hereinafter provided.

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

                      Section    1.    DEFINITIONS,    ACCOUNTING    TERMS   AND
DETERMINATIONS.

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

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

                      "ADDITIONAL  SHARES OF COMMON STOCK" shall mean all shares
(including  treasury shares) of Common Stock issued or sold by the Company on or
after the date hereof,  other than (i) the shares of Common  Stock  described as
being issued and outstanding




                                WARRANT AGREEMENT

<PAGE>
in Section 3.07 hereof and (ii) the Option Stock, Options and Warrants listed on
Schedule 1 hereto.

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

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

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

                      "BOC  WARRANT"  shall  mean the  warrant  to acquire up to
1,000,000  shares of Common Stock dated May 1, 1997 from the Company in favor of
The BOC Group, Inc.

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

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

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

                      "COMMON STOCK" shall mean the Company's  authorized Common
Stock, par value $.001 per share, and any stock into which such Common Stock may
thereafter be changed, and also shall


                                WARRANT AGREEMENT

                                      -2-
<PAGE>
include stock of the Company of any other class (including,  without limitation,
any  future  class(es)  of such  Common  Stock),  which is not  preferred  as to
dividends  or  assets  over any class of stock of the  Company  and which is not
subject to redemption.

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

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

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

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


                                WARRANT AGREEMENT

                                      -3-
<PAGE>
connection with an acquisition of assets or stock, a tender or exchange offer, a
merger or other business  combination  shall be deemed to be the price per share
as determined in such  acquisition,  tender or exchange  offer,  merger or other
business combination agreement.

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

                      "DATE OF ISSUANCE" shall have the meaning assigned to such
term in SECTION 11.05 hereof.

                      "DEMAND  NOTICE"  shall have the meaning  assigned to such
term in SECTION 12.01 hereof.

                      "DEMAND  REGISTRATION"  shall have the meaning assigned to
such term in SECTION 12.01 hereof.

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

                      "ELECTION  NOTICE" shall have the meaning assigned to such
term in SECTION 11.05 hereof.

                      "ELECTION  PERIOD" shall have the meaning assigned to such
term in SECTION 11.05 hereof.

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

                                WARRANT AGREEMENT

                                      -4-
<PAGE>
                      "EXCHANGE ACT" shall mean the  Securities  Exchange Act of
1934, as amended,  and the rules and  regulations of the Commission  thereunder,
all as the same shall be in effect at the time or any replacement act.

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

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

                      "EXPIRATION  DATE" shall mean the 7th  Anniversary  of the
closing date of the Notes.

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

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

                      "HOLDER"  shall mean any Person  who  acquires  Restricted
Warrants  pursuant  to the  provisions  of this  Agreement,  including,  without
limitation,  the Initial  Holders,  any  Affiliate of the Initial  Holders,  any
Person who becomes a party to this  Agreement  pursuant  to SECTION  5.04 and an
Affiliate of such Person and any permitted transferees of any of the foregoing.

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

                      "IPO  WARRANTS"  shall  mean the  warrants  to  acquire an
aggregate  of 33,000  shares of Common  Stock  dated as of May 24, 1996 from the
Company in favor of First Analysis Securities Corporation,  Allan Cohen, Michael
Siemplenski, Richard Drage, Steve Bouck and Mark Koulogeorge.


                                WARRANT AGREEMENT

                                      -5-

<PAGE>
                      "INDEMNIFIED  PARTY"  shall have the  meaning  assigned to
such term in SECTION 12.06 hereof.

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

                      "ISSUE PRICE" shall have the meaning assigned to such term
in SECTION 11.05 hereof.

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

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

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

                      "NOTES"  shall have the  meaning  assigned to such term in
the second paragraph of this Agreement.

                      "NOTICE OF  ISSUANCE"  shall have the meaning  assigned to
such term in SECTION 11.05 hereof.

                      "ON A FULLY DILUTED BASIS" shall mean, with respect to the
Common  Stock of the Company  outstanding  at any time,  the number of shares of
such  Common  Stock  then  issued and  outstanding,  assuming  full  conversion,
exercise and exchange of all issued and outstanding  Convertible  Securities and
Options that shall be (or may become) exchangeable for, or exercisable or


                                WARRANT AGREEMENT

                                      -6-
<PAGE>
convertible  into, such Common Stock,  including  Warrants with respect thereto;
PROVIDED that the number of shares of Common Stock deemed to be outstanding  "on
a fully diluted basis" shall be reduced  (without  duplication) by the number of
shares of Common Stock  purchasable  or issuable  upon  exercise,  conversion or
exchange of (i) Options or  Convertible  Securities  at the time of  calculation
that are Out of the Money and (ii) Options issued under the Stock Option Plans.

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

                      "OPTION  STOCK"  shall mean shares of Common  Stock not to
exceed, in the aggregate,  910,000 shares of Common Stock, issued or issuable in
accordance  with the Stock Option  Plans,  PROVIDED  that (i) in the case of the
1995 Stock Option Plan,  the option  exercise price at the time of such grant is
not less than 75% of the fair  market  value of such  shares on the date of such
grant as  reasonably  determined  in good  faith by the  Stock  Option  or other
administering  Committee  of the Board  and (ii) the  number of shares of Common
Stock  specified  above shall be adjusted  as  appropriate  to reflect any stock
split,  stock  consolidation,  subdivision or  combination  affecting the Common
Stock.

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

                      "OUT  OF THE  MONEY"  shall  mean  (a) in the  case  of an
Option,  that the fair market  value of the shares of any Common Stock which the
holder thereof is entitled to purchase or


                                WARRANT AGREEMENT

                                      -7-
<PAGE>
subscribe for is less than the exercise price of such Option and (b) in the case
of a Convertible  Security,  that the quotient  resulting from dividing the fair
market value of such Convertible  Security by the number of shares of any Common
Stock into or for which such Convertible Security is exercisable, convertible or
exchangeable  is greater  than the fair  market  value of a share of such Common
Stock.

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

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

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

                      "REGULATED  HOLDER" shall mean a Holder which is a bank, a
bank holding company or an Affiliate of any of the foregoing.

                      A Regulated  Holder shall be deemed to have a  "REGULATORY
PROBLEM" when (i) such  Regulated  Holder's  investment  in the Warrants  and/or
Warrant Stock exceeds any limitation to which it is subject, or is otherwise not
permitted,  under any law,  rule or  regulation  of any  Governmental  Authority
(including any position to that effect taken by such Governmental Authority), or
(ii) restrictions are imposed on such Regulated


                                WARRANT AGREEMENT

                                      -8-
<PAGE>
Holder which, in its reasonable  judgment,  make it illegal or unduly burdensome
for such  Regulated  Holder to continue  to hold such  Warrants  and/or  Warrant
Stock.

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

                      "REPRESENTATIVE"  shall have the meaning  assigned to such
term in SECTION 11.04 of this Agreement.

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

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

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

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

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

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

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

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


                                WARRANT AGREEMENT

                                      -9-
<PAGE>
                      "SHAREHOLDER"  shall  mean  any  Person  who  directly  or
indirectly owns any shares of Common Stock of the Company.

                      "STATE STREET  WARRANT"  shall mean the warrant to acquire
84,917  shares of Common  Stock  dated as of June 7, 1997  (original  issue date
December  22,  1995) from the  Company in favor of State  Street  Bank and Trust
Company.

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

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

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

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

                      "WARRANTS"  shall mean the warrant  certificates  covering
the  purchase  of Stock  Units,  each in the form of Annex 1 to this  Agreement,
originally issued by the Company pursuant to SECTION 2 hereof,  and all Warrants
issued upon transfer,  division or combination of, or in  substitution  for, any
thereof. All Warrants shall at all times be identical as to terms and


                                WARRANT AGREEMENT

                                      -10-
<PAGE>
conditions  and expiry  date,  except as to the number of Stock  Units for which
they may be exercised and the Exercise Price.

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

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

                      Section 2.  PURCHASE, SALE AND EXERCISE OF WARRANTS.

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

                      2.2  THE CLOSING.

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


                                WARRANT AGREEMENT

                                      -11-
<PAGE>
                           (b) On the date hereof,  the Company shall deliver to
each Initial Holder a single certificate for the Warrants to be acquired by such
Initial Holder hereunder,  registered in the name of such Initial Holder, except
that,  if such Initial  Holder shall notify the Company in writing prior to such
issuance  that it  desires  certificates  for  Warrants  to be  issued  in other
denominations  or  registered  in the  name or names of any  Person  or  Persons
referred to in SECTION  5.01(A)(I) or (II) hereof or any nominee or nominees for
its or their  benefit,  then the  certificates  for Warrants to be issued by the
Company  shall  be  issued  to such  Initial  Holder  in the  denominations  and
registered in the name or names specified in such notice.

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

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


                                WARRANT AGREEMENT

                                      -12-
<PAGE>
                      2.4  SECURITIES  ACT   COMPLIANCE.   Each  Initial  Holder
understands that the Company has not registered or qualified the warrants or the
Warrant Stock under the Securities Act or any applicable  state  securities laws
and each Initial  Holder  agrees that neither the Warrants nor the Warrant Stock
shall be sold or offered for sale without  registration under the Securities Act
or the  availability  of an exemption  therefrom,  all as more fully provided in
SECTION 4 hereof.

