Document:

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                                                                   EXHIBIT 10.1

                               FRESH AMERICA CORP.

                       AMENDED AND RESTATED NOTE AGREEMENT
                   WITH RESPECT TO NOTE AGREEMENT DATED AS OF
                                   MAY 4, 1998

                           DATED AS OF APRIL 15, 2000

            $20,000,000 12% SENIOR SUBORDINATED NOTES DUE MAY 1, 2007

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<TABLE>
<S>                                                                                                              <C>
1.    PAYMENTS....................................................................................................2

   1.1   INTEREST PAYMENT.........................................................................................2
   1.2   REQUIRED PRINCIPAL PAYMENTS..............................................................................2
   1.3   OPTIONAL PRINCIPAL PAYMENTS..............................................................................2
   1.4   OFFER TO PAY UPON CHANGE IN CONTROL......................................................................3
   1.5   DELIVERY OF NOTES IN PAYMENT OF WARRANT PURCHASE PRICE...................................................6
   1.6   PAYMENTS AMONG NOTEHOLDERS...............................................................................6
   1.7   NOTATION OF NOTES ON PAYMENT.............................................................................6
   1.8   NO OTHER PAYMENTS OF PRINCIPAL; ACQUISITION OF NOTES.....................................................7
   1.9   MANNER OF PAYMENTS.......................................................................................7

2.    REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...............................................................8

   2.1   REGISTRATION OF NOTES....................................................................................8
   2.2   EXCHANGE OF NOTES........................................................................................8
   2.3   REPLACEMENT OF NOTES.....................................................................................9
   2.4   ISSUANCE TAXES..........................................................................................10

3.    GENERAL COVENANTS..........................................................................................10

   3.1   PAYMENT OF TAXES AND CLAIMS.............................................................................10
   3.2   MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.....................................................10
   3.3   PAYMENT OF NOTES AND MAINTENANCE OF OFFICE..............................................................11
   3.4   PENSION PLANS...........................................................................................12
   3.5   PRIVATE OFFERING........................................................................................13

4.    NEGATIVE AND FINANCIAL COVENANTS...........................................................................13

   4.1   MERGERS AND CONSOLIDATIONS..............................................................................13
   4.2   DISPOSITION OF ASSETS, RESTRICTED SUBSIDIARY STOCK......................................................14
   4.3   LIENS...................................................................................................18
   4.4   NET WORTH...............................................................................................22
   4.5   FIXED CHARGE COVERAGE...................................................................................22
   4.6   TOTAL DEBT..............................................................................................23
   4.7   SENIOR DEBT.............................................................................................23
   4.8   RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS..........................................................23
   4.9   SENIORITY TO FUTURE SUBORDINATED DEBT...................................................................25
   4.10  DESIGNATION OF SUBSIDIARIES.............................................................................25
   4.11  LINE OF BUSINESS........................................................................................26
   4.12  TRANSACTIONS WITH AFFILIATES............................................................................27
   4.13  SUBSIDIARY GUARANTEES...................................................................................27
   4.14  CURRENT RATIO...........................................................................................28

5.    REPORTING COVENANTS........................................................................................28

   5.1   FINANCIAL AND BUSINESS INFORMATION......................................................................28
   5.2   OFFICER'S CERTIFICATES..................................................................................32
   5.3   ACCOUNTANTS' CERTIFICATES...............................................................................32
   5.4   INSPECTION..............................................................................................33

6.    EVENTS OF DEFAULT..........................................................................................33
</TABLE>

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<TABLE>
<S>                                                                                                              <C>
   6.1   EVENTS OF DEFAULT.......................................................................................33
   6.2   DEFAULT REMEDIES........................................................................................36
   6.3   ANNULMENT OF ACCELERATION OF NOTES......................................................................38

7.    SUBORDINATION..............................................................................................39

   7.1   GENERAL.................................................................................................39
   7.2   INSOLVENCY..............................................................................................39
   7.3   PROOFS OF CLAIM.........................................................................................39
   7.4   ACCELERATION OF SENIOR DEBT.............................................................................40
   7.5   PAYMENT DEFAULT IN RESPECT OF SENIOR DEBT...............................................................40
   7.6   SIGNIFICANT NONPAYMENT DEFAULT IN RESPECT OF SENIOR DEBT................................................41
   7.7   STANDSTILL..............................................................................................42
   7.8   TURNOVER OF PAYMENTS....................................................................................42
   7.9   SUBORDINATION UNAFFECTED BY CERTAIN EVENTS..............................................................43
   7.10  WAIVER AND CONSENT......................................................................................44
   7.11  REINSTATEMENT OF SUBORDINATION..........................................................................44
   7.12  OBLIGATIONS NOT IMPAIRED................................................................................44
   7.13  PAYMENT OF SENIOR DEBT; SUBROGATION.....................................................................45
   7.14  RELIANCE OF HOLDERS OF SENIOR DEBT......................................................................45
   7.15  IDENTITY OF HOLDERS OF SENIOR DEBT......................................................................45
   7.16  AMENDMENTS TO SENIOR CREDIT FACILITY....................................................................46

8.    INTERPRETATION OF THIS AGREEMENT...........................................................................46

   8.1   TERMS DEFINED...........................................................................................46
   8.2   ACCOUNTING PRINCIPLES...................................................................................78
   8.3   DIRECTLY OR INDIRECTLY..................................................................................79
   8.4   SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION.................................................79
   8.5   GOVERNING LAW...........................................................................................79
   8.6   GENERAL INTEREST PROVISIONS.............................................................................79

9.    MISCELLANEOUS..............................................................................................81

   9.1   COMMUNICATIONS..........................................................................................81
   9.2   REPRODUCTION OF DOCUMENTS...............................................................................82
   9.3   SURVIVAL; ENTIRE AGREEMENT..............................................................................82
   9.4   SUCCESSORS AND ASSIGNS..................................................................................83
   9.5   AMENDMENT AND WAIVER....................................................................................83
   9.6   EXPENSES................................................................................................85
   9.7   WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC......................................................86
   9.8   EXECUTION IN COUNTERPART................................................................................87
</TABLE>

Annex 1        - Addresses of Purchasers; Payment Information
Annex 2        - Address of Company
Annex 3        - Senior Credit Agreement Definitions
Attachment A   - Form of Amended and Restated Note

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                       AMENDED AND RESTATED NOTE AGREEMENT
                   WITH RESPECT TO NOTE AGREEMENT DATED AS OF
                                   MAY 4, 1998

     AMENDED AND RESTATED NOTE AGREEMENT, dated as of April 15, 2000, with
respect to the Note Agreement dated as of May 4, 1998, among FRESH AMERICA
CORP., a Texas corporation (together with its successors and assigns, the
"Company"), and JOHN HANCOCK LIFE INSURANCE COMPANY, JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY and SIGNATURE 1A (CAYMAN), LTD. (together with their
respective successors and assigns, the "HOLDERS").

                                    RECITALS

     WHEREAS, pursuant to the Initial Securities Purchase Agreement, the Holders
purchased from the Company, and the Company sold to the Holders, Twenty Million
Dollars ($20,000,000) in aggregate principal amount of the Initial Notes due May
4, 2003; and

     WHEREAS, pursuant to the Securities Purchase Agreement, certain of the
Holders have agreed to purchase from the Company, and the Company has agreed to
sell to such Holders, 50,000 shares of Cumulative Preferred Stock and _____
Series B Warrants; and

     WHEREAS, each Holder was a Purchaser under the Initial Securities Purchase
Agreement, and each Purchaser under the Initial Securities Purchase Agreement is
a Holder; and

     WHEREAS, as a condition to the purchase and sale of the Cumulative
Preferred Stock and the Series B Warrants, the Company has requested and the
Holders have agreed to amend and restate the Initial Note Agreement on the terms
and in the manner set forth herein.

     WHEREAS, by their execution and delivery hereof, the Company and the
Holders are entering into this Agreement to amend and restate the Initial Note
Agreement and to govern the terms of the Notes;

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein,

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     (a) the Initial Note Agreement is hereby amended and restated as set forth
herein;

     (b) the Initial Notes are hereby, and are hereby deemed to be, amended and
restated in the form of Note set forth in Attachment A hereto, and each Holder
may now or hereafter exchange any or all of the Initial Notes held by it for new
amended and restated Notes in the form of Attachment A, each such new Note to be
of a principal amount equal to the outstanding principal amount of the Initial
Note delivered in exchange, provided however, that the failure of a Holder to so
exchange any Initial Note for a new Note shall have no effect or consequence
hereunder, and each such Initial Note shall be deemed to be, and shall be
treated for all purposes hereunder, as being a new Note in the form of
Attachment A); and

     (c) the parties to this Agreement hereby agree as provided in the various
Sections of this Agreement.

1. PAYMENTS

     1.1  INTEREST PAYMENT

     Interest on the Notes shall be computed and paid in the manner and on the
dates provided in the Notes.

     1.2  REQUIRED PRINCIPAL PAYMENTS

         There shall be no required principal prepayments with respect to the
Notes. The entire principal of the Notes outstanding on May 1, 2007, together
with interest accrued thereon, shall become due and payable on such date.

     1.3  OPTIONAL PRINCIPAL PAYMENTS

          (a) OPTIONAL PRINCIPAL PAYMENTS WITH PREPAYMENT COMPENSATION AMOUNT.
     The Company may pay the principal amount of the Notes in whole or in part,
     on any date in a minimum aggregate amount of Five Hundred Thousand Dollars
     ($500,000), or in any higher integral multiples of One Hundred Thousand
     Dollars ($100,000) (or, if the aggregate outstanding principal amount of
     the Notes is less than Five Hundred Thousand Dollars ($500,000) at such
     time, then such principal amount), together with:

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               (i) an amount equal to the Prepayment Compensation Amount due at
          such time in respect of the principal amount of the Notes being so
          paid; and

               (ii) interest on such principal amount then being paid accrued to
          the payment date.

          (b) NOTICE OF OPTIONAL PAYMENT. The Company will give notice of any
     optional payment of the Notes pursuant to this Section 1.3 to each holder
     of Notes not less than thirty (30) days nor more than sixty (60) days
     before the specified payment date, stating:

               (i) the specified payment date;

               (ii) that such payment is to be made pursuant to this Section
          1.3;

               (iii) the principal amount of each Note to be paid on such date;

               (iv) the interest to be paid on each such Note, accrued to the
          specified payment date; and

               (v) the calculation (with details) of an estimated Prepayment
          Compensation Amount, if any (calculated as if the date of such notice
          was the date of payment), due in connection with such payment.

          (c) Notice of payment having been so given, the aggregate principal
     amount of the Notes to be paid stated in such notice, together with the
     Prepayment Compensation Amount determined as of the specified payment date,
     if any, and interest thereon accrued to the specified payment date, shall
     become due and payable on the specified payment date. Two (2) Business Days
     prior to the making of such payment, the Company shall deliver to each
     holder of Notes by facsimile transmission (confirmed by nationwide
     overnight courier) a certificate of a Senior Financial Officer specifying
     the details of the calculation of the Prepayment Compensation Amount as of
     the specified payment date, and including a copy of the source of interest
     rate information used in the calculation thereof.

     1.4 OFFER TO PAY UPON CHANGE IN CONTROL

          (a) NOTICE OF CHANGE IN CONTROL NOTICE EVENT. In the event of the
     obtaining of knowledge of a Change in Control Notice Event by any Senior
     Officer (including, without limitation, via the receipt of notice of a
     Change in

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     Control Notice Event from any holder of Notes), the Company will, within
     five (5) Business Days after the occurrence of such event, give notice of
     such Change in Control Notice Event to each holder of Notes. Each such
     notice shall:

               (i) be dated the date of the sending of such notice;

               (ii) be executed by a Senior Officer;

               (iii) refer to this Section 1.4; and

               (iv) specify, in reasonable detail, the nature and date of the
          Change in Control Notice Event.

          (b) OFFER IN RESPECT OF A CHANGE IN CONTROL. In the event of a Change
     in Control, the Company will, within five (5) Business Days after the
     occurrence of such event (or, in the case of any Change in Control the
     consummation or finalization of which would involve any action of the
     Company, at least twenty (20) days prior to such Change in Control), give
     notice of such Change in Control to each holder of Notes. Such notice shall
     contain an irrevocable separate offer to each holder of Notes to pay all,
     but not less than all, of the principal of, and interest and Prepayment
     Compensation Amount, if any, on the Notes held by such holder on a date
     (the "CHANGE IN CONTROL PAYMENT DATE") specified in such notice that is not
     less than twenty (20) days and not more than thirty (30) days after the
     date of such notice. Each such notice shall:

               (i) be dated the date of the sending of such notice;

               (ii) be executed by a Senior Officer;

               (iii) specify, in reasonable detail, the nature and date of the
          Change in Control;

               (iv) specify the Change in Control Payment Date;

               (v) specify the principal amount of each Note outstanding;

               (vi) specify the interest that would be due on each Note offered
          to be paid, accrued to the Change in Control Payment Date; and

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               (vii) the calculation (with details) of an estimated Prepayment
          Compensation Amount, if any (calculated as if the date of such notice
          was the date of payment), due in connection with such payment.

          (c) ACCEPTANCE, REJECTION. Each holder of Notes shall have the option
     to accept or reject such offered payment. In order to reject such offered
     payment, a holder of Notes shall cause a notice of such rejection to be
     delivered to the Company at least five (5) days prior to the Change in
     Control Payment Date. A failure to reject in writing such written offer of
     payment as provided in this Section 1.4(c), or a written acceptance of such
     offered prepayment, shall be deemed to constitute an acceptance of such
     offer.

          (d) DEFERRAL OF OBLIGATION TO PURCHASE. The obligation of the Company
     to purchase Notes pursuant to the offers required by Section 1.4(b) and
     accepted or deemed accepted in accordance with Section 1.4(c) is subject to
     the occurrence of the Change in Control in respect of which such offers and
     acceptances shall have been made. In the event that such Change in Control
     does not occur prior to the Change in Control Payment Date in respect
     thereof, such purchase shall be deferred until and shall be made on the
     date on which such Change in Control occurs or, if the Company determines
     that efforts to effect such Change in Control have ceased or have been
     abandoned, then such offer, acceptances and obligation to purchase shall be
     deemed to have been rescinded. The Company shall keep each holder of Notes
     reasonably and timely informed of:

               (i) any such deferral of the date of purchase;

               (ii) the date on which such Change in Control and the purchase
          are expected to occur; and

               (iii) any determination by the Company that efforts to effect
          such Change in Control have ceased or been abandoned.

               (iv) PAYMENT. The offered payment shall be made at one hundred
          percent (100%) of the principal amount of the Notes to be prepaid,
          together with interest and Prepayment Compensation Amount, if any, on
          such Notes, accrued to and determined as of the Change in Control
          Payment Date. Two (2) Business Days prior to the making of such
          payment, the Company shall deliver to each holder of Notes by
          facsimile transmission a certificate of a Senior Financial Officer
          specifying the details of the calculation of the Prepayment
          Compensation Amount as of

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          the specified payment date, and including a copy of the source of
          interest rate information used in such calculation.

     1.5 DELIVERY OF NOTES IN PAYMENT OF WARRANT PURCHASE PRICE

     The Warrant Agreement provides that a holder of Warrants may tender Notes
in partial or complete payment of the purchase price for the shares of Common
Stock issued upon exercise of the Warrants. Promptly following the receipt of
any Note so tendered, the Company shall promptly cancel and retire such
surrendered Note (and no such Note shall be reissued), and shall issue to the
holder thereof a new Note in the principal amount of such tendered Note
remaining after deduction of the principal amount thereof applied to payment of
the purchase price for the shares of Common Stock. For purposes of Rule 144
under the Securities Act, 17 C.F.R. Section 230.144, the Company and you agree
that a tender of Notes in payment of the exercise price in respect of the
Warrants shall not be deemed a prepayment of the Notes, but rather a conversion
of such Notes, pursuant to the terms of the Warrant Agreement and the Warrants,
into Common Stock.

