<PAGE>   1

                                                                     EXHIBIT 4.1



         THE OFFERING AND SALE OF THIS WARRANT AND THE SHARES OF
         COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
         APPLICABLE STATE SECURITIES LAWS AND THIS WARRANT AND SUCH
         SHARES MUST BE HELD INDEFINITELY UNLESS THE OFFERING AND
         SALE THEREOF ARE SUBSEQUENTLY REGISTERED UNDER SAID ACT
         AND ANY APPLICABLE STATE SECURITIES LAWS OR THIS WARRANT
         AND SUCH SHARES ARE DISPOSED OF PURSUANT TO AN EXEMPTION
         FROM SUCH REGISTRATION REQUIREMENTS.
         

                                    WARRANT


 Company:                      Celebrity, Inc.
                               a Texas corporation

 Number of Shares:             100,000, subject to adjustment as provided
                               herein

 Class of Stock:               Common Stock

 Initial Exercise Price:       $1.00 per share

 Issued as of:                 February 3, 1998

 Expiration Date:              February 3, 2003


         FOR VALUE RECEIVED, the adequacy and receipt of which are hereby
acknowledged, Celebrity, Inc., a Texas corporation, hereby certifies that
FOOTHILL CAPITAL CORPORATION, a California corporation, and its successors and
assigns, are entitled to purchase from the Company at any time and from time to
time on and after the date hereof until 12:00 midnight California local time on
the Expiration Date at an initial exercise price of One Dollar ($1.00) per
share of Common Stock of One Hundred Thousand (100,000) fully paid and
nonassessable shares of Common Stock of the Company; on the terms and
conditions hereinafter set forth.  The number of such shares of Common Stock
and the Exercise Price are subject to adjustment as provided in this Warrant.

         1.      Certain Definitions.  As used in this Warrant, the following
terms have the following definitions:

         "Additional Shares of Common Stock" means all shares of Common Stock
issued or issuable by the Company after the date of this Warrant, excluding an
amount not to exceed
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5% of the Company's outstanding Common Stock on a fully diluted basis
(determined at the time the calculation is being made) issued pursuant to the
Celebrity, Inc. 1992 Stock Option Plan and the Celebrity, Inc. 1993 Stock
Purchase Plan at a price per share less than the Current Market Price or
Exercise Price.

         "Common Stock" means the Company's Common Stock, par value $0.01 per
share, and includes any common stock of the Company of any class or classes
resulting from any reclassification or reclassifications thereof which is not
limited to a fixed sum or percentage of par value in respect of the rights of
the holders thereof to participate in dividends and in the distribution of
assets upon the voluntary or involuntary liquidation, dissolution or winding up
of the Company.

         "Company" means Celebrity, Inc., a Texas corporation.

         "Convertible Securities" means evidence of indebtedness, shares of
stock or other securities which are at any time directly or indirectly
convertible into or exchangeable for Additional Shares of Common Stock.

         "Current Market Price" of a share of Common Stock or of any other
security as of a relevant date means: (i) the Fair Value thereof as determined
in accordance with clause (ii) of the definition of Fair Value with respect to
common stock or any other security that is not listed on a national securities
exchange or traded on the over-the-counter market or quoted on NASDAQ, and (ii)
the average of the daily closing prices for the ten (10) trading days before
such date (excluding any trades which are not bona fide arm's length
transactions) with respect to Common Stock or any other security that is listed
on a national securities exchange or traded on the over-the-counter market or
quoted on NASDAQ.  The closing price for each day shall be (i) the last sale
price of shares of Common Stock or such other security, regular way, on such
date or, if no such sale takes place on such date, the average of the closing
bid and asked prices thereof on such date, in each case as officially reported
on the principal national securities exchange on which the same are then listed
or admitted to trading, or (ii) if no shares of Common Stock or if no
securities of the same class as such other security are then listed or admitted
to trading on any national securities exchange, the average of the reported
closing bid and asked prices thereof on such date in the over-the-counter
market as shown by the National Association of Securities Dealers automated
quotation system or, if no shares of Common Stock or if no securities of the
same class as such other security are then quoted in such system, as published
by the National Quotation Bureau, Incorporated or any similar successor
organization, and in either case as reported by any member firm of the New York
Stock Exchange selected by the Warrantholders.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Exchange Act




                                    2
<PAGE>   3
shall include a reference to the comparable section, if any, of any such
successor Federal statute.

         "Exercise Period" means the period commencing on the date hereof and
ending at 12:00 midnight California local time on the Expiration Date.

         "Exercise Price" means initially $1.00 per share, subject to
adjustment as provided in this Warrant.

         "Expiration Date" means the February 3, 2003.

         "Fair Value" means: (i) with respect to a share of Common Stock or any
other security, the Current Market Price thereof, and (ii) with respect to any
other property, assets, business or entity, an amount determined in accordance
with the following procedure:  The Company and the holders of the Warrants and
Warrant Shares, as applicable, shall use their best efforts to mutually agree
to a determination of Fair Value within ten (10) days of the date of the event
requiring that such a determination be made.  If the Company and such holders
are unable to reach agreement within said ten (10) day period, the Company and
such holders shall within ten (10) days of the expiration of the ten (10) day
period referred to above each retain a separate independent investment banking
firm (which firm shall not be the investment banking firm regularly retained by
the Company).  If either the Company or such holders fails to retain such an
investment banking firm during such period, then the independent investment
banking firm retained by such holders or the Company, as the case may be,
acting alone, shall take the actions outlined below.  Such firms shall
determine (within thirty (30) days of their being retained) the Fair Value of
the security, property, assets, business or entity, as the case may be, in
question and deliver their opinion in writing to the Company and to such
holders.  If such firms cannot jointly make the determination, then, unless
otherwise directed by agreement of the Company and such holders, such firms, in
their sole discretion, shall choose another investment banking firm independent
of the Company and such holders, which firm shall make the determination and
render an opinion as promptly as practicable.  In either case, the
determination so made shall be conclusive and binding on the Company and such
holders.  The fees and expenses of any such determination made by any and all
such independent investment banking firms shall be paid by the Company.  If
there is more than one holder of Warrants, and/or Warrant Shares entitled to a
determination of Fair Value in any particular instance, each action to be taken
by the holders of such Warrants and/or Warrant Shares under this Section shall
be taken by a majority in interest of such holders and the action taken by such
majority (including as to any mutual agreement with the Company with respect to
Fair Value and as to any selection of investment banking firms) shall be
binding upon all such holders.  In the case of a determination of the Fair
Value per share of Common Stock, the Company and such holders shall not take
into consideration, and shall instruct all such investment banking firms not to
take into consideration, any premium for shares representing control of the
Company, any discount for any minority interest therein or any restrictions on
transfer under applicable federal and state securities laws or otherwise.





                                       3
<PAGE>   4

         "Foothill" means Foothill Capital Corporation, a California
corporation.

         "Indemnified Party" and "Indemnifying Party" have the meanings set
forth in Section 11(e)(iii).

         "Registrable Stock" means: (i) all Warrant Shares which are issuable
to the Warrantholders pursuant to the Warrants, whether or not the Warrants
have in fact been exercised and whether or not such Warrant Shares have in fact
been issued, (ii) all Warrant Shares acquired by the Warrantholders pursuant to
the Warrants, (iii) any shares of Common Stock, whether or not such shares of
Common Stock have in fact been issued, and stock or other securities of the
Company issued upon conversion of, in a stock split or reclassification of, or
a stock dividend or other distribution on, or in substitution or exchange for,
or otherwise in connection with, such Warrant Shares.  For purposes of Section
11, a Warrantholder of record shall be treated as the record holder of the
related Warrant Shares and other securities issuable pursuant to the Warrants.
Registrable Stock shall not include Warrant Shares or Common Stock that the
holder is entitled to sell without restriction under Rule 144(k) promulgated
under the Securities Act.