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

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

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

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

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


                                WARRANT AGREEMENT

                                      -13-
<PAGE>
            (ii)      such Warrant,

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

                      If a Holder is subject to the  provisions of Regulation Y.
such  Holder  shall not,  and shall not permit any of its Bank  Holding  Company
Affiliates  to,  exercise any Warrant if, after giving effect to such  exercise,
(i) such Holder and its Bank Holding Company  Affiliates  would own more than 5`
of the total issued and  outstanding  shares of Common Stock on a fully  diluted
basis or (ii) such Holder would be deemed  under  Regulation Y to have the power
to exercise, directly or indirectly, a controlling influence over the management
or policies  of, or would  otherwise  control,  the Company (and for purposes of
this clause (ii), a reasoned opinion of counsel to such Holder delivered to such
Holder (which is based on facts and  circumstances  deemed  appropriate  by such
counsel) to the effect that such Holder does not have the power to exercise such
a controlling influence or otherwise control the Company shall be conclusive).

                      The stock certificate or certificates for warrant Stock so
delivered  shall be in such  denominations  as may be  specified in the Exercise
Notice and shall be  registered in the name of such Holder or such name or names
as shall be  designated  in such  Exercise  Notice.  Such stock  certificate  or
certificates  shall be deemed to have been  issued and such  Holder or any other
Person so designated to be named therein shall be deemed to have


                                WARRANT AGREEMENT

                                      -14-
<PAGE>
become a holder of record of such shares,  including, to the extent permitted by
law,  the right to vote such  shares or to  consent  or to  receive  notice as a
Shareholder, as of the date on which the last of the Exercise Notice, payment of
the Exercise Price and the Warrant to which such exercise relates is received by
the Company as aforesaid,  and all taxes required to be paid by Holder,  if any,
pursuant to SECTION 13.04(C)  hereof,  prior to the issuance of such shares have
been paid. If such Warrant shall have been  exercised or converted only in part,
the Company shall,  at the time of delivery of the  certificate or  certificates
representing  Warrant  Stock and other  securities,  execute and deliver to such
Holder a new  warrant  evidencing  the  rights of such  Holder to  purchase  (or
convert)  the  unpurchased  (or  unconverted)  Stock  Units  called  for by such
Warrant,  which new Warrant  shall in all other  respects be identical  with the
surrendered Warrant.

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

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

                      2.6  ISSUE  PRICE;   ORIGINAL   ISSUE   DISCOUNT.   Having
considered all facts relevant to a  determination  of the value of the Notes and
the warrants being acquired by the Initial Holders,  the Company and the Initial
Holders have concluded and do hereby agree that, for the purposes of Section 305
and of Section 1273 of the Code,  and for purposes of  determining  any original
issue


                                WARRANT AGREEMENT

                                      -15-
<PAGE>
discount with respect to the Notes to be issued at the closing hereof, the issue
price for the Notes and the Warrants is $24,750,000 and $250,000,  respectively.
The  Company  and the  Holders  agree not to take a  position  on any income tax
return, before any governmental agency charged with collection of any income tax
or in any judicial proceeding that is inconsistent herewith,  unless required to
do so pursuant to a "Determination"  within the meaning of Section 1313(a)(i) of
the Code.

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

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

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

                      3.3  CORPORATE  ACTION.  The  Company  has  all  necessary
corporate  power and authority to execute,  deliver and perform its  obligations
under this Agreement and the Warrants;  the execution,  delivery and performance
by the Company of this  Agreement and the Warrants have been duly  authorized by
all necessary corporate action (including all required shareholder


                                WARRANT AGREEMENT

                                      -16-
<PAGE>
action) on the part of the Company;  this  Agreement  has been duly executed and
delivered by the Company and constitutes, and the Warrants when executed, issued
and delivered  pursuant to this  Agreement  will  constitute,  valid and legally
binding  obligations of the Company entitled to the benefits  provided  therein,
and the Warrant Stock initially  covered by the Warrants shall,  when issued and
delivered against payment therefor in accordance with the Warrants,  be duly and
validly issued, fully paid and nonassessable; and the Warrants when executed and
delivered  by  the  Company  will  constitute,  its  legal,  valid  and  binding
obligations,  enforceable  against it in accordance with their terms,  except as
enforcement  may be limited by  bankruptcy,  insolvency  or other  similar  laws
affecting  creditors'  rights  generally,  and by general  principles  of equity
(regardless of whether enforcement is sought at equity or in law).

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

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

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

                      3.7  CAPITALIZATION.



                                WARRANT AGREEMENT

                                      -17-
<PAGE>
                      (a)  Upon  the  issuance  of  the   warrants   under  this
Agreement,  the total  number of shares of capital  stock  which the Company has
authority  to issue and the  outstanding  shares of the  Company  will be as set
forth in  SCHEDULE  2 hereto.  Upon the  issuance  of the  Warrants  under  this
Agreement,  the  Company  shall not have  outstanding  any  stock or  securities
convertible  into or  exchangeable  for any shares of capital stock nor shall it
have outstanding any rights to subscribe for or to purchase,  or any Options for
the purchase of, or any  agreements  providing for the issuance  (contingent  or
otherwise) of, or any calls, commitments or claims of any character relating to,
any capital stock or stock or securities  convertible  into or exchangeable  for
any  capital  stock other than (i) the  Warrants  to be issued  pursuant to this
Agreement, and (ii) the Option Stock, Options and Warrants listed on SCHEDULE 1.

                      (b)  There  is  not  in  effect  on the  date  hereof  any
agreement  by the Company  pursuant to which any  holders of  securities  of the
Company have a right to cause the Company to register such securities  under the
Securities Act other than (i) this  Agreement,  (ii) the BOC warrant,  (iii) the
IPO warrants, and the (iv) the State Street Warrant.

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

                      3.9 SEC DOCUMENTS;  FINANCIAL STATEMENTS.  The Company has
filed in a timely  manner all  documents  that the Company was  required to file
with the  Commission  under  Sections 13,  14(a) and 15(d) of the Exchange  Act,
since its initial public  offering.  As of their  respective  filing dates,  all
documents filed by the Company with the Commission ("SEC Documents')


                                WARRANT AGREEMENT

                                      -18-
<PAGE>
complied in all material  respects with the  requirements of the Exchange Act or
the  Securities  Act,  as  applicable.  None of the SEC  Documents  as of  their
respective dates contained any untrue statement of a material fact or omitted to
state a material  fact  required to be stated  therein or  necessary to make the
statements  made therein,  in light of the  circumstances  under which they were
made, not misleading.  The financial  statements of the Company  included in the
SEC Documents  (the  "Financial  Statements")  comply as to form in all material
respects with applicable  accounting  requirements  and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance  with GAAP and fairly present the  consolidated
financial  position of the Company and any Subsidiaries at the dates thereof and
the consolidated results of their operations and consolidated cash flows for the
periods then ended  (subject,  in the case of unaudited  statements,  to normal,
recurring adjustments).

                      Section 4. TRANSFERS GENERALLY: SECURITIES ACT COMPLIANCE.

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

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


                                WARRANT AGREEMENT

                                      -19-
<PAGE>
                      4.3  NOTICE OF  CERTAIN  TRANSFERS.  If any  Holder of any
Restricted  Security  desires to transfer such  Restricted  Security  other than
pursuant to an effective registration  statement,  Rule 144 under the Securities
Act an  applicable  exemption  from the  Securities  Act or in  accordance  with
SECTION  5.01(A)  hereof,  such Holder  shall  deliver to the Company at least 7
Business  Days' prior  written  notice with  respect to the  proposed  transfer,
together with an opinion (at such Holder's expense) of Milbank,  Tweed, Hadley &
McCloy,  or such other counsel  reasonably  satisfactory to the Company,  to the
effect that an exemption from registration under the Securities Act is available
and specifying the applicable exemption.

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

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

                      "THE  TRANSFER  OF  THE  SECURITIES  REPRESENTED  BY  THIS
                      CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THAT
                      CERTAIN  WARRANT  AGREEMENT  DATED AS OF OCTOBER 31, 1997,
                      BETWEEN NUCO2 INC., A FLORIDA CORPORATION,


                                WARRANT AGREEMENT

                                      -20-
<PAGE>
                      AND CERTAIN INITIAL HOLDERS, AS SUCH WARRANT AGREEMENT MAY
                      BE MODIFIED  AND  SUPPLEMENTED  AND IN EFFECT FROM TIME TO
                      TIME,  AND NO TRANSFER OF THE  SECURITIES  REPRESENTED  BY
                      THIS  CERTIFICATE  SHALL BE VALID OR EFFECTIVE  UNTIL SUCH
                      CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE FORM OF SUCH
                      WARRANT  AGREEMENT  IS ON FILE AND MAY BE INSPECTED AT THE
                      PRINCIPAL  EXECUTIVE OFFICE OF THE AFORESAID  CORPORATION.
                      THE  HOLDER OF THIS  CERTIFICATE,  BY  ACCEPTANCE  OF THIS
                      CERTIFICATE,  AGREES TO BE BOUND BY THE PROVISIONS OF SUCH
                      WARRANT AGREEMENT."

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

                      Section 5. ADDITIONAL PROVISIONS RELATING TO TRANSFERS.

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

                      (a) Subject to compliance with the provisions of SECTION 4
hereof,  except with respect to the requirement for an opinion of counsel to the
Holder, which shall not be required


                                WARRANT AGREEMENT

                                      -21-
<PAGE>
under this  SECTION  5.01(A),  any Holder  shall have the right to transfer  any
Restricted Securities:

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

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

           (iii)      to another Initial Holder.

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

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


                                WARRANT AGREEMENT

                                      -22-
<PAGE>
                      5.2 TRANSFER RESTRICTION. Notwithstanding anything in this
Agreement or the Warrants to the contrary,  no Holder  subject to the provisions
of Regulation Y shall transfer any Warrants or shares of Warrant Stock issued by
the  Company  and held by it, if, as a result of such  transfer  or the right to
effect such transfer, such Holder would be deemed under Regulation Y to have the
power to exercise,  directly or  indirectly,  a controlling  influence  over the
management or policies of, or otherwise control,  the Company (and, for purposes
of this  restriction,  a reasoned opinion of counsel to such Holder delivered to
such Holder (which is based on facts and  circumstances  deemed  appropriate  by
such counsel) to the effect that such Holder does not have the power to exercise
such  a  controlling  influence  or  otherwise  control  the  Company  shall  be
conclusive).

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

                      5.4 CANCELLATION AND REISSUANCE.  If any Initial Holder or
any of its  Affiliates  assigns or  otherwise  transfers  any of its  Notes,  or
assigns any of its rights or obligations  thereunder to any Person, such Initial
Holder may request  (upon 10 Business  Days' prior notice to the Company) that a
number of warrants held by such Initial  Holder be cancelled on the date of such
assignment  and  transfer  and that a like  number of  Warrants be issued by the
Company  to the  Person to whom  such  Notes are  being  assigned  or  otherwise
transferred.  Upon the date specified in such request,  the Company shall issue,
and the Initial  Holder  shall  deliver to the Company  for  cancellation,  such
number of warrants as aforesaid  and the Company and such Person  shall  execute
and  deliver an  instrument  pursuant  to which such  Person  becomes a "Holder"
hereunder  entitled to all the benefits  accorded to a Holder under, and subject
to all of the obligations  imposed upon a Holder pursuant to, this Agreement and
the warrants.


                                WARRANT AGREEMENT

                                      -23-
<PAGE>
                      5.5  TRANSFER,   DIVISION  AND  COMBINATION.   Subject  to
SECTIONS 4 and 5 hereof,  transfer  of a Warrant and all rights  thereunder,  in
whole or in part (the "TRANSFERRED  WARRANT"),  shall be registered on the books
of the  Company  to be  maintained  for such  purpose,  upon  surrender  of such
Transferred  Warrant at the office of the Company  maintained  for such  purpose
pursuant  to  SECTION   13.03  hereof,   together  with  a  written   assignment
substantially in the form set out at the end of such Transferred  Warrant,  duly
executed  by the  relevant  Holder and  payment of funds  sufficient  to pay any
transfer  taxes payable upon the making of such  transfer.  Upon such  surrender
and, if required,  such payment,  the Company shall, subject to SECTIONS 4 and 5
hereof and the  immediately  following  sentence,  (a) execute and deliver a new
Warrant  or  Warrants  in the  name  of the  assignee  or  assignees  and in the
denominations  specified  in such  instrument  of  assignment,  (b) issue to the
assignor a new Warrant evidencing the portion of such Transferred warrant not so
assigned or transferred  and (c) promptly  cancel such  Transferred  Warrant.  A
Warrant, if properly assigned in compliance with SECTIONS 4 and 5 hereof, may be
exercised  by an assignee  for the  purchase of shares of Common  Stock  without
having a new Warrant or Warrants issued. Notwithstanding any provision herein to
the  contrary,  the Company  shall not be required to register  the  transfer of
Warrants or Warrant  Stock in the name of any Person who  acquired  such Warrant
(or part thereof) or any Warrant Stock  otherwise  than in accordance  with this
Agreement.

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

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


                                WARRANT AGREEMENT

                                      -24-
<PAGE>
                      6.1 STOCK DIVIDENDS,  SUBDIVISIONS AND COMBINATIONS. If at
any time the Company shall:

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

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

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

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

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


                                WARRANT AGREEMENT

                                      -25-
<PAGE>
Price.  For purposes of this SECTION 6.02, for all issuances of shares of Common
Stock except for those shares issued in connection with an acquisition of assets
or stock, a tender or exchange  offer,  a merger or other business  combination,
the date as of which the Current  Market  Price  shall be computed  shall be the
earlier of (i) the date on which the Company  shall  enter into a firm  contract
for the issuance of such Additional  Shares of Common Stock and (ii) the date of
actual  issuance of such Additional  Shares of Common Stock.  Subject to SECTION
6.05  hereof,  no further  adjustment  of the  number of shares of COMMON  Stock
comprising  a Stock Unit shall be made under this SECTION 6.02 upon the issuance
of any Additional Shares of Common Stock:

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

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

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

                      6.3 ISSUANCE OF OPTIONS.  If at any time the Company shall
issue or sell,  or shall fix a record date for the  determination  of holders of
any class of  securities  entitled to receive,  any Options,  whether or not the
rights to purchase thereunder are immediately exercisable, and the consideration
received by the Company in payment for such Options  (determined  in  accordance
with  SECTION  6.06(A)  hereof)  shall be less than the Current  Market Price in
effect on the date of and immediately prior to such issuance,  sale or fixing of
a record date, then the number of shares of Common Stock thereafter comprising a
Stock Unit shall be adjusted  as  provided  in SECTION  6.02 hereof on the basis
that (a) the maximum number of Additional Shares of Common


                                WARRANT AGREEMENT

                                      -26-
<PAGE>
Stock issuable  pursuant to all such Options shall be deemed to have been issued
as of (and, accordingly,  the date as of which the Current Market Price shall be
computed  shall  be) the  computation  date  specified  in the  next  succeeding
sentence of this SECTION  6.03,  and (b) the  aggregate  consideration  for such
maximum number of Additional Shares of Common Stock shall be (subject to SECTION
6.05 hereof) the consideration  received by the Company for the issuance or sale
of such Additional  Shares of Common Stock pursuant to the terms of such Options
or pursuant to the terms of such  Convertible  Securities.  For purposes of this
SECTION 6.03, the computation  date for clause (a) above shall be the earlier of
(i) the date on which the  Company  shall  take a record of the  holders  of its
Common Stock for the purpose of entitling them to receive any such Options, (ii)
the date on which the Company  shall enter into a firm contract for the issuance
or sale of such  Options and (iii) the date on which the Company  shall issue or
sell such Options. No further adjustment of the number of shares of Common Stock
comprising  a Stock Unit shall be made under this SECTION 6.03 upon the issuance
or sale of any Options to  subscribe  for or purchase any  Additional  Shares of
Common Stock or any Convertible  Securities or upon the subsequent issue or sale
of Additional  Shares of Common Stock upon the exercise of such Options,  if any
such  adjustment  shall  previously  have been made upon the issuance or sale of
such Option or upon the setting of a record  date  therefor,  or upon any deemed
issuance or sale of such Additional Shares of Common Stock, as a distribution or
a dividend which is distributed or declared and paid in accordance  with SECTION
7.02 hereof.  Notwithstanding the foregoing,  any issuance of an Option which is
issued together with a debt security of the Company, as a unit, shall be treated
for the purpose of this SECTION 6 as the issuance of a Convertible Security.

                      6.4 ISSUANCE OF CONVERTIBLE SECURITIES. If at any time the
Company  shall  issue or sell any  Convertible  Securities,  whether  or not the
rights to exchange or convert  thereunder are immediately  exercisable,  and the
consideration received by the Company in payment for such Convertible Securities
shall be less than the Convertible Security Value thereof, then the number of



                                WARRANT AGREEMENT

                                      -27-
<PAGE>
shares of Common Stock thereafter  comprising a Stock Unit shall be increased to
a number of shares of Common  Stock  having a value  immediately  following  the
computation  date (as  established  below)  equal to the value of the  number of
shares  comprising such Stock Unit  immediately  before such increase.  For this
purpose,  the value before the increase will be the Current  Market Price of the
Common Stock  (determined  as at the date  immediately  preceding such increase)
DIVIDED by the number of shares of Common Stock following the  computation  date
shall be the foregoing  value,  except that the  numerator  shall be the Current
Market  Price PLUS the cash  amount  paid to the  Company  for such  Convertible
Securities LESS the Convertible Security Value of such Convertible Securities on
issuance and the  denominator  shall be  increased  by the number of  Additional
Shares of Common Stock issuable on exercise of such Convertible Securities.  For
purposes of this SECTION 6.04, the computation date shall be the earliest of (i)
the date on which the  Company  shall take a record of the holders of its Common
Stock  for the  purpose  of  entitling  them to  receive  any  such  Convertible
Securities,  (ii) the date on which the Company shall enter into a firm contract
for the issuance or sale of such  Convertible  Securities  and (iii) the date of
actual issuance or sale of such Convertible Securities. No further adjustment of
the number of shares of Common Stock comprising a Stock Unit shall be made under
this SECTION 6.04 upon the issuance or sale of any Convertible Securities or the
conversion or exchange of such Convertible  Securities into Additional Shares of
Common Stock:

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

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



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

                      6.5 SUPERSEDING  ADJUSTMENT OF STOCK UNIT. If, at any time
after any adjustment of the number of shares of Common Stock  comprising a Stock
Unit shall have been made pursuant to SECTION 6.03 or 6.04 hereof as a result of
the issuance of Options or Convertible  Securities,  or after any new adjustment
of the number of shares of Common Stock  comprising a Stock Unit shall have been
made pursuant to this SECTION 6.05, (a) such Options or the right of conversion,
exchange or exercise of such Convertible  Securities shall expire,  and all or a
portion of such Options or the right of  conversion,  exchange or exercise  with
respect to all or a portion of such Convertible Securities,  as the case may be,
shall not have been  exercised or treated as having been  exercised or otherwise
canceled  or  acquired  by  the  Company  in  connection   with  any  settlement
(including,  without  limitation,  any cash  settlement)  of such Options or the
rights of conversion, or exchange or exercise of such convertible Securities, or
(b) there has been any change  (whether by the passage of time or  otherwise) in
the number of shares  issuable  upon  exercise,  conversion  or exchange of such
Options or  Convertible  Securities  (including  as a result of the operation of
antidilution provisions applicable thereto), or (c) the consideration per share,
for which  Additional  Shares of Common  Stock  are  issuable  pursuant  to such
Options or the terms of any Convertible Securities,  or the maturity of any such
Convertible  Security,  shall be  changed  (whether  by the  passage  of time or
otherwise) then such previous adjustment shall be rescinded and annulled and the
Additional  Shares of Common  Stock  which  were  deemed to have been  issued by
virtue of the  computation  made in connection  with the adjustment so rescinded
and  annulled  shall no longer  be deemed to have been  issued by virtue of such
computation.  Thereupon,  a  recomputation  shall be made of the  effect of such
Options or Convertible Securities on the basis of:

                      (i)  treating  the number of  Additional  Shares of Common
         Stock, if any, theretofore actually issued or sold


                                WARRANT AGREEMENT

                                      -29-
<PAGE>
         pursuant  to the  previous  exercise  of such  Options or such right of
         conversion  or  exchange,  as having been issued or sold on the date or
         dates of such  issuance as  determined  for  purposes of such  previous
         adjustment and for the consideration actually received therefor;

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

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

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

                      (a) COMPUTATION OF  CONSIDERATION.  To the extent that any
Additional  Shares of Common Stock,  any Options or any  Convertible  Securities
shall be  issued  for cash  consideration,  the  consideration  received  by the
Company  therefor  shall be deemed  to be the  amount  of cash  received  by the
Company  therefor,  or, if such  Additional  Shares of Common Stock,  Options or
Convertible  Securities  are  offered  by  the  Company  for  subscription,  the
subscription price, or, if such Additional


                                WARRANT AGREEMENT

                                      -30-
<PAGE>
Shares  of  Common  Stock,  Options  or  Convertible   Securities  are  sold  to
underwriters or dealers for public offering without a subscription offering, the
initial public offering price. To the extent that such issuance or sale shall be
for consideration  other than cash, then the amount of such consideration  shall
be deemed to be the fair market value of such  consideration at the time of such
issuance,  as reasonably  determined  by the Board.  The  consideration  for any
Additional  Shares of Common Stock issuable  pursuant to any Option to subscribe
for or purchase the same shall be the  consideration  received or  receivable by
the  Company  for the  sale or  issuance  of such  Option  plus  the  additional
consideration  payable to the Company  upon the  exercise  thereof in full.  The
consideration for any Additional Shares of Common Stock issuable pursuant to the
terms of any Convertible  Securities shall be the consideration  paid or payable
to the  Company in respect of the  subscription  for,  sale or  issuance of such
Convertible Securities plus the additional  consideration payable to the Company
upon the conversion or exchange  thereof in full. In case of the issuance at any
time of any Additional  Shares of Common Stock in payment or satisfaction of any
dividend upon any class of stock other than Common  Stock,  the Company shall be
deemed to have received for such Additional Shares of Common Stock consideration
equal to the amount of such dividend so paid or satisfied.

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


                                WARRANT AGREEMENT

                                      -31-
<PAGE>
SECTION 6 and not previously made,  would result in a minimum  adjustment on the
date of exercise.  For the purpose of any adjustment,  any specified event shall
be  deemed  to  have  occurred  at the  close  of  business  on the  date of its
occurrence.

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

                      (d) WHEN ADJUSTMENT NOT REQUIRED. (i) If the Company shall
take a record of the holders of its Common  Stock for the  purpose of  entitling
them to receive a dividend or  distribution  or  subscription or purchase rights
and  shall,  thereafter  and before the  distribution  thereof to  Shareholders,
legally  abandon  its  plan  to  pay or  deliver  such  dividend,  distribution,
subscription or purchase rights,  then no adjustment shall be required by reason
of the taking of such record and any such adjustment  previously made in respect
thereof  shall be rescinded  and  annulled,  and no  adjustment in the number of
shares of Common Stock  thereafter  comprising a Stock Unit under  SECTION 6.02,
6.03 or 6.04  hereof  shall  be made in  respect  of the  Warrants  held by such
Holder. (ii) No adjustment shall be made hereunder in respect of the issuance of
Option Stock or options representing the right to acquire Option Stock.

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

                      7.1 CONSOLIDATION,  MERGER, SHARE EXCHANGE, ETC. In case a
consolidation,  merger or share  exchange of the Company  shall be effected with
another  Person after the date hereof and the Company shall not be the surviving
entity,  or the Company shall be the surviving entity but its Common Stock shall
be changed into  securities or other  property of another  Person,  or the sale,
lease or transfer of all or a substantial  part of its assets to another  Person
shall  be  effected  after  the  date  hereof,  then,  as a  condition  of  such
consolidation, merger, share


                                WARRANT AGREEMENT

                                      -32-
<PAGE>
exchange,  sale, lease or transfer,  lawful and adequate provision shall be made
whereby  each Holder  shall  thereafter  have the right to purchase and receive,
upon the  exercise of its  Warrants,  on the basis and the terms and  conditions
specified  herein  (and  in  lieu of each  Stock  Unit  immediately  theretofore
purchasable  and receivable  upon the exercise of the Warrants),  such shares of
stock,  securities,  cash or other property  receivable upon such consolidation,
merger,  share exchange,  sale, lease or transfer as such Holder would have been
entitled to receive if its Warrants had been exercised immediately prior to such
event. In any such case,  appropriate and equitable provision also shall be made
with  respect  to the rights and  interests  of each  Holder to the end that the
provisions hereof  (including  SECTION 6 hereof) shall thereafter be applicable,
as nearly as may be, in  relation  to any shares of stock,  securities,  cash or
other property  thereafter  deliverable  upon the exercise of any Warrants.  The
Company shall not effect any such consolidation,  merger, share exchange,  sale,
lease or  transfer  unless  prior  to or  simultaneously  with the  consummation
thereof the  successor  Person (if other than the Company)  resulting  from such
consolidation,  merger or share  exchange or the Person  purchasing,  leasing or
otherwise  acquiring  such  assets  shall  assume,  by written  instrument,  the
obligation to deliver to such Holder such shares of stock,  securities,  cash or
other property as, in accordance with the foregoing provisions,  such Holder may
be entitled to upon the exercise of its Warrants.  The above  provisions of this
SECTION 7.01 shall similarly apply to successive consolidations,  mergers, share
exchanges, sales, leases or transfers.

                      7.2  DISTRIBUTIONS  UPON  DECLARATION OF DIVIDEND OR OTHER
DISTRIBUTION. So long as any Warrants remain outstanding, the Company shall pay,
upon the declaration  and payment of any dividend or distribution  (whether such
dividend  or  distribution  is in the  form of  cash,  debt  securities,  equity
securities or other  property) on any class of Common Stock,  to each Holder the
dividend or distribution that such Holder would be otherwise entitled to receive
had such Holder exercised the Warrants held by it in full  immediately  prior to
the  taking of record of those  holders  of Common  Stock  entitled  to any such
dividend or


                                WARRANT AGREEMENT

                                      -33-
<PAGE>
distribution,  PROVIDED that,  this  provision  shall apply only to dividends or
distributions in respect of the Common Stock other than ordinary,  periodic cash
dividends  paid out of  earned  surplus  of the  Company.  If such  dividend  or
distribution  is in the form of a voting  equity  security,  such Holder will be
entitled to receive,  at its option,  in its stead non-voting  equity securities
otherwise  identical to and  convertible at such Holder's option into the equity
securities to which such Holder is otherwise entitled  thereunder and continuing
benefiting from antidilution  provisions similar to those herein. This provision
shall not apply to stock dividends of Additional Shares of Common Stock, or to a
reclassification  or  recapitalization,  PROVIDED  that the Company  adjusts the
number of shares of Common  Stock  comprising  a Stock Unit  pursuant to SECTION
6.01 hereof.

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

                      Section 8.    NOTICE TO WARRANT HOLDERS.



                                WARRANT AGREEMENT

                                      -34-
<PAGE>
                      8.1 NOTICE OF ADJUSTMENT OF STOCK UNIT OR EXERCISE  PRICE.
Whenever the number of shares of Common  Stock  comprising a Stock Unit shall be
adjusted pursuant to SECTION 6 or 7 hereof, the Company shall forthwith obtain a
certificate signed by the chief financial officer of the Company, setting forth,
in reasonable detail, the event requiring the adjustment and the method by which
such  adjustment was  calculated  (including a description of the basis on which
the Board determined the fair market value of Additional  Shares of Common Stock
issued  or sold and,  if the  consideration  therefor  was other  than  cash,  a
description  of how such  consideration  was valued),  specifying  the number of
shares of Common Stock  comprising a Stock Unit and (if such adjustment was made
pursuant  to  SECTION  7 hereof)  describing  the  number  and kind of any other
securities  comprising a Stock Unit, and any change in the Exercise Price, after
giving effect to such  adjustment or change.  The Company shall  promptly and in
any case within 10 days after the making of such adjustments cause a signed copy
of such  certificate  to be delivered to each Holder in accordance  with SECTION
13.02 hereof. The Company shall keep at its office or agency, maintained for the
purpose  pursuant to SECTION 13.03 hereof,  copies of all such  certificates and
cause the same to be  available  for  inspection  at said office  during  normal
business hours by any Holder or any prospective permitted purchaser of a Warrant
designated by a holder thereof.

