SUPREMA SPECIALTIES, INC.





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                                WARRANT AGREEMENT

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                            DATED AS OF MARCH 9, 1998


                    105,000 WARRANTS TO PURCHASE COMMON STOCK




<PAGE>



                                TABLE OF CONTENTS
                             (Not Part of Agreement)

<TABLE>
<CAPTION>
                                                                                                       Page
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<S>                                                                                                      <C>
1.       FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES..........................................  1
         1.1      Form of Warrant Certificates.........................................................  1
         1.2      Execution of Warrant Certificates; Registration Books................................  1
         1.3      Transfer, Split Up, Combination and Exchange of Warrant Certificates;
                  Lost or Stolen Warrant Certificates..................................................  2
         1.4      Subsequent Issuance of Warrant Certificates..........................................  3
         1.5      Effect of Issuance in Registered Form................................................  3

2.       EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE...............................................  3
         2.1      Exercise of Warrants.................................................................  3
         2.2      Issuance of Common Stock.............................................................  5
         2.3      Unexercised Warrants.................................................................  5
         2.4      Cancellation and Destruction of Warrant Certificates.................................  5
         2.5      Notice of Expiration; Extension of Expiration Date...................................  6
         2.6      Fractional Shares....................................................................  6

3.       AGREEMENTS OF THE COMPANY.....................................................................  6
         3.1      Reservation of Common Stock..........................................................  6
         3.2      Common Stock To Be Duly Authorized and Issued, Fully Paid and
                  Nonassessable........................................................................  6
         3.3      Transfer Taxes.......................................................................  6
         3.4      Common Stock Record Date.............................................................  7
         3.5      Rights in Respect of Common Stock....................................................  7
         3.6      CUSIP Number.........................................................................  7
         3.7      Right of Action......................................................................  8
         3.8      Survival.............................................................................  8

4.       ANTIDILUTION ADJUSTMENTS......................................................................  8
         4.1      Mechanical Adjustments...............................................................  8
         4.2      Stock Dividends, Subdivisions and Combinations.......................................  8
         4.3      Dividends and Distributions..........................................................  8
         4.4      Repurchases of Common Stock or Rights................................................  9
         4.5      Issuances of Additional Common Stock or Rights....................................... 10
         4.6      Expiration of Rights................................................................. 11
         4.7      Consolidation; Merger; Sale; Reclassification........................................ 11
         4.8      De Minimis Changes in Purchase Price................................................. 12
         4.9      Adjustment of Number of Shares Issuable Pursuant to Warrants......................... 12
         4.10     Miscellaneous........................................................................ 13
         4.11     Other Securities..................................................................... 13
         4.12     Additional Agreements of the Company................................................. 13

5.       REPORTING COVENANTS........................................................................... 14
         5.1      Financial and Business Information................................................... 14
</TABLE>

                                        i

<PAGE>


                          TABLE OF CONTENTS (continued)
                             (Not Part of Agreement)
<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----

<S>                                                                                                      <C>
         5.2      Extension of Time to File SEC Reports................................................ 15
         5.3      Information Concerning Antidilution Adjustments...................................... 16

6.       REGISTRATION RIGHTS........................................................................... 17
         6.1      Incidental Registration.............................................................. 17
         6.2      Companies Registration............................................................... 18
         6.3      Registration Procedures.............................................................. 18
         6.4      Reasonable Investigation............................................................. 21
         6.5      Registration Expenses................................................................ 22
         6.6      Indemnification; Contribution........................................................ 22
         6.7      Holdback Agreements; Registration Rights to Others................................... 25
         6.8      Other Registration of Common Stock................................................... 25
         6.9      Availability of Information.......................................................... 25

7.       RIGHT OF FIRST REFUSAL........................................................................ 26
         7.1      Transfer of Warrants................................................................. 26
         7.2      Notice of Proposed Transfer.......................................................... 26
         7.3      First Refusal Right.................................................................. 26
         7.4      Transfers to Third Parties on Refusal or Failure to Consummate....................... 26
         7.5      Limited Right of First Refusal Regarding Sale of Certain Common Stock................ 27

8.       INTERPRETATION OF THIS AGREEMENT.............................................................. 28
         8.1      Certain Defined Terms................................................................ 28
         8.2      Descriptive Headings................................................................. 41
         8.3      Governing Law........................................................................ 41

9.       MISCELLANEOUS................................................................................. 41
         9.1      Expenses............................................................................. 41
         9.2      Amendment and Waiver................................................................. 42
         9.3      Directly or Indirectly............................................................... 42
         9.4      Survival of Representations and Warranties; Entire Agreement......................... 42
         9.5      Successors and Assigns............................................................... 43
         9.6      Notices.............................................................................. 43
         9.7      Satisfaction Requirement............................................................. 43
         9.8      Severability......................................................................... 44
         9.9      Counterparts......................................................................... 44
         9.10     Waiver of Jury Trial; Consent to Jurisdiction; Etc................................... 44


Annex 1           --        Addresses of Purchasers
Annex 2           --        Address of Company

Attachment A      --        Form of Warrant Certificate
</TABLE>

                                       ii

<PAGE>

                                WARRANT AGREEMENT


     WARRANT  AGREEMENT,  dated as of March 9, 1998, among SUPREMA  SPECIALTIES,
INC., a New York  corporation  (together with its  successors  and assigns,  the
"Company")  and ALBION  ALLIANCE  MEZZANINE  FUND,  L.P., and THE EQUITABLE LIFE
ASSURANCE  SOCIETY OF THE UNITED STATES (each,  together with its successors and
assigns, a "Purchaser" and collectively, the "Purchasers").


                                    AGREEMENT

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

1.   FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.

     1.1 Form of Warrant Certificates.

     The  warrant  certificates  (individually,  a  "Warrant  Certificate"  and,
collectively, the "Warrant Certificates") evidencing the Warrants, and the forms
of  assignment  and of  election  to  purchase  shares  to be  attached  to such
certificates,  shall be  substantially  in the form set  forth in  Attachment  A
hereto and may have such letters,  numbers or other marks of  identification  or
designation  as may be  required  to  comply  with  any law or with  any rule or
regulation of any  governmental  authority,  stock  exchange or  self-regulatory
organization.  Each  Warrant  Certificate  shall be dated  the date of  issuance
thereof by the  Company,  either  upon  initial  issuance  or upon  transfer  or
exchange, and on its face shall initially entitle the holder thereof to purchase
a number of shares of Common Stock equal to the number of Warrants  specified on
the face of such Warrant  Certificate at a price per share equal to the Purchase
Price,  but the number of such shares and the Purchase Price shall be subject to
adjustment as provided herein.

     1.2 Execution of Warrant Certificates; Registration Books.

          (a) Execution of Warrant Certificates.  The Warrant Certificates shall
     be  executed  on  behalf  of the  Company  by an  officer  of  the  Company
     authorized  by the Board of  Directors.  In case the officer of the Company
     who shall have  signed any  Warrant  Certificate  shall cease to be such an
     officer of the Company before  issuance and delivery by the Company of such
     Warrant  Certificate,  such Warrant Certificate  nevertheless may be issued
     and delivered  with the same force and effect as though the  individual who
     signed such Warrant Certificate had not ceased to be such an officer of the
     Company, and any Warrant Certificate may be signed on behalf of the Company
     by any individual  who, at the actual date of the execution of such Warrant
     Certificate,  shall be a proper officer of the Company to sign such Warrant
     Certificate,  although at the date of the  execution of this  Agreement any
     such individual was not such an officer.


                                        1

<PAGE>



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

     1.3  Transfer,  Split Up, Combination and Exchange of Warrant Certificates;
          Lost or Stolen Warrant Certificates.

          (a) Transfer, Split Up, etc. Any Warrant Certificate,  with or without
     other  Warrant   Certificates,   subject  to  the  terms  hereof,   may  be
     transferred,   split  up,   combined  or  exchanged  for  another   Warrant
     Certificate or Warrant  Certificates,  entitling the  registered  holder or
     Transferee  thereof to purchase a like number of shares of Common  Stock as
     the Warrant Certificate or Warrant  Certificates  surrendered then entitled
     such  registered  holder to purchase.  Any  registered  holder  desiring to
     transfer,  split up, combine or exchange any Warrant Certificate shall make
     such request in writing  delivered to the Company,  and shall surrender the
     Warrant  Certificate or Warrant  Certificates to be transferred,  split up,
     combined or exchanged  at the office of the Company  referred to in Section
     hereof,  whereupon,  subject to the terms hereof, the Company shall deliver
     promptly to the Person  entitled  thereto a Warrant  Certificate or Warrant
     Certificates,  as the case may be,  as so  requested.  Notwithstanding  the
     foregoing,  no holder of Warrants  may sell or transfer any Warrants to any
     Person other than a Permitted Investor,  and no holder of Warrants may sell
     or transfer any  Warrants to any other Person  unless such holder has first
     complied with the provisions of Section 7 hereof.

          (b)  Loss,  Theft,  etc.  Upon  receipt  by the  Company  of  evidence
     reasonably  satisfactory  to it of the  ownership  of and the loss,  theft,
     destruction or mutilation of any Warrant  Certificate (which evidence shall
     be, in the case of any Purchaser or another institutional investor,  notice
     from such institutional investor of such ownership (or of ownership by such
     institutional  investor's  nominee) and such loss,  theft,  destruction  or
     mutilation), and:

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

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

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


                                        2

<PAGE>



     1.4 Subsequent Issuance of Warrant Certificates. Subsequent to the original
issuance, no Warrant Certificates shall be issued except:

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

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

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

     1.5  Effect of  Issuance  in  Registered  Form.  Every  holder of a Warrant
Certificate  by accepting the same consents and agrees with the Company and with
every other holder of a Warrant Certificate that:

          (a) the Warrant  Certificates  are  transferable  only on the registry
     books of the Company if surrendered  at the office of the Company  referred
     to in Section 1.2(b) hereof,  duly endorsed or accompanied by an instrument
     of transfer  (in the form  attached  hereto) and payment of any  applicable
     transfer tax or stamp tax; and

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

2.   EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.

     2.1 Exercise of Warrants.

          (a) Manner of Exercise.  At any time and from time to time on or after
     the  Effective  Date and prior to the  Expiration  Date,  the holder of any
     Warrant  Certificate may exercise the Warrants evidenced thereby,  in whole
     or in part (but not,  in the case of any  exercise  in part,  to the extent
     that such  exercise  would result in the issuance of a fractional  share of
     Common Stock), by surrender of such Warrant  Certificate,  with an election
     to  purchase  (a form of which is  attached  to each  Warrant  Certificate)
     attached thereto duly executed, to the Company at its office referred to in
     Section 1.2(b) hereof, together with payment of the Purchase Price for each
     share of Common  Stock with  respect to which the  Warrants  are then being
     exercised. Such Purchase Price shall be payable either:

               (i) in cash pursuant to Section 2.1(b)  hereof;

               (ii) by a tender of Notes pursuant to Section 2.1(c) hereof;


                                        3

<PAGE>



               (iii) by a tender of cash  pursuant  Section  2.1(b)  hereof  and
          Notes pursuant to Section hereof; or

               (iv) by  delivery  of Warrant  Certificates  pursuant  to Section
          2.1(c) hereof.

          (b) Payment in Cash.  Upon exercise of any  Warrants,  the holder of a
     Warrant Certificate may pay the Purchase Price (and shall pay the excess of
     the Purchase  Price for the Warrants  being  exercised  over the amounts so
     deemed to be paid by tender of Notes  pursuant to Section 2.1(d) in cash or
     by certified or official  bank check payable to the order of the Company or
     by wire  transfer  of  immediately  available  funds to the  account of the
     Company.

          (c)  Payment in Notes.  To the extent  that any holder of any  Warrant
     Certificate  surrenders with such Warrant Certificate any Note then held by
     such  holder,  such holder shall be deemed to have paid that portion of the
     Purchase Price equal to one hundred percent (100%) of the principal of such
     Note which the holder  thereof  directs the Company to accept as payment of
     the Purchase Price, which Note shall be cancelled and not reissued.  To the
     extent that the principal  amount of such tendered Note is greater than the
     amount of the Purchase Price paid by surrender  thereof,  the Company shall
     deliver a new Note to the tendering holder thereof,  in accordance with the
     provisions  of the Note  Agreement,  in the  principal  amount equal to the
     amount not so applied to payment of the Purchase  Price. At the time of the
     issuance  of the shares of Common  Stock  pursuant  to the  exercise of the
     Warrants  of any  holder,  the  Company  shall pay all  accrued  and unpaid
     interest  on the  principal  amount  of any Note of such  holder  cancelled
     pursuant  to this  Section  2.1(c)  up to but  excluding  the  date of such
     issuance.  For  purposes  of Rule 144 under the  Securities  Act, 17 C.F.R.
     ss.230.144,  the  Company  and the  Purchasers  agree  that a tender of the
     principal of any Notes in payment of the  exercise  price in respect of the
     Warrants  shall not be  deemed a  prepayment  of the  Notes,  but  rather a
     conversion  of such  Notes,  pursuant  to the terms of the Notes,  the Note
     Agreement, this Agreement and the Warrants, into Common Stock.