     1.6 PAYMENTS AMONG NOTEHOLDERS

     If at the time any payment of the principal of the Notes made pursuant to
Section 1.2 or Section 1.3 is due there is more than one Note outstanding, the
aggregate principal amount of each such required or optional partial payment of
the Notes shall be allocated among the Notes at the time outstanding pro rata in
proportion to the respective unpaid principal amounts of all such outstanding
Notes.

     1.7 NOTATION OF NOTES ON PAYMENT

     Upon any partial payment of a Note, the holder of such Note may (but shall
not be required to), at its option:

          (a) surrender such Note to the Company pursuant to Section 2.2 in
     exchange for a new Note in a principal amount equal to the principal amount
     remaining unpaid on the surrendered Note;

          (b) make such Note available to the Company for notation thereon of
     the portion of the principal so paid; or

          (c) mark such Note with a notation thereon of the portion of the
     principal so paid.

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In case the entire principal amount of any Note is paid, such Note shall be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the paid principal amount of any Note.

     1.8 NO OTHER PAYMENTS OF PRINCIPAL; ACQUISITION OF NOTES

     Except for payments of principal made in accordance with this Section 1.8,
the Company may not make any payment of principal in respect of the Notes. The
Company will not, and will not permit any Subsidiary or any Affiliate to,
directly or indirectly, acquire or make any offer to acquire any Notes unless:

          (a) the Company or such Subsidiary or Affiliate shall have offered in
     writing to acquire Notes, pro rata, from all holders of the Notes upon the
     same terms and at the same price, which price shall be clearly disclosed;

          (b) such offer will remain open for at least ten (10) Business Days
     from the date the offer is received by each holder of Notes;

          (c) the Company will provide each holder of Notes with a calculation
     of the estimated Prepayment Compensation Amount that would be due if the
     Company were to pay, in accordance with Section 1.3, the amount of Notes in
     respect of which such offer is being made; and

          (d) the Company will promptly provide each holder of Notes with such
     other information regarding such offer (including, without limitation, if
     requested, a list of all holders of Notes indicating the amount of the
     holdings of each and whether such holder shall have accepted or rejected
     such offer, as of the most recent practicable time) as such holder shall
     reasonably request. In the event that the Company acquires any Notes, such
     Notes will thereafter be cancelled and no Notes will be issued in
     substitution therefor.

     1.9 MANNER OF PAYMENTS

          (a) MANNER OF PAYMENT. The Company shall pay all amounts payable with
     respect to each Note (without any presentment of such Notes and without any
     notation of such payment being made thereon) by crediting, by federal funds
     bank wire transfer, the account of the holder thereof in any bank in the
     United States of America as may be designated in writing by such holder, or
     in such other manner as may be reasonably directed or to such other address
     in the United States of America as may be reasonably designated in writing
     by such holder. Annex 1 shall be deemed to constitute notice, direction or
     designation (as appropriate) by the Holder to the Company with respect to

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     payments to be made to the Holder as aforesaid. In the absence of such
     written direction, all amounts payable with respect to each Note shall be
     paid by check mailed and addressed to the registered holder of such Note at
     the address shown in the register maintained by the Company pursuant to
     Section 2.1.

          (b) PAYMENTS DUE ON HOLIDAYS. If any payment due on, or with respect
     to, any Note shall fall due on a day other than a Business Day, then such
     payment shall be made on the first Business Day following the day on which
     such payment shall have so fallen due; provided that if all or any portion
     of such payment shall consist of a payment of interest, for purposes of
     calculating such interest, such payment shall be deemed to have been
     originally due on such first following Business Day, such interest shall
     accrue and be payable to (but not including) the actual date of payment,
     and the amount of the next succeeding interest payment shall be adjusted
     accordingly.

          (c) PAYMENTS, WHEN RECEIVED. Any payment to be made to the holders of
     Notes hereunder or under the Notes shall be deemed to have been made on the
     Business Day such payment actually becomes available at such holder's bank
     prior to the close of business of such bank, provided that interest for one
     day at the non-default interest rate of the Notes shall be due on the
     amount of any such payment that actually becomes available to such holder
     at such holder's bank after 12:00 noon (local time of such bank).

2. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

     2.1 REGISTRATION OF NOTES.

     The Company will keep at its office, maintained pursuant to Section 3.3, a
register for the registration and transfer of Notes. The name and address of
each holder of one or more Notes, each transfer thereof made in accordance with
Section 2.2 and the name and address of each transferee of one or more Notes
shall be registered in such register. The Person in whose name any Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary, other than in accordance with Section 2.2.

     2.2 EXCHANGE OF NOTES.

          (a) EXCHANGE OF NOTES. Upon surrender of any Note at the office of the
     Company maintained pursuant to Section 3.3, duly endorsed or accompanied by
     a written instrument of transfer duly executed by the registered holder of
     such Note or such holder's attorney duly authorized in writing, the

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     Company will execute and deliver, at the Company's expense (except as
     provided in Section 2.2(b)), a new Note or Notes in exchange therefor, in
     an aggregate principal amount equal to the unpaid principal amount of the
     surrendered Note. Each such new Note shall be registered in the name of
     such Person as such holder may request and shall be substantially in the
     form of Attachment A. Each such new Note shall be dated and bear interest
     from the date to which interest shall have been paid on the surrendered
     Note or dated the date of the surrendered Note if no interest shall have
     been paid thereon. Each such new Note shall carry the same rights to unpaid
     interest and interest to accrue that were carried by the Note so exchanged
     or transferred. Notes shall not be transferred in denominations of less
     than Five Hundred Thousand Dollars ($500,000), provided that a holder of
     Notes may transfer its entire holding of Notes regardless of the principal
     amount of such holder's Notes.

          (b) COSTS. The Company will pay the cost of delivering to or from such
     holder's home office or custodian bank from or to the Company, the
     surrendered Note and any Note issued in substitution or replacement for the
     surrendered Note. The Company may require payment of a sum sufficient to
     cover any stamp tax or governmental charge imposed in respect of any such
     transfer of Notes.

     2.3 REPLACEMENT OF NOTES.

     Upon receipt by the Company from the registered holder of a Note of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Note (which evidence shall be, in the case of an
institutional investor, notice from such institutional investor of such loss,
theft, destruction or mutilation), and:

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to the Company; provided, however, that if the holder of such
     Note is a Holder, an institutional investor or a nominee either, the
     unsecured agreement of indemnity of such Holder or institutional investor
     (but not of any nominee therefor) shall be deemed to be satisfactory; or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof;

the Company at its own expense will execute and deliver, in lieu thereof, a
replacement Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.

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     2.4 ISSUANCE TAXES.

     The Company will pay all taxes (if any) due (but not, in any event, income
taxes) in connection with and as the result of the initial issuance and sale of
the Notes, the amendment and restatement contemplated hereby and in connection
with any modification, waiver or amendment of this Agreement or the Notes and
shall save each holder of Notes harmless without limitation as to time against
any and all liabilities with respect to all such taxes.

3. GENERAL COVENANTS

     The Company covenants that on and after the Closing Date and so long as any
of the Notes shall be outstanding:

     3.1 PAYMENT OF TAXES AND CLAIMS.

     The Company will, and will cause each Restricted Subsidiary to, pay before
they become delinquent:

          (a) all taxes, assessments and governmental charges or levies imposed
     upon it or its Property; and

          (b) all claims or demands of materialmen, mechanics, carriers,
     warehousemen, vendors, landlords, growers or suppliers of agricultural
     products and other like Persons that, if unpaid, might result in the
     creation of a statutory, regulatory or common law Lien (other than a Lien
     expressly permitted pursuant to Section 4.3(a)(ii)(D)) upon its Property;

provided, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings and reasonable book reserves in accordance with GAAP have been
established and maintained with respect thereto.

     3.2 MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.

     The Company shall, and will cause each Restricted Subsidiary to:

          (a) PROPERTY - maintain its Property in good condition, ordinary wear
     and tear and obsolescence excepted, and make all necessary renewals,
     replacements, additions, betterments and improvements thereto; provided,
     however, that this Section 3.2(a) shall not prevent the Company or any
     Restricted Subsidiary from discontinuing the operation or the maintenance
     of

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     any of its Properties if such discontinuance is desirable in the conduct of
     its business and such discontinuance could not reasonably be expected to
     have a Material Adverse Effect;

          (b) INSURANCE - maintain, with financially sound and reputable
     insurers, insurance with respect to its Property and business against such
     casualties and contingencies, of such types and in such amounts as is
     customary in the case of corporations of established reputations engaged in
     the same or a similar business and similarly situated;

          (c) FINANCIAL RECORDS - keep proper books of record and account, in
     which full and correct entries shall be made of all dealings and
     transactions of or in relation to the Properties and business thereof, and
     which will permit the production of financial statements in accordance with
     GAAP;

          (d) CORPORATE EXISTENCE AND RIGHTS - do or cause to be done all things
     necessary to preserve and keep in full force and effect its corporate
     existence, corporate rights (charter and statutory) and corporate
     franchises, except as permitted by Section 4.1; and

          (e) COMPLIANCE WITH LAW - comply with all laws, ordinances and
     governmental rules and regulations to which it is subject (including,
     without limitation, any environmental protection law) and obtain all
     licenses, certificates, permits, franchises and other governmental
     authorizations necessary to the ownership of its Properties and the conduct
     of its business except for such violations and failures to obtain that, in
     the aggregate, could not reasonably be expected to have a Material Adverse
     Effect.

     3.3 PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.

     The Company will punctually pay, or cause to be paid, the principal of and
interest (and Prepayment Compensation Amount, if any) on, the Notes, as and when
the same shall become due according to the terms hereof and of the Notes, and
will maintain an office at the address of the Company provided in Annex 2 where
notices, presentations and demands in respect hereof or the Notes may be made
upon it. Such office will be maintained at such address until such time as the
Company notifies the holders of the Notes of any change of location of such
office, which will in any event be located within the United States of America.

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     3.4 PENSION PLANS.

          (a) COMPLIANCE. The Company will, and will cause each ERISA Affiliate
     to, at all times with respect to each Pension Plan, comply with all
     applicable provisions of ERISA and the IRC, except for such failures to
     comply that, in the aggregate, could not reasonably be expected to have a
     Material Adverse Effect.

          (b) PROHIBITED ACTIONS. The Company will not, and will not permit any
     ERISA Affiliate to:

               (i) engage in any "prohibited transaction" (as such term is
          defined in section 406 of ERISA or section 4975 of the IRC) or
          "reportable event" (as such term is defined in section 4043 of ERISA)
          that could result in the imposition of a tax or penalty;

               (ii) incur with respect to any Plan any "accumulated funding
          deficiency" (as such term is defined in section 302 of ERISA), whether
          or not waived;

               (iii) terminate any Plan in a manner that could result in the
          imposition of a Lien on the Property of the Company or any Restricted
          Subsidiary pursuant to section 4068 of ERISA or the creation of any
          liability under section 4062 of ERISA;

               (iv) fail to make any payment required by section 515 of ERISA;

               (v) incur any withdrawal liability under Title IV of ERISA with
          respect to any Multiemployer Plan or any liability as a result of the
          termination of any Multiemployer Plan; or

               (vi) incur any liability or suffer the existence of any Lien on
          the Property of the Company or any ERISA Affiliate, in either case
          pursuant to Title I or Title IV of ERISA or pursuant to the penalty or
          excise tax or security provisions of the IRC;

if the aggregate amount of the taxes, penalties, funding deficiencies, interest,
amounts secured by Liens, and other liabilities in respect of any of the
foregoing at any time could reasonably be expected to have a Material Adverse
Effect.

          (c) FOREIGN PENSION PLANS. The Company will, and will cause each
     Restricted Subsidiary to, at all times, comply in all material respects
     with all

                                       12
<PAGE>   16

     laws, regulations and orders applicable to the establishment, operation,
     administration and maintenance of all Foreign Pension Plans, and pay when
     due all premiums, contributions and any other amounts required by
     applicable Foreign Pension Plan documents or applicable laws, except where
     the failure to comply with such laws, regulations and orders, and to make
     such payments, in the aggregate for all such failures, could not reasonably
     be expected to have a Material Adverse Effect.

     3.5 PRIVATE OFFERING.

     The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of the same from, any Person so as
to bring the issuance and sale of the Notes within the provisions of section 5
of the Securities Act.

4. NEGATIVE AND FINANCIAL COVENANTS

     4.1 MERGERS AND CONSOLIDATIONS.

     The Company will not, nor will it permit any Restricted Subsidiary to,
merge with or into or consolidate with any other Person, permit any other Person
to merge or consolidate with or into it or sell all or substantially all of its
Property to any other Person; provided, however, that the foregoing restriction
does not apply to the merger or consolidation of the Company with or into
another corporation or sale of all or substantially all of the Property of the
Company to any other Person if:

          (a) the corporation that results from such merger or consolidation or
     to which all or substantially all of the Property of the Company is sold
     (the "SURVIVING CORPORATION") is organized under the laws of, and conducts
     substantially all of its business and has substantially all of its
     Properties within, the United States of America or any jurisdiction or
     jurisdictions thereof;

          (b) the Surviving Corporation (if not the Company) expressly assumes
     the due and punctual payment of the principal of and Prepayment
     Compensation Amount, if any, and interest on all of the Notes, according to
     their tenor, and the due and punctual performance and observance of all the
     covenants in the Notes, this Agreement and each other Financing Document to
     be performed or observed by the Company, pursuant to such assumption
     agreements and instruments in such forms as shall be approved by the
     Required Holders, and the Company causes to be delivered to each holder of
     Notes an opinion, satisfactory in form and substance to the Required
     Holders, of

                                       13
<PAGE>   17

     independent counsel to the effect that such agreements and instruments are
     enforceable in accordance with their terms; and

          (c) immediately prior to, and immediately after the consummation of
     the transaction, and after giving effect thereto:

               (i) no Default or Event of Default exists or would exist; and

               (ii) the Surviving Corporation would be permitted by the
          provisions of Section 4.6 to incur at least One Dollar ($1.00) of
          additional Adjusted Debt, and of Section 4.7 to incur at least One
          Dollar ($1.00) of additional Senior Debt, assuming that the financial
          ratios set forth in Section 4.6 and Section 4.7 were recalculated on a
          Pro Forma Adjusted Basis as of the last day of the fiscal quarter of
          the Surviving Corporation then most recently ended.

Notwithstanding the foregoing, a Restricted Subsidiary may merge with or into,
or consolidate with, or Transfer all or substantially all of its Property to:

          (A) the Company so long as the Company is the Surviving Corporation;

          (B) a Wholly-Owned Restricted Subsidiary, so long as such Wholly-Owned
     Restricted Subsidiary is the Surviving Corporation; and

          (C) any Person other than the Company or a Restricted Subsidiary so
     long as such Transfer complies in all respects with Section 4.2.

     4.2 DISPOSITION OF ASSETS, RESTRICTED SUBSIDIARY STOCK.

          (a) DISPOSITION OF ASSETS. The Company will not, and will not permit
     any Restricted Subsidiary to Transfer any Property except:

               (i) Transfers of inventory and of other Property no longer
          necessary for the operation of, and that are individually and in the
          aggregate immaterial to, the business of the Company and the
          Restricted Subsidiaries, in each case in the ordinary course of
          business of the Company or such Restricted Subsidiary;

               (ii) Transfers from the Company to a Wholly-Owned Restricted
          Subsidiary;

                                       14
<PAGE>   18

               (iii) Transfers from a Restricted Subsidiary to the Company or a
          Wholly-Owned Restricted Subsidiary;

               (iv) Transfers for Acceptable Consideration arising solely out of
          Sale-Leaseback Transactions, so long as:

                        (A) the Property is both Transferred and concurrently or
                   thereafter leased by the Company or a Restricted Subsidiary
                   as lessee, in each case within one hundred eighty (180) days
                   after the construction of such Property or the initial
                   acquisition thereof by the Company or a Restricted
                   Subsidiary;

                        (B) within one hundred eighty (180) days after the
                   Transfer involved in such Sale-Leaseback Transaction, the
                   proceeds of such Transfer, net of reasonable and ordinary
                   transaction costs, expenses and income tax on any gain
                   related to such Transfer incurred and actually paid in
                   connection with such Transfer, are applied by the Company or
                   such Restricted Subsidiary to:

                              (I) purchase Tangible Property ; or

                              (II) pay, on or prior to its scheduled maturity,
                         an amount of Debt of the Company or any Restricted
                         Subsidiary (other than Debt owing to an Affiliate or
                         Debt subordinate to the Subordinated Notes); and

                        (C) immediately before and after the consummation of the
                   Transfer, and after giving effect thereto, no Default or
                   Event of Default would exist;

               (v) any other Transfer at any time of any Property (other than in
          connection with Sale-Leaseback Transactions) to a Person for an
          Acceptable Consideration if:

                        (A) the sum of:

                              (I) the book value of such Property at the time of
                         Transfer; plus

                              (II) the aggregate book value of all other
                         Property Transferred (other than in Excluded Transfers)
                         after the Fiscal Year End Date immediately preceding
                         the date of such Transfer;

                                       15
<PAGE>   19

                    would be less than fifteen percent (15%) of Consolidated
                    Total Assets measured as of the Fiscal Year End Date
                    immediately preceding the date of such Transfer;

                        (B) the sum of:

                              (I) the book value of such Property at the time of
                         Transfer; plus

                              (II) the aggregate book value of all other
                         Property Transferred (other than in Excluded Transfers)
                         since the Closing Date;

                    would be less than forty percent (40%) of Consolidated Total
                    Assets measured as of the most recent Fiscal Year End Date;
                    and

                        (C) immediately before and after the consummation of the
                   Transfer, and after giving effect thereto, no Default or
                   Event of Default would exist;

          and

               (vi) any other Transfer of Property (other than in a
          Sale-Leaseback Transaction), but solely to the extent that, within one
          hundred eighty (180) days after such Transfer, the proceeds of such
          Transfer, net of reasonable and ordinary transaction costs, expenses
          and income tax on any gain related to such Transfer incurred and
          actually paid in connection with such Transfer, are applied by the
          Company or such Restricted Subsidiary to:

                        (A) purchase Tangible Property; or

                        (B) pay, on or prior to its scheduled maturity, an
                   amount of Debt of the Company or any Restricted Subsidiary
                   (other than Debt owing to an Affiliate or Debt subordinate to
                   the Subordinated Notes).

          (b) DISPOSITION OF RESTRICTED SUBSIDIARY STOCK. The Company will not,
     and will not permit any Restricted Subsidiary to, sell or otherwise dispose

                                       16
<PAGE>   20

     of any shares of the stock or Rights of a Restricted Subsidiary (such stock
     and Rights herein called "RESTRICTED SUBSIDIARY STOCK"), nor will any
     Restricted Subsidiary issue, sell or otherwise dispose of any shares of, or
     Rights to purchase shares of, its own Restricted Subsidiary Stock;
     provided, however, that the foregoing restrictions do not apply to:

               (i) Transfers by the Company or a Restricted Subsidiary of shares
          of Restricted Subsidiary Stock to the Company or a Wholly-Owned
          Restricted Subsidiary;

               (ii) the issuance by a Restricted Subsidiary of shares of its own
          Restricted Subsidiary Stock to the Company or a Wholly-Owned
          Restricted Subsidiary;

               (iii) the issuance by a Restricted Subsidiary of shares of its
          own Restricted Subsidiary Stock to directors, Management or
          Affiliates; provided, however, that at no time shall the total number
          of shares of such Restricted Subsidiary Stock issued to or held by
          Management and Affiliates as a group (including shares underlying
          Rights) exceed twenty-five percent (25%) of the total number of shares
          of such Restricted Subsidiary Stock outstanding following any such
          issuance; and

               (iv) the Transfer of all of the Restricted Subsidiary Stock of a
          Restricted Subsidiary owned by the Company and its other Restricted
          Subsidiaries if:

                        (A) such Transfer satisfies the requirements of Section
                   4.2(a)(v) or Section 4.2(a)(vi) or both;

                        (B) in connection with such Transfer, the entire
                   Investment (whether represented by stock, Debt, claims or
                   otherwise) of the Company and its other Restricted
                   Subsidiaries in such Restricted Subsidiary is Transferred to
                   a Person other than the Company or a Restricted Subsidiary
                   not being simultaneously disposed of; and

                        (C) the Restricted Subsidiary being disposed of has no
                   continuing Investment in any other Restricted Subsidiary not
                   being simultaneously disposed of or in the Company.

     For purposes of determining the book value of assets constituting
     Restricted Subsidiary Stock being Transferred as provided in clause (b)(iv)
     above, such

                                       17
<PAGE>   21

     book value shall be deemed to be the aggregate book value of the net assets
     of the Restricted Subsidiary that shall have issued such Restricted
     Subsidiary Stock.

          (c) RESTRICTED SUBSIDIARY MERGERS AND CONSOLIDATIONS. A merger or
     consolidation of a Restricted Subsidiary in which a Person other than the
     Company or a Wholly-Owned Restricted Subsidiary shall be the Surviving
     Corporation shall be deemed to be a disposition of the Restricted
     Subsidiary Stock of such Restricted Subsidiary and shall be subject to
     Section 4.2(b).

     4.3 LIENS.

          (a) NEGATIVE PLEDGE. The Company will not, and will not permit any
     Restricted Subsidiary to, cause or permit, or agree or consent to cause or
     permit in the future (upon the happening of a contingency or otherwise),
     any of their Property, whether now owned or hereafter acquired, at any time
     to be subject to a Lien except:

               (i) CLOSING DATE AND SENIOR DEBT LIENS -

                        (A) Liens in existence on the Closing Date and described
                   in PART 2.1(c) OF ANNEX 3; and

                        (B) Liens securing Senior Debt arising under the terms
                   of an Acceptable Revolving Credit Facility;

               (ii) ORDINARY COURSE BUSINESS LIENS -

                        (A) PERFORMANCE BONDS - Liens incurred or deposits made
                   in the ordinary course of business to secure the performance
                   of letters of credit, bids, tenders, sales contracts, leases,
                   statutory obligations, surety and performance bonds (of a
                   type other than set forth in Section 4.3(a)(iii)) and other
                   similar obligations not incurred in connection with the
                   borrowing of money, the obtaining of advances or the payment
                   of the deferred purchase price of Property;

                        (B) REAL ESTATE - Liens in the nature of reservations,
                   exceptions, encroachments, easements, rights-of-way,
                   covenants, conditions, restrictions, leases and other similar
                   title exceptions or encumbrances affecting real property;
                   provided, however, that such exceptions and encumbrances do
                   not in the aggregate

                                       18
<PAGE>   22

                    materially detract from the value of said Properties or
                    materially interfere with the use of such Properties in the
                    ordinary conduct of the business of the Company and the
                    Subsidiaries;

                        (C) TAXES, WORKERS' COMPENSATION, ETC. -

                              (I) Liens securing taxes, assessments or
                         governmental charges which are either not yet due or
                         payable or which are being actively contested in good
                         faith and by appropriate proceedings, or

                              (II) pledges or deposits securing obligations
                         under worker's compensation, unemployment compensation
                         laws or similar legislation to secure public or
                         statutory obligations of the Company or any Restricted
                         Subsidiary; or

                              (III) levies or the claims or demands of
                         materialmen, mechanics, carriers, ware-housemen,
                         vendors, landlords and other like Persons;

                   provided, however, that the payment thereof is not required
                   by Section 3.1 and that adequate reserves have been made
                   against such claims; and

                        (D) PACA - any Lien (including any Lien arising out of
                   any constructive trust) arising under PACA which is asserted,
                   perfected or imposed by any growers or suppliers to the
                   Company or any Restricted Subsidiary of agricultural
                   products, so long as no creditors of the Company or any of
                   the Restricted Subsidiaries have asserted their rights under
                   PACA that, in the aggregate, exceed Five Hundred Thousand
                   Dollars ($500,000);

               (iii) JUDICIAL LIENS - Liens arising from judicial attachments
          and judgments, securing appeal bonds or supersedeas bonds, and arising
          in connection with court proceedings (including, without limitation,
          surety bonds and letters of credit or any other instrument serving a
          similar purpose); provided, however, that the execution or other
          enforcement of such Liens is effectively stayed, that the claims
          secured thereby are being actively contested in good faith and by
          appropriate proceedings, that adequate reserves have been made against
          such claims and that the aggregate amount so secured will not at any
          time exceed Five Million Dollars ($5,000,000);

                                       19
<PAGE>   23

               (iv) INTERGROUP LIENS - Liens on Property of a Restricted
          Subsidiary; provided, however, that such Liens secure only obligations
          owing to the Company;

               (v) PURCHASE MONEY LIENS - any Lien on Property acquired or owned
          by the Company or any Restricted Subsidiary or leased by the Company
          or any Restricted Subsidiary as lessee under any Capital Lease which
          secures Debt (including Debt in respect of a Capital Lease) incurred
          to pay all or a portion of the related purchase price or costs of
          construction, extension or improvement of such Property, so long as:

                        (A) that such purchase price or costs of construction,
                   extension or improvement shall not exceed the Fair Market
                   Value of such Property, extension or improvement, as the case
                   may be, determined at the time of the creation of such Lien;

                        (B) such Lien is created contemporaneously with, or
                   within one hundred eighty (180) days of, such acquisition,
                   construction, extension or improvement;

                        (C) such Lien encumbers only Property so purchased,
                   acquired, constructed, extended or improved after the Closing
                   Date;

                        (D) such Lien is not, after the creation thereof,
                   extended to any other Property; and

                        (E) immediately prior to the incurrence of, and after
                   giving effect to the incurrence of, all Debt secured by the
                   Liens referred to in such clauses, no Default or Event of
                   Default exists or would exist;

               (vi) ACQUISITION LIENS - any Lien (including, without limitation,
          any Lien arising out of a Capital Lease) existing on Property at the
          time of acquisition thereof by the Company or any Restricted
          Subsidiary (whether or not the Debt secured thereby is assumed by the
          Company or any Restricted Subsidiary), or existing on the Property of,
          the Debt of or the Capital Stock of any Person (other than an
          Unrestricted Subsidiary) at the time such Person became a Restricted
          Subsidiary (whether by means of the acquisition of all or
          substantially all of the Property of such

                                       20
<PAGE>   24

          Person, of the Capital Stock thereof or otherwise) or merges or
          consolidates with the Company or any Restricted Subsidiary, so long
          as:

                        (A) the aggregate principal amount of Debt secured
                   thereby does not exceed the acquisition cost of such
                   Property, the consideration paid for the acquisition of such
                   Person or the consideration paid in connection with such
                   merger or consolidation, as the case may be, as determined at
                   the date of the acquisition, merger or consolidation;

                        (B) such Lien shall not extend to or cover any Property
                   other than the Property subject to such Lien at the time of
                   any such acquisition; and

                        (C) immediately after, and after giving effect to, such
                   acquisition, merger or consolidation, and the assumption of
                   all such Liens no Default or Event of Default exists or would
                   exist; and

               (vii) OTHER LIENS - Liens securing Debt of the Company or any
          Restricted Subsidiary and not otherwise permitted by clauses (i)
          through (vi), inclusive, of this Section 4.3(a) so long as,
          immediately prior to, and immediately after giving effect to the
          incurrence of such Debt:

                        (A) no Default or Event of Default exists or would
                   exist; and

                        (B) it would be permitted by the provisions of Section
                   4.6 to incur at least One Dollar ($1.00) of additional
                   Adjusted Debt, and, to the extent that such Liens secure
                   Senior Debt, of Section 4.7 to incur at least One Dollar
                   ($1.00) of additional Senior Debt, assuming that the
                   financial ratios set forth in Section 4.6 and Section 4.7
                   were recalculated on a Pro Forma Basis as of the last day of
                   the fiscal quarter of the Company then most recently ended.

          (b) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property shall
     be subjected to a Lien in violation of Section 4.3(a), the Company will
     forthwith make or cause to be made, to the fullest extent permitted by
     applicable law, provision whereby the Notes will be secured equally and
     ratably as to such Property with all other obligations secured thereby
     pursuant to such agreements and instruments as shall be approved by the
     Required Holders, and the Company will promptly cause to be delivered to
     each holder of a Note an opinion of independent counsel satisfactory to the
     Required Holders to the effect

                                       21
<PAGE>   25

     that such agreements and instruments are enforceable in accordance with
     their terms, and in any event the Notes shall have the benefit, to the full
     extent that, and with such priority as, the holders of Notes may be
     entitled under applicable law, of an equitable Lien on such Property (and
     any proceeds thereof) securing the Notes. Such violation of Section 4.3(a)
     will constitute an Event of Default hereunder, whether or not any such
     provision is made or any equitable Lien is created pursuant to this Section
     4.3(b).

          (c) CONSTRUCTION. Nothing in this Section 4.3 shall be construed to
     permit the incurrence or existence of any Debt not otherwise permitted by
     this Agreement. Nothing in this Agreement that permits the incurrence or
     existence of any Debt shall be construed to permit the incurrence or
     existence of a Lien securing such Debt unless such Lien is permitted by
     Section 4.3(a).

     4.4 NET WORTH.

     The Company will not at any time permit Consolidated Net Worth to be less
than an amount equal to the sum of:

          (a) Twenty-Four Million Dollars ($24,000,000); plus

          (b) one hundred percent (100%) of the principal amount of any Debt of
     the Company, other than Senior Debt, that is converted into Capital Stock
     of the Company; plus

          (c) for each fiscal year of the Company ending after the Restatement
     Date, an amount equal to the greater of:

               (i) Zero Dollars ($0); and

               (ii) fifty percent (50%) of Consolidated Net Company Income
          determined in respect of such fiscal year.

     4.5 FIXED CHARGE COVERAGE.

     The Company will not, at any time on or after March 31, 2001, permit the
Pro Forma Combined Fixed Charge Coverage Ratio for a period consisting of any
four (4) out of the five (5) then most recently ended full consecutive fiscal
quarters of the Company, measured as at the end of the most recently ended
fiscal quarter of the Company, to be less than 1.25 to 1.0.

                                       22
<PAGE>   26

     4.6 TOTAL DEBT.

     The Company will not at any time permit the ratio of Consolidated Adjusted
Debt at such time to Pro Forma Combined EBITDA, as determined in respect of the
then most recently ended period of four (4) full consecutive fiscal quarters of
the Company, to exceed:

          (a) 4.5 to 1.0 at any time from the Closing Date through and including
     December 31, 2001; or

          (b) 4.0 to 1.0 at any time following December 31, 2001.

     4.7 SENIOR DEBT.

     The Company will not at any time permit the ratio of Consolidated Senior
Debt at such time to Pro Forma Combined EBITDA, as determined in respect of the
then most recently ended period of four (4) full consecutive fiscal quarters of
the Company, to exceed:

          (a) 3.0 to 1.0 at any time from the Closing Date through and including
     February 1, 2001; or

          (b) 2.5 to 1.0 at any time following February 1, 2001.

     4.8 RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.

          (a) LIMIT ON RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS. Except as
     permitted by Section 4.8(b), the Company will not, nor will it permit any
     Restricted Subsidiary to, at any time, declare or make or incur any
     liability to declare or make any Restricted Payment or make or authorize,
     or permit any Restricted Subsidiary to make or authorize, any Restricted
     Investment unless, immediately after and after giving effect to the
     proposed Restricted Payment or Restricted Investment:

               (i) the sum of

                        (A) the aggregate amount of Restricted Investments
                   (valued in each case at acquisition cost) made during the
                   period commencing on the Closing Date and ending on the date
                   of, and after giving effect to, such proposed Restricted
                   Payment or Restricted Investment; plus

                                       23
<PAGE>   27

                        (B) the aggregate amount of Restricted Payments made
                   during the period commencing on the Closing Date and ending
                   on the date of, and after giving effect to, such proposed
                   Restricted Payment or Restricted Investment;

     would not exceed an amount equal to the sum of:

                              (I) Five Hundred Thousand Dollars ($500,000); plus

                              (II) fifty percent (50%) of Consolidated Net
                         Company Income in respect of the period beginning on
                         January 2, 2000 and ending on the last day of the
                         fiscal quarter of the Company then most recently ended
                         (or minus one hundred percent (100%) of Consolidated
                         Net Company Income for such period if Consolidated Net
                         Company Income for such period is a loss); plus

                              (III) the aggregate amount of net cash proceeds
                         received by the Company from the sale of any Specified
                         Stock made after the Closing Date; plus

                              (IV) the aggregate amount of net cash proceeds
                         received after the Closing Date by the Company or any
                         Subsidiary from the sale or liquidation, or as a result
                         of the final maturity, of any Restricted Investment
                         made after the Closing Date; plus

                              (V) the aggregate principal amount of any Debt
                         (including the Notes) cancelled in exchange for or
                         converted into any Specified Stock after the Closing
                         Date; and

               (ii) no Default or an Event of Default would exist.

          (b) CUMULATIVE PREFERRED STOCK DIVIDENDS PERMITTED. Notwithstanding
     the provisions of Section 4.8(a), the Company may make payments of cash
     dividends to the holders of the Cumulative Preferred Stock which are
     required by the terms of such Cumulative Preferred Stock. For the purpose
     of making computations under Section 4.8(a), payments of cash dividends in
     respect of the Cumulative Preferred Stock shall in each case be excluded.

                                       24
<PAGE>   28

          (c) OTHER MATTERS. For the purpose of making computations under
     Section 4.8(a), Restricted Investments made solely by issuance of Specified
     Stock of the Company shall in each case be excluded. Any Person that
     becomes a Restricted Subsidiary after the Closing Date shall be deemed to
     have made, at the time it becomes a Restricted Subsidiary, all Restricted
     Investments of such Person existing immediately after it becomes a
     Restricted Subsidiary.

     4.9 SENIORITY TO FUTURE SUBORDINATED DEBT.

     The Company shall not incur, create, assume or Guaranty any Debt which is
subordinated in right of payment to any other Debt of the Company unless such
Debt is also subordinated in right of payment, on the same terms, to the
obligations of the Company in respect of the Notes and this Agreement. The
Company shall not incur, create, assume or Guaranty any Debt owing to any
Subsidiary or any Affiliate unless such Debt is subordinated in right of
payment, on terms acceptable to the Required Holders, to the obligations of the
Company in respect of the Notes and this Agreement.

     4.10 DESIGNATION OF SUBSIDIARIES.

          (a) RIGHT OF DESIGNATION. Subject to the following sentence, each of
     the Subsidiaries listed on Annex 3 shall be a Restricted Subsidiary so long
     as it shall continue to satisfy the requirements of the definition of
     Restricted Subsidiary. Subject to the satisfaction of the requirements of
     Section 4.10(b), the Company shall have the right to designate as a
     Restricted Subsidiary any Subsidiary which, following such designation,
     would meet the definition of a "Restricted Subsidiary," and to designate
     any Restricted Subsidiary as an Unrestricted Subsidiary, by delivering to
     each holder of Notes a writing, signed by a Senior Officer, so designating
     such Subsidiary. Any Subsidiary not designated as a Restricted Subsidiary
     shall be deemed to be an Unrestricted Subsidiary.

          (b) DESIGNATION CRITERIA.

               (i) No Subsidiary shall at any time after the Closing Date be
          designated as a Restricted Subsidiary unless:

                       (A) such Subsidiary at such time meets all of the
                   requirements of being a Restricted Subsidiary as set forth in
                   the definition thereof (other than clause (a) of such
                   definition);

                                       25
<PAGE>   29

                       (B) immediately before and after, and after giving effect
                   to such designation, no Default or Event of Default exists or
                   would exist; and

                       (C) such Subsidiary shall not previously have been
                   designated as a Restricted Subsidiary on more than one (1)
                   other occasion.

               (ii) No Restricted Subsidiary shall at any time after the Closing
          Date be designated as an Unrestricted Subsidiary unless:

                       (A) immediately after, and after giving effect to such
                   designation, no Default or Event of Default exists or would
                   exist; and

                       (B) immediately prior to such designation, such
                   Restricted Subsidiary being so designated does not own,
                   directly or indirectly, any Capital Stock of any Restricted
                   Subsidiary not being simultaneously designated as an
                   Unrestricted Subsidiary.

          (c) CONSEQUENCE OF DESIGNATION. By designating a Subsidiary as an
     Unrestricted Subsidiary, the Company shall be deemed to have made an
     Investment in such Subsidiary in an amount equal to the Fair Market Value
     of its Investment in such Subsidiary on the date of such designation.

          (d) EFFECTIVENESS. Any designation under this Section 4.10 that
     satisfies all of the conditions set forth in this Section 4.10 shall become
     effective, for purposes of this Agreement, on the day that notice thereof
     shall have been delivered by the Company to each holder of Notes in
     accordance with Section 9.1.

     4.11 LINE OF BUSINESS.

     The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business if, as a result, the general nature of the business in
which the Company and the Restricted Subsidiaries, taken as a whole, would then
be engaged would be substantially changed from the general nature of the
business in which the Company and the Restricted Subsidiaries, taken as a whole,
are engaged on the Closing Date as described in the Annual Report on Form 10-K
of the Company for the fiscal year ended January 1, 1999.

                                       26
<PAGE>   30

     4.12 TRANSACTIONS WITH AFFILIATES.

     The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale,
lease or exchange of Property or the rendering of any service, with any
Affiliate, except for:

          (a) relocation loans (including, without limitation, short-term bridge
     financing in connection with the purchase of a principal residence) to any
     executive or employee of the Company or any Restricted Subsidiary not
     exceeding at any time Five Hundred Thousand Dollars ($500,000);

          (b) other loans, advances and other extensions of credit to any
     executive, officer, director or stockholder (or any relative of any of the
     foregoing) not exceeding at any time the sum of:

               (i) Three Hundred Thousand Dollars ($300,000) in the aggregate at
          any time outstanding; plus

               (ii) one percent (1%) of Consolidated Net Company Income in
          respect of the period beginning on the first day of the fiscal quarter
          of the Company commencing after the Closing Date and ending on the
          last day of the fiscal quarter of the Company then most recently ended
          (or minus one percent (1%) of Consolidated Net Company Income for such
          period if Consolidated Net Company Income for such period is a loss);
          and

          (c) transactions in the ordinary course of and pursuant to the
     reasonable requirements of the Company's or such Restricted Subsidiary's
     business and upon fair and reasonable terms no less favorable to the
     Company or such Restricted Subsidiary than would obtain in a comparable
     arm's-length transaction with a Person not an Affiliate.

     4.13 SUBSIDIARY GUARANTEES.

         The Company will not at any time permit any Subsidiary to incur,
create, assume, Guaranty or otherwise become liable in respect of any Debt in
respect of any Senior Credit Facility (whether as primary obligor, guarantor,
surety or otherwise) after the Closing Date unless such Subsidiary, upon or
prior to such incurrence, creation, assumption, Guaranty or otherwise becoming
liable in respect of any such Debt, shall enter into an unconditional
subordinated Guaranty (as amended and restated on the Restatement Date and as
further amended from time to time, the "SUBSIDIARY GUARANTEE") in favor of the
holders of the Notes in substantially the form of Exhibit 4.5(c) to the
Securities Purchase Agreement. The Company will cause

                                       27
<PAGE>   31

each Subsidiary which entered into a Subsidiary Guarantee on the Closing Date,
and each Subsidiary subsequently entering into a Subsidiary Guarantee pursuant
to this Section 4.13, to maintain such Subsidiary Guarantee for so long as such
Subsidiary remains liable in respect of any such Debt.

     4.14 CURRENT RATIO

     The Company will not at any time permit the ratio of Consolidated Current
Assets to Consolidated Current Liabilities to be less than 1.15 to 1.0.

5. REPORTING COVENANTS

     5.1 FINANCIAL AND BUSINESS INFORMATION.

     The Company shall deliver to each holder of Notes:

          (a) QUARTERLY FINANCIAL STATEMENTS - as soon as practicable after the
     end of each quarterly fiscal period in each fiscal year of the Company
     (other than the last quarterly fiscal period of each such fiscal year), and
     in any event within fifty (50) days thereafter:

               (i) a consolidated balance sheet as at the end of such quarter;
          and

               (ii) consolidated statements of income, changes in shareholders'
          equity and cash flows for such quarter and (in the case of the second
          and third quarters) for the portion of the fiscal year ending with
          such quarter;

     for the Company and the Restricted Subsidiaries, setting forth in each
     case, in comparative form, the financial statements for the corresponding
     periods in the previous fiscal year, all in reasonable detail, prepared in
     accordance with GAAP applicable to quarterly financial statements
     generally, and certified as complete and correct by a Senior Financial
     Officer, and accompanied by the certificate required by Section 5.2;
     provided, that delivery of copies of the Company's Quarterly Report on Form
     10-Q filed with the SEC within the time period specified above shall be
     deemed to satisfy the requirements of this Section 5.1(a) so long as such
     Quarterly Report contains or is accompanied by the information specified in
     this Section 5.1(a);

          (b) ANNUAL FINANCIAL STATEMENTS - as soon as practicable after the end
     of each fiscal year of the Company, and in any event within one hundred
     twenty (120) days thereafter:

                                       28
<PAGE>   32

               (i) a consolidated balance sheet as at the end of such year; and

               (ii) consolidated statements of income, changes in shareholders'
          equity and cash flows for such year;

     for the Company and the Restricted Subsidiaries, setting forth, in
     comparative form, the financial statement for the previous fiscal year, all
     in reasonable detail, prepared in accordance with GAAP, and accompanied by:

                       (A) an audit report thereon of independent certified
                   public accountants of recognized national standing, which
                   report shall state without qualification (including, without
                   limitation, qualifications related to the scope of the audit,
                   the compliance of the audit with generally accepted auditing
                   standards, or the ability of the Company or a material
                   subsidiary thereof to continue as a going concern), that such
                   financial statements have been prepared and are in conformity
                   with GAAP; and

                       (B) the certificates required by Section 5.2 and Section
                   5.3;

provided, that delivery of the Company's Annual Report on Form 10-K for such
fiscal year filed with the SEC within the time period specified above shall be
deemed to satisfy the requirements of this Section 5.1(b) so long as such Annual
Report contains or is accompanied by the reports and other information otherwise
specified in this Section 5.1(b);

          (c) SEC AND OTHER REPORTS - promptly upon their becoming available,
     and in any event within fifteen (15) days thereafter:

               (i) each financial statement, report, notice or proxy statement
          sent by the Company to stockholders generally;

               (ii) each regular or periodic report (including, without
          limitation, each Form 10-K, Form 10-Q and Form 8-K), any registration
          statement which shall have become effective, and each final prospectus
          and all amendments thereto filed by the Company or any Restricted
          Subsidiary with the SEC; and

               (iii) all press releases and other statements made available by
          the Company or any Restricted Subsidiary to the public concerning
          material developments in the business of the Company or the Restricted
          Subsidiaries;

                                       29
<PAGE>   33

          (d) NOTICE OF DEFAULT OR EVENT OF DEFAULT - within two (2) Business
     Days of becoming aware:

               (i) of the existence of any condition or event which constitutes
          a Default or an Event of Default; or

               (ii) that the holder of any Note, any lender or creditor in
          respect of a Senior Credit Facility or any holder of any other Debt in
          a principal amount of Two Hundred Fifty Thousand Dollars ($250,000) or
          more, shall have given notice or taken any other action with respect
          to a claimed Default, Event of Default or default or event of default;

     a notice specifying the nature of the claimed Default, Event of Default or
     default or event of default and the notice given or action taken (if any)
     by such holder and what action the Company is taking or proposes to take
     with respect thereto;

          (e) ERISA -

               (i) within two (2) Business Days of becoming aware of the
          occurrence of any "reportable event" (as such term is defined in
          section 4043 of ERISA) for which notice thereof has not been waived
          pursuant to regulations of the DOL or "prohibited transaction" (as
          such term is defined in section 406 of ERISA or section 4975 of the
          IRC) in connection with any Plan or any trust created thereunder, a
          notice specifying the nature thereof, what action the Company is
          taking or proposes to take with respect thereto, and, when known, any
          action taken by the Internal Revenue Service, the DOL or the PBGC with
          respect thereto; and

               (ii) prompt notice of and, where applicable, a description of:

                       (A) any notice from the PBGC in respect of the
                   commencement of any proceedings pursuant to section 4042 of
                   ERISA to terminate any Plan or for the appointment of a
                   trustee to administer any Plan, and any distress termination
                   notice delivered to the PBGC under section 4041 of ERISA in
                   respect of any Plan, and any determination of the PBGC in
                   respect thereof;

                       (B) the placement of any Multiemployer Plan in
                   reorganization status under Title IV of ERISA, any
                   Multiemployer

                                       30
<PAGE>   34

                   Plan becoming "insolvent" (as such term is defined in section
                   4245 of ERISA) under Title IV of ERISA, or the whole or
                   partial withdrawal of the Company or any ERISA Affiliate from
                   any Multiemployer Plan and the withdrawal liability incurred
                   in connection therewith; or

                       (C) the occurrence of any event, transaction or condition
                   that could result in the incurrence of any liability of the
                   Company or any ERISA Affiliate or the imposition of a Lien on
                   the Property of the Company or any ERISA Affiliate, in either
                   case pursuant to Title I or Title IV of ERISA or pursuant to
                   the penalty or excise tax or security provisions of the IRC;

provided, however, that the Company shall not be required to deliver any such
notice at any time when the aggregate amount of the actual or potential
liability of the Company and the Restricted Subsidiaries in respect of all such
events at such time could not reasonably be expected to have a Material Adverse
Effect;

          (f) AUDITOR'S REPORTS - each report or, upon the request of any holder
     of Notes, any management letter submitted to the Company or any Restricted
     Subsidiary by independent accountants in connection with any annual,
     interim or special audit made of the books of the Company or any
     Subsidiary;

          (g) ACTIONS, PROCEEDINGS - promptly after the commencement of any
     action or proceeding relating to the Company or any Subsidiary in any court
     or before any governmental authority or arbitration board or tribunal as to
     which there is a reasonable possibility of an adverse determination and
     that, if adversely determined, is reasonably likely to have a Material
     Adverse Effect, a notice specifying the nature and period of existence
     thereof and what action the Company is taking or proposes to take with
     respect thereto;

          (h) OTHER CREDITORS - promptly upon the reasonable request of any
     holder of Notes, copies of any statement, report or certificate furnished
     to any holder of Debt to the extent that the information contained in such
     statement, report or certificate has not already been delivered to each
     holder of Notes;

          (i) RULE 144A - promptly upon the request of any holder of Notes,
     information required to permit the holder to comply with 17
     C.F.R. Section 230.144A, as amended from time to time, in connection with a
     transfer of any Note; and

                                       31
<PAGE>   35

          (j) REQUESTED INFORMATION - with reasonable promptness, such other
     data and information as from time to time may be reasonably requested by
     any holder of Notes.