                      8.2  NOTICE  OF  CERTAIN  CORPORATE  ACTIONS.  In case the
Company  shall  propose (a) to pay any dividend  (other than a regular  periodic
dividend  payable in cash out of earned  surplus)  to the  holders of its Common
Stock or to make any other  distribution  to the holders of its Common Stock, or
(b) to offer to the holders of its Common Stock  rights to  subscribe  for or to
purchase any Additional  Shares of Common Stock or Other  Securities,  rights or
options, or (c) to effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision,  or combination, of outstanding
shares of Common Stock), or (d) to effect any capital reorganization,  or (e) to
effect any  consolidation,  merger or share exchange in which the Company is not
the surviving entity, or is the surviving entity but its Common Stock


                                WARRANT AGREEMENT

                                      -35-
<PAGE>
shall be changed into securities or other property of another  Person,  or sale,
lease,  transfer  or other  disposition  of all or a majority  of its  property,
assets or business, or (f) to effect the liquidation,  dissolution or winding up
of the Company,  then, in each such case, the Company shall give to each Holder,
in accordance with SECTION 13.02 hereof, a notice of such proposed action, which
shall specify the date on which a record is to be taken for the purposes of such
stock dividend,  distribution  or offering of rights,  or the date on which such
reclassification,  reorganization,  consolidation, merger, share exchange, sale,
lease, transfer, disposition,  liquidation, dissolution or winding up is to take
place and the date of  participation  therein by the holders of Common Stock, if
any such date is to be fixed and shall also set forth  such  facts with  respect
thereto as shall be  reasonably  necessary to indicate the effect of such action
on the Common  Stock,  if any,  and the  number and kind of any other  shares of
stock  which  will  comprise  a Stock  Unit,  and the  purchase  price or prices
thereof,  after giving effect to any adjustment,  if any, which will be required
as a result of such  action.  Such  notice  shall be so given in the case of any
action  covered  by clause (a) or (b) above at least 20 days prior to the record
date for  determining  holders of the Common  Stock for purposes of such action,
and in the case of any other such action,  at least 20 days prior to the date of
the taking of such proposed action or the date of  participation  therein by the
holders of Common Stock, whichever shall be the earlier.

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

                      Section 9. RESERVATION AND  AUTHORIZATION OF COMMON STOCK.
The Company  shall at all times  reserve and keep  available  for issue upon the
exercise or conversion of Warrants  such number of its  authorized  but unissued
shares of Common Stock as will be


                                WARRANT AGREEMENT

                                      -36-
<PAGE>
sufficient to permit the exercise in full of all outstanding  Warrants from time
to time. All shares of Common Stock which shall be so issuable, when issued upon
exercise of any Warrant and payment of the applicable Exercise Price therefor in
accordance with the terms hereof and of the Warrants,  shall be duly and validly
issued by the Company,  fully paid and  nonassessable  and free and clear of all
Liens.

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

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

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

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


                                WARRANT AGREEMENT

                                      -37-
<PAGE>
                      (a) In the case of all dividends or other distributions by
the  Company  to the  holders  of its  Common  Stock  with  respect to which any
provision of SECTION 6 and SECTION 7.02 hereof  refers to the taking of a record
of such  holders,  the Company  shall in each such case take such a record as of
the close of business on a Business Day.

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

                      Section 11.   HOLDERS' SPECIAL RIGHTS.

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

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

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

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

                      11.2  RESTRICTIONS ON CERTAIN ACTION.

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


                                WARRANT AGREEMENT

                                      -38-
<PAGE>
obligations  under this Agreement or making such  performance or the issuance of
shares of Common Stock upon the  exercise of any Warrant  issued by it a default
under any such agreement or instrument.

                      (b) So long as at least 50` of all of the Warrants  issued
to the  Initial  Holders  hereunder  (not  including  those  Warrants  issued to
NationsBanc Montgomery Securities,  Inc.) shall remain outstanding,  neither the
Company nor any of its Subsidiaries  shall (i) issue any Participating  Security
or  Options  for or  Convertible  Securities  convertible  into a  Participating
Security,  (ii) issue any class of equity other than Common Stock outstanding on
the date hereof and any Preferred Stock of the Company or (iii) make or agree to
make payments to any Person,  such as any "phantom"  stock  payments,  where the
amount  thereof is calculated  with  reference to fair market or equity value of
the Company or any of the Subsidiaries.

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

                      11.4 BOARD ATTENDANCE.  So long as the Initial Holders own
50% or more of the  Warrants  and the Warrant  Stock,  one  representative  (the
"Representative") appointed by the Majority Initial Holders shall be entitled to
attend  all  meetings  of (i) the  Board,  (ii) the  board of  directors  of any
Subsidiary  of the  Company  and  (iii)  any  committee  of (i) and  (ii)  above
PROVIDED,  HOWEVER, that the Representative shall not be entitled to vote at any
such  meeting.  The Company shall  reimburse,  by Company check mailed within 30
Business  Days of receipt by the Company of proper  documentation  thereof,  the
reasonable  out-of-pocket  expenses incurred by the Representative in connection
with



                                WARRANT AGREEMENT

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<PAGE>
attendance at any meetings  pursuant to this SECTION 11.04;  PROVIDED,  HOWEVER,
the  Representative  shall not be  entitled  to  reimbursement  for  first-class
travel.

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

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


                                WARRANT AGREEMENT

                                      -40-
<PAGE>
of Issuance (the  "Election  Period"),  at which time such Initial  Holder shall
become  irrevocably  bound  (subject  to  the  satisfaction  of  all  regulatory
requirements)  to purchase such Equity  Securities.  Each  Election  Notice will
indicate the number of units that each Initial Holder elects to purchase.

                      (c) Any purchase and sale  pursuant to the  provisions  of
this SECTION 11.05 shall occur on the Date of Issuance at the principal  offices
of the Company unless otherwise agreed. At any closing of a purchase and sale in
accordance  with this  SECTION  11.05,  the Company  will  deliver  certificates
evidencing  the Equity  Securities to be so purchased  against  delivery by each
Initial  Holder of an amount  equal to the  number  of units  that each  Initial
Holder has elected to purchase  multiplied by the Issue Price.  Such amount will
be payable at such  closing.  Each  Initial  Holder  making a purchase of Equity
Securities  pursuant to this SECTION 11.05 shall be responsible  for the payment
of any  transfer or other taxes due as a result of such  purchase and such taxes
shall be payable at the closing (unless such Initial Holder provides evidence in
form satisfactory to the Company that such taxes have been paid).

                      (d) The  failure of any  Initial  Holder to  exercise  its
right to purchase Equity  Securities under this SECTION 11.05 in connection with
any one  issuance of Equity  Securities  by the Company will not, in any manner,
waive or  otherwise  impair the rights of such Initial  Holder to purchase  such
Initial  Holder's  share of  Equity  Securities  in  connection  with any  other
proposed   issuance  of  Equity  Securities  to  which  this  SECTION  11.05  is
applicable.

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



                                WARRANT AGREEMENT

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<PAGE>
                      Section 12.   REGISTRATION.

                      12.1 NOTICE.  On and after the date of this  Agreement (a)
upon receipt of notice (a "DEMAND NOTICE") from the Majority Holders  requesting
that the Company effect the  registration of Warrants or shares of Warrant Stock
held by any Holder or Holders, or (b) whenever the Company otherwise proposes to
effect the  registration  of any Common  Stock  under the  Securities  Act,  the
Company  shall  promptly,  and in any  event  at  least  20  days  prior  to the
anticipated  filing date of the proposed  registration  statement,  give written
notice of such proposed  registration to all Holders. Each Holder that wishes to
register  its  Warrants or shares of Warrant  Stock  (each,  a "SELLER")  shall,
within 15 days after  receipt of such  notice from the  Company,  deliver to the
Company  a notice  (a  "SELLER  NOTICE")  stating  that  such  Seller  wishes to
participate  in such  offering and setting forth the number of shares of Warrant
Stock  that such  Seller  desires  to  include  in such  offering.  The  Company
thereupon shall,  subject to SECTION 12.01(C) as expeditiously as possible,  use
its best efforts to effect the  registration  under the  Securities  Act of such
shares of Warrant Stock (any such registration  effected or undertaken  pursuant
to a  Demand  Notice  being  herein  referred  to as a  "DEMAND  REGISTRATION");
PROVIDED,  HOWEVER,  that the Company  shall not be required to effect more than
two Demand  Registrations  PROVIDED,  FURTHER that the  Company's  obligation to
effect  registration  of  Warrants  or shares of  Warrant  Stock  under  Section
12.01(b)  shall be  unlimited  in  number.  In the event  that (i) the amount of
securities  proposed to be sold by Sellers  pursuant to a Demand Notice shall be
reduced  pursuant to SECTION 12.02(A) hereof to an amount which is less than 75%
of the amount of securities  originally  proposed to be sold by Sellers, or (ii)
any Demand Notice shall be withdrawn by the Holder or Holders  originally giving
such  Demand  Notice  at any  time  prior  to the  filing  by the  Company  of a
preliminary  registration statement in connection with such Demand Notice, then,
in such event,  no right to a Demand  Registration  shall be deemed to have been
exercised  or forfeited  and such Demand  Notice shall not operate to reduce the
Company's obligation to effect a Demand Registration pursuant to a Demand Notice
on two occasions;



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                                      -42-
<PAGE>
provided,  however,  if the Demand  Notice is withdrawn by the Holder or Holders
originally giving such Demand Notice as provided in subparagraph (ii) above, the
right to a Demand  Registration  shall be deemed to have been  exercised if such
Holder or Holders does not  reimburse  the Company for all costs and expenses of
such withdrawn registration.

                      (a)  DEFERRAL OF FILING.  The Company may defer the filing
(but not the  preparation)  of a  registration  statement  required  by  SECTION
12.01(A)  until a date not later  than 60 days in the case of  clause  (i) below
and, in the case of clause (ii)  below,  180 days (or, if longer,  90 days after
the effective date of the  registration  statement  contemplated  by clause (ii)
below),  after  the date of the  Demand  Notice  if (i) at the time the  Company
receives the Demand Notice, the Company or any of its Subsidiaries is engaged in
confidential negotiations or other confidential business activities,  disclosure
of which  would be  required in such  registration  statement  (but would not be
required  if  such  registration  statement  were  not  filed),  and  the  Board
determines in good faith that such disclosure would be materially detrimental to
the Company and its  shareholders or would have a material adverse effect on any
such confidential  negotiations or other confidential  business  activities,  or
(ii) prior to receiving the Demand Notice,  the Board had determined to effect a
registered  underwritten  public  offering of the Company's  securities  for the
Company's account and the Company had taken  substantial  steps (including,  but
not  limited to,  selecting a managing  underwriter  for such  offering)  and is
proceeding with reasonable  diligence to effect such offering. A deferral of the
filing of a registration  statement  pursuant to this SECTION  12.01(C) shall be
lifted, and the requested registration  statement shall be filed forthwith,  if,
in the case of a deferral pursuant to clause (i) of the preceding sentence,  the
negotiations or other activities are disclosed or terminated, or, in the case of
a deferral  pursuant  to clause (ii) of the  preceding  sentence,  the  proposed
registration  for the  Company's  account  is  abandoned.  In order to defer the
filing of a  registration  statement  pursuant  to this  SECTION  12.01(C),  the
Company shall promptly (but in any event within 10 days), upon



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                                      -43-
<PAGE>
determining to seek such deferral,  deliver to each Seller a certificate  signed
by an executive  officer of the Company  pursuant to this SECTION 12.01(C) and a
general  statement of the reason for such deferral and an  approximation  of the
anticipated  delay.  Within 15 days after receiving such  certificate,  Seller's
holding a majority in interest of the warrant Stock for which  registration  was
previously  requested may withdraw such request by giving notice to the Company;
if  withdrawn,  the Demand  Notice shall be deemed not to have been made for all
purposes  of this  Agreement.  The Company may not invoke its right to defer the
filing of a registration statement under this SECTION 12.01(C) more than once in
any eighteen month period.

                      (b) If the Majority  Holders so elect, the offering of the
Warrants,  the Warrant  Stock and/or the Other  Securities  pursuant to a Demand
Registration  shall be in the form of an  underwritten  offering.  If any Demand
Registration is in the form of an underwritten  offering,  the Majority  Holders
will select and obtain the  investment  banker or  investment  bankers that will
administer  the  offering;  provided,  that  such  investment  banker  shall  be
reasonably satisfactory to the Company.

                      12.2  PRORATION.

                      (a) In the case of a Demand  Registration,  if underwriter
(or, if the offering is not  underwritten,  an independent  financial advisor to
the Sellers)  determines  that  marketing  factors  require a limitation  on the
number of  securities  to be offered  and sold,  there shall be included in such
registration  only that number of securities that the underwriter,  or financial
advisor, as the case may be, reasonably believes will not jeopardize the success
of the  offering.  Any  reduction in the number of  securities  to be so offered
shall first be pro-rata among all Persons (other than the Company)  proposing to
sell  securities  pursuant to such  offering who are not  Sellers,  based on the
number of securities  originally  proposed to be sold by each of them, and then,
if  necessary,  pro-rata  among all  Sellers  based on the number of  securities
originally proposed to be sold by each of them.


                                WARRANT AGREEMENT

                                      -44-
<PAGE>
                      (b) In the case of a registration to be effected  pursuant
to SECTION  12.01(B)  hereof,  if the  underwriter  (or, if the  offering is not
underwritten,  an independent  financial advisor to the Company) determines that
marketing factors require a limitation on the number of securities to be offered
and sold in the offering,  including securities requested to be offered and sold
by  Sellers,  there  shall be  included  in the  offering  only  that  number of
securities  that the  underwriter,  or  financial  advisor,  as the case may be,
reasonably  believes  will not  jeopardize  the  success  of the  offering.  Any
reduction in the number of securities  to be so offered shall be pro-rata  among
the  Shareholders,  the  Sellers  and  all  other  Persons,  proposing  to  sell
securities  pursuant  to  such  offering,  based  on the  number  of  securities
originally proposed to be sold by each such Person.

Nothing  contained  herein shall be construed to limit in any way the  Company's
right, in its sole  discretion,  to withdraw any  registration  statement (other
than a  registration  statement  filed  pursuant to a Demand Notice) before such
registration  statement  becomes  effective,  or to  postpone  the  offering  of
securities contemplated by any such registration statement.

                      12.3 REGISTRATION PROCEDURES.  If and whenever the Company
is required by the  provisions  of SECTION  12.01(A)  hereof or, with respect to
subsections  (iii),  (vi), (vii),  (viii),  (ix), (x) and (xiii) of this SECTION
12.03,  by the  provisions  of SECTION  12.01(A) or (B) hereof,  to use its best
efforts to effect the registration of any of its securities under the Securities
Act, the Company shall, as expeditiously as possible,

                      (i) prepare and file with the  Commission  a  registration
         statement on Form S-2,  Form S-3 or such other  "short-form"  as may be
         available  with respect to such  securities and use its best efforts to
         cause such registration  statement to become and remain effective for a
         period of not less than 90 days to permit  the sale of such  securities
         in  accordance  with the plan of  distribution  chosen by the Seller or
         Sellers and the underwriter;



                                WARRANT AGREEMENT

                                      -45-
<PAGE>
             (ii)  prepare  and file with the  Commission  such  amendments  and
         supplements to such  registration  statement and the prospectus used in
         connection  therewith  as may be  necessary  to keep such  registration
         statement effective and to comply with the provisions of the Securities
         Act with  respect to the sale or other  disposition  of all  securities
         covered by such registration statement;

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

            (iv) use its best  efforts to  register  or qualify  the  securities
         covered by such  registration  statement under such other securities or
         blue sky laws of such  jurisdictions  within the United  States as each
         Seller shall reasonably request,  and do such other reasonable acts and
         things as may be  requested  of it to enable such Seller to  consummate
         the  public  sale or other  disposition  in such  jurisdictions  of the
         securities owned by such Seller,  except that the Company shall not for
         any such  purpose be  required  to qualify to do  business as a foreign
         corporation in any jurisdiction wherein it is not so qualified;

                      (v) use its best efforts to cause the  securities  covered
         by such  registration  statement to be  registered  with or approved by
         such other U.S. or state governmental agencies or authorities as may be
         necessary  to enable the Seller or Sellers  thereof to  consummate  the
         disposition of such securities;

             (vi)  notify  each  Seller  of  any  securities   covered  by  such
         registration  statement, at any time when a prospectus relating thereto
         is required to be delivered  under the Securities Act, of the Company's
         becoming  aware  that  the  prospectus  included  in such  registration
         statement, as then



                                WARRANT AGREEMENT

                                      -46-
<PAGE>
         in effect,  includes an untrue statement of a material fact or omits to
         state any material fact  required to be stated  therein or necessary to
         make  the  statements  therein  not  misleading  in  the  light  of the
         circumstances  then existing  (upon receipt of which each Seller agrees
         to forthwith cease making offers and sales of such securities  pursuant
         to such  prospectus  and to deliver to the  Company  any copies of such
         prospectus  then in the possession of such Seller),  and at the request
         of any such  Seller  promptly  prepare  and  furnish  to such  Seller a
         reasonable number of copies of a prospectus  supplemented or amended so
         that, as  thereafter  delivered to the  purchasers of such  securities,
         such  prospectus  shall not include an untrue  statement  of a material
         fact or omit to state a material fact required to be stated  therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances then existing;

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

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

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

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



                                WARRANT AGREEMENT

                                      -47-

<PAGE>
             (xi)  enter  into  such   agreements   (including  an  underwriting
         agreement in customary form  containing  without  limitation  customary
         indemnity  and   contribution   provisions   for  the  benefit  of  the
         underwriter  or  underwriters  and the Seller or Sellers) and take such
         other  actions  as the Seller or Sellers  shall  reasonably  request in
         order to expedite or facilitate the disposition of such securities;

            (xii)  obtain an  opinion  from the  Company's  counsel  and a "cold
         comfort" letter from the Company's  independent  public  accountants in
         customary form and covering such matters as the Seller or Sellers shall
         reasonably request;

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

            (xiv) permit any Seller of securities  covered by such  registration
         statement to require the  insertion  therein of material,  furnished to
         the Company in writing, which in the reasonable judgment of such Seller
         should be included.

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



                                WARRANT AGREEMENT

                                      -48-
<PAGE>
financial  requirements of the Company,  or (B) in the event that such reference
to such Seller by name or otherwise is not required by the  Securities  Act, the
deletion of the reference to such Seller.

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

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

                      12.4 HOLDBACK ON SALES. The Company and the Holders hereby
agree not to effect any public sale or distribution of any securities similar to
those  registered  in  accordance  with SECTION  12.03 hereof  during the 14 day
period prior to, and during the 45 day period beginning on, the


                                WARRANT AGREEMENT

                                      -49-
<PAGE>
effective  date  of  any  registration   statement   (except  as  part  of  such
registration statement).

                      12.5 EXPENSES.  Subject to SECTION  12.01,  all reasonable
expenses incurred in complying with this Section, including, without limitation,
all registration and filing fees,  printing expenses,  fees and disbursements of
counsel for the Company,  the reasonable fees and  disbursements  of one counsel
for the  Seller or the  Sellers  (to be chosen by the  Seller or by the  Sellers
holding a majority of the securities to be included by Sellers in a registration
statement),  expenses of any special audits  incident to or required by any such
registration  and expenses of complying  with the securities or blue sky laws of
any jurisdictions  (PROVIDED,  HOWEVER,  the Company may delay such registration
for up to 30 days,  if such  delay  will  eliminate  the  need for such  special
audit),  shall be paid by the  Company;  provided,  that in no event  shall  the
Company be  required  to pay any  underwriting  discounts,  commissions  or fees
attributable to the sale of warrant Shares by a Seller hereunder.

                      12.6  INDEMNIFICATION.

                      (a)  In  the  event  of  any  registration  of  any of its
securities  under the  Securities  Act  pursuant to this SECTION 12, the Company
shall,  and hereby  agrees to,  indemnify  and hold harmless each Seller of such
securities, its directors and officers, partners, and each other Person, if any,
who controls such Seller within the meaning of Section 15 of the Securities Act,
against any losses to which such Seller or any such director,  officer,  partner
or Person may become subject under the Securities Act or any other statute or at
common law,  insofar as such losses (or actions in respect thereof) arise out of
or are based upon any alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered under the
Securities  Act, any  preliminary  prospectus or final  prospectus  with respect
thereto,  or any amendment or  supplement  thereto,  or any alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and


                                WARRANT AGREEMENT

                                      -50-
<PAGE>
shall reimburse such Seller or such director,  officer, partner or participating
Person or  controlling  Person  for any legal or any other  expenses  reasonably
incurred  by such Seller or such  director,  officer,  partner or  participating
Person or controlling  Person in connection with  investigating or defending any
such loss; PROVIDED,  HOWEVER,  that the Company shall not be liable in any such
case to the extent that any such loss arises out of or is based upon any alleged
untrue  statement  or  alleged  omission  made in such  registration  statement,
preliminary prospectus,  prospectus, or amendment or supplement in reliance upon
and  in  conformity  with  written  information  furnished  to the  Company  for
inclusion  therein through an instrument duly executed by such Seller;  PROVIDED
FURTHER,  HOWEVER  that with  respect to any untrue  statement  or  omission  or
alleged untrue  statement or omission made in any  preliminary  prospectus,  the
indemnity  agreement  contained in this paragraph  shall not apply to the extent
that any such loss,  claim,  damage,  liability or expense results from the fact
that a  current  copy of the  prospectus  was not sent or  given  to the  Person
asserting any such loss, claim, damage,  liability or expense at or prior to the
written  confirmation of the sale of the securities  concerned to such Person if
the  Company  had prior  thereto  given such  Seller the notice  referred  to in
SECTION  12.03(VI)  hereof and provided to such Seller a supplemented or amended
prospectus as  contemplated by SECTION  12.03(VI),  and such current copy of the
prospectus would have cured the defect giving rise to such loss, claim,  damage,
liability  or  expense.  Such  indemnity  shall  remain in full force and effect
regardless  of any  investigation  made by or on behalf  of such  Seller or such
director,  officer or  participating  Person or  controlling  Person,  and shall
survive the transfer of such securities by such Seller.

                      (b) Each  Seller of  securities  which are  included  in a
registration statement hereunder, as a condition to including securities in such
registration  statement,  shall, to the full extent permitted by law,  indemnify
and hold harmless the Company, its directors and officers and each other Person,
if any,  who  controls  the  Company  within  the  meaning  of Section 15 of the
Securities Act, against any losses to which the Company or



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

                      (c)  Promptly  after  receipt  by any  Person  under  this
Section  of  notice  of  the  commencement  of  any  action,   such  Person  (an
"INDEMNIFIED  PARTY") shall, if a claim in respect thereof is to be made against
any other Person (an  "INDEMNIFYING  PARTY") for  indemnity  under this Section,
notify the Indemnifying  Party in writing of the commencement  thereof;  but the
omission  so to notify  the  Indemnifying  Party  shall not  relieve it from any
liability which it may have to any Indemnified Party,  except to the extent that
the Indemnifying Party is prejudiced  thereby.  The Indemnifying Party may, upon
being  notified  of such  action,  assume  the  defense  thereof,  with  counsel
satisfactory to such


                                WARRANT AGREEMENT

                                      -52-
<PAGE>
Indemnified Party, and, after such assumption,  the Indemnifying Party shall not
be liable to such Indemnified Party under this Section for any legal expenses of
other counsel or any other expenses,  in each case subsequently incurred by such
Indemnified  Party, in connection with the defense thereof;  PROVIDED,  HOWEVER,
that the Indemnifying  Party may not assume the defense of the action, and shall
remain  liable to the  Indemnified  Party for its legal  expenses of counsel and
other  expenses,  in the event that the  Indemnified  Party has been  advised in
writing by counsel who, in good faith determines that a conflict of interest may
exist between the Indemnified Party and the Indemnifying Party.

                      (d) If the indemnification provided for in this Section is
unenforceable   although   available,   or  insufficient  to  hold  harmless  an
Indemnified  Party  hereunder for any losses (or actions in respect  thereof) in
respect of which the provisions of SECTION 12.06(A) or (B) would otherwise apply
by their terms, then the Indemnifying  Party shall contribute to the amount paid
or payable by such  Indemnified  Party as a result of such losses (or actions in
respect  thereof) in such  proportion as is  appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other hand in connection with the statements or omissions which resulted in such
losses (or actions in respect thereof),  as well as any other relevant equitable
considerations.  The relative  fault shall be  determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
relates to  information  supplied by the  Indemnifying  Party on the one hand or
such  Indemnified  Party on the other  hand and the  parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission. The parties agree that it would not be just and equitable
if  contribution  pursuant  to  this  subsection  were  determined  by pro  rata
allocation or by any other method of  allocation  which does not take account of
the equitable considerations referred to in this subsection.  The amount paid or
payable as a result of the losses (or  actions in respect  thereof)  referred to
above in this subsection  shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with


                                WARRANT AGREEMENT

                                      -53-
<PAGE>
investigating  or  defending  any such  action or claim.  In no event  shall any
Seller be required to contribute in the aggregate an amount exceeding the amount
of proceeds  received by such Seller in connection with any offering.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any Person who was
not guilty of such fraudulent misrepresentation.

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

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

                      Section 13.  MISCELLANEOUS.

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

                      13.2  NOTICES.   All  notices  and  other   communications
provided  for  herein  and the  Warrants  (including,  without  limitation,  any
modifications  of, or waivers or consents under,  this Agreement) shall be given
or made in writing (including,  without limitation,  by telecopy), if to (a) any
party hereto,


                                WARRANT AGREEMENT

                                      -54-
<PAGE>
delivered to the intended recipient at the "Address for Notices" specified below
its name on the  signature  pages  hereof;  or, as to any  party,  at such other
address as shall be designated  by such party in a written  notice to each other
party,  or (b) any other Person who is the registered  Holder of any Warrants or
Warrant  Stock,  to the  address  for such  Holder as it appears in the stock or
warrant ledger of the Company.  Except as otherwise  provided in this Agreement,
all such communications shall be deemed to have been duly given when transmitted
by telecopier or personally delivered,  or, in the case of a mailed notice, upon
receipt,  in each case given or addressed as  aforesaid.  The Company  agrees to
deliver  to each  Holder in the  manner  prescribed  by this  SECTION  12.02 any
notices or other communications delivered to the shareholders of the Company.

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

                      13.4  EXPENSES, TRANSFER TAXES AND OTHER CHARGES.

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


                                WARRANT AGREEMENT

                                      -55-
<PAGE>
Company  hereunder or under any Warrant or in  connection  with any  enforcement
action or other  proceedings  relating  hereto or  thereto  (including,  without
limitation, the enforcement of this SECTION 13.04).

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

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

                      13.5  AMENDMENTS,   ETC.  Except  as  otherwise  expressly
provided in this  Agreement,  any provision of this  Agreement may be amended or
modified only by an instrument in writing  signed by the Company and the Holders
of at least 66-2/3% of the Restricted Warrants; PROVIDED that (a) the consent of
the Holders of Restricted Warrants shall not be required with respect to any



                                WARRANT AGREEMENT

                                      -56-
<PAGE>
amendment or waiver which does not affect the rights or benefits of such Holders
under this Agreement,  (b) the consent of the Holders of Restricted  Stock shall
be required  with  respect to any  amendment or waiver of SECTION 12, and (c) no
such  amendment or waiver shall,  without the written  consent of all Holders of
Restricted  Stock and Restricted  Warrants at the time  outstanding,  amend this
SECTION 13.05.

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

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

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

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

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


                                WARRANT AGREEMENT

                                      -57-
<PAGE>
13.11  GOVERNING  LAW.  This  Agreement  shall be governed by, and  construed in
accordance with, the law of the State of New York.

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

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

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



                                WARRANT AGREEMENT

                                      -58-
<PAGE>
                      IN WITNESS WHEREOF,  the parties hereto have duly executed
this Agreement as of the date first above written.

                                   COMPANY

                                   NUCO2 INC.



                                   By: /S/ JOSEPH CRISCUOLO
                                       ------------------------
                                       Title: President

Address for Notices:

                                   NUCO2 INC.
                                   2800 Southeast Market Place
                                   Stuart, Florida 34997
                                   Attention: Joann Sabatino
                                               Chief Financial Officer

                                   Telephone:  561-221-1754
                                   Fax:        561-221-1690


                                   WITH A COPY TO:

                                   Olshan, Grundman, Frome & Rosenzweig LLP
                                   505 Park Avenue, 17th Floor
                                   New York, NY 10022
                                   Attention: Steve Wolosky, Esq.

                                   Telephone:  212-753-7200
                                   Fax:        212-980-7177



                                WARRANT AGREEMENT

                                      -59-
<PAGE>
PERCENTAGE

3.5%                                 CHASE EQUITY ASSOCIATES L.P.


