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                                                                    EXHIBIT 10.3


                             REGISTRATION AGREEMENT

         THIS AGREEMENT is made as of April 18, 1997, by and among Kerr Group,
Inc., a Delaware corporation (the "Company"), and Madeleine L.L.C., a New York
limited liability company (the "Purchaser"), and each other Person who becomes a
party to this Agreement after the date hereof pursuant to Section 3.5 below.
Certain capitalized terms used herein are defined in Section 2 below.

         WHEREAS, the Purchaser is the holder of Warrants issued by the Company
in connection with the revolving credit facility provided to the Company of up
to $8,500,000 pursuant to the terms and provisions of the Loan and Security
Agreement, dated as of the date hereof, by and among the Company and the
Purchaser; and

         WHEREAS, the Company presently has each of its shares of Common Stock
and its $1.70 Class B Cumulative Convertible Preferred Stock, Series D,
registered under the Exchange Act and listed on the New York Stock Exchange;

         WHEREAS, in connection with the purchase of such Warrants, the Company
has agreed to provide for the registration of certain of its securities under
the Securities Act;

         WHEREAS, the registration of such securities may permit the delayed or
continuous offering of the Registrable Securities of the Company;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:

         1.   Registration under Securities Act, etc.

         1.1. Registration on Request.

         (a)  Request. Upon the written request of one or more Initiating
    Holders, requesting that the Company effect the registration under the
    Securities Act of all or part of such Initiating Holders' Registrable
    Securities and specifying the intended method of disposition thereof, which
    method may include a delayed or continuous offering pursuant to Rule 415,
    the Company will, subject to the terms of this Agreement, promptly give
    written notice of such requested registration to all registered holders of
    Registrable Securities, and thereupon the Company will use its reasonable
    best efforts to effect the registration under the Securities Act of:
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              (i)   the Registrable Securities which the Company has been so
         requested to register by such Initiating Holders for disposition in
         accordance with the intended method of disposition stated in such
         request,

              (ii)  all other Registrable Securities the holder of which shall
         have made a written request to the Company for registration thereof
         within 30 days after the giving of such written notice by the Company,
         and

              (iii) all shares of Common Stock which the Company may elect to
         register in connection with the offering of Registrable Securities
         pursuant to this Section 1.1 ("Additional Registrable Shares"),

all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
Additional Registrable Shares, if any, so to be registered.

         (b) Registration Statement Form. Registrations under this Section 1.1
    shall be on such appropriate registration form of the Commission (i) as
    shall be selected by the Company and reasonably acceptable to the holders of
    more than 50% (by number of shares) of the Registrable Securities so to be
    registered (excluding the Additional Registrable Shares, if any) and (ii) as
    shall permit the disposition of such Registrable Securities in accordance
    with the intended method or methods of disposition specified in the request
    for such registration by such Initiating Holders. The Company agrees to
    include in any such registration statement all information which holders of
    Registrable Securities being registered shall reasonably request.

         (c) Expenses. The Company shall pay all Registration Expenses in
    connection with any registration requested pursuant to this Section 1.1 by
    any Initiating Holders of Registrable Securities. The discounts and
    commissions of the underwriters or agents and transfer taxes, if any, in
    connection with such registration requested under this Section 1.1 shall be
    allocated pro rata among all Persons on whose behalf securities of the
    Company are included in such registration, on the basis of the respective
    amounts of the securities offered and sold on their behalf.

         (d) Effective Registration Statement. A registration requested pursuant
    to this Section 1.1 shall not be deemed to have been effected (i) unless a
    registration statement with respect thereto has become effective, provided
    that a registration statement which does not become effective after the
    Company has filed such registration statement with respect thereto solely by
    reason of the unreasonable refusal to proceed of the Initiating Holders
    (which may be based upon the advice of counsel) shall be deemed to have been
    effected by the Company at the request of such Initiating Holders unless the
    Initiating Holders shall have elected to pay all Registration Expenses in
    connection with such registration, (ii) if, after it has become effective,
    such registration statement becomes subject to any stop order, injunction or
    other order or requirement of the Commission or other governmental agency or
    court for any reason, or (iii) the conditions to closing specified in the
    Offering Agreement entered into in

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    connection with such registration are not satisfied, other than by reason of
    some unreasonable act or omission by such Initiating Holders.

         (e) Selection of Underwriters or Agents. If a requested registration
    pursuant to this Section 1.1 involves an Offering, the managing or lead
    underwriter(s) or agent(s) thereof shall be selected by the holders of at
    least a majority (by number of shares) of the Registrable Securities as to
    which registration has been requested (other than Additional Registrable
    Shares, if any) subject to prior approval of the Company, which such
    approval shall not unreasonably withheld.

         (f) Priority in Requested Registrations. If a requested registration
    pursuant to this Section 1.1 involves an Offering, and the managing
    underwriter or agent advises the Company in writing (an "Underwriter's
    Letter"), with a copy to each holder of Registrable Securities requesting
    registration, that, in its opinion, the number of securities to be included
    in such Offering (including securities of the Company which are not
    Registrable Securities) exceeds the number which may reasonably be expected
    to be sold in such Offering within a price range that such managing
    underwriter or agent believes is acceptable to the holders of a majority of
    the Registrable Securities (other than Additional Registrable Shares, if
    any) to be included in such Offering (such Underwriter's Letter to state the
    basis of such belief and the approximate number of such Registrable
    Securities which may be distributed without such effect, the "Marketable
    Amount"), then the Company may, upon written notice to all holders of such
    Registrable Securities, reduce the number of Registrable Securities to be
    included in such Offering to the number equal to the Marketable Amount in
    the following order of priority: (i) first, the securities of the Company
    which are proposed to be included in the Offering which are not Registrable
    Securities, then (ii) the securities the Company proposes to sell which are
    proposed to be included in such Offerings; then (iii) pro rata among the
    holders of Registrable Securities requesting such registration on the basis
    of the number of such securities requested to be included by such holders.
    No Registrable Securities or any other securities excluded from the
    underwriting by reason of the underwriter's marketing limitation shall be
    included in such registration.

         (g) Postponement of a Requested Registration. The Company shall be
    entitled to postpone the filing of a registration requested pursuant to this
    Section 1.1 for a period of time of up to ninety (90) days after the receipt
    of a written request by a Initiating Holder if the filing of a registration
    statement would require (i) the disclosure therein, pursuant to the
    Securities Act, of previously undisclosed, material pending corporate
    development or undertaking, such as an acquisition or a financing, which, in
    the good faith determination of the Board of Directors of the Company, would
    be materially and adversely affected by such disclosure or (ii) any special
    audit or the acceleration of any annual audit of the financial statements of
    the Company or any subsidiary (or any company proposed to be acquired by the
    Company); provided that if such disclosure or such financial statements are
    required by the Exchange Act, the Company shall not be entitled to so
    postpone the filing of such registration statement,

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    and provided, further, that the Company shall be entitled to so postpone a
    registration statement only once during any one-hundred and eighty (180) day
    period.

         (h) Limitations. Notwithstanding any provision of this Section 1.1 to
    the contrary, the Company shall not be obligated to effect, or take any
    action to effect, any such registration pursuant to this Section 1.1:

         (x) In any particular jurisdiction in which the Company would be
    required in execute a general consent to service of process in effecting
    such registration, qualification or compliance, unless the Company is
    already subject to service in such jurisdiction and except as may be
    required by the Securities Act or applicable rules or regulations
    thereunder; or

         (y) After the Company has effected three (3) such registrations
    pursuant to this Section 1.1 and such registrations have been declared or
    ordered effective and the sales of such Registrable Securities shall have
    closed.

         1.2. Incidental Registration.

         (a) Right to Include Registrable Securities. If the Company at any time
    proposes to register any of its equity securities under the Securities Act
    (other than by a registration of Form S-4 or S-8 or any successor or similar
    forms and other than pursuant to Section 1.1), whether or not for sale for
    its own account, it will each such time give prompt written notice (in any
    event such notice shall be provided at least 45 days prior to the filing of
    such registration statement) to all holders of Registrable Securities of its
    intention to do so and of such holders' rights under this Section 1.2. Upon
    the written request of any such holder made within 30 days after the receipt
    of any such notice, the Company will, subject to the terms of this
    Agreement, use its reasonable best efforts to effect the registration under
    the Securities Act of all Registrable Securities which the Company has been
    so requested to register by the holders thereof, to the extent requisite to
    permit the disposition of the Registrable Securities so to be registered, by
    inclusion of such Registrable Securities in the registration statement which
    covers the securities which the Company proposes to register, provided 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 either not to register or to delay registration of such
    securities, the Company may, at its election, give written notice of such
    determination to each holder of Registrable Securities and, thereupon, (i)
    in the case of a determination not to register, shall be relieved of its
    obligation to register any Registrable Securities in connection with such
    registration (but not from its obligation to pay the Registration Expenses
    in connection therewith), without prejudice, however, to the rights of any
    holder or holders of Registrable Securities entitled to do so to request
    that such registration be effected as a registration under Section 1.1, and
    (ii) in the case of a determination to delay registering, shall be permitted
    to delay registering any Registrable Securities, for the

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    same period as the delay in registering such other securities. Any
    registration effected under this Section 1.2 shall not relieve the Company
    of its obligation to effect any registration upon request under Section 1.1
    nor shall any such registration hereunder be deemed to have been effected
    pursuant to Section 1.1. The Company will pay all Registration Expenses in
    connection with each registration of Registrable Securities requested
    pursuant to this Section 1.2.

         (b) Priority in Incidental Registrations. If (i) a registration
    pursuant to this Section 1.2 involves an Offering of the securities so being
    registered, whether or not for sale for the account of the Company, to be
    distributed by or through one or more underwriters or agents of recognized
    standing under underwriting terms appropriate for such a transaction, (ii)
    the Registrable Securities so requested to be registered for sale for the
    account of holders of Registrable Securities are not also to be included in
    such Offering (either because the Company has not been requested so to
    include such Registrable Securities pursuant to Section 1.4(b) or, if
    requested to do so, is not obligated to do so under Section 1.4(b)), and
    (iii) the managing underwriter or agent of such Offering shall provide the
    Company (with a copy to each of the holders of the Registrable Securities
    requesting such registration) with an Underwriter's Letter, then the Company
    may, upon written notice to all holders of such Registrable Securities,
    reduce pro rata (if and to the extent stated by such managing underwriter to
    be necessary to eliminate such effect) the number of such Registrable
    Securities the registration of which shall have been requested by each
    holder of Registrable Securities such that the resultant aggregate number of
    such Registrable Securities so included in such registration shall be equal
    to the Marketable Amount, provided, that in such event, each holder shall
    have an option, exercisable by written notice to the Company with 30 days
    after such holder has received the Underwriter's Letter, to not participate
    in such Offering and withdraw its request provided under Section 1.2(a). No
    Registrable Securities or any other securities excluded from the
    underwriting by reason of the underwriter's marketing limitation shall be
    included in such registration.