          (d) Net Exercise. In the event that any holder of Warrant Certificates
     delivers such Warrant  Certificates to the Company and notifies the Company
     in writing that such holder intends to exercise all, or any portion of, the
     Warrants represented by such Warrant Certificates to satisfy its obligation
     to pay the Purchase Price in respect thereof by virtue of the provisions of
     this Section 2.1(d), such holder shall become entitled to receive,  instead
     of the number of shares of Common Stock such holder would have received had
     the Purchase  Price been paid pursuant to Section  2.1(b) or Section 2.1(c)
     hereof,  a number of shares of Common  Stock in respect of the  exercise of
     such Warrants equal to the product of:

               (i) the  number  of shares of  Common  Stock  issuable  upon such
          exercise of such  Warrant  Certificate  (or, if only a portion of such
          Warrant Certificate is being exercised,  issuable upon the exercise of
          such portion); multiplied by

               (ii) the quotient of:

                                        4

<PAGE>




                    (A) the difference of:

                         (I) the Market  Price per share of Common  Stock at the
                    time of such exercise; minus

                         (II) the  Purchase  Price per share of Common  Stock at
                    the time of such exercise;

               divided by

                    (B) the Market  Price per share of Common  Stock at the time
               of such exercise.

          The Company shall not be required to issue fractional shares by virtue
          of this Section , but shall pay the exercising  holder cash in lieu of
          such  fractional  share in  accordance  with  Section 2.6 hereof.  For
          purposes of Rule 144 under the Securities  Act, 17 C.F.R.  ss.230.144,
          the Company and the Purchasers agree that the exercise of any Warrants
          in accordance  with this Section shall be deemed to be a conversion of
          such  Warrants,  pursuant  to the  terms  of  this  Agreement  and the
          Warrants, into Common Stock.

     2.2 Issuance of Common Stock. Upon timely receipt of a Warrant Certificate,
with the form of election to purchase duly  executed,  accompanied by payment of
the Purchase Price for each of the shares to be purchased in the manner provided
in Section 2.1(a) hereof and an amount equal to any applicable  transfer tax (if
not payable by the Company as provided in Section 3.3 hereof), the Company shall
thereupon promptly cause certificates representing the number of whole shares of
Common  Stock then being  purchased  to be delivered to or upon the order of the
registered  holder  of such  Warrant  Certificate,  registered  in such name or,
subject to the terms hereof,  in such names as may be designated by such holder,
and, promptly after such receipt deliver the cash, if any, to be paid in lieu of
fractional  shares  pursuant  to Section  2.6 hereof to or upon the order of the
registered holder of such Warrant Certificate. For the avoidance of doubt, prior
to the Share Purchase Right  Termination Date, each share of Common Stock issued
upon the  exercise  of any Warrant or  Warrants  shall in each case  include the
attached Share Purchase Rights.

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

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


                                        5

<PAGE>



     2.5 Notice of Expiration; Extension of Expiration Date.

          (a) Notice of  Expiration;  Effect.  All  Warrants  that have not been
     exercised or purchased in accordance  with the provisions of this Agreement
     shall expire and all rights of holders of such Warrants shall terminate and
     cease on the  Expiration  Date. The Company agrees to notify each holder of
     Warrants,  not less than forty-five (45) days but not more than one hundred
     twenty  (120)  days,  prior  to the  Expiration  Date  in  writing,  of the
     Expiration  Date and that, on the Expiration  Date, all Warrants  remaining
     unexercised  shall expire and all rights of holders of such Warrants  shall
     terminate and cease.

          (b) Extension of Expiration  Date. If notice of the Expiration Date is
     not given  within the time period  specified  in Section  2.5(a),  then the
     Expiration Date shall be extended to, and shall instead occur, on that date
     which is ninety (90) days after such notice is actually given.

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

          (a) the fractional amount of such share; times

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

3.   AGREEMENTS OF THE COMPANY.

     3.1 Reservation of Common Stock.  The Company  covenants and agrees that it
will at all times cause to be reserved and kept  available out of its authorized
and  unissued  shares of Common  Stock such number of shares of Common  Stock as
will be  sufficient  to  permit  the  exercise  in full of all  Warrants  issued
hereunder and all other Rights  exercisable or convertible into Common Stock. In
addition,  at all times prior to the Share Purchase Right  Termination Date, the
Company shall reserve a sufficient  number of Share  Purchase  Rights as will be
sufficient  to permit all shares of Common Stock  issuable upon exercise in full
of all Warrants issued hereunder and all other Rights exercisable or convertible
into Common Stock to be issued together with the attached Share Purchase Rights.

     3.2  Common  Stock  To Be  Duly  Authorized  and  Issued,  Fully  Paid  and
Nonassessable.  The  Company  covenants  and  agrees  that it will take all such
action as may be necessary  to ensure that all shares of Common Stock  delivered
upon the exercise of any Warrants,  at the time of delivery of the  certificates
representing  such shares,  shall be duly and validly  authorized and issued and
fully  paid and  nonassessable,  free of any  preemptive  rights in favor of any
Person in respect of such  issuance  and free of any Lien created by, or arising
out of actions of, the Company, any Subsidiary or any Affiliate.

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

                                        6

<PAGE>


          (a) each Warrant Certificate;

          (b) each Warrant  Certificate issued in exchange for any other Warrant
     Certificate pursuant to Section 1.3(a) or Section 2.3 hereof (in each case,
     other  than in  connection  with a  transfer  of the  Warrants  represented
     thereby to a Transferee); and

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

The Company shall not, however, be required to:

          (i) pay any  transfer  tax  that  may be  payable  in  respect  of the
     transfer  or delivery of  certificates  representing  Warrants or shares of
     Common  Stock in a name  other  than that of the  registered  holder of the
     certificate surrendered for exercise, conversion, transfer or exchange (any
     such tax being  payable  by the holder of such  certificate  at the time of
     surrender); or

          (ii)  issue  or  deliver  any  such  certificates  referred  to in the
     foregoing clause (i) until any such tax referred to in the foregoing clause
     (i) shall have been paid.

     3.4 Common Stock Record Date. Each Person in whose name any certificate for
shares of Common  Stock is issued upon the  exercise  of Warrants  shall for all
purposes  be deemed to have  become  the  holder of record of the  Common  Stock
represented thereby on, and such certificate shall be dated, the date upon which
the Warrant  Certificate  evidencing such Warrants was duly  surrendered with an
election to purchase attached thereto duly executed and payment of the aggregate
Purchase Price (and any applicable  transfer  taxes,  if payable by such Person)
was made.

     3.5  Rights in  Respect  of Common  Stock.  Except as  otherwise  set forth
herein,  prior to the  exercise of the  Warrants  evidenced  thereby and payment
therefor,  the  holder of a Warrant  Certificate  shall not be  entitled  to any
rights of a  stockholder  in the  Company  with  respect to shares for which the
Warrants shall be exercisable,  including, without limitation, the right to vote
in respect of any matter upon which the holders of Common  Stock may vote or the
right to receive dividends or other  distributions  and, except as expressly set
forth herein,  shall not be entitled to receive any notice of any proceedings of
the  Company.  Prior to the  exercise of the  Warrants  evidenced  thereby,  the
holders  of the  Warrant  Certificates  shall  not  have any  obligation  or any
liability as stockholders of the Company, whether such obligation or liabilities
are asserted by the Company or by creditors of the Company.

     3.6 CUSIP Number. The Company covenants and agrees to maintain:

          (a) a private placement number in respect of the Warrants; and

          (b) a CUSIP number in respect of the Common Stock;

in each case, from the CUSIP Service Bureau of Standard & Poor's,  a division of
McGraw-Hill, Inc.


                                       7

<PAGE>



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

     3.8 Survival.  The  agreements  of the Company  contained in this Section 3
shall survive the exercise of and the expiration of the Warrants.

4.   ANTIDILUTION ADJUSTMENTS.

     4.1  Mechanical   Adjustments.   The  number  of  shares  of  Common  Stock
purchasable upon the exercise of each Warrant,  and the Purchase Price, shall be
subject to adjustment as set forth in this Section 4.

     4.2 Stock Dividends,  Subdivisions and Combinations.  In the event that the
Company shall, on or after the date hereof:

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

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

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

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

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

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

An adjustment  made  pursuant to this Section 4.2 shall become  effective on the
effective date of such event.

     4.3 Dividends and  Distributions.  In the event that the Company shall make
or pay any  dividend  of, or  distribute  to holders  of shares of Common  Stock
(including,  without limitation, any such distribution made in connection with a
consolidation  or merger in which the  Company  is the  continuing  corporation)
shares of capital stock (other than Common Stock) or rights, warrants or options
exercisable into such capital stock (other than Rights), other Securities,

                                        8

<PAGE>



evidences of its  indebtedness or any of its Property (other than cash dividends
payable out of current net income or retained earnings), then, in each case, the
Purchase  Price in effect  after the record date in respect of which such stock,
rights,  warrants,  options,  other  Securities,  indebtedness  or Property were
dividended or distributed shall be adjusted by multiplying the Purchase Price in
effect immediately prior to such record date by the quotient of:

          (a) the difference of:

               (i) the Reference Price on such record date; minus

               (ii) the quotient of:

                    (A) the then fair  value  (as  determined  by the  Valuation
               Agent, whose  determination,  if so made, shall be conclusive) of
               the shares of stock, rights, warrants, options, other Securities,
               evidences  of   indebtedness   or  Property  so   dividended   or
               distributed; divided by

                    (B) the number of shares of Common Stock  outstanding on the
               record date;

     divided by

          (b) the Reference Price on such record date.

Such  adjustment  shall be made  whenever any such dividend or  distribution  is
made, and shall become effective on the date of such dividend or distribution.

     4.4  Repurchases  of Common Stock or Rights.  In the event that the Company
shall repurchase,  redeem, retire or otherwise acquire shares of Common Stock or
Rights for a Consideration  Per Share greater than the Reference Price in effect
on the date of such repurchase,  redemption, retirement or acquisition, then the
Purchase  Price in effect  immediately  after such event  shall be  adjusted  by
multiplying the Purchase Price in effect  immediately prior to such event by the
quotient of:

          (a) the difference of:

               (i) the product of:

                    (A) the number of shares of Common  Stock  (calculated  on a
               Fully-Diluted Basis) immediately prior to such event;  multiplied
               by

                    (B) the Reference Price in effect  immediately prior to such
               event;

           minus

               (ii) the Aggregate Consideration Paid;


                                        9

<PAGE>



         divided by

          (b) the product of:

               (i) the  Reference  Price  in  effect  immediately  prior to such
          event; multiplied by

               (ii) the number of shares of Common Stock (calculated on a Fully-
          Diluted Basis) immediately after such event.

     In the event  that any of the  Aggregate  Consideration  Paid  consists  of
Property  other than cash,  the value of such Property for purposes of computing
the Aggregate  Consideration  Paid shall be determined by the Valuation Agent as
of a date not more  than  thirty  (30) days  prior to the date of  determination
thereof and shall be set forth in a written  certificate of the Valuation  Agent
which  shall  be  delivered  to the  holders  of  the  Warrants  in  the  manner
contemplated by Section .

     The  provisions  of this Section  shall not apply to any  redemption of all
Share  Purchase  Rights by the Company in accordance  with the provisions of the
Rights Agreement.

     4.5 Issuances of Additional  Common Stock or Rights.  In the event that the
Company  shall  issue or sell  shares  of  Additional  Common  Stock  or  Rights
(excluding  Excluded  Securities) for no consideration or at a Consideration Per
Share lower than the  Reference  Price in effect on the date of such issuance or
sale,  then the Purchase Price in effect  immediately  after such event shall be
adjusted by multiplying the Purchase Price in effect  immediately  prior to such
event by the quotient of:

          (a) the sum of:

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

               (ii) the quotient of:

                    (A) the Aggregate Consideration Receivable; divided by

                    (B) the Reference Price;

          in each case immediately prior to such event;

     divided by

          (b) the sum of:

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


                                       10

<PAGE>


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

     In the event that any of the Aggregate Consideration Receivable consists of
Property  other than cash,  the value of such Property for purposes of computing
the  Aggregate  Consideration  Receivable  shall be  determined by the Valuation
Agent  as of a date  not  more  than  thirty  (30)  days  prior  to the  date of
determination  thereof  and shall be set forth in a written  certificate  of the
Valuation  Agent which shall be  delivered to the holders of the Warrants in the
manner contemplated by Section .

     4.6  Expiration of Rights.  Upon the expiration of any Rights in respect of
the issuance of which  adjustment was made pursuant to Section 4.5,  without the
exercise  thereof,  the Purchase  Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall,  upon such  expiration,  be
readjusted and shall thereafter be such Purchase Price and such number of shares
of Common  Stock as would have been had such  Purchase  Price and such number of
shares of Common Stock been originally  adjusted (or had the original adjustment
not been required, as the case may be) as if:

          (a) the only  shares of  Common  Stock so  issued  were the  shares of
     Common  Stock,  if any,  actually  issued or sold upon the exercise of such
     Rights; and

          (b) such shares of Common  Stock,  if any, were issued or sold for the
     consideration  actually received by the Company upon such exercise plus the
     aggregate  consideration,  if any, actually received by the Company for the
     issuance,  sale or grant of all of such Rights,  whether or not  exercised;
     provided that no such readjustment  shall have the effect of increasing the
     Purchase  Price by an  amount in  excess  of the  amount  of the  reduction
     initially made in respect of the issuance, sale, or grant of such Rights.

     4.7 Consolidation; Merger; Sale; Reclassification.  In the event that there
shall be:

          (a) any  consolidation  of the Company  with, or merger of the Company
     with or into, another corporation (other than a merger in which the Company
     is the surviving corporation and that does not result in either:

               (i) any  reclassification  or change  of  shares of Common  Stock
          outstanding immediately prior to such merger; or

               (ii) cash or Securities or Property of any Person  acquiring then
          Company being issued to all  stockholders  of the Company  (other than
          the acquiring  Person) in exchange for the Common Stock  formerly held
          by  them  (whether   pursuant  to  a  reverse   triangular  merger  or
          otherwise);

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

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


                                       11

<PAGE>



          (d) any separation of the Share Purchase  Rights  (including,  without
     limitation,  on the Distribution  Date, as defined therein) from the Common
     Stock;

then, in each such case,  lawful  provision shall be made as a part of the terms
of such  transaction so that the holders of Warrants shall  thereafter  have the
right to  purchase  the  number and kind of shares of stock,  other  Securities,
Share  Purchase  Rights,   cash,   Property  and  Rights  receivable  upon  such
consolidation,  merger, sale,  conveyance,  reclassification by a holder of such
number of shares of Common  Stock as the holder of a Warrant  would have had the
right to acquire  upon the exercise of such  Warrant  immediately  prior to such
consolidation, merger, sale, conveyance,  reclassification or detachment, at the
Purchase Price then in effect,  and,  without  further action on the part of any
Person,  each  Warrant  will  thereafter  represent  the right to receive,  upon
payment of the Purchase Price,  such shares of stock,  other  Securities,  Share
Purchase  Rights,  cash,  Property and Rights as are so receivable.  The Company
agrees that, as a condition of proceeding with any such merger, consolidation or
sale,  it shall cause the Person  surviving  such merger or  consolidation,  the
Person  acquiring  the Company or the Person to whom such sale or  conveyance is
made, as the case may be, at the time of such consolidation,  merger or sale, to
expressly  assume the due and punctual  observance  and  performance of each and
every  provision of this Agreement and all  obligations  and  liabilities of the
Company hereunder (subject to the foregoing sentence), in each case, pursuant to
such  agreements and  instruments  as are reasonably  acceptable to the Required
Warrantholders.

     4.8 De Minimis  Changes in Purchase  Price.  No  adjustment in the Purchase
Price shall be  required  unless such  adjustment  would  require an increase or
decrease of at least one percent (1%) in the Purchase  Price;  provided that any
adjustments  that,  at the time of the  calculation  thereof,  are less than one
percent  (1%) of the  Purchase  Price at such time and by reason of this Section
are not  required to be made at such time shall be carried  forward and added to
any  subsequent  adjustment or adjustments  for purposes of determining  whether
such subsequent  adjustment or adjustments,  as so supplemented,  exceed the one
percent  (1%) amount set forth in this  Section 4.8 and, if any such  subsequent
adjustment, as so supplemented or otherwise, should exceed such one percent (1%)
amount,  all  adjustments  deferred prior thereto and not previously  made shall
then be made. In any case, all such  adjustments  being carried forward pursuant
to this  Section 4.8 shall be given  effect upon the exercise of any Warrants by
any holder thereof for purposes of determining  the Purchase Price thereof.  All
calculations shall be made to the nearest cent ($0.01).

     4.9 Adjustment of Number of Shares Issuable Pursuant to Warrants. Upon each
adjustment of the Purchase Price as a result of any  calculations  made pursuant
to Section 4.2,  Section 4.3,  Section 4.4,  Section 4.5 or Section  4.12,  each
Warrant  outstanding  immediately  prior to the making of such adjustment  shall
thereafter evidence the right to purchase,  at the adjusted Purchase Price, that
number of shares of Common Stock  (calculated to the nearest share)  obtained by
multiplying  the  number  of  shares of Common  Stock  covered  by such  Warrant
immediately prior to such adjustment by the quotient of:

          (a) the Purchase Price in effect immediately prior to such adjustment,

     divided by

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


                                       12

<PAGE>



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

     4.10 Miscellaneous.

          (a) Adjustments  shall be made pursuant to this Section 4 successively
     whenever any of the events  referred to in Section 4.2 through Section 4.7,
     inclusive, shall occur.

          (b) If any Warrant  shall be exercised  subsequent  to the record date
     for any of the events  referred  to in Section  4.2  through  Section  4.7,
     inclusive, but prior to the effective date thereof, appropriate adjustments
     shall be made  immediately  after such effective date so that the holder of
     such Warrant on such record date shall have received, in the aggregate, the
     kind and number of shares of Common Stock or other  Securities  or Property
     that it would have owned or been entitled to receive on such effective date
     had such Warrant been exercised prior to such record date.

          (c)  Shares of Common  Stock  owned by or held for the  account of the
     Company or any Subsidiary  shall not, for purposes of the  adjustments  set
     forth in this Section 4, be deemed outstanding.

     4.11 Other  Securities.  In the event  that at any time,  as a result of an
adjustment made pursuant to this Section 4, each holder of Warrants shall become
entitled to purchase any  Securities  of the Company other than shares of Common
Stock,  the number or amount of such other  Securities  so  purchasable  and the
Purchase Price of such  Securities  shall be subject to adjustment  from time to
time in a  manner  and on terms  as  nearly  equivalent  as  practicable  to the
provisions contained in Section 4.2 through Section 4.7, inclusive,  hereof, and
all other relevant provisions of this Section 4 that are applicable to shares of
Common Stock shall be applicable to such other Securities.

     4.12 Additional Agreements of the Company. The Company covenants and agrees
that:

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

                                       13

<PAGE>




          (b) Before taking any action that would result in an adjustment to the
     then current Purchase Price to a price that would be below the then current
     par value of Common  Stock  issuable  upon  exercise  of any  Warrant,  the
     Company will take or cause to be taken any and all  necessary  corporate or
     other  action that may be  necessary  in order that the Company may validly
     and legally issue fully paid and nonassessable  shares of Common Stock upon
     payment of such Purchase Price as so adjusted.

          (c) If the Company  shall amend the  provisions  of any Rights  (other
     than the Warrants),  including,  without limitation, the Series A Preferred
     Stock or the Outstanding Warrants, or make any adjustment thereto (pursuant
     to  any   antidilution   provision  or  otherwise)  so  as  to  reduce  the
     Consideration Per Share applicable  thereto,  increase the number of shares
     issuable upon exercise thereof or otherwise change the economic terms (such
     as the purchase price, exercise price, conversion price or conversion ratio
     thereof), then the Company shall make appropriate adjustment,  as nearly as
     practical to those that would be required by the  provisions of Section 4.2
     through Section 4.5, inclusive, most nearly analogous to the effect of such
     amendment,  to the Purchase Price, and, pursuant to and Section 4.9, to the
     number of shares of Common Stock issuable upon exercise of the Warrants, as
     shall  be fair and  equitable,  such  adjustment  to be  determined  by the
     Valuation Agent.

          (d) In the event  that any of the events  described  in any of Section
     4.2 through  Section  4.5,  inclusive,  give rise to an  adjustment  to the
     purchase,  exercise or conversion  price or conversion  ratio, or number of
     shares of Common Stock issuable upon conversion or exercise,  of any Rights
     (other than the  Warrants),  including,  without  limitation,  the Series A
     Preferred Stock and the Outstanding Warrants, then the adjustments provided
     for in Section 4.2 through Section 4.5, inclusive, in respect of such event
     shall give effect both to the event  giving rise to such  adjustment  under
     this  Agreement and to all such  adjustments  made in respect of such other
     Rights;  provided,  however,  that no such  adjustment  shall duplicate any
     adjustment  required  to be  made  in  respect  thereof  by  virtue  of the
     provisions of Section 4.12(c).

5.   REPORTING COVENANTS

     5.1 Financial and Business Information.

     The Company shall deliver to each holder of Warrants:

          (a) Quarterly Financial Statements -- as soon as practicable after the
     end of each  quarterly  fiscal  period in each  fiscal  year of the Company
     (other than the last quarterly fiscal period of each such fiscal year), and
     in any event within forty-five (45) days thereafter:

               (i) a  consolidated  balance sheet as at the end of such quarter;
          and

               (ii)  consolidated  statements  of income and cash flows for such
          quarter  and (in the case of the  second and third  quarters)  for the
          portion of the fiscal year ending with such quarter;


                                       14

<PAGE>



          for the Company and the  Subsidiaries,  setting forth in each case, in
          comparative  form,  the  financial  statements  for the  corresponding
          periods  in  the  previous  fiscal  year,  all in  reasonable  detail,
          prepared in accordance  with GAAP  applicable  to quarterly  financial
          statements generally;  provided, that timely delivery of copies of the
          Company's  Quarterly  Report on Form 10-Q  filed with the SEC shall be
          deemed to satisfy the requirements of this Section 5.1(a);

          (b) Annual  Financial  Statements -- as soon as practicable  after the
     end of each fiscal year of the Company, and in any event within ninety (90)
     days thereafter:

               (i) a consolidated balance sheet as at the end of such year; and

               (ii) consolidated statements of income,  stockholders' equity and
          cash flows for such year;

     for the Company and the  Subsidiaries,  setting forth in comparative  form,
     the  financial  statement for the previous  fiscal year,  all in reasonable
     detail,  prepared in  accordance  with GAAP,  and  accompanied  by an audit
     report thereon of independent  certified  public  accountants of recognized
     national   standing,   which  report  shall  state  without   qualification
     (including, without limitation,  qualifications related to the scope of the
     audit,  the  compliance  of the  audit  with  generally  accepted  auditing
     standards,  or the ability of the Company or a material  subsidiary thereof
     to continue as a going concern),  that such financial  statements have been
     prepared  and are in  conformity  with  GAAP;  provided,  that  the  timely
     delivery of the  Company's  Annual Report on Form 10-K for such fiscal year
     filed  with the SEC shall be deemed to  satisfy  the  requirements  of this
     Section 5.1(b);

          (c) SEC and Other Reports -- promptly upon their becoming available:

               (i) each financial statement,  report,  notice or proxy statement
          sent by the Company or any Subsidiary to stockholders generally; and

               (ii)  each  regular  or  periodic  report   (including,   without
          limitation,  each  Form  10-K,  Form  10-Q  and  Form  8-K),  and each
          amendment  thereto filed by the Company or any Subsidiary with the SEC
          (and any successor agency);

          (d) Rule 144A -- promptly  upon the request of any holder of Warrants,
     information required to comply with 17 C.F.R. ss.230.144A,  as amended from
     time to time, in connection  with any transfer or proposed  transfer of any
     Warrants; and

          (e) Requested  Information -- with reasonable  promptness,  such other
     data and information as from time to time may be requested by any holder of
     Warrants.

     5.2 Extension of Time to File SEC Reports.  If the rules and regulations of
the SEC under the  Exchange  Act and the rules  and  regulations  of the  NASDAQ
National  Market are amended to permit  extend the  deadline for delivery to the
SEC and the NASDAQ  National  Market of  Quarterly  Reports on Form 10-Q (or any
successor form) beyond the forty-five (45) days following the end of each fiscal
quarter  of the  Company  (other  than its last  fiscal  quarter)  as  currently
required, then the forty-five (45) day period within which quarterly financial

                                       15

<PAGE>



statements  are required to be delivered in  accordance  with the  provisions of
Section 5.1(a) shall be similarly extended.  If the rules and regulations of the
SEC under the Exchange Act and the rules and  regulations of the NASDAQ National
Market are amended to permit extend the deadline for delivery to the SEC and the
NASDAQ  National  Market of Annual Reports on Form 10-K (or any successor  form)
beyond the ninety (90) days  following the end of the  Company's  fiscal year as
currently  required,  then  the  ninety  (90) day  period  within  which  annual
financial  statements  are  required  to be  delivered  in  accordance  with the
provisions of Section 5.1(b) shall be similarly extended.

     5.3 Information Concerning Antidilution Adjustments.

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

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

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

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

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

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

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

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

          (c)  Confirmation  by  Accountants.  At the  request  of a  holder  of
     Warrants,  a certificate of the chief financial officer pursuant to Section
     5.3(a) or Section  5.3(b)  shall be  confirmed  by a  certificate  from the
     independent certified public accountants of the Company.

          (d) Notices of Certain  Events.  Whenever the Company  shall  publicly
     announce the authorization of any Notice Event, the Company shall, not less
     than  fifteen (15) days prior to the record date with respect to such event
     (or, if no record date for the same shall be fixed,  not less than  fifteen
     (15) days  prior to the  occurrence  of such  Notice  Event),  give to each
     holder of Warrants, written notice of such event setting forth any

                                       16

<PAGE>



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

6.   REGISTRATION RIGHTS.

     6.1 Incidental Registration.

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

          (b) Selection of  Underwriters.  Notice of the Company's  intention to
     register such Securities shall designate the proposed  underwriters of such
     offering and shall contain the Company's agreement to use its best efforts,
     if requested to do so, to arrange for such  underwriters to include in such
     underwriting  the  Registrable  Securities  that  the  Company  has been so
     requested to register  pursuant to this  Section  6.1, it being  understood
     that the holders of  Registrable  Securities  shall have no right to select
     different underwriters for the disposition of their Registrable Securities.

