Document:

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                      STOCK AND WARRANT PURCHASE AGREEMENT

                               dated July 26, 2000

                                 by and between

                              SONY ELECTRONICS INC.

                                       and

                                 PANAVISION INC.

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                        TABLE OF CONTENTS
                                                                          Page

                                  ARTICLE I
                                 DEFINITIONS

 1.1      Definitions.......................................................1
 1.2      Knowledge.........................................................7
 1.3      Interpretation....................................................7

                                 ARTICLE II
                         CLOSING; PURCHASE AND SALE

 2.1      The Closing.......................................................8
 2.2      Issuance and Delivery of the Purchase Shares
          and Issuance of the Warrant.......................................8
 2.3      The Purchase Price................................................8
 2.4      Delivery of Purchase Price........................................8

                                 ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF THE SELLER

 3.1      Organization; Good Standing.......................................8
 3.2      Subsidiaries......................................................9
 3.3      Authority; Execution and Delivery; Enforceability.................9
 3.4      Non-Contravention.................................................9
 3.5      Corporate Documents..............................................10
 3.6      Capitalization; Options..........................................10
 3.7      Consents and Approvals...........................................11
 3.8      Title to Assets..................................................12
 3.9      SEC Reports and Financial Statements.............................12
 3.10     Intellectual Property Rights.....................................13
 3.11     Insurance........................................................15
 3.12     Contracts........................................................15
 3.13     Tax Matters......................................................15
 3.14     Absence of Certain Changes and Events............................16
 3.15     Litigation and Claims............................................16
 3.16     Governmental Permits; Compliance with Laws.......................16
 3.17     Environmental Matters............................................17
 3.18     Employee Plans...................................................18
 3.19     No Finder........................................................19
 3.20     Section 203 of the DGCL..........................................19

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                                 ARTICLE IV
                 REPRESENTATIONS AND WARRANTIES OF THE BUYER

 4.1      Organization and Good Standing...................................19
 4.2      Corporate Authority; Execution and Delivery; Enforceability......19
 4.3      Non-Contravention................................................20
 4.4      Consents and Approvals...........................................20
 4.5      Litigation and Claims............................................20
 4.6      No Finder........................................................21
 4.7      Investment Representations.......................................21
 4.8      Accredited Investor..............................................21
 4.9      Ownership of Common Stock........................................21

                                  ARTICLE V
                                  COVENANTS

 5.1      Governmental Consents............................................21
 5.2      Restrictive Legends..............................................22
 5.3      Publicity........................................................22

                                 ARTICLE VI

                                MISCELLANEOUS

 6.1      Survival; Certain Other Matters..................................23
 6.2      Further Assurances...............................................24
 6.3      Expenses of the Transaction......................................24
 6.4      Notices..........................................................25
 6.5      No Modification Except in Writing................................26
 6.6      Entire Agreement.................................................26
 6.7      Severability.....................................................26
 6.8      Assignment.......................................................26
 6.9      Governing Law; Jurisdiction......................................26
 6.10     Captions.........................................................27
 6.11     Recovery of Attorney's Fees......................................27
 6.12     Counterparts.....................................................27

 Annex I: Seller Disclosure Schedule
 Exhibit A: Warrant Certificate

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                      STOCK AND WARRANT PURCHASE AGREEMENT

         STOCK AND WARRANT PURCHASE AGREEMENT ("Agreement"), made and entered
into this 26th day of July, 2000, by and between SONY ELEC TRONICS INC., a
Delaware corporation (the "Buyer"), and PANAVISION INC., a Delaware corporation
(the "Seller").

                              W I T N E S S E T H:

         WHEREAS, the Buyer desires to purchase and acquire from the Seller, and
the Seller desires to issue and deliver to the Buyer, 714,300 shares (the
"Purchase Shares") of the Seller's common stock, par value $0.01 ("Common
Stock"), free and clear of all liabilities, obligations, claims, liens, options,
charges and encumbrances of any kind other than restrictions on transfer as
provided under the Securities Act and comparable state securities laws, and a
warrant (the "Warrant") to purchase an additional 714,300 shares (the "Warrant
Shares") of Common Stock of the Seller, on the terms and subject to the
conditions hereinafter set forth; and

         WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement shall have the meanings ascribed to such terms in Article I of
this Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants hereinafter contained, the parties hereto hereby agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.1 Definitions. As used herein, the following terms shall have the
respective meanings ascribed to them below:

         "Affiliate" means, with respect to any specified Person, (i) any other
Person 50% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with the power to vote by such specified
Person or (ii) any other Person directly or indirectly controlling, controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, the term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person by virtue of ownership of voting securities, by contract
or otherwise. For purposes of this Agreement, the Seller and its Affiliates
shall not be deemed to be an Affiliate of the Buyer or of any of the Buyer's
Affiliates or of Newco, and the Buyer and its Affili-

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ates shall not be deemed to be an Affiliate of the Seller or of any of the
Seller's Affiliates or of Newco, in any such case solely by reason of the
existence of this Agreement, the Transaction Documents or the Operating
Agreement.

         "Affiliated Group" or "Affiliated Groups" means any affiliated,
consolidated, combined, unitary or similar group (within the meaning of Section
1504 of the Code, or any comparable provision of state, local or foreign law, as
the case may be) of which the Seller and/or any of its Subsidiaries is or was a
member but only for the periods during which the Seller or any of its
Subsidiaries, as the case may be, is or was a member.

         "Agreement" has the meaning ascribed to such term in the Preamble
hereto.

         "Business Day" means a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are not authorized or
obligated by law to close.

         "Buyer" has the meaning ascribed to such term in the Preamble hereto.

         "Closing" has the meaning ascribed to such term in Section 2.1.

         "Closing Date" has the meaning ascribed to such term in Section 2.1.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute thereto and all regulations promulgated
thereunder.

         "Common Stock" has the meaning ascribed to such term in the Recitals
hereto.

         "Contracts" shall mean all contracts, agreements, indentures,
promissory notes, guarantees, arrangements, commitments and understandings of
any kind, whether written or oral, to which the Seller or any of its
Subsidiaries is a party or by which the Seller or any of its Subsidiaries or any
of the assets of the Seller or any of its Subsidiaries may be bound.

         "Copyrights" has the meaning ascribed to such term in Section 3.10.

         "Environment" shall mean soil, surface waters, ground waters, land,
stream, sediments, surface or subsurface strata and ambient air.

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         "Environmental Approvals" shall mean all permits, licenses, consents
and approvals necessary for conducting the business of the Seller and its
Subsidiaries which are required under Environmental Laws.

         "Environmental Condition" shall mean the presence of Hazardous
Substances in the Environment at concentrations that may result in a claim for
property damage, personal injury or environmental remediation.

         "Environmental Laws" shall mean all Governmental Rules relating to
protection of human health or the Environment, including, without limitation,
all Governmental Rules (i) pertaining to reporting, licensing, permitting,
investigation, remediation and removal of, emissions, discharges, releases or
threatened releases of Hazardous Substances or (ii) relating to the treatment,
storage, disposal, transport or handling of Hazardous Substances.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute thereto and all final or
temporary regulations promulgated thereunder.

         "ERISA Affiliate" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control and all other entities which, together with the Seller and its
Subsidiaries, are treated as a single employer under any or all of Sections
414(b), (c), (m), or (o) of the Code on the date of this Agreement or the
Closing Date or at any time during the period of five years ending on the
Closing Date.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and all regulations promulgated thereunder.

         "Facility" shall mean any real property or improvements thereon which
is now or has heretofore been owned or used in connection with the business of
the Seller and its Subsidiaries.

         "Financial Statements" has the meaning ascribed to such term in
Section 3.9.

         "GAAP" shall mean United States generally accepted accounting
principles, consistently applied.

         "Governmental Authority" shall mean any federal, state, municipal or
other governmental authority, department, commission, board, agency or other
instrumentality.

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         "Governmental Permits" shall mean all licenses, franchises, permits,
privileges, immunities, approvals and other authorizations from a Governmental
Authority.

         "Governmental Rules" shall mean all statutes, rules, regulations,
codes, ordinances, writs, orders or decrees of any Governmental Authority.

         "Hazardous Substances" shall mean any substance:

                    (i) the presence of which requires or may hereafter require
         notification, investigation, or remediation under Environmental Laws;

                    (ii) which is defined as "toxic", a "hazardous waste",
         "hazardous material" or "hazardous substance" or "pollutant" or
         "contaminant" under any Environmental Laws;

                    (iii) which is toxic, explosive, corrosive, flammable,
         infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
         to human health or the Environment and is regulated by any Governmental
         Authority as of the date hereof;

                    (iv) which contains gasoline, diesel fuel or other petroleum
         hydrocarbons or volatile organic compounds;

                    (v) which contains polychlorinated byphenyls (PCBs) or
         asbestos or urea formaldehyde foam insulation; or

                    (vi) which contains or emits radioactive particles, waves or
         materials, including radon gas.

         "Intellectual Property" has the meaning ascribed to such term in
Section 3.10.

         "Lien" shall mean all mortgages, pledges, liens, security interests,
conditional sale agreements, charges, encumbrances or restrictions of any kind
or nature.

         "Newco" means DHD Ventures, LLC, a Delaware limited liability company.

         "Operating Agreement" shall mean the Operating Agreement of Newco,
dated as of the date hereof, by and between the Seller and the Buyer.

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         "Patents" has the meaning ascribed to such term in Section 3.10.

         "Permitted Liens" shall mean any and all Liens (i) for any current
Taxes or assessments that (x) are not yet delinquent or (y) are being contested
in good faith and with respect to which reserves in conformity with GAAP have
been provided on the Financial Statements, or (ii) created by statute of
carriers, warehousemen, mechanics, laborers or materialmen incurred in the
ordinary course of business for sums not yet due.

         "Person" shall mean any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, estate, trust,
cooperative, foundation, union, syndicate, league, consortium, coalition,
committee, society, firm, company or other enterprise, association, organization
or other entity or Governmental Authority.

         "Plan" has the meaning ascribed to such term in Section 3.18.

         "Preferred Stock" has the meaning ascribed to such term in Section 3.6.

         "Purchase Price" has the meaning ascribed to such term in Section 2.3.

         "Purchase Shares" has the meaning ascribed to such term in the Recitals
hereto.

         "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the date hereof, by and between the Seller and the
Buyer.

         "SEC" shall mean the Securities and Exchange Commission.

         "SEC Reports" has the meaning ascribed to such term in Section 3.9.

         "Securities Act" shall mean the Securities Act of 1933, as amended from
time to time, and all regulations promulgated thereunder.

         "Seller" has the meaning ascribed to such term in the Preamble hereto.

         "Seller Disclosure Schedule" shall mean that certain schedule attached
hereto as Annex I qualifying the representations and warranties contained in
Article III.

         "Seller Instruments" has the meaning ascribed to such term in Section
3.6.

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         "Seller Material Adverse Effect" shall mean a material adverse effect
on the business, results of operations or financial condition of the Seller and
its Subsidiaries, taken as a whole; provided, however, that any effect or
change attributable to or resulting from (1) events, conditions or trends in
economic, business, or financial conditions which affects the economy or
business conditions in general or (2) any material change in the financial,
banking, currency or capital markets in general, shall be excluded from the
definition of "Seller Material Adverse Effect".

         "Software" has the meaning ascribed to such term in Section 3.10.

         "Stockholders Agreement" shall mean the Stockholders Agreement, dated
as of the date hereof, by and between the Seller and the Buyer.

         "Subsidiary" shall mean, when used with respect to any Person, any
other Person, whether incorporated or unincorporated, of which (i) more than
fifty percent of the securities or other ownership interests or (ii) securities
or other interests having by their terms ordinary voting power to elect more
than fifty percent of the board of directors or others performing similar
functions with respect to such corporation or other organization, is directly
owned or controlled by such Person or by any one or more of its Subsidiaries.
For purposes of this Agreement, Newco shall not be deemed to be a Subsidiary of
Buyer or Seller or their respective Subsidiaries.

         "Survival Period" has the meaning ascribed to such term in Section 6.1.

         "Tax" shall mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto.

         "Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.

         "Trademarks" has the meaning ascribed to such term in Section 3.10.

         "Transaction Documents" shall mean (i) the Warrant, the Registration
Rights Agreement and the Stockholders Agreement and (ii) those other agreements,
certificates and documents entered into or delivered between the Buyer and the

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Seller related to, ancillary to, or in connection with this Agreement or the
documents listed in clause (i) hereof.

         "Warrant" has the meaning ascribed to such term in the Recitals hereto.

         "Warrant Shares" has the meaning ascribed to such term in the Recitals
hereto.

         1.2 Knowledge. As used in the Agreement, "to the Seller's knowledge" or
"to the knowledge of the Seller" or words of similar import shall mean the
knowledge of the following officers of the Seller: John Farrand, Scott Seybold,
Ken Krainman and Barry Schwartz.

         1.3 Interpretation.

         (a) When a reference is made in this Agreement to a section, article,
paragraph, clause, annex or exhibit, such reference shall be to a reference to
this Agreement unless otherwise clearly indicated to the contrary. The
descriptive article and section headings herein are intended for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." The words "hereof," "herein" and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement.
The meaning assigned to each term used in this Agreement shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting either gender shall include both genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.

         (b) The parties have participated jointly in the negotiation and
drafting of this Agreement and the Transaction Documents. Consequently, in the
event an ambiguity or question of intent or interpretation arises, this
Agreement and each of the Transaction Documents shall be construed as if drafted
jointly by the parties thereto, and no presumption or burden of proof shall
arise favoring or disfavoring either party by virtue of the authorship of any
provision of this Agreement or of any of the Transaction Documents.

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                                   ARTICLE II

                           CLOSING; PURCHASE AND SALE

         2.1 The Closing. The closing (the "Closing") of the transactions set
forth in this Article II shall take place simultaneously with the execution and
delivery of this Agreement by the parties hereto (such date upon which the
Closing occurs is referred to as the "Closing Date").

         2.2 Issuance and Delivery of the Purchase Shares and Issuance of the
Warrant. At the Closing, the Seller shall (i) issue and deliver to the Buyer
certificates for the Purchase Shares and the Buyer shall purchase the Purchase
Shares from the Seller and (ii) issue and deliver to the Buyer certificates
representing the Warrant, in substantially the form of Exhibit A hereto, and
the Buyer shall accept such certificates.

         2.3 The Purchase Price. The Buyer shall purchase the Purchase Shares
and the Warrant for an aggregate amount equal to Ten Million Dollars
($10,000,000) (the "Purchase Price").

         2.4 Delivery of Purchase Price. At the Closing, the Purchase Price
shall be paid by the Buyer to the Seller by wire transfer of immediately
available funds to an account designated in writing by the Seller at least two
Business Days prior to the Closing.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

         The Seller represents and warrants to the Buyer as of the date hereof
as follows:

         3.1 Organization; Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Seller has the corporate power and authority to conduct its
business as now being conducted and is duly licensed or qualified to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of the business conducted by it, and/or the character of the assets
owned or leased by it, makes such qualification or licensure necessary, except
for those jurisdictions in which the failure to be so qualified or licensed or
to be in good standing would not,

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individually or in the aggregate, limit the Seller's ability to consummate the
transactions hereby contemplated or have a Seller Material Adverse Effect.

         3.2 Subsidiaries. Except as set forth in the Seller Disclosure Schedule
or except as disclosed in the SEC Reports or any exhibit thereto, all of the
outstanding shares of the capital stock of each Subsidiary of the Seller are
owned by the Seller free and clear of all Liens. Each of the Seller's
Subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each of the Seller's Subsidiaries has the power and authority to
conduct its business as now being conducted and is duly licensed or qualified to
do business and is in good standing as a foreign corporation or other legal
entity in all jurisdictions in which the nature of the business conducted by it,
and/or the character of the assets owned or leased by it, makes such
qualification or licensure necessary, except for those jurisdictions in which
the failure to be so qualified or licensed or to be in good standing would not,
individually or in the aggregate, limit the Seller's ability to consummate the
transactions hereby contemplated or have a Seller Material Adverse Effect.

         3.3 Authority; Execution and Delivery; Enforceability. The Seller has
the corporate power and authority to execute and deliver this Agreement and the
Transaction Documents and to consummate the transactions hereby and thereby
contemplated. The execution and delivery by the Seller of this Agreement and the
Transaction Documents and the consummation by the Seller of the transactions
hereby and thereby contemplated have been authorized by all necessary corporate
action of the Seller. The Seller has duly executed and delivered this Agreement
and the Transaction Documents, and, assuming the due execution and delivery of
this Agreement and the Transaction Documents by each party thereto (other than
the Seller and other than PX Holding Corporation), this Agreement and the
Transaction Documents constitute valid and binding obligations of the Seller and
are enforceable against the Seller in accordance with its and their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or general equitable principles
(whether considered in a proceeding at equity or in law).

         3.4 Non-Contravention. Except as set forth in the Seller Disclosure
Schedule, neither the execution and delivery of this Agreement and the
Transaction Documents by the Seller, nor the consummation of the transactions
hereby and thereby contemplated by the Seller, will:

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                    (i) constitute any violation or breach of the certificate of
         incorporation or the by-laws (or comparable organizational documents in
         the case of Subsidiaries of the Seller which are not corporations) of
         the Seller or any of its Subsidiaries;

                    (ii) constitute a default under or a violation or breach of,
         or result in the acceleration of any obligation under, any provision of
         any Contract to which the Seller or any of its Subsidiaries is a party
         or by which any of the assets of the Seller or any of its Subsidiaries
         or the Purchase Shares, the Warrant or the Warrant Shares may be
         affected or secured;

                    (iii) assuming the consents and approvals described in
         Section 3.7 have been received, violate any judgment, order, writ,
         injunction or decree, or any statute, rule or regulation affecting the
         Seller or any of its Subsidiaries;

                    (iv) result in the creation of any Lien on any of the assets
         of the Seller or any of its Subsidiaries; or

                    (v) result in the termination of any license, franchise,
         lease or permit to which the Seller or any of its Subsidiaries is a
         party or by which it is bound;

other than, in the case of foregoing clauses (ii), (iii), (iv) and (v), those
defaults, violations, breaches, accelerations, Liens and terminations which,
individually or in the aggregate, would not have a Seller Material Adverse
Effect.

         3.5 Corporate Documents. The Seller has filed as exhibits to its SEC
Reports true and complete copies of the Amended and Restated Certificate of
Incorporation and By-Laws of the Seller.

         3.6 Capitalization; Options.

         (a) The Seller is authorized to issue 50,000,000 shares of Common
Stock, 8,055,619 of which are issued and outstanding as of the date hereof
(prior to giving effect to the transactions contemplated by this Agreement), and
2,000,000 shares of preferred stock, par value $0.01 ("Preferred Stock"), of
which none are issued and outstanding as of the date hereof.

         (b) All of the Purchase Shares when issued to Buyer in accordance with
the terms of this Agreement shall be legally and validly issued, fully paid and
non-

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assessable, free and clear of all Liens other than transfer restrictions
provided under the Securities Act and comparable state securities laws. The
Warrant when issued to Buyer in accordance with the terms of this Agreement
shall be legally and validly issued, free and clear of all Liens other than
transfer restrictions provided under the Securities Act and comparable state
securities laws and other than as provided by the terms of the Warrant. The
Warrant Shares when issued upon exercise of the Warrant, in accordance with the
terms of the Warrant, shall be legally and validly issued, fully paid and
nonassessable, free and clear of all Liens other than as provided under the
Securities Act and comparable state securities laws. The Seller has reserved for
issuance the Warrant Shares on the Seller's books and records upon exercise of
the Warrant in accordance with their terms.

         (c) Other than the Common Stock and the Preferred Stock, there are no
other series or classes of capital stock of the Seller authorized or issued and
outstanding. Except as disclosed in the Seller Disclosure Schedule or except as
disclosed in the SEC Reports or any exhibit thereto, there are no outstanding
warrants, options, contracts, rights (preemptive or otherwise), calls,
commitments or other instruments convertible into or exchangeable for shares of
capital stock of the Seller or any of the Seller's Subsidiaries, in each such
case, to which the Seller or any of Seller's Subsidiaries is a party and which
relates to the sale or issuance of shares of capital stock of the Seller or of
any of Seller's Subsidiaries (collectively, the "Seller Instruments"). As of the
date hereof, there are 1,500,000 shares of Common Stock reserved on the Seller's
books and records for issuance pursuant to the Seller's 1999 Stock Option Plan
(included as an exhibit to the Seller's Definitive Proxy Statement dated March
31, 1999). Except as set forth on the Seller Disclosure Schedule, as disclosed
in the SEC Reports or any exhibit thereto or as contemplated by this Agreement
and the Transaction Documents, (i) the Seller has not agreed to register any
shares of its capital stock under the Securities Act or granted registration
rights with respect to shares of its capital stock to any Person and (ii) there
are no voting trusts, stockholders agreements, proxies or other agreements or
understandings in effect to which the Seller is a party with respect to the
voting or transfer of any shares of Common Stock. Except as set forth on the
Seller Disclosure Schedule or as disclosed in the SEC Reports or any exhibit
thereto, to the extent any such Seller Instruments are outstanding as of the
date hereof, neither the issuance and sale of the Purchase Shares or the Warrant
nor the issuance of any Warrant Shares upon the exercise of the Warrant in
accordance with their terms will result in an adjustment of the exercise or
conversion price of, or number of shares issuable upon the exercise or
conversion of any such, Seller Instruments.

         3.7 Consents and Approvals. Except as set forth in the Seller
Disclosure Schedule, no consent, approval or authorization of, or declaration,
filing or

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registration with, any Governmental Authority or third party is required on
behalf of the Seller or any of its Subsidiaries in connection with the
execution, delivery or performance of this Agreement and the Transaction
Documents or the consummation of the transactions contemplated hereby and
thereby, other than such consents, approvals and authorizations of, and
declarations, filings and registrations with, third parties (other than
Governmental Authorities) the failure of which to obtain, make or otherwise
effect which would not, individually or in the aggregate, result in a Seller
Material Adverse Effect. The Purchase Shares and the Warrant Shares have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.

         3.8 Title to Assets. Except as set forth on the Seller Disclosure
Schedule, each of the Seller and its Subsidiaries has good title, free and clear
of all Liens (other than Permitted Liens), to all of its assets, other than such
failures to have good title which would not, individually or in the aggregate,
have a Seller Material Adverse Effect.

         3.9 SEC Reports and Financial Statements.

         (a) The Seller has filed all forms, reports and documents required to
be filed by it with the SEC since December 31, 1998 (collectively, the "SEC
Reports"). The SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. None of
the Seller's Subsidiaries is required to file any form, report or other document
with the SEC.

         (b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the SEC Reports (the "Financial
Statements") (i) was prepared from the books of account and other financial
records of the Seller and its Subsidiaries, (ii) was prepared in accordance with
GAAP applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto) and (iii) presented fairly in all
material respects the consolidated financial position of the Seller and its
consolidated Subsidiaries as at the respective dates thereof and the results of
their operations and their cash flows for the respective periods indicated
therein except as otherwise noted therein (subject, in the case of unaudited
statements, to the omission of footnotes and normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to have a Seller Material Adverse Effect).

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         (c) Except for liabilities and obligations reflected on the March 31,
2000 consolidated balance sheet of the Seller included in the SEC Reports
(including the notes thereto), liabilities and obligations disclosed in the SEC
Reports (including exhibits thereto) filed prior to the date of this Agreement
and other liabilities and obligations incurred in the ordinary course of
business since March 31, 2000, neither the Seller nor any of the Seller's
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which, individually or in the aggregate,
would cause a Seller Material Adverse Effect.

         3.10 Intellectual Property Rights.

         (a) "Intellectual Property" means any United States, foreign,
international and state: patents and patent applications, industrial design
registrations, certificates of invention and utility models (collectively,
"Patents"); trademarks, service marks, and trademark or service mark
registrations and applications, and trade names (collectively, "Trademarks");
Internet domain names; copyrights, copyright registrations, renewals and
applications for copyrights including, but not limited to, copyrights in the
Software (as defined below in this Section 3.10) (collectively, "Copyrights");
Software, technology and trade secrets; and all license agreements relating to
any of the foregoing. "Software" means any and all (i) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code form and (ii) databases,
compilations, and any other electronic data files.

         (b) Except as set forth in the Seller Disclosure Schedule or except as
would not have a Seller Material Adverse Effect:

                    (i) Each of the Seller and its Subsidiaries owns or has the
         valid right to use all Intellectual Property, as currently used in
         connection with the business of the Seller and its Subsidiaries,
         including, without limitation, all license agreements and other
         agreements granting rights relating to any Intellectual Property to
         which the Seller or any of its Subsidiaries is a party or is otherwise
         bound.

                    (ii) The Intellectual Property owned by the Seller or its
         Subsidiaries is solely and exclusively owned by the Seller or its
         Subsidiaries free and clear of all Liens, and the Seller or one of its
         Subsidiaries is listed in the records of the appropriate United States,
         state, private (with respect to Internet domain names) or foreign
         agency as the sole owner or assignee of record for each registration
         and application for any Patent, Trademark,

                                       13

<PAGE>

         Internet domain name and registered Copyright that it owns, whenever
         such recordation is required. To the knowledge of Seller, all of the
         Intellectual Property items owned or used by the Seller or one of its
         Subsidiaries are valid and subsisting, in full force and effect, and
         have not been cancelled, expired, or abandoned or are used by the
         Seller or its Subsidiaries pursuant to a valid license which is in full
         force and effect. There is no pending or, to the knowledge of the
         Seller, threatened opposition, interference or cancellation proceeding
         before any court or registration authority in any jurisdiction against
         the Intellectual Property items owned by the Seller or one of its
         Subsidiaries or, to the knowledge of the Seller, against any
         Intellectual Property used but not owned by the Seller or any of its
         Subsidiaries.

                    (iii) To the knowledge of the Seller, the conduct of the
         business of the Seller and its Subsidiaries as currently conducted or
         as presently contemplated to be conducted does not and will not
         infringe upon any Intellectual Property owned or controlled by any
         third party (either directly or indirectly, such as through
         contributory infringement or inducement to infringe). There are no
         claims or suits pending or, to the knowledge of the Seller, threatened,
         and the Seller has not received any written notice of a third party
         claim or suit that remains unresolved, (i) alleging that the activities
         of the Seller or its Subsidiaries or the conduct of the business of the
         Seller or its Subsidiaries infringes upon or constitutes the
         unauthorized use of the Intellectual Property rights of any third
         party or (ii) challenging the ownership, use or validity of any
         Intellectual Property owned by the Seller and its Subsidiaries.

                    (iv) To the knowledge of the Seller, no third party is
         misappropriating, infringing, diluting, or otherwise violating any
         Intellectual Property owned or used by the Seller or any of its
         Subsidiaries and no such claims are pending against a third party by
         the Seller or any of its Subsidiaries.

                    (v) To the knowledge of the Seller, the Seller and its
         Subsidiaries have taken all reasonably necessary steps to maintain and
         protect the Intellectual Property owned by them.

                    (vi) The Seller does not have knowledge of any facts or
         circumstances that it knows would reasonably be likely to render any
         of the Intellectual Property owned or used by the Seller or any of its
         Subsidiaries invalid or unenforceable.

                                       14

<PAGE>

         3.11 Insurance. The Seller Disclosure Schedule sets forth a true and
complete list of all material, in-force policies which provide coverage for
Seller and its Subsidiaries and their assets.

         3.12 Contracts. Except as set forth in the Seller Disclosure Schedule,
each of the Seller and its Subsidiaries has, with respect to all Contracts
listed as exhibits to the Seller's filing on Form 10-K for the year ending
December 31, 1999, performed all obligations required to be performed by it, and
is not in default under any such Contract, and no event has occurred which, with
the lapse of time or the giving of notice or both, would constitute a default by
the Seller or any of its Subsidiaries, or, to the knowledge of the Seller, by
any other party to any such Contract, other than such failures to perform
obligations, defaults or events which would not, individually or in the
aggregate, result in a Seller Material Adverse Effect.

         3.13 Tax Matters.

         (a) Except as set forth in the Seller Disclosure Schedule: (i) the
Seller and the Seller's Subsidiaries have filed (or there have been filed on
their behalf) all Tax Returns that are required to have been filed, and all such
Tax Returns were correct and complete, except to the extent that any failure to
file or any incorrect or incomplete Tax Return would not have a Seller Material
Adverse Effect; and (ii) all Taxes owed by the Seller and the Seller's
Subsidiaries (whether or not shown on any Tax Return) have been paid except to
the extent that any failure to pay would not have a Seller Material Adverse
Effect.

         (b) Neither the Internal Revenue Service nor any other Tax authority is
now asserting in writing, or, to the knowledge of the Seller, has proposed in
writing to assert (which assertion is continuing as of the date hereof), any
deficiency or claim for additional Taxes that could have a Seller Material
Adverse Effect.

         (c) Neither the Seller nor any of its Subsidiaries are "United States
real property holding corporations" within the meaning of Section 897 of the
Code.

         (d) Each of the Seller and its Subsidiaries do not have any liability
for Taxes of any other person under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law). To the knowledge of Seller,
neither the Seller nor any of its Subsidiaries has filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f) (2) of the Code
apply to any disposition of a "subsection (f) asset" (as such term is defined in
Section 341(f) (4) of the Code) owned by the Seller or any of its Subsidiaries.
Except for the Tax sharing agreement

                                       15

<PAGE>

relating to the Affiliated Group of which Seller and its Subsidiaries are
presently members, to the knowledge of Seller, neither the Seller nor any of its
Subsidiaries are, or have ever been, a party to any Tax sharing or similar
agreement or arrangement, or have potential liability or obligation as a result
of or pursuant to such an agreement or arrangement.

         3.14 Absence of Certain Changes and Events. Since March 31, 2000,
except as set forth in the Seller Disclosure Schedule or as disclosed in the SEC
Reports or any exhibit thereto:

         (a) each of the Seller and its Subsidiaries has conducted its business
in the ordinary course thereof in a manner consistent with past practice;

         (b) there has been no material adverse change in the operations or in
the condition, financial or otherwise, of the Seller and its Subsidiaries (taken
as a whole) or any damage, destruction or loss, whether or not covered by
insurance, with respect to the properties or assets of the Seller, which in any
such case has resulted in a Seller Material Adverse Effect;

         (c) the Seller has not split, combined or reclassified any shares of
its capital stock, and has not declared, set aside for payment or paid any
dividend or other distribution (whether in cash, stock or other property) in
respect of its capital stock, or directly or indirectly retired, redeemed,
purchased or otherwise acquired any shares of its capital stock; and

         (d) none of the Seller or any of its Subsidiaries has agreed, whether
in writing or otherwise, to take any action described in Section 3.14(a) or
3.14(b) hereof; and, the Seller has not agreed, whether in writing or otherwise,
to take any action described in Section 3.14(c) hereof.

         3.15 Litigation and Claims. Except as set forth in the Seller
Disclosure Schedule or as disclosed in the SEC Reports or any exhibit thereto,
(i) there is no action, suit, claim, proceeding, arbitration or investigation
pending or, to the knowledge of the Seller, threatened against or affecting the
Seller or any of its Subsidiaries and (ii) neither the Seller nor any of its
Subsidiaries is subject to or in default under any judgment, order, writ,
agreement, injunction or decree of any court or Govern mental Authority which,
in the case of either clause (i) and (ii), is reasonably likely to result in a
Seller Material Adverse Effect.

                                       16
<PAGE>

         3.16 Governmental Permits; Compliance with Laws.

         (a) Each of the Seller and its Subsidiaries owns, holds or possesses
all Governmental Permits which are necessary to entitle it to own or lease,
operate and use its assets and to carry on and conduct its business as currently
conducted, except for those Governmental Permits the absence of which,
individually or in the aggregate, would not have a Seller Material Adverse
Effect.

         (b) Except as set forth in the Seller Disclosure Schedule, each of the
Seller and its Subsidiaries has fulfilled and performed in all respects their
obligations under each of their respective Governmental Permits, other than such
failures to fulfill or perform their obligations which would not have a Seller
Material Adverse Effect. No written notice of cancellation, of default or of any
dispute concerning any Governmental Permit has been received by the Seller or
any of its Subsidiaries, except for such cancellations, defaults or disputes
which would not have a Seller Material Adverse Effect.

         (c) Each of the Seller and its Subsidiaries is in compliance in all
respects with all Governmental Rules which are applicable to its business, other
than any failures to comply which would not have a Seller Material Adverse
Effect.

         3.17 Environmental Matters.

         (a) Except as would not, individually or in the aggregate, have a
Seller Material Adverse Effect:

                  (i) Each of the Seller and its Subsidiaries has obtained and
         continues to maintain Environmental Approvals. Neither the Seller nor
         any of its Subsidiaries has operated the business of the Seller and its
         Subsidiaries in violation of any applicable Environmental Law or the
         terms of any Environmental Approval.

                  (ii) Neither the Seller nor any of its Subsidiaries has used,
         stored, generated, discharged, emitted, transported, disposed of or
         treated Hazardous Substances except using, storing, generating,
         discharging, emitting, transporting, disposing and treating those
         Hazardous Substances normally used, stored, generated, discharged,
         emitted, transported, disposed of or treated in the course of its
         business and only in a manner which complies with applicable
         Environmental Laws.

                                       17

<PAGE>

                  (iii) To the knowledge of the Seller, there are not any
         Environmental Conditions or releases, or threats of releases (as those
         terms are defined by Environmental Laws) of Hazardous Substances at,
         on, or from any Facility.

                  (iv) Neither the Seller nor any of its Subsidiaries has
         received written notice of any pending or threatened investigation,
         claims, enforcement proceedings, cleanup orders, citizen suits or
         other actions instituted by any private party or Governmental Authority
         arising out of the conduct or the operations of the business of the
         Seller and its Subsidiaries, in connection with any applicable
         Environmental Laws or as a result of any Environmental Conditions at
         any Facility.

         (b) Notwithstanding anything to the contrary contained in this
Agreement, the representations and warranties set forth in this Section 3.17 are
the sole and exclusive representations and warranties of Seller in this
Agreement with respect to environmental matters.

         3.18 Employee Plans. Except as would not have a Seller Material Adverse
Effect:

         (a) Each of the Seller and its Subsidiaries has, with respect to each
Plan (as defined below), complied and each Plan has been administered with all
applicable provisions of ERISA and the Code and in compliance with all of the
provisions of each plan, program, arrangement, agreement or commitment sponsored
or maintained by or on behalf of the Seller, any of its Subsidiaries or any
ERISA Affiliate, which is a pension, profit sharing, savings, thrift or other
retirement plan, deferred compensation, stock purchase, stock option,
performance share, bonus or other incentive plan, severance pay plan, policy or
procedure, life, health, disability or accident insurance plan (including,
without limitation, each "employee benefit plan" as defined in Section 3(3) of
ERISA or any other employee benefit plan, program, arrangement, agreement or
commitment, whether or not written) and which provides benefits to employees of
the Seller or any of its Subsidiaries (all of the foregoing being hereinafter
referred to individually as a "Plan" and collectively as the "Plans"). The
Seller, each of its Subsidiaries and each ERISA Affiliate has made all required
contributions to each such plan.

         (b) No such Plan is or has at any time been subject to Title IV of
ERISA and no such Plan is or has at any time been a "multiemployer plan" with
the meaning of section 3(37) of ERISA or section 4001(a)(3) of ERISA.

                                       18

<PAGE>

         (c) Each Plan which is an "employee welfare benefit plan" within the
meaning of Section 3(l) of ERISA and which is a group health plan within the
meaning of Section 4980B of the Code is and at all times has been in compliance
with the applicable requirements of Section 4980B of the Code and Sections 601
through 608 of ERISA.

         (d) None of the Plans has been notified in writing that it is under
investigation or audit (which investigation or audit is continuing as of the
date hereof) by either the United States Department of Labor or the Internal
Revenue Service.

         (e) Each Plan which is intended to qualify under Section 401 of the
Code has received a favorable determination letter from the Internal Revenue
Service with respect to such qualification or is entitled to rely on such a
letter under the provisions of a Standardized Adoption Agreement with respect to
such Plan, and, to the knowledge of the Seller, nothing has occurred that has
or, the Seller believes, is likely to affect adversely such qualification or
exemption.

         3.19 No Finder. Neither the Seller, nor any of its Subsidiaries, nor
any party acting on their behalf, has paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions contemplated hereby.

         3.20 Section 203 of the DGCL. The Board of Directors of the Company has
taken all appropriate and necessary actions to ensure that the restrictions on
business combinations in Section 203 of the Delaware General Corporation Law
will not be applicable to the Buyer as the result of the issuance to the Buyer
of the Purchase Shares and, upon exercise of the Warrant, the Warrant Shares.

                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

         The Buyer represents and warrants to the Seller as of the date hereof
as follows:

         4.1 Organization and Good Standing. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.

                                       19

<PAGE>

         4.2 Corporate Authority; Execution and Delivery; Enforceability. The
Buyer has the corporate power and authority to execute and deliver this
Agreement and the Transaction Documents and to consummate the transactions
hereby and thereby contemplated. The execution and delivery by the Buyer of this
Agreement and the Transaction Documents and the consummation by the Buyer of the
transactions hereby and thereby contemplated have been authorized by all
necessary corporate action. The Buyer has duly executed and delivered this
Agreement and the Transaction Documents, and, assuming the due execution and
delivery of this Agreement and the Transaction Documents by each party thereto
(other than the Buyer), this Agreement and the Transaction Documents constitute
valid and binding obligations of the Buyer and are enforceable against the Buyer
in accordance with its and their respective terms, except as such enforceability
may be limited by bank ruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or general equitable principles (whether considered
in a proceeding at equity or in law).

         4.3 Non-Contravention. Neither the execution and delivery of this
Agreement or the Transaction Documents by the Buyer, nor the consummation of the
transactions hereby or thereby contemplated by the Buyer, will:

                  (i) constitute any violation or breach of the Certificate of
         Incorporation or By-laws of the Buyer; or

                  (ii) violate any judgement, order, writ, injunction or decree,
         statute, rule or regulation affecting the Buyer, other than any such
         violations which, individually or in the aggregate, would not prevent
         the Buyer from consummating the transactions contemplated by this
         Agreement and the Transaction Documents.

         4.4 Consents and Approvals. No consent, approval or authorization of,
or declaration, filing or registration with, any Governmental Authority or third
party is required on behalf of the Buyer in connection with the execution,
delivery or performance of this Agreement or the Transaction Documents and all
documents contemplated hereby or thereby or the transactions contemplated hereby
and thereby, other than such consents, approvals and authorizations of, and
declarations, filings and registrations with, third parties the failure of which
to obtain, make or otherwise effect which would not, individually or in the
aggregate, prevent the Buyer from consummating the transactions contemplated by
this Agreement and the Transaction Documents; provided, however, that, in
connection with the exercise of the Warrants and the issuance of Warrant Shares
therefor, the Buyer may be required to make

                                       20

<PAGE>

certain filings with, and to seek approvals from, certain Governmental
Authorities pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

         4.5 Litigation and Claims. There is no action, suit, claim, proceeding,
arbitration or investigation pending or, to the knowledge of the Buyer,
threatened against or affecting the Buyer with respect to the propriety or
validity of the transactions contemplated hereby.

         4.6 No Finder. Neither the Buyer nor any party acting on its behalf has
paid or become obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions contemplated hereby.

         4.7 Investment Representations. The Buyer hereby acknowledges and
agrees that the Purchase Shares, the Warrant, and, if and when issued, the
Warrant Shares will not be registered under the Securities Act or any state
securities laws and may not be offered or sold except pursuant to registration
or an exemption from the registration requirements of the Securities Act and all
applicable state securities laws. In this connection, the Buyer understands Rule
144 promulgated under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.

         4.8 Accredited Investor. The Buyer represents that: (i) the Buyer is an
"accredited investor" (as such term is defined in Regulation D under the
Securities Act) and is acquiring the Purchase Shares and the Warrant (and, upon
exercise of the Warrant, the Warrant Shares) for its own account, for investment
purposes only, and not with a view to the resale or offer for sale thereof or
with any present intention of distributing or selling or offering for sale any
of such securities; and (ii) the Buyer is capable of bearing the economic risk
of such investment, including a complete loss of the investment in the Purchase
Shares, the Warrant and the Warrant Shares.

         4.9 Ownership of Common Stock. The Buyer and its Affiliates do not own,
either individually or in the aggregate, five percent or greater of the
outstanding shares of Common Stock as of the date of this Agreement (prior to
giving effect to the transactions contemplated by this Agreement).

                                       21
<PAGE>

                                    ARTICLE V

                                    COVENANTS

         5.1 Governmental Consents. If and to the extent that any applications,
documents, filings or submissions for the consent of any Governmental Authority
are required by any Governmental Authority (including, without limitation,
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended) in connection with the Buyer's exercise, in whole or in part, of the
Warrant, the Buyer and the Seller shall as promptly as possible file such
applications, documents, filings or submissions and each such party shall
furnish to the other such necessary information and reasonable assistance as
the other may request in connection with its preparation of any such
applications, documents, filings or submissions. Each such party shall keep the
other apprised of the status of any communications with, and any inquiries or
requests for additional information from such Governmental Authorities and shall
comply promptly with any such inquiry or request. Each such party shall use its
reasonable efforts to obtain any clearance required from such Governmental
Authorities for the exercise, in whole or in part, of the Warrant.

         5.2 Restrictive Legends. None of the Purchase Shares, the Warrant or
the Warrant Shares may be transferred without registration under the Securities
Act and applicable state securities laws unless counsel to the Buyer (which is
reasonably acceptable to the Seller) shall advise the Seller in writing that
such transfer may be effected without such registration. Each certificate
representing any of the foregoing shall bear legends in substantially the
following form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY JURISDICTION.
         SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT
         TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS
         EFFECTIVE UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAW, OR (II)
         ANY EXEMPTION FROM REGIS TRATION UNDER SUCH ACT, AND APPLICABLE STATE
         SECURITIES LAW, RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING
         RULE 144.

         The Seller shall remove or cause its registrar and transfer agent to
remove such legend at the time such Purchase Shares or Warrant Shares are
transferred

                                       22

<PAGE>

pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 under the Securities Act.

         5.3 Publicity. No public release or announcement concerning the
transactions contemplated by this Agreement or the Transaction Documents shall
be issued by either party without the prior consent of the other party (which
consent shall not be unreasonably withheld or delayed), except as such release
or announce ment may be required by law or the rules or regulations of any
United States or foreign securities exchange, in which case the party required
to make the release or announcement shall allow the other party reasonable time
to comment on such release or announcement in advance of such issuance, and in
which case the other party also shall have the right to issue a press release or
announcement concerning the transactions contemplated hereby, provided that it
shall allow the party required to make the release or announcement reasonable
time to comment on such other party's release or announcement in advance of the
issuance thereof.

                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1 Survival; Certain Other Matters.

         (a) The representations and warranties of the parties contained in this
Agreement shall survive the Closing and shall continue in full force and effect
until the first anniversary of the date hereof, after which time such
representations and warranties shall terminate and have no further force or
effect; provided, however, that the representations and warranties contained in
Sections 3.6(b), 3.13, 3.17, 4.7 and 4.8 hereof shall survive the Closing and
remain in full force and effect until the expiration of the applicable statute
of limitations relating to any issue thereunder, after which time such
representations and warranties shall terminate and have no further force or
effect. The period during which any such representation or warranty survives is
the "Survival Period" for such representation or warranty. Notwithstand ing the
foregoing but subject to Section 6.1(b) below, any representation or warranty
that would otherwise terminate shall survive with respect to, and only with
respect to, any matter of which notice is given to Seller or Buyer, as the case
may be, in writing pursuant to this Agreement prior to the end of the applicable
Survival Period until such matter is resolved, after which time such
representation and warranty shall terminate and have no further force or effect.

                                       23

<PAGE>

         (b) The Seller and its Affiliates and their respective directors,
officers, employees, Affiliates, shareholders, controlling persons, agents and
representatives aggregate responsibility or liability to any and all of the
Buyer and its Affiliates and their respective directors, officers, employees,
Affiliates, shareholders, controlling persons, agents and representatives with
respect to breaches of the representations and warranties of the Seller set
forth in Article III of this Agreement shall not exceed ten million dollars
($10,000,000).

         (c) The Buyer and its Affiliates and their respective directors,
officers, employees, Affiliates, shareholders, controlling persons, agents and
representatives aggregate responsibility or liability to any and all of the
Seller and its Affiliates and their respective directors, officers, employees,
Affiliates, shareholders, controlling persons, agents and representatives with
respect to breaches of the representations and warranties of the Buyer set forth
in Article IV of this Agreement shall not exceed ten million dollars
($10,000,000).

         (d) The covenants and agreements of the parties contained in this
Agreement shall survive the Closing indefinitely; provided, however, that the
covenants and agreements contained in Section 5.3 hereof shall not survive the
Closing.

         (e) Each party hereto may assert a claim or cause of action under this
Agreement with respect to (i) any breach of one or more of the representations
and warranties contained in Articles III and IV hereof, as the case may be,
provided that such claim or cause of action is asserted within the applicable
time period specified in Section 6.1(a) hereof and such claim or cause of action
is subject to the limitations contained in Sections 6.1(b) and 6.1(c) hereof, as
the case may be, and (ii) subject to Section 6.1(d) hereof, a breach of any one
or more of the covenants or agreements contained in this Agreement. Except as
provided for in the immediately preceding sentence, the parties to this
Agreement agree that no claims or causes of action on any basis (including in
contract or tort, under federal or state securities laws or otherwise), other
than for fraud, may be brought against the Seller or the Buyer or any of their
respective directors, officers, employees, Affiliates, shareholders, successors,
permitted assigns, agents, or representatives based upon, directly or
indirectly, any of the representations or warranties contained in Articles III
and IV of this Agreement or any misstatement or failure to state any fact made
by Seller in connection with the Buyer's purchase of the Purchase Shares, the
Warrant and the Warrant Shares. None of the limitations set forth in this
Section 6.1(e) shall amend or modify any rights a holder of the Warrant may have
pursuant to the terms and provisions of the Warrant.

                                       24

<PAGE>

         6.2 Further Assurances. From and after the Closing Date, each party
shall, at any time and from time to time, make, execute and deliver, or cause to
be made, executed and delivered, such instruments and agreements, and take or
cause to be taken all such actions as counsel for the other party may reasonably
request for the effectual consummation of this Agreement and the transactions
hereby contem plated.

         6.3 Expenses of the Transaction. Each of the parties hereto agrees to
pay such party's own fees and expenses in connection with this Agreement and the
transactions hereby contemplated including, without limitation, legal and
accounting fees and expenses.

         6.4 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered (i) when
delivered personally or by private courier, (ii) when actually delivered by
registered or certified United States mail, return receipt requested, or (iii)
when sent by telecopy (provided that it is confirmed by a means specified in
clause (i) or (ii)), addressed as follows:

         If to the Buyer, to:

                  Sony Electronics Inc.
                  1 Sony Drive
                  Park Ridge, New Jersey 07656
                  Attention: General Counsel, Legal Department
                  Telephone: (201) 930-6420
                  Telecopy:  (201) 930-6099

         With a copy to:

                  Rosenman & Colin LLP
                  575 Madison Avenue
                  New York, New York 10022
                  Attention:  David H. Landau, Esq.
                  Telephone:  (212) 940-6608
                  Telecopy:   (212) 940-8776

                             25

<PAGE>

         If to the Seller to:

                  Panavision Inc.
                  6219 De Soto Avenue
                  Woodland Hills, California  91367
                  Attention: John Farrand
                  Telephone: (818) 316-1000
                  Telecopy:  (818) 316-1110

         With a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, New York  10036
                  Attention: Alan C. Myers, Esq.
                  Telephone: (212) 735-3000
                  Telecopy:  (212) 735-2000

or to such other address as such party may indicate by a notice delivered to the
other parties hereto.

         6.5 No Modification Except in Writing. This Agreement shall not be
changed, modified, or amended except by a writing signed by the party to be
affected by such change, modification or amendment, and this Agreement may not
be discharged except by performance in accordance with its terms or by a writing
signed by the party to which performance is to be rendered.

         6.6 Entire Agreement. This Agreement, together with the Schedules and
Exhibits hereto, sets forth the entire agreement and understanding among the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of every kind and nature among them.

         6.7 Severability. If any provision of this Agreement or the application
of any provision hereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision to other
persons or circum stances shall not be affected unless the provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.

         6.8 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. This Agreement may not be
assigned by either

                                       26

<PAGE>

party hereto, except with the prior written consent of the other party hereto;
pro vided, however, that each party may assign its rights, but not its
obligations, under this Agreement to any Affiliate of such party.

         6.9 Governing Law; Jurisdiction.

         (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts made and to be
performed wholly within said State, without giving effect to the conflict of
laws principles thereof.

         (b) Neither party shall commence any legal proceeding or action against
the other party under this Agreement unless and until the parties have attempted
in good faith to settle the underlying dispute through negotiation or mediation
for a period of not less than 30 days. Each of the parties hereto irrevocably
and uncondi tionally submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or, if such court will not
accept jurisdiction, the Supreme Court of the State of New York, New York County
or any court of compe tent civil jurisdiction sitting in New York County, New
York. In any action, suit or other proceeding, each of the parties hereto
irrevocably and unconditionally waives and agrees not to assert by way of
motion, as a defense or otherwise any claims that it is not subject to the
jurisdiction of the above courts, that such action or suit is brought in an
inconvenient forum or that the venue of such action, suit or other proceeding is
improper. Each of the parties hereto also agrees that any final and unappealable
judgment against a party hereto in connection with any action, suit or other
proceeding shall be conclusive and binding on such party and that such award or
judgment may be enforced in any court of competent jurisdiction, either within
or outside of the United States. A certified or exemplified copy of such award
or judgment shall be conclusive evidence of the fact and amount of such award or
judgment.

         (c) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY LEGAL PRO CEEDING RELATING TO THIS AGREEMENT OR THE
ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT.

         6.10 Captions. The captions appearing in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit or
describe the scope and intent of this Agreement or any of the provisions hereof.

                                       27

<PAGE>

         6.11 Recovery of Attorney's Fees. Should either party hereto bring an
action in connection with a breach of, or failure to perform, any of the terms
of this Agreement then, if the Buyer prevails in such action it shall be
entitled to recovery of its attorney's fees from the Seller, and if the Seller
prevails in such action it shall be entitled to recovery of its attorney's fees
from the Buyer.

         6.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single agreement.

                            [Signature page follows]

                                       28

<PAGE>

         IN WITNESS WHEREOF, each of the parties hereto has executed this Stock
and Warrant Purchase Agreement on the day and year first above written.

                                                 SONY ELECTRONICS INC.

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

                                                 PANAVISION INC.

                                                 By:
                                                    --------------------------
                                                     Name:
                                                     Title:<PAGE>

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF
          ANY JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR
           TRANSFERRED EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT
        WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT
         AND APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM
          REGISTRATION UNDER SUCH ACT, AND APPLICABLE STATE SECURITIES
      LAW, RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144.

                         THE TRANSFER OF THIS WARRANT IS
                         RESTRICTED AS DESCRIBED HEREIN.

                                 PANAVISION INC.
               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK,
                            PAR VALUE $.01 PER SHARE
No. W-1                                                          714,300 Shares

         THIS CERTIFIES that, for value received, SONY ELECTRONICS INC., a
Delaware corporation (the "Holder"), is entitled to subscribe for and purchase
from PANAVISION INC., a Delaware corporation (the "Company"), upon the terms and
conditions set forth herein, at any time or from time to time after July 26,
2000 and before 5:00 P.M. on July 25, 2010 New York time (the "Exercise
Period"), 714,300 shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at a price per share equal to the Exercise Price (as
defined in Section 1(b) below). This Warrant is the warrant (collectively,
including any warrants issued upon the exercise or transfer of any such warrants
in whole or in part, the "Warrants") issued pursuant to the Stock and Warrant
Purchase Agreement, dated July 26, 2000 (the "Purchase Agreement"), by and
between the Company and the Holder. As used herein the term "this Warrant" shall
mean and include this Warrant and any Warrant or Warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole or in part.
Neither this Warrant nor any shares of Common Stock issued on exercise hereof
may be sold or transferred except in accordance with the legend above, except
that this Warrant or any such shares may be transferred, in whole or in part, to
(i) one or more affiliates of the Holder; (ii) a successor to the Holder, or any
affiliates of such successor; (iii) a purchaser of substantially all of the
assets of the Holder; or (iv) by operation of law; and the term the "Holder" as
used herein shall include any transferee to whom this Warrant has been
transferred in accordance with the above.

         The number of shares of Common Stock issuable upon exercise of the
Warrants (the "Warrant Shares") and the Exercise Price may be adjusted from time
to time as hereinafter set forth.

         1. (a) Subject to the terms and conditions hereinafter set forth, this
Warrant may be exercised during the Exercise Period, as to the whole or any
lesser number of whole Warrant Shares, by the surrender of this Warrant (with
the form of election attached hereto duly executed) to the Company at its office
at 6219 De Soto Avenue, Woodland Hills, California

<PAGE>

91367, or at such other place as is designated in writing by the Company,
together with, at the option of the Holder, (i) a certified or bank cashier's
check payable to the order of the Company in an amount equal to the Exercise
Price multiplied by the number of Warrant Shares for which this Warrant is being
exercised (the "Aggregate Exercise Price"), (ii) the acceptance by the Holder of
a number of Warrant Shares equal to the number of Warrant Shares being purchased
upon such exercise, less that number of Warrant Shares having an aggregate
Current Market Price (as defined in Section 5(d)) equal to the Aggregate
Exercise Price, or (iii) any combination of the foregoing.

         (b) For purposes of this Warrant, the term "Exercise Price" shall mean
$17.50; provided, however, that, in the event that the Company's 2000 EBITDA (as
defined below) is less than sixty-nine million dollars ($69,000,000), then the
"Exercise Price" as of the time of the filing of the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 (the "2000 Form 10-K")
with the Securities and Exchange Commission shall equal the Exercise Price that
would have been effect at the time of filing of the 2000 Form 10-K had the
Exercise Price as of the date of the issuance of this Warrant been $15.50. In
the event that this Warrant has been exercised in whole or in part prior to the
time of filing of the 2000 Form 10-K, then the adjustments contemplated by this
Section 1(b) shall not apply with respect to the Warrant (or any portion
thereof) exercised prior to such time of filing. For purposes of this Section
1(b), the term "2000 EBITDA" shall mean the EBITDA (as reported in the Company's
Selected Financial Data table contained in the 2000 Form 10-K) of the Company
and its consolidated subsidiaries for the twelve months ended December 31, 2000;
provided, however, that (i) EBITDA shall be calculated in manner that is
consistent with the manner of calculation set forth in the Selected Financial
Data table in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, and (ii) the financial statements of the Company from which
the individual items used to calculate 2000 EBITDA shall have been prepared in
accordance with generally accepted accounting principles, consistently applied.

         2. Upon each exercise of the Holder's rights to purchase Warrant
Shares, the Holder shall be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise, notwithstanding that the transfer books of
the Company shall then be closed or certificates representing such Warrant
Shares shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Warrant, the Company shall issue
and deliver to the Holder a certificate or certificates for the Warrant Shares
issuable upon such exercise, registered in the name of the Holder or its
designee. If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the right of the Holder to purchase the balance of the
Warrant Shares (or portions thereof) subject to purchase hereunder.

         3. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be registered in a warrant register (the
"Warrant Register") as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant on the

                                       2

<PAGE>

Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such Warrant
on the part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his or its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or authority to
transfer. In all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced. Upon any registration of transfer, the Company
shall deliver a new Warrant or Warrants to the person entitled thereto. This
Warrant may be exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of Warrant
Shares (or portions thereof), upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person if, in
the opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act").

         4. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of the rights to purchase all Warrant Shares granted pursuant to
the Warrants, such number of shares of Common Stock as shall, from time to time,
be sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the Company of the full
Exercise Price therefor, shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.

         5. (a) In case the Company shall at any time after the date the
Warrants were first issued (i) declare a dividend on the outstanding Common
Stock payable in shares of its capital stock, (ii) subdivide the outstanding
Common Stock into a greater number of shares, (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then, in each case, the Exercise Price,
and the number of Warrant Shares issuable upon exercise of this Warrant, in
effect immediately prior to the close of business on the record date for the
determination of stockholders entitled to receive such dividend or to
participate in such subdivision, contribution or reclassification or, if no
record date is selected or the fixing of a record date is inapplicable,
immediately prior to the effective time of such subdivision, combination, or
reclassification, shall be proportionately adjusted so that the Holder of any
Warrants exercised after such time shall be entitled to receive the aggregate
number and kind of shares which, if such Warrant had been exercised immediately
prior to such time, such Holder

                                       3
<PAGE>

would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur and shall
take effect at the close of business on the aforementioned record date or at the
aforementioned effective time, as the case may be. In the event that after
fixing any such record date any such dividend or other transaction is not
effected, the Exercise Price and the number of Warrant Shares shall be
readjusted to the Exercise Price and the number of Warrant Shares which would
then have been in effect if such record date had not been fixed.

            (b) (i) (x) In case the Company shall fix a record date with respect
to the issuance of or, if no record date is selected or if the selection of a
record date is inapplicable, in the case the Company shall issue, in either such
case, shares of Common Stock or rights, options, or warrants to subscribe for or
purchase Common Stock, or securities convertible into or exchangeable for Common
Stock, or rights, options, or warrants to subscribe for or purchase such
convertible or exchangeable securities, but excluding (A) rights issued pursuant
to a shareholder rights plan, and (B) shares, rights, options, warrants, or
convertible or exchangeable securities issued or issuable in any of the
transactions with respect to which an adjustment of the Exercise Price is
provided pursuant to Section 5(a) above,

                    (y) at a price per share lower than the Current Market Price
immediately prior to such issuance (such per share price determined, in the case
of such rights, options, warrants, or convertible or exchangeable securities, by
dividing (A) the aggregate consideration received by the Company for the sale
and issuance of such rights, options, warrants, or convertible or exchangeable
securities, by (B) the maximum number of shares of Common Stock covered by such
rights, options, warrants, or convertible or exchangeable securities),

                    (z) then the Exercise Price shall be adjusted by multiplying
the Exercise Price in effect immediately prior to such issuance by a fraction,
(A) the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of shares of
Common Stock which the aggregate consideration received by the Company for such
sale and issuance would purchase at such Current Market Price, and (B) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such issuance plus the number of additional
shares of Common Stock issued and outstanding pursuant to such issuance.

                (ii) For the purposes of the foregoing:

                    (x) the "maximum number of shares of Common Stock covered by
such rights, options, warrants, or convertible or exchangeable securities" (or
words of similar import) shall equal the aggregate number of shares of Common
Stock holders of such rights, options, warrants, or convertible or exchangeable
securities are initially entitled to receive

                                       4
<PAGE>

upon their exercise (without regard to any provision contained therein for
subsequent adjustment of such amount to protect against dilution or otherwise),

                    (y) the "number of additional shares of Common Stock issued
and outstanding pursuant to the issuance of rights, options, warrants, or
convertible or exchangeable securities" (or words of similar import) shall equal
the aggregate number of shares of Common Stock holders of such rights, options,
warrants, or convertible or exchangeable securities are initially entitled to
receive upon exercise (without regard to any provision contained therein for
subsequent adjustment of such amount to protect against dilution or otherwise),
and

                    (z) the "aggregate consideration received by the Company for
the sale and issuance of rights, options, warrants, or convertible or
exchangeable securities" (or words of similar import) shall equal the aggregate
consideration received or receivable by the Company upon the issuance of such
rights, options, warrants, or convertible or exchangeable securities, plus the
minimum aggregate consideration or premiums stated in such rights, options,
warrants, or convertible or exchangeable securities to be paid upon the
exercise, conversion or exchange thereof for the shares of Common Stock covered
thereby (without regard to any provision contained therein for subsequent
adjustment of such amount to protect against dilution or otherwise).

                (iii) No further adjustment of the Exercise Price shall be made
to account for any actual issuance of shares of Common Stock on exercise of such
rights, options, or warrants or on conversion or exchange of such convertible or
exchangeable securities.

                (iv) In case the Company shall issue shares of Common Stock or
any such rights, options, warrants, or convertible or exchangeable securities
for a consideration consisting, in whole or in part, of property other than cash
or its equivalent, then the "price per share" and the "consideration received by
the Company" for purposes of this Section 5(b) shall be as determined in good
faith by the board of directors of the Company. Shares of Common Stock owned by
the Company or held for the account of the Company or held by any majority-owned
subsidiary of the Company shall not be deemed outstanding for the purpose of any
such computation.

                (v) Any such adjustment pursuant to this Section 5(b) shall
become effective (i) in the case where a record date has been selected for the
determination of stockholders entitled to participate in an issuance
contemplated by Section 5(b)(i)(x) hereof, at the close of business on such
record date, or (ii) in the case where no record date has been selected or where
the selection of a record date is inapplicable with respect to an issuance
contemplated by Section 5(b)(i)(x) hereof, upon such issuance. In the event that
after fixing a record date such rights, options, warrants, or convertible or
exchangeable securities are not so issued, the Exercise Price and the number of
Warrant Shares shall be readjusted to the Exercise

                                       5
<PAGE>

Price and number of Warrant Shares which would then have been in effect if such
record date had not been fixed.

            (c) In case the Company shall distribute to all holders of Common
Stock (including any such distribution made to the stockholders of the Company
in connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness or assets (other than cash
dividends paid in the ordinary course of business or distributions and dividends
payable in shares of Common Stock), or rights, options, or warrants to subscribe
for or purchase Common Stock, or securities convertible into or exchangeable for
shares of Common Stock (excluding those with respect to the issuance of which an
adjustment of the Exercise Price is provided pursuant to Section 5(b) hereof),
then, in each case, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the close of business on the
record date for the determination of stockholders entitled to receive such
distribution by a fraction, (A) the numerator of which shall be the Current
Market Price determined as of such record date, less the fair market value (as
determined in good faith by the board of directors of the Company) of the
portion of the evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or exchangeable securities,
applicable to one share, and (B) the denominator of which shall be such Current
Market Price. Such adjustment shall be made whenever any such distribution is
made, and shall become effective at the close of business on the aforementioned
record date.

            (d) As used in this Warrant, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices for the 20 consecutive trading days commencing 25 trading days
immediately preceding the date in question; provided, however, that, for
purposes of Section 1(a)(ii) hereof, the "Current Market Price" of a Warrant
Share shall be deemed to be the closing price of a share of Common Stock as of
the date immediately preceding the date upon which the Warrant is delivered to
the Company for exercise. The closing price for any day shall be the last
reported sales price regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices regular way, in
either case on the principal national securities exchange (including, for
purposes hereof, Nasdaq) on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price for the Common
Stock as furnished by the National Association of Securities Dealers, Inc.
through Nasdaq or a similar organization if Nasdaq is no longer reporting such
information. If on any such date the Common Stock is not listed or admitted to
trading on any national securities exchange and is not quoted by Nasdaq or any
similar organization, the fair value of a share of Common Stock on such date, as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error, shall be used.

            (e) No adjustment in the Exercise Price shall be required as a
result of the issuance of: (i) any options or rights, or any shares of Common
Stock issuable upon the

                                       6
<PAGE>

exercise of options or rights, issued pursuant to the Company's 1999 Stock
Option Plan; (ii) any rights, options, warrants, or other convertible or
exchangeable securities issued under any other employment benefit plans adopted
by the Board of Directors of the Company (but only to the extent that the
aggregate number of rights, options, warrants and other convertible and
exchangeable securities excluded by this clause (ii) and issued after July 26,
2000 shall not exceed the right to receive more than five percent (5%) of the
outstanding Common Stock as of July 26, 2000); or (iii) Common Stock upon
exercise of the Warrant.

            (f) No adjustment in the Exercise Price shall be required if such
adjustment is less than $.01; provided, however, that any adjustments which by
reason of this Section 5(f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest one-thousandth of
a share, as the case may be.

            (g) In any case in which this Section 5 shall require that an
adjustment in the Exercise Price be made effective as of the close of business
on a record date for a specified event, the Company may elect to defer, until
the occurrence of such event, issuing to the Holder, if the Holder exercised
this Warrant as of or after the close of business on such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.

            (h) Upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 5(b) or 5(c) hereof, this Warrant shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
shares (calculated to the nearest thousandth) obtained by dividing (A) the
product obtained by multiplying (i) the number of shares purchasable upon
exercise of this Warrant prior to adjustment of the Exercise Price by (ii) the
Exercise Price in effect prior to adjustment of the Exercise Price by (B) the
Exercise Price in effect after such adjustment of the Exercise Price.

            (i) On the expiration, cancellation, retirement or termination of
any rights, options, warrants or convertible or exchangeable securities
described in Sections 5(b) or 5(c), the Exercise Price and the number of Warrant
Shares (but only with respect to Warrants exercised after such expiration,
cancellation, retirement or termination which, for purposes of this Section
5(i), shall be deemed to include the portion of those Warrants which have been
exercised and in respect of which a due bill or other instrument has been
delivered to the Holder in accordance with Section 5(g) hereof) shall be
readjusted at the time of such expiration, cancellation, retirement or
termination to the Exercise Price and the number of Warrant Shares that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights, options, warrants, or
convertible or exchangeable securities.

                                       7
<PAGE>

            (j) Whenever there shall be an adjustment as provided in this
Section 5, the Company shall promptly cause written notice thereof to be sent by
registered mail, postage prepaid, to the Holder, at its address as it shall
appear in the Warrant Register, which notice shall be accompanied by an
officer's certificate setting forth the number of Warrant Shares purchasable
upon the exercise of this Warrant and the Exercise Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation thereof.

            (k) The Company shall not be required to issue fractions of shares
of Common Stock or other capital stock of the Company upon the exercise of this
Warrant. If any fraction of a share would be issuable on the exercise of this
Warrant (or specified portions thereof), the Company shall purchase such
fraction for an amount in cash equal to the same fraction of the Exercise Price
on the date of exercise of this Warrant.

            (l) No adjustment in the Exercise Price or the number of Warrant
Shares purchasable upon the exercise of each Warrant need be made (i) under
Section 5(b) or 5(c) if the Company issues or distributes to each Holder of
Warrants the rights, options, warrants, or convertible or exchangeable
securities, or evidences of indebtedness or other assets referred to in those
Sections which each Holder of Warrants would have been entitled to receive had
the Warrants been exercised prior to the happening of such event or the record
date with respect thereto or (ii) for any change in the par value of the Common
Stock.

            (m) If any single action would require adjustment of the Exercise
Price or the number of Warrant Shares purchasable upon the exercise of each
Warrant pursuant to more than one provision of this Warrant, only one adjustment
shall be made.

         6. (a) In case of any consolidation with or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation), or in case of any sale,
lease, or conveyance to another corporation of all or substantially all of the
assets of the Company, such successor, leasing, or purchasing corporation, as
the case may be, shall (i) execute with the Holder an agreement providing that
the Holder shall have the right thereafter to receive upon exercise of this
Warrant solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such consolidation,
merger, sale, lease, or conveyance by a holder of the number of shares of Common
Stock for which this Warrant might have been exercised immediately prior to such
consolidation, merger, sale, lease, or conveyance and (ii) make effective
provision in its certificate of incorporation or otherwise, if necessary, to
effect such agreement. Such agreement shall provide for adjustments which shall
be as nearly equivalent as practicable to the adjustments in Section 5.

            (b) In case of any reclassification or change of the shares of
Common Stock issuable upon exercise of this Warrant (including (i) any
consolidation or merger of

                                       8
<PAGE>

another corporation into the Company in which the Company is the continuing
corporation and in which there is a reclassification or change (including a
change to the right to receive cash or other property) of the shares of Common
Stock and (ii) any change in the Common Stock into two or more classes or series
of shares) in respect of which an adjustment has not been provided for under
Section 5(a), the Holder shall have the right to receive upon exercise of this
Warrant following the consummation of any such reclassification or change solely
the kind and amount of shares of stock and other securities, property, cash, or
any combination thereof which would have been receivable upon such
reclassification or change by a holder of the number of shares of Common Stock
for which this Warrant might have been exercised immediately prior to such
reclassification or change. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 5.

            (c) The above provisions of this Section 6 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

         7. In case at any time the Company shall propose

            (a) to pay any dividend (other than cash dividends paid in the
ordinary course of business) or make any distribution on shares of Common Stock
in shares of Common Stock or make any other distribution to all holders of
Common Stock; or

            (b) to issue any rights, warrants, or other securities to all
holders of Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities (other than
pursuant to: (i) the Company's 1999 Stock Option Plan; or (ii) other employee
benefit plans of the Company, but only to the extent that no adjustment to the
Exercise Price is required pursuant to Section 5(e) hereof); or

            (c) to effect any reclassification or change of outstanding shares
of Common Stock, or any consolidation, merger, sale, lease, or conveyance of
property, described in Section 6; or

            (d) to effect any liquidation, dissolution, or winding-up of the
Company; or

            (e) to take any other action which would cause an adjustment to the
Exercise Price;

then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Warrant Register, mailed at least 15
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such dividend, distribution, rights,

                                       9
<PAGE>

warrants, or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding up, or (iii) the date of such action which would require
an adjustment to the Exercise Price. Failure to mail the notice or any defect
therein shall not affect the validity of the transaction requiring the mailing
of such notice.

         8. The issuance of any shares of Common Stock or other securities upon
the exercise of this Warrant, and the delivery of certificates or other
instruments representing such shares or other securities, in each case to the
registered holder of the Warrants, shall be effected by the Company without the
Company imposing any of charges upon such registered holder. Notwithstanding
anything to the contrary herein, the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer of any Warrants or
Warrant Shares to a person or entity other than that of the registered holder of
such Warrant or Warrant Shares, and the Company shall not be required to issue
or deliver such Warrants or Warrant Shares to any person or entity other than
that of the registered holder unless or until such other person or entity
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid or is not payable under law.

         9. Upon issuance, the Warrant Shares may not be transferred without
registration under the Securities Act and applicable state securities laws
unless counsel to the Holder (which is reasonably acceptable to the Company)
shall advise the Company in writing that such transfer may be effected without
such registration. Each certificate representing any of the Warrant Shares shall
bear legends in substantially the following form:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
     BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
     SECURITIES LAWS OF ANY JURISDICTION. SUCH SECURITIES MAY NOT BE
     OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO (I) A REGISTRATION
     STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH
     ACT AND APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM
     REGISTRATION UNDER SUCH ACT, AND APPLICABLE STATE SECURITIES LAW,
     RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144.

                                       10
<PAGE>

The Company shall remove or cause its registrar and transfer agent to remove
such legend at the time such Warrant Shares are transferred pursuant to an
effective registration statement under the Securities Act or pursuant to Rule
144 under the Securities Act.

         10. Upon receipt by the Company of evidence satisfactory to the Company
of the loss, theft, destruction, or mutilation of any Warrant (and upon
surrender of any Warrant if mutilated) and an indemnity from the Holder, and
upon reimbursement of the Company's reasonable incidental expenses by the
Holder, the Company shall execute and deliver to the Holder thereof a new
Warrant of like date, tenor, and denomination.

         11. The Holder of any Warrant shall not have, solely on account of such
status, any rights of a stockholder of the Company, either at law or in equity.
Without limiting the immediately preceding sentence, the Holder of any Warrant
shall be given notices of meetings of the stockholders of the Company at the
same time as such notice is given to such stockholders.

         12. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested or sent by Federal Express, Express Mail, or similar overnight
delivery or courier service or delivered (in person or by telecopy, telex, or
similar telecommunications equipment) against receipt to the party to whom it is
to be given, if sent to the Company, at: 6219 De Soto Avenue, Woodland Hills,
California 91367, Attention: The Chairman or the President; or if sent to the
Holder, at the Holder's address as it shall appear on the Warrant Register; or
to such other address as the party shall have furnished in writing in accordance
with the provisions of this Section 12. Any notice or other communication given
by certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which will be deemed given at the
time of receipt thereof. Any notice given by other means permitted by this
Section 12 shall be deemed given at the time of receipt thereof.

         13. This Warrant shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of the Holder and its permitted
successors and assigns.

         14. This Warrant shall be construed in accordance with the laws of the
State of Delaware applicable to contracts made and performed within such State,
without regard to principles of conflicts of law.

         15. The Company and, by its acceptance of the benefits of this Warrant,
the holder of this Warrant agree that they shall not commence any legal
proceeding or action against the other under this Warrant unless and until they
have attempted in good faith to settle the underlying dispute through
negotiation or mediation for a period of not less than 30 days. The Company and,
by its acceptance of the benefits of this Warrant, the holder of this Warrant
irrevocably and unconditionally submit to the exclusive jurisdiction of the
United States District

                                       11
<PAGE>

Court for the Southern District of New York or, if such court will not accept
jurisdiction, the Supreme Court of the State of New York, New York County or any
court of competent civil jurisdiction sitting in New York County, New York. In
any action, suit or other proceeding, the Company and, by its acceptance of the
benefits of this Warrant, the holder of this Warrant irrevocably and
unconditionally waive and agree not to assert by way of motion, as a defense or
otherwise any claim that it is not subject to the jurisdiction of the above
courts, that such action or suit is brought in an inconvenient forum or that the
venue of such action, suit or other proceeding is improper. The Company and, by
its acceptance of the benefits of this Warrant, the holder of this Warrant also
agree that any final and unappealable judgment against either of them in
connection with any action, suit or other proceeding shall be conclusive and
binding on such party and that such award or judgment may be enforced in any
court of competent jurisdiction, either within or outside of the United States.
A certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment.

         16. THE COMPANY AND, BY ITS ACCEPTANCE OF THE BENEFITS OF THIS WARRANT,
THE HOLDER OF THIS WARRANT IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE
ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT.

         17. Each of the Company and, by its acceptance of the benefits under
this Warrant, the Holder agree that in the event of any action with respect to
the terms and provisions of this Warrant, if the Holder prevails in such action
then the Holder shall be entitled to recovery of its attorney's fees from the
Company, and if the Company prevails in such action the Company shall be
entitled to recovery of its attorney's fees from the Holder(s) party to such
actions.

                                       12
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by a duly authorized officer under its corporate seal and attested
by its Secretary on the day and year first written below.

Dated:  July ___, 2000

                                        PANAVISION INC.

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

[Seal]
ATTEST:

------------------------------
Secretary

<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Warrant and such transfer is permissible under the terms of the
attached Warrant.)

                  FOR VALUE RECEIVED, _____________________________ hereby

sells, assigns, and transfers unto __________________ a Warrant to purchase

__________ shares of Common Stock, par value $.01 per share, of Panavision Inc.

(the "Company"), together with all right, title, and interest therein, and does

hereby irrevocably constitute and appoint __________ attorney to transfer such

Warrant on the books of the Company, with full power of substitution.

Dated:
      ---------------

                                    Signature
                                              ---------------------------

                                     NOTICE

                  The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.

<PAGE>

To:      Panavision Inc.

         -------------------------

         -------------------------

                              ELECTION TO EXERCISE

         The undersigned hereby irrevocably exercises his or its rights to
purchase _______ Warrant Shares covered by the within Warrant and tenders
payment herewith in the amount of $_________ in accordance with the terms
thereof, and requests that certificates for such securities be issued in the
name of, and delivered to:

------------------------------------------------------------

------------------------------------------------------------

------------------------------------------------------------
           (Print Name, Address and Social Security
                 or Tax Identification Number)

and, if such number of Warrant Shares shall not be all the Warrant Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

Dated:                       Name
      -------------------         ----------------------------
                                            (Print)

Address:
        ------------------------------------------------------

                                               ---------------------------
                                                       (Signature)

         The above signature must correspond to the name as written upon the
face of the within Warrant in every particular, without alteration or
enlargement or any change whatsoever.

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