                                     By Chase Capital Partners,
                                        its general partner


                                     By: /S/ RICHARD D. WATERS
                                         -------------------------
                                         Title:






                                WARRANT AGREEMENT


                                      -60-
<PAGE>

PERCENTAGE

 .70%                                 ORIX USA CORPORATION



                                     By: /S/ FRANKLIN CLARKE
                                         -----------------------
                                         Title:  President & CEO






                                WARRANT AGREEMENT


                                      -61-
<PAGE>
PERCENTAGE

 .47%                                 EMPIRE  INSURANCE  COMPANY, as
                                     executed on their behalf by their
                                     Investment Manager, Cohanzick
                                     Management, L.L.C.


                                     By: /S/ DAVID SHERMAN
                                         ---------------------
                                         Title: President






                                WARRANT AGREEMENT


                                      -62-
<PAGE>
PERCENTAGE

1.17%                                DK ACQUISITION PARTNERS, L.P.

                                     By M.H. Davidson & Co.,
                                        its general partner


                                     By:/S/ THOMAS L. KEMPNER
                                        ------------------------






                                WARRANT AGREEMENT

                                      -63-
<PAGE>
PERCENTAGE

 .32%                                 NATIONSBANC MONTGOMERY SECURITIES,
INC.


                                     By: /S/ ROBERT D. LONG
                                         ----------------------
                                         Title:
                                         Managing Director






                                WARRANT AGREEMENT

                                      -64-
<PAGE>
                                   Addresses for Notices:

                                   CHASE CAPITAL PARTNERS
                                   380 Madison Avenue
                                   12th Floor
                                   New York, New York  10017-3100
                                   Attention:  Richard D. Waters

                                   Telephone:  (212) 622-3096
                                   Fax:         (212) 622-3950

                                   WITH A COPY TO:

                                   Milbank, Tweed, Hadley & McCloy
                                   1 Chase Manhattan Plaza
                                   New York, New York  10005
                                   Attention:  John T. O'Connor

                                   Telephone:  (212) 530-5548
                                   Fax:        (212) 530-5219

                                   EMPIRE INSURANCE COMPANY
                                   122 5th Avenue
                                   New York, New York 10011
                                   Attention: Frank Colalucci

                                   Telephone: (212) 387-3113
                                   Fax:       (212) 691-6374

                                   WITH A COPY TO:

                                   COHANZICK MANAGEMENT, L.L.C.
                                   110 East 42nd Street
                                   Suite 1305
                                   New York, New York 10017
                                   Attention: David K. Sherman



                                WARRANT AGREEMENT

                                      -65-
<PAGE>
                                   Telephone:  (212) 953-6900
                                   Fax:        (212) 953-5833

                                   ORIX USA
                                   780 Third Avenue
                                   48th Floor
                                   New York, New York 10017
                                   Attention: Franklin Clark

                                   Telephone: (212) 418-8355
                                   Fax:       (212) 418-8308

                                   DK ACQUISITIONS PARTNERS, L.P.
                                   c/o M.H. Davidson & Co.
                                   885 Third Avenue, Suite 3300
                                   New York, New York 10022
                                   Attention:  Thomas L. Kempner, Jr.

                                   Telephone:  (212) 371-3000
                                   Fax:        (212) 371-4318

                                   WITH A COPY TO:

                                   Akin, Gump, Strauss, Hauer &
                                     Feld, L.L.P.
                                   590 Madison Avenue
                                   New York, New York 10022
                                   Attention:  Ronald W. Goldberg

                                   Telephone:  (212) 872-1000
                                   Fax:        (212) 872-1002

                                   NATIONSBANC MONTGOMERY SECURITIES,
                                      INC.
                                   9 West 57th Street
                                   New York, New York 10019
                                   Attention:  Thomas C. Liu
                                   Telephone:  (212) 583-8531
                                   Fax:        (212) 583-8561



                                WARRANT AGREEMENT

                                      -66-
<PAGE>
                                                                      Annex 1 to
                                                               Warrant Agreement


                                [Form of Warrant]

                                     WARRANT

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

         THE  TRANSFER OF THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  IS
         SUBJECT TO THE CONDITIONS  SPECIFIED IN THAT CERTAIN WARRANT  AGREEMENT
         DATED  AS  OF  OCTOBER  31,  1997,   BETWEEN   NUCO2  INC.,  A  FLORIDA
         CORPORATION, AND CERTAIN INITIAL HOLDERS, AS SUCH WARRANT AGREEMENT MAY
         BE MODIFIED AND  SUPPLEMENTED  AND IN EFFECT FROM TIME TO TIME,  AND NO
         TRANSFER OF THE  SECURITIES  REPRESENTED BY THIS  CERTIFICATE  SHALL BE
         VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A COPY OF
         THE FORM OF SUCH  WARRANT  AGREEMENT IS ON FILE AND MAY BE INSPECTED AT
         THE PRINCIPAL EXECUTIVE OFFICE OF THE AFORESAID CORPORATION. THE HOLDER
         OF THIS CERTIFICATE,  BY ACCEPTANCE OF THIS  CERTIFICATE,  AGREES TO BE
         BOUND BY THE PROVISIONS OF SUCH WARRANT AGREEMENT.

No. of Stock Units: ________________                       Warrant No.__________


                                     WARRANT
                           to Purchase Common Stock of
                                   NUCO2 INC.



                      THIS IS TO CERTIFY THAT [NAME OF INITIAL  HOLDER],  or its
registered assigns, is entitled to purchase in whole or in




                                WARRANT AGREEMENT

<PAGE>
part from NUCO2 INC., a Florida  corporation  (the  "COMPANY"),  at any time and
from time to time on or after the date hereof, but not later than 5:00 p.m., New
York City time, on [ ] (the "EXPIRATION  DATE"),  [_] Stock Units (as defined in
the Warrant  Agreement  referred to below) at a PURCHASE  PRICE of [ ] per Stock
Unit, PROVIDED that such purchase price shall not be less than the aggregate par
value of the capital  stock  contained in a Stock Unit (the  "EXERCISE  PRICE"),
subject  to the  terms  and  conditions  set  forth  herein  and in the  Warrant
Agreement,  each  such  purchase  of a Stock  Unit to be made,  and to be deemed
effective  for the  purpose  of  determining  the date of  exercise,  only  upon
surrender  of this  warrant to the Company at its office  referred to in SECTION
13.03 of the Warrant Agreement,  with the Form of Exercise attached hereto (or a
reasonable  facsimile  thereof) duly  completed and signed,  and upon payment in
full to the Company of the  Exercise  Price (i) in cash or (ii) by  certified or
official  bank  check or  (iii)  by any  combination  of the  foregoing,  all as
provided in the warrant  Agreement and upon  compliance  with and subject to the
conditions set forth herein and in the Warrant Agreement.

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

                      If a Holder is subject to the  provisions of Regulation Y.
such  Holder  shall not,  and shall not permit any of its Bank  Holding  Company
Affiliates  to,  exercise this Warrant if, after giving effect to such exercise,
(i) such Holder and its Bank Holding Company  Affiliates  would own more than 5`
of the total issued and outstanding shares of Common Stock on a fully




                                WARRANT AGREEMENT

<PAGE>
diluted basis or (ii) such Holder would be deemed under Regulation Y to have the
power to exercise,  directly or  indirectly,  a controlling  influence  over the
management  or policies  of, or would  otherwise  control,  the Company (and for
purposes  of this  clause  (ii),  a reasoned  opinion of counsel to such  Holder
delivered  to such  Holder  (which  is based on facts and  circumstances  deemed
appropriate  by such  counsel)  to the effect that such Holder does not have the
power to exercise such a controlling  influence or otherwise control the Company
shall be conclusive).

                      This  Warrant is issued under and in  accordance  with the
Warrant  Agreement  dated as of October 31, 1997 between the Company and certain
investors (as the same may be modified and  supplemented  in accordance with its
terms  and as in effect  from time to time,  the  "WARRANT  AGREEMENT"),  and is
subject to the terms and  provisions of the Warrant  Agreement,  which terms and
provisions are hereby  incorporated by reference  herein and made a part hereof.
Every  Holder of this  Warrant  consents  to all of the terms  contained  in the
Warrant Agreement by acceptance hereof.

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

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

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




                                WARRANT AGREEMENT

<PAGE>
with  and  subject  to the  conditions  set  forth  herein  and  in the  Warrant
Agreement.

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

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

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

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



                                WARRANT AGREEMENT

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

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

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

Dated: _________________ _____, 1997


                                   NUCO2 INC.


                                   By _______________________________________
                                      Name:
                                      Title:





                                WARRANT AGREEMENT
<PAGE>
                               FORM OF ASSIGNMENT


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



                                                             Number of
                                                             Stock
Name of Assignee               Address                       Units





Dated:________________________



                                        _______________________________________
                                        Signature of Registered Holder


                                        _______________________________________
                                        Name of Registered Holder
                                        (Please Print)



Witness:



_______________________________________






                                WARRANT AGREEMENT

<PAGE>
                                FORM OF EXERCISE

                (To be executed by the registered holder hereof)


                      The undersigned registered owner of this Warrant
hereby

                      SELECT ONE OF THE FOLLOWING TWO CHOICES:

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

                                       OR

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

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

Dated:___________, ______________


                                        _______________________________________
                                        (Signature of Registered Holder)


Instructions for issuance and registration of Stock Units:


Name of Registered Holder:______________________________________________________
(Please print)

Social Security or Other Identifying Number:____________________________________





                                WARRANT AGREEMENT

<PAGE>

         Please deliver certificate to the following address:


                 _____________________________________________

                 _____________________________________________

                 _____________________________________________





                                WARRANT AGREEMENT