          (c) Priority on Incidental Registrations.  If the managing underwriter
     shall  advise  the  Company  in  writing  (with a copy to  each  holder  of
     Registrable   Securities  requesting  sale)  that,  in  such  underwriter's
     opinion,  the number of shares of  Securities  requested  to be included in
     such  Incidental  Registration  exceeds the number that can be sold in such
     offering  within a price range  acceptable  to the Company (such writing to
     state the basis of such  opinion  and the  approximate  number of shares of
     Securities that may be included in such offering without such effect),  the
     Company will include in such

                                       17

<PAGE>



     Incidental  Registration,  to  the  extent  of  the  number  of  shares  of
     Securities that the Company is so advised can be sold in such offering:

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

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

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

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

                    (A)  first,  Securities  requested  to be sold by the  Other
               Stockholders requesting such Registration;

                    (B) second,  Registrable  Securities requested to be sold by
               the  holders  thereof  pursuant  to  this  Section  6.1  and  all
               Securities  proposed to be registered  by the Other  Stockholders
               (other than those referred to in Section 6.1(c)(ii)(A)), pro rata
               among such holders on the basis of the number of shares requested
               to be so registered by such holders; and

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

     6.2 Companies  Registration.  If the  Securities  Act (whether by statutory
amendment, amendment of the rules and regulations thereunder or both) is amended
after the date hereof to provide for a Companies  Registration  Scheme,  and the
Company is or becomes  eligible to  participate  in the  Companies  Registration
Scheme,  then the  Company,  promptly  following  the  request  of the  Required
Holders,  shall use its reasonable  best efforts to register  promptly under the
Companies  Registration  Scheme  so  as  to  facilitate  the  resale  under  the
registration statement contemplated by such Companies Registration Scheme of the
Registrable  Securities in accordance with the method or methods of distribution
contemplated by the Holders.

     6.3  Registration  Procedures.  The  Company  will use its best  efforts to
effect each  Registration,  and to cooperate  with the sale of such  Registrable
Securities  in accordance  with the intended  method of  disposition  thereof as
quickly as practicable, and the Company will as expeditiously as possible:

          (a) subject, in the case of an Incidental Registration, to the proviso
     to Section , prepare and file with the SEC the  registration  statement and
     use its best  efforts  to  cause  the  Registration  to  become  effective;
     provided, however, that before filing

                                       18

<PAGE>



     any  registration  statement or prospectus or any amendments or supplements
     thereto,  the  Company  will  furnish  to the  holders  of the  Registrable
     Securities covered by such registration  statement,  their counsel, and the
     underwriters,  if any,  and their  counsel,  copies  of all such  documents
     proposed to be filed (i) in the case of the originally  filed  registration
     statement,  at least five (5) Business Days prior thereto,  which documents
     will be subject to the reasonable review, within such five (5) Business Day
     period, of such holders,  their counsel and the  underwriters;  and (ii) in
     the case of any amendment or supplement,  a reasonable period of time prior
     thereto so as to permit the holders and their counsel to reasonably  review
     such amendment or  supplement;  and the Company will not name any holder of
     Registrable  Securities in any registration  statement or amendment thereto
     or any  prospectus or any  supplement  thereto  (including  such  documents
     incorporated by reference) to which the Requisite  Holders shall reasonably
     object within such period;

          (b)  subject to the proviso to Section  6.1(a),  prepare and file with
     the SEC such amendments and  post-effective  amendments to any registration
     statement  and  any  prospectus  used  in  connection  therewith  as may be
     necessary to keep such registration  statement effective and to comply with
     the provisions of the Securities Act with respect to the disposition of all
     Registrable  Securities covered by such registration  statement;  and cause
     the prospectus to be  supplemented by any required  prospectus  supplement,
     and  as so  supplemented  to be  filed  pursuant  to  Rule  424  under  the
     Securities Act;

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

          (d) notify each holder of the Registrable Securities of any stop order
     or other order suspending the effectiveness of any registration  statement,
     issued or threatened by the SEC in connection  therewith,  and,  subject to
     the proviso to Section  6.1(a),  take all  reasonable  actions  required to
     prevent  the entry of such stop order or to remove it or obtain  withdrawal
     of it at the earliest possible moment if entered;

          (e) if requested by the managing underwriter or underwriters,  if any,
     or any  holder  of  Registrable  Securities  in  connection  with  any sale
     pursuant to a registration statement,  promptly incorporate in a prospectus
     supplement or  post-effective  amendment such information  relating to such
     underwriting as the managing  underwriter or underwriters,  if any, or such
     holder reasonably requests to be included therein; and make

                                       19

<PAGE>



     all  required  filings  of such  prospectus  supplement  or  post-effective
     amendment  as soon as  practicable  after  being  notified  of the  matters
     incorporated in such prospectus supplement or post-effective amendment;

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

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

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

          (i)  notify  each  seller of  Registrable  Securities  covered by such
     Registration,  upon discovery that, or upon the happening of any event as a
     result of which, the prospectus  included in such Registration,  as then in
     effect,  includes an untrue  statement of a material fact or omits to state
     any material  fact  required to be stated  therein or necessary to make the
     statements therein not misleading,  and promptly prepare, file with the SEC
     and  furnish to such  seller or holder a  reasonable  number of copies of a
     supplement  to or an  amendment of such  prospectus  as may be necessary so
     that, as thereafter  delivered to the purchasers or prospective  purchasers
     of such  Securities,  such prospectus shall not include an untrue statement
     of a material  fact or omit to state a material  fact required to be stated
     therein or necessary to make the  statements  therein not misleading in the
     light of the circumstances under which they are made;

          (j) otherwise  comply with all applicable rules and regulations of the
     SEC, and make generally  available to its security holders (as contemplated
     by Section 11(a) under the Securities Act) an earnings statement satisfying
     the provisions of Rule 158 under the

                                       20

<PAGE>



     Securities  Act no later than  ninety (90) days after the end of the twelve
     (12) month period  beginning  with the first month of the  Company's  first
     fiscal  quarter  commencing  after the effective  date of the  registration
     statement, which statement shall cover said twelve (12) month period;

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

          (l) obtain and  maintain  the  registration  of the Common Stock under
     either section 12(b) or section 12(g) of the Exchange Act; and use its best
     efforts to cause all Registrable Securities covered by each Registration to
     be listed subject to notice of issuance, prior to the date of first sale of
     such Registrable Securities pursuant to such Registration, on:

               (i)  either  the New York  Stock  Exchange,  Inc.,  or the NASDAQ
          National Market; and

               (ii) each other securities exchange,  if any, on which the Common
          Stock is then listed.

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

     6.4 Reasonable Investigation. The Company shall:

          (a) give the holders of Registrable Securities, their underwriters, if
     any,  and their  respective  counsel and  accountants  the  opportunity  to
     participate  in  the  preparation  of  the  registration  statement,   each
     prospectus  included  therein  or filed  with  the SEC and  each  amendment
     thereof or supplement thereto;

          (b) give each such holder and underwriter reasonable  opportunities to
     discuss  the  business of the Company  with its  officers,  counsel and the
     independent public accountants who have certified its financial statements;

          (c)  make  available  for  inspection  by any  holder  of  Registrable
     Securities included in any Registration,  any underwriter  participating in
     any disposition pursuant to any Registration,  and any attorney, accountant
     or other agent  retained by any such seller or  underwriter,  all financial
     and other  records,  pertinent  corporate  documents and  properties of the
     Company; and

          (d) cause the  Company's  officers,  directors and employees to supply
     all information  reasonably requested by any such Person in connection with
     such Registration;


                                       21

<PAGE>



in each such case,  as shall be  reasonably  necessary,  in the  opinion of such
holder or such underwriter, to enable it to conduct a "reasonable investigation"
within the meaning of the section  11(b)(3) of the Securities Act and to satisfy
the requirement of reasonable care imposed by section 12(a)(2) of the Securities
Act.

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

     6.6 Indemnification; Contribution.

          (a)  Indemnification by the Company.  The Company shall indemnify,  to
     the fullest extent permitted by law, each holder of Registrable Securities,
     its officers,  directors,  partners,  trustees and agents, if any, and each
     Person,  if any, who controls  such holder within the meaning of section 15
     of the Securities Act, against all losses, claims, damages, liabilities (or
     proceedings in respect  thereof) and expenses  (under the Securities Act or
     common law or otherwise), joint or several, resulting from any violation by
     the Company of the provisions of the Securities Act or any untrue statement
     or  alleged   untrue   statement  of  a  material  fact  contained  in  any
     registration  statement or prospectus  (and as amended or  supplemented  if
     amended or  supplemented)  or any  preliminary  prospectus or caused by any
     omission or alleged  omission to state  therein a material fact required to
     be stated therein or necessary to make the statements  therein (in the case
     of any  prospectus,  in light of the  circumstances  under  which they were
     made) not  misleading,  except to the  extent  that  such  losses,  claims,
     damages,  liabilities (or  proceedings in respect  thereof) or expenses are
     caused by any untrue statement or alleged untrue statement  contained in or
     by any omission or alleged omission from information  concerning any holder
     furnished  in  writing  to the  Company by such  holder  expressly  for use
     therein.  If the offering pursuant to any registration  statement  provided
     for under this Section 6 is made through underwriters, no action or failure
     to act on the part of such underwriters (whether or not such underwriter is
     an  Affiliate  of any holder of  Registrable  Securities)  shall affect the
     obligations   of  the  Company  to  indemnify  any  holder  of  Registrable
     Securities or any other Person pursuant to the preceding  sentence.  If the
     offering  pursuant to any  registration  statement  provided for under this
     Section is made through  underwriters,  the Company agrees,  and subject to
     the  proviso to Section  6.1(a),  to the  extent  (but only to the  extent)
     required  by such  underwriters,  to enter  into an  underwriting  or other
     agreement  providing for indemnity of such  underwriters,  their  officers,
     directors  and agents,  if any, and each Person,  if any, who controls such
     underwriters  within the meaning of section 15 of the Securities Act to the
     same extent as hereinbefore provided with respect to the indemnification of
     the holders of Registrable Securities;  provided that the Company shall not
     be required to indemnify any such  underwriter,  or any officer or director
     of such underwriter or any Person who controls such underwriter  within the
     meaning of section 15 of the  Securities  Act, to the extent that the loss,
     claim, damage, liability (or proceedings in respect thereof) or expense for
     which indemnification is claimed results from such underwriter's failure to
     send or give a copy of an amended or supplemented  final  prospectus to the
     Person  asserting  an untrue  statement  or  alleged  untrue  statement  or
     omission or alleged omission at or prior to the written confirmation of the
     sale of Registrable Securities to such Person if such statement or omission
     was corrected in such amended or supplemented final prospectus prior to

                                       22

<PAGE>



     such  written  confirmation  and the  underwriter  was  provided  with such
     amended or supplemented final prospectus.

          (b)   Indemnification   by  the  Holders.   In  connection   with  any
     registration  statement  in which a holder  of  Registrable  Securities  is
     participating,   each  such  holder,   severally  and  not  jointly,  shall
     indemnify,  to the fullest  extent  permitted  by law,  the  Company,  each
     underwriter (if the underwriter so requires) and their respective officers,
     directors  and agents,  if any, and each  Person,  if any, who controls the
     Company  or such  underwriter  within  the  meaning  of  section  15 of the
     Securities  Act,  against  any losses,  claims,  damages,  liabilities  (or
     proceedings  in respect  thereof)  and expenses  resulting  from any untrue
     statement or alleged untrue statement of a material fact or any omission or
     alleged  omission  of  a  material  fact  required  to  be  stated  in  the
     registration  statement or  prospectus  or  preliminary  prospectus  or any
     amendment thereof or supplement thereto or necessary to make the statements
     therein (in the case of any prospectus, in light of the circumstances under
     which they were  made) not  misleading,  but only to the  extent  that such
     untrue  statement is contained in or such omission is from  information  so
     concerning a holder  furnished in writing by such holder  expressly for use
     therein; provided,  however, that such holder's obligations hereunder shall
     be limited to an amount  equal to the net  proceeds  to such  holder of the
     Registrable Securities sold pursuant to such registration statement.

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

          (d)  Contribution.  If for  any  reason  the  foregoing  indemnity  is
     unavailable,  then the  indemnifying  party shall  contribute to the amount
     paid or  payable  by the  indemnified  party  as a result  of such  losses,
     claims, damages, liabilities or expenses:


                                       23

<PAGE>



               (i) in such  proportion as is appropriate to reflect the relative
          benefits  received by the  indemnifying  party on the one hand and the
          indemnified party on the other; or

               (ii) if the  allocation  provided  by  clause  (i)  above  is not
          permitted  by  applicable   law  or  provides  a  lesser  sum  to  the
          indemnified  party than the  amount  hereinafter  calculated,  in such
          proportion as is appropriate to reflect not only the relative benefits
          received by the indemnifying party on the one hand and the indemnified
          party on the other  but also the  relative  fault of the  indemnifying
          party  and  the  indemnified  party  as  well  as any  other  relevant
          equitable considerations.

     Notwithstanding the foregoing, no holder of Registrable Securities shall be
     required to contribute any amount in excess of the amount such holder would
     have been required to pay to an  indemnified  party if the indemnity  under
     Section  6.6(b)  hereof  was  available.  No Person  guilty  of  fraudulent
     misrepresentation  (within the meaning of section  11(f) of the  Securities
     Act) shall be entitled to  contribution  from any Person who was not guilty
     of such  fraudulent  misrepresentation.  The  obligation  of any  Person to
     contribute pursuant to this Section 6.6 shall be several and not joint.

          (e) Advancement of Expenses. An indemnifying party shall make payments
     of all amounts required to be made pursuant to the foregoing  provisions of
     this Section 6.6 to or for the account of the  indemnified  party from time
     to time promptly upon receipt of bills or invoices relating thereto or when
     otherwise due or payable. Without limiting the generality of the foregoing,
     each  indemnifying  party, as an interim measure during the pendency of any
     claim, action, investigation, inquiry or proceeding arising out of or based
     upon any matter or subject for which  indemnity  (or  contribution  in lieu
     thereof) would be available to any indemnified party under any provision of
     this Section 6.6, shall promptly reimburse each indemnified party, as often
     as invoiced  therefor  (but in no event more often than  monthly),  for all
     reasonable  legal  or  other  expenses  incurred  in  connection  with  the
     investigation or defense of any such claim, action, investigation,  inquiry
     or proceeding, notwithstanding the absence of any judicial determination as
     to the propriety or enforceability of the indemnifying  party's  obligation
     to reimburse the  indemnified  party for such expenses and  notwithstanding
     the possibility  that the obligations to pay such expenses might later have
     been  held to be  improper  by a court of  competent  jurisdiction.  To the
     extent that any such  interim  reimbursement  is held to be  improper,  the
     indemnified  party agrees to promptly  return the amount so advanced to the
     indemnifying  party,  together with interest,  compounded  monthly,  at the
     prime rate (or other  commercial  lending rate for borrowers of the highest
     credit  standing) listed from time to time in The Wall Street Journal which
     represents the average base rate on corporate  loans posted by the nation's
     thirty (30) largest banks.  Any such interim  reimbursement  payments which
     are not made to the indemnified  party within thirty (30) days of a request
     therefor  shall  bear  interest  at such  prime  rate from the date of such
     request to the extent such reimbursement payments are ultimately determined
     to be proper obligations of the indemnifying party.  Subject to the proviso
     to Section 6.1(a),  to the extent required by any underwriter in connection
     with the  execution  of any  underwriting  agreement  pursuant to which the
     holders of  Registrable  Securities  shall be selling  any shares of Common
     Stock,  the Company  shall  agree to  advancement  of the  expenses of such
     underwriter to at least the same extent as provided in this Section 6.6(e).

                                       24

<PAGE>




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

     6.7 Holdback Agreements; Registration Rights to Others.

          (a)  In  connection  with  each   underwritten   sale  of  Registrable
     Securities,  the Company agrees, and each holder of Registrable  Securities
     by  acquisition  of such  Registrable  Securities  agrees,  to  enter  into
     customary   holdback   agreements   concerning   sale  or  distribution  of
     Registrable Securities and other equity Securities of the Company,  except,
     in the case of any holder of  Registrable  Securities,  to the extent  that
     such holder is prohibited by applicable law or exercise of fiduciary duties
     from agreeing to withhold Registrable  Securities from sale or is acting in
     its capacity as a fiduciary or  investment  adviser.  Without  limiting the
     scope of the term  "fiduciary,"  a holder shall be deemed to be acting as a
     fiduciary  or an  investment  adviser  if its  actions  or the  Registrable
     Securities  proposed  to be sold are  subject  to the  Employee  Retirement
     Income Security Act of 1974, as amended,  or the Investment  Company Act of
     1940, as amended, or if such Registrable  Securities are held in a separate
     account under applicable insurance law or regulation.

          (b) If the Company shall at any time after the date hereof  provide to
     any holder of any  Securities  of the Company  rights  with  respect to the
     registration of such Securities under the Securities Act:

               (i) such rights shall not be in conflict with or adversely affect
          any of the  rights  provided  in  this  Section  6 to the  holders  of
          Registrable Securities; and

               (ii) if such  rights are  provided  on terms or  conditions  more
          favorable  to such  holder than the terms and  conditions  provided in
          this  Section 6, the Company will provide (by way of amendment to this
          Section 6 or otherwise) such more favorable terms or conditions to the
          holders of Registrable Securities.

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

     6.9  Availability of Information.  At any time that any class of the Common
Stock is  registered  under  section 12(b) or section 12(g) of the Exchange Act,
the Company will comply with the reporting requirements of sections 13 and 15(d)
of the  Exchange  Act  (whether or not it shall be required to do so pursuant to
such  Sections)  and will comply  with all other  public  information  reporting
requirements  of the SEC from time to time in effect.  In addition,  the Company
shall file such reports and information,  and shall make available to the public
and to the  holders of  Registrable  Securities  such  information,  as shall be
necessary to permit such

                                       25

<PAGE>



holders to offer and sell Registrable  Securities  pursuant to the provisions of
Rule 144  promulgated  under the Securities Act. The Company will also cooperate
with each such holder in supplying such information as may be necessary for such
holder  to  complete  and file any  information  reporting  forms  presently  or
hereafter required by the SEC as a condition to the availability of an exemption
from the  registration  provisions of the Securities Act in connection  with the
sale of any  Registrable  Securities.  The  Company  will  furnish  to each such
holder,  promptly  upon  their  becoming  available,  copies  of  all  financial
statements,  reports,  notices  and  proxy  statements  sent or  made  available
generally  by the  Company to its  stockholders,  and copies of all  regular and
periodic reports and all registration  statements and prospectuses  filed by the
Company with any securities exchange or with the SEC.


7.   RIGHT OF FIRST REFUSAL.

     7.1 Transfer of Warrants.  No holder of Warrants shall sell or transfer any
Warrants held by such holder except pursuant to the provisions of this Section 7
or pursuant to an Exempt Transfer.

     7.2 Notice of Proposed  Transfer.  Not less than fifteen (15) days prior to
making any sale or transfer of any Warrants  (other than an Exempt  Transfer and
other than a transfer to the  Company),  the  transferring  holder or holders of
Warrants  shall deliver a written  notice (a "Transfer  Notice") to the Company,
which Transfer Notice shall:

               (a) state the proposed number of Warrants to be transferred  (the
          "Offered Warrants");

               (b)  state  the  amount  and  kind of  consideration  offered  in
          exchange for the Offered Warrants;

               (c) state the name or identity of the proposed Transferee;

               (d)  describe  in  reasonable   detail  the  proposed  terms  and
          conditions of the sale or transfer; and

               (e) state the intended date of closing of such transfer.

     7.3 First  Refusal  Right.  The Company may elect to purchase  all (but not
less than all) the Offered  Warrants  specified  in the  Transfer  Notice at the
price and on the terms  specified  therein by delivering  written notice of such
election  to each  holder of  Offered  Warrants  within  ten (10) days after the
delivery  of the  Transfer  Notice to the  Company.  If the  Company  shall have
elected to purchase all the Offered  Warrants,  the holder having  delivered the
Transfer  Notice shall sell to the Company,  and the Company shall purchase from
such holder, all such Offered Warrants on the First Refusal Sale Date.

     7.4 Transfers to Third Parties on Refusal or Failure to Consummate. If:


                                       26

<PAGE>



          (a) the Company has not  elected to  purchase  all,  but not less than
     all, the Offered  Warrants  pursuant to Section 7.3 on or prior to the date
     which is ten (10) days after the date of delivery of the  Transfer  Notice;
     or

          (b) the  Company  shall have  elected to  purchase  all of the Offered
     Warrants  pursuant  to Section  7.3  hereof,  but the  purchase of all such
     Offered Warrants is not consummated on the First Refusal Sale Date;

then,  in either case,  for a period of one hundred  eighty (180) days after the
First  Refusal  Sale Date  relating  thereto,  the  holder or holders of Offered
Warrants  may sell or  transfer  any Offered  Warrants to one or more  Permitted
Investors without any requirement of compliance with this Section 7.

     7.5 Limited Right of First Refusal Regarding Sale of Certain Common Stock.

          (a) Grant of First  Refusal  Option.  Each  Person  who is a holder of
     Warrants,  by its purchase and acceptance thereof,  agrees that should such
     Person exercise any Warrants held by such Person,  such Person (but not any
     future  holder of the shares of Common  Stock  issued to such  Person  upon
     exercise of the Warrants),  prior to selling or transferring such shares of
     Common Stock (other than in an Exempt Transfer),  shall give written notice
     (which notice,  notwithstanding the provisions of Section 9.6, may be given
     solely by facsimile transmission and which shall state the number of shares
     proposed to be sold or transferred),  and shall use its reasonable  efforts
     to  confirm  such  transmission  by  telephone,  of such  intended  sale or
     transfer of such shares of Common Stock. The Company shall have the option,
     for a period of three  (3) hours  following  the  giving of such  facsimile
     notice,  to elect to  purchase  all (but not less than all) such  shares of
     Common Stock specified in such facsimile  notice at a price per share equal
     to the Closing  Price in effect at the time of  dispatch of such  facsimile
     notice.

          (b)  Exercise of First  Refusal  Option.  The Company may exercise its
     option  by  giving  the  selling   Person  written  notice  (which  notice,
     notwithstanding  the  provisions  of Section  9.6,  may be given  solely by
     facsimile  transmission)  of its  intention  to purchase all such shares of
     Common Stock at such Closing Price not later than three (3) hours following
     the  giving  of such  facsimile  notice by such  Person,  and shall use its
     reasonable  efforts to  confirm  such  transmission  by  telephone.  If the
     Company shall have elected to purchase all such shares of Common Stock, the
     Company shall deliver  (which,  notwithstanding  the  provisions of Section
     9.6, shall be given by facsimile transmission, with the original dispatched
     prepaid by overnight courier) to such Person within two (2) hours after the
     dispatch of its notice of exercise  its option to purchase all such shares,
     a  written   confirmation  of  such  sale,  in  customary  form  reasonably
     acceptable to the selling Person,  setting forth the number of shares to be
     purchased,  the identity of the selling Person,  such Closing Price and the
     aggregate  price for all such shares  being sold,  confirming  the sale and
     transfer of all such shares of Common Stock by such  selling  Person to the
     Company. Subject to Section 7.5(c),  settlement of such sale shall occur on
     the third (3rd) Business Day following the date the Company  exercises such
     option.  On such date, the Company shall deliver to the selling holder,  by
     wire transfer of immediately  available  funds,  the purchase price for the
     shares of Common  Stock  being  purchased,  and the  selling  holder  shall
     deliver, by physical delivery of certificates

                                       27

<PAGE>



     representing  such  shares of Common  Stock,  accompanied  by stock  powers
     executed in blank, or, in the event such shares of Common Stock are held in
     book entry form, through the facilities of a customary  book-entry transfer
     facility or system.

          (c) Other Sales of Common  Stock.  In the event that the Company  does
     not exercise its election to purchase all, but not less than all, shares of
     Common  Stock  proposed  to be sold by the  selling  Person by  delivery of
     facsimile  notice  thereof to the  selling  Person not later than three (3)
     hours following the giving of notice of the selling  Person's  intention to
     sell such shares of Common Stock, then such selling Person, for a period of
     thirty  (30) days  commencing  upon the  failure by the Company to properly
     exercise such option, shall be free to sell any shares of Common Stock held
     or owned by such  Person to any  other  Person  on any  terms  without  any
     further  requirement of compliance with this Section 7.5. In the event that
     the Company  shall  exercise any option to purchase  shares of Common Stock
     pursuant to this Section 7.5 but shall fail to make payment therefor on the
     settlement date therefor:

               (i) the  Company's  rights  pursuant  to this  Section  7.5 shall
          terminated immediately and without any further action;

               (ii) the selling  holder of the shares of Common Stock which were
          the  subject  of the sale  which the  Company  failed to settle  shall
          dispose of all such shares in a commercially  reasonable  manner,  and
          the Company shall  indemnify  upon demand and hold harmless the holder
          for any difference between the price which the Company would have been
          required to pay had such  settlement  occurred and the price  actually
          realized  upon such actual  sale,  together  with any other  expenses,
          losses or damages  (including  consequential  or  incidental  damages)
          occasioned  by such  failure to settle  such sale and such  subsequent
          actual sale; and

               (iii) all other  holders of Common Stock  received by such holder
          upon the exercise of any Warrant formerly held by such holder shall be
          free to sell any such  shares  at any time to any  Person on any terms
          without any further restraint on account of this Section .


8.   INTERPRETATION OF THIS AGREEMENT.

     8.1 Certain Defined Terms. For the purpose of this Agreement, the following
terms shall have the meanings set forth below or set forth in the Section hereof
following such term:

     Additional Common Stock -- means Common Stock,  including  treasury shares,
issued  after the date hereof,  except  Common Stock issued upon the exercise of
any one or more Warrants.


                                       28

<PAGE>



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

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

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

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

at such time.

As used in this definition,

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

     Aggregate  Consideration  Paid  --  means,  in the  case  of a  repurchase,
redemption,  retirement or acquisition of shares of Common Stock,  the aggregate
amount  paid by the  Company  in  connection  therewith  and,  in the  case of a
repurchase, redemption, retirement or acquisition of Rights, the sum of:

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

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

     For  purposes  of  clause  (a)  above,  in the  event  of  the  repurchase,
redemption,  retirement  or  acquisition  of  any  Rights  together  with  other
Securities  or  obligations  of the  Company  or any  other  Person in which the
purchase  price for the Rights  and such  other  Securities  or  obligations  is
expressed as a single purchase price (including,  without  limitation,  upon the
issuance or sale of Preferred  Stock or debt  Securities  which are  convertible
into Common  Stock),  the  aggregate  amount paid by the Company for such Rights
shall include only the portion of such single  purchase  price  attributable  to
such  Rights,  and not the  portion  attributable  to such other  Securities  or
obligations.  The portion of such purchase price  attributable to such Rights in
such case shall be equal to the product of:

          (i) such single purchase price; multiplied by

          (ii) the quotient of:

               (A) the fair market value (as determined by the Valuation  Agent)
          of such Right,  independent  of the value of such other  Securities or
          obligations  (computed using the Black-Scholes option pricing model or
          such  other  pricing  model  as  the  Valuation  Agent  determines  is
          appropriate, and applying such

                                       29

<PAGE>



          reasonable  assumptions concerning price variances with respect to the
          Common Stock and such other variables as the Valuation Agent considers
          appropriate); divided by

               (B) the fair market value (as determined by the Valuation  Agent)
          of such Right  together  with such  other  Securities  or  obligations
          (computed using such  methodology  and making such  assumptions as the
          Valuation Agent determines is appropriate).

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

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

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

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

     For  purposes of clause (a) above,  in the event of the issuance or sale of
any Rights  together with other  Securities or obligations of the Company or any
other  Person  in which  the  purchase  price  for the  Rights  and  such  other
Securities or  obligations is expressed as a single  purchase price  (including,
without  limitation,  upon  the  issuance  or sale of  Preferred  Stock  or debt
Securities which are convertible  into Common Stock),  the aggregate amount paid
to the Company for such Rights  should  include  only the portion of such single
purchase price attributable to such Rights, and not the portion  attributable to
such  other  Securities  or  obligations.  The  portion of such  purchase  price
attributable to such Rights in such case shall be equal to the product of:

          (i) such single purchase price; multiplied by

          (ii) the quotient of:

               (A) the fair market value (as determined by the Valuation  Agent)
          of such  Right,  independent  of the value of the value of such  other
          Securities or obligations  (computed  using the  Black-Scholes  option
          pricing  model or such  other  pricing  model as the  Valuation  Agent
          determines is appropriate,  and applying such  reasonable  assumptions
          concerning  price  variances with respect to the Common Stock and such
          other variables as the Valuation Agent considers appropriate); divided
          by

               (B) the fair market value (as determined by the Valuation  Agent)
          of such Right  together  with such  other  Securities  or  obligations
          (computed using such  methodology  and making such  assumptions as the
          Valuation Agent determines is appropriate).


                                       30

<PAGE>



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

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

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

     Charter -- means te Certificate of Incorporation of the Company, as amended
and in effect as of the date hereof.

     Closing  Price -- means,  on any date with  respect  to any share of Common
Stock:

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

          (b) if no Common  Stock is then  listed or  admitted to trading on any
     national securities  exchange,  but is listed on the NASDAQ National Market
     or the NASDAQ SmallCap  Market,  as the case may be, the last trading price
     of any Common  Stock on such date as reported by NASDAQ,  or if there shall
     have been no trading on such date, the average of the reported  closing bid
     and asked prices on such date as shown by NASDAQ.

     Common Stock -- means the Common  Stock,  par value $.01 per share,  of the
Company;  provided,  however, that prior to the Share Purchase Right Termination
Date, the term "Common  Stock," and references to any shares  thereof,  shall in
each case include the attached Share Purchase Rights.

     Companies  Registration  Scheme -- means an amendment to the Securities Act
(whether  by  statutory  amendment,  amendment  of  the  rules  and  regulations
thereunder or both), such as, without  limitation,  as proposed in the Report of
the Advisory Committee on the Capital Formation and Regulatory  Processes of the
Securities and Exchange Commission, dated July 24, 1996, pursuant to which:

          (a) issuers of  Securities  are permitted to register all issuances of
     securities on an integrated company registration statement; and

          (b) under the provisions of such amendment,  such  registration  could
     cover the  reoffering or resale by the holders  thereof of shares of Common
     Stock issued upon the exercise of the Warrants, if any, outstanding at such
     time.

     Company -- shall have the meaning  specified in the introductory  paragraph
hereof.


                                       31

<PAGE>



     Consideration Per Share -- means, with respect to shares of Common Stock or
Rights, the quotient of:

          (a) the  Aggregate  Consideration  Paid (in the case of a  repurchase,
     redemption,  retirement or other  acquisition  for value of Common Stock or
     Rights)  or the  Aggregate  Consideration  Receivable  (in  the  case of an
     issuance or sale of Common Stock or Rights by the Company), as the case may
     be, in respect of such shares of Common Stock or such Rights; divided by

          (b) the total number of such shares of Common Stock or, in the case of
     Rights,  the total  number of shares  of Common  Stock  into  which by such
     Rights are exercisable or convertible.

     Effective Date -- means March 1, 1999.

     Exchange Act -- means the Securities Exchange Act of 1934, as amended,  and
the rules and regulations of the SEC promulgated thereunder.

     Excluded Securities -- means and includes:

          (a) shares of Common Stock or Rights issued in any of the transactions
     described in Section 4.2 through  Section 4.7,  inclusive,  hereof,  and in
     respect of which an adjustment has been made pursuant to such Section;

          (b) shares of Common Stock  issuable  upon exercise of the Warrants or
     any other Rights (including,  without limitation, any Outstanding Warrants)
     outstanding on the date hereof;

          (c) shares of Common Stock or other  Securities  issued or sold by the
     Company upon exercise of any Share Purchase  Rights in accordance  with the
     provisions of the Rights  Agreement,  and any Common Stock,  if any, issued
     upon the exercise or conversion of such other Securities in accordance with
     the provisions of the Rights Agreement;

          (d) shares of Common  Stock issued to the public in a bona fide public
     offering registered under the Securities Act to Persons other than:

               (i) Affiliates;

               (ii) employees of the Company; or

               (iii) existing holders of Common Stock or Rights;

     provided,  however,  that a bona  fide  public  offering  sold  through  an
     underwriter  and held open to the public  generally  shall not fail to meet
     the  requirements  of this clause (c) merely by virtue of the fact that one
     or more Affiliates, employees or existing holders of Common Stock or Rights
     may have been purchasers from the underwriters therein so

                                       32

<PAGE>



     long as no  pre-existing  arrangement or agreement to so purchase shares in
     connection with such offering was in existence or in effect;

          (e) shares of the Common Stock sold in a bona fide  private  placement
     transaction  for a price not less than  ninety  (90%) of the  Market  Price
     calculated as the date of the closing of such sale, so long as the price of
     such shares was negotiated at arm's length and so long as the purchasers of
     such shares are not either:

               (i) Affiliates;

               (ii) employees of the Company; or

               (iii) existing holders of Common Stock or Rights; and

          (f) Rights  consisting  of  employee  stock  options  granted  with an
     exercise price not less than the Market Price thereof as of the date of the
     grant,  and shares of Common  Stock  issued upon  exercise of such  Rights,
     issued to employees,  consultants or independent contractors of the Company
     pursuant to any stock option plan approved by the Board of Directors at any
     time, so long as, and to the extent that:

               (i) the aggregate  number of shares of Common Stock issuable upon
          exercise  of  such  stock  options  (whether  or  not  then  currently
          exercisable)  at such time,  together  with all shares of Common Stock
          previously issued upon exercise of such stock options, does not exceed
          nine hundred thousand  (900,000)  shares,  such number of shares to be
          appropriately  adjusted  in  respect of the  occurrence  of any of the
          events described in Section 4 hereof; and

               (ii) no other holder of any Rights or any other Securities of the
          Company  shall  have the  right  to any  preemptive,  subscription  or
          similar right in respect of such issuance.

     Exempt  Transfer  -- means,  with  respect to any  transfer  of Warrants or
Common Stock issued upon  exercise of any  Warrants by any holder  thereof,  any
transfer:

          (a) to any affiliate of such holder;

          (b) to any other holder of Warrants;

          (c) to any affiliate of any other holder;

          (d) in connection with the  liquidation,  dissolution,  termination or
     other event with  respect to any holder of  Warrants  which  requires  such
     holder  to  distribute  the  Warrants  to the  stockholders,  shareholders,
     members or partners of such  holder,  each such  stockholder,  shareholder,
     member or partner;

          (e) to a nominee of or custodian for such holder; or

          (f) in  connection  with a bona fide pledge of such Warrants or Common
     Stock.

                                       33

<PAGE>




     Expiration Date -- means March 1, 2008, subject to extension as provided in
Section 2.5.

     Fair Value -- means, with respect to any share of Common Stock at any time,
the quotient of:

          (a) the difference of:

               (i) the sum of:

                    (A)  the  fair  salable  value  of the  Company  as a  going
               concern, giving effect to all Property thereof and subject to all
               liabilities  thereof,  that would be realized in an arm's  length
               sale  between an informed  and willing  buyer and an informed and
               willing seller, under no compulsion to buy or sell, respectively,
               as of a date that is within  fifteen  (15) days of the date as of
               which the  determination  is to be made,  determined by agreement
               among the holders of the Warrants and the Company and, if, in the
               Company's view after reasonable negotiation no such agreement can
               be reached,  by the Valuation Agent, such determination in either
               case to be made  without  regard  to the  absence  of a liquid or
               ready market for such Common Stock; plus

                    (B)  the  aggregate  exercise  or  conversion  price  of all
               Warrants  and  all  other  Valuable  Rights  (including,  without
               limitation, Valuable Rights in respect of any shares of Preferred
               Stock  convertible  at such time into shares of Common  Stock) in
               existence and remaining unexercised on such date;

          minus

               (ii)  if  there  shall  then  exist  any  outstanding  shares  of
          Preferred Stock (other than Preferred  Stock  convertible at such time
          into shares of Common Stock, which shares represent Valuable Rights at
          such time), the aggregate liquidation  preference of (or, if less, the
          aggregate  price,  if any, at which the Company could elect to redeem)
          such shares of Preferred  Stock  (together with all accrued and unpaid
          dividends thereon);

     divided by

          (b) the sum of:

               (i) the total number of shares of Common Stock then  outstanding;
          plus

               (ii) the aggregate  number of shares of Common Stock  issuable in
          respect  of  all  Valuable  Rights  (including,   without  limitation,
          Valuable   Rights  in  respect  of  any  shares  of  Preferred   Stock
          convertible at such time into shares of Common Stock) at such time.


                                       34

<PAGE>



     First Refusal Sale Date -- means, with respect to any Transfer Notice,  the
date which is fifteen (15) days after the date such Transfer Notice is delivered
to the Company, or such later date as is agreed to by the Company and the holder
of the Offered Warrants.

     Fully Diluted Basis -- means, with respect to any calculation of the number
of shares of Common Stock at any time, the sum of:

          (a) the  number of shares of Common  Stock  outstanding  at such time;
     plus

          (b) the aggregate  number of shares of Common Stock  issuable upon the
     exercise,  conversion  or  exchange,  as the  case  may be,  of all  Rights
     outstanding  at such  time,  regardless  of  whether  such  Rights are then
     exercisable,  convertible  or  exchangeable  and  regardless of whether the
     consideration  given up by the holder of such Right in connection  with the
     exercise,  conversion  or exchange  thereof  would  exceed the value of the
     Common Stock received upon such exercise, conversion or exchange.

     GAAP -- means  accounting  principles as  promulgated  from time to time in
statements,  opinions and  pronouncements by the American Institute of Certified
Public  Accountants  and the Financial  Accounting  Standards  Board and in such
statements,  opinions and  pronouncements of such other entities with respect to
financial   accounting  of  for-profit  entities  as  shall  be  accepted  by  a
substantial segment of the accounting profession in the United States.

     Incidental Registration -- Section 6(a).

     Initial   Purchase  Price  --  means  Four  and  One  Hundred   Twenty-Five
One-Thousandths Dollars ($4.125) per share.

     Initiating  Holders -- means,  at any time,  the  holders  (other  than the
Company or any Affiliate thereof) of at least fifty-one percent (51%) (by number
of shares) of the Registrable Securities at such time (excluding any Registrable
Securities held directly or indirectly by the Company or any Affiliate thereof).

     Lien -- means any interest in Property securing an obligation owed to, or a
claim by, a Person  other than the owner of the Property  (for  purposes of this
definition,  the  "Owner"),  whether  such  interest is based on the common law,
statute or contract, and includes but is not limited to:

          (a) the security  interest lien arising from a mortgage,  encumbrance,
     pledge,  conditional  sale or  trust  receipt  or a lease,  consignment  or
     bailment for security purposes,  and the filing of any financing  statement
     under the Uniform  Commercial Code of any jurisdiction,  or an agreement to
     give any of the foregoing;

          (b) reservations, exceptions, encroachments, easements, rights-of-way,
     covenants, conditions,  restrictions, leases and other title exceptions and
     encumbrances affecting real Property;


                                       35

<PAGE>



          (c)  stockholder   agreements,   voting  trust  agreements,   buy-back
     agreements  and all similar  arrangements  affecting the Owner's  rights in
     stock owned by the Owner; and

          (d) any  interest in any  Property  held by the Owner  evidenced  by a
     conditional sale agreement, capitalized lease or other arrangement pursuant
     to which  title to such  Property  has been  retained  by or vested in some
     other Person for security purposes.

The term "Lien" does not include  negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.

     Market  Price --  means,  per  share  of  Common  Stock,  as of any date of
determination,  the daily  Closing  Price on the trading day before such date of
determination;  provided  that if the Common  Stock is then  neither  listed nor
admitted to trading on any national  securities  exchange,  the NASDAQ  National
Market or the NASDAQ SmallCap  Market,  then "Market Price" means the Fair Value
of one share of Common Stock,  as  determined  by the Valuation  Agent as of the
date of determination.