         1.3 Registration Procedures. If and whenever (a) the Company is
required to use its reasonable best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Sections 1.1 and
1.2 or (b) there is a Requesting Holder in connection with any other proposed
registration by the Company under the Securities Act, the Company shall, as
expeditiously as possible:

             (i) prepare and (within 90 days after the end of the period within
         which requests for registration may be given to the Company or in any
         event as soon thereafter as possible) (in the case of a registration
         pursuant to Section 1.1, such filing to be made within 90 days after
         the initial request of one or more Initiating Holders of Registrable
         Securities or in any event as soon thereafter as possible) file with
         the Commission the requisite registration statement to effect such
         registration (including such audited financial statements as may be
         required by the Securities Act (subject to Section 1.1(g)) and
         thereafter use its reasonable best efforts to cause such registration
         statement to become and remain effective

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         in compliance with the provisions of the Securities Act, provided, that
         the Company may discontinue any registration of its securities which
         are not Registrable Securities (and, under the circumstances specified
         in Section 1.2(a), its securities which are Registrable Securities) at
         any time prior to the effective date of the registration statement
         relating thereto;

             (ii)  prepare and file with the Commission such amendments and
         supplements (including, without limitation, any document incorporated
         by reference or deemed to be incorporated by reference therein) to such
         registration statement and the prospectus used in connection therewith
         as may be necessary to keep such registration statement effective and
         to comply with the provisions of the Securities Act with respect to the
         disposition of all securities covered by such registration statement
         until the earlier of (a) such time as all of such securities have been
         disposed of in accordance with the intended methods of disposition by
         the seller or sellers thereof set forth in such registration statement
         and (b) 120 days from the effective date of such registration
         statement;

             (iii) furnish to each seller of Registrable Securities covered by
         such registration statement and each Requesting Holder and each
         underwriter or agent, if any, of the securities being sold by such
         seller such number of conformed copies of such registration statement
         and of each such amendment and supplement thereto (in each case
         including all exhibits and, upon request, all schedules, appendixes and
         exhibits to any agreement or document included in any such exhibit),
         such number of copies of the prospectus contained in such registration
         statement (including each preliminary prospectus (or supplement
         thereto) and any summary prospectus) and any other prospectus (or
         supplement thereto) filed under Rule 424 under the Securities Act, in
         conformity with the requirements of the Securities Act, and such other
         documents, as such seller and underwriter or agent, if any, may
         reasonably request in order to facilitate the public sale or other
         disposition of the Registrable Securities owned by such seller;

             (iv)  use its reasonable best efforts to register or qualify all
         Registrable Securities and other securities covered by such
         registration statement under such other securities laws or blue sky
         laws of such jurisdictions as any seller thereof and any underwriter or
         agent of the securities being sold by such seller and any Requesting
         Holder shall reasonably request, to keep such registrations or
         qualifications in effect for so long as such registration statement
         remains in effect, and take any other action which may be reasonably
         necessary or advisable to enable such seller and underwriter or agent
         to consummate the disposition in such jurisdictions of the securities
         owned by such seller, provided that the Company shall not for any such
         purpose be required to qualify generally to do business as a foreign
         corporation in any jurisdiction wherein it

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         would not but for the requirements of this subdivision (iv) be
         obligated to be so qualified or to consent to general service of
         process in any such jurisdiction;

             (v) use its reasonable best efforts to cause all Registrable
         Securities covered by such registration statement to be registered with
         or approved by such other governmental agencies or authorities as may
         be necessary to enable the seller or sellers thereof to consummate the
         disposition of such Registrable Securities;

             (vi) furnish to each seller of Registrable Securities and each
         Requesting Holder a signed counterpart, addressed to such seller, such
         Requesting Holder and the underwriters or agents, if any of

                  (x)   in the case of an underwritten offering, an opinion of
             counsel for the Company, dated the Offering Date, substantially in
             the form delivered to the underwriter, and

                  (y)   to the full extent permitted under the prevailing
             accounting or auditing standards, a "comfort" letter (or, in the
             case of such Person which does not satisfy the conditions for
             receipt of a "comfort" letter specified in Statement on Auditing
             Standards ("SAS") No. 72 (or any similar pronouncement), an "agreed
             upon procedures" letter specified in SAS No. 75 (or any similar
             pronouncement) and interim report specified in SAS No. 71 (or any
             similar pronouncement), in each case, dated the Offering Date,
             signed by the independent public accountants who have certified the
             Company's financial statements included in such registration
             statement, covering substantially the same matters with respect to
             such registration statement (and the prospectus (as amended and
             supplement) included therein) and, in the case of the accountants'
             letter, with respect to events subsequent to the date of such
             financial statements, as are customarily covered in opinions of
             issuer's counsel and in accountants' letters delivered to the
             underwriters in underwritten public offerings of securities and, in
             the case of the accountants' letter, such other financial matters,
             and, in the case of the legal opinion, (if applicable) such other
             legal matters, as such seller or such Requesting Holder (or the
             lead or managing underwriters or agents, if any) may reasonably
             request;

