Exhibit 10.17







================================================================================




                                   NUCO2 INC.


                                       and


                         CHASE CAPITAL INVESTMENTS, L.P.


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



                       PREFERRED STOCK PURCHASE AGREEMENT

                            Dated as of May 15, 2000



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




================================================================================





<PAGE>


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Parties  ......................................................................1
Recitals ......................................................................1


Section 1.  Definitions, Accounting Terms and Determinations...................1
         1.01  Definitions.....................................................1
         1.01  Accounting Terms and Determinations.............................9


Section 2.  Purchase and Sale of Preferred Stock...............................9
         2.01  Authorization and Issuance of Preferred
                Shares and Common Stock........................................9
         2.02  Sale of Preferred Shares; The Closing...........................9
         2.03  Initial Holder Representations, Warranties and Agreements......10
         2.04  Securities Act Compliance......................................10
         2.05  Use of Proceeds................................................10


Section 3.  Representations and Warranties of the Company.....................10
         3.01  Existence......................................................11
         3.02  No Breach......................................................11
         3.03  Corporate Action...............................................11
         3.04  Approvals......................................................11
         3.05  Investment Company Act.........................................12
         3.06  Public Utility Holding Company Act.............................12
         3.07  Capitalization.................................................12
         3.08  Private Offering...............................................12
         3.09  SEC Documents; Financial Statements............................12
         3.10  Provided Information...........................................13
         3.11  Material Adverse Change........................................13
         3.12  Litigation.....................................................13
         3.13  Permits and Licenses...........................................14
         3.14  Properties.....................................................14
         3.15  Environmental Matters..........................................14
         3.16  Compliance with Laws and Agreements............................14
         3.17  Taxes..........................................................14
         3.18  ERISA..........................................................14
         3.19  Subsidiaries...................................................15
         3.20  No Burdensome Restrictions.....................................15


Section 4.  Transfers Generally; Securities Act Compliance....................15
         4.01  Transfers Generally............................................16
         4.02  Transfers of Restricted Securities Pursuant
                to Registration Statements and Rule 144, Etc..................16

                                      (i)
<PAGE>

         4.03  Notice of Certain Transfers....................................16
         4.04  Restrictive Legend.............................................16
         4.05  Termination of Restrictions....................................17


Section 5.  Additional Provisions Relating to Transfers.......................17
         5.01  Disposition of Securities......................................17
         5.02  Repurchase of Common Stock.....................................18
         5.03  Transfer, Division and Combination.............................18


Section 6.  Notice to Holders of Preferred Shares.............................18


Section 7.  Reservation and Authorization of Common Stock.....................19


Section 8.  Stock and Preferred Shares Transfer Books.........................19


Section 9.  Holders' Special Rights...........................................19
         9.01  Replacement of Instruments.....................................19
         9.02  Restrictions on Certain Action.................................20
         9.03  Inspection Rights..............................................20
         9.04  Board Attendance...............................................20


Section 10.  Registration.....................................................20
        10.01  Notice.20
        10.02  Proration......................................................22
        10.03  Registration Procedures........................................23
        10.04  Holdback on Sales..............................................25
        10.05  Expenses.......................................................25
        10.06  Indemnification................................................26
        10.07  No Other Registration Rights...................................28
        10.08  Rule 144.......................................................28


Section 11.  Miscellaneous....................................................28
        11.01  Waiver.........................................................28
        11.02  Notices........................................................28
        11.03  Office of the Company..........................................28
        11.04  Expenses, Transfer Taxes and Other Charges.....................29
        11.05  Amendments, Etc................................................29
        11.06  Successors and Assigns.........................................30
        11.07  Survival.......................................................30
        11.08  Captions.......................................................30
        11.09  Counterparts...................................................30

                                      (ii)

<PAGE>

        11.10  Governing Law; Jurisdiction; Consent to Service of Process.....30
        11.11  Severability...................................................31
        11.12  Entire Agreement...............................................31
        11.13  No Third Party Beneficiary.....................................31
        11.14  Waiver of Jury Trial...........................................31

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


                                     (iii)

<PAGE>

                       PREFERRED STOCK PURCHASE AGREEMENT


            .PREFERRED  STOCK  PURCHASE  AGREEMENT  dated  as of  May  15,  2000
between: NuCo2 Inc., a corporation duly organized and validly existing under the
laws of the State of Florida  (the  "Company")  and Chase  Capital  Investments,
L.P., a limited  partnership  duly organized and validly existing under the laws
of the State of Delaware ( "Purchaser").

            WHEREAS,  Purchaser  desires to purchase  from the Company,  and the
Company  desires  to sell to  Purchaser,  an  aggregate  of 5,000  shares  of 8%
cumulative,  convertible  preferred stock, no par value, 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.

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

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

            "Additional Shares of Common Stock" shall mean all shares (including
treasury  shares) of Common  Stock issued or sold by the Company on or after the
date hereof, other than (i) the shares of Common Stock described as being issued
and  outstanding  in Section  3.07 hereof and (ii) the Option  Stock and Options
listed on Schedule 2 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)  Purchaser  (or any of its
Affiliates) shall not be an Affiliate of the 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.

            "Certificate of  Designations"  shall mean the articles of amendment
relating to the  designations,  preferences  and rights of the Preferred  Shares
filed in connection  with the issuance of the Preferred  Shares pursuant to this
Agreement.


<PAGE>

            "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  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.

            "Demand  Notice"  shall have the  meaning  assigned  to such term in
Section 10.01 hereof.

            "Demand  Registration"  shall have the meaning assigned to such term
in Section 10.01 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.

            "Environmental  Laws" means all  Federal,  state,  local and foreign
statutes and codes or regulations,  rules or ordinances issued,  promulgated, or
approved thereunder, now or hereafter in effect (including,  without limitation,
those with  respect to asbestos or asbestos  containing  material),  relating to
pollution or  protection  of the  environment  and relating to public health and
safety, relating to (i) emissions,  discharges,  releases or threatened releases
of Hazardous  Materials,  into the environment  (including,  without limitation,
ambient air, surface water, ground water, land surface or subsurface strata), or
(ii) the  manufacture,  processing,  distribution,  use  generation,  treatment,
storage,  disposal,  transport or handling of any Hazardous Materials, and (iii)
underground  storage tanks and related  piping,  and  emissions,  discharges and
releases or threatened releases  therefrom,  such Environmental Laws to include,
without  limitation,  (i) the Clean Air Act (42 U.S.C.ss.7401 et seq.), (ii) the
Clean Water Act (33 U.S.C.ss.1251 et seq.), (iii) the Resource  Conservation and
Recovery Act (42 U.S.C.ss.6901 et seq.),  (iv) the Toxic Substances  Control Act
(15 U.S.C.ss.2601 et seq.) and (v) CERCLA, each as amended.

            "Environmental   Liability"  means  any  liability,   contingent  or
otherwise   (including  any  liability  for  damages,   costs  of  environmental
remediation,  fines, penalties or indemnities), of

                                       2

<PAGE>

the Company or any  Subsidiary  directly or indirectly  resulting  from or based
upon (i) violation of any Environmental Law, (ii) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (iii)
exposure to any Hazardous  Materials,  (iv) the release or threatened release of
any Hazardous  Materials into the environment or (v) any contract,  agreement or
other consensual  arrangement  pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

            "Equity   Rights"   means,   with   respect  to  any   Person,   any
subscriptions,  options, warrants, commitments,  preemptive rights or agreements
of any kind (including,  without  limitation,  any stockholders' or voting trust
agreements)  for the issuance,  sale,  registration  or voting of, or securities
convertible  into,  any  additional  shares of capital  stock of any  class,  or
partnership or other ownership interests of any type in, such Person.

            "ERISA" means the Employee  Retirement  Income Security Act of 1974,
as  amended  from  time  to time  and  the  rules  and  regulations  promulgated
thereunder.

            "ERISA  Affiliate"  means  any  trade or  business  (whether  or not
incorporated)  that,  together with the Company, is treated as a single employer
under  Section  414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

            "ERISA  Event"  means:  (i) any  "reportable  event",  as defined in
Section 4043 of ERISA or the  regulations  issued  thereunder  with respect to a
Plan (other than an event for which the 30-day  notice  period is waived);  (ii)
the existence with respect to any Plan of an  "accumulated  funding  deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA),  whether or not
waived;  (iii) the  filing  pursuant  to  Section  412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum  funding  standard
with respect to any Plan; (iv) the incurrence by the Company or any of its ERISA
Affiliates  of any  liability  under  Title  IV of  ERISA  with  respect  to the
termination of any Plan;  (v) the receipt by the Company or any ERISA  Affiliate
from the PBGC or a plan  administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (vi)
the  incurrence  by the Company or any of its ERISA  Affiliates of any liability
with  respect  to  the  withdrawal  or  partial  withdrawal  from  any  Plan  or
Multiemployer  Plan; or (vii) the receipt by the Company or any ERISA  Affiliate
of any notice, or the receipt by any Multiemployer  Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

            "ERISA Plan" means any employee  pension  benefit plan (other than a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA,  and in respect of which the Company or
any ERISA  Affiliate is (or, if such plan were  terminated,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.

                                       3

<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.

            "Financial  Statements" shall have the meaning assigned to such term
in Section 3.09 hereof.

            "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.

            "Hazardous Materials" means all explosive or radioactive  substances
or wastes and all  hazardous or toxic  substances,  wastes or other  pollutants,
including  petroleum or petroleum  distillates,  asbestos or asbestos containing
materials,  polychlorinated  biphenyls,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

            "Holder"  shall mean any Person who  acquires  Restricted  Preferred
Shares  pursuant  to  the  provisions  of  this  Agreement,  including,  without
limitation,  Purchaser,  any  Affiliate of  Purchaser,  any Person who becomes a
party to this Agreement pursuant to Section 5.03 and an Affiliate of such Person
and any permitted transferees of any of the foregoing.

            "Indemnified  Party" shall have the meaning assigned to such term in
Section 10.06(c) hereof.

            "Indemnifying Party" shall have the meaning assigned to such term in
Section 10.06(c) hereof.

            "Information"  shall  have  the  meaning  assigned  to such  term in
Section 3.10 hereof.

            "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.

            "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
Underlying  Common Stock issued or issuable  upon  conversion  of the  Preferred
Shares.  For purposes of giving notices

                                       4

<PAGE>

hereunder,  Holders of Preferred  Shares shall be deemed  holders of  Underlying
Common Stock issued upon the exercise thereof.

            "Material Adverse Effect" means a material adverse effect on (i) the
business, assets, property, operations or condition,  financial or otherwise, of
the  Company  and its  Subsidiaries  taken as a whole or (ii) the ability of the
Company  to  perform  any  of  its  obligations  under  this  Agreement  or  the
transaction contemplated hereby.

            "Multiemployer  Plan"  means  a  multiemployer  plan as  defined  in
Section 4001(a)(3) of ERISA as to which the Company, any Subsidiary or any ERISA
Affiliate  is  obligated  to  make,  has  made,  or  will be  obligated  to make
contributions on behalf of participants who are or were employed by any of them.

            "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 2 hereto.

            "Option  Stock" shall mean shares of Common Stock not to exceed,  in
the  aggregate,  2,060,000  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  Underlying
Common 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 conversion of the Preferred Shares held by such Holder,  in
lieu of or in addition to Underlying Common Stock, or which at any time shall be
issuable  or shall  have  been  issued  in  exchange  for or in  replacement  of
Underlying  Common Stock or Other  Securities  received in an earlier  exchange,
exercise or replacement of Underlying 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.

            "Permitted Encumbrances" means:

            (i)  Liens imposed by law for taxes that are not yet due;

            (ii)    carriers',     warehousemen's,     mechanics',    workmen's,
            materialmen's,  repairmen's,  statutory  landlord's  and other  like
            Liens imposed by law, arising in

                                       5

<PAGE>

            the ordinary  course of business and securing  obligations  that are
            not overdue by more than 60 days;

            (iii) pledges and deposits  made in the ordinary  course of business
            in compliance with workers' compensation, unemployment insurance and
            other social security laws or regulations and Liens thereon;

            (iv) deposits to secure the  performance of bids,  trade  contracts,
            leases, statutory obligations,  surety and appeal bonds, performance
            bonds and other  obligations  of a like nature,  in each case in the
            ordinary course of business;

            (v)  easements,  zoning  restrictions,   rights-of-way  and  similar
            encumbrances  on real  property  imposed  by law or  arising  in the
            ordinary  course  of  business  that  do  not  secure  any  monetary
            obligations  and do not  materially  detract  from the  value of the
            affected property or interfere with the ordinary conduct of business
            of the Company or any Subsidiary;

            (vi) deposits in connection  with the  prosecution or defense of any
            claim in any  court  or  before  any  administrative  commission  or
            agency; and

            (vii) Liens arising out of judgments or awards with respect to which
            the  Company  or any  Subsidiary  at the time shall in good faith be
            diligently  prosecuting an appeal or proceedings for review and with
            respect to which the Company or any of its  Subsidiaries  shall have
            secured a stay of execution  pending such appeal or proceedings  for
            review.