     NASD -- means the National Association of Securities Dealers, Inc.

     NASDAQ -- means the NASDAQ Stock Market, Inc., a subsidiary of the NASD.

     NASDAQ National Market -- has the meaning  ascribed thereto in Rule 4200(r)
of NASDAQ.

     NASDAQ SmallCap Market -- has the meaning  ascribed thereto in Rule 4200(t)
of NASDAQ.

     Note  Agreement -- means the Note  Agreement,  dated as of the date hereof,
between the Company and the Purchasers, pursuant to which the Notes were issued.

     Notes -- means the 16.5% Senior Subordinated Notes due March 1, 2006 issued
pursuant to the Securities Purchase Agreement and the Note Agreement.

     Notice  Event -- means any event that would  require an  adjustment  in the
Purchase Price pursuant to Section 4 hereof.

     Offered Warrants -- Section 7.2 hereof.

     Other  Stockholders  -- means and  includes,  at any time,  all  holders of
Securities  of the Company at such time  (other than the holders of  Registrable
Securities).

     Outstanding  Warrants -- means and includes all warrants to purchase Common
Stock of the Company outstanding on the date hereof and prior to the issuance of
the Warrants.

     Permitted Investor -- means and includes any Person:


                                       36

<PAGE>



          (a) which is a Purchaser;

          (b) in connection with the  liquidation,  dissolution,  termination or
     other event with respect to any holder of Warrants  which requires any such
     holder  of  Warrants  to  distribute  the  Warrants  to  the  stockholders,
     shareholders,  members or partners of such holder,  each such  stockholder,
     shareholder, member or partner; or

          (c) (i) which meets the criteria for an "accredited  investor," as set
     forth in either  Rule  501(a)(1),  Rule  501(a)(2),  Rule  501(a)(3),  Rule
     501(a)(7) or Rule 501(a)(8), in each case, under the Securities Act; and

               (ii)  which  is not  engaged  principally  in the  production  or
          distribution of dairy products.

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

     Preferred  Stock -- means and includes all capital  stock of the Company of
any class (including, without limitation, the Series A Preferred Stock) which is
preferred as to payment upon a liquidation  or  dissolution  of the Company,  or
both, over the Common Stock.

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

     Public  Offering  -- shall mean any sale of Common  Stock in a  transaction
either  registered  under,  or requiring  registration  under,  section 5 of the
Securities Act.

     Purchase Price -- means,  prior to any adjustment  pursuant to Section 4 of
this Agreement, the Initial Purchase Price and thereafter,  the Initial Purchase
Price as thereafter successively adjusted and readjusted from time to time.

     Purchaser -- shall have the meaning specified in the introductory paragraph
hereof.

     Reference  Price -- means,  per share of  Common  Stock,  as of any date of
determination,  the  arithmetic  mean of the daily Closing Prices for the twenty
(20) consecutive  trading days before such date of determination;  provided that
if the  Common  Stock is then  neither  listed  nor  admitted  to trading on any
national securities exchange,  the NASDAQ National Market or the NASDAQ SmallCap
Market,  then  "Reference  Price"  means  the Fair  Value of one share of Common
Stock, as determined by the Valuation Agent as of the date of determination.

     Registrable Securities -- means, at any time:

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

          (b) any shares of Common  Stock into which such shares of Common Stock
     shall have been converted at any time; and

                                       37

<PAGE>




          (c) any shares of Common Stock that are issuable  upon the exercise of
     the Warrants or the conversion of Common Stock referred to in clause (a) or
     clause (b) above.

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

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

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

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

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

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

     Registration -- means each Incidental Registration.

     Registration  Expenses  -- means all  expenses  incident  to the  Company's
performance of or compliance  with  compliance  with Section 6.1 through Section
6.4, inclusive, including, without limitation:

          (a) all registration and filing fees;

          (b) fees and expenses of compliance  with  securities or blue sky laws
     (including  reasonable fees and disbursements of counsel in connection with
     blue sky qualifications of the Registrable Securities);

          (c) expenses of printing  certificates for the Registrable  Securities
     in a form eligible for deposit with Depositary Trust Company;

          (d) messenger and delivery expenses;

          (e) internal expenses (including, without limitation, all salaries and
     expenses of its  officers  and  employees  performing  legal or  accounting
     duties);


                                       38

<PAGE>



          (f)  fees  and  disbursements  of  counsel  for  the  Company  and its
     independent  certified  public  accountants  (including the expenses of any
     management  review,  cold comfort letters or any special audits required by
     or incident to such performance and compliance);

          (g)  securities  acts  liability  insurance (if the Company  elects to
     obtain such insurance);

          (h) the reasonable fees and expenses of any special  experts  retained
     by the Company in connection with such registration;

          (i) fees and expenses of other Persons retained by the Company; and

          (j) in  connection  with any  transaction  in which the holders of the
     Registrable Securities tender and continue to hold available for sale under
     any Registration all (but not less than all) of the Registrable  Securities
     (and irrespective of whether any such tendered Registrable  Securities fail
     to be included in such  Registration  pursuant to the  operation of Section
     6.1(c)),  the  reasonable  fees and  expenses of one counsel for holders of
     Registrable Securities, selected by the Requisite Holders;

but not including any underwriting fees,  discounts or commissions  attributable
to the sale of  Registrable  Securities  or fees and  expenses  of more than one
counsel representing the holders of Registrable  Securities or any other selling
expenses,  discounts  or  commissions  incurred in  connection  with the sale of
Registrable Securities.

     Required  Warrantholders  -- means,  at any time,  the  holders of at least
sixty-six  and  two-thirds  percent  (66  2/3%)  of  all  Warrants   outstanding
(excluding  any  Warrants  directly  or  indirectly  held  by the  Company,  any
Subsidiary or any Affiliate) at such time.

     Requisite  Holders -- means,  with respect to any  registration or proposed
registration of Registrable  Securities pursuant to Section 6 hereof, any holder
or holders  (other than the Company or any Affiliate or  Subsidiary)  holding at
least  sixty-six and  two-thirds  percent (66 2/3%) of the shares of Registrable
Securities   (excluding  any  shares  of  Registrable   Securities  directly  or
indirectly  held  by  the  Company  or any  Affiliate  or  Subsidiary)  to be so
registered.

     Right -- means and includes:

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

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

          (c) any right to acquire  Common Stock  pursuant to the  provisions of
     any Security (including,  without limitation, the Series A Preferred Stock)
     convertible or exchangeable into Common Stock; and

                                       39

<PAGE>




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

     Rights Agreement -- means the Rights Agreement,  dated as of March 6, 1996,
between the Company and  Continental  Stock Transfer & Trust Company,  as Rights
Agent.

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

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

     Securities  Purchase  Agreement  --  means,   collectively,   the  separate
Securities Purchase  Agreements,  each dated as of the date hereof,  between the
Company and each  Purchaser,  relating to the offering and sale of the Notes and
the Warrants.

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

     Series A  Preferred  Stock -- means  the  Series A  Redeemable  Convertible
Preferred Stock of the Company.

     Share Purchase Right Termination Date -- means the earlier to occur of:

          (a) any  separation  of the  Share  Purchase  Rights  pursuant  to the
     provisions of the Rights Agreement (including,  without limitation,  on the
     Distribution Date, as defined therein); and

          (b) any redemption by the Company of all Share  Purchase  Rights under
     circumstances  under which no further Share Purchase  Rights will be issued
     under the Rights Agreement.

     Share  Purchase  Rights  -- means and  includes  each of the  Common  Stock
purchase  rights  issued  pursuant  to, and governed by the terms of, the Rights
Agreement.

     Subsidiary -- means, at any time, each  corporation,  association,  limited
liability  company or other business  entity which  qualifies as a subsidiary of
the Company that is properly included in a consolidated  financial  statement of
the Company and its subsidiaries in accordance with GAAP at such time.

     Transferee -- means any registered transferee of all or any part of any one
or more Warrant Certificates acquired by the Purchasers under this Agreement.

     Transfer Notice -- Section 7.2 hereof.

     Valuable Right -- means,  at any time, a Right,  the effective  conversion,
exercise or purchase  price of which on the date of  determination  is less than
the  Market  Price in  respect  of the  shares of  Common  Stock  issuable  upon
conversion, exercise or purchase pursuant to such Right on such date.

                                       40

<PAGE>




     Valuation  Agent -- means the Board of Directors of the Company,  or a duly
constituted and appropriately empowered committee thereof, acting in good faith,
the  determination  of which shall be delivered in writing to the holders of the
Warrants;  provided,  however,  that if any holder of  Warrants  objects in good
faith  and in  writing  to any  such  written  determination  of such  Board  of
Directors or committee within thirty (30) days after the receipt  thereof,  then
the  "Valuation  Agent"  shall  mean  a firm  of  independent  certified  public
accountants,  an investment banking firm or appraisal firm (which firm shall own
no Securities of, and shall not be an Affiliate,  Subsidiary or a related Person
of, the Company) of  recognized  national  standing  retained by the Company and
reasonably acceptable to the Required Warrantholders.

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

     Warrant -- shall mean each  Warrant to purchase  shares of the Common Stock
issued pursuant to this Agreement.

     Warrant Certificate -- Section 1.1.

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

     8.3 Governing  Law. THIS  AGREEMENT AND THE WARRANT  CERTIFICATES  SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE  WITH,  AND THE RIGHTS OF THE PARTIES SHALL
BE  GOVERNED  BY,  THE LAWS OF THE  STATE OF NEW  YORK,  WITHOUT  REGARD  TO ANY
CONFLICTS  OF LAW RULES WHICH WOULD  REQUIRE THE  APPLICATION  OF THE LAW OF ANY
OTHER JURISDICTION.

9.   MISCELLANEOUS.

     9.1 Expenses.  The Company  agrees to pay, and save the  Purchasers and any
Transferees  harmless  against  liability for the payment of, all  out-of-pocket
expenses (including,  without limitation,  the reasonable fees and disbursements
of special counsel for the Purchasers and any Transferee)  arising in connection
with the transactions herein contemplated, including, without limitation:

          (a) the cost, if any, of complying with Section 3.6 hereof;

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


                                       41

<PAGE>



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

The obligations of the Company under this Section 9.1 shall survive the transfer
of any  Warrant  Certificate  or  portion  thereof  or  interest  therein by any
Purchaser or any Transferee and the exercise or expiration of any Warrant.

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

          (a) in the case of Section 1 through  Section 5, Section 8.2,  Section
     8.3 or  Section 9 hereof  (other  than this  Section  9.2),  or of any term
     defined in Section 801 to the extent used therein,  the written  consent of
     the Required Warrantholders;

          (b) the  provisions  of Section 6 hereof,  and of any term  defined in
     Section 8.1 hereof as used in Section 6 hereof, may be amended, modified or
     supplemented  only  by a  writing  duly  executed  by or on  behalf  of the
     Initiating Holders and the Company;  provided,  however, that compliance by
     the Company with the  provisions  of Section 6 hereof,  with respect to any
     particular registration, may be waived by the Requisite Holders; and

          (c) in the case of this Section 9.2, or of any term defined in Section
     8.1 to the extent  used  herein,  the  written  consent  of all  holders of
     Warrants then  outstanding  (excluding any Warrants  directly or indirectly
     held by the  Company,  any  Subsidiary  or any  Affiliate)  and  all  other
     Registrable Securities then outstanding;

provided, however, that:

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

          (ii) no  change  delaying  the  occurrence  of the  Effective  Date or
     accelerating the occurrence of the Expiration Date;

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

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

                                       42

<PAGE>




     9.4 Survival of  Representations  and  Warranties;  Entire  Agreement.  All
representations  and warranties  contained herein and in the Securities Purchase
Agreement in  connection  herewith  shall  survive the execution and delivery of
this  Agreement and the Warrant  Certificates,  the transfer by any Purchaser of
any Warrant  Certificate or portion thereof or interest therein and the exercise
or  expiration  of any Warrant,  and may be relied upon by any  Purchaser or any
Transferee,  regardless of any investigation made at any time by or on behalf of
any  Purchaser  or such  Transferee.  Subject to the  preceding  sentence,  this
Agreement  and  the  Warrant   Certificates  embody  the  entire  agreement  and
understanding  among the Company and the  Purchasers,  and  supersede  all prior
agreements and understandings, relating to the subject matter hereof.

     9.5  Successors  and Assigns.  All covenants  and other  agreements in this
Agreement  contained by or on behalf of any of the parties hereto shall bind and
inure to the  benefit of the  respective  successors  and assigns of the parties
hereto (including,  without limitation,  any Transferee) whether so expressed or
not.  Notwithstanding the foregoing sentence,  other than as required by Section
4.7 hereof, the Company may not assign any of its rights,  duties or obligations
hereunder or under the Warrants without the prior written consent of all holders
of the Warrants then outstanding.

     9.6 Notices. All communications hereunder or under the Warrants shall be in
writing  and shall be  delivered  either by  national  overnight  courier  or by
facsimile transmission (confirmed by delivery by national overnight courier sent
on the  day of the  sending  of  such  facsimile  transmission),  and  shall  be
addressed to the following addresses:

          (a) if to a  Purchaser,  at its  address  set forth on Annex 1 to this
     Agreement,  or at such  other  address as it shall  have  specified  to the
     Company in writing;

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

          (c) if to the  Company,  at the  address  set forth on Annex 2 to this
     Agreement,  or at such other address as the Company shall have specified to
     each holder of Warrants in writing.

