<PAGE>

                                                                   EXHIBIT 10.35

                               WARRANT AGREEMENT

                                    BETWEEN

                          STEVENS INTERNATIONAL, INC.

                                      AND

                    AMERICAN STOCK TRANSFER & TRUST COMPANY

                          DATED AS OF OCTOBER 31, 1996


     WARRANT AGREEMENT dated as of October 31, 1996 between Stevens
International, Inc., a Delaware corporation (the "Company") and American Stock
Transfer & Trust Company (the "Warrant Agent").

     In connection with the settlement of the action Howard Lasker v. Stevens
                                                     ------------------------
Graphics Corporation, et. al., Civil Action No. 3:90-CV-2766-G, in the United
-----------------------------                                                
States District Court for the Northern District of Texas, Dallas Division, and
pursuant to a Stipulation of Settlement dated as of March 1, 1996 (the
"Stipulation") among the parties to the above-captioned litigation, the Company
proposes to issue warrants ("Warrants") to purchase an aggregate of 737,618
shares of the Company's Series A Common Stock, par value $0.10 per share
("Common Stock"), at a purchase price of $2.672 per share, subject to adjustment
in certain circumstances as hereinafter provided all upon the terms and subject
to the conditions set forth in this Agreement.

     The Company desires to retain the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of Warrants.

     The Company desires to enter into this Agreement to set forth the terms and
conditions of the warrants and the rights of the holders thereof and to set
forth the respective rights and obligations of the Company and the Warrant
Agent.

     NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties hereto agree as follows:

     1.  Appointment of Warrant Agent.  The Company hereby appoints the Warrant
         ----------------------------                                          
Agent to act an agent for the Company in accordance with the instructions in
this Agreement, and the Warrant Agent hereby accepts such appointment.

     2.  Date, Denomination and Execution of Warrant Certificates.  The Warrant
         --------------------------------------------------------              
Certificates (and the Form of Election to Purchase and the Form of Assignment to
be printed on the reverse thereof) shall be in registered form only and shall be
substantially of the tenor recited in Exhibit A hereto, and may have such
                                      ---------                          
letters, numbers or other marks of identification
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or designation and such legends, summaries or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law, or with any rule or regulation made pursuant thereto, or
with any rule or regulation of any stock exchange on which the Common Stock or
Warrants may be listed, or to conform to usage.  Each Warrant Certificate shall
entitle the registered holder thereof, subject to the provisions of this
Agreement (including, without limitations Section 7) and of the Warrant
Certificate, to purchase, at any time during the period commencing on the
original Issuance Data (as hereinafter defined) and ending at the close of
business on the first anniversary of the Original Issuance Date (the "Exercise
Period"), one fully paid and nonassessable share of Common Stock for each
Warrant evidenced by such Warrant Certificate, at an exercise price equal to the
Purchase Price (as defined in Section 6).  Each Warrant Certificate issued
pursuant to the Stipulation as part of the original issuance of the Warrants
shall be dated October 31, 1996 (the "Original Issuance Date");  each other
Warrant Certificate shall be dated the date on which the Warrant Agent received
valid issuance instructions from the Company or, if such instructions specify
another date, such other date.  For purposes of this Agreement, (i) the term
"close of business" on any given date means 5:00 P.M., Ft. Worth, Texas time, on
such date; provided, however, that if such date is not a business day, it shall
           -----------------                                                   
mean 5:00 p.m., Ft. Worth, Texas time, on the next succeeding business day; and
(ii) the term "business day" means any other day other than a Saturday, Sunday
or a day on which banking institutions in Ft. Worth, Texas, are authorized or
obligated by law to be closed.

     Each Warrant Certificate shall be executed on behalf of the Company by its
Chairman of the Board or its President or a Vice President, either manually or
by facsimile signature printed thereon, and have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
Each Warrant Certificate shall be manually countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned.  If any officer
of the Company who shall have signed any Warrant Certificate shall cease to be
such officer of the Company before countersignature by the Warrant Agent and
issue and delivery thereof by the Company, such Warrant Certificate,
nevertheless, may be countersigned by the Warrant Agent, issued and delivered
with the same force and treat as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company.

     3.  Subsequent Issue of Warrant Certificates.  Following the original
         ----------------------------------------                         
issuance of Warrant Certificates, no new Warrant Certificates shall be issued
except (i) Warrant Certificates issued upon transfer thereof in accordance with
Section 4, (ii) Warrant Certificates issued upon any combination, split-up or
exchange of Warrant Certificates pursuant to Section 4, (iii) Warrant
Certificates issued in replacement of mutilated, destroyed, lost or stolen
Warrant Certificates pursuant to Section 5, (iv) Warrant Certificates issued
upon the partial exercise of Warrant Certificates pursuant to Section 8, and (v)
Warrant Certificates issued pursuant to Section 23 to reflect any adjustment or
change in the Purchase Price or the number or kind of shares purchasable
thereunder.  The Warrant Agent is hereby irrevocably authorized to countersign
and deliver, in accordance with the provisions of Sections 4, 5, 8 and 23, the
new

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<PAGE>
 
Warrant Certificates required for purposes thereof, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Company for such purposes.

     4.  Transfers and Exchanges of Warrant Certificates.  The Warrant Agent
         -----------------------------------------------                    
shall keep or cause to be kept books for registration of ownership and transfer
of the Warrant Certificates issued hereunder.  Such registers shall show the
names and,addresses of the respective holders of the Warrant Certificates, the
number of Warrants evidenced by each such Warrant Certificate and the date of
each of the Warrant Certificates.

     The Warrant Agent shall, from time to time, register the transfer of any
outstanding Warrants upon the books to be maintained by the Warrant Agent for
that purpose, upon surrender of the Warrant Certificate evidencing such
Warrants, with the Form of Assignment completed and duly executed, to the
Warrant Agent at its stock transfer office in New York, New York, at any time on
or before the date of expiration of the Exercise Period, and upon payment to the
Warrant Agent for the account of the Company of an amount equal to any
applicable transfer tax.  Payment of the amount of such tax may be made in cash,
or by certified or official bank check, payable in lawful money of the United
States of America to the order of the Company.

     Upon receipt of a Warrant Certificate, with the Form of Assignment
completed and duly executed, accompanied by payment of an amount equal to any
applicable transfer tax, the Warrant Agent shall promptly cancel the surrendered
Warrant Certificate and countersign and deliver to the transferee a new Warrant
Certificate for the number of full Warrants transferred to such transferee;
                                                                           
provided, however, that if the registered holder of any Warrant Certificate
-----------------                                                          
shall elect to transfer fewer than all of the Warrants evidenced by such Warrant
Certificate, the Warrant Agent in addition shall promptly countersign and
deliver to such registered holder one or more now Warrant Certificates for the
number of full Warrants not so transferred.

     Any Warrant Certificate may be exchanged at the option of the holder
thereof for one or more Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the same number of Warrants, upon
surrender of the Warrant Certificate to be exchanged, with the Form of
Assignment completed and duly executed, to the Warrant Agent, at any time or
from time to time after the date hereof and prior to the expiration of the
Exercise Period.  The Warrant Agent shall promptly cancel the surrendered
Warrant Certificate and deliver the new Warrant Certificate pursuant to the
provisions of this Section 4.

     5.  Mutilated, Destroyed, Lost or Stolen Warrant Certificates.  Upon
         ---------------------------------------------------------       
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation or any Warrant
Certificate, and in the case of loss, theft or destruction, of indemnity and/or
security reasonably satisfactory to them, and reimbursement to them of all
reasonable expenses incidental thereto, and in the case of mutilation, upon
surrender and cancellation of the mutilated Warrant Certificate, the Warrant
Agent shall countersign and deliver a new Warrant Certificate of like tenor for
the same number of Warrants.

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<PAGE>
 
     Any Warrant Certificate issued upon the transfer, exchange, destruction,
loss, theft or mutilation of any Warrant Certificate described herein shall be
subject to all of the terms and provisions of the Warrant Agreement and the
Warrant.

     6.  Purchase Price.  As used in this Agreement, the term "Purchase Price"
         --------------                                                       
means the purchase price of $2.672 per share, subject to adjustment from time to
time in accordance with the provisions of Section 7.

     7.  Anti-Dilution Adjustments. (a) If the Company shall at any time or from
         -------------------------                                              
time to time after the Original Issuance Date declare a dividend payable in
Common Stock (including, in the event of a Common Stock split), then each holder
of an unexercised Warrant, upon exercise of such Warrant after the record date
or dates for the determination of holders of Common Stock entitled to receive
such dividend, shall be entitled to receive, in addition to the number of shares
of Common Stock as to which such Warrant is exercised, such additional shares of
Common Stock as such holder would have received had such Warrant been exercised
immediately prior to such record date or dates.

     (b) if the Company shall at any time after the Original Issuance Date
effect a recapitalization or reclassification of such character that the shares
of Common Stock shall be changed into or become exchangeable for a larger or
smaller number of shares, then upon the effective date of such recapitalization
or reclassification the number of shares of Common Stock that each holder of an
unexercised Warrant shall be entitled to purchase upon exercise of such Warrant
shall be increased or decreased, as the case may be, in direct proportion to the
increase or decrease in the number of shares of Common Stock by reason of such
recapitalization or reclassification, and the Purchase Price shall be, in the
case of an increase in the number of shares, proportionately decreased and, in
the case of a decrease in the number of shares, proportionately increased, with
the effect that the total consideration payable upon exercise of any Warrant in
respect of all the shares of Common Stock purchasable thereunder shall remain
the same.  If the Company shall at any tine hereafter issue any shares of
capital stock of the Company by reclassification of shares of Common Stock
(including, except as otherwise provided in Section 7(i), in connection with any
merger or consolidation of the Company in which it is the continuing
corporation), then each holder of an unexercised Warrant shall have the right
thereafter to receive, upon exercise of such Warrant, the kind and amount of
shares of stock and other securities an property or assets receivable upon such
reclassification by a holder of the number of shares of Common Stock for which
such Warrant might have been exercised immediately prior to such
reclassification.  The provisions of this Section 7(b) shall similarly apply to
successive recapitalizations and reclassifications of shares of Common Stock.
If, as a result of an adjustment made pursuant to this Section 7(b), any holder
of Warrants shall become entitled upon the exercise thereof to receive shares of
two or more classes of capital stock of the Company, the Board of Directors of
the Company (whose determination shall be conclusive and shall be evidenced by a
resolution of the Company's Board of Directors filed with the Warrant Agent)
shall determine the allocation of the adjusted Purchase Price between or among
shares of such classes of capital stock.  Any adjustment in respect of a
recapitalization involving the

                                       4
<PAGE>
 
forgiveness, exchange or conversion of outstanding debt shall be governed by
Section 7(c) and not this Section 7(b).

     (c) If the Company shall at any time after the Original Issuance Date
during the exercise period issue or sell any shares of Common Stock or any other
securities convertible into Common Stock or any options or Warrants to purchase
Common Stock (except by way of a dividend as provided in Section 7(a) and except
as provided in Section 7(i)), including in connection with retirement of
outstanding debt, for a consideration per share less than the fair market value
in effect immediately prior to the time of such issue or sale, then, forthwith
upon such issue or sale, the Purchase Price shall be reduced to the price
(calculated to the nearest cent) determined by dividing (1) and amount equal to
the sum of (x) the number of shares of Common Stock outstanding immediately
prior to such issue or sale multiplied by the Purchase Price at the time plus
(y) the consideration, if any, received by the Company upon such issue or sale,
by (2) the total number of shares of Common Stock outstanding immediately after
such issue or sale multiplied by the purchase price. The number of shares
purchasable upon exercise of each Warrant shall not be subject to adjustment
upon the occurrence of any event referred to in this Section 7(c).

     For purposes of this Section 7(c) the consideration in connection with any
such issue or sale shall be the amount of cash received by the Company (or, in
the case of securities sold to underwriters or dealers for public offering or to
the public through underwriters, the initial public offering price) for the sale
of such shares or other securities, options or warrants, before deducting
therefrom any commissions or other expenses paid or incurred by the Company in
connection with the issue or sale of such securities, options or warrants plus
any additional cash receivable by the Company on conversion or exercise of such
other securities, options or warrants except that, if any portion of such
consideration is a consideration other than cash, the amount of such
consideration other than cash shall be (i) the principal amount thereof, plus
any accrued but unpaid interest thereon and all other amounts payable in
connection with such debt including for expenses and yield maintenance premiums,
in the case of debt forgiven, exchanged or converted, and (ii) the value of such
consideration as determined in good faith by the Board of Directors of the
Company (whose determination shall be conclusive and shall be evidenced by a
resolution of the Company's Board of Directors filed with the Warrant Agent), in
the case of any other non-cash consideration.

     If the conversion or exercise price of any securities convertible into
Common Stock or options or warrants to purchase Common Stock is not specified at
the time of the issue or sale of such securities, option or warrants, the amount
thereof, for purposes only of this Section 7(c), shall be as determined in
accordance with Section 7(g).

     In the event of the issuance or sale by the Company of any securities
convertible into Common Stock or any options or warrants to purchase Common
Stock (except by way of a dividend as provided in Section 7(a) and except as
provided in Section 7(i)), the Company shall be deemed to have issued the
maximum number of shares of Common Stock into which such convertible securities
may be converted or the maximum number of shares of Common Stock

                                       5
<PAGE>
 
deliverable upon the exercise of such options or warrants, as the case may be,
for the minimum consideration payable in respect thereof.  On the expiration of
such options or warrants or the termination of the right to convert such
convertible securities, the Purchase Price shall be readjusted based upon the
number of shares of Common Stock actually delivered upon the exercise of such
options or warrants or upon the conversion of such convertible securities.
Except as provided in the next preceding sentence no further adjustment of the
Purchase Price shall be made as a result of the actual issuance of shares of
Common Stock upon the exercise of such options or warrants or the conversion of
such convertible securities.

     (d) if the Company shall at any time after the Original Issuance Date
consolidate or merge with any other corporation (except as provided in Section
7(i)) or transfer all or substantially all of its assets to any other
corporation, then the corporation formed by such consolidation or merger or the
party that shall have acquired such assets, as the case may be, shall, as a
condition precedent to such transaction, execute and deliver to the Warrant
Agent a supplemental warrant agreement providing that each holder of an
unexercised Warrant upon exercise of such Warrant after the effective date of
such transaction shall be entitled to receive the kind and amount of shares,
evidences of indebtedness and/or other securities or assets receivable on such
transaction by a holder of the number of shares of Common Stock as to which such
Warrant was exercisable immediately prior to such transaction and, in any such
case, such supplemental warrant agreement shall contain appropriate provisions
with respect to the rights and interests of the holder of each Warrant to the
end that the provisions of this Section 7 shall thereafter be applicable (as
nearly as may be practicable) with respect to any shares, evidences of
indebtedness and/or other securities or assets thereafter deliverable upon
exercise of such Warrant.