         "Regulated Warrantholder" means any Warrantholder which is, or the
parent of which is, subject to the Bank Holding Company Act, or any successor
statute, or any other federal or state banking laws and regulations.

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

         "Warrant(s)" means this Warrant and any warrants issued in exchange or
replacement of this Warrant or upon transfer hereof.

         "Warrantholder(s)" means Foothill and its successors and assigns.

         "Warrant Shares" means shares of Common Stock issuable to
Warrantholders pursuant to the Warrants.

         2.      Exercise of Warrant.  This Warrant may be exercised, in whole
or in part, at any time and from time to time during the Exercise Period by
written notice to the Company and upon payment to the Company of the Exercise
Price (subject to adjustment as provided herein) for the shares of Common Stock
in respect of which the Warrant is exercised.

         3.      Form of Payment of Exercise Price.  Anything contained herein
to the contrary notwithstanding, at the option of the Warrantholders, the
Exercise Price may be paid in any one or a combination of the following forms:
(a) by wire transfer to the Company, (b) by the Warrantholder's check to the
Company, (c) by the cancellation of any indebtedness owed by the Company and/or
any subsidiaries of the Company to the Warrantholder, and/or (d) by the
surrender to the Company of Warrants, Warrant Shares, Common Stock and/or other





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<PAGE>   5
securities of the Company and/or any subsidiaries of the Company having a Fair
Value equal to the Exercise Price.

         4.      Cashless Exercise/Conversion.  In lieu of exercising this
Warrant as specified in Sections 2 and 3 above, the Warrantholders may from
time to time at the Warrantholders' option convert this Warrant, in whole or in
part, into a number of shares of Common Stock of the Company determined by
dividing (A) the aggregate Fair Value of such shares or other securities
otherwise issuable upon exercise of this Warrant minus the aggregate Exercise
Price of such shares by (B) the Fair Value of one such share.

         5.      Certificates for Warrant Shares; New Warrant.  The Company
agrees that the Warrant Shares shall be deemed to have been issued to the
Warrantholders as the record owner of such Warrant Shares as of the close of
business on the date on which payment for such Warrant Shares has been made (or
deemed to be made by conversion) in accordance with the terms of this Warrant.
Certificates for the Warrant Shares shall be delivered to the Warrantholders
within a reasonable time, not exceeding five (5) days, after this Warrant has
been exercised or converted.  A new Warrant representing the number of shares,
if any, with respect to which this Warrant remains exercisable also shall be
issued to the Warrantholders within such time so long as this Warrant has been
surrendered to the Company at the time of exercise.

         6.      Adjustment of Exercise Price, Number of Shares and Nature of
Securities Issuable Upon Exercise of Warrants.

                 (a)      Exercise Price:  Adjustment of Number of Shares.  The
Exercise Price shall be subject to adjustment from time to time as hereinafter
provided.  Upon each adjustment of the Exercise Price, the Warrantholders shall
thereafter be entitled to purchase, at the Exercise Price resulting from such
adjustment, a number of shares determined by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.

                 (b)      Adjustment of Exercise Price Upon Issuance of Common
Stock.  If and whenever after the date hereof the Company shall issue or sell
Additional Shares of Common Stock without consideration or for a consideration
per share less than the Current Market Price or the Exercise Price then in
effect immediately prior to the issuance or sale of such shares, then the
Exercise Price in effect immediately prior to such issuance or sale of such
shares shall be reduced to a number which shall be calculated by dividing (A)
an amount equal to the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the then
existing Exercise Price plus (2) the aggregate consideration, if any, received
by the Company upon such issue or sale, by (B) the total number of shares of
Common Stock outstanding immediately after such issue or sale.





                                       5
<PAGE>   6

                          No adjustment of the Exercise Price, however, shall
be made in an amount less than $.01 per share, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to $.01 per share or more.

                          The provisions of this Section 6(b) shall not apply
to any Additional Shares of Common Stock which are distributed to holders of
Common Stock pursuant to a stock split for which an adjustment is provided
under Section 6(f).

                 (c)      Further Provisions for Adjustment of Exercise Price
Upon Issuance of Additional Shares of Common Stock and Convertible Securities.
For purposes of Section 6(b), the following provisions shall also be
applicable:

                          (i)     In case at any time on or after the date
hereof, the Company shall declare any dividend, or authorize any other
distribution, upon any stock of the Company of any class, payable in Additional
Shares of Common Stock or by the issuance of Convertible Securities, such
declaration or distribution shall be deemed to have been issued or sold (as of
the record date) without consideration and shall thereby cause an adjustment in
the Exercise Price as required by Section 6(b).

                          (ii)    (A)      In case at any time on or after the
date hereof, the Company shall in any manner issue or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, there shall be determined the price per share for
which Additional Shares of Common Stock are issuable upon the conversion or
exchange thereof, such determination to be made by dividing (a) the total
amount received or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof by (b) the maximum aggregate number of Additional Shares of
Common Stock issuable upon conversion or exchange of all such Convertible
Securities for such minimum aggregate amount of additional consideration; and
such issue or sale shall be deemed to be an issue or sale for cash (as of the
date of issue or sale of such Convertible Securities) of such maximum number of
Additional Shares of Common Stock at the price per share so determined, and
shall thereby cause an adjustment in the Exercise Price, if such an adjustment
is required by Section 6(b).

                                  (B)      If such Convertible Securities shall
by their terms provide for an increase or increases, with the passage of time,
in the amount of additional consideration, if any, payable to the Company, or
in the rate of exchange upon the conversion or exchange thereof, the adjusted
Exercise Price shall, upon any such increase becoming effective, be increased
to such Exercise Price as would have been in effect had the adjustments made
upon the issuance of such Convertible Securities been made upon the basis of
(a) the issuance of the number of shares of Common Stock theretofore actually
delivered upon the conversion or exchange of such Convertible Securities (and
the total consideration





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<PAGE>   7
received upon issuance of such Convertible Securities and upon the conversion
or exchange thereof), (b) the issuance of all Common Stock, all Convertible
Securities and all rights and options to purchase Common Stock issued after the
issuance of such Convertible Securities (and the total consideration received
upon the issuance thereof and received or to be received upon the conversion,
exchange or exercise thereof), and (c) the original issuance at the time of
such change of any such Convertible Securities then still outstanding (and the
total consideration received upon the issuance thereof and received or to be
received upon the conversion or exchange thereof); provided, however, that any
such increase or increases shall not exceed, in the aggregate, the amount of
the original reduction of the Exercise Price attributable to the Convertible
Securities.

                                  (C)      If any rights of conversion or
exchange evidenced by such Convertible Securities shall expire without having
been exercised, the adjusted Exercise Price shall forthwith be readjusted to
such Exercise Price as would have been in effect had an adjustment with respect
to such Convertible Securities been made on the basis that the only Additional
Shares of Common Stock issued or sold were those actually issued upon the
conversion or exchange of such Convertible Securities, and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of such Convertible Securities.

                          (iii)   (A)      In case at any time on or after the
date hereof, the Company shall in any manner grant or issue any rights or
options to subscribe for, purchase or otherwise acquire Additional Shares of
Common Stock, whether or not such rights or options are immediately
exercisable, there shall be determined the price per share for which Additional
Shares of Common Stock are issuable upon the exercise of such rights or
options, such determination to be made by dividing (a) the total amount, if
any, received or receivable by the Company as consideration for the granting of
such rights or options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of such rights
or options if the maximum number of Additional Shares were issued pursuant to
such rights or options for such minimum aggregate amount of additional
consideration, by (b) the maximum number of Additional Shares of Common Stock
of the Company issuable upon the exercise of all such rights or options for
such minimum aggregate amount of additional consideration; and the granting of
such rights or options shall be deemed to be an issue or sale for cash (as of
the date of the granting of such rights or options) of such maximum number of
Additional Shares of Common Stock at the price per share so determined, and
shall thereby cause an adjustment in the Exercise Price, if such an adjustment
is required by Section 6(b).