Any communication  addressed and delivered as herein provided shall be deemed to
be received when actually  delivered to the address of the addressee (whether or
not delivery is accepted) or received by the telecopy  machine of the recipient.
Any communication not so addressed and delivered shall be ineffective.

     9.7  Satisfaction  Requirement.  If any  agreement,  certificate  or  other
writing,  or any action taken or to be taken,  is by the terms of this Agreement
required to be  satisfactory  to the  Purchasers  or to any holder or holders of
Warrant  Certificates,  the  determination of such  satisfaction  shall,  unless
specifically  required  herein in any  instance to be  "reasonable"  or words to
similar effect, be made by the Purchasers or such holder or holders, as the case
may be, in

                                       43

<PAGE>



the sole and  exclusive  judgment  (exercised  in good  faith) of the  Person or
Persons making such determination.

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

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

     9.10 Waiver of Jury Trial; Consent to Jurisdiction; Etc.

          (a)  Waiver  of  Jury  Trial.  THE  PARTIES  HERETO   VOLUNTARILY  AND
     INTENTIONALLY  WAIVE  ANY  RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
     RESPECT OF ANY LITIGATION  ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
     AGREEMENT, THE WARRANTS OR ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS
     CONTEMPLATED HEREBY.

          (b) Consent to Jurisdiction.  ANY SUIT,  ACTION OR PROCEEDING  ARISING
     OUT OF OR RELATING TO THIS AGREEMENT, THE WARRANTS OR ANY OF THE DOCUMENTS,
     AGREEMENTS OR TRANSACTIONS  CONTEMPLATED HEREBY OR ANY ACTION OR PROCEEDING
     TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH UNDER
     THIS  AGREEMENT,  THE WARRANTS OR ANY  DOCUMENT OR  AGREEMENT  CONTEMPLATED
     HEREBY MAY BE BROUGHT BY SUCH PARTY IN ANY FEDERAL  DISTRICT  COURT LOCATED
     IN NEW YORK COUNTY,  NEW YORK,  OR ANY NEW YORK STATE COURT  LOCATED IN NEW
     YORK COUNTY,  NEW YORK AS SUCH PARTY MAY IN ITS SOLE DISCRETION  ELECT, AND
     BY THE  EXECUTION  AND  DELIVERY  OF THIS  AGREEMENT,  THE  PARTIES  HERETO
     IRREVOCABLY AND  UNCONDITIONALLY  SUBMIT TO THE  NON-EXCLUSIVE  IN PERSONAM
     JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY
     WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING  BEFORE ANY TRIBUNAL,  BY
     WAY OF MOTION, AS A DEFENSE OR OTHERWISE,  ANY CLAIM THAT IT IS NOT SUBJECT
     TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE
     PARTIES HERETO IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
     ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE LAYING OF VENUE IN
     ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
     OR ANY DOCUMENT,  AGREEMENT OR TRANSACTION  CONTEMPLATED  HEREBY BROUGHT IN
     ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
     ACTION OR  PROCEEDING  BROUGHT  IN ANY SUCH  COURT HAS BEEN  BROUGHT  IN AN
     INCONVENIENT FORUM.

          (c)  Service of Process.  EACH PARTY  HERETO  IRREVOCABLY  AGREES THAT
     PROCESS  PERSONALLY  SERVED  OR  SERVED  BY  U.S.  REGISTERED  MAIL  AT THE
     ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO

                                       44

<PAGE>



     THE  EXTENT  PERMITTED  BY LAW,  ADEQUATE  SERVICE  OF PROCESS IN ANY SUIT,
     ACTION OR  PROCEEDING  ARISING OUT OF OR RELATING  TO THIS  AGREEMENT,  THE
     WARRANTS OR ANY DOCUMENT,  AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR
     ANY ACTION OR  PROCEEDING  TO EXECUTE OR OTHERWISE  ENFORCE ANY JUDGMENT IN
     RESPECT  OF ANY  BREACH  HEREUNDER  OR  UNDER  ANY  DOCUMENT  OR  AGREEMENT
     CONTEMPLATED  HEREBY.  RECEIPT OF PROCESS SO SERVED  SHALL BE  CONCLUSIVELY
     PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT  FURNISHED BY THE UNITED STATES
     POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE.

          (d) Other Forums.  NOTHING  HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
     THE ABILITY OF THE  PURCHASERS TO SERVE ANY WRITS,  PROCESS OR SUMMONSES IN
     ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN  JURISDICTION  OVER THE
     COMPANY IN SUCH OTHER  JURISDICTION,  AND IN SUCH OTHER  MANNER,  AS MAY BE
     PERMITTED BY APPLICABLE LAW.


  [Remainder of page intentionally left blank; next page is a signature page.]



                                       45

<PAGE>



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

                                   SUPREMA SPECIALTIES, INC.



                                   By:
                                      ------------------------------------------

                                            Name:
                                            Title:


                                   ALBION ALLIANCE MEZZANINE FUND,
                                   L.P.
                                   By:  Albion Alliance LLC, its General
                                   Partner



                                   By:
                                      ------------------------------------------

                                            Name:
                                            Title:


                                   THE EQUITABLE LIFE ASSURANCE
                                   SOCIETY OF THE UNITED STATES



                                   By:
                                       -----------------------------------------

                                            Name:
                                            Title:


<PAGE>

                                     ANNEX 1
                             ADDRESSES OF PURCHASERS

================================================================================
Purchaser Name                       ALBION ALLIANCE MEZZANINE FUND, L.P.
--------------------------------------------------------------------------------
Name in which Warrant                ALBION ALLIANCE MEZZANINE FUND, L.P.
Certificate is Registered
--------------------------------------------------------------------------------
Warrant Certificate                  WR-1:  85,000 Warrants
Registration Number;
Number of Warrants
--------------------------------------------------------------------------------
Address for Notices                  Albion Alliance Mezzanine Fund, L.P.
                                     c/o Albion Alliance LLC
                                     1345 Avenue of the Americas, 41st Floor
                                     New York, NY 10105
                                     Attention: William Gobbo, Jr.
                                                   (212) 969-1547 - Phone
                                                   (212) 969-1529 - Fax
--------------------------------------------------------------------------------
Other Instructions                   Signature Page Format:

                                     ALBION ALLIANCE MEZZANINE FUND, L.P.
                                     By:  Albion Alliance LLC, its 
                                          General Partner


                                     By___________________________
                                        Name:
                                        Title:
--------------------------------------------------------------------------------
Tax Identification Number            13-3975300
================================================================================


                                    Annex 1-1

<PAGE>


                                     ANNEX 1
                         ADDRESSES OF PURCHASERS (Cont.)

================================================================================
Purchaser Name                      THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
                                    UNITED STATES
--------------------------------------------------------------------------------
Name in which Warrant               THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
Certificate is Registered           UNITED STATES
--------------------------------------------------------------------------------
Warrant Certificate                 WR-2:  20,000 Warrants
Registration Number;
Number of Warrants
--------------------------------------------------------------------------------
Address for Notices                 The Equitable Life Assurance Society of
                                    the United States
                                    c/o Alliance Capital Management, L.P.
                                    1345 Avenue of the Americas, 41st Floor
                                    New York, NY 10105
                                    Attention:  Alliance Corporate
                                                Finance Group Inc.
                                                  (212) 969-1547 - Phone
                                                  (212) 969-1529 - Fax
--------------------------------------------------------------------------------
Other Instructions                  Signature Page Format:

                                    THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE
                                    UNITED STATES


                                    By___________________________
                                         Name:
                                         Title:
--------------------------------------------------------------------------------
Tax Identification Number           13-5570651
================================================================================



                                    Annex 1-2

<PAGE>



                                     ANNEX 2
                               ADDRESS OF COMPANY


Address of Company for Notices:

Suprema Specialties
510 East 35th Street
P.O. Box 280 Park Station
Paterson, New Jersey 07543
Attn:    President


                                    Annex 2-1

<PAGE>



                                                                    ATTACHMENT A

                          [FORM OF WARRANT CERTIFICATE]

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
A  TRANSACTION  REGISTERED  UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION  FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT. THE WARRANT AGREEMENT REFERRED TO IN THIS
CERTIFICATE CONTAINS, AMONG OTHER THINGS, PROVISIONS WHICH LIMIT THE TRANSFER OF
THIS  SECURITY.  A COPY OF THE WARRANT  AGREEMENT IS AVAILABLE  FROM THE COMPANY
UPON REQUEST.



                               WARRANT CERTIFICATE

                            SUPREMA SPECIALTIES, INC.

No. WR-___                                                  __________ Warrants
Date:  ________                                               PPN:  86859F 2* 7


     This Warrant Certificate certifies that ___________________,  or registered
assigns,  is the registered  holder of  ___________  (________)  Warrants.  Each
Warrant  entitles  the owner  thereof  to  purchase  at any time on or after the
Effective  Date and on or prior to the  Expiration  Date, one (1) fully paid and
nonassessable  share of Common  Stock,  par value  $.01 per share  (the  "Common
Stock"), of SUPREMA SPECIALTIES, INC., a New York corporation (together with its
successors  and  assigns,  the  "Company"),  at a  Purchase  Price  (subject  to
adjustment   as  provided   therein)   of  Four  and  One  Hundred   Twenty-Five
One-Thousandths  Dollars  ($4.125) per share upon  presentation and surrender of
this Warrant  Certificate  with a form of election to purchase duly executed and
delivery to the Company of the payment of the  Purchase  Price in the manner set
forth in the Warrant Agreement. The number of shares of Common Stock that may be
purchased  upon  exercise of each Warrant and the Purchase  Price are the number
and the Purchase  Price as of the date hereof,  and are subject to adjustment as
referred to below.

     The Warrants are issued  pursuant to the Warrant  Agreement (as it may from
time to time be amended or supplemented,  the "Warrant Agreement"),  dated as of
March 9, 1998  between the  Company  and the  investor  named  therein,  and are
subject to all of the terms,  provisions and conditions  thereof,  which Warrant
Agreement is hereby  incorporated herein by reference and made a part hereof and
to which Warrant  Agreement  reference is hereby made for a full  description of
the rights, obligations, duties and immunities of the Company and the holders of
the Warrant Certificates.  Capitalized terms used, but not defined,  herein have
the respective meanings ascribed to them in the Warrant Agreement.

     As provided in the Warrant Agreement,  the Purchase Price and the number of
shares of Common Stock that may be  purchased  upon the exercise of the Warrants
evidenced by this Warrant Certificate are, upon the happening of certain events,
subject to modification  and  adjustment.  Except as otherwise set forth in, and
subject to, the Warrant Agreement, the


                                 Attachment A-1

<PAGE>



Effective Date of this Warrant  Certificate is March 1, 1999, and the Expiration
Date of this Warrant Certificate is March 1, 2008.

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

     Except as expressly set forth in the Warrant  Agreement,  no holder of this
Warrant  Certificate shall be entitled to vote or receive dividends or be deemed
for any purpose the holder of shares of Common Stock or of any other  Securities
of the Company  that may at any time be issued  upon the  exercise  hereof,  nor
shall  anything  contained  in the Warrant  Agreement  or herein be construed to
confer upon the holder hereof, as such, any of the rights of a holder of a share
of Common Stock in the Company or any right to vote upon any matter submitted to
holders of shares of Common Stock at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization,  issuance of
stock,  reclassification  of  Securities,  change of par  value,  consolidation,
merger,  conveyance,  or  otherwise),  or to receive  dividends or  subscription
rights,  or otherwise,  until the Warrant or Warrants  evidenced by this Warrant
Certificate shall have been exercised as provided in the Warrant Agreement.

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

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

                                                  SUPREMA SPECIALTIES, INC.



                                                 By:
                                                     ---------------------------
                                                     Name:
                                                     Title:

                                 Attachment A-2

<PAGE>



                              [FORM OF ASSIGNMENT]
                   (To be executed by the registered holder if
            such holder desires to transfer the Warrant Certificate)


     FOR VALUE RECEIVED,  _______________________________________  hereby sells,
assigns and transfers unto


________________________________________________________________________________
(Please print name and address of transferee.)

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



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

Dated: ____________________, ________.


                                     [HOLDER]



                                     By ________________________________




                                     NOTICE

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

                                 Attachment A-3

<PAGE>



                         [FORM OF ELECTION TO PURCHASE]
                   (To be executed by the registered holder if
            such holder desires to exercise the Warrant Certificate)


To SUPREMA SPECIALTIES, INC.:

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




________________________________________________________________________________
(Please print name and address.)



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


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



________________________________________________________________________________
(Please print name and address.)



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



                                 Attachment A-4

<PAGE>


The  undersigned  is paying the Purchase Price for the shares of Common Stock to
be issued on exercise of the foregoing Warrants:

     |_|  in cash pursuant to Section (a)(i) of the Warrant Agreement;

     |_|  in Notes (as  defined in the  Warrant  Agreement)  pursuant to Section
          (a)(ii) of the Warrant Agreement;

     |_|  in cash in the amount of $____________ and a principal amount of Notes
          equal to  $___________  pursuant  to Section  (a)(iii)  of the Warrant
          Agreement; or

     |_|  by net exercise of the Warrants  being  exercised  pursuant to Section
          (a)(iv) of the Warrant Agreement.



Dated:  __________________, ______.


                              [HOLDER]



                              By __________________________________



                                     NOTICE

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


                                 Attachment A-5