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

            "PBGC" means the Pension Benefit  Guaranty  Corporation  referred to
and defined in ERISA and any successor entity performing similar functions.

            "Plan"  means  any  employee  benefit  plan,  program,  arrangement,
practice  or  contract,  maintained  by or on behalf of the  Company or an ERISA
Affiliate,  which provides benefits or compensation to or on behalf of employees
or  former  employees,  whether  formal or  informal,  whether  or not  written,
including, but not limited to, the following types of plans:

            (i) Executive Arrangements. Any bonus, incentive compensation, stock
      option, deferred compensation,  commission, severance, "golden parachute",
      "rabbi trust", or other executive  compensation  plan,  program,  contract
      arrangement or practice;

            (ii) ERISA Plans.  Any "employee  benefit plan" as defined in ERISA,
      including,  but not limited to, any defined benefit  pension plan,  profit
      sharing plan, money purchase  pension plan,  savings or thrift plan, stock
      bonus plan,  employee stock  ownership  plan,  Multiemployer  Plan, or any
      plan,  fund,  program,  arrangement  or  practice  providing  for

                                       6

<PAGE>

      medical (including  post-retirement medical),  hospitalization,  accident,
      sickness, disability, or life insurance benefits; and

            (iii) Other Employee Fringe Benefits. Any stock purchase,  vacation,
      scholarship,  day care,  prepaid legal  services,  severance pay or fringe
      benefit plan, program, arrangement, contract or practice.

            "Preferred  Shares"  shall  mean  the  8%  cumulative,   convertible
preferred stock, no par value, of the Company.

            "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.

            "Projections"  shall  have  the  meaning  assigned  to such  term in
Section 3.10 hereof.

            "Purchased  Shares" shall have the meaning  assigned to such term in
Section 2.02(a).

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

            "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 9.04 of this Agreement.

            "Restricted  Certificate" shall mean a certificate for Common Stock,
Preferred Stock or Other Securities  bearing the restrictive legend set forth in
Section 4.04 hereof.

            "Restricted  Preferred Shares" shall mean Preferred Shares evidenced
by a Restricted Certificate.

            "Restricted  Securities"  shall mean Restricted Stock and Restricted
Preferred Shares.

            "Restricted Stock" shall mean Common Stock 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.

            "SEC  Documents"  shall have the  meaning  assigned  to such term in
Section 3.09 hereof.

                                       7

<PAGE>

            "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
10.01 hereof.

            "Seller  Notice"  shall have the  meaning  assigned  to such term in
Section 10.01 hereof.

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

            "Stock Option Plans" shall mean the Company's 1995 Stock Option Plan
and the Company's Directors' Stock Option Plan.

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

            "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.

            "Tax"  means,  with  respect to any Person,  any  Federal,  state or
foreign tax,  assessment,  customs duties or other governmental  charge, levy or
assessment  (including  any  withholding  tax)  upon  such  Person  or upon such
Person's assets, revenues, income or profits.

            "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.

            "Transferred  Purchased  Share"  shall have the meaning  assigned to
such term in Section 5.03 hereof.

            "Underlying  Common  Stock" shall mean the shares of Common Stock of
the Company issuable or issued upon the conversion of the Preferred Stock issued
by the Company, including any such Common Stock into which such Common Stock may
thereafter be changed.

            "Warrant  Agreement"  shall mean the Warrant  Agreement  dated as of
October 31, 1997, as amended, by and among the Company and each of the investors
signatory thereto.

            "Warrants" shall mean any warrant certificates issued by the Company
under the Warrant Agreement.

                                       8

<PAGE>

            "Withdrawal  Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

            1.01 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 Preferred Shares shall be
prepared,  in  accordance  with GAAP.  All  calculations  made for  purposes  of
determining compliance with the terms of this Agreement and the Preferred Shares
shall (except as may be expressly  provided  herein) be made by  application  of
GAAP.

            Section 2. Purchase and Sale of Preferred Stock.

            2.01  Authorization  and  Issuance  of  Preferred  Shares and Common
Stock.  The Company has  authorized:  (a) the issue of the Preferred  Shares for
issuance to Purchaser  pursuant to this  Agreement;  and (b) the reservation for
issuance of such number of shares of its Common Stock as shall be issuable  upon
conversion of the Preferred Shares.

            2.02 Sale of Preferred Shares; The Closing.

            (a) The  Closing  shall take place on the date hereof at the offices
of Milbank, Tweed, Hadley & McCloy LLP at 10:00 a.m. local time. On the basis of
the representations, warranties, covenants and agreements, the Company agrees to
authorize,  issue and sell to Purchaser on the date hereof, and Purchaser agrees
to  subscribe  for and  purchase  from the  Company  on the date  hereof,  5,000
Preferred Shares (the "Purchased Shares") at the purchase price of $5,000,000.

            (b) On the date hereof, the Company shall deliver to Purchaser:

                  (i)    a  single   certificate   for  the  Purchased   Shares,
                         registered in the name of Purchaser;

                 (ii)    evidence of filing the  Certificate of  Designations in
                         the state of Florida;

                 (iii)   a legal opinion from counsel to the Company in form and
                         substance reasonably satisfactory to Purchaser;

                 (iv)    a  certificate,  dated the date hereof and  executed by
                         the  Secretary  of the Company,  in form and  substance
                         reasonably satisfactory to Purchaser; and

                 (v)     a   regulatory   sideletter   in  form  and   substance
                         reasonably satisfactory to Purchaser.

                                       9

<PAGE>

                  The  Company  shall also pay on the date hereof any legal fees
                  and expenses of Milbank,  Tweed,  Hadley & McCloy LLP that are
                  due and remain  outstanding  or that relate to this  Agreement
                  and the transactions  contemplated  hereby by wire transfer of
                  immediately  available funds to an account  designated by such
                  firm.

            (c) On the date  hereof,  Purchaser  shall  deliver  to the  Company
$5,000,000  by wire  transfer  of  immediately  available  funds  to an  account
designated by the Company.