     5.2 OFFICER'S CERTIFICATES.

     Each set of financial statements delivered to each holder of Notes pursuant
to Section 5.1(a) or Section 5.1(b) shall be accompanied by a certificate of a
Senior Financial Officer, setting forth:

          (a) COVENANT COMPLIANCE - the financial information (including
     detailed calculations) required in order to establish whether the Company
     was in compliance with the requirements of Section 4 (in each case where
     such Section imposes numerical financial requirements) as of the end of the
     period covered by the financial statements then being furnished (including
     with respect to such Section, where applicable, the calculations of the
     maximum or minimum amount, ratio or percentage, as the case may be,
     permissible under the terms of such Section, and the calculation of the
     amount, ratio or percentage then in existence); and

          (b) EVENT OF DEFAULT - a statement that the signer has reviewed the
     relevant terms hereof and has made, or caused to be made, under his or her
     supervision or authority, a review of the transactions and conditions of
     the Company and the Subsidiaries from the beginning of the accounting
     period covered by the income statements being delivered therewith to the
     date of the certificate and that such review shall not have disclosed the
     existence during such period of any condition or event that constitutes a
     Default or an Event of Default or, if any such condition or event existed
     or exists, specifying the nature and period of existence thereof and what
     action the Company shall have taken or proposes to take with respect
     thereto.

     5.3 ACCOUNTANTS' CERTIFICATES.

     Each set of annual financial statements delivered pursuant to Section
5.1(b) shall be accompanied by a certificate of the accountants who were engaged
to audit such financial statements, stating that they have reviewed Section
4.2(a)(v)(A), Section 4.2(a)(v)(B) and Section 4.4 through Section 4.8(a)(i),
inclusive, and the corresponding definitions of financial terms used therein and
defined in Section 8.1, and stating further, whether, in making their audit,
such accountants have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if such accountants are aware
that any such condition or event then exists, specifying the nature and period
of existence thereof.

                                       32
<PAGE>   36

     5.4 INSPECTION.

     The Company will permit the representatives of each holder of Notes to
visit and inspect any of the Properties of the Company or any of the Restricted
Subsidiaries, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the finances and affairs of the Company
and the Restricted Subsidiaries) all at such reasonable times, upon such
reasonable notice and as often as may be reasonably requested. At all times
during which there exists a Default or Event of Default, expenses incurred by
the holders of the Notes in connection with this Section 5.4 shall be paid in
accordance with Section 9.6 and otherwise such expenses will be borne by such
holder.

6. EVENTS OF DEFAULT

     6.1 EVENTS OF DEFAULT.

     An "EVENT OF DEFAULT" exists at any time if any of the following both
occurs and is continuing thereafter for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or otherwise):

          (a) PAYMENTS ON NOTES -

               (i) PRINCIPAL OR PREPAYMENT COMPENSATION AMOUNT PAYMENTS - the
          Company fails to make any payment of principal or Prepayment
          Compensation Amount on any Note on or before the date such payment is
          due; or

               (ii) INTEREST PAYMENTS - the Company fails to make any payment of
          interest on any Note on or before five (5) Business Days after the
          date such payment is due;

          (b) OTHER DEFAULTS -

               (i) NEGATIVE AND FINANCIAL COVENANT DEFAULTS - the Company or any
          Restricted Subsidiary fails to comply with any provision of Section 4;

                                       33
<PAGE>   37

               (ii) OTHER DEFAULTS - the Company or any Restricted Subsidiary
          fails to comply with any other provision hereof, and such failure
          continues for more than thirty (30) days after such failure shall
          first become known to any Senior Officer;

     provided, however, that the failure of the Company or any Restricted
     Subsidiary to comply with the provisions of Section 4.6 or Section 4.7
     during the period commencing on April 15, 2000 and ending on April 1, 2001
     shall not constitute a Default or Event of Default unless the Company or
     any Restricted Subsidiary incurs any Debt (other than Senior Debt) during
     such period;

          (c) WARRANTIES OR REPRESENTATIONS - any warranty, representation or
     other statement by or on behalf of the Company contained in the Initial
     Securities Purchase Agreement or the Securities Purchase Agreement or any
     other Financing Document, in any written amendment, supplement,
     modification or waiver with respect to any Financing Document or in any
     instrument furnished in compliance herewith or in reference hereto, shall
     have been false or misleading in any material respect when made;

          (d) ACCELERATION OF DEBT -

               (i) the Company or any Restricted Subsidiary fails to make, when
          due, at maturity or otherwise, any payment or payments in an amount
          aggregating in excess of Two Million Dollars ($2,000,000) in respect
          of any Debt; or

               (ii) any event shall occur or any condition shall exist in
          respect of Debt, or under any agreement securing or relating to such
          Debt:

                       (A) as a result of which the maturity of such Debt, or a
                   portion thereof, is accelerated; or

                       (B) that requires the Company or any Restricted
                   Subsidiary to repurchase such Debt from the holders thereof;

provided that the aggregate amount of all obligations in respect of all such
Debt exceeds at such time Two Million Dollars ($2,000,000);

                                       34
<PAGE>   38

          (e) INSOLVENCY -

               (i) INVOLUNTARY BANKRUPTCY PROCEEDINGS -

                       (A) a receiver, liquidator, custodian or trustee of the
                   Company or any Restricted Subsidiary, or of all or any
                   substantial part of the Property of either, is appointed by
                   court order and such order remains in effect for more than
                   sixty (60) days; or an order for relief is entered with
                   respect to the Company or any Restricted Subsidiary, or the
                   Company or any Restricted Subsidiary is adjudicated a
                   bankrupt or insolvent;

                       (B) all or any substantial part of the Property of the
                   Company or any Restricted Subsidiary is sequestered by court
                   order and such order remains in effect for more than sixty
                   (60) days; or

                       (C) a petition is filed against the Company or any
                   Restricted Subsidiary under any bankruptcy, reorganization,
                   arrangement, insolvency, readjustment of debt, dissolution or
                   liquidation law of any jurisdiction, whether now or hereafter
                   in effect, and is not dismissed within sixty (60) days after
                   such filing;

               (ii) VOLUNTARY PETITIONS - the Company or any Restricted
          Subsidiary- files a voluntary petition in bankruptcy or seeks relief
          under any provision of any bankruptcy, reorganization, arrangement,
          insolvency, readjustment of debt, dissolution or liquidation law of
          any jurisdiction, whether now or hereafter in effect, or consents to
          the filing of any petition against it under any such law; or

               (iii) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETC. - the Company or
          a Restricted Subsidiary makes an assignment for the benefit of its
          creditors, or admits in writing its inability, or fails, to pay its
          debts generally as they become due, or consents to the appointment of
          a receiver, liquidator or trustee of the Company or a Restricted
          Subsidiary or of all or a substantial part of its Property;

          (f) UNDISCHARGED FINAL JUDGMENTS - a final, non-appealable judgment or
     final, non-appealable judgments for the payment of money aggregating more
     than Two Million Dollars ($2,000,000) in excess of all applicable insurance
     coverage which has not been contested by the relevant insurer or insurers
     is or are outstanding against one or more of the Company

                                       35
<PAGE>   39

     and the Restricted Subsidiaries and any one of such judgments shall have
     been outstanding for more than sixty (60) days from the date of its entry
     and shall not have been discharged in full or stayed; or

          (g) SUBSIDIARY GUARANTY - any Subsidiary Guaranty shall cease to be in
     full force and effect or shall be declared by a court or other Governmental
     Authority of competent jurisdiction to be void, voidable or unenforceable
     against any Subsidiary Guarantor; the validity or enforceability of any
     Subsidiary Guaranty against any Subsidiary Guarantor shall be contested by
     such Subsidiary Guarantor, the Company or any Affiliate; or any Subsidiary
     Guarantor, the Company or any Affiliate shall deny that such Subsidiary
     Guarantor has any further liability or obligation under any Subsidiary
     Guaranty.

     6.2 DEFAULT REMEDIES.

          (a) ACCELERATION OF MATURITY OF NOTES.

               (i) ACCELERATION ON EVENT OF DEFAULT.

                       (A) AUTOMATIC. If any Event of Default specified in
                   Section 6.1(e) shall exist, all of the Notes at the time
                   outstanding shall automatically become immediately due and
                   payable together with interest accrued thereon and, to the
                   extent permitted by law, the Prepayment Compensation Amount
                   at such time with respect to the principal amount of such
                   Notes, without presentment, demand, protest or notice of any
                   kind, all of which are hereby expressly waived.

                       (B) BY ACTION OF HOLDERS. Subject to Section 7.7, if any
                   Event of Default shall exist, the Required Holders may
                   exercise any right, power or Remedy permitted to such holder
                   or holders by law, and shall have, in particular, without
                   limiting the generality of the foregoing, the right to
                   declare the entire principal of, and all interest accrued on,
                   all the Notes then outstanding to be, and such Notes shall
                   thereupon become, forthwith due and payable, without any
                   presentment, demand, protest or other notice of any kind, all
                   of which are hereby expressly waived, and the Company shall
                   forthwith pay to the holder or holders of all the Notes then
                   outstanding the entire principal of, and interest accrued on,
                   the Notes and, to the extent permitted by law, the Prepayment

                                       36
<PAGE>   40

                   Compensation Amount at such time with respect to such
                   principal amount of such Notes.

               (ii) ACCELERATION ON PAYMENT DEFAULT. Subject to Section 7.7,
          during the existence of an Event of Default described in Section
          6.1(a), and irrespective of whether the Notes then outstanding shall
          have become due and payable pursuant to Section 6.2(a)(i)(B), any
          holder of Notes who or which shall have not consented to any waiver
          with respect to such Event of Default may, at his or its option, by
          notice in writing to the Company, declare the Notes then held by such
          holder to be, and such Notes shall thereupon become, forthwith due and
          payable together with all interest accrued thereon, without any
          presentment, demand, protest or other notice of any kind, all of which
          are hereby expressly waived, and the Company shall forthwith pay to
          such holder the entire principal of and interest accrued on such Notes
          and, to the extent permitted by law, the Prepayment Compensation
          Amount at such time with respect to such principal amount of such
          Notes.

          (b) VALUABLE RIGHTS. The Company acknowledges, and the parties hereto
     agree, that the right of each holder to maintain its investment in the
     Notes free from repayment by the Company (except as herein specifically
     provided for) is a valuable right and that the provision for payment of a
     Prepayment Compensation Amount by the Company in the event that the Notes
     are prepaid or are accelerated as a result of an Event of Default is
     intended to provide compensation for the deprivation of such right under
     such circumstances.

          (c) OTHER REMEDIES. During the existence of an Event of Default and
     irrespective of whether the Notes then outstanding shall become due and
     payable pursuant to Section 6.2(a), and irrespective of whether any holder
     of Notes then outstanding shall otherwise have pursued or be pursuing any
     other rights or Remedies, subject to Section 7.7, any holder of Notes may
     proceed to protect and enforce its rights hereunder and under such Notes by
     exercising such Remedies as are available to such holder in respect thereof
     under applicable law, either by suit in equity or by action at law, or
     both, whether for specific performance of any agreement contained herein or
     in aid of the exercise of any power granted herein; provided, however, that
     the maturity of such holder's Notes may be accelerated only in accordance
     with Section 6.2(a).

          (d) NONWAIVER; REMEDIES CUMULATIVE. No course of dealing on the part
     of any holder of Notes nor any delay or failure on the part of any holder
     of Notes to exercise any right shall operate as a waiver of such right or
     otherwise

                                       37
<PAGE>   41

     prejudice such holder's rights, powers and Remedies. All rights and
     Remedies of each holder of Notes hereunder and under applicable law are
     cumulative to, and not exclusive of, any other rights or Remedies any such
     holder of Notes would otherwise have.

          (e) SUBORDINATION. The rights of the holders of the Notes to receive
     payments in respect of this Agreement and the Notes, and to exercise any
     Remedies, solely as between the holders of the Notes and the holders of the
     Senior Debt, shall be subject in all respects to the provisions of Section
     7; provided, however, that all such rights shall remain unconditional and
     absolute as between the holders of the Notes and the Company.

     6.3 ANNULMENT OF ACCELERATION OF NOTES.

     If a declaration is made pursuant to Section 6.2(a)(i)(B), then and in
every such case, the holders of sixty-six and two-thirds percent (66 and 2/3%)
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by any one or more of the Company, any Restricted Subsidiary or any
Affiliate) may, by written instrument filed with the Company, rescind and annul
such declaration, and the consequences thereof; provided, however, that at the
time such declaration is annulled and rescinded:

          (a) no judgment or decree shall have been entered for the payment of
     any moneys due on or pursuant hereto or the Notes;

          (b) all arrears of interest upon all of the Notes and all of the other
     sums payable hereunder and under the Notes (except any principal of, or
     interest or Prepayment Compensation Amount on, the Notes which shall have
     become due and payable by reason of such declaration under Section
     6.2(a)(i)(B)) shall have been duly paid; and

          (c) each and every other Default and Event of Default shall have been
     waived pursuant to Section 9.5 or otherwise made good or cured;

and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.

                                       38
<PAGE>   42

7. SUBORDINATION

     7.1 GENERAL.

     The Subordinated Debt is subordinate and junior in right of payment to all
Senior Debt to the extent provided in this Section 7.

     7.2 INSOLVENCY.

     In the event of:

          (a) any insolvency, bankruptcy, receivership, liquidation,
     reorganization, readjustment, composition or other similar proceeding
     relating to the Company, its creditors or its Property;

          (b) any proceeding for the liquidation, dissolution or other
     winding-up of the Company, voluntary or involuntary, whether or not
     involving insolvency or bankruptcy proceedings;

          (c) any assignment by the Company for the benefit of creditors; or

          (d) any other marshalling of the assets of the Company;

all Senior Debt shall first be paid in full, in cash or cash equivalents, before
any payment or distribution, whether in cash, Securities or other Property,
shall be made to any holder of any Subordinated Debt on account of any
Subordinated Debt. Any payment or distribution, whether in cash, Securities or
other Property (other than Securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this Section 7 with respect to
Subordinated Debt, to the payment of all Senior Debt at the time outstanding and
to any Securities issued in respect thereof under any such plan of
reorganization or readjustment), which would otherwise (but for this Section 7)
be payable or deliverable in respect of Subordinated Debt shall be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt shall have
been paid in full, in cash or cash equivalents.

     7.3 PROOFS OF CLAIM.

     If any holder of Subordinated Debt does not file a proper claim or proof of
debt therefor prior to ten (10) days before the expiration of the time to file
such claim or

                                       39
<PAGE>   43

proof, then the Senior Agent is hereby authorized and empowered (but not
obligated) as the agent and attorney-in-fact for such holder for the specific
and limited purpose set forth in this paragraph, to file such claim or proof for
or on behalf of such holder; provided, however, that the Senior Agent shall
have, prior to taking any such action, given fifteen (15) days prior written
notice (which notice may be given up to sixty (60) days prior to the expiration
of the time to file such claim) to such holder of Subordinated Debt that they
intend to file such claim or proof of debt. In no event may the Senior Agent or
any holder of the Senior Debt vote any claim on behalf of any holder of the
Subordinated Debt, and such agency and appointment of attorney-in-fact shall not
extend to any such right to vote any such claim.

     7.4 ACCELERATION OF SENIOR DEBT.

     In the event that the holders of any Senior Debt, or any trustee or agent
acting on behalf of any such holders, accelerate the maturity of such Senior
Debt or demand that the Company repurchase the same, then, and in each such
case, no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt until such time as such Senior Debt has been
paid in full in cash or cash equivalents. The Company shall give prompt written
notice to each holder of Subordinated Debt of its knowledge of the acceleration
of the maturity of any Senior Debt.

     7.5 PAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.

     If: the Company shall default in the payment of any principal of or
premium, if any, or interest on any Senior Debt (a "SENIOR PAYMENT DEFAULT")
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or otherwise; and

          (a) the Company receives from the Senior Agent written notice (a
     "PAYMENT DEFAULT NOTICE") of the happening of such Senior Payment Default
     stating that such notice is a payment blockage notice pursuant to this
     Section 7.5;

then no direct or indirect payment (in cash, Property or Securities or by
set-off or otherwise) shall be made or agreed to be made on account of any
Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in respect
of any redemption, retirement, purchase, prepayment or other acquisition or
payment of any Subordinated Debt unless and until such Senior Payment Default
shall have been cured or waived or otherwise shall have ceased to exist.

                                       40
<PAGE>   44

     The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any Payment Default Notice under this Section 7.5.

     7.6 SIGNIFICANT NONPAYMENT DEFAULT IN RESPECT OF SENIOR DEBT.

     If:

          (a) any Significant Nonpayment Default shall have occurred; and

          (b) the Company receives from the Senior Agent written notice (a
     "NONPAYMENT DEFAULT NOTICE") of the happening of such Significant
     Nonpayment Default, stating that such notice is a payment blockage notice
     pursuant to Section 7.6 of this Agreement;

then no direct or indirect payment (in cash, property or Securities or by
set-off or otherwise) shall be made or agreed to be made for or on account of
any Subordinated Debt, or as a sinking fund for any Subordinated Debt, or in
respect of any redemption, retirement, repurchase, prepayment, purchase or other
acquisition or payment of any Subordinated Debt, for a period (each, a "PAYMENT
BLOCKAGE PERIOD") commencing on the date the Nonpayment Default Notice is
delivered to the Company and ending on the Payment Blockage Period Termination
Date; provided, however, that:

               (i) only one such Payment Blockage Period may arise in any period
          of three hundred sixty (360) consecutive days;

               (ii) no more than three (3) Payment Blockage Periods may be
          instituted pursuant to this Section 7.6; and

               (iii) no Payment Blockage Period may be imposed as a result of
          any Significant Nonpayment Default which served as the basis for or
          was continuing during a previous Payment Blockage Period.

     All payments in respect of Subordinated Debt postponed during any Payment
Blockage Period shall be immediately due and payable upon the termination
thereof (together with such additional interest as is provided for herein and in
the Notes for late payment of principal, Prepayment Compensation Amount and
interest).

     The Company shall give prompt written notice to each holder of Subordinated
Debt of its receipt of any Nonpayment Default Notice under this Section 7.6.

                                       41
<PAGE>   45

     7.7 STANDSTILL.

     Notwithstanding anything contained in this Agreement or any other Financing
Document to the contrary, for so long as any amount is outstanding under a
Senior Credit Facility, no holder of any Subordinated Debt may exercise any
Remedies in respect thereof (and no acceleration or purported acceleration
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) shall become effective)
during any period (a "STANDSTILL PERIOD") commencing on the first date the
holders of the Subordinated Debt, but for the provisions of this Section 7,
would have been entitled to accelerate the maturity of the Subordinated Debt
pursuant to Section 6.2(a)(i)(B) or Section 6.2(a)(ii) and ending upon the
earliest of:

          (a) the date which is:

               (i) if any Event of Default described in Section 6.1(a) has
          occurred and is continuing, ninety (90) days; and

               (ii) if no Event of Default described in Section 6.1(a) has
          occurred or is continuing, one hundred twenty (120) days;

     in each case, after the commencement of such Standstill Period;

          (b) the date that any holder of any Senior Debt commences the exercise
     of any Remedies in respect of such Debt; and

          (c) the first date upon which any of the Events of Default described
     in Section 6.1(e) shall have occurred and be continuing beyond any period
     of grace specified therein; and, in such event, the automatic acceleration
     of the Notes contemplated in respect of such Event of Default pursuant to
     Section 6.2(a)(i)(A) shall occur immediately upon the termination of the
     Standstill Period.

     7.8 TURNOVER OF PAYMENTS

     If:

          (a) any payment or distribution shall be paid to or collected or
     received by any holders of Subordinated Debt in contravention of any of the
     terms of this Section 7; and

                                       42
<PAGE>   46

          (b) the Senior Agent shall have notified the holders of Subordinated
     Debt of the facts by reason of which such payment or collection or receipt
     so contravenes this Section 7 or constituted a Significant Nonpayment
     Default;

then such holders of Subordinated Debt will deliver such payment or
distribution, to the extent necessary to pay all such Senior Debt in full, in
cash or cash equivalents, to the Senior Agent, on behalf of the holders of the
Senior Debt, and, until so delivered, the same shall be held in trust by such
holders of Subordinated Debt as the property of the holders of such Senior Debt.
If any amount is delivered to the Senior Agent pursuant to this Section 7.8,
whether or not such amounts have been applied to the payment of Senior Debt, and
the outstanding Senior Debt shall thereafter be paid in full, in cash or cash
equivalents, by the Company or otherwise other than pursuant to this Section
7.8, the holders of Senior Debt shall return to such holders of Subordinated
Debt an amount equal to the amount delivered to such holders of Senior Debt
pursuant to this Section 7.8, so long as after the return of such amounts the
Senior Debt shall remain paid in full, in cash or cash equivalents.

     7.9 SUBORDINATION UNAFFECTED BY CERTAIN EVENTS.

     The rights set forth in this Section 7 of the holders of the Senior Debt as
against each holder of Subordinated Debt shall remain in full force and effect
without regard to, and shall not be impaired by:

          (a) any act or failure to act on the part of the Company;

          (b) any change in the manner, place or terms of payment of, or any
     extension or indulgence in respect of, any payment or prepayment of the
     Senior Debt or any part thereof or in respect of any other amount payable
     to any holder of Senior Debt;

          (c) any amendment, modification, restatement, renewal, refinancing or
     waiver of, or addition or supplement to, or deletion from, or compromise,
     release, consent or other action in respect of, any of the terms of any
     Senior Debt or any other agreement relating to any Senior Debt, other than
     such as would cause all or any portion of such Debt to fail to meet the
     definition of "Senior Debt;"

          (d) any sale, exchange, release or other dealing with any Property
     which is the subject of any Lien securing any Senior Debt, or any failure
     or delay in the perfection of any such Lien;

                                       43
<PAGE>   47

          (e) any release of any Person liable in any manner (including, without
     limitation, by virtue of any Guaranty) for the payment or collection of the
     Senior Debt;

          (f) any exercise or non-exercise by any holder of Senior Debt of any
     right, power, privilege or remedy under or in respect of any Senior Debt or
     Subordinated Debt or any waiver of any such right, power, privilege or
     remedy or any default in respect of any Senior Debt or the Subordinated
     Debt, any dealing with or action against any collateral security therefor
     or any receipt by any holder of Senior Debt of any security, or any failure
     by any holder of Senior Debt to perfect a security interest in, or any
     release by any such holder of Senior Debt of, any security for the payment
     of any Senior Debt;

          (g) any merger or consolidation of the Company or any of its
     Subsidiaries into or with any of its Subsidiaries or into or with any
     Person, or any Transfer of any or all of the Property of the Company or any
     of its Subsidiaries to any other Person; or

          (h) the absence of any notice to, or knowledge of, any holder of
     Subordinated Debt of the existence or occurrence of any of the matters or
     events set forth in the foregoing clauses (a) through (g).

     7.10 WAIVER AND CONSENT.

     Each holder of Subordinated Debt waives any and all notices of the
acceptance of the provisions of this Section 7 or of the creation, renewal,
extension or accrual, now or at any time in the future, of any Senior Debt.

     7.11 REINSTATEMENT OF SUBORDINATION.

     The obligations of each holder of Subordinated Debt under the provisions
set forth in this Section 7 shall continue to be effective, or be reinstated, as
the case may be, as to any payment in respect of any Senior Debt that is
rescinded or must otherwise be returned by the holder of such Senior Debt upon
the occurrence or as a result of any bankruptcy or judicial proceeding, all as
though such payment had not been made.

     7.12 OBLIGATIONS NOT IMPAIRED.

     Nothing contained in this Section 7 shall impair, as between the Company
and any holder of Subordinated Debt, the obligation of the Company to pay to
such holder the principal thereof and Prepayment Compensation Amount, if any,
and interest thereon as and when the same shall become due and payable in
accordance with the

                                       44
<PAGE>   48

terms thereof and to comply with each and every provision of the Notes and this
Agreement or prevent any holder of any Subordinated Debt from exercising all
rights, powers and remedies otherwise permitted by applicable law or under this
Agreement, all subject to the rights of the holders of the Senior Debt to
receive cash, Securities or other Property otherwise payable or deliverable to
the holders of Subordinated Debt.

     7.13 PAYMENT OF SENIOR DEBT; SUBROGATION.

     Upon the payment in full of all Senior Debt, the holders of Subordinated
Debt shall be subrogated to all rights of any holder of Senior Debt to receive
any further payments or distributions applicable to the Senior Debt until the
Subordinated Debt shall have been paid in full, and such payments or
distributions received by the holders of Subordinated Debt by reason of such
subrogation, of cash, Securities or other Property which otherwise would be paid
or distributed to the holders of Senior Debt, shall, as between the Company and
its creditors other than the holders of Senior Debt, on the one hand, and the
holders of Subordinated Debt, on the other hand, be deemed to be a payment by
the Company on account of Senior Debt and not on account of Subordinated Debt.

     7.14 RELIANCE OF HOLDERS OF SENIOR DEBT.

     Each holder of Subordinated Debt by its acceptance thereof shall be deemed
to acknowledge and agree that the foregoing subordination provisions are, and
are intended to be, an inducement to and a consideration of each holder of any
Senior Debt, whether such Senior Debt was created or acquired before or after
the creation of Subordinated Debt, to acquire and hold, or to continue to hold,
such Senior Debt, and such holder of Senior Debt shall be deemed conclusively to
have relied on such subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt. Each such holder of Senior Debt is
intended to be, and is, a third party beneficiary of this Section 7. Each holder
of Subordinated Debt acknowledges and agrees that the provisions set forth in
this Section 7 shall be enforceable against such Persons by the holders of the
Senior Debt. Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, none of the provisions of this Section 7
(including, without limitation, this Section 7.14) may, directly or indirectly,
be amended, modified, supplemented or waived without the prior written consent
of the Senior Agent, on behalf of the holders of the Senior Debt.

     7.15 IDENTITY OF HOLDERS OF SENIOR DEBT.

     Upon the request of any holder of Subordinated Debt, the Company shall
deliver to such holder a list of all holders of Senior Debt outstanding at such
time, providing the name and address of each such holder of Senior Debt and the
principal amount of

                                       45
<PAGE>   49

Senior Debt held by each such holder; provided, however, that, if any holder of
Senior Debt shall have appointed an agent or other representative with respect
to the Senior Debt held by it, the Company may provide the name and address of
such agent or representative in lieu of the name and address of such holder of
Senior Debt.

     7.16 AMENDMENTS TO SENIOR CREDIT FACILITY.

     Notwithstanding the other provisions of this Section 7, no amendment to or
refinancing, replacement or refunding of the Senior Debt or any agreement or
instrument related thereto shall be effective as to the holders of the
Subordinated Debt or be entitled to the benefits of this Section 7 without the
consent of each holder of Notes to the extent that such amendment, refinancing,
replacement or refunding would directly prohibit the Company or any Subsidiary
from making scheduled or required payments in respect of the Subordinated Debt
in any manner which is not specifically set forth in the Senior Credit
Agreement, as in effect on the Closing Date. The holders of the Senior Debt may
restrict the right of the Company to make, or prohibit the Company from making,
optional prepayments of the Notes in accordance with the provisions of Section
1.3 or Section 1.4 or other optional repurchases of the Notes.

8. INTERPRETATION OF THIS AGREEMENT

     8.1 TERMS DEFINED.

     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:

     ACCEPTABLE CONSIDERATION - means, with respect to any Transfer of any
Property of the Company or any Restricted Subsidiary, cash consideration,
promissory notes or such other consideration (or any combination of the
foregoing) as is, in each case for the Fair Market Value thereof and in each
case in which the value of the Property so Transferred is equal to or greater
than One Million Dollars ($1,000,000), determined by the Board of Directors, in
its good faith opinion, to be in the best interests of the Company and to
reflect the Fair Market Value of such Property.

     ACCEPTABLE REVOLVING CREDIT FACILITY - means and includes a revolving
credit agreement or similar agreement:

          (a) pursuant to which the lender commits to permit the Company,
     subject to the conditions therein, to obtain from time to time thereunder
     loans or advances of cash, letters of credit or bankers acceptances and
     periodically repay the same; and

                                       46
<PAGE>   50

          (b) the obligations under which are not, by its terms or the terms of
     any ancillary agreement, expressed to be subordinated in right of payment
     to any other Debt of the Company or any Subsidiary; and

          (c) the obligations under which are not owing to the Company, any
     Affiliate or any Subsidiary.

     ACQUIRED BUSINESS - means and includes, in connection with any computation
of Pro Forma Combined Income Available for Fixed Charges, Pro Forma Combined
EBITDA or Pro Forma Combined Fixed Charges for any period, any Person (other
than an Unrestricted Subsidiary) all the Capital Stock of which or substantially
all of the Property of which was acquired by the Company or a Restricted
Subsidiary, or which shall have merged into or consolidated with the Company
(with the Company being the Surviving Corporation) or which shall have merged
with or into or consolidated with a Restricted Subsidiary with the result that
the Surviving Corporation became a Restricted Subsidiary, in each case, during
such period, if, but only if:

          (a) Consolidated EBITDA, Consolidated Rental Expense and Consolidated
     Fixed Charges and for such acquired Persons for such Period can be
     determined on a basis reasonably acceptable to the holders of Notes for
     such period, and Consolidated Debt and Consolidated Senior Debt for such
     acquired Persons can be determined on a basis reasonably acceptable to the
     holders of Notes as at the relevant time of determination; and

          (b) concurrently with any such determination, the Company shall have
     delivered to the holders of the Notes audited financial statements (to the
     extent available) and other financial information prepared in accordance
     with GAAP and reasonably satisfactory to the holders of the Notes with
     respect to such acquired Person, which financial statements and information
     demonstrates the basis for such determination to an extent reasonably
     satisfactory to the holders of the Notes.

     ADJUSTED DEBT - with respect to any Person, means, without duplication, the
liabilities of such Person with respect to:

          (a) BORROWED MONEY - borrowed money;

          (b) SECURED LIABILITIES - borrowed money secured by any Lien existing
     on Property owned by such Person (whether or not such liabilities have been
     assumed);

                                       47
<PAGE>   51

          (c) CAPITAL LEASES - Capital Leases of such Person; and

          (d) GUARANTEES - any Guaranty of such Person of any obligation or
     liability of another Person of obligations of the type listed in clause (a)
     through clause (c) of this definition of Adjusted Debt.

Adjusted Debt shall not include letters of credit, surety bonds or similar
instruments.

     AFFILIATE - means and includes, at any time, each Person (other than a
Restricted Subsidiary):

          (a) that directly or indirectly through one or more intermediaries
     controls, or is controlled by, or is under common control with, the
     Company;

          (b) that beneficially owns or holds ten percent (10%) or more of any
     class of the Voting Stock of the Company;

          (c) ten percent (10%) or more of the Voting Stock (or in the case of a
     Person that is not a corporation, ten percent (10%) or more of the equity
     interest) of which is beneficially owned or held by the Company or a
     Subsidiary; or

          (d) that is an officer or director of the Company or that is an
     Initial Manager Affiliate;

at such time; provided, however, that none of the Holders nor any affiliate of
any Holder shall be deemed to be an "Affiliate," and no Person holding any one
or more of the Notes or Warrants shall be deemed to be an "Affiliate" solely by
virtue of the ownership of such securities. As used in this definition:

          control - means the possession, directly or indirectly, of the power
     to direct or cause the direction of the management and policies of a
     Person, whether through the ownership of voting securities, by contract or
     otherwise.

     AGREEMENT, THIS - and references thereto shall mean this Note Agreement as
it may from time to time be amended or supplemented.

     ANNEX 3 - means Annex 3 to the Securities Purchase Agreement.

     APPLICABLE INTEREST LAW - means any present or future law (including,
without limitation, the laws of the State of New York and the United States of

                                       48
<PAGE>   52

America) which has application to the interest and other charges pursuant to
this Agreement and the Notes.

     BANK OF AMERICA - means Bank of America Texas, N.A.

     BOARD OF DIRECTORS - means, at any time, the board of directors of the
Company or any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.

     BORROWING BASE - means:

          (a) for so long as the Senior Credit Agreement (as amended, renewed or
     extended) remains in effect, the "Adjusted Borrowing Base," as defined in
     the Senior Credit Agreement, as in effect on the date hereof, and as set
     forth on Annex 3 hereto; provided, however, that if clause (b) of the
     definition of "Adjusted Borrowing Base" in the Senior Credit Agreement is
     amended (including, without limitation, in connection with a renewal or
     extension of the Senior Credit Facility) to remove the PACA Adjustment
     deduction from the "Borrowing Base" (as defined in the Senior Credit
     Agreement as in contained therein, then such amendment shall be given
     effect for purposes of calculating the Borrowing Base; and

          (b) thereafter, any substantially similar formulation contained in any
     other Acceptable Revolving Credit Facility at such time, so long as:

               (i) if such formulation contains a PACA Adjustment, such
          formulation would yield an amount no higher than the amount calculated
          in accordance with the definition of "Adjusted Borrowing Base" as set
          forth in the Senior Credit Agreement, as in effect on the date hereof;
          and

               (ii) if such formulation does not contain a PACA Adjustment, such
          formulation would yield an amount no higher than the amount calculated
          in accordance with the definition of "Adjusted Borrowing Base" as set
          forth in the Senior Credit Agreement, as in effect on the date hereof
          but assuming that such definition did not contain a PACA Adjustment;

and, in either case, which formulation is provided to each holder of the Notes
in writing disclosing that the Company intends to use such formulation as the
"Borrowing Base."

                                       49<PAGE>   1
                                                                    EXHIBIT 10.2

                               FRESH AMERICA CORP.

                     AMENDED AND RESTATED WARRANT AGREEMENT
                     WITH RESPECT TO WARRANT AGREEMENT DATED
                                AS OF MAY 4, 1998

                           DATED AS OF APRIL 15, 2000

               155,483 SERIES A WARRANTS TO PURCHASE COMMON STOCK

               420,651 SERIES B WARRANTS TO PURCHASE COMMON STOCK

<PAGE>   2

<TABLE>
<S>      <C>                                                                                                     <C>
1.    FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES........................................................2

   1.1.  FORMS OF WARRANT CERTIFICATES............................................................................2
   1.2.  EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS....................................................3
   1.3.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT CERTIFICATES; LOST OR STOLEN WARRANT
   CERTIFICATES...................................................................................................3
   1.4.  SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES..............................................................4
   1.5.  EFFECT OF ISSUANCE IN REGISTERED FORM....................................................................5

2.    EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.............................................................5

   2.1.  EXERCISE OF WARRANTS.....................................................................................5
   2.2.  ISSUANCE OF COMMON STOCK.................................................................................8
   2.3.  UNEXERCISED WARRANTS.....................................................................................8
   2.4.  CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES.....................................................9
   2.5.  NOTICE OF EXPIRATION.....................................................................................9
   2.6.  FRACTIONAL SHARES........................................................................................9

3.    AGREEMENTS OF THE COMPANY...................................................................................9

   3.1.  RESERVATION OF COMMON STOCK..............................................................................9
   3.2.  COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND NONASSESSABLE.............................10
   3.3.  TRANSFER TAXES..........................................................................................10
   3.4.  COMMON STOCK RECORD DATE................................................................................11
   3.5.  RIGHTS IN RESPECT OF COMMON STOCK.......................................................................11
   3.6.  CUSIP NUMBER............................................................................................11
   3.7.  RIGHT OF ACTION.........................................................................................11
   3.8.  RIGHT TO RECEIVE DISTRIBUTION OF SPINOFF WARRANTS.......................................................12

4.    ANTIDILUTION ADJUSTMENTS...................................................................................14

   4.1.  MECHANICAL ADJUSTMENTS..................................................................................14
   4.2.  STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS..........................................................14
   4.3.  DIVIDENDS AND DISTRIBUTIONS.............................................................................15
   4.4.  REPURCHASES OF COMMON STOCK OR RIGHTS...................................................................16
   4.5.  ISSUANCES OF ADDITIONAL COMMON STOCK OR RIGHTS..........................................................17
   4.6.  EXPIRATION OF RIGHTS....................................................................................18
   4.7.  SPINOFF.................................................................................................18
   4.8.  CONSOLIDATION; MERGER; SALE; RECLASSIFICATION...........................................................19
   4.9.  DE MINIMIS CHANGES IN PURCHASE PRICE....................................................................20
   4.10.    ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO WARRANTS.........................................20
   4.11.    MISCELLANEOUS........................................................................................21
   4.12.    OTHER SECURITIES.....................................................................................21
   4.13.    ADDITIONAL AGREEMENTS OF THE COMPANY.................................................................21

5.    REPORTING COVENANTS........................................................................................23

   5.1.  FINANCIAL AND BUSINESS INFORMATION......................................................................23
   5.2.  INFORMATION CONCERNING ANTIDILUTION ADJUSTMENTS.........................................................24

6.    REGISTRATION RIGHTS........................................................................................25

   6.1.  SHELF REGISTRATION......................................................................................25
   6.2.  INCIDENTAL REGISTRATION.................................................................................28
   6.3.  COMPANIES REGISTRATION..................................................................................29
   6.4.  REGISTRATION PROCEDURES.................................................................................30
   6.5.  REASONABLE INVESTIGATION................................................................................34
   6.6.  REGISTRATION EXPENSES...................................................................................35
   6.7.  INDEMNIFICATION; CONTRIBUTION...........................................................................35
   6.8.  HOLDBACK AGREEMENTS; REGISTRATION RIGHTS TO OTHERS......................................................38
   6.9.  OTHER REGISTRATION OF COMMON STOCK......................................................................39
</TABLE>

                                      -1-
<PAGE>   3

<TABLE>
<S>      <C>                                                                                                     <C>
   6.10. AVAILABILITY OF INFORMATION.............................................................................39

7.    INTERPRETATION OF THIS AGREEMENT...........................................................................40

   7.1.  CERTAIN DEFINED TERMS...................................................................................40
   7.2.  DESCRIPTIVE HEADINGS....................................................................................59
   7.3.  GOVERNING LAW...........................................................................................59

8.    MISCELLANEOUS..............................................................................................59

   8.1.  EXPENSES................................................................................................59
   8.2.  AMENDMENT AND WAIVER....................................................................................60
   8.3.  DIRECTLY OR INDIRECTLY..................................................................................61
   8.4.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT............................................61
   8.5.  SUCCESSORS AND ASSIGNS..................................................................................62
   8.6.  NOTICES.................................................................................................62
   8.7.  SATISFACTION REQUIREMENT................................................................................62
   8.8.  SEVERABILITY............................................................................................63
   8.9.  COUNTERPARTS............................................................................................63
   8.10.    WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC...................................................63
</TABLE>

Annex 1  -        Address of Holders
Annex 2  -        Address of Company

Attachment A1     -        Form of Series A Warrant Certificate

Attachment A2     -        Form of Series B Warrant Certificate

                                      -ii-
<PAGE>   4

                     AMENDED AND RESTATED WARRANT AGREEMENT

         AMENDED AND RESTATED WARRANT AGREEMENT (as amended from time to time,
this "AGREEMENT") with respect to the Warrant Agreement dated as of May 4, 1998,
dated as of April 15, 2000, among FRESH AMERICA CORP., a Texas corporation
(together with its successors and assigns, the "COMPANY"), and JOHN HANCOCK LIFE
INSURANCE COMPANY, JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, SIGNATURE 1A
(CAYMAN), LTD. and INVESTORS PARTNER LIFE INSURANCE COMPANY (together with their
respective successors and assigns, the "HOLDERS").

                                    RECITALS:

         WHEREAS, pursuant to the Securities Purchase Agreement dated as of May
4, 1998 (the "INITIAL SECURITIES PURCHASE AGREEMENT"), the Company sold to John
Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and Signature 1A (Cayman), Ltd. (collectively, the "INITIAL PURCHASERS")
155,483 warrants to purchase Common Stock (the "INITIAL WARRANTS"), the terms of
which were governed by a warrant agreement dated as of May 4, 1998 (as amended
from time to time and as in effect immediately prior to the effectiveness
hereof, the "INITIAL WARRANT AGREEMENT").

         WHEREAS, pursuant to the Securities Purchase Agreement dated as of
April 15, 2000 (the "SECURITIES PURCHASE AGREEMENT"), the Company sold to John
Hancock Life Insurance Company, John Hancock Variable Life Insurance Company and
Investors Partner Life Insurance Company (collectively, the "PURCHASERS")
warrants to purchase Common Stock (the "SERIES B WARRANTS"), the terms of which
are governed by this Agreement.

         WHEREAS, the Initial Purchasers, as holders of all of the Initial
Warrants on the date hereof, and the Purchasers, as the purchasers and holders
of the Additional Warrants on the date hereof, have entered into this Agreement
to amend and restate the Initial Warrant Agreement, to govern the terms and
conditions of the Initial Warrants and the Additional Warrants, to provide for
the amendment and restatement of the Initial Warrants and to provide for the
Additional Warrants.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein,

         (a) the Initial Warrant Agreement is hereby amended and restated as set
forth herein;

<PAGE>   5

         (b) the Initial Warrants are hereby, and are hereby deemed to be,
amended and restated in the form of Series A Warrant set forth in Attachment A1
hereto (as so amended and restated, collectively, the "SERIES A WARRANTS"), and
each Initial Purchaser or subsequent holder may now or hereafter exchange any or
all of the Initial Warrants held by it for new amended and restated Series A
Warrants to be evidenced in the form of Attachment A1, each such new Series A
Warrant to be in respect of the same number of shares as the Initial Warrant so
delivered in exchange, provided however, that the failure of an Initial
Purchaser or a subsequent holder to so exchange any Initial Warrant for a new
Series A Warrant shall have no effect or consequence hereunder, and each such
Initial Warrant shall be deemed to be, and shall be treated for all purposes
hereunder, as being a new Series A Warrant to be evidenced by a warrant
certificate in the form of Attachment A1;

         (c) the Series A Warrants and the Series B Warrants shall be referred
to herein, collectively, as the "WARRANTS" and other than as expressly set forth
herein, each Warrant shall be subject to the same terms and conditions, and have
available the same benefits and privileges, as each other Warrant, without
regard to the Series thereof; and

         (d) the Initial Purchasers, the Purchasers and the Company hereby agree
as provided in the various Sections of this Agreement.

1.       FORM, EXECUTION AND TRANSFER OF WARRANT CERTIFICATES.

         1.1. FORMS OF WARRANT CERTIFICATES.

         The warrant certificates evidencing the Series A Warrants (in the form
of Attachment A1 as provided in this Section, individually, a "SERIES A WARRANT
CERTIFICATE" and, collectively, the "SERIES A WARRANT CERTIFICATES"), and the
warrant certificates evidencing the Series B Warrants (in the form of Attachment
A2 as provided in this Section, individually, a "SERIES B WARRANT CERTIFICATE"
and, collectively, the "SERIES B WARRANT CERTIFICATES"; the Series A Warrant
Certificates and the Series B Warrant Certificates are herein collectively
referred to as the "WARRANT CERTIFICATES"), and the forms of assignment and of
election to purchase shares to be attached to such certificates, shall be
substantially in the form set forth in Attachment A1 hereto (with respect to
Series A Warrants) and Attachment A2 hereto (with respect to Series B Warrants)
and may have such letters, numbers or other marks of identification or
designation as may be required to comply with any law or with any rule or
regulation of any governmental authority, stock exchange or self-regulatory
organization. Each Warrant Certificate shall be dated the date of issuance
thereof by the Company, either upon initial issuance or upon transfer or
exchange, and on its face shall initially entitle the

                                      -2-
<PAGE>   6

holder thereof to purchase a number of shares of Common Stock equal to the
number of Warrants specified on the face of such Warrant Certificate at a price
per share equal to the Purchase Price, but the number of such shares and the
Purchase Price shall be subject to adjustment as provided herein.

         1.2. EXECUTION OF WARRANT CERTIFICATES; REGISTRATION BOOKS.

                  (a) EXECUTION OF WARRANT CERTIFICATES. The Warrant
         Certificates shall be executed on behalf of the Company by an officer
         of the Company authorized by the Board of Directors. In case the
         officer of the Company who shall have signed any Warrant Certificate
         shall cease to be such an officer of the Company before issuance and
         delivery by the Company of such Warrant Certificate, such Warrant
         Certificate nevertheless may be issued and delivered with the same
         force and effect as though the individual who signed such Warrant
         Certificate had not ceased to be such an officer of the Company, and
         any Warrant Certificate may be signed on behalf of the Company by any
         individual who, at the actual date of the execution of such Warrant
         Certificate, shall be a proper officer of the Company to sign such
         Warrant Certificate, although at the date of the execution of this
         Agreement any such individual was not such an officer.

                  (b) REGISTRATION BOOKS. The Company will keep or cause to be
         kept at its office maintained at the address of the Company set forth
         in Section 8.6 hereof or at such other office of the Company in the
         United States of America of which the Company shall have given notice
         to each holder of Warrant Certificates, books for registration and
         transfer of the Warrant Certificates issued hereunder. Such books shall
         show the names and addresses of the respective holders of the Warrant
         Certificates, the registration number and the number of Warrants
         evidenced on its face by each of the Warrant Certificates, the Series
         of the Warrants evidenced by each of the Warrant Certificates and the
         date of each of the Warrant Certificates.

         1.3.     TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
                  CERTIFICATES; LOST OR STOLEN WARRANT CERTIFICATES.

                  (a) TRANSFER, SPLIT UP, ETC. Any Warrant Certificate, with or
         without other Warrant Certificates representing Warrants of the same
         Series, may be transferred, split up, combined or exchanged for another
         Warrant Certificate or Warrant Certificates representing Warrants of
         the same Series entitling the holder to purchase a minimum of one
         thousand (1,000) shares of the Common Stock or, if less, the entire
         number of Warrants represented by the Warrant Certificate so
         surrendered, entitling the registered holder or Transferee thereof to
         purchase a like number of shares of Common Stock as the Warrant
         Certificate or Warrant Certificates surrendered then entitled

                                      -3-
<PAGE>   7

         such registered holder to purchase. Any registered holder desiring to
         transfer, split up, combine or exchange any Warrant Certificate shall
         make such request in writing delivered to the Company, and shall
         surrender the Warrant Certificate or Warrant Certificates to be
         transferred, split up, combined or exchanged at the office of the
         Company referred to in Section 1.2(b) hereof, whereupon the Company
         shall deliver promptly to the Person entitled thereto a Warrant
         Certificate or Warrant Certificates, as the case may be, as so
         requested.

                  (b) LOSS, THEFT, ETC. Upon receipt by the Company of evidence
         reasonably satisfactory to it of the ownership of and the loss, theft,
         destruction or mutilation of any Warrant Certificate (which evidence
         shall be, in the case of any Holder or another institutional investor,
         notice from such institutional investor of such ownership (or of
         ownership by such institutional investor's nominee) and such loss,
         theft, destruction or mutilation), and:

                           (i) in the case of loss, theft or destruction, of
                  indemnity reasonably satisfactory to the Company; provided,
                  however, that if the holder of such Warrant Certificate is an
                  institutional investor or a Holder, or a nominee of an
                  institutional investor or a Holder, such Holder's or
                  institutional investor's own unsecured agreement of indemnity
                  shall be deemed to be satisfactory; or

                           (ii) in the case of mutilation, upon surrender and
                  cancellation thereof;

         the Company at its own expense will execute and deliver, in lieu
         thereof, a new Warrant Certificate, dated the date of such lost,
         stolen, destroyed or mutilated Warrant Certificate, evidencing the same
         Series and of like tenor, in lieu of the lost, stolen, destroyed or
         mutilated Warrant Certificate.

         1.4. SUBSEQUENT ISSUANCE OF WARRANT CERTIFICATES.

         Subsequent to the original issuance in connection with the Initial
Securities Purchase Agreement and the Initial Warrant Agreement and the issuance
in connection with the Securities Purchase Agreement and this Agreement, no
Warrant Certificates shall be issued except:

                  (a) Warrant Certificates issued upon any transfer,
         combination, split up or exchange of Warrants pursuant to Section
         1.3(a) hereof;

                  (b) Warrant Certificates issued in replacement of mutilated,
         destroyed, lost or stolen Warrant Certificates pursuant to Section
         1.3(b) hereof; and

                                      -4-
<PAGE>   8

                  (c) Warrant Certificates issued pursuant to Section 2.3 hereof
         upon the partial exercise of any Warrant Certificate to evidence the
         unexercised portion of such Warrant Certificate.

         1.5. EFFECT OF ISSUANCE IN REGISTERED FORM.

         Every holder of a Warrant Certificate by accepting the same consents
and agrees with the Company and with every other holder of a Warrant Certificate
that:

                  (a) the Warrant Certificates are transferable only on the
         registry books of the Company if surrendered at the office of the
         Company referred to in Section 1.2(b) hereof, duly endorsed or
         accompanied by an instrument of transfer (in the form attached hereto)
         and payment of any applicable transfer tax or stamp tax; and

                  (b) the Company may deem and treat the Person in whose name
         each Warrant Certificate is registered as the absolute owner thereof
         and of the Warrants evidenced thereby (notwithstanding any notations of
         ownership or writing on the Warrant Certificates made by anyone other
         than the Company) for all purposes whatsoever, and the Company shall
         not be affected by any notice to the contrary.

2.       EXERCISE OF WARRANTS; PAYMENT OF PURCHASE PRICE.

         2.1. EXERCISE OF WARRANTS.

                  (a) MANNER OF EXERCISE. At any time and from time to time on
         or prior to the Expiration Date, the holder of any Warrant Certificate
         may exercise the Warrants evidenced thereby, in whole or in part (but
         not, in the case of any exercise in part, to the extent that such
         exercise would result in the issuance of the lesser of one hundred
         (100) whole shares of Common Stock and such lesser number of shares as
         is issuable by virtue of exercise of all the Warrants held by such
         holder), by surrender of such Warrant Certificate, with an election to
         purchase (a form of which is attached to each Warrant Certificate)
         attached thereto duly executed, to the Company at its office referred
         to in Section 1.2(b) hereof, together with payment of the Purchase
         Price for each share of Common Stock with respect to which the Warrants
         are then being exercised. Such Purchase Price shall be payable either:

                           (i) in cash pursuant to Section 2.1(b) hereof;

                           (ii) by a tender of Notes pursuant to Section 2.1(c)
                  hereof;

                                      -5-
<PAGE>   9
                           (iii) by a tender of shares of Series C Preferred
                  Stock pursuant to Section 2.1(d) hereof;

                           (iv) by a tender of cash pursuant Section 2.1(b)
                  hereof and either Notes pursuant to Section 2.1(c) hereof or
                  shares of Series C Preferred Stock pursuant to Section 2.1(d)
                  hereof; or

                           (v) by delivery of Warrant Certificates pursuant to
                  Section 2.1(e) hereof.

                  (b) PAYMENT IN CASH. Upon exercise of any Warrants, the holder
         of a Warrant Certificate may pay the Purchase Price (and shall pay the
         excess of the Purchase Price for the Warrants being exercised over the
         amounts so deemed to be paid by tender of Notes pursuant to Section
         2.1(c) or by tender of shares of Series C Preferred Stock pursuant to
         Section 2.1(d)) in cash or by certified or official bank check payable
         to the order of the Company or by wire transfer of immediately
         available funds to the account of the Company.

                  (c) PAYMENT IN NOTES. To the extent that any holder of any
         Warrant Certificate surrenders with such Warrant Certificate any Note
         then held by such holder, such holder shall be deemed to have paid that
         portion of the Purchase Price equal to one hundred percent (100%) of
         the principal of such Note which the holder thereof directs the Company
         to accept as payment of the Purchase Price, which Note shall be
         cancelled and not reissued. To the extent that the principal amount of
         such tendered Note is greater than the amount of the Purchase Price
         paid by surrender thereof, the Company shall deliver a new Note to the
         tendering holder thereof, in accordance with the provisions of the Note
         Agreement, in the principal amount equal to the amount not so applied
         to payment of the Purchase Price. At the time of the issuance of the
         shares of Common Stock pursuant to the exercise of the Warrants of any
         holder, the Company shall pay all accrued and unpaid interest on the
         principal amount of any Note of such holder cancelled pursuant to this
         Section 2.1(c) up to but excluding the date of such issuance. For
         purposes of Rule 144, the Company and the Holders agree that a tender
         of the principal of any Notes in payment of the exercise price in
         respect of the Warrants shall not be deemed a prepayment of the Notes,
         but rather a conversion of such Notes, pursuant to the terms of the
         Notes, the Note Agreement, this Agreement and the Warrants, into Common
         Stock.

                  (d) PAYMENT IN SHARES OF SERIES C PREFERRED STOCK. To the
         extent that any holder of any Warrant Certificate surrenders with such
         Warrant Certificate any certificate or certificates representing shares
         of Series C Preferred Stock then held by such holder, such holder shall
         be deemed to have paid that portion of the Purchase Price equal to one
         hundred percent

                                      -6-
<PAGE>   10

         (100%) of the Redemption Price of such shares of Series C Preferred
         Stock which the holder thereof directs the Company to accept as payment
         of the Purchase Price, which shares shall be cancelled and not
         reissued. To the extent that the Redemption Price of such tendered
         shares of Series C Preferred Stock is greater than the amount of the
         Purchase Price paid by surrender thereof, the Company shall deliver a
         new share certificate to the tendering holder thereof representing the
         whole number of shares not so applied to payment of the Purchase Price.
         For purposes of Rule 144, the Company and the Holders agree that a
         tender of shares of the Series C Preferred Stock in payment of the
         Purchaser Price in respect of the Warrants shall not be deemed a
         redemption of such shares, but rather a conversion of such shares,
         pursuant to the terms of the Charter, this Agreement and the Warrants,
         into Common Stock.

                  (e) NET EXERCISE. In the event that any holder of Warrant
         Certificates delivers such Warrant Certificates to the Company and
         notifies the Company in writing that such holder intends to exercise
         all, or any portion of, the Warrants represented by such Warrant
         Certificates to satisfy its obligation to pay the Purchase Price in
         respect thereof by virtue of the provisions of this Section 2.1(e),
         such holder shall become entitled to receive, instead of the number of
         shares of Common Stock such holder would have received had the Purchase
         Price been paid pursuant to Section 2.1(b), Section 2.1(c) or Section
         2.1(d) hereof, a number of shares of Common Stock in respect of the
         exercise of such Warrants equal to the product of:

                           (i) the number of shares of Common Stock issuable
                  upon such exercise of such Warrant Certificate (or, if only a
                  portion of such Warrant Certificate is being exercised,
                  issuable upon the exercise of such portion); multiplied by

                           (ii) the quotient of:

                                    (A) the difference of:

                                             (I) the Market Price per share of
                                    Common Stock at the time of such exercise;
                                    minus

                                             (II) the Purchase Price per share
                                    of Common Stock at the time of such
                                    exercise;

                           divided by

                                    (B) the Market Price per share of Common
                           Stock at the time of such exercise.

                                      -7-
<PAGE>   11

         The Company shall not be required to issue fractional shares by virtue
         of this Section 2.1(e), but shall pay the exercising holder cash in
         lieu of such fractional share in accordance with Section 2.6 hereof.
         For purposes of Rule 144 under the Securities Act, 17 C.F.R. Section
         230.144, the Company and the Holders agree that the exercise of any
         Warrants in accordance with this Section 2.1(e) shall be deemed to be a
         conversion of such Warrants, pursuant to the terms of this Agreement
         and the Warrants, into Common Stock.

         2.2. ISSUANCE OF COMMON STOCK.

         Upon timely receipt of a Warrant Certificate, with the form of election
to purchase duly executed, accompanied by payment of the Purchase Price for each
of the shares to be purchased in the manner provided in Section 2.1(a) hereof
and an amount equal to any applicable transfer tax (if not payable by the
Company as provided in Section 3.3 hereof), the Company shall thereupon promptly
cause certificates representing the number of whole shares of Common Stock then
being purchased to be delivered to or upon the order of the registered holder of
such Warrant Certificate, registered in such name or names as may be designated
by such holder, and, promptly after such receipt deliver the cash, if any, to be
paid in lieu of fractional shares pursuant to Section 2.6 hereof to or upon the
order of the registered holder of such Warrant Certificate. For the avoidance of
doubt, subsequent to the creation or issuance of any Share Purchase Rights and
prior to the Share Purchase Right Detachment Date, each share of Common Stock
issued upon the exercise of any Warrant or Warrants shall in each case include
the attached Share Purchase Rights; and subsequent to any Share Purchase Right
Detachment Date and prior to the Share Purchase Right Termination Date, the
Company shall issue, in addition to the shares of Common Stock issuable upon
exercise of the Warrants, such Share Purchase Rights as would have been attached
to such shares of Common Stock had such exercise of the Warrants and issuance of
Common Stock occurred immediately prior to the Share Purchase Right Detachment
Date.

         2.3. UNEXERCISED WARRANTS.

         In case the registered holder of any Warrant Certificate shall exercise
less than all the Warrants evidenced thereby, a new Warrant Certificate
evidencing Warrants of the same Series equal in number to the number of Warrants
remaining unexercised shall be issued by the Company to the registered holder of
such Warrant Certificate or to its duly authorized assigns.

                                      -8-
<PAGE>   12

         2.4. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES.

         All Warrant Certificates surrendered to the Company for the purpose of
exercise, exchange, substitution or transfer shall be cancelled by it, and no
Warrant Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall cancel
and retire any other Warrant Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof.

         2.5. NOTICE OF EXPIRATION.

         All Warrants that have not been exercised or purchased in accordance
with the provisions of this Agreement shall expire and all rights of holders of
such Warrants shall terminate and cease on the Expiration Date. The Company
agrees to notify each holder of Warrants, not less than forty-five (45) days but
not more than one hundred twenty (120) days, prior to the Expiration Date in
writing, of the Expiration Date and that, on the Expiration Date, all Warrants
remaining unexercised shall expire and all rights of holders of such Warrants
shall terminate and cease.

         2.6. FRACTIONAL SHARES.

         The Company shall not be required to issue fractional shares of Common
Stock upon the exercise of any Warrant. Upon the exercise of any Warrant, there
shall be paid to the holder thereof, in lieu of any fractional share of Common
Stock resulting therefrom, an amount of cash equal to the product of:

              (a) the fractional amount of such share; times

              (b) the Market Price, as determined on the trading day immediately
         prior to the date of exercise of such Warrant.

3. AGREEMENTS OF THE COMPANY.

         3.1. RESERVATION OF COMMON STOCK.

         The Company covenants and agrees that it will at all times cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock such number of shares of Common Stock as will be sufficient to permit the
exercise in full of all Warrants issued hereunder and all other Rights
exercisable or convertible into Common Stock. In addition, at all times
subsequent to the creation or issuance of any Share Purchase Rights and prior to
the Share Purchase Right Termination Date, the Company shall reserve a
sufficient number of Share Purchase Rights as will be sufficient to permit all
shares of Common Stock issuable

                                      -9-
<PAGE>   13

upon exercise in full of all Warrants issued hereunder and all other Rights
exercisable or convertible into Common Stock to be issued together with the
attached or detached Share Purchase Rights.

         3.2.  COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID AND
               NONASSESSABLE.

         The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Common Stock delivered upon the
exercise of any Warrants, at the time of delivery of the certificates
representing such shares, shall be duly and validly authorized and issued and
fully paid and nonassessable, free of any preemptive rights in favor of any
Person in respect of such issuance and free of any Lien created by, or arising
out of actions of, the Company, any Subsidiary or any Affiliate.

         3.3. TRANSFER TAXES.

         The Company covenants and agrees that it will pay when due and payable
any and all federal and state transfer taxes and charges that may be payable in
respect of the initial issuance or delivery (including, without limitation, the
delivery pursuant to the Initial Securities Purchase Agreement, the Initial
Warrant Agreement, the Securities Purchase Agreement or this Agreement) of:

              (a) each Warrant Certificate;

              (b) each Warrant Certificate issued in exchange for any other
         Warrant Certificate pursuant to Section 1.3(a) or Section 2.3 hereof;
         and

              (c) each share of Common Stock issued upon the exercise of any
         Warrant.

The Company shall not, however, be required to:

                     (i) pay any transfer tax that may be payable in respect of
              the transfer or delivery of certificates representing Warrants or
              shares of Common Stock in a name other than that of the registered
              holder of the certificate surrendered for exercise, conversion,
              transfer or exchange (any such tax being payable by the holder of
              such certificate at the time of surrender); or

                     (ii) issue or deliver any such certificates referred to in
              the foregoing clause (i) until any such tax referred to in the
              foregoing clause (i) shall have been paid.

                                      -10-
<PAGE>   14

         3.4. COMMON STOCK RECORD DATE.

         Each Person in whose name any certificate for shares of Common Stock is
issued upon the exercise of Warrants shall for all purposes be deemed to have
become the holder of record of the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered with an election to purchase
attached thereto duly executed and payment of the aggregate Purchase Price (and
any applicable transfer taxes, if payable by such Person) was made.

         3.5. RIGHTS IN RESPECT OF COMMON STOCK.

         Except as otherwise set forth herein, prior to the exercise of the
Warrants evidenced thereby, the holder of a Warrant Certificate shall not be
entitled to any rights of a stockholder in the Company with respect to shares
for which the Warrants shall be exercisable, including, without limitation, the
right to vote in respect of any matter upon which the holders of Common Stock
may vote or the right to receive dividends or other distributions and, except as
expressly set forth herein, and shall