                                  (B)      If such rights or options shall by
their terms provide for an increase or increases, with passage of time, in the
amount of additional consideration payable to the Company upon the exercise
thereof, the adjusted Exercise Price shall, upon any such increases becoming
effective, be increased to such Exercise Price as would have





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<PAGE>   8
been in effect had the adjustments made upon the issuance of such rights or
options been made upon the basis of (a) the issuance of the number of shares of
Common Stock theretofore actually delivered upon the exercise of such rights or
options (and the total consideration received upon the issuance of such rights
or options and upon the exercise thereof), (b) the issuance of all Common
Stock, all rights and options and all Convertible Securities issued after the
issuance of such rights and options (and the total consideration received upon
the issuance thereof and received or to be received upon the conversion,
exchange or exercise thereof), and (c) the original issuance at the time of
such change of any such rights or options then still outstanding (and the total
consideration received upon the issuance of the rights or options and received
or to be received upon the exercise thereof); provided, however, that any such
increase or increases in the Exercise Price shall not exceed, in the aggregate,
the amount of the original reduction of the Exercise Price attributable to the
grant of such rights or options.

                                  (C)      If any such rights or options shall
expire without having been exercised, the adjusted Exercise Price shall
forthwith be readjusted to such Exercise Price as would have been in effect had
an adjustment with respect to such rights or options been made on the basis
that the only Additional Shares of Common Stock so issued or sold were those
actually issued or sold upon the exercise of such rights or options and that
they were issued or sold for the consideration actually received by the Company
upon such exercise, plus the consideration, if any, actually received by the
Company for the granting of such rights or options.

                          (iv)    (A)      In case at any time on or after the
date hereof, the Company shall grant any rights or options to subscribe for,
purchase or otherwise acquire Convertible Securities, there shall be determined
the price per share for which Additional Shares of Common Stock are issuable
upon the exchange or conversion of such Convertible Securities if such rights
or options were exercised, such determination to be made by dividing (a) the
total amount, if any, received or receivable by the Company as consideration
for the issuance of such rights or options, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the exercise
of such rights or options if the maximum number of Convertible Securities were
issued pursuant to such rights or options for such minimum aggregate amount of
additional consideration, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exchange or conversion
of such Convertible Securities if the maximum number of Additional Shares were
issued pursuant to such Convertible Securities for such minimum aggregate
amount of additional consideration, by (b) the maximum aggregate number of
Additional Shares of Common Stock issuable upon the exchange or conversion of
the Convertible Securities for such minimum aggregate amount of additional
consideration; and the issue or sale of such rights or options shall be deemed
to be an issue or sale for cash (as of the date of the granting of such rights
or options) of such maximum number of Additional Shares of Common Stock at the
price per share so determined, and thereby shall cause an adjustment in the
Exercise Price, if such an adjustment is required by Section 6(b).





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<PAGE>   9

                                  (B)      If such rights or options to
subscribe for or otherwise acquire Convertible Securities shall by their terms
provide for an increase or increases, with the passage of time, in the amount
of additional consideration payable to the Company upon the exercise of such
rights or options or the exchange or conversion of such Convertible Securities,
the adjusted Exercise Price shall, forthwith upon any such increase becoming
effective, be increased to such Exercise Price as would have been in effect had
the adjustments made upon the issuances of such rights or options been made
upon the basis of (a) the issuance of the number of shares of Common Stock
theretofore actually delivered upon the exchange or conversion of such
Convertible Securities (and the total consideration received upon the issuance
of such Convertible Securities and received or to be received upon the
conversion or exchange thereof), (b) the issuance of all Common Stock and all
rights, options and Convertible Securities issued after the issuance of such
rights and options (and the total consideration received upon the issuance of
such Convertible Securities, rights and options and received or to be received
upon the exercise, conversion or exchange thereof) and (c) the original
issuances at the time of such change of any such rights, options and
Convertible Securities issued upon exercise of such rights or options which are
then still outstanding (and the total consideration received upon the issuance
of such Convertible Securities, rights and options and received or to be
received upon the exercise of such rights or options); provided, however, that
any such increase or increases shall not exceed, in the aggregate, the amount
of the original reduction of the Exercise Price attributable to the grant of
such rights or options.

                                  (C)      If any such rights, options or
rights of conversion or exchange of such Convertible Securities shall expire
without having been exercised, exchanged or converted, the adjusted Exercise
Price shall forthwith be readjusted to such Exercise Price as would have been
in effect had an adjustment been made with respect to such rights, options or
rights of conversion or exchange of such Convertible Securities on the basis
that the only Additional Shares of Common Stock so issued or sold were those
actually issued or sold upon the exercise of such rights or options and
exchange or conversion of such Convertible Securities and that they were issued
or sold for the consideration actually received by the Company upon exercise of
such rights and options and exchange or conversion of such Convertible
Securities, plus the consideration, if any, actually received by the Company
for the granting of such rights, options or Convertible Securities.

                          (v)     In any case where an adjustment has been made
in the Exercise Price upon the issuance of Convertible Securities or any rights
or options to purchase Convertible Securities or Additional Shares of Common
Stock pursuant to this Section 6(c), no further adjustment shall be made at the
time of the conversion of any such Convertible Securities or at the time of the
exercise of any such rights or options.

                          (vi)    In case at any time on or after the issuance
of this Warrant any shares of Common Stock or Convertible Securities shall be
issued or sold for a consideration other than cash, the amount of the
consideration other than cash payable to the Company shall





                                       9
<PAGE>   10
be deemed to be the Fair Value of such consideration.  Whether or not the
consideration so received is cash, the amount thereof shall be determined after
deducting therefrom any expenses incurred or any underwriting commissions or
concessions or discounts paid or allowed by the Company in connection
therewith.

                          (vii)   In case at any time the Company shall fix a
record date of the holders of its Common Stock for the purpose of entitling
them (a) to receive a dividend or other distribution payable in Common Stock,
Convertible Securities or rights or options to purchase either thereof, or (b)
to subscribe for or purchase Common Stock, Convertible Securities or rights or
options to purchase either thereof, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed, pursuant to
this Section 6(c), to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting
of such right of subscription or purchase, as the case may be.

                          (viii)  The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purposes of this Section
6(c).

                 (d)      Reorganization, Reclassification, Consolidation,
Merger or Sale.  If any capital reorganization or reclassification of the
capital stock of the Company, or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive cash, stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the Warrantholders shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions specified in this Warrant upon exercise of this Warrant and in lieu
of the shares of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby,
such cash, shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares of Common
Stock equal to the number of shares of such Common Stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby, and in any such case appropriate provision shall be made
with respect to the rights and interest of the Warrantholders to the end that
the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.  The Company shall not effect
any consolidation, merger or sale of all or substantially all of the assets of
the Company unless prior to or simultaneous with the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation, merger or





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<PAGE>   11
purchase of such assets shall assume, by written instrument executed and mailed
or delivered to the Warrantholders, the obligation to deliver to such
Warrantholders such cash (or cash equivalent), shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Warrantholders may
be entitled to receive and containing the express assumption of such successor
corporation of the due and punctual performance and observance of each
provision of this Warrant to be performed and observed by the Company and of
all liabilities and obligations of the Company hereunder.

                          In case any Additional Shares of Common Stock or
Convertible Securities or any rights or options to purchase any Additional
Shares of Common Stock or Convertible Securities shall be issued in connection
with any merger of another corporation into the Company, the amount of
consideration therefor shall be deemed to be the Fair Value of such portion of
the assets of such merged corporation as the Board of Directors of the Company
shall in good faith determine to be attributable to such Additional Shares of
Common Stock, Convertible Securities or rights or options, as the case may be,
and the Exercise Price shall be adjusted if such an adjustment is required in
accordance with  Section 6(b).

                 (e)      Company to Prevent Dilution.  In case at any time or
from time to time conditions arise by reason of action taken by the Company
which are not adequately covered by the provisions of this Section 6, and which
might materially and adversely affect the exercise rights of the Warrantholders
under any provision of this Warrant, unless the adjustment necessary shall be
agreed upon by the Company and the Warrantholders, the Board of Directors of
the Company shall appoint a firm of independent certified public accountants of
recognized national standing (who have not been employed by the Company within
the last five years), acceptable to the Warrantholders, who at the Company's
expense shall give their opinion upon the adjustment, if any, on a basis
consistent with the standards established in the other provisions of this
Section 6, necessary with respect to the Exercise Price and the number of
shares purchasable upon exercise of the Warrants, so as to preserve, without
dilution, the exercise rights of the Warrantholders.  Upon receipt of such
opinion, such Board of Directors shall forthwith make the adjustments described
therein.

                 (f)      Stock Splits and Reverse Splits.  In case at any time
the Company shall subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced and the number of shares of
Common Stock purchasable pursuant to this Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in case at any
time the Company shall combine its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased and the number of shares of
Common Stock purchasable upon the exercise of this Warrant immediately prior to
such combination shall be proportionately reduced.





                                       11
<PAGE>   12

                 (g)      Dissolution, Liquidation and Wind-Up.  In case the
Company shall, at any time prior to the expiration of this Warrant, dissolve,
liquidate or wind up its affairs, the Warrantholders shall be entitled, upon
the exercise of this Warrant, to receive, in lieu of the shares of Common Stock
of the Company which such Warrantholders would have been entitled to receive,
the same kind and amount of assets as would have been issued, distributed or
paid to such Warrantholders upon any such dissolution, liquidation or winding
up with respect to such shares of Common Stock of the Company, had such
Warrantholders been the holders of record of the Warrant Shares receivable upon
the exercise of this Warrant on the record date for the determination of those
persons entitled to receive any such liquidating distribution.  After any such
dissolution, liquidation or winding up which shall result in any cash
distribution in excess of the Exercise Price provided for by this Warrant, the
Warrantholders may, at each such Warrantholder's option, exercise the same
without making payment of the Exercise Price, and in such case the Company
shall, upon the distribution to said Warrantholders, consider that said
Exercise Price has been paid in full to it and in making settlement to said
Warrantholders, shall deduct from the amount payable to such Warrantholders an
amount equal to such Exercise Price.

                 (h)      Accountants' Certificate.  In each case of an
adjustment in the number of shares of Common Stock or other stock, securities
or property receivable on the exercise of the Warrants, the Company at its
expense shall cause independent public accountants of recognized standing
selected by the Company and acceptable to the Warrantholders to compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of (a) the consideration
received or to be received by the Company for any Additional Shares of Common
Stock, rights, options or Convertible Securities issued or sold or deemed to
have been issued or sold, (b) the number of shares of Common Stock of each
class outstanding or deemed to be outstanding, (c) the adjusted Exercise Price
and (d) the number of shares issuable upon exercise of this Warrant.  The
Company will forthwith mail a copy of each such certificate to each
Warrantholder.

         7.      Special Agreements of the Company.

                 (a)      Reservation of Shares.  The Company covenants and
agrees that all Warrant Shares will, upon issuance in accordance with the terms
of this Warrant, be validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder, and from all taxes, liens and charges
with respect to the issue thereof.  The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized, and reserved, a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.  The Company hereby covenants and agrees to
take all such action as may be necessary to assure that the par value per share
of the Common Stock is at all times equal to or less than the Exercise Price.





                                       12
<PAGE>   13

                 (b)      Avoidance of Certain Actions.  The Company will not,
by amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, issue or sale of securities or
otherwise, avoid or take any action which would have the effect of avoiding the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in
carrying out all of the provisions of this Warrant and in taking all of such
action as may be necessary or appropriate in order to protect the rights of the
Warrantholders against dilution or other impairment of their rights hereunder.

                 (c)      Securing Governmental Approvals.  If any shares of
Common Stock required to be reserved for the purposes of exercise of this
Warrant require registration with or approval of any governmental authority
under any federal law (other than the Securities Act) or under any state law
before such shares may be issued upon exercise of this Warrant, the Company
will, at its expense, as expeditiously as possible, cause such shares to be
duly registered or approved, as the case may be.

                 (d)      Listing on Securities Exchanges; Registration.  If,
and so long as, any class of the Company's Common Stock shall be listed on any
national securities exchange (as defined in the Exchange Act), the Company
will, at its expense, obtain and maintain the approval for listing upon
official notice of issuance of all Warrant Shares and maintain the listing of
Warrant Shares after their issuance; and the Company will so list on such
national securities exchange, will register under the Exchange Act (or any
similar statute then in effect), and will maintain such listing of, any other
securities that at any time are issuable upon exercise of this Warrant if and
at the time any securities of the same class shall be listed on such national
securities exchange by the Company.

                 (e)      Information Rights.  So long as the Warrantholders
hold this Warrant and/or any of the Warrant Shares, the Company shall deliver
to the Warrantholders (i) promptly after mailing, copies of all communications
to the stockholders of the Company, (ii) within ninety-five (95) days after the
end of each fiscal year of the Company, the annual audited financial statements
of the Company certified by the independent public accountants of recognized
standing, and (iii) within fifty (50) days after the end of each of the first
three quarters of each fiscal year, the Company's quarterly, unaudited
financial statements.

                 (f)      Restrictions on Public Sale by the Company.  The
Company will not effect any public or private sale or distribution of its
convertible debt or equity securities, including a sale pursuant to Regulation
D under the Securities Act, during the ten (10) day period prior to, and during
the ninety (90) day period beginning on, the closing date of each underwritten
offering by the Company made pursuant to a registration statement filed
pursuant to Sections 11(a) or 11(b); and the Company shall cause each holder of
its privately placed convertible debt or equity securities issued by it at any
time on or after the date of this Warrant to agree not to effect any public
sale or distribution of any such securities during such period, including a
sale pursuant to Rule 144 or Rule 144A under the Securities Act.





                                       13
<PAGE>   14

                 (g)      Preemptive Rights.  In the event the Company offers
to the Company's stockholders the right to purchase any securities of the
Company, then all shares of Common Stock issuable pursuant to the Warrants
shall be deemed to be issued and outstanding and held by the Warrantholders and
the Warrantholders shall be entitled to participate in such rights offering.

                 (h)      Compliance with Law.  The Company shall comply with
all applicable laws, rules and regulations of the United States and of all
states, municipalities and agencies and of any other jurisdiction applicable to
the Company and shall do all things necessary to preserve, renew and keep in
full force and effect and in good standing its corporate existence and
authority necessary to continue its business.

         8.      Fractional Shares.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.  With
respect to any fraction of a share called for upon exercise hereof, the Company
shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the Current Market Value of one share of Common Stock.

         9.      Notices of Stock Dividends, Subscriptions, Reclassifications,
Consolidations, Mergers, etc.  If at any time:  (i) the Company shall declare a
cash dividend (or an increase in the then existing dividend rate), or declare a
dividend on Common Stock payable otherwise than in cash out of its net earnings
after taxes for the prior fiscal year; or (ii) the Company shall authorize the
granting to the holders of Common Stock of rights to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or (iii) there
shall be any capital reorganization, or reclassification, or redemption of the
capital stock of the Company, or consolidation or merger of the Company with,
or sale of all or substantially all of its assets to, another corporation or
firm; or (iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company, then the Company shall give to the
Warrantholders at the addresses of such Warrantholders as shown on the books of
the Company, at least twenty (20) days prior to the applicable record date
hereinafter specified, a written notice summarizing such action or event and
stating the record date for any such dividend or rights (or, if a record date
is not to be selected, the date as of which the holders of Common Stock of
record entitled to such dividend or rights are to be determined), the date on
which any such reorganization, reclassification, consolidation, merger, sale of
assets, dissolution, liquidation or winding up is expected to become effective,
and the date as of which it is expected the holders of Common Stock of record
shall be entitled to effect any exchange of their shares of Common Stock for
cash (or cash equivalent), securities or other property deliverable upon any
such reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up.





                                       14
<PAGE>   15

         10.     Registered Holder; Transfer of Warrants or Warrant Shares.

                 (a)      Maintenance of Registration Books; Ownership of this
Warrant.  The Company shall keep at its principal office a register in which
the Company shall provide for the registration, transfer and exchange of this
Warrant.  The Company shall not at any time, except upon the dissolution,
liquidation or winding-up of the Company, close such register so as to result
in preventing or delaying the exercise or transfer of this Warrant.

                 (b)      Exchange and Replacement.  This Warrant is
exchangeable upon surrender hereof by the registered holder to the Company at
its principal office for new Warrants of like tenor and date representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by said registered holder at the time of
surrender.  This Warrant and all rights hereunder are transferable in whole or
in part upon the books of the Company by the registered holder hereof in person
or by duly authorized attorney, and new Warrants shall be made and delivered by
the Company, of the same tenor and date as this Warrant but registered in the
name of the transferee(s), upon surrender of this Warrant, duly endorsed, to
said office of the Company.  Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant, without requiring the posting of any bond or the giving of any other
security.  This Warrant shall be promptly cancelled by the Company upon the
surrender hereof in connection with any exchange, transfer or replacement.  The
Company shall pay all expenses, taxes and other charges payable in connection
with the preparation, execution and delivery of Warrants pursuant to this
Section 10.

                 (c)      Warrants and Warrant Shares Not Registered.  The
holder of this Warrant, by accepting this Warrant, represents and acknowledges
that the offering and sale of this Warrant and the Warrant Shares are not being
registered under the Securities Act on the grounds that the offering and sale
of this Warrant and the offering and sale of such Warrant Shares are exempt
from registration under Section 4(2) of the Securities Act as not involving any
public offering.

         11.     Registration.

                 (a)      Required Registration.  Whenever the Company shall
receive a written request therefor from any holder or holders of at least 10%
of the Registrable Stock, the Company shall promptly prepare and file a
registration statement under the Securities Act covering the offering and sale
of the Registrable Stock which is the subject of such request and shall use its
best efforts to cause such registration statement to become effective as
expeditiously as possible.  Upon the receipt of such request, the Company shall
promptly give written notice to all holders of Registrable Stock that such
registration is to be effected.  The





                                       15
<PAGE>   16
Company shall include in such registration statement such Registrable Stock for
which it has received written requests to register such shares by the holders
thereof within thirty (30) days after the effectiveness of the Company's
written notice to such other holders.  Except as hereinafter expressly
provided, without the written consent of the holders of a majority of the
shares of Registrable Stock for which registration has been requested pursuant
to this Section, neither the Company nor any other holder of securities of the
Company may include securities in such registration.

                 (b)      Incidental Registration.  Each time the Company shall
determine to file a registration statement under the Securities Act (other than
on Form S-8 or Form S-4) in connection with the proposed offer and sale for
money of any of its securities by it or by any of its security holders, the
Company will give written notice of its determination to all holders of
Registrable Stock.  Upon the written request of a holder of any Registrable
Stock, the Company will cause all such Registrable Stock, the holders of which
have so requested registration thereof, to be included in such registration
statement, all to the extent requisite to permit the sale or other disposition
by the prospective seller or sellers of the Registrable Stock to be so
registered in accordance with the terms of the proposed offering.  If the
registration statement is to cover an underwritten distribution, the Company
shall use its best efforts to cause the Registrable Stock requested for
inclusion pursuant to this Section 11(b) to be included in the underwriting on
the same terms and conditions as the securities otherwise being sold through
the underwriters.  If, in the good faith judgment of the managing underwriter
of such public offering, the inclusion of all of the Registrable Stock
requested to be registered would materially and adversely affect the successful
marketing of the other shares proposed to be offered, then the amount of the
Registrable Stock to be included in the offering shall be reduced and the
Registrable Stock and the other shares to be offered shall participate in such
offering as follows:  the shares to be sold by the Company, the Registrable
Stock to be included in such offering and the other shares of Common Stock to
be included in such offering shall each be reduced pro rata in proportion to
the number of shares of Common Stock proposed to be included in such offering
by each holder of such shares and by the Company.

                 (c)      Registration Procedures.  If and whenever the Company
is required by the provisions of Section 11(a) or 11(b) to effect the
registration of the offering and sale of Registrable Stock under the Securities
Act, the Company will, at its expense, as expeditiously as possible:

                          (i)     In accordance with the Securities Act and the
rules and regulations of the Commission, prepare and file with the Commission a
registration statement on the form of registration statement appropriate with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective until the securities covered by such
registration statement have been sold, and prepare and file with the Commission
such amendments to such registration statement and supplements to the
prospectus contained therein as may be necessary to keep such registration
statement effective





                                       16
<PAGE>   17
and such registration statement and prospectus accurate and complete until the
securities covered by such registration statement have been sold;

                          (ii)    If the offering is to be underwritten, in
whole or in part, enter into a written underwriting agreement with the holders
of the Registrable Stock participating in such offering and the underwriter in
form and substance reasonably satisfactory to the managing underwriter of the
public offering and the holders of the Registrable Stock participating in such
offering;

                          (iii)   Furnish to the holders of securities
participating in such registration and to the underwriters of the securities
being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents as
such underwriters and holders may reasonably request in order to facilitate the
public offering of such securities;

                          (iv)    Use its best efforts to register or qualify
the securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating holders
and underwriters may reasonably request;

                          (v)     Notify the holders participating in such
registration, promptly after it shall receive notice thereof, of the date and
time when such registration statement and each post-effective amendment thereto
has become effective or a supplement to any prospectus forming a part of such
registration statement has been filed;

                          (vi)    Notify such holders promptly of any request
by the Commission for the amending or supplementing of such registration
statement or prospectus or for additional information;

                          (vii)   Prepare and file with the Commission,
promptly upon the request of any such holders, any amendments or supplements to
such registration statement or prospectus which, in the opinion of counsel for
such holders, is required under the Securities Act or the rules and regulations
thereunder in connection with the distribution of the Registrable Stock by such
holders;

                          (viii)  Prepare and promptly file with the
Commission, and promptly notify such holders of the filing of, such amendments
or supplements to such registration statement or prospectus as may be necessary
to correct any statements or omissions if, at the time when a prospectus
relating to such securities is required to be delivered under the Securities
Act, any event has occurred as the result of which any such prospectus or any
other prospectus as then in effect may include an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;





                                       17
<PAGE>   18

                          (ix)    In case any of such holders or any
underwriter for any such holders is required to deliver a prospectus at a time
when the prospectus then in circulation is not in compliance with the
Securities Act or the rules and regulations of the Commission, prepare promptly
upon request such amendments or supplements to such registration statement and
such prospectus as may be necessary in order for such prospectus to comply with
the requirements of the Securities Act and such rules and regulations;

                          (x)     Advise such holders, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order
by the Commission suspending the effectiveness of such registration statement
or the initiation or threatening of any proceeding for that purpose and
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued;

                          (xi)    If requested by the managing underwriter or
underwriters or a holder of Registrable Stock being sold in connection with an
underwritten offering, immediately incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters and the
holders of a majority of the Registrable Stock being sold agree should be
included therein relating to the plan of distribution with respect to such
Registrable Stock, including information with respect to the Registrable Stock
being sold to such underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the underwritten (or best
efforts underwritten) offering of the Registrable Stock to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment;

                          (xii)   Cooperate with the selling holders of
Registrable Stock and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable Stock
to be sold and not bearing any restrictive legends; and enable such Registrable
Stock to be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale of
Registrable Securities to the underwriters;

                          (xiii)  Prepare a prospectus supplement or
post-effective amendment to the registration statement or the related
prospectus or any document incorporated therein by reference or file any other
required documents so that, as thereafter delivered to the purchasers of the
Registrable Stock, the prospectus will not contain an untrue statement of
material fact or omit to state any material fact necessary to make the
statements therein not misleading;

                          (xiv)   Enter into such agreements (including an
underwriting agreement) and take all such other actions in connection therewith
in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection, whether or not





                                       18
<PAGE>   19
an underwriting agreement is entered into and whether or not the registration
is an underwritten registration:

                                  (A)      make such representations and
warranties to the holders of such Registrable Stock and the underwriters, if
any, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings;

                                  (B)      If an underwriting agreement is
entered into, the same shall set forth in full the indemnification provisions
and procedures of Section 11(e) hereof with respect to all parties to be
indemnified pursuant to said Section; and

                                  (C)      The Company shall deliver such
documents and certificates as may be requested by the holders of the majority
of the Registrable Stock being sold and the managing underwriters, if any, to
evidence compliance with the terms of this Section 11(c) and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.

                                  The above shall be done at each closing under
such underwriting or similar agreement or as and to the extent required
thereunder;

                          (xv)    Make available for inspection by a
representative of the holders of a majority of the Registrable Stock, any
underwriter participating in any disposition pursuant to a registration
statement, and any attorney or accountant retained by the sellers or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with the
preparation of the registration statement; provided, that any records,
information or documents that are designated by the Company in writing as
confidential shall be kept confidential by such persons unless disclosure of
such records, information or documents is required by court or administrative
order;

                          (xvi)   Otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to the Company's security holders, earning statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than forty-five
(45) days after the end of any twelve (12) month period (or ninety (90) days,
if such a period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Stock is sold to underwriters in an underwritten
offering, or, if not sold to underwriters in such an offering, (ii) beginning
with the first month of the Company's first fiscal quarter commencing after the
effective date of a registration statement;

                          (xvii)  Not file any amendment or supplement to such
registration statement or prospectus to which a majority in interest of such
holders has objected on the grounds that such amendment or supplement does not
comply in all material respects with the





                                       19
<PAGE>   20
requirements of the Securities Act or the rules and regulations thereunder,
after having been furnished with a copy thereof at least five (5) business days
prior to the filing thereof; provided, however, that the failure of such
holders or their counsel to review or object to any amendment or supplement to
such registration statement or prospectus shall not affect the rights of such
holders or any controlling person or persons thereof or any underwriter or
underwriters therefor under Section 11(e) hereof; and

                          (xviii) At the request of any such holder (i) furnish
to such holder on the effective date of the registration statement or, if such
registration includes an underwritten public offering, at the closing provided
for in the underwriting agreement, an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, addressed to
the underwriters, if any, and to the holder or holders making such request,
covering such matters with respect to the registration statement, the
prospectus and each amendment or supplement thereto, proceedings under state
and federal securities laws, other matters relating to the Company, the
securities being registered and the offer and sale of such securities as are
customarily the subject of opinions of issuer's counsel provided to
underwriters in underwritten public offerings, and such opinion of counsel
shall additionally cover such legal and factual matters with respect to the
registration as such requesting holder or holders may reasonably request, and
(ii) use its best effort to furnish to such holder letters dated each such
effective date and such closing date, from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and to the
holder or holders making such request, stating that they are independent
certified public accountants within the meaning of the Securities Act and
dealing with such matters as the underwriters may request, or, if the offering
is not underwritten, that in the opinion of such accountants the financial
statements and other financial data of the Company included in the registration
statement or the prospectus or any amendment or supplement thereto comply in
all material respects with the applicable accounting requirements of the
Securities Act, and additionally covering such other financial matters,
including information as to the period ending immediately prior to the date of
such letter with respect to the registration statement and prospectus, as such
requesting holder or holders may reasonably request.

                 (d)      Expenses of Registration.  All expenses incident to
the Company's performance of or compliance with this Warrant, including,
without limitation, the following shall be borne by the Company, regardless of
whether the registration statement becomes effective:

                          (i)     All registration and filing fees (including
those with respect to filings required to be made with the National Association
of Securities Dealers, Inc.);

                          (ii)    Fees and expenses of compliance with all
securities or blue sky laws (including fees and disbursements of counsel for
the underwriters or selling holders in connection with blue sky qualifications
of the Registrable Stock and in determination of their





                                       20
<PAGE>   21
eligibility for investment under the laws of such jurisdictions as the managing
underwriters or holders of a majority of the Registrable Stock being sold may
designate);

                          (iii)   Printing, messenger, telephone and delivery
expenses;

                          (iv)    Fees and disbursements of counsel for the
Company and for the sellers of the Registrable Stock as hereinafter provided;

                          (v)     Fees and disbursements of all independent
certified public accountants of the Company (including the expenses of any
special audit and "comfort" letters required by or incident to such
performance);

                          (vi)    Fees and disbursements of underwriters
(excluding discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating to the
distribution of the Registrable Stock and legal expenses of any person other
than the Company and the selling holders); and

                          (vii)   Fees and expenses of other persons retained
by the Company.

                                  The Company will, in any event, pay its
internal expenses (including without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed, rating agency fees
and the fees and expenses of any person, including special experts, retained by
the Company.

                                  In connection with the registration statement
required hereunder, the Company will reimburse the holders of Registrable
Stock, the offering and sale of which are being registered pursuant to the
registration statement for the reasonable fees and disbursements of not more
than one counsel (or more than one counsel if conflict exists among such
selling holders in the exercise of the reasonable judgment of counsel for the
selling holders and counsel for the Company) chosen by the holders of a
majority of such Registrable Stock.

                 (e)      Indemnification.

                          (i)     The Company hereby agrees to indemnify each
of the holders of Registrable Stock against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, preliminary or final prospectus, or other document
incident to any such registration, qualification or compliance (or in any
related registration statement, notification or the like) or any omission (or
alleged omission) to state





                                       21
<PAGE>   22
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and to reimburse the
holders of Registrable Stock (including officers and directors of the same and
controlling persons) for any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such claim, loss, damage or liability
arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by Warrantholders in an instrument
duly executed by Warrantholders and stated to be specifically for use therein.

                          (ii)    The Warrantholders severally and not jointly
agree to indemnify the Company and its officers and directors and each person,
if any, who controls any thereof within the meaning of Section 15 of the
Securities Act and their respective successors against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any prospectus,
offering circular or other document incident to any registration, qualification
or compliance relating to securities purchased pursuant to the Warrants (or in
any related registration statement, notification or the like) 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 will
reimburse the Company and each other person indemnified pursuant to this
subsection (ii) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that this subsection (ii) shall apply
only if (and only to the extent that) such statement or omission was made in
reliance upon information (including, without limitation, written negative
responses to inquiries) furnished to the Company by an instrument duly executed
by Warrantholders and stated to be specifically for use in such prospectus, or
other document (or related registration statement, notification or the like) or
any amendment or supplement thereto.

                          (iii)   Each party entitled to indemnification
hereunder (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party (at such Indemnifying
Party's expense) to assume the defense of any claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be satisfactory to the
Indemnified Party, and the Indemnified Party may participate in such defense at
such party's expense, and provided, further, that the omission by any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 11(e) except to the
extent that the omission results in a failure of actual notice to the
Indemnifying Party and such Indemnifying Party is materially damaged solely as
a result of the failure to give notice.  No Indemnifying





                                       22
<PAGE>   23
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.

                          (iv)    If the indemnification provided for in this
Section 11(e) is unavailable or insufficient to hold harmless an Indemnified
Party in respect of any losses, claims, damages, liabilities, expenses or
actions in respect thereof referred to herein, then the Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, liabilities, expenses or actions in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand, and the Indemnified Party on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities, expenses or actions as well as any other relevant
equitable considerations, including the failure to give the notice required
hereunder.  The relative fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.  The Company and the Warrantholders  agree
that it would not be just and equitable if contributions pursuant to this
Section 11(e) were determined by pro rata allocation or by any other method of
allocation which did not take account of the equitable considerations referred
to above.  The amount paid or payable to an Indemnified Party as a result of
the losses, claims, damages, liabilities or actions in respect thereof,
referred to above, shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim.  Notwithstanding the contribution
provisions of this Section 11(e), in no event shall the amount contributed by
any seller of Registrable Stock exceed the aggregate net offering proceeds
received by such seller from the sale of Registrable Stock to which such
contribution or indemnification claim relates.  No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.

                          (v)     The indemnification required by this Section
11(e) shall be made by periodic payments during the course of the investigation
or defense, as and when bills are received or expenses incurred.  Anything
contained herein to the contrary notwithstanding, the maximum aggregate
liability of any holder of Registrable Stock under this Section 11(e) shall not
exceed the amount of the net proceeds actually received by such holder from the
sale of its Registrable Stock pursuant to the registration, qualification,
notification or compliance in respect of which such liability arose.

                 (f)      Reporting Requirements Under Exchange Act.  The
Company shall maintain the registration of its Common Stock under Section 12 of
the Exchange Act and shall keep effective such registration and shall timely
file such information, documents and reports





                                       23
<PAGE>   24
as the Commission may require or prescribe under Section 13 of the Exchange
Act, or otherwise.  From and after the date hereof, the Company shall (whether
or not it shall then be required to do so) timely file such information,
documents and reports as the Commission may require or prescribe under Section
13 or 15(d) (whichever is applicable) of the Exchange Act.  The Company shall
forthwith upon request furnish any holder of Registrable Stock (i) a written
statement by the Company that it has complied with such reporting requirements,
(ii) a copy of the most recent annual or quarterly report of the Company, and
(iii) such other reports and documents filed by the Company with the Commission
as such holder may reasonably request in availing itself of an exemption for
the sale of Registrable Stock without registration under the Securities Act.
The Company acknowledges and agrees that the purpose of the requirements
contained in this Section 11(f) is to enable any such holder to comply with the
current public information requirement contained in Rule 144 under the
Securities Act should such holder ever wish to dispose of any of the securities
of the Company acquired by it without registration under the Securities Act in
reliance upon Rule 144 (or any other similar exemptive provision).  In
addition, the Company shall take such other measures and file such other
information, documents and reports as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 and Rule 144A under
the Securities Act (or any similar exemptive provision hereafter in effect).

                 (g)      Stockholder Information.  The Company may require
each holder of Registrable Stock as to which any registration is to be effected
pursuant to this Section 11 to furnish the Company such information with
respect to such holder and the distribution of such Registrable Stock as shall
be required by law or by the Commission in connection therewith.

         12.     Representation and Warranties.  The Company hereby represents
and warrants to and covenants with Foothill, each Warrantholder, and each
holder of Warrant Shares that:

                 (a)      Organization and Capitalization of the Company.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas.  As of the date hereof, the authorized
capital of the Company consists of 25,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock, of which 6,307,419 shares of Common Stock
and no shares of Preferred Stock are issued and outstanding.  The Company has,
and at all times during the Exercise Period will have, reserved for issuance
pursuant to the Warrants that number of shares of Common Stock that are issuable
pursuant to the Warrants.  Except in respect of the Celebrity, Inc. 1992 Stock
Option Plan and the Celebrity, Inc. 1993 Stock Purchase Plan, no unissued shares
of Common Stock are reserved for any purpose other than for issuance upon the
exercise of the Warrants.  Except as to the Celebrity, Inc. 1992 Stock Option
Plan, as of the date hereof, the Company has not issued or agreed to issue any
stock purchase rights, options, convertible securities, warrants (other than
this Warrant) or any other securities or indebtedness convertible into shares of
Common Stock, and there are no preemptive rights in effect with respect to the
issuance of any shares of Common Stock.  All the outstanding shares of Common
Stock have been validly issued without violation of any preemptive or similar
rights, 
                 




                                       24
<PAGE>   25
are fully paid and nonassessable and have been issued in compliance with all
federal and applicable state securities laws.

                 (b)      Authority.  The Company has full corporate power and
authority to execute and deliver this Warrant, to issue the shares of Common
Stock issuable upon exercise of this Warrant, and to perform all of its
obligations hereunder, and the execution, delivery and performance hereof has
been duly authorized by all necessary corporate action on its part.  This
Warrant has been duly executed on behalf of the Company and constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms.

                 (c)      No Legal Bar.  Neither the execution, delivery or
performance of this Warrant nor the issuance of the shares of Common Stock
issuable upon exercise of this Warrant will (a) conflict with or result in a
violation of the Articles of Incorporation or Bylaws of the Company, (b)
conflict with or result in a violation of any law, statute, regulation, order
or decree applicable to the Company or any affiliate, (c) require any consent
or authorization or filing with, or other act by or in respect of any
governmental authority or (d) result in a breach of, constitute a default under
or constitute an event creating rights of acceleration, termination or
cancellation under any mortgage, lease, contract, franchise, instrument or
other agreement to which the Company is a party or by which it is bound.

                 (d)      Validity of Shares.  When issued upon the exercise of
this Warrant as contemplated herein, the shares of Common Stock so issued will
have been validly issued and will be fully paid and nonassessable.  On the date
hereof, the par value of the Common Stock is less than the Exercise Price per
share of Common Stock.

         13.     Continuing Validity.  Foothill and each holder of Warrant
Shares shall continue to be entitled to all rights to which a Warrantholder is
entitled pursuant to the provisions of this Warrant except such rights as by
their terms apply solely to a Warrantholder, notwithstanding the fact that this
Warrant has been exercised or the period of exercisability has expired.  The
Company will, at any time upon the request of Foothill or a holder of the
Warrant Shares, acknowledge in writing, in form reasonably satisfactory to
Foothill or such holder, the Company's continuing obligation to afford to
Foothill or such holder all rights to which Foothill or such holder shall
continue to be entitled in accordance with the provisions of this Warrant;
provided, however, that if Foothill or such holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to Foothill and such holder all such rights.

         14.     Miscellaneous Provisions.

                 (a)      Notice of Expiration.  The Company shall give written
notice to the Warrantholders specifically advising them of the Expiration Date
and of their right to exercise the Warrants not more than one hundred eighty
(180) days and not less than ninety (90) days before the Expiration Date.  If
such written notice is not so given, the Expiration Date shall





                                       25
<PAGE>   26
automatically be extended until ninety (90) days after the date that the
Company gives the Warrantholders such written notice.

                 (b)      Judicial Reference.

                          (i)     Other than the appointment of a receiver, or
the exercise of other provisional remedies (any and all of which may be
initiated pursuant to applicable law), each controversy, dispute or claim
arising out of or relating to this Warrant, which controversy, dispute or claim
is not settled in writing within thirty (30) days after the "Claim Date"
(defined as the date on which the Company or a Warrantholder gives written
notice to the other that a controversy, dispute or claim exists), will be
settled by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure, or
their successor section ("CCP"), which shall constitute the exclusive remedy
for the settlement of any controversy, dispute or claim concerning this
Warrant, including whether such controversy, dispute or claim is subject to the
reference proceeding and except as set forth above, the parties waive their
rights to initiate any legal proceedings against each other in any court or
jurisdiction other than the Superior Court in counties of Los Angeles or
Orange, California (the "Court").  The referee shall be a retired Judge of the
Court selected by mutual agreement of the parties, and if they cannot so agree
within forty-five (45) days after the Claim Date, the referee shall be promptly
selected by the Presiding Judge of the Court (or his or her representative).
The referee shall be appointed to sit as a temporary judge, with all of the
powers for a temporary judge, as authorized by law, and upon selection should
take and subscribe to the oath of office as provided for in Rule 244 of the
California Rules of Court (or any subsequently enacted Rule).  Each party shall
have one peremptory challenge pursuant to CCP Section 170.6.  The referee shall
(i) be requested to set the matter for hearing within sixty (60) days after the
Claim Date and (ii) try any and all issues of law or fact and report a
statement of decision upon them, if possible, within ninety (90) days of the
Claim Date.  Any decision rendered by the referee will be final, binding and
conclusive and judgment shall be entered pursuant to CCP Section 644 in any
court in the State of California having jurisdiction.  Any party may apply for
a reference proceeding at any time after thirty (30) days following notice to
any other party of the nature of the controversy, dispute or claim, by filing a
petition for a hearing and/or trial.  All discovery permitted by this Warrant
shall be completed no later than fifteen (15) days before the first hearing
date established by the referee.  The referee may extend such period in the
event of a party's refusal to provide requested discovery for any reason
whatsoever, including, without limitation, legal objections raised to such
discovery or unavailability of a witness due to absence or illness.  No party
shall be entitled to "priority" in conducting discovery.  Depositions may be
taken by either party upon seven (7) days written notice, and request for
production or inspection of documents shall be responded to within ten (10)
days after service.  All disputes relating to discovery which cannot be
resolved by the parties shall be submitted to the referee whose decision shall
be final and binding upon the parties.  Pending appointment of the referee as
provided herein, the Court is empowered to issue temporary and/or provisional
remedies, as appropriate.





                                       26
<PAGE>   27

                          (ii)    Except as expressly set forth in this
Warrant, the referee shall determine the manner in which the reference
proceeding is conducted, including the time and place of all hearings, the
order of presentation of evidence, and all other questions that arise with
respect to the course of the reference proceeding.  All proceedings and
hearings conducted before the referee, except for trial, shall be conducted
without a court reporter except that when any party so requests, a court
reporter will be used at any hearing conducted before the referee.  The party
making such a request shall have the obligation to arrange for and pay for the
court reporter.  The costs of the court reporter at the trial shall be borne
equally by the parties.

                          (iii)   The referee shall be required to determine
all issues in accordance with existing case law and the statutory laws of the
State of California.  The rules of evidence applicable to proceedings at law in
the State of California will be applicable to the reference proceeding.  The
referee shall be empowered to enter equitable as well as legal relief, to
provide all temporary and/or provisional remedies and to enter equitable orders
that will be binding upon the parties.  The referee shall issue a single
judgment at the close of the reference proceeding which shall dispose of all of
the claims of the parties that are the subject of the reference.  The parties
hereto expressly reserve the right to contest or appeal from the final judgment
or any appealable order or appealable judgment entered by the referee.  The
parties hereto expressly reserve the right to findings of fact, conclusions of
laws, a written statement of decision, and the right to move for a new trial or
a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision.

                          (iv)    In the event that the enabling legislation
which provides for appointment of a referee is repealed (and no successor
statute is enacted), any dispute between the parties that would otherwise be
determined by the reference procedure herein described will be resolved and
determined by arbitration.  The arbitration will be conducted by a retired
judge of the Court, in accordance with the California Arbitration Act, Section
1280 through Section 1294.2 of the CCP as amended from time to time.  The
limitations with respect to discovery as set forth hereinabove shall apply to
any such arbitration proceeding.

                 (c)      Notices.  Unless otherwise provided in this Warrant,
all notices or demands by any party relating to this Warrant shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to the Warrantholders
or holder of Warrant Shares, as the case may be, at its address set forth
below:

                 If to Company:     CELEBRITY, INC.
                                    4520 Old Troup Highway
                                    Tyler, Texas 75711
                                    Attn:   Robert H. Patterson, Jr.
                                    Fax No.  903.509.3631





                                       27
<PAGE>   28
                 with copies to:    THOMPSON & KNIGHT, P.C.
                                    1700 Pacific Avenue, Suite 3300
                                    Dallas, Texas 75201
                                    Attn: Fred W. Fulton, Esq.
                                    Fax No.  214.969.1751

                 If to Foothill:    FOOTHILL CAPITAL CORPORATION
                                    11111 Santa Monica Boulevard
                                    Suite 1500
                                    Los Angeles, California 90025-3333
                                    Attn:   Business Finance Division Manager
                                    Fax No. 310.478.9788

                 with copies to:    BUCHALTER, NEMER, FIELDS & YOUNGER
                                    601 South Figueroa, Suite 2400
                                    Los Angeles, California 90017
                                    Attn: Robert C. Colton, Esq.
                                    Fax No. 213.896.0400

                 The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given
to the other.

                 (d)      Successors and Assigns.  This Warrant shall be
binding upon and inure to the benefit of the Company, Foothill, the
Warrantholders and the holders of Warrant Shares and the successors, assigns
and transferees of the Company, Foothill, the Warrantholders and the holders of
Warrant Shares.

                 (e)      Attorneys' Fees.  The Company agrees to pay, on
demand, all attorneys' fees (including attorneys' fees incurred pursuant to
proceedings arising under Bankruptcy Code) and all other costs and expenses
which may be incurred by Foothill, the Warrantholders and the holders of
Warrant Shares in connection with any amendment to this Warrant and/or in
connection with the enforcement of this Warrant, whether or not suit is
brought.

                 (f)      Entire Agreement; Amendments and Waivers.  This
Warrant sets forth the entire understanding of the parties with respect to the
transactions contemplated hereby.  The failure of any party to seek redress for
the violation or to insist upon the strict performance of any term of this
Warrant shall not constitute a waiver of such term and such party shall be
entitled to enforce such term without regard to such forbearance.  This Warrant
may be amended, the Company may take any action herein prohibited or omit to
take action herein required to be performed by it, and any breach of or
compliance with any covenant, agreement, warranty or representation may be
waived, only if the Company has obtained the written consent or written waiver
of the majority in interest of the Warrantholders, and then





                                       28
<PAGE>   29
such consent or waiver shall be effective only in the specific instance and for
the specific purpose for which given.

                 (g)      Severability.  If any term of this Warrant as applied
to any person or to any circumstance is prohibited, void, invalid or
unenforceable in any jurisdiction, such term shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without in any way
affecting any other term of this Warrant or affecting the validity or
enforceability of this Warrant or of such provision in any other jurisdiction.

                 (h)      Headings.  The headings in this Warrant are inserted
only for convenience of reference and shall not be used in the construction of
any of its terms.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officers effective as of the date first set forth above.

                                   CELEBRITY, INC.,
                                   a Texas corporation


                                   By  /s/ DAVID J. HUFFMAN
                                      ----------------------------------------
                                      Name: David J. Huffman
                                           -----------------------------------
                                      Title: EVP
                                            ----------------------------------


ATTEST:


/s/ LISA K. BORK                                                   
---------------------------------------
Lisa Bork, Assistant Secretary





                                       29