     The Warrant Agent shall not be under any responsibility to determine the
correctness of any provision contained in any such supplemental warrant
agreement relating to either the kind or amount of shares of stock or securities
or property (or cash) purchasable by holders of Warrant Certificates upon the
exercise of their Warrants after any such consolidation, merger, sale or
transfer or of any adjustment to be made with respect thereto, but subject to
the provisions of Section 21, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, a
certificate of a firm of independent certified public accountants with respect
thereto.

     (e) No adjustment shall be made hereunder to the Purchase Price unless such
adjustment would change the Purchase Price at the time by $.25 or more;
provided, however, that all adjustments not so made shall be deferred and made
-----------------                                                             
when the aggregate thereof would change the Purchase Price at the time by $.25
or more.  No adjustment made pursuant to any provision of this Section 7 shall
have the effect of increasing the total consideration payable upon exercise of
any Warrant in respect of all the shares of Common Stock purchasable thereunder.

     (f) Whenever the number of shares of Common Stock purchasable upon exercise
of a Warrant is adjusted as provided in this Section 7, the Company shall
promptly file with the Warrant Agent a certificate signed by the Chairman of the
Board or the President or

                                       6
<PAGE>
 
Vice President of the Company and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Company setting forth the number
and kind of shares purchasable, as so adjusted, stating that such adjustments in
the number or kind of shares or other securities conform to the requirements of
this Section 7, and setting forth a brief statement of the facts accounting for
such adjustments.  Promptly after filing such certificate with the Warrant
Agent, the Company, or the Warrant Agent at the Company's request, will deliver,
by first-class, postage prepaid mail, a brief summary thereof (to be supplied by
the Company) to the registered holders of the outstanding Warrant Certificates;
                                                                               
provided, however, that failure to file or to give any notice required under the
-----------------                                                               
Section 7(f), or any defect therein shall not affect the legality or validity of
any such adjustments under this Section 7; and provided, further, that, where
                                               -----------------             
appropriate, such notice may be given in advance and included as part of the
notice required to be given pursuant to Section 13. Any such certificate shall
be available at the principal office of the Company for inspection by the holder
of any Warrant on any day during normal business hours.

     (g) The Company shall retain a firm of independent public accountants of
recognized standing, which may be the firm regularly retained by the Company,
selected by the Board of Directors of the Company or the Executive Committee of
such Board to make any computation required under this Section 7, and a
certificate signed by much firm shall be conclusive evidence of the correctness
of any computation made under this Section 7.

     (h) For the purpose of this Section 7, the term "Common Stock" shall mean
(i) the class of stock designated as Series A Common Stock in the Articles of
Incorporation of the Company, as amended, at the date of this agreement, or (ii)
any other class of stock resulting from successive changes or reclassifications
of such Series A Common Stock consisting solely of changes in par value, or from
no par value to par value, or from par value to no par value.  If at any time,
as a result of an adjustment made pursuant to this Section 7, the holder of
Warrant shall, upon exercise of such Warrant, become entitled to receive shares
and/or other securities or assets (other than shares of Common Stock), then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 7.

     (i) Notwithstanding anything to the contrary contained in this Section 7,
no adjustments to the Purchase Price or the number of share of Common Stock that
the holder of any Warrant shall be entitled to purchase upon exercise of such
Warrant shall be made pursuant to this Section 7;

     (1) upon the issuance or exercise of any of the Warrants;

     (2) upon (i) the issuance or sale of shares of Common Stock pursuant to
options, warrants or convertible securities outstanding as of the date of this
Agreement; (ii) the grant, or the issuance of shares of Common Stock pursuant to
the exercise of any options,

                                       7
<PAGE>
 
warrants, convertible securities, stock appreciation rights, or similar rights
issued (whether before or after the date hereof) to employees, officers or
directors of or consultants to the Company or any subsidiary of the Company, to
purchase shares of Common Stock; or (iii) issuance of shares of Common Stock
pursuant to the Company's existing stock option or similar plan whether or by
sale, gift, bonus or grant to employees, officers, or directors of or
consultants to the Company or any subsidiary of the Company.

     (3) upon the issuance of any shares of Common Stock in connection with a
consolidation or merger in which the Company or a wholly owned subsidiary of the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock, or (ii) pursuant to and in
connection with the acquisition by the Company or any wholly owned subsidiary of
the Company of all or substantially all of the assets or stock (or other equity
interests, as the case may be) of another entity.

     (4) upon the offerings or issuance of Common Stock pursuant to any firm
commitment or best efforts underwritten public offering.

     8.  Exercise of Warrants. (a) Subject to the provisions of Section 10, the
         --------------------                                                  
registered holder of any Warrant Certificate may exercise the Warrants evidenced
by such Warrant Certificate, at any time or from time to time during the
Exercise Period, as to all or any lesser number of the whole shares of Common
Stock covered by such Warrants.  Upon expiration of the Exercise Period the
Warrant Certificates shall be and become wholly void and of no value.

     (b) Exercise of Warrants shall be accomplished upon surrender at any time
during the Exercise Period of the Warrant Certificate evidencing such Warrants,
with the Form of Election to Purchase on the reverse side thereof completed and
duly executed to the Warrant Agent at its stock transfer office in New York, New
York, together with payment to the Company of the Purchase Price of the Warrants
then being exercised and an amount equal to any applicable transfer tax and, if
requested by the Company, any other taxes or other governmental charges which
the Company may be required by law to collect in respect of such exercise.
Payment of the Purchase Price and other amounts may be made in cash, or by
certified or official bank checks payable in lawful money of the United States
of America to the order of the Company.  No adjustment shall be made for any
cash dividends, whether paid or declared, on any securities issuable upon
exercise of a Warrant.

     (c) Upon receipt of a Warrant Certificate, with the Form of Election to
Purchase completed and duly executed, accompanied by payment of the Purchase
Price of the Warrants being exercised (and an amount equal to any applicable
taxes or government charges as aforesaid), the Warrant Agent shall promptly
request from the transfer agent with respect to the securities to be issued and
deliver to or upon the order of the registered holder of such Warrant
Certificate, in such name or names as such registered holder may designate, a
Certificate or Certificates for the number of full shares of the securities to
be purchased together with, if applicable, cash made available by the Company
pursuant to Section 9 in respect of any fraction of a share of such securities
otherwise issuable upon such exercise, and shall deliver all

                                       8
<PAGE>
 
amounts paid on account of the Purchase Price and any amounts paid on account of
applicable taxes and government charges, promptly to the Company. If the Warrant
is then exercisable to purchase property other than securities, the Warrant
Agent shall take appropriate steps to cause such property to be delivered to or
upon the order of the registered holder of such Warrant Certificate.

     (d) If the registered holder of any Warrant Certificate shall exercise
fewer than all of the Warrants evidenced by such Warrant Certificate, the
Warrant Agent shall promptly countersign and deliver to the registered holder of
such Warrant Certificate, or to such holder's duly authorized assigns, one or
more new Warrant Certificates evidencing the number of Warrants that were not so
exercised.

     (e) Each person in whose name any certificate for securities is issued upon
the exercise of Warrants shall for all purposes be deemed to have become the
holder of record of the securities represented thereby as of, and such
Certificate shall be dated, the date upon which the Warrant Certificate was duly
surrendered in proper form (and payment of any applicable taxes or other
governmental charges was made in full); provided, however, that if the date of
                                        --------  -------                     
such surrender (and payment) is a date on which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares as of, and the certificate for such shares shall be dated, the
next succeeding business day on which the stock transfer books of the Company
are open (whether before, on or after the date of expiration of the Exercise
Period), and the Warrant Agent shall be under no duty to deliver the certificate
for such shares until such date.  The Company covenants and agrees that it shall
not cause its stock transfer books to be closed for a period of more than 20
consecutive business days except upon consolidation, merger, sale of all or
substantially all of its assets, dissolution or liquidation or as otherwise
provided by law.

     9.  Fractional Interests.  The Company shall not be required to issue any
         --------------------                                                 
Warrant Certificate evidencing a fraction of a Warrant or to issue fractions of
shares of securities on the exercise of the Warrants. If any fraction
(calculated to the nearest one-hundredth) of a Warrant or a share of securities
would, except for the provisions of this Section 9, be issuable on the exercise
of any Warrant, the Company shall, in lieu thereof, round down to the lowest
whole Warrant.  By accepting a Warrant Certificate, the holder thereof expressly
waives any right to receive a Warrant Certificate evidencing any fraction of a
Warrant, or to receive any fractional share of securities upon exercise of a
Warrant.

     10.  Reservation of Securities and Property; Exemption from Registration.
          -------------------------------------------------------------------  
The Company covenants that it will at all times, solely for the purpose of issue
and delivery upon exercise of the Warrants, reserve and keep available, free
from preemptive and other rights, out of its authorized and unissued or treasury
shares of Common Stock, such number of shares of Common Stock and any other
securities or property which shall then be issuable and/or deliverable upon the
exercise of all outstanding Warrants. The Company covenants that all securities
which shall be so issuable shall, upon such issue be duly authorized, validly
issued,

                                       9
<PAGE>
 
fully paid and nonassessable.  The Warrants, and all securities issued upon
exercise of the Warrants, shall be exempt from registration pursuant to 15
U.S.C. (S) 77c(a)(10).

     11.  Reduction of Conversion Price Below Par Value. Before taking any
          ---------------------------------------------                   
action that would cause an adjustment pursuant to Section 7 reducing the portion
of the Purchase Price required to purchase one share of capital stock below the
then par value (if any) of a share of such capital stock, the Company will use
commercially reasonable efforts to take any corporate action which, in the
opinion of its counsel, may be necessary so that the Company may validly and
legally issue fully paid and nonassessable shares of such capital stock.

     12.  Payment of Taxes.  The Company covenants and agrees that it will pay
          ----------------                                                    
when due and payable any and all federal and state document stamp and other
original issue taxes which may be payable in respect of the original issuance of
the Warrant Certificates, or any shares of Common Stock or other securities upon
the exercise of Warrants.  The Company shall not, however, be required (i) to
pay any tax that may be payable in respect of any transfer involved in the
issuance, transfer or delivery of Warrant Certificates or the issuance or
delivery of Certificates for Common Stock or other securities in a name other
than that of the registered holder of the Warrant Certificate surrendered for
purchase or (ii) to issue or deliver any Certificate for shares of Common Stock
or other securities upon the exercise of any Warrant Certificate until any such
tax shall have been paid, all such tax being payable by the holder of such
Warrant Certificate at the time of surrender.

     13.  Notice of Certain Corporate Action. If, at any time during the
          ----------------------------------                            
Exercise Period (prior to the exercise of this Warrant in full), any of the
following events shall occur;

     (i) the Company shall declare any dividend or other distribution upon its
Common Stock payable otherwise than in cash out of earned surplus; or

     (ii) the Company shall offer to the holders of its Common Shares any
additional shares of the Company or options or warrants therefor or securities
convertible into shares of the Company or any right to subscribe therefor; or

     (iii)  dissolution, liquidation, winding-up of the Company or other similar
action of the Company requiring approval by the shareholders shall be proposed,

then, in each such case, the Company shall file with the Warrant Agent and the
Company, or the Warrant Agent on its behalf, shall mail (by first-class, postage
prepaid mail) to all registered holders of the Warrant Certificates, not less
than fifteen (15) days' prior notice of the date on which;

     (a) the books of the Company shall be closed or a record date taken for
determination of the shareholders entitled to such dividend, distribution or
subscription rights, or

                                       10
<PAGE>
 
     (b) the books of the Company shall be closed or a record date taken for
determination of the shareholders entitled to vote on such proposed dissolution,
liquidation, winding-up or other similar action;

and which shall also specify any record date for determination of holders of
Common Stock entitled to vote thereon or participate therein.

     Failure to give any such notice or any defect therein shall not affect the
legality or validity of any transaction listed in this Section 13.

     14.  Disposition of Proceeds on Exercise of Warrant Certificates, etc.  The
          -----------------------------------------------------------------     
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay to the Company all moneys received by the Warrant
Agent in respect of the purchase of securities or other property through the
exercise of such Warrants.

     The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its stock
transfer office. Copies of this Agreement may be obtained upon written request
addressed to the Warrant Agent at its stock transfer office in New York, New
York.

     15.  Warrant Certificate Holder Not Deemed a Stockholder.  No holder, as
          ---------------------------------------------------                
such of any Warrant Certificate shall be entitled to vote, receive dividends or
be deemed the holder of Common Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Warrants represented
thereby for any purpose whatever, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon the holder of any Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders (except as provided in Section
13 hereof), or to receive dividend or subscription rights, or otherwise, until
such Warrant Certificate shall have been duly exercised in accordance with the
provisions hereof.

     16.  Right of Action.  All rights of action in respect to this Agreement
          ---------------                                                    
are vested in the respective registered holders of the Warrant Certificates; and
any registered holder of any Warrant Certificate without the consent of the
Warrant Agent or of the holder of any Warrant Certificate, may, in his own
behalf for his own benefit, enforce, and may institute and maintain any suit,
action or preceding against the Company suitable to enforces or otherwise in
respect of his right to exercise the Warrants evidenced by such Warrant
Certificate, for the purchase of shares of the Common Stock in the manner
provided in the Warrant Certificate and in this Agreement.

                                       11
<PAGE>
 
     17.  Agreement of Holders of Warrant Certificates.  Every holder of a
          --------------------------------------------                    
Warrant Certificate by accepting the same consents and agrees with the Company,
the Warrant Agent and every other holder of a Warrant Certificate that:

     (a) the Warrant Certificates are transferable only on the registry books of
the Warrant Agent and only upon the terms and conditions set forth in this
Agreement; and

     (b) the Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the absolute owner of the
Warrants evidenced by such Warrant Certificate (notwithstanding any notation of
the ownership or other writing thereon made by anyone other than the Company or
the Warrant Agent) for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

     18.  Cancellation of Warrant Certificates.  If the Company shall purchase
          ------------------------------------                                
or otherwise acquire any Warrant Certificate after the issuance thereof, such
Warrant Certificate shall thereupon be delivered to the Warrant Agent and be
canceled by it and retired.  The Warrant Agent shall also cancel any Warrant
Certificate delivered to it for exercise, in whole or in part (in accordance
with Section 8), or delivered to it for transfer, split-up, combination or
exchange.  Warrant Certificates so canceled shall be delivered by the Warrant
Agent to the Company from time to time, or disposed of in accordance with the
instructions of the Company.

     19.  Concerning the Warrant Agent.  The Company shall pay to the Warrant
          ----------------------------                                       
Agent from time to time, on demand of the Warrant Agent, reasonable compensation
for all services rendered by it hereunder in accordance with the attached fee
schedule, and also its reasonable expenses and other reasonable disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also shall indemnify the
Warrant Agent for, and hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Warrant Agent, arising out of or in connection with the acceptance and
administration of this Agreement.

     20.  Merger or Consolidation or Change of Name of Warrant Agent.  Any
          ----------------------------------------------------------      
corporation into which the Warrant Agent, or any successor Warrant Agent, may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Warrant Agent, or any successor Warrant
Agent, shall be a party, or any corporation succeeding to the corporate trust
business of the Warrant Agent, or any successor Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 22. If at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, any of the Warrant
Certificates shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent and deliver such Warrant Certificates so countersigned; and in case at
that time any of the Warrant Certificates shall not have been countersigned, any
successor to the

                                       12
<PAGE>
 
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor Warrant Agent, and
in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.

     If at any time the name of the Warrant Agent shall be changed and at such
time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrant Certificates so countersigned, and in case at that time any
of the Warrant Certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in its prior name or in its
changed name; and in such cases such Warrant Certificates shall have the full
force provided in the Warrant Certificates and in this Agreement.

     21.  Duties Of Warrant Agent.  The Warrant Agent undertakes the duties and
          -----------------------                                              
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrant Certificates, by their
acceptance thereof, shall be bound:

     (a) The Warrant Agent may consult with counsel satisfactory to it (who may
be legal counsel for the Company), and the opinion of such legal counsel shall
be full and complete authorization and protection to the Warrant Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such opinion; provided, however, that the Warrant Agent shall have exercised
              -----------------                                             
reasonable care in the selection of such legal counsel.

     (b) Whenever in the performance of its duties under this Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
provided or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a Certificate signed by the Chairman of the Board or the
President or a Vice President or the Secretary of the Company and delivered to
the Warrant Agent, and such Certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such Certificate.

     (c) The Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.

     (d) The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Warrant
Certificates (except its countersignature on the Warrant Certificates and such
statements or recitals as describe the Warrant Agent or action taken or to be
taken by it) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.

                                       13
<PAGE>
 
     (e) The Warrant Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant Certificate; nor shall
it be responsible for the making of any change in the number of shares of Common
Stock required under the provisions of Section 7 or responsible for the manner,
method or amount of any such change or the ascertaining of the existence of
facts that would require any such adjustment or change; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any shares of
Common Stock will, when issued, be validly issued, fully paid and nonassessable.

     (f) The Warrant Agent shall be under no obligation to institute any action,
suit or legal proceeding or take any other action likely to involve expense
unless the Company or one or more registered holders of Warrants shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
expenses that may be incurred.  All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
institute by the Warrant Agent shall be brought in its name as Warrant agent,
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrants, as their respective rights or interests may appear.

     (g) The Warrant Agent and any stockholder, director, officer or employee of
the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction
with the Company as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

     (h) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board or President or a Vice President or the Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with the Warrant Agent's duties, and it shall not be liable for any action taken
or suffered or omitted by it in good faith in accordance with instructions of
any such officer.

     (i) The Warrant Agent will not incur any liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken, or any
failure to take action, in reliance on any notice, resolution waiver, consent,
order, certificate, or other papers, document or instrument reasonably believed
by the Warrant Agent to be genuine and to have been signed, sent or presented by
the proper party or parties.

                                       14
<PAGE>
 
     (j) The Warrant Agent will act hereunder solely as agent of the Company in
a ministerial capacity, and its duties will be determined solely by the
provisions hereof. The Warrant Agent will not be liable for anything that it may
do or refrain from doing in connection with this Agreement except for its own
gross negligence, bad faith or willful misconduct.

     22.  Change of Warrant Agent.  The Warrant Agent may resign and be
          -----------------------                                      
discharged from its duties under this Agreement upon 30 days' prior written
notice, sent to the Company by registered or certified mail.  The Company may
remove the Warrant Agent or any successor Warrant agent upon 30 days prior
written notice, sent to the Warrant Agent or successor warrant agent, as the
case may be, by registered or certified mail.  If the Warrant Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent and shall, within 15 days following
such appointment, give notice thereof in writing to each registered holder of
the Warrant Certificates. If the Company shall fail to make such appointment
within a period of 15 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent, then the Company agrees to perform the duties of
the Warrant Agent hereunder until a successor Warrant Agent is appointed. After
appointment the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent shall
deliver and transfer to the successor Warrant Agent any property at the time
held by it hereunder and execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Failure to give any notice provided for
in this Section, however, or any defect therein shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment
of the successor Warrant Agent, as the case may be.

     23.  Issuance of New Warrant Certificates. Notwithstanding any of the
          ------------------------------------                            
provisions of this Agreement, or the several Warrant Certificates to the
contrary, the Company may, at its option, issue new Warrant Certificates in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the number or kind of shares purchasable under the several Warrant
Certificates made in accordance with the provisions of this Agreement.

     24.  Notices. Notice or demand pursuant to this Agreement to be given or
          -------                                                            
made on the Company by the Warrant Agent or by the registered holder of any
Warrant Certificate shall be sufficiently given or made if sent by first class
or registered mail, postage prepaid, addressed (until another address is filed
in writing by the Company with the Warrant Agent) as follows:

     Subject to the provisions of Section 22, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made if
sent by first class or registered mail, postage prepaid, addressed (until
another address is filed in writing by the Warrant Agent with the Company) as
follows:

                                       15
<PAGE>
 
          Stevens International, Inc.
          5500 Airport Freeway
          Fort Worth, Texas  76117
          Attn: President

     A copy of any notice to be given or made by the Company or by the Warrant
Agent pursuant to this Agreement shall also be given by first class or
registered mail, postage prepaid, to:

          Jackson & Walker, L.L.P.
          901 Main Street
          Suite 6000
          Dallas, Texas  75202
          Attn:   Charles D. Maguire, Jr.

     Any notice or demand authorized to be given or and to the registered holder
of any Warrant Certificate under this Agreement shall be sufficiently given or
made if sent by first class or registered mail, postage prepaid, to the last
address of such holder as it shall appear on the registers maintained by the
Warrant Agent.

     25.  Modification of Agreement. The Warrant Agent may, without the consent
          -------------------------                                            
or concurrence of the holders of the Warrant Certificates, by supplemental
agreement or otherwise, concur with the Company in making any changes or
corrections in this Agreement that the Warrant Agent shall have been advised by
counsel (who may be counsel for the Company) are necessary or desirable to cure
any ambiguity or to correct any defective or inconsistent provision or clerical
omission or manifest error herein contained or to make any other provisions in
regard to matters or questions arising hereunder and which shall not be
inconsistent with the provisions of the Warrant Certificates and which shall not
adversely affect the interests of the holders of Warrant Certificates; provided,
that the Warrant Agent shall sign any amendment or supplement authorized
pursuant to Section 25 if such amendment or supplement does not adversely affect
the Warrant Agent's rights, duties, liabilities or immunities under this
Agreement.  As of the date hereof, this Agreement contains the entire and only
agreement, understanding, representation, condition, warranty or covenant
between the parties hereto with respect to the matters herein, supersedes any
and all other agreements between the parties hereto relating to such matters,
and may be modified or amended only by a written agreement signed by both
parties hereto pursuant to the authority granted by the first sentence of this
Section 25.

     26.  Successors.  All the covenants and provisions of this Agreement by or
          ----------                                                           
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.

     27.  Governing Law.  This Agreement and each Warrant Certificate issued
          -------------                                                     
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all

                                       16
<PAGE>
 
purposes shall be construed in accordance with the laws of such state applicable
to contracts made and performed in such state.

     28.  Termination.  This Agreement shall terminate as of the close of
          -----------                                                    
business on the date of expiration of the Exercise Period, or such earlier date
upon which all Warrants shall have been exercised or redeemed, except as to
Section 8(d) (which shall survive such expiration to the extent any Warrants
have been validly exercised in accordance with such section 8(d) prior to the
expiration of the Exercise Period) and except that the Warrant Agent shall
account to the Company pursuant to Section 4 as to all Warrants outstanding and
all cash held by it as of the close of business on the expiration of the
Exercise Period.

     29.  Benefits of this Agreement. Nothing in this Agreement or in the
          --------------------------                                     
Warrant Certificates shall be construed to give to any person or corporation
other than the Company, the Warrant Agent, and their respective successors and
assigns hereunder and the registered holders of the Warrant Certificates any
legal or equitable rights remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, their respective successors and assigns hereunder and the
registered holders of the Warrant Certificates.

     30.  Descriptive Headings.  The descriptive headings of the several
          --------------------                                          
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

     31.  Counterparts.  This Agreement may be executed in any number of
          ------------                                                  
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.

                                       17
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and the year first above written.

                              COMPANY:

                              STEVENS INTERNATIONAL, INC.



                              By:   /s/ Constance I. Stevens
                                    ------------------------
                                    Name: Constance I. Stevens
                                    Title: Vice President-Administration



                              WARRANT AGENT:

                              AMERICAN STOCK TRANSFER &
                              TRUST COMPANY



                              By:   /s/ Herbert J. Lemmer
                                    ---------------------
                                    Name: Herbert J. Lemmer
                                    Title: Vice President

                                       18