            2.03 Initial  Holder  Representations,  Warranties  and  Agreements.
Purchaser  represents  and  warrants  to, and agrees with the  Company  that (a)
Purchaser is purchasing  for its own account,  and not with a view to the resale
or  distribution of the Purchased  Shares or the Underlying  Common Stock or any
part  thereof,  and Purchaser is prepared to bear the economic risk of retaining
the Purchased Shares and the Underlying  Common Stock for an indefinite  period,
all without prejudice,  however,  to the right of Purchaser at any time lawfully
to sell or  otherwise to dispose of all or any part of the  Purchased  Shares or
the  Underlying  Common  Stock  held  by it,  (b)  Purchaser  is an  "accredited
investor"  (as  defined  in Rule  501 of  Regulation  D  promulgated  under  the
Securities  Act),  (c) Purchaser is  experienced  in evaluating and investing in
securities,  and understands that the Purchased Shares and the Underlying Common
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 Purchaser  shall be in
compliance with all laws applicable to Purchaser.

            2.04  Securities  Act  Compliance.  Purchaser  understands  that the
Company has not  registered or qualified the Purchased  Shares or the Underlying
Common Stock under the Securities Act or any applicable  state  securities  laws
and Purchaser agrees that the Purchased  Shares and the Underlying  Common Stock
shall not be sold or offered for sale without  registration under the Securities
Act or the availability of an exemption therefrom, all as more fully provided in
Section 4 hereof.

            2.05 Use of Proceeds.  The Company  shall use the proceeds  from the
issuance of the Purchased  Shares in connection  with this Agreement for general
corporate purposes.

            Section  3.  Representations  and  Warranties  of the  Company.  The
Company represents and warrants to Purchaser that:

                                       10

<PAGE>

            3.01 Existence. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has all
requisite  corporate power and authority to own its properties and assets and to
carry  on its  business  as it is now  being  conducted  and as  proposed  to be
conducted.  Each of the Company and its material  domestic  Subsidiaries is duly
qualified to transact business as a foreign  corporation and is in good standing
in each jurisdiction in which the character of the properties owned or leased by
it or the nature of its business makes such qualification necessary,  except for
any  such  failures  to so  qualify  or be in  good  standing  that  would  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect..

            3.02 No Breach. None of the execution and delivery of this Agreement
and the  Purchased  Shares,  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.

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

            3.04 Approvals. No authorizations,  approvals or consents of, and no
filings or registrations with, any Governmental  Authority are necessary for the
execution,  delivery or  performance  by the Company of this Agreement or of the
Purchased Shares 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  Purchased  Shares,  or the  issuance of the  Purchased
Shares,  has  been  duly  taken by all such  Governmental  Authorities  or other
Persons, as the case may be.

                                       11

<PAGE>

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

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

            3.07 Capitalization.

            (a) Upon the issuance of the Purchased  Shares 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
1 hereto.  Upon the issuance of the Purchased  Shares 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 Purchased Shares to be issued pursuant to this Agreement,  and (ii)
the Warrants, Option Stock and Options listed on Schedule 2.

            (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 Warrant Agreement,  (iii) the BOC Warrant and
(iv) the IPO Warrants.

            (c) The  Underlying  Common  Stock  has  been  duly  authorized  and
adequately  reserved in  contemplation of the conversion of the Preferred Shares
and, when issued and delivered in accordance  with the terms of the  Certificate
of  Designations,  will  have been  validly  issued  and will be fully  paid and
nonassessable,  and the  issuance  thereof  will not have  been  subject  to any
preemptive rights or made in violation of any applicable law.

            (d) The holders of the Preferred Shares will, upon issuance thereof,
have the rights set forth in the  Certificate  of  Designations  (subject to the
limitations and qualifications set forth therein).

            3.08 Private Offering. The Company agrees that neither it nor anyone
acting on its behalf  has  offered  or will  offer the  Purchased  Shares or the
Underlying  Common 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  Purchased
Shares within the provisions of Section 5 of the Securities Act.

            3.09 SEC Documents; Financial Statements. The Company has filed in a
timely  manner all  documents  that the  Company  was  required to file with the
Commission  under  Sections 13, 14(a) and 15(d) of the Exchange  Act,  since its
initial public  offering.  As of their

                                       12

<PAGE>

respective  filing dates, all documents filed by the Company with the Commission
("SEC Documents") complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable.  None of the SEC Documents as
of their  respective  dates contained any untrue statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.  The financial  statements of the Company included in
the SEC Documents (the "Financial Statements") comply as to form in all material
respects with applicable  accounting  requirements  and with the published rules
and regulations of the Commission with respect thereto. The Financial Statements
have been prepared in accordance  with GAAP and fairly present the  consolidated
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).  Except as set forth or reflected in the SEC  Documents
filed prior to the date  hereof,  the Company does not have any  liabilities  or
obligations of any nature (whether accrued, absolute, contingent,  unasserted or
otherwise)  that  individually  or in the aggregate  would be expected to have a
Material Adverse Effect.

            3.10  Provided  Information.  To the  knowledge of the Company,  all
written  information  (excluding  information of a general  economic  nature and
financial projections) concerning the Company and the transactions  contemplated
hereby (the  "Information") that has been or will be prepared by or on behalf of
the Company or any of the Company's authorized representatives and that has been
made  or  will  be  made  available  to  Purchaser  or  any  of  its  authorized
representatives in connection with the Purchased Shares,  when taken as a whole,
was or will be, at the time made available, correct in all material respects and
did not or will not, at the time made available, contain any untrue statement of
a material fact or omit to state a material fact  necessary in order to make the
statements  contained therein not misleading in light of the circumstances under
which such statements are made. All financial projections concerning the Company
and the Purchased  Shares (the  "Projections")  that have been prepared by or on
behalf of the Company or any of the  Company's  authorized  representatives  and
that have been or will be made  available to Purchaser or any of its  authorized
representatives  in connection  with the Purchased  Shares have been, and at the
time made available will be, reasonably  prepared on a basis reflecting the best
currently  available  estimates and judgments of the Company's  management as to
the future  financial  performance  of the Company and the  individual  business
segments thereof.

            3.11  Material  Adverse  Change.  Except  as  disclosed  in the  SEC
Documents and as set forth in Schedule 3.11,  since June 30, 1999, there has not
been any event,  occurrence or development of a state of  circumstances or facts
that has had, or could have  reasonable  been  expected to have,  (i) a Material
Adverse  Effect or (ii) a material  adverse effect on the ability of the Company
to perform its obligations under this Agreement.

            3.12 Litigation. There are not any (a) outstanding judgments against
or affecting the Company or any of its Subsidiaries, (b) proceedings pending or,
to the knowledge of the Company,  threatened against or affecting the Company or
any of its Subsidiaries or (c) investigations by any Governmental Authority that
are, to the knowledge of the Company, pending or threatened against of affecting
the Company or any of its Subsidiaries  that (i) in any

                                       13

<PAGE>

manner  challenge  or seek to prevent,  enjoin,  alter or  materially  delay the
issuance of the Purchased Shares or (ii) if resolved adversely to the Company or
any Subsidiary, would have, individually or in the aggregate, a Material Adverse
Effect.

            3.13 Permits and  Licenses.  The Company and its  Subsidiaries  have
obtained all  governmental  permits,  licenses,  franchises  and  authorizations
required  for the  Company  and its  Subsidiaries  to conduct  their  respective
businesses  as  currently  conducted,  except for those of which the  failure to
obtain would not have a Material Adverse Effect.

            3.14  Properties.  (a) Each of the Company and its  Subsidiaries has
good  title to,  or valid  leasehold  interests  in,  all its real and  personal
property  material to its business,  except for (i) Permitted  Encumbrances  and
(ii) minor  defects in title that do not  interfere  with its ability to conduct
its business as currently  conducted  or to utilize  such  properties  for their
intended purposes.

            (b) Each of the Company and its Subsidiaries owns, or is licensed to
use, all  trademarks,  tradenames,  copyrights,  patents and other  intellectual
property  material to its  business,  and the use thereof by the Company and its
Subsidiaries, to the best of the Company's knowledge, does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the  aggregate,  could not  reasonably be expected to result in a Material
Adverse Effect.

            3.15 Environmental Matters. Except with respect to any matters that,
individually or in the aggregate,  could not reasonably be expected to result in
a Material  Adverse Effect,  neither the Company nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has  become  subject to any  Environmental  Liability,  (iii) has  received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

            3.16 Compliance  with Laws and  Agreements.  Each of the Company and
its  Subsidiaries is in compliance with all laws,  regulations and orders of any
Governmental  Authority  applicable  to it or its property  and all  indentures,
agreements and other instruments  binding upon it or its property,  except where
the failure to do so, individually or in the aggregate,  could not reasonably be
expected to result in a Material Adverse Effect.

            3.17  Taxes.  Each of the Company  and its  Subsidiaries  has timely
filed or caused to be filed all tax returns  and  reports  required to have been
filed and has paid or caused to be paid all Taxes  required to have been paid by
it,  except (a) Taxes  that are being  contested  in good  faith by  appropriate
proceedings and for which the Company or such Subsidiary, as applicable, has set
aside on its books adequate reserves or (b) to the extent that the failure to do
so could not reasonably be expected to result in a Material Adverse Effect.

            3.18 ERISA.  (a) (i)  Neither  the  Company nor any ERISA  Affiliate
maintains or contributes  to, or has maintained or contributed to, any Plan that
is an ERISA  Plan and  (ii)  neither  the  Company  nor any of its  Subsidiaries
maintains or contributes  to, or has maintained or

                                       14

<PAGE>

contributed  to, any Plan that is an  "Executive  Arrangement"  (as that term is
used in the definition of "Plan");

            (b) Each Plan has at all times been maintained,  by its terms and in
operation,   in  accordance  with  all  applicable   laws,   except  where  such
noncompliance (when taken as a whole) would not have a Material Adverse Effect;

            (c) Neither the Company  nor any of its  Subsidiaries  is  currently
making,  nor has in the  last 6 years  been  obligated  to  make,  contributions
(directly or indirectly) to a  Multiemployer  Plan, nor is it currently nor will
it become  subject to any liability  (including  withdrawal  liability),  tax or
penalty  whatsoever to any Person whomsoever with respect to any Plan including,
but not limited to, any tax, penalty or liability arising under Title I or Title
IV or ERISA or Chapter 43 of the Code, except where such liabilities (when taken
as a whole) would not have a Material Adverse Effect; and

            (d) The  Company and each ERISA  Affiliate  has made full and timely
payment of all amounts (i)  required to be  contributed  under the terms of each
Plan and  applicable  law and (ii) required to be paid as expenses of each Plan.
No Plan has an "amount of unfunded  benefit  liabilities" (as defined in Section
4001(a)(18) of ERISA).

            3.19  Subsidiaries.  Set forth in  Schedule  3.19 is a complete  and
correct  list of all of the  Subsidiaries  of the  Company as of the date hereof
together with, for each such Subsidiary, (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding ownership interests in such Subsidiary
and (iii) the nature of the ownership interests held by each such Person and the
percentage  of  ownership  of such  Subsidiary  represented  by  such  ownership
interests.  Each of the Company  and its  Subsidiaries  owns,  free and clear of
Liens,  and has the  unencumbered  right  to  vote,  all  outstanding  ownership
interests  in each Person  shown to be held by it in Schedule  3.19,  all of the
issued  and  outstanding  capital  stock  of each  such  Person  organized  as a
corporation is validly  issued,  fully paid and  nonassessable  and there are no
outstanding Equity Rights with respect to such Person.

            3.20 No Burdensome Restrictions.  Neither the Company nor any of its
Subsidiaries  is party to any  contract or  agreement  that would  result in any
burdensome  restrictions  that  might  reasonably  be  expected  have a Material
Adverse  Effect,  including,  but not  limited  to,  any  collective  bargaining
agreements.

            Section 4. Transfers Generally; Securities Act Compliance.

                                       15

<PAGE>

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

            4.02  Transfers of Restricted  Securities  Pursuant to  Registration
Statements and Rule 144, Etc. The  Restricted  Securities may be offered or sold
by the Holder thereof pursuant to (a) an effective  registration statement under
the  Securities  Act, (b) to the extent  applicable,  Rule 144 or (c) subject to
Section 4.03 hereof, any other applicable exemption from the Securities Act.

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

            4.04  Restrictive  Legend.  Unless and until otherwise  permitted by
this Section 4, each  certificate  for the  Purchased  Shares  issued under this
Agreement,  each  certificate for any Purchased  Shares issued to any subsequent
transferee of any such  certificate,  each certificate for any Underlying Common
Stock issued upon conversion of any Purchased  Share,  each  certificate for any
Underlying  Common  Stock  issued  to any  subsequent  transferee  of  any  such
certificate, each certificate for any Other Securities issued in connection with
the  conversion  of any  Purchased  Share  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  PREFERRED
            STOCK  PURCHASE  AGREEMENT  DATED AS OF MAY __, 2000,  BETWEEN NUCO2
            INC., A FLORIDA

                                       16

<PAGE>

            CORPORATION, AND CHASE CAPITAL INVESTMENTS, L.P., A DELAWARE LIMITED
            PARTNERSHIP,  AS SUCH  PREFERRED  STOCK  PURCHASE  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  PREFERRED  STOCK  PURCHASE  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 PREFERRED
            STOCK PURCHASE AGREEMENT."

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

            Section 5. Additional Provisions Relating to Transfers.

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

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

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

                        (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.

            (b) 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 Purchased  Shares or

                                       17

<PAGE>

Underlying Common Stock issued by the Company and sold by such Holder are widely
disseminated.

            5.02  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.

            5.03 Transfer, Division and Combination. Subject to Sections 4 and 5
hereof,  transfer of Purchased Shares and all rights thereunder,  in whole or in
part (the "Transferred  Purchased  Share"),  shall be registered on the books of
the  Company  to  be  maintained  for  such  purpose,  upon  surrender  of  such
Transferred  Purchased  Shares at the office of the Company  maintained for such
purpose  pursuant to Section  11.03  hereof,  together  with a written  power or
assignment, 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
new  Preferred  Shares  in the  name of the  assignee  or  assignees  and in the
denominations  specified  in such  instrument  of  assignment,  (b) issue to the
assignor  new  Preferred  Shares  evidencing  the  portion  of such  Transferred
Purchased  Shares not so assigned or  transferred  and (c) promptly  cancel such
Transferred  Purchased  Shares.   Preferred  Shares,  if  properly  assigned  in
compliance  with  Sections 4 and 5 hereof,  may be  converted by an assignee for
shares  of  Common  Stock   without   having  new   Preferred   Shares   issued.
Notwithstanding  any provision herein to the contrary,  the Company shall not be
required to register  the  transfer of  Preferred  Shares or  Underlying  Common
Shares in the name of any Person who  acquired  such  Preferred  Shares (or part
thereof) or any Underlying  Common 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  Preferred
Shares.

            Section  6.  Notice to  Holders  of  Preferred  Shares.  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 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 11.02 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

                                       18

<PAGE>

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.

            Section  7.  Reservation  and  Authorization  of Common  Stock.  The
Company  shall at all  times  reserve  and keep  available  for  issue  upon the
conversion of the Preferred  Shares such number of its  authorized  but unissued
shares of Common Stock as will be sufficient to permit the conversion in full of
all the  outstanding  Preferred  Shares from time to time.  All shares of Common
Stock which shall be so issuable,  when issued upon  conversion of any Preferred
Shares in accordance with the terms thereof, shall be duly and validly issued by
the Company, fully paid and nonassessable and free and clear of all Liens.

            The  Company  will  list  on  each  trading  market,  including  any
automated  quotation  system and any  securities  exchange,  on which any Common
Stock may at any time be listed or  admitted  to  trading,  subject to  official
notice of issuance upon  conversion of the Preferred  Shares,  and will maintain
such  listing of or  admission  to, all shares of Common Stock from time to time
issuable upon the conversion of the Preferred  Shares.  The Company will also so
list on such  trading  market,  and will  maintain  such  listing  of, any Other
Securities  if at the time any  securities  of the same class shall be listed on
such trading market by the Company.

            Section 8. Stock and Preferred Shares Transfer Books.

            The Company  shall not close its stock  transfer  books or Preferred
Shares  transfer  books for the purpose of  preventing or delaying the exercise,
conversion or transfer of any Preferred Shares.

            Section 9. Holders' Special Rights.

            9.01  Replacement  of  Instruments.  Upon  receipt by the Company of
evidence reasonably  satisfactory to it of the ownership of and the loss, theft,
destruction  or  mutilation of any  certificate  or  instrument  evidencing  any
Preferred Shares 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
      Purchaser,   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,

                                       19

<PAGE>

      the Company, at its expense, shall execute,  register and deliver, in lieu
      thereof, a new certificate or instrument for such Preferred Shares.

            9.02 Restrictions on Certain Action.

            (a) The  Company  shall not at any time enter into an  agreement  or
other instrument  limiting in any manner (other than in a de minimis manner) its
ability  to  perform  its  obligations  under  this  Agreement  or  making  such
performance or the issuance of shares of Common Stock upon the conversion of any
Preferred Shares issued by it a default under any such agreement or instrument.

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

            9.03 Inspection  Rights.  As and when  requested,  the Company shall
provide to Purchaser or any  transferee  who is a Holder of more than 15% of the
total  outstanding  Preferred  Shares 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.

            9.04 Board Attendance.  So long as Purchaser owns 50% or more of the
Purchased  Shares  or the  Underlying  Common  Stock,  one  representative  (the
"Representative")  appointed  by  Purchaser  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
attendance at any meetings pursuant to this Section 9.04; provided, however, the
Representative shall not be entitled to reimbursement for first-class travel.

            Section 10. Registration.

            10.01 Notice.  (a) On and after the date of this  Agreement (i) upon
receipt of notice (a "Demand Notice") from the Majority Holders  requesting that
the  Company  effect  the  registration  of the  Preferred  Shares  or shares of
Underlying  Common  Stock held by any Holder or  Holders  or (ii)  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

                                       20

<PAGE>

Preferred Shares or shares of Underlying  Common 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 Preferred Shares or
Underlying Common Stock, as the case may be, that such Seller desires to include
in such offering.  The Company  thereupon shall,  subject to Section 10.01(b) as
expeditiously as possible, use its best efforts to effect the registration under
the Securities Act of such Preferred Shares or Underlying Common 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 (x) one Demand  Registration  on Form
S-1 or other  "long-form"  registration  as may be available  and (y) two Demand
Registrations  on  Form  S-3  or  other  "short-form"  registration  as  may  be
available;   provided,   further  that  the   Company's   obligation  to  effect
registration  of  Preferred  Shares or  Underlying  Common  Stock under  Section
10.01(a)(ii)  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 10.02(a) hereof to an amount which is less than 75%
of the amount of securities  originally proposed to be sold by Sellers or if any
securities  of the Company  other than those  proposed to be sold by Sellers are
included  in such  Demand  Registration  on a pari  passu  basis  with  Seller's
securities,  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  the  number of Demand
Registrations  pursuant to a Demand  Notice as specified in this Section  10.01;
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.

            (b)  Deferral  of Filing.  The Company may defer the filing (but not
the  preparation) of a registration  statement  required by Section  10.01(a)(i)
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  10.01(b) 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

                                       21

<PAGE>

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 10.01(b),  the
Company shall  promptly (but in any event within 10 days),  upon  determining to
seek such deferral,  deliver to each Seller a certificate signed by an executive
officer of the Company pursuant to this Section 10.01(b) 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 Underlying  Common 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 10.01(b) more than once in
any eighteen month period.

            (c) If the Majority  Holders so elect, the offering of the Preferred
Shares,  the Underlying  Common 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.

            10.02 Proration.

            (a) In the case of a Demand Registration, if the 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  and the Company  based on the number of
securities originally proposed to be sold by each of them.

            (b) In the case of a registration to be effected pursuant to Section
10.01(a)(ii)   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

                                       22

<PAGE>

pursuant  to  a  Demand  Notice)  before  such  registration  statement  becomes
effective,  or to postpone the offering of securities  contemplated  by any such
registration statement.

            10.03  Registration  Procedures.  If and  whenever  the  Company  is
required by the  provisions  of Section  10.01(a)(i)  hereof or, with respect to
subsections  (iii),  (vi), (vii),  (viii),  (ix), (x) and (xiii) of this Section
10.03, by the provisions of Sections 10.01(a)(i) or (ii) 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-1 (or such other  "long-form")  or Form S-3 (or such other
            "short-form") as may be available,  as the case may be, 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;

               (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 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

                                       23

<PAGE>

            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 automatic
            quotation  system or 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;

               (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

                                       24

<PAGE>

               (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  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
10.03(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 10.03(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.

            10.04  Holdback on Sales.  The Company and the Holders  hereby agree
not to effect any public sale or distribution of any securities similar to those
registered  in  accordance  with Section  10.03 hereof  during the 14 day period
prior to, and during the 45 day period  beginning on, the effective  date of any
registration statement (except as part of such registration statement).

            10.05 Expenses.  Subject to Section 10.01,  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

                                       25

<PAGE>

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 shares of Preferred
Stock by a Seller hereunder.

            10.06 Indemnification.

            (a) In the event of any  registration of any of its securities under
the Securities  Act pursuant to this Section 10, the Company  shall,  and hereby
agrees to,  indemnify  and hold  harmless  each Seller of such  securities,  its
directors and officers,  partners,  and each other Person,  if any, who controls
such Seller within the meaning of Section 15 of the Securities Act,  against any
losses to which such Seller or any such director, officer, partner or Person may
become  subject under the  Securities Act or any other statute or at common law,
insofar as such losses (or actions in respect thereof) arise out of or are based
upon  any  alleged  untrue  statement  of any  material  fact  contained  in any
registration  statement under which such  securities  were registered  under the
Securities  Act, any  preliminary  prospectus or final  prospectus  with respect
thereto,  or any amendment or  supplement  thereto,  or any alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not misleading,  and shall reimburse such Seller or such
director, officer, partner or participating Person or controlling Person for any
legal or any other expenses reasonably incurred by such Seller or such director,
officer,  partner or  participating  Person or controlling  Person in connection
with  investigating  or defending  any such loss;  provided,  however,  that the
Company  shall not be liable in any such case to the  extent  that any such loss
arises out of or is based upon any alleged untrue  statement or alleged omission
made in such registration  statement,  preliminary  prospectus,  prospectus,  or
amendment  or  supplement  in  reliance  upon  and in  conformity  with  written
information furnished to the Company for inclusion therein through an instrument
duly executed by such Seller; provided further, however that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary  prospectus,  the indemnity  agreement  contained in this  paragraph
shall not apply to the extent that any such loss,  claim,  damage,  liability or
expense results from the fact that a current copy of the prospectus was not sent
or given to the Person  asserting  any such loss,  claim,  damage,  liability or
expense at or prior to the written  confirmation  of the sale of the  securities
concerned to such Person if the Company had prior  thereto given such Seller the
notice  referred to in Section  10.03(vi)  hereof and  provided to such Seller a
supplemented or amended  prospectus as contemplated  by Section  10.03(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 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

                                       26

<PAGE>

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 if the obligation to provide indemnification pursuant to
this Section  10.06(b) is  applicable in more than one Seller,  such  obligation
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 10.06(b) in connection with
any sale of securities  shall be limited to the total proceeds  received by such
holder from the sale of such  securities.  Such  indemnity  shall remain in full
force and effect  regardless  of any  investigation  made by or on behalf of the
Company  or any such  other  Person  and  shall  survive  the  transfer  of such
securities by such Seller.

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

            (d)  If  the  indemnification   provided  for  in  this  Section  is
unenforceable   although   available,   or  insufficient  to  hold  harmless  an
Indemnified  Party  hereunder for any losses (or actions in respect  thereof) in
respect of which the  provisions  of Sections  10.06(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

                                       27

<PAGE>

method of allocation which does not take account of the equitable considerations
referred  to in this  subsection.  The amount paid or payable as a result of the
losses (or  actions in respect  thereof)  referred  to above in this  subsection
shall be deemed to include any legal or other  expenses  reasonably  incurred by
such  Indemnified  Party in connection with  investigating or defending any such
action or claim.  In no event shall any Seller be required to  contribute in the
aggregate an amount exceeding the amount of proceeds  received by such Seller in
connection with any offering.  No Person guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  Person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

            10.07 No Other Registration  Rights. The Company shall not grant any
registration  rights to any holder of  securities  of the  Company in respect of
such securities if such  registration  rights would rank senior to, or otherwise
adversely affect in any material  respect,  the  registration  rights granted in
this Section 10.

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

            Section 11. Miscellaneous.

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

            11.02  Notices.  All notices and other  communications  provided for
herein  and  the  Preferred   Shares   (including,   without   limitation,   any
modifications  of, or waivers or consents under,  this Agreement) shall be given
or made in writing (including,  without limitation,  by telecopy), if to (a) any
party hereto,  delivered to the intended  recipient at the "Address for Notices"
specified below its name on the signature pages hereof;  or, as to any party, at
such other address as shall be  designated by such party in a written  notice to
each other party,  or (b) any other Person who is the  registered  Holder of any
Preferred  Shares or Underlying  Common Stock, to the address for such Holder as
it appears in the stock or Preferred  Shares  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  11.02 any  notices or other  communications  delivered  to the
Shareholders.

            11.03 Office of the Company.  So long as any of the Preferred Shares
remain  outstanding,  the Company  shall  maintain an office in the  continental
United  States of  America  where the  Preferred  Shares  may be  presented  for
conversion,  transfer,  division or combination  provided in the  Certificate of
Designations.  Such office  shall be at 2800  Southeast  Market  Place,

                                       28

<PAGE>

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.

            11.04 Expenses, Transfer Taxes and Other Charges.

            (a) Expenses,  Etc. The Company agrees to pay or reimburse Purchaser
for paying:  (i) all  reasonable  out-of-pocket  costs and expenses of Purchaser
(including,  without  limitation,  the reasonable  fees and expenses of Milbank,
Tweed,  Hadley & McCloy LLP,  special counsel to Purchaser),  in connection with
(x) the negotiation,  preparation,  execution and delivery of this Agreement and
the  issuance  of  the  Preferred   Shares  hereunder  and  (y)  any  amendment,
modification  or waiver of any of the terms of this  Agreement or the  Preferred
Shares; and (ii) all reasonable fees, costs and expenses of Purchaser (including
reasonable  fees of a single  counsel for the  Holders) in  connection  with any
default by the Company  hereunder or under the Certificate of Designations or in
connection with any enforcement  action or other proceedings  relating hereto or
thereto (including, without limitation, the enforcement of this Section 11.04).

            (b) Certain  Taxes,  Etc.  Except as  otherwise  provided in Section
11.04(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 Preferred  Shares hereunder or
in connection  with any  modification  of this  Agreement or the  Certificate of
Designations 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  11.04(b)  shall  survive  any  redemption,
repurchase  or  acquisition  of the  Preferred  Shares  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  certificates,  that are  incurred in
respect of the issuance or delivery of shares of Common Stock upon conversion of
the Preferred Shares or in connection with any transfer, division or combination
of the Preferred  Shares pursuant to Section of the Certificate of Designations.
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  Preferred  Shares
are 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.

            11.05  Amendments,  Etc. Except as otherwise  expressly  provided in
this Agreement,  any provision of this Agreement may be amended or modified only
by an  instrument  in writing  signed by the Company and the Holders of at least
66-2/3% of the Restricted Preferred Shares; provided that (a) the consent of the
Holders of Restricted Preferred Shares shall not be required with respect to any
amendment or waiver which does not affect the rights or benefits of such Holders
under this Agreement,  (b) the consent of the Holders of Restricted  Stock shall
be required  with  respect to any  amendment or waiver of Section 10, and (c) no
such  amendment or waiver shall,  without the written  consent of all Holders of
Restricted Stock and Restricted Preferred Shares at the time outstanding,  amend
this Section 11.05.

                                       29

<PAGE>

            11.06  Successors and Assigns.  This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and permitted assigns.

            11.07  Survival.  All  representations  and  warranties  made by the
Company herein or in any certificate or other  instrument  delivered by it or on
its behalf under this Agreement  shall be considered to have been relied upon by
Purchaser and shall survive the execution and delivery of this Agreement and the
issuance of the Preferred  Shares or the Underlying  Common Stock  regardless of
any investigation  made by or on behalf of Purchaser.  All  representations  and
warranties made by Purchaser 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 Purchaser of the Preferred  Shares,  the  Underlying  Common
Stock and any Other  Securities  regardless of any  investigation  made by or on
behalf of the Company.

            11.08 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.

            11.09 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.

            11.10 Governing Law; Jurisdiction; Consent to Service of Process.

            (a)  This  Agreement  shall  be  construed  in  accordance  with and
governed by the law of the State of New York.

            (b) The Company hereby irrevocably and unconditionally  submits, for
itself and its property,  to the nonexclusive  jurisdiction of the Supreme Court
of the State of New York  sitting in New York  County  and of the United  States
District  Court of the Southern  District of New York,  and any appellate  court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement,  or for  recognition or enforcement of any judgment,  and each of the
parties hereto hereby irrevocably and unconditionally  agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent  permitted by law, in such Federal  court.  Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect  any right  that  Purchaser  may  otherwise  have to bring any  action or
proceeding  relating to this Agreement  against the Company or its properties in
the courts of any jurisdiction.

            (c) The Company hereby  irrevocably and  unconditionally  waives, to
the fullest extent it may legally and  effectively do so, any objection which it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding arising out of or relating to this Agreement in any court referred to
in Section 11.10(b).  Each of the parties hereto hereby  irrevocably  waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

                                       30

<PAGE>

            (d) Each party to this Agreement  irrevocably consents to service of
process in the manner  provided  for notices in Section  11.02.  Nothing in this
Agreement  will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

            11.11  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.

            11.12  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.

            11.13 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.

            11.14 Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY  ARISING OUT OF OR RELATING
TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER BASED ON
CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (A) CERTIFIES  THAT NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,  SEEK
TO  ENFORCE  THE  FOREGOING  WAIVER AND (B)  ACKNOWLEDGES  THAT IT AND THE OTHER
PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS  AGREEMENT  BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.14.



                                       31
<PAGE>

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


                                       NUCO2 INC.


                                       By: /s/ Eric M. Wechsler
                                           ------------------------
                                         Name: Eric M. Wechsler
                                         Title: General Counsel and Secretary

                                         Address for Notices:

                                         NUCO2 INC.
                                         2800 Southeast Market Place
                                         Stuart, Florida  34997
                                         Attention:  Edward M. Sellian

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


                                         with a copy to:

                                         NUCO2 INC.
                                         2800 Southeast Market Place
                                         Stuart, Florida  34997
                                         Attention:  Eric M. Wechsler, Esq.

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


                                       32
<PAGE>


                                         CHASE CAPITAL INVESTMENTS, L.P.

                                           By Chase Capital Partners,
                                             its general partner

                                         By: /s/ Richard D. Waters
                                           Name: Richard D. Waters
                                           Title: General Partner - Mezzanine


                                         Address 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 LLP
                                         1 Chase Manhattan Plaza
                                         New York, New York  10005
                                         Attention:  Roland Hlawaty, Esq. and
                                                     John T. O'Connor, Esq.

                                         Telephone:  (212) 530-5000
                                         Fax:  (212) 530-5219

                                       33