                  (vii) notify the holders of Registrable Securities and the
             lead or managing underwriter(s) or agent(s), if any, promptly and
             confirm such advice in writing promptly thereafter:

                  (v)   when the registration statement, the prospectus or any
             prospectus supplement related thereto or amendment to the
             registration statement has been filed, and, with respect to the
             registration statement

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             or any post-effective amendment thereto, when the same has become
             effective;

                    (w) of any comments by the Commission or any request by the
             Commission for amendments or supplements to the registration
             statement or the prospectus (or any supplement thereto) or for
             additional information;

                    (x) of the issuance by the Commission of any stop order
             suspending the effectiveness of the registration statement or the
             initiation or contemplation of any proceedings by any Person for
             that purpose;

                    (y) if at any time the representations and warranties of the
             Company made as contemplated by Section 1.4 cease to be true and
             correct in any material respect; and

                    (z) of the receipt by the Company of any notification with
             respect to the suspension of the qualification of any Registrable
             Securities for sale under the U.S. or applicable foreign securities
             or blue sky laws of any jurisdiction or the initiation or threat of
             any proceeding for such purpose;

             (viii) notify each seller of Registrable Securities covered by such
         registration statement and each Requesting Holder, at any time when a
         prospectus relating thereto is required to be delivered under the
         Securities Act, immediately upon the happening of any event as a result
         of which, the prospectus (including any amendment or supplement
         thereto) included in such registration statement, as then in effect,
         includes an untrue statement of a material fact or omits to state any
         material fact required to be stated therein or necessary to make the
         statement therein not misleading in the light of the circumstances
         under which they were made, and at the request of any such seller or
         Requesting Holder promptly prepare and furnish to such seller or
         Requesting Holder and each underwriter or agent, if any, 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 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 light of the circumstances under which they
         were made;

             (ix)   otherwise use its reasonable best efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders, as soon as reasonably practicable, an earnings
         statement covering the period of at least twelve months, but not more
         than eighteen months, beginning with the first full calendar quarter
         after the effective date of such registration statement, which earnings
         statement shall satisfy the provisions

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         of Section 11(a) of the Securities Act and Rule 158 thereunder, and
         will furnish to each such seller and each Requesting Holder at least
         five business days prior to the filing thereof a copy of any amendment
         or supplement to such registration statement or prospectus and shall
         not file any thereof to which any such seller or any Requesting Holder
         shall have reasonably objected on the grounds that such amendment or
         supplement does not comply in all material respects with the
         requirements of the Securities Act;

             (x)    make available for inspection by a representative or
         representatives of the holders of Registrable Securities, each such
         representative representing the holders of not less than a majority of
         the Registrable Securities included in the registration, any
         underwriter or agent participating in any disposition pursuant to the
         registration statement and any attorney or accountant retained by such
         selling holders or underwriter or agent (each, an "Inspector"), all
         financial and other records, pertinent corporate documents and
         properties of the Company (the "Records"), and cause the Company's
         officers, directors and employees to supply all information reasonably
         requested by any such Inspector in connection with such registration in
         order to permit a reasonable investigation within the meaning of
         Section 11 of the Securities Act;

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

             (xii)  enter into such customary agreements and take such other
         customary actions as sellers of such Registrable Securities holding
         more than 50% of the shares so to be sold shall reasonably request in
         order to expedite or facilitate the disposition of such Registrable
         Securities; and

             (xiii) use its reasonable best efforts to list all Registrable
         Securities covered by such registration statement on any securities
         exchange on which any of the securities of the same class as the
         Registrable Securities are then listed and, if not so listed, to be
         listed on the NASD automated quotation system and, if listed on the
         NASD automated quotation system, use its reasonable best efforts to
         secure designation of all such Registrable Securities covered by such
         registration statement as a NASDAQ "national market system security"
         within the meaning of Rule 11Aa2-1 of the Commission or, failing that,
         to secure NASDAQ authorization for such Registrable Securities and,
         without limiting the generality of the foregoing, to arrange for at
         least two market makers to register as such with respect to such
         Registrable Securities with the NASD.

         As a condition to its obligations hereunder, the Company may require
each seller of Registrable Securities as to which any registration is being
effected to furnish to the Company such information necessary for compliance
with Regulation S-K under the Securities

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Act regarding such seller, the Registrable Securities of such seller and the
distribution of such securities as the Company may reasonably request in
writing.

         Each holder of Registrable Securities hereby agrees that, upon receipt
of any notice from the Company of the occurrence of any event of the kind
described in subdivision (viii) of this Section 1.3, such holder will forthwith
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (viii) of this Section 1.3 and, if so directed by
the Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.

         1.4. Offerings.

         (a) Requested Offerings. If requested by the underwriters or agents for
    any Offering by holders of Registrable Securities pursuant to a registration
    requested under Section 1.1, the Company will enter into an underwriting
    agreement or similar agreement, e.g., distribution or selling agency
    agreement (each, an "Offering Agreement") with such underwriters or agents
    for such Offering, such agreement to be reasonably satisfactory in substance
    and form to the Company, each such holder and the underwriters or agents,
    and to contain such representations and warranties by the Company and such
    other terms and provisions as are generally prevailing in agreements of this
    type, including, without limitations, indemnities to the effect and to the
    extent provided in Section 1.7. The holders of the Registrable Securities
    will cooperate in good faith with the Company in the negotiation of the
    Offering Agreement and will give consideration to the reasonable suggestions
    of the Company regarding the form thereof, provided that nothing herein
    contained shall diminish the foregoing obligations of the Company. The
    holders of Registrable Securities to be distributed by such underwriters or
    agents shall be parties to such Offering Agreement and may, at their option,
    require that any or all of the representations and warranties by, and the
    other agreements on the part of, the Company to and for the benefit of such
    underwriters or agents shall also be made to and for the benefit of such
    holders of Registrable Securities and that any or all of the conditions
    precedent to the obligations of such underwriters or agents under such
    Offering Agreement be conditions precedent to the obligations of such
    holders of Registrable Securities.

         (b) Incidental Underwritten Offerings. If the Company at any time
    proposes to register any of its securities under the Securities Act as
    contemplated by Section 1.2 and such securities are to be distributed by or
    through one or more underwriters or agents, the Company will, if requested
    by any holder of Registrable Securities as provided in Section 1.2 and
    subject to the provisions of Section 1.2(b), use its reasonable best efforts
    to arrange for such underwriters or agents to include all the Registrable
    Securities to be offered and sold by such holder among the securities to be
    distributed by such underwriters or agents.

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         (c) Holdback Agreements.

             (i)  Each holder of Registrable Securities agrees, if so required
         by the managing underwriter or agent, not to sell, make any short sale
         of, loan, grant any option for the purchase of, effect any public sale
         or distribution of or otherwise dispose of any equity securities of the
         Company, during a period of 30 days after the Offering Date of any
         Offering, except as part of such Offering. Notwithstanding the
         foregoing sentence, each holder of Registrable Securities subject to
         the foregoing sentence shall be entitled to sell during the foregoing
         period securities in a sale exempt from registration under the
         provisions of the Securities Act.

             (ii) The Company agrees (x) not to sell, make any short sale of,
         loan, grant any option for the purchase of, effect any public sale or
         distribution of or otherwise dispose of its equity securities or
         securities convertible into or exchangeable or exercisable for any of
         such securities during the seven days prior to and the 90 days after
         the Offering Date of any Offering pursuant to Section 1.1 or 1.2,
         except as part of such registration and except pursuant to
         registrations on Form S-4, S-8 or any successor or similar forms
         thereto, and (y) to cause each holder of its equity securities or any
         securities convertible into or exchangeable or exercisable for any of
         such securities, in each case purchased directly from the Company at
         any time after the date of this Agreement (other than in a public
         offering, including an offering registered on Form S-8) to agree not to
         sell, make any short sale of, loan, grant any option for the purchase
         of, effect any such public sale or distribution of or otherwise dispose
         of such securities during such period except as part of such
         registration.

         (d) Participation in Offerings. No Person may participate in any
    Offering hereunder unless such Person (i) agrees to sell such Person's
    securities on the basis provided in any Offering Agreements approved,
    subject to the terms and conditions hereof, by the Company and the holders
    of a majority of Registrable Securities to be included in such Offering and
    (ii) completes and executes all questionnaires, indemnities, Offering
    Agreements and other documents (other than powers of attorney) required
    under the terms of such Offering Agreements.

         1.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters or
agents, if any, each Requesting Holder and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its directors, officers, legal counsel and the
independent public accountants who have certified its financial statements as
shall be necessary, in the reasonable opinion of such holders' and such

                                       11
<PAGE>   12
underwriters' or agents' respective counsel, to conduct a "reasonable
investigation" within the meaning of Section 11 of the Securities Act.

         1.6. Rights of Requesting Holders. The Company will not file any
registration statement under the Securities Act (other than by a registration on
Form S-8, S-4 or any successor form), unless it shall first have given to each
holder of Registrable Securities at the time outstanding (other than any such
Person who acquired all such securities held by such Person in a public offering
registered under the Securities Act or as the direct or indirect transferee of
shares initially issued in such an offering), at least 30 days prior written
notice thereof. Any such Person who shall so request within 30 days after such
notice (a "Requesting Holder") shall have the rights of a Requesting Holder
provided in Sections 1.3, 1.5 and 1.7. In addition, if any such registration
statement refers to any Requesting Holder by name or otherwise as the holder of
any securities of the Company, then such holder shall have the right to require
therein language, in form and substance reasonably satisfactory to such holder,
relating to such holder to the extent that such reference to such holder by name
or otherwise is not required by the Securities Act, the limitation or deletion
of the reference to such holder to such extent.

         1.7. Indemnification.

         (a) Indemnification by the Company. In the event of any registration of
    any securities of the Company under the Securities Act, the Company will,
    and hereby does, indemnify and hold harmless in the case of any registration
    statement filed pursuant to Section 1.1 or 1.2, the holder of any
    Registrable Securities covered by such registration statement, its directors
    and officers, each other Person who participates as an underwriter in the
    offering or sale of such securities and each other Person, if any, who
    controls such holder or any such underwriter within the meaning of the
    Securities Act, against any losses, claims, damages or liabilities, joint or
    several, to which such holder or Requesting Holder or any such director of
    officer or underwriter or controlling person may become subject under the
    Securities Act or otherwise, insofar as such losses, claims, damages or
    liabilities (or actions or proceedings, whether commenced or threatened, in
    respect thereof) arise out of or are based upon any untrue statement or
    alleged untrue statement of any material fact contained in any registration
    statement under which such securities were registered under the Securities
    Act, any preliminary prospectus, final prospectus or summary prospectus
    contained therein, or any amendment or supplement thereto, or any omission
    or alleged omission to state therein a material fact required to be stated
    therein or necessary to make the statements therein not misleading, and the
    Company will reimburse such holder, such Requesting Holder and each such
    director, officer, underwriter and controlling person for any legal or any
    other expenses reasonably incurred by them in connection with investigating
    or defending (or preparing to investigate and defend) any such loss, claim,
    liability, action or proceeding, provided that the Company shall not be
    liable to any such Person in any such case to the extent that any such loss,
    claim, damage, liability (or action or proceeding in respect thereof) or
    expense arises out of or is based upon an untrue statement or alleged untrue
    statement or omission or alleged omission made in such

                                       12
<PAGE>   13
    registration statement, any such preliminary prospectus, final prospectus,
    summary prospectus, amendment or supplement in reliance upon and in
    conformity with written information furnished to the Company by such holder
    or Requesting Holder, as the case may be, specifically stating that it is
    for use in the preparation thereof.

         (b) Indemnification by the Sellers. The Company may require, as a
    condition to including any Registrable Securities in any registration
    statement filed pursuant to Section 1.3, that the Company shall have
    received an undertaking substantially in the form of Section 1.7(a) from the
    prospective seller of such Registrable Securities, to indemnify and hold
    harmless (in the same manner and to the same extent as set forth in
    subdivision (a) of this Section 1.7) the Company, each director of the
    Company, each officer of the Company and each other person, if any, who
    controls the Company within the meaning of the Securities Act, with respect
    to any statement or alleged statement in or omission or alleged omission
    from such registration statement, any preliminary prospectus, final
    prospectus or summary prospectus contained therein, or any amendment or
    supplement thereto, if such statement or alleged statement or omission or
    alleged omission was made in reliance upon and in conformity with written
    information furnished to the Company by such seller specifically stating
    that it is for use in the preparation of such registration statement,
    preliminary prospectus, final prospectus, summary prospectus, amendment or
    supplement. Any such indemnity shall remain in full force and effect,
    regardless of any investigation made by or on behalf of the Company or any
    such director, officer or controlling person and shall survive the transfer
    of such securities by such seller.

         (c) Notices of Claims, etc. Promptly after receipt by an indemnified
    party of notice of the commencement of any action or proceeding involving a
    claim referred to in the preceding subdivisions of this Section 1.7, such
    indemnified party will, if a claim in respect thereof is to be made against
    an indemnifying party, give written notice to the latter of the commencement
    of such action, provided that the failure of any indemnified party to give
    notice as provided herein shall not relieve the indemnifying party of its
    obligations under the preceding subdivisions of this Section 1.7, except to
    the extent that the indemnifying party is actually prejudiced by such
    failure to give notice. In case any such action is brought against an
    indemnified party, unless in such indemnified party's reasonable judgment a
    conflict of interest between such indemnified and indemnifying parties may
    exist in respect of such claim, the indemnifying party shall be entitled to
    participate in and to assume the defense thereof, jointly with any other
    indemnifying party similarly notified, to the extent that the indemnifying
    party may wish, with counsel reasonably satisfactory to such indemnified
    party, and after notice from the indemnifying party to such indemnified
    party of its election so to assume the defense thereof, the indemnifying
    party shall not be liable to such indemnified party for any legal or other
    expenses subsequently incurred by the latter in connection with the defense
    thereof other than reasonable costs of investigation. No indemnifying party
    shall, without the consent of the indemnified party, consent to entry of any
    judgment or enter into any settlement of any such action which does not
    include as an unconditional term thereof the giving by the claimant or

                                       13
<PAGE>   14
    plaintiff to such indemnified party of a release from all liability , or a
    covenant not to sue, in respect to such claim or litigation. No indemnified
    party shall consent to entry of any judgment or enter into any settlement of
    any such action the defense of which has been assumed by an indemnifying
    party without the consent of such indemnifying party.

         (d) Other Indemnification. Indemnification similar to that specified in
    the preceding subdivisions of this Section 1.7 (with appropriate
    modifications) shall be given by the Company and each seller of Registrable
    Securities with respect to any required registration or other qualification
    of securities under any Federal or state law or regulation of any
    governmental authority, other than the Securities Act.

         (e) Indemnification Payments. The indemnification required by this
    Section 1.7 shall be made by periodic payments of the amount thereof during
    the course of the investigation or defense, as and when bills are received
    or expense, loss, damage or liability is incurred, in any event, not later
    than 10 days after such amount is requested by the indemnified party.

         (f) Contribution. If the indemnification provided for in the preceding
    subdivisions of this Section 1.7 is unavailable to an indemnified party in
    respect of any expense, loss, claim, damage or liability referred to
    therein, then each indemnifying party, in lieu of indemnifying such
    indemnified party, shall contribute to the amount paid or payable by such
    indemnified party as a result of such expense, loss, claim, damage or
    liability referred to therein, then each indemnifying party,. in lieu of
    indemnifying such indemnifying party, shall contribute to the amount paid or
    payable by such indemnified party as a result of such expense, loss, claim,
    damage or liability (i) in such proportion as is appropriate to reflect the
    relative benefits received by the Company on the one hand and the holder or
    underwriter, as the case may be, on the other form the distribution of the
    Registrable Securities or (ii) if the allocation provided by clause (i)
    above is not permitted by applicable law, in such proportion as is
    appropriate to reflect not only the relative benefits referred to in clause
    (i) above but also the relative fault of the Company on the one hand and of
    the holder or underwriter, as the case may be, on the other in connection
    with the statement or omissions which resulted in such expense, loss, damage
    or liability, as well as any other relevant equitable considerations. The
    relative benefits received by the Company on the one hand and the holder or
    underwriter, as the case may be, on the other in connection with the
    distribution of the Registrable Securities shall be deemed to be in the same
    proportion as the total net proceeds received by the Company from the
    initial sale of the Registrable Securities by the Company to the purchasers
    pursuant to the Offering Agreement bear to the gain, if any, realized by the
    selling holder or the underwriting discounts and commissions received by the
    underwriter, as the case may be. The relative fault of the Company on the
    one hand and of the holder or underwriter, as the case may be, on the other
    shall be determined by reference to, among other things, whether the untrue
    or alleged untrue statement of a material fact or omission to state a
    material fact relates to information supplied by the Company, by the

                                       14
<PAGE>   15
    holder or by the underwriter and the parties' relative intent, knowledge,
    access to information and opportunity to correct or prevent such statement
    or omission, provided that the foregoing contribution agreement shall not
    inure to the benefit of any indemnified party if indemnification would be
    unavailable to such indemnified party by reason of the provisions contained
    in the first sentence of subdivision (a) of this Section 1.7, and in no
    event shall the obligation of any indemnifying party to contribute under
    this subdivision (f) exceed the amount that such indemnifying party would
    have been obligated to pay by way of indemnification if the indemnification
    provided for under subdivisions (a) or (b) of this Section 1.7 had been
    available under the circumstances.

         The Company and the holders of Registrable Securities agree that it
    would not be just and equitable if contribution pursuant to this subdivision
    (f) were determined by pro rata allocation (even if the holders, Requesting
    Holders and any underwriters or agents were treated as one entity for such
    purpose) or by any other method of allocation that does not take account of
    the equitable considerations referred to in the immediately preceding
    paragraph. The amount paid or payable by an indemnified party as a result of
    the losses, claims, damages and liabilities referred to in the immediately
    preceding paragraph shall be deemed to include, subject to the limitations
    set forth in the preceding sentence and subdivision (c) of this Section 1.7,
    any legal or other expenses reasonably incurred by such indemnified party in
    connection with investigating or defending any such action or claim.

         Notwithstanding the provisions of this subdivision (f), no holder of
    Registrable Securities or underwriter shall be required to contribute any
    amount in excess of the amount by which (i) in the case of any such holder,
    the net proceeds received by such holder from the sale of Registrable
    Securities or (ii) in the case of an underwriter, the total price at which
    the Registrable Securities purchased by it and distributed to the public
    were offered to the public exceeds, in any such case, the amount of any
    damages that such holder or underwriter has otherwise been required to pay
    by reason of such untrue or alleged untrue statement or omission. 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.

         (g) The foregoing indemnity agreement of the Company is subject to the
    condition that, insofar as it relates to any loss, claim, liability or
    damage made in a preliminary prospectus but eliminated or remedied in the
    amended prospectus on file with the Commission at the time the registration
    statement in question becomes effective or the amended prospectus filed with
    the Commission pursuant to Commission Rule 424(b) (the "Final Prospectus"),
    such indemnity or contribution agreement shall not inure to the benefit of
    any underwriter or holder of Registrable Securities if a copy of the Final
    Prospectus was furnished to the underwriter or such holder and was not
    furnished to the person asserting the loss, liability, claim or damage at or
    prior to the time such action is required by the Securities Act.

                                       15
<PAGE>   16
         2. Certain Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:

         Affiliates: Shall have the meaning ascribed thereto by the Securities
Act.

         Commission: The Securities and Exchange Commission (or, as the context
may require, the staff of the Securities and Exchange Commission) or any other
federal agency at the time administering the Securities Act.

         Common Stock: The common stock of the Company and any security into
which such Common Stock shall have been changed or any security resulting from
any reclassification of such Common Stock.

         Initiating Holders: Any holder or holders of Registrable Securities and
initiating a request pursuant to Section 1.1 for the registration of all or part
of such holder's Registrable Securities.

         NASD: The National Association of Securities Dealers, Inc.

         Offering: Any offer or solicitation of any offer to purchase
Registrable Securities registered under the Securities Act whether or not by a
firm commitment or best offer underwriting or in connection with a delayed or
continuous offering in compliance with Rule 415 under the Securities Act (or any
successor or similar rule).

         Offering Agreement: As defined in Section 1.4.

         Offering Date: (a) if the applicable Offering is an underwritten
offering, then the closing date of such Offering; or (b) if the applicable
Offering is in connection with a delayed or continuous offering in compliance
with Rule 415, then the date the applicable registration statement is declared
effective by the Commission [and the relevant closing date of such Offering].

         Other Securities: Any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or otherwise) which the
holders of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities.

         Person: A corporation, an association, a partnership, an organization,
a business, an individual, a government or political subdivision thereof or a
governmental agency.

         Registrable Securities: (a) Any shares of Common Stock or Other
Securities issued or issuable upon exercise of any Warrant, (b) any securities
issued or issuable with respect to any securities referred to in the foregoing
subdivision by way of stock dividend or

                                       16
<PAGE>   17
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization, and (c) any securities issued or
issuable with respect to any Warrants in connection with (i) a recapitalization,
merger, consolidation or other reorganization or (ii) otherwise. As to any
particular Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (A) 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, (B) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (C) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (d)
they shall have ceased to be outstanding.

         Registration Expense: All reasonable expenses incident to the Company's
performance of or compliance with Section 1, including, without limitation, all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits, agreed upon procedures, interim reports, or
"cold comfort" letters required by or incident to such performance and
compliance, the fees and disbursements of any counsel and accountants (which
fees and disbursements of such counsel and accountants shall not exceed $15,000)
retained by the holder or holders of more than 50% of the Registrable Securities
being registered (other than Additional Registrable Shares), costs of policies
of insurance against liabilities arising out of the public offering of the
Registrable Securities being registered, if any, and any fees and disbursements
of underwriters or agents customarily paid by issuers or sellers of securities,
but excluding underwriting discounts and commissions and transfer taxes, if any,
provided that, in any case where Registration Expenses are not to be borne by
the Company, such expenses shall not include salaries of Company personnel or
general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters or agents of
the Company or other expenses for the preparation of financial statements or
other data normally prepared by the Company in the ordinary course of its
business or which the Company would have incurred in any event.

         Requesting Holder: As defined in Section 1.6.

         Rule 415: Rule 415 under the Securities Act (or any successor or
similar rule).

         Securities Act: The Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

                                       17
<PAGE>   18
         Warrants: Any of the Warrants originally issued by the Company to the
Purchaser on the date hereof and any Warrants issued in substitution therefor in
accordance with the terms and provisions thereof.

         3. Miscellaneous.

            3.1. No Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities or amend any of its
charter documents which is inconsistent with or violates the rights granted to
the holders of Registrable Securities in this Agreement.

            3.2. Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially and
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).

            3.3. Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.

            3.4. Amendments and Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the holders of Registrable Securities unless
such modification, amendment or waiver is approved in writing by (i) the Company
and (ii) the holders of at least a majority of the Registrable Securities then
in existence who are a party to this Agreement; provided that no such amendment
or action which materially adversely affects any one holder of Registrable
Securities, as such, vis-a-vis the other holders of Registrable Securities, as
such, shall be effective against such holder without the prior written consent
of such holder. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.

            3.5. Additional Parties. Each Person who after the date of this
Agreement is the assignee or transferee of any of the Warrants shall be
entitled, but not obligated, to execute a counterpart to this Agreement and
become a party hereto (each, an "Additional Party").

            3.6. Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the

                                       18
<PAGE>   19
respective successors and assigns of the parties hereto whether so expressed or
not including, without limitation, any Person which is the successor to the
Company. In addition, whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of purchasers or holders
of Registrable Securities are also for the benefit of, and enforceable by, any
subsequent holder of Registrable Securities.

            3.7. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

            3.8. Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.

            3.9. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.

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

            3.11. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PRINCIPLES THEREOF.

            3.12. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable overnight courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to holder of Registrable Securities at the address
indicated on the books and records of the Company and to the Company at its
principal executive office (to the attention of the Company's president) or to
such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party.

            3.13 Judicial Proceedings. Any legal action, suit or proceeding
brought against the Company with respect to this Agreement may be brought in any
federal court of the Southern District of New York or any state court located in
New York County, State of New York, and by execution and delivery of this
Agreement, the Company irrevocably waives any claim (by way of motion, as a
defense or otherwise) of improper venue, that it is not subject personally to
the jurisdiction of such court, that such courts are an inconvenient forum or
that this Agreement or the subject matter may not be enforced in or by

                                       19
<PAGE>   20
such court. The Company hereby irrevocably consents to the service of process of
any of the aforementioned courts in any such action, suit or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, at
its address provided for in Section 3.12, such service to become effective 10
days after such mailing. Nothing herein contained shall be deemed to affect the
right of any party to serve process in any manner permitted by law or commence
legal proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section. EACH OF THE PURCHASER AND THE COMPANY HEREBY
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING, WHETHER AT
LAW OR EQUITY, BROUGHT BY IT OR THE PURCHASER IN CONNECTION WITH THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            3.14 Interpretation. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine and/or neuter
forms, and the singular form of nouns and pronouns shall include the plural and
vice versa. Unless the context otherwise requires, any reference to a prospectus
or a prospectus supplement shall include all documents incorporated by
reference, or deemed to be incorporated by reference, therein in accordance with
the Securities Act.

            3.15 Termination. The registration rights set forth in this
Agreement shall not be available to any holder of Registrable Securities if, in
the opinion of counsel to the Company, upon which opinion the Purchaser shall be
expressly entitled to rely, all of the Registrable Securities then owned by such
holders could be sold in any 90-day period pursuant to Rule 144.



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                                       20
<PAGE>   21
            IN WITNESS WHEREOF, the parties hereto have executed this
Registration Agreement on the day and year first above written.

                                 KERR GROUP, INC.

                                 By: /s/ D. Gordon Strickland
                                     ------------------------------------------
                                     Name:  D. Gordon Stricklland
                                     Title: President & Chief Executive Officer

                                 MADELEINE L.L.C.

                                 By: /s/ Kevin Genda
                                     ------------------------------------------
                                     Name: Kevin Genda
                                     Title: Vice President

                                       21