Exhibit 10.3

     WARRANT AGREEMENT

     BETWEEN

     NATIONSBANK, N.A.

     AND

     BREED TECHNOLOGIES, INC.

     October 30, 1997




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     TABLE OF CONTENTS

ARTICLE 1         CERTAIN DEFINITIONS..........................................1

ARTICLE 2         ORIGINAL ISSUE OF WARRANTS...................................3
         2.1      Form of Warrant Certificates.................................3
         2.2      Legend.......................................................3
         2.3      Delivery of the Warrants.....................................4

ARTICLE 3         EXERCISE OF WARRANTS.........................................4
         3.1      Exercise of Warrants; Increase in Warrants...................4
         3.2      Exercise Price...............................................5
         3.3      Restrictions on Exercise; Expiration.........................5
         3.4      Method of Exercise; Payment of Exercise Price................5
         3.5      Dividends and Distributions..................................6

ARTICLE 4         ADJUSTMENTS..................................................6
         4.1      Adjustments..................................................6
         4.2      Below Market Price Issuances.................................8
         4.3      Notice of Adjustment........................................10
         4.4      Statements in the Warrants..................................10
         4.5      Notice of Consolidation, Merger or Sale of Assets...........10
         4.6      Fractional Interests........................................11
         4.7      No Dilution or Impairment...................................11

ARTICLE 5         RESERVATION AND AUTHORIZATION OF COMMON SHARES,
                  ETC.........................................................11
         5.1      Reservation and Authorization...............................11
         5.2      Covenant Regarding Securities...............................11
         5.3      Registration................................................12
         5.4      S-3 Eligibility.............................................12

ARTICLE 6         WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER............12
         6.1      Transfer and Exchange.......................................12
         6.2      Special Transfer Provisions.................................13
         6.3      Surrender of a Warrant Certificate..........................13

ARTICLE 7         OPTIONS.....................................................13
         7.1      Option to Redeem Warrants...................................13

ARTICLE 8         REGISTRATION RIGHTS.........................................14
         8.1      Registration by the Corporation.............................14
         8.2      Registration Procedures and Expenses........................14
         8.3      Indemnification.............................................15
         8.4      Conflicting Rights..........................................17
         8.5      Termination.................................................17
         8.6      Registration on Form S-3....................................17

ARTICLE 9         MISCELLANEOUS...............................................17
         9.1      Loss or Mutilation..........................................17
         9.2      Payment of Taxes............................................18
         9.3    No Merger, Consolidation or Sale of Assets or the Corporation.18


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         9.4      Notices.....................................................18
         9.5      Governing Law...............................................19
         9.6      Assignment; Successors......................................19
         9.7      Counterparts................................................19
         9.8      Amendments..................................................19
         9.9      Headings....................................................20
         9.10     Third Party Beneficiaries...................................20
         9.11     Severability................................................20
         9.12     No Inconsistent Agreements..................................20

EXHIBIT A         WARRANT CERTIFICATE.........................................22



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     WARRANT AGREEMENT

     WARRANT AGREEMENT, dated as of October 30, 1997 (this "Agreement"), between
BREED  TECHNOLOGIES,  INC.  a  Delaware  corporation  (the  "Corporation"),  and
NATIONSBANK, N.A. ("NationsBank").

     Pursuant  to the  terms of a  Credit  Agreement  dated  October  30,  1997,
NationsBank,  N.A.  as agent  (the  "Agent")  and as a Lender has agreed to make
available to the  Corporation  loans of up to  $900,000,000  (the "Loans") which
Loans are to be  evidenced by Notes of the  Corporation  in favor of the Lenders
(the "Notes").  In order to induce  NationsBank to agree to make the Loans,  the
Corporation agreed to issue to NationsBank warrants (the "Warrants") exercisable
for  Common  Stock,  $.01 par value per share of the  Corporation  (the  "Common
Stock").

     Initially,  the  Corporation is authorizing  the issuance to NationsBank of
3,000,000  Warrants to purchase a total of 3,000,000 shares of Common Stock (the
"Warrant  Shares") of the  Corporation  under the terms and  conditions  hereof,
which  amount is subject to increase  as provided  herein.  Each  Warrant  shall
entitle the holder  thereof to purchase  one share of Common  Stock,  subject to
adjustment as provided herein.

     In  consideration  of the foregoing and of the agreements  contained in the
Credit  Agreement,  and for the purpose of defining the terms and  provisions of
the  Warrants  and  Warrant  Shares and the  respective  rights and  obligations
thereunder  of the  Corporation  and the  Holder(s)  (as  defined  herein),  the
Corporation and NationsBank hereby agree as follows:

     ARTICLE 1

     CERTAIN DEFINITIONS

     For all purposes of this Agreement, except as otherwise expressly provided:

     (a) the terms defined in this Article 1 have the meanings  assigned to them
in this Article, and include the plural as well as the singular; and

     (b) the words  "herein,"  "hereof"  and  "hereunder,"  and  other  words of
similar  import,  refer to this  Agreement as a whole and not to any  particular
article, section or other subdivision.

     "Additional Warrants" has the meaning set forth in Section 3.1 hereof.

     "Affiliate"  means,  as to any person,  any other person which  directly or
indirectly controls,  or is under common control with, or is controlled by, such
person. For purposes of this definition,  "control" (including, with correlative
meanings,  the terms "controlling,"  "under common control with" and "controlled
by"),  and as used  with  respect  to any  person,  shall  mean the  possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management or policies of such person,  whether  through the ownership of voting
stock, by agreement or otherwise;  provided,  however, that beneficial ownership
of 5% or more of the voting stock of a person shall be deemed to be control.

     "Appraised Market Value" shall mean the market value of the Common Stock as
agreed by the Corporation and the affected Holder(s) of the Warrants,  or if the
Corporation and such Holder(s)  cannot agree, as determined by a valuation by an
investment  banking company  suitable to the Corporation and such Holder(s).  In
the event the parties cannot agree on an investment  banking  company to perform
the valuation  described  above,  the  Corporation and such Holder(s) shall each
select an investment banking company and the two investment banking companies so
selected shall select a third  investment  banking company which shall determine
the Appraised  Market Value.  In determining  the Appraised  Market Value of the
Common Stock, no discount shall be applied because the shares of Common Stock

                                                                

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     held by the  holders  thereof  (a)  have  not  been  registered  under  the
Securities  Act, or (b) represent a minority  interest in the  Corporation.  The
fees and expenses of the investment  banking company or companies shall be borne
by the Corporation.

     "Board of Directors" means the board of directors of the Corporation.

     "Board Resolution" means a copy of a resolution  certified by the Secretary
or any Assistant  Secretary of the  Corporation to have been duly adopted by the
Board of Directors.

     "Business  Day" means any day which is not a  Saturday,  Sunday or a day on
which  banking  institutions  in the  States  of New  York and  Florida  are not
authorized or obligated by law,  executive  order,  regulation  or  governmental
decree to close.

     "Commission" means the Securities and Exchange Commission.

     "Common Stock" has the meaning set forth in the preamble hereto.

     "Corporation" has the meaning set forth in the preamble hereto.

     "Credit Agreement" has the meaning set forth in the preamble hereto.

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

     "Exercise Price" has the meaning set forth in Section 3.2 hereof.

     "Expiration Date" means October 30, 2000.

     "Holders"  means the holders  from time to time of the  Warrants or Warrant
Shares issued upon exercise of the Warrants.

     "Issue Date" means the date of the original issuance of the Warrants.

     "Market  Price"  means the closing  price of a share of Common Stock on the
principal national securities exchange (including the Nasdaq National Market) on
which the shares of Common  Stock are listed or  admitted to trading as reported
in The Wall  Street  Journal  or, if not  listed or  admitted  to trading on any
national securities exchange (including the Nasdaq National Market), the average
of the bid and asked  prices in the  over-the-counter  market  as  furnished  by
Nasdaq, or, if the shares of Common Stock are not publicly traded, the Appraised
Market Value.

     "NationsBank" has the meaning set forth in the preamble hereto.

     "Notes" has the meaning set forth in the preamble hereof.

     "Private  Placement  Legend"  means  the  legend  in the form set  forth in
Section 2.2 hereof.

     "Registration Expenses" has the meaning set forth in Section 8.2 hereof.

     "Registrable Securities" shall mean the Warrant Shares.


                                                                

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     "Rights"  means  rights,  options  or  warrants  for the  purchase  of,  or
securities convertible into or exchangeable for, Common Stock.

     "Securities  Act" means the  Securities  Act of 1933,  as amended,  and the
rules and regulations of the Commission promulgated thereunder.

     "Warrants" have the meaning set forth in the preamble hereto.

     "Warrant Certificates" have the meaning set forth in Section 2.1 hereof.

     "Warrant Shares" have the meaning set forth in the preamble hereto.

     ARTICLE 2 ORIGINAL ISSUE OF WARRANTS

     2.1 Form of Warrant Certificates. Any certificate representing the Warrants
(a "Warrant  Certificate"),  the form of which is attached  hereto as Exhibit A,
shall be detachable from this Agreement,  the Credit Agreement and any Notes and
shall be dated the date on which it is signed by a duly  authorized  officer  of
the Corporation and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification   as  the  Corporation  may  deem  appropriate  and  as  are  not
inconsistent with the provisions of this Agreement.

     2.2 Legend.  Each Warrant Certificate and, until registered or an exemption
from  registration  is  available,   each  certificate  representing  securities
acquired  upon exercise of the Warrants  shall bear the following  legend on the
face thereof:

     THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES  ACT OF 1933 (THE  "SECURITIES  ACT").  THE SECURITIES MAY NOT BE
SOLD,  TRANSFERRED,  PLEDGED OR  HYPOTHECATED  IN THE  ABSENCE  OF AN  EFFECTIVE
REGISTRATION  STATEMENT  FOR  THE  SECURITIES  UNDER  THE  SECURITIES  ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.

     2.3 Delivery of the Warrants.

     This Agreement  authorizes the initial issuance of 3,000,000 Warrants which
amount is subject to increase as  provided in Section  3.1. On the Closing  Date
(as defined in the Credit Agreement), the Corporation shall issue to NationsBank
in connection  therewith (but  detachable  therefrom) a Warrant  Certificate for
3,000,000 Warrants.

     If Additional Warrants become authorized under Section 3.1, the Corporation
shall promptly issue and deliver to  NationsBank a Warrant  Certificate  for the
Additional Warrants.

     ARTICLE 3  EXERCISE OF WARRANTS

     3.1 Exercise of Warrants; Increase in Warrants.

     (a) Subject to the limitations and  adjustments as provided  herein,  on or
before the Expiration Date, the Warrants may be exercised on any Business Day as
to all or any  portion of the  Warrant  Shares for which the  Warrants  are then
exercisable as follows: (a) as of the date of this Agreement and the issuance of
the Warrant Certificate,  the number of Warrants which may be exercised pursuant
to this Agreement, and the number of Warrant Shares issuable

                                                                

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     upon  exercise of such  Warrants,  shall be  250,000;  (b) in the event the
Corporation  shall  not have paid in full its  Obligations  (as  defined  in the
Credit  Agreement) on or prior to January 27, 1998, the number of Warrants which
may be exercised  pursuant to this  Agreement,  and the number of Warrant Shares
issuable upon exercise of such  Warrants,  shall be  automatically  increased to
1,000,000 effective as of January 27, 1998 unless the Corporation (i) shall have
furnished NationsBank a Plan (as defined in the Credit Agreement) and (ii) shall
be in receipt of not less than  $300,000,000  of  permanent  capital  [excluding
indebtedness] (over September 24, 1997 levels) on terms reasonably acceptable to
NationsBank;  (c) in the event the  Corporation  shall not have paid in full its
Obligations (as defined in the Credit Agreement) (or if a binding  commitment to
refinance  and/or repay the obligations  arising under the Credit Agreement does
not exist) on or prior to April 27,  1998,  the number of Warrants  which may be
exercised pursuant to this Agreement,  and the number of Warrant Shares issuable
upon exercise of such Warrants,  shall be  automatically  increased to 2,000,000
effective as of April 27, 1998; and (d) in the event the  Corporation  shall not
have paid in full its  Obligations  (as defined in the Credit  Agreement)  on or
prior to July 26, 1998,  (or if a binding  commitment to refinance  and/or repay
the obligations  arising under the Credit Agreement does not exist),  the number
of Warrants which may be exercised pursuant to this Agreement, and the number of
Warrant Shares  issuable upon exercise of such Warrants,  will be  automatically
increased to 3,000,000 effective as of July 26, 1998.

     (b) If the  Corporation  shall  not have paid in full its  Obligations  (as
defined in the Credit  Agreement)  on or prior to July 31,  1998,  the number of
Warrants  granted  hereunder shall increase and the Holders shall be entitled to
immediately exercise and purchase under the terms of this Agreement an amount of
Warrant  Shares equal to (x) 7.7% of all shares of Common Stock  outstanding  or
deemed  outstanding on a fully diluted basis on July 31, 1998 less (y) 3,000,000
(the "Additional Warrants").

     For  purposes  of  calculating   the  number  of  shares  of  Common  Stock
outstanding  on July 31, 1998,  the number of shares of Common Stock issuable in
connection  with the  exercise  of  conversion  rights of the holders of (i) the
Corporation's  Series A Preference shares (the "Series A Preference Shares") and
(ii) the Breed Capital Trust ____% Convertible  Trust Preferred  Securities (the
"Trust Preferred Securities") or if the Trust Preferred Securities have not been
issued then  4,000,000  shares of Common Stock  issuable upon  conversion of the
Corporation's  Series B Preference  Shares (the  "Series B  Preference  Shares")
shall be deemed to be  outstanding,  whether or not such  conversion  rights are
then exercisable or have been exercised.

     3.2 Exercise Price.  Initially,  the Warrant Certificates shall entitle the
Holders  thereof,  subject to the provisions of this  Agreement,  to purchase an
aggregate  of  3,000,000  Warrant  Shares at a per  share  purchase  price  (the
"Exercise  Price")  determined as follows,  subject to adjustment as provided in
Article 4 hereof:

     The Exercise  Price for the 250,000  Warrant  Shares  exercisable as of the
date of this  Agreement  shall be $23.125.  The Exercise Price for the remaining
Warrant  Shares  shall be the Market  Price of the  Common  Stock on the day the
Warrants for such Warrant  Shares  become  exercisable  under the  provisions of
Section 3.1.

     The Exercise Price for any  additional  Warrant Shares to be subject to the
Additional  Warrants  shall be the Market  Price of the Common Stock on July 31,
1998.

     Once  established  for a number of Warrant  Shares,  the Exercise Price for
those shares shall not be adjusted by reason of any later  increase in the total
number of Warrants which may be exercised by the Holders.

     3.3 Restrictions on Exercise; Expiration. On or before the Expiration Date,
the  Warrants  may be  exercised on any Business Day as to all or any portion of
the Warrant  Shares.  If any of the Warrants are not exercised by 5:00 p.m., New
York City time, on the Expiration Date, this Agreement and unexercised  Warrants
shall  expire and all  rights of the  Holders  hereunder  and  thereunder  shall
terminate unless otherwise provided herein or therein.



                                                                

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     3.4 Method of Exercise; Payment of Exercise Price.

     (a) In order to exercise  all or any of the  Warrants,  the Holder  thereof
must  provide  written  notice to the  Corporation  at its  address set forth in
Section 9.4 hereof  specifying  the number of  Warrants  being  exercised.  Such
notice shall be accompanied by one or more Warrant Certificates representing not
less than the number of Warrants being exercised,  together with payment in full
of the per share Exercise Price multiplied by the number of Warrant Shares to be
purchased pursuant to the exercise.  The Exercise Price shall be payable, at the
option of the Holder, (i) by wire transfer, certified check, official bank check
or bank cashier's check payable to the order of the Corporation,  or (ii) by the
surrender  of Warrants  exercisable  for a number of shares  having an aggregate
Market Price as of the date of surrender  equal to the aggregate  Exercise Price
of all Warrants  covered  thereby.  If the number of Warrants being exercised is
less than the  number of  Warrants  represented  by the  Warrant  Certificate(s)
tendered  in  connection  with the  exercise,  the  Corporation  shall issue new
Warrant   Certificate(s)  for  the  unexercised   Warrants  in  accordance  with
instructions contained in the notice of exercise and this Agreement.

     (b)  Upon  exercise  of  any  Warrant  in  conformity  with  the  foregoing
provisions,  the Corporation shall (i) transfer promptly to, or upon the written
order of the Holder of such  Warrant,  appropriate  evidence of ownership of any
Warrant Shares or other securities or property  (including money) to which it is
entitled,  registered  or  otherwise  placed  in such  name or  names  as may be
directed  in  writing by the Holder  thereof,  (ii)  deliver  such  evidence  of
ownership and any other securities or property  (including  money) to the person
or persons entitled to receive the same, and (iii) reissue,  as the case may be,
a Warrant Certificate for any unexercised Warrants. A Warrant shall be deemed to
have been  exercised  immediately  prior to the close of business on the date of
the surrender for exercise of the Warrant Certificate  representing such Warrant
being exercised and, for all purposes of this Agreement,  the person entitled to
receive any Warrant Shares or other securities or property deliverable upon such
exercise shall, as between such person and the Corporation,  be deemed to be the
Holder of such Warrant  Shares or other  securities  or property of record as of
the close of  business on such date and shall be entitled to receive any Warrant
Shares or other  securities or property  (including  money) to which such person
would have been  entitled had such person been the record holder of such Warrant
Shares or other securities or property on such date.

     3.5 Dividends and Distributions.  For so long as any of the Warrants remain
outstanding and  unexercised,  the  Corporation  will, upon the declaration of a
cash dividend upon its Common Stock or other  distribution to the holders of its
Common  Stock  (other  than a dividend  payable  in shares of the  Corporation's
Common Stock) and at least 20 days prior to the record date,  notify the Holders
of such  declaration,  which notice will  contain,  at a minimum,  the following
information:  (i) the date of the  declaration of the dividend or  distribution,
(ii) the amount of such dividend or distribution,  (iii) the record date of such
dividend or  distribution,  (iv) the payment date or  distribution  date of such
dividend  or  distribution,  and  (v) the  Corporation's  best  estimate  of the
frequency  and amount of cash  dividends  or other  distributions  (other than a
dividend payable in shares of the Corporation's Common Stock) to be paid or made
in each of the succeeding three years.

     ARTICLE 4 ADJUSTMENTS

     4.1  Adjustments.  The  Exercise  Price and the  number of  Warrant  Shares
issuable upon exercise of each Warrant shall be subject to adjustment  from time
to time as follows:

     (a)  Adjustments for Change in Common Stock. If the Corporation at any time
after  the date  hereof  (i)  declares  a  dividend  payable  in  shares  of the
Corporation's  Common Stock,  (ii) subdivides its  outstanding  shares of Common
Stock into a larger number of shares or (iii) combines its outstanding shares of
Common  Stock into a smaller  number of  shares,  the number and kind of Warrant
Shares  issuable upon  exercise of each Warrant,  at the time of the record date
for such dividend or of the effective  date of such  subdivision  or combination
shall be  proportionately  adjusted so that the Holder of any Warrant  exercised
after such time shall be entitled to receive the

                                                                

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     aggregate  number and kind of shares of Common Stock which, if such Warrant
had been exercised  immediately prior to such date, such Holder would have owned
upon such  exercise  and been  entitled  to receive by virtue of such  dividend,
subdivision or  combination.  An adjustment made pursuant to this Section 4.1(a)
shall become effective  immediately after the effective date of such subdivision
or combination.  Such adjustment  shall be made  successively  whenever any such
event shall occur.

     If at any time, as a result of an adjustment  made pursuant to this Section
4.1(a),  the Holder of any  Warrant  thereafter  exercised  becomes  entitled to
receive any  securities  other than shares of Common  Stock,  the number of such
other securities so receivable upon exercise of such Warrant shall be subject to
adjustment  from time to time in a manner and on terms as nearly  equivalent  as
practicable  to the provisions  with respect to the Warrant Shares  contained in
this Section  4.1,  and the  provisions  of this  Agreement  with respect to the
Warrant Shares shall apply on like terms to any such other securities.

     (b) De Minimis  Adjustments.  No adjustment in the Exercise Price or number
of Warrant  Shares  purchasable  upon  exercise of any Warrant  pursuant to this
Section 4.1 or Section 4.2 below shall be required unless such adjustment  would
require an  increase or  decrease  of at least  one-tenth  of one percent in the
Exercise Price or number of Warrant Shares purchasable upon the exercise of each
Warrant,  as the case may be; provided,  however,  that any adjustments which by
reason of this  Section  4.1(b)  are not  required  to be made  shall be carried
forward and taken into account in any subsequent adjustment.

     (c)  Adjustment of Exercise  Price.  Whenever the number of Warrant  Shares
purchasable  upon the exercise of each Warrant is adjusted,  as herein provided,
the Exercise Price per Warrant Share payable upon exercise of each Warrant shall
be adjusted  (calculated to the nearest $.0001) so that it shall equal the price
determined  by  multiplying  such  Exercise  Price  immediately  prior  to  such
adjustment  by a fraction,  the numerator of which shall be the number of shares
purchasable  upon  the  exercise  of  each  Warrant  immediately  prior  to such
adjustment,  and the  denominator  of which  shall be the  number  of  shares so
purchasable immediately thereafter.

     (d) Consolidation, Merger or Sale of Assets; Liquidation.

     (i) Subject to the  provisions of Section  4.1(d)(ii)  below,  in the event
that, at any time after the date of this Agreement, the Corporation consolidates
with, merges with or into, or sells,  transfers or otherwise  disposes of all or
substantially  all of its property and assets to, any person,  and in connection
therewith  consideration  is payable to holders of shares of Common  Stock,  the
Warrants  shall  remain  subject to the terms and  conditions  set forth in this
Agreement  and each Warrant  shall,  after such  consolidation,  merger or sale,
entitle the Holder thereof to receive,  upon  exercise,  the number of shares of
capital  stock  or  other  securities  or  property   (including  cash)  of  the
Corporation,  or of such person  resulting from such  consolidation or surviving
such  merger  or to which  such  sale  shall  be  made,  that  would  have  been
distributable  or payable  on  account  of the shares of Common  Stock (or other
securities  or  property  purchasable  upon  exercise  of the  Warrants)  if the
Warrants had been exercised  immediately prior to such merger,  consolidation or
sale (or, if applicable,  any record date therefor);  and, in any such case, the
provisions of this Agreement with respect to the rights and interests thereafter
of the Holders shall be  appropriately  adjusted by the Board of  Directors,  in
good faith,  as  evidenced by a Board  Resolution,  so as to be  applicable,  as
nearly as reasonably possible, to any shares of stock or other securities or any
property thereafter deliverable on the exercise of the Warrants.

     (ii)  Notwithstanding the provisions of Section 4.1(d)(i) above, (A) if the
Corporation   consolidates   with,   merges  with  or  into,  or  sells  all  or
substantially  all of its property and assets to, any person,  and consideration
is payable to holders of shares of Common  Stock in exchange for their shares of
Common  Stock in  connection  with  such  merger,  consolidation  or sale  which
consists solely of cash, or (B) in the event of the dissolution,  liquidation or
winding-up  of the  Corporation,  then  the  Holders  shall  receive  per  share
distributions  at the same time and on an equal basis with  holders of shares of
Common Stock (or other

                                                                

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     securities or property purchasable upon exercise of the Warrants) as if the
Warrants had been exercised  immediately prior to such event (or, if applicable,
any record date therefor),  less the per share Exercise  Price.  Upon receipt of
such payment,  with respect to the Warrants in respect of which such payment was
received, the rights of the Holders shall terminate except as expressly provided
herein or in the Warrant Certificate and such Warrants shall expire. The Holders
shall  promptly  deliver  such  Warrant  Certificates  to  the  Corporation  for
cancellation.  In the case of any such merger,  consolidation or sale of assets,
the  surviving  or  acquiring  person  or,  in the  event  of  any  dissolution,
liquidation or winding up of the  Corporation,  the  Corporation,  shall deposit
promptly  on behalf of the  Holders  the  funds,  if any,  necessary  to pay the
Holders pursuant to this Section 4.1(d)(ii).

     (e)  Adjustments by Board.  In addition to the foregoing  adjustments,  the
Board of  Directors  may make any other  adjustment  to  increase  the number of
Warrant Shares purchasable upon exercise of Warrants or to decrease the Exercise
Price as it may,  in good  faith,  deem  desirable  to  protect  the  rights and
benefits of the Holders hereunder.

     (f) Further  Adjustments.  If a state of facts shall occur  which,  without
being  specifically  controlled by the provisions of this Section 4.1, would not
fairly  protect  the  exercise  rights of the  Holders  in  accordance  with the
essential intent and principles of such provisions,  then the Board of Directors
of the  Corporation  shall  make  an  adjustment  in  the  application  of  such
provisions,  in accordance with such essential  intent and principles,  so as to
protect such exercise rights.

     4.2 Below Market Price Issuances.

     (a) Subject to the provisions of Section 4.2(g) below,  if the  Corporation
shall issue (other than as provided in Section 4.1) or sell any shares of Common
Stock for a consideration per share less than the Market Price, then at the time
of such issuance or sale the Exercise Price shall be  appropriately  adjusted to
the number  determined by multiplying  the Exercise Price in effect  immediately
prior to such  issuance or sale by a fraction,  the  numerator of which shall be
the number of shares of Common  Stock  outstanding,  whether  issued or issuable
upon conversion or exercise,  immediately  prior to the issuance or sale of such
shares of Common  Stock plus the number of such shares of Common Stock which the
aggregate  consideration for such additional shares of Common Stock so issued or
sold would purchase at a consideration  per share equal to the Market Price, and
the  denominator  of  which  shall be the  number  of  shares  of  Common  Stock
outstanding, whether issued or issuable upon conversion or exercise, immediately
prior to the  issuance or sale of such shares of Common Stock plus the number of
shares of Common Stock so issued or sold.

     (b) If the Corporation  shall issue (other than as provided in Section 4.1)
or sell any Rights,  and the  consideration per share for which shares of Common
Stock may at any time thereafter be issuable pursuant to such Rights (when added
to the  consideration  per  share of Common  Stock,  if any,  received  for such
Rights)  shall be less than the Market Price,  then the Exercise  Price shall be
appropriately  adjusted by the number  determined  by  multiplying  the Exercise
Price in effect  immediately  prior to such issuance or sale by a fraction,  the
numerator  of which shall be the number of shares of Common  Stock  outstanding,
whether issued or issuable upon conversion or exercise, immediately prior to the
issuance or sale of such Rights plus the number of  additional  shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so offered (when added to the  consideration per share of Common Stock, if
any,  received  for such Rights)  would  purchase at the Market  Price,  and the
denominator of which shall be the number of shares of Common Stock  outstanding,
whether issued or issuable upon conversion or exercise, immediately prior to the
issuance or sale of such Rights plus the number of  additional  shares of Common
Stock issuable upon exercise of such Rights.

     (c) For the  purposes of this  Section 4.2, the date as of which the Market
Price shall be computed shall be the date of the issuance or sale of such shares
of Common Stock or Rights.


                                                               

<PAGE>



     (d) No  adjustment  of the Exercise  Price shall be made under this Section
4.2 upon the issuance of any shares of Common Stock which are issued pursuant to
the exercise of any Rights,  if such adjustment  shall previously have been made
upon the issuance of such Rights pursuant to this Section 4.2.

     (e) If Rights (or any  portion  thereof)  which shall have given rise to an
adjustment pursuant to this Section 4.2 shall have expired or terminated without
the  exercise  thereof,  or if by reason of the terms of such Rights there shall
have been an increase or increases,  with the passage of time or  otherwise,  in
the exercise or conversion  price  thereof,  then the Exercise  Price  hereunder
shall be readjusted (but to no greater extent than  originally  adjusted) on the
basis of (i)  eliminating  from the  computation  of any shares of Common  Stock
attributable  to such  Rights as shall  have  expired  or  terminated,  and (ii)
treating the shares of Common Stock,  if any,  actually  issued  pursuant to the
previous  exercise of such  Rights as having  been issued for the  consideration
actually received and receivable therefor.

     (f) (i) In any such case covered by this Section  4.2, in  determining  the
amount of  consideration  received by the  Corporation  for the Common  Stock or
Rights if the  consideration  is in whole or in part  consideration  other  than
cash,  the amount of the  consideration  shall be deemed to be the fair value of
such  consideration  as  reasonably  determined by the Board of Directors of the
Corporation.  If shares of Common  Stock  shall be issued as part of a unit with
Rights,  then the amount of  consideration  for the Rights shall be deemed to be
the amount  reasonably  determined by the Board of Directors of the Corporation;
and (ii) in case any  shares  of  Common  Stock or  Rights  shall be  issued  in
connection  with any merger or  consolidation  in which the  Corporation  is the
surviving  corporation,  the amount of consideration therefor shall be deemed to
be the fair value,  as  reasonably  determined  by the Board of Directors of the
Corporation,  of such  portion of the assets and  business  of the  nonsurviving
corporation or  corporations  as the Board shall determine to be attributable to
such shares of Common Stock or Rights.

     (g)  Notwithstanding  the  foregoing  provisions  of this  Section 4.2, the
provisions  of this  Section 4.2 shall not apply to (i) any  issuance or sale of
Common Stock or Rights to any employee or other person providing services to the
Corporation as an element of such individual's  compensation,  (ii) any issuance
or sale of Common Stock in connection  with any merger or  consolidation  or the
acquisition of the assets (other than cash or cash  equivalents)  of a person or
entity,  (iii) the  issuance  or sale of Common  Stock  based  upon the  average
closing  price of a share of Common Stock over a period not to exceed 30 trading
days and the average price so obtained is less than the Market Price on the date
of the issuance or sale of such shares of Common Stock,  or (iv) any issuance or
sale of any Common  Stock  issuable  upon the  exercise  of the  Warrants or the
warrants issued pursuant to this Warrant Agreement.

     (h) For purposes of this Section 4.2, that number of shares of Common Stock
issuable to (i)  holders of Series A  Preference  Shares in excess of  4,883,227
shares,  (ii) holders of Trust  Preferred  Securities in excess of the number of
shares of Common  Stock  initially  issuable to such holders as at the date such
Trust  Preferred  Securities are issued and (iii) Series B Preference  Shares in
excess of  4,000,000  shares shall be deemed to be shares  issuable  pursuant to
Rights for a consideration less than the Market Price.

     4.3 Notice of  Adjustment.  Whenever the number of Warrant  Shares or other
securities  or property  purchasable  upon the  exercise of each  Warrant or the
Exercise Price is adjusted,  as herein provided,  the Corporation shall promptly
mail to the  Holders  a notice  of such  adjustment  or  adjustments,  and shall
deliver to the Holders a certificate of a firm of independent public accountants
selected by the Board of Directors (who may be the regular accountants  employed
by the  Corporation)  setting  forth (i) the number of  Warrant  Shares or other
securities  or property  purchasable  upon the  exercise of each Warrant and the
Exercise  Price  after  such  adjustment,  (ii) a brief  statement  of the facts
requiring such  adjustment,  and (iii) the  computation by which such adjustment
was made.

     4.4  Statements  in the  Warrants.  Notwithstanding  any  adjustment in the
Exercise  Price or the number or kind of  Warrant  Shares  purchasable  upon the
exercise of the Warrants,  the Warrant  Certificates  theretofore  or thereafter
issued may  continue  to express the same price and number and kind of shares as
are  stated  in the  Warrant  Certificate  initially  issued  pursuant  to  this
Agreement.

                                                                

<PAGE>



     4.5 Notice of  Consolidation,  Merger or Sale of Assets. In the event that,
at any time after the date of this  Agreement,  and prior to 5:00 p.m., New York
City time,  on the  Expiration  Date,  there shall be any (a)  consolidation  or
merger involving the Corporation,  or sale, transfer or other disposition of all
or substantially all of the  Corporation's  property and assets (except a merger
or  other  reorganization  in  which  the  Corporation  shall  be the  surviving
corporation  and  holders  of  shares of Common  Stock (or other  securities  or
property  purchasable upon exercise of the Warrants) receive no consideration in
respect of their shares or property) or (b) any other  transaction  contemplated
by Section  4.1(d)(ii) above, then in any such case, the Corporation shall cause
to be mailed to the  Holders,  at the  earliest  practicable  time (and,  in any
event, not later than the later of (i) the date the proxy materials (if any) are
first  distributed  (or  other  notice  is  first  given)  to the  Corporation's
shareholders  regarding  the  proposed  transaction,  or (ii) 20 days before the
effective  date (or record  date,  if  earlier) of such  proposed  transaction),
notice of the date on which such reorganization,  sale,  consolidation,  merger,
dissolution,  liquidation  or winding up or other  such  transaction  shall take
place,  as the case may be. Such notice shall also set forth such facts as shall
indicate  the effect of such  action (to the extent  such effect may be known at
the date of such  notice)  on the  Exercise  Price  and the kind and  amount  of
securities and property  purchasable upon exercise of the Warrants.  Such notice
shall also  specify  the date as of which the holders of record of the shares of
Common Stock or other  securities or property  purchasable  upon exercise of the
Warrants  shall be entitled  to exchange  their  shares or other  securities  or
property  for  securities,   money  or  other  property  deliverable  upon  such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up or other such transaction, as the case may be.

     4.6 Fractional  Interests.  In computing  adjustments under this Article 4,
fractional  interests in Common Stock shall be taken into account to the nearest
one-thousandth  of a  share.  No  fractional  shares  of  Common  Stock or scrip
representing fractional shares of Common Stock shall be issued upon any exercise
of the  Warrants,  but, in lieu  thereof,  there shall be paid an amount in cash
equal to the same  fraction of the Market Price of a whole share of Common Stock
on the business day preceding the day of exercise.

     4.7 No  Dilution  or  Impairment.  The  Corporation  shall  not  amend  its
Certificate of Incorporation or participate in any  reorganization,  transfer of
assets, consolidation,  merger, dissolution,  issue or sale of securities or any
other  voluntary  action,  for the  purpose of  avoiding or seeking to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder by the  Corporation,  but will at all times, in good faith,  assist in
carrying out all such actions as may be reasonably  necessary or  appropriate in
order to protect the rights of the holders of the Warrants  against  dilution or
other impairment.

     ARTICLE 5 RESERVATION AND AUTHORIZATION OF COMMON SHARES, ETC.

     5.1 Reservation and  Authorization.  The Corporation  hereby represents and
warrants that it has reserved, and shall at all times hereafter reserve and keep
available,  for issuance  upon  exercise of the Warrants such number of its duly
authorized  but  unissued  shares of  Common  Stock or other  securities  of the
Corporation  purchasable  upon exercise of the Warrants as will be sufficient to
permit  the  exercise  in  full  of all  outstanding  Warrants  and  will  cause
appropriate  evidence  of  ownership  of such  shares of  Common  Stock or other
securities to be delivered to the Holders of the Warrants upon their request for
delivery of such,  and shall take such action as shall be  necessary so that all
such shares of Common Stock or other  securities  shall,  at all times,  be duly
approved for listing, subject to official notice of issuance, on each securities
exchange,  if any, on which such shares of Common Stock or other  securities are
then listed.

     5.2 Covenant  Regarding  Securities.  The  Corporation  covenants  that all
shares of Common Stock or other securities of the Corporation that may be issued
upon the exercise of the Warrants will, upon issuance,  be (a) duly  authorized,
validly issued,  fully paid and nonassessable,  (b) free from preemptive and any
other  similar  rights and (c) free from any taxes,  liens,  charges or security
interest with respect thereto.


                                                                

<PAGE>



     5.3  Registration.   If  the  Warrant  Shares  or  any  securities  of  the
Corporation  issuable  upon the  exercise of the Warrants  require  registration
with,  or approval of, any  governmental  authority  (in addition to such as the
Corporation is required to obtain  pursuant to Article 8 hereof),  or the taking
of any other  action (in  addition  to such as the  Corporation  is  required to
obtain  pursuant  to Article 8 hereof),  under the laws of the United  States of
America or any state or political  subdivision  thereof,  before such securities
may be  validly  offered  or  sold  in  compliance  with  such  laws,  then  the
Corporation  covenants  that  at its  expense  it  will,  in good  faith  and as
expeditiously as practicable,  endeavor to secure and maintain such registration
or approval or to take such other action, as the case may be; provided, however,
that the Corporation will not be required to qualify generally to do business in
any  jurisdiction  where it is not then so  qualified or to take any action that
would  subject it to general  service  of  process  or to  taxation  in any such
jurisdiction where it is not then so subject.

     5.4 S-3 Eligibility. The Corporation has represented to NationsBank that it
is currently  eligible to register its  securities  for resale on Form S-3 under
the provisions of the Securities Act and hereby  covenants that it will take all
action  appropriate to maintain such eligibility at all times during the term of
this Agreement.

     ARTICLE 6 WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER

     6.1 Transfer and Exchange.

     (a) The  Corporation  shall keep and  maintain  at its office a register in
which,  subject  to  such  reasonable  regulations  as  it  may  prescribe,  the
Corporation  shall provide for the  registration of the Warrant  Certificates on
the Corporation's records and transfers or exchanges of the Warrant Certificates
as herein provided.

     (b) The Holders may transfer a Warrant Certificate by written notice to the
Corporation  stating the name of the proposed transferee and otherwise complying
with the terms of this Agreement.

     (c)  Subject  to  Section  6.2(a)  hereof,  when a Warrant  Certificate  is
presented  to the  Corporation  with a request to register  the transfer of such
Warrant  Certificate,  the  Corporation  shall register the transfer or make the
exchange  as  requested  if its  requirements  for  such  transactions  and  any
applicable  requirements  hereunder are satisfied.  To permit  registrations  of
transfers and exchanges,  the Corporation shall execute and deliver such Warrant
Certificate in accordance with the provisions hereof. No service charge shall be
made for any registration of transfer or exchange of the Warrants.

     (d) Any  Warrant  Certificate  when duly  endorsed in blank shall be deemed
negotiable.  The Holder of a Warrant  Certificate  duly endorsed in blank may be
treated  by the  Corporation  and all other  persons  dealing  therewith  as the
absolute  owner  thereof for any purpose and as the person  entitled to exercise
the rights represented thereby, any notice to the contrary notwithstanding;  but
until such transfer on such register,  the  Corporation may treat the registered
Holder thereof as the owner for all purposes.

     6.2 Special Transfer Provisions.

     (a) By its acceptance of the Warrants  represented by a Warrant Certificate
bearing the Private Placement Legend,  each Holder of the Warrants  acknowledges
the  restrictions on transfer of the Warrants and Warrant Shares and agrees that
it will transfer the Warrants and Warrant  Shares only in accordance  with those
restrictions.

     (b) Upon the transfer,  exchange or replacement of a Warrant Certificate or
certificate  representing  Warrant  Shares not  bearing  the  Private  Placement
Legend, the Corporation shall deliver a Warrant Certificate or stock certificate
that does not bear the Private Placement Legend. Upon the transfer,  exchange or
replacement of a Warrant Certificate or certificate  representing Warrant Shares
bearing the Private Placement Legend, the Corporation shall

                                                               

<PAGE>



     deliver such Warrant  Certificate or stock certificate  bearing the Private
Placement Legend,  unless such legend may be removed from a Warrant  Certificate
or stock  certificate  as provided in the next sentence.  The Private  Placement
Legend may be removed from a Warrant  Certificate or stock  certificate if there
is delivered to the  Corporation  evidence  satisfactory  to the  Corporation to
confirm  that  neither  such legend nor the  restrictions  on transfer set forth
therein are required to ensure that  transfers of such security will not violate
the registration and prospectus  delivery  requirements of the Securities Act or
applicable law; provided, however, that the Corporation shall not be required to
determine the sufficiency of any such evidence.

     6.3 Surrender of a Warrant Certificate. Any Warrant Certificate surrendered
for registration of transfer,  exchange or exercise of the Warrants  represented
thereby shall be promptly  canceled by the Corporation and shall not be reissued
by the Corporation  and, except in case of mutilation or partial exercise of the
Warrants represented by such Warrant  Certificate,  no Warrant Certificate shall
be issued hereunder in lieu thereof.

     ARTICLE 7 OPTIONS

     7.1  Option to Redeem  Warrants.  The  Corporation  shall have the right to
redeem for cash all, but not less than all, outstanding exercisable Warrants and
Warrant  Shares held by the Holders by the  delivery of a notice of purchase not
less than 20 nor more than 45 days prior to the  specified  purchase  date.  The
purchase  price per  Warrant or Warrant  Share  shall be an amount  equal to the
greater of (a) 135% of the Exercise Price (net of the respective Exercise Price)
or (b) the  higher of the  Market  Price on the date of giving of notice and the
Business Day immediately preceding the specified closing date for such purchase.

     ARTICLE 8 REGISTRATION RIGHTS

     8.1  Registration  by the  Corporation.  If at  any  time  the  Corporation
proposes to register any of its Common Stock under the Securities  Act,  whether
or not for  sale  for its own  account  (except  with  respect  to  registration
statements  filed on Form S-4 or Form S-8 or any successor  forms  thereto),  it
will give written  notice to each Holder,  at such Holder's  address as it shall
appear upon the Warrant  register,  of its  intention so to do. Upon the written
request of the Holders of not less than 50% of the Warrant Shares,  given within
20 days after receipt of the Corporation's  notice, the Corporation will use its
best efforts to cause all or a part of the Registrable Securities (in accordance
with the request of the Holders) to be included in the  securities to be covered
by the  registration  statement  proposed  to be filed by the  Corporation.  The
Corporation shall not be required to include any Registrable  Securities in such
registration  statement  unless  the  Holder  thereof  accepts  the terms of the
underwriting  as agreed upon between the  Corporation (or other persons who have
the right to agree upon the underwriting terms relating to the offering) and the
underwriter(s)  selected by the Corporation (or other persons who have the right
to select such underwriter). Notwithstanding any other provision of this Article
8, if the  underwriter of such  registration  advises the Corporation in writing
with a copy to the Holders that  marketing  factors  require a limitation of the
number of shares of Registrable  Securities to be underwritten,  the Corporation
shall so advise all Holders, and the number of securities including  Registrable
Securities  that may be included in such  registration  shall be apportioned pro
rata based on the number of shares requested to be included in such registration
by the  Holders and by all other  holders of  securities  participating  in such
registration,  including  the  holders  of the  Preference  Shares and the Trust
Preferred  Securities  and the Common  Stock  related  thereto  (other  than the
Corporation).  The  Corporation  may,  in its sole  discretion  and  without the
consent of the Holders, withdraw any such registration statement and abandon the
proposed  offering  in which the Holders  shall have  requested  to  participate
pursuant to this Section 8.1.

     8.2 Registration Procedures and Expenses.

     (a) In connection  with any  registration of Registrable  Securities  under
this Article 8, the Holders of said

                                                               

<PAGE>



     Registrable  Securities  will  furnish in writing  such  information  as is
reasonably  requested by the Corporation or its underwriter or underwriters  for
inclusion in the registration statement relating to such offering and such other
information  and   documentation  as  the  Corporation  or  its  underwriter  or
underwriters may reasonably  request and the Holders hereby agree to comply with
all  requirements  of the  Securities  Act or other laws  applicable  to them in
connection with the offer, sale, underwriting and distribution of its respective
Registrable Securities. The Holders participating in such registration shall not
be required to make any  representations  or warranties to or agreement with the
Corporation or the  underwriters  other than those  relating to the Holder,  its
Registrable  Securities and information provided by it in writing for use in the
registration  statement.  In connection with the  registration,  the Corporation
will, as expeditiously as possible:

     (i) take all actions, supply information and use its best efforts to obtain
all  legal  opinions,  auditors'  consents  and  comfort  letters  and  experts'
computations  that may be necessary  or  desirable to complete the  registration
process;

     (ii)  furnish,  at the request of the Holders,  on the date that all or any
part of such  Registrable  Securities is delivered to the  underwriters for sale
pursuant to such registration, an opinion dated such date of independent counsel
representing the Corporation for the purposes of such registration, addressed to
the Holders making such request,  with respect to such legal matters relating to
the  registration  in  connection  with which such opinion is being given in the
same  form  mutatis,   mutandis,  as  the  opinion  of  such  counsel  given  to
underwriters; and

     (iii)  notify  the  Holders  of  Registrable  Securities  covered  by  such
registration  statement,  at any time  when a  prospectus  relating  thereto  is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration  statement, as
then in effect,  includes  an untrue  statement  of a material  fact or omits to
state any material fact  required to be stated  therein or necessary to make the
statements  therein  not  misleading  in the  light  of the  circumstances  then
existing.

     (b) All expenses incurred by the Corporation in complying with this Article
8, including,  without  limitation,  all registration and filing fees,  printing
expenses, fees and disbursements of counsel for the Corporation,  auditors' fees
and blue  sky  fees  and  expenses  ("Registration  Expenses"),  except  for all
underwriting  discounts and selling  commissions  applicable to the sales of the
Holders'  Registrable  Securities being included in the subject offering and all
fees and  disbursements  of counsel  for the Holders of  Registrable  Securities
(including  counsel  designated  by  any  such  seller  for  a  "due  diligence"
investigation of the Corporation) shall be borne by the Corporation.

     8.3 Indemnification.

     (a) In the event of a  registration  of any of the  Registrable  Securities
under the  Securities  Act or under any state  securities  laws pursuant to this
Article 8, the Corporation  will indemnify and hold harmless the sellers of such
Registrable  Securities,  each underwriter of such Registrable  Securities,  the
Holders and the transferors of the Registrable Securities or any portion thereof
to  underwriters,  and each other  person,  if any,  who  controls  such seller,
transferor or underwriter within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Party"),  against any and all losses,  claims, damages or
liabilities,  joint or  several,  to which  such  seller,  underwriter,  Holder,
transferor or controlling person may become subject under the Securities Act and
under any state securities laws (or any successor law) or otherwise,  insofar as
such losses,  claims,  damages or  liabilities  (or actions in respect  thereof)
arise out of or are based upon an untrue  statement or alleged untrue  statement
of any material fact contained in any  registration  statement  under which such
Registrable  Securities shall have been registered under the Securities Act, any
preliminary  prospectus or final prospectus  contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the statements  therein not  misleading;  and the  Corporation
will reimburse such Indemnified Party

                                                               

<PAGE>



     for  any  legal  or any  other  expenses  reasonably  incurred  by  them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action; provided,  however, that the Corporation will not be liable
in any such case to the extent that any such loss,  claim,  damage or  liability
arises out of or is based upon an untrue  statement or alleged untrue  statement
or  omission  or alleged  omission  made in such  registration  statement,  said
preliminary  prospectus or said  prospectus  or said  amendment or supplement in
reliance  upon and in  conformity  with  written  information  furnished  to the
Corporation   through  an  instrument   executed  by  such   Indemnified   Party
specifically  for  inclusion  in  such   registration   statement,   preliminary
prospectus, final prospectus,  amendment or supplement thereto.  Notwithstanding
the foregoing, the liability of any such Holder shall not exceed an amount equal
to the proceeds  realized by each such Holder of Registrable  Securities sold as
contemplated herein.

     (b) In the event of any  registration of any Registrable  Securities  under
the Securities  Act pursuant to this Article 8, each seller of such  Registrable
Securities (other than any underwriter or dealer purchasing Warrant Shares), and
the holder of the Warrants,  as transferors of Registrable  Securities,  jointly
and severally, will indemnify and hold harmless the Corporation, each person, if
any,  who  controls  the  Corporation  within  the  meaning of Section 15 of the
Securities  Act,  each  officer of the  Corporation  who signs the  registration
statement and each director of the Corporation  against any and all such losses,
claims,  damages,  or  liabilities  arising  out of or  based  upon  any  untrue
statement or alleged  untrue  statement in or omission or alleged  omission from
any such registration  statement,  prospectus,  amendment or supplement,  if the
untrue  statement or omission or alleged untrue statement or omission in respect
of which such loss, claim,  damage or liability is asserted was made in reliance
upon and in conformity with information  furnished in writing to the Corporation
by or on behalf of such seller or transferor  specifically for inclusion in such
registration statement,  preliminary prospectus, final prospectus,  amendment or
supplement thereto; and such seller or transferor will reimburse the Corporation
or such  indemnified  party  for any  legal  or any  other  expenses  reasonably
incurred by them in connection  with  investigating  or defending any such loss,
claim,  damage,  liability or action;  provided,  however,  that, if any losses,
claims,  damages  or  liabilities  arise  out of or are  based  upon  an  untrue
statement,  alleged untrue statement,  omission or alleged omission contained in
any preliminary  prospectus which did not appear in the final  prospectus,  such
seller or transferor  shall not have any such liability with respect  thereto to
the Corporation,  any person who controls the Corporation  within the meaning of
Section 15 of the Securities  Act, any officer of the Corporation who signed the
registration  statement or any director of the Corporation if the Corporation or
any person on their behalf delivered a copy of the preliminary prospectus to the
person  alleging  such  losses,  claims,  damages or  liabilities  and failed to
deliver a copy of the final  prospectus,  as amended or  supplemented  if it has
been  amended  or  supplemented,  to such  person  at or  prior  to the  written
confirmation of the sale to such person.

     (c)  Payments in respect of  indemnifications  required by this Section 8.3
shall be made by periodic  payments  during the course of the  investigation  or
defense,  as and when bills are received or expenses  incurred.  Any party which
proposes  to assert the right to be  indemnified  under this  Section  8.3 will,
promptly  after  receipt  of  notice  of  commencement  of any  action,  suit or
proceeding  against such party in respect of which a claim is to be made against
an  indemnifying  party under this  Section 8.3,  notify each such  indemnifying
party of the commencement of such action,  suit or proceeding,  enclosing a copy
of all papers served,  but the omission so to notify such indemnifying  party of
any such  action,  suit or  proceeding  shall not relieve it from any  liability
which it may have to any  indemnified  party  otherwise  than under this Section
8.3. In case any such action,  suit or proceeding  shall be brought  against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish,  jointly with any other  indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably  satisfactory to
such indemnified  party, and after notice from such  indemnifying  party to such
indemnified  party  of its  election  so to  assume  the  defense  thereof,  the
indemnifying  party shall not be liable to such indemnified  party for any legal
or other expenses  subsequently incurred by such indemnified party in connection
with  the  defense  thereof  except  as  provided  in  the  next  sentence.  The
indemnified  party  shall have the right to employ  its own  counsel in any such
action,  but the fees and  expenses of such  counsel  shall be at the expense of
such  indemnified  party,  when and as incurred,  unless (i) the  employment  of
counsel by such indemnified party has been authorized by the indemnifying party,
(ii) the

                                                               

<PAGE>



     indemnified  party shall have received a written  opinion from  independent
counsel that there may be a conflict of interest between the indemnifying  party
and the indemnified party in the conduct of the defense of such action (in which
case the  indemnifying  party  shall not have the right to direct the defense of
such action on behalf of the indemnified  party) or (iii) the indemnifying party
shall not in fact have employed counsel to assume the defense of such action. An
indemnifying party shall not be liable for any settlement of any action or claim
effected  without  its  consent.  In no  event  shall an  indemnifying  party be
required to pay for more than one counsel for an indemnified party, exclusive of
local counsel.

     8.4  Conflicting  Rights.  The  Corporation  shall not,  without  the prior
written  consent of the  Holders of not less than 50% of the  Warrant or Warrant
Shares (assuming  exercise of all Warrants),  grant any rights to any persons to
register any shares of capital stock or other  securities of the  Corporation if
such right is senior to the rights of the Holders hereunder.

     8.5 Termination. The registration rights granted under this Article 8 shall
terminate  with  respect  to any Holder on the date on which the Holder may sell
the  Warrants  or Warrant  Shares  without  restriction  pursuant to Rule 144(k)
promulgated under the Securities Act.

     8.6  Registration  on Form S-3.  At any time  prior to two years  after the
Expiration  Date,  the  Holder  shall  have  the  unlimited  right  (but no more
frequently  than once each six  months) to require the  Corporation  to promptly
register  the Warrant  Shares on Form S-3. The  Corporation  will include in the
Form  S-3  Registration  Statement  such  information  as any  underwriters  may
reasonably request for marketing  reasons.  If at the time of sale, only Warrant
Shares are being offered, any underwriters selected in connection with such sale
shall be  acceptable  to the Selling  Holders.  The  Corporation  shall keep the
Holder advised of the initiation of such  registration and its effectiveness and
shall take all steps appropriate to maintain such  effectiveness for a period of
24 months.

     ARTICLE 9 MISCELLANEOUS

     9.1 Loss or  Mutilation.  Upon receipt by the  Corporation  of (a) evidence
satisfactory  to it of the  ownership,  and  the  loss,  theft,  destruction  or
mutilation,  of any Warrant Certificate and (b) of indemnity  satisfactory to it
or, in the case of mutilation,  upon surrender and cancellation of the mutilated
Warrant  Certificate,  then,  the  Corporation  shall execute and deliver to the
registered  Holder  of  the  lost,   stolen,   destroyed  or  mutilated  Warrant
Certificate,  in exchange for or in lieu thereof,  a new Warrant  Certificate of
the same  tenor and for a like  aggregate  number of  Warrant  Shares.  Upon the
issuance of any new Warrant  Certificate under this Section 9.1, the Corporation
may  require  the  payment  of a sum  sufficient  to  cover  any  tax  or  other
governmental  charge that may be imposed in relation  thereto and other expenses
in connection  therewith.  Every new Warrant Certificate  executed and delivered
pursuant  to this  Section  in lieu of any  lost,  stolen or  destroyed  Warrant
Certificate  shall  constitute  a  contractual  obligation  of the  Corporation,
whether or not the allegedly lost, stolen or destroyed Warrant Certificate shall
be at any time  enforceable by anyone,  and shall be entitled to the benefits of
this  Agreement.  The  provisions  of this Section 9.1 are  exclusive  and shall
preclude (to the extent lawful) all other rights or remedies with respect to the
replacement of the mutilated, lost, stolen, or destroyed Warrant Certificate.

     9.2  Payment  of  Taxes.  The  Corporation  shall  pay any  taxes and other
governmental  charges that may be imposed under the laws of the United States of
America or any political  subdivision or taxing authority  thereof or therein in
respect of the issue or delivery  of Warrant  Shares or of other  securities  or
property  deliverable  upon  exercise of the  Warrants  (other than income taxes
imposed on the Holders). The Corporation shall not be required,  however, to pay
any tax or other charge imposed in connection with any transfer  involved in the
issue of any  certificate  for Warrant  Shares or other  securities  or property
issuable  upon the  exercise  of the  Warrants  or payment of cash to any person
other than the Holder of a Warrant Certificate  surrendered upon exercise of the
Warrants and in case of such transfer or payment,  the Corporation  shall not be
required to issue any stock certificate or pay any cash

                                                             
<PAGE>



     until  such tax or charge has been paid or it has been  established  to the
Corporation's satisfaction that no such tax or charge is due.

     9.3 No Merger,  Consolidation or Sale of Assets or the Corporation.  Except
as otherwise provided herein, the Corporation will not merge into or consolidate
with any other person,  or sell or otherwise  transfer its property,  assets and
business substantially as an entirety to a successor of the Corporation,  unless
the person resulting from such merger or consolidation, or such successor of the
Corporation,  shall expressly assume, by supplemental  agreement satisfactory in
form to the Holders and  executed  and  delivered  to the  Holders,  the due and
punctual  performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Corporation.

     9.4 Notices.  Any notice,  demand or delivery  authorized by this Agreement
shall be in writing and shall be delivered by hand or overnight courier service,
mailed or set by facsimile as follows:

         To the Corporation:

         BREED Technologies, Inc.
         5300 Old Tampa Highway
         Lakeland, Florida 33811
         Attention:  General Counsel
         Telephone No.  941-668-6000

         To NationsBank:

         NationsBank, N.A.
         400 N. Ashley Drive, 2nd Floor
         Tampa, Florida 33602
         Attention: Global Finance
         Telecopy: (813) 224-5948
         Attention: Joseph J. Troy

         With a copy to:

         NationsBank, N.A.
         Independence Center, 15th Floor
         NC1-001-15-04
         Charlotte, North Carolina 28255
         Attention: Agency Services
         Telecopy: (704) 386-9923

     or such other  address or telecopy  number as shall have been  furnished to
the party giving or making such notice,  demand or delivery.  Any notice that is
sent in a manner provided herein shall have been duly given when sent.

     9.5  Governing  Law. THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE  STATE OF  FLORIDA  WITHOUT  GIVING  EFFECT  TO
CONFLICTS OF LAW PRINCIPLES THEREOF.

     9.6  Assignment;   Successors.  Subject  to  Section  6.2(a)  hereof,  this
Agreement  may be  assigned by  NationsBank  to any  Affiliate  at any time upon
written notice. This Agreement shall be binding upon and inure to the benefit of
the Corporation and the Holders and their respective successors and assigns, and
the Holders from time to time of the

                                                               
<PAGE>



     Warrants.  Nothing in this  Agreement  is intended or shall be construed to
confer upon any person, other than the Corporation,  and the Holders, any right,
remedy or claim under or by reason of this Agreement or any part hereof.

     9.7  Counterparts.  This Agreement may be executed manually or by facsimile
in any number of  counterparts,  each of which shall be deemed an original,  but
all of which together shall constitute one and the same instrument.

     9.8 Amendments.  Any provision of this Agreement or the Warrant Certificate
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the  Corporation  and the  Holders of a majority in interest of
the issued or issuable  Warrant  Shares;  provided,  however,  if any  amendment
adversely affects the Exercise Price or the number of Warrant Shares issued upon
exercise of any Warrant,  then the Holders of all the issued or issuable Warrant
Shares must sign the amendment.

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

     9.10  Third  Party   Beneficiaries.   The  Holders  shall  be  third  party
beneficiaries to the agreements made hereunder  between the Corporation,  on the
one hand,  and  NationsBank,  on the other hand,  and the Holders shall have the
right  to  enforce  such  agreements  directly  to  the  extent  it  deems  such
enforcement  necessary  or  advisable to protect its rights or the rights of the
Holder hereunder.

     9.11  Severability.  In the  event  that any one or more of the  provisions
contained  herein,  or the  application  thereof  in any  circumstances  is held
invalid,  illegal or unenforceable in any respect for any reason,  the validity,
legality and  enforceability of any such provision in every other respect and of
the  remaining  provisions  hereof  shall not be in any way impaired or affected
thereby,  it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.

     9.12 No  Inconsistent  Agreements.  Except as provided in Section  8.4, the
Corporation  has not, as of the date hereof,  entered into,  nor shall it, on or
after the date hereof,  enter into, any agreement that is inconsistent  with the
rights  granted  to the  Holders  herein or that  otherwise  conflicts  with the
provisions hereof.


     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed, as of the date first above written

                                                     BREED TECHNOLOGIES, INC.


                                                     By:
                                                     Name:
                                                     Title:


                                                     NATIONSBANK, N.A.


                                                     By:
                                                     Name:  Miles C. Dearden III
                                                     Title:Senior Vice President



                                                               

<PAGE>



EXHIBIT A

     WARRANT CERTIFICATE

     THE WARRANTS  EVIDENCED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE"SECURITIES  ACT"). THE WARRANTS MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE WARRANTS  UNDER THE  SECURITIES  ACT OR AN EXEMPTION  FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

     No. 1
Warrants to purchase an aggregate of __________shares of Common Stock

     WARRANT TO PURCHASE COMMON STOCK

     This certifies that  _______________________ (the "Holder") or its assigns,
is the owner of ___________________  Warrants to purchase shares of Common Stock
("Common Stock") of BREED Technologies,  Inc. (the "Corporation").  Each Warrant
initially  entitles  the holder  thereof  (the  "Holder")  to purchase  from the
Corporation  one share of Common  Stock at the  purchase  price  (the  "Exercise
Price") set forth in the Agreement (as defined below),  subject to the terms and
conditions  hereof  and of the  Agreement.  In order to  exercise  the  Warrants
represented  by this Warrant  Certificate,  the  registered  Holder  hereof must
surrender this Warrant  Certificate at the office of Corporation as set forth in
the Agreement or to its successor.

     This Warrant  Certificate is issued under and in accordance  with a Warrant
Agreement  dated  October  __,  1997 by and between  NationsBank,  N.A.  and the
Corporation  (the  "Agreement"),  and is  subject  to the terms  and  provisions
contained  therein,  to all of which  terms and  provisions  the  Holder of this
Warrant  Certificate  consents by  acceptance  hereof.  The  Agreement is hereby
incorporated  herein by reference  and made a part  hereof.  Reference is hereby
made to the  Agreement  for a full  description  of the rights,  limitations  of
rights, obligations, duties and immunities thereunder of the Corporation and the
Holder of the Warrants.  The summary or the terms of the Agreement  contained in
this Warrant  Certificate  is qualified in its entirety by express  reference to
the Agreement.  All terms used in this Warrant  Certificate  that are defined in
the Agreement shall have the meanings assigned to them in the Agreement.

     Copies of the  Agreement are on file at the office of the  Corporation  and
may be obtained by writing to the Corporation requesting the same.

     The number of shares of Common Stock  purchasable  upon the exercise of the
Warrants and the  Exercise  Price are subject to  adjustment  as provided in the
Agreement.

     In the event the Corporation  merges or consolidates  with, or sells all or
substantially  all of its assets to, another person,  the Holder of the Warrants
will,  upon  exercise,  be  entitled to receive the number of shares of stock or
other  securities  or the amount of money or other  property  to be  received by
holders on Common  Stock on an equal basis with holders of Common  Stock,  as if
the Warrants had been exercised immediately prior to such transaction.

     All shares of Common Stock issuable by the Corporation upon the exercise of
the  Warrants  shall  be  validly  issued,  fully  paid and  nonassessable.  The
Corporation  shall  pay any taxes and  other  governmental  charges  that may be
imposed  under  the  laws of the  United  States  of  America  or any  political
subdivision  or taxing  authority  thereof or therein in respect of the issue or
delivery of the Warrant  Shares or of other  securities or property  deliverable
upon  exercise of the Warrants  (other than income taxes imposed on the Holder).
The Corporation shall not be required,  however,  to pay any tax or other charge
imposed in connection with any transfer involved in the issue of any

                                                               

<PAGE>



     certificate  for Warrant  Shares or other  securities or property  issuable
upon the  exercise of the  Warrants or payment of cash to any person  other than
the Holder of a Warrant Certificate  surrendered upon exercise of a Warrant and,
in case of such transfer or payment,  the  Corporation  shall not be required to
issue any stock  certificate  or pay any cash  until such tax or charge has been
paid or it has been established to the  Corporation's  satisfaction that no such
tax or charge is due.

     Subject to the requirements set forth in the Agreement and the restrictions
on transfer set forth above,  this Warrant  Certificate and all rights hereunder
shall be  transferable  by the  registered  Holder hereof on the register of the
Corporation  maintained by the  Corporation  for such purpose at its office upon
surrender of this Warrant Certificate duly endorsed, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation duly executed, by
the  registered  Holder  hereof or such  Holder's  attorney  duly  authorized in
writing and upon payment of any  necessary  transfer  tax or other  governmental
charge imposed upon such  transfer.  Upon any partial  transfer the  Corporation
will issue and deliver to such Holder a new Warrant  Certificate with respect to
any portion not so transferred.

     This Warrant  Certificate  shall be void and all exercise rights  evidenced
hereby shall cease on October __, 200_.


     This  Warrant  Certificate  and the  Agreement  are subject to amendment as
provided in the Agreement.

Dated:_______________, 1997.

                                                     BREED TECHNOLOGIES, INC.

                                                     By:
                                                     Name:
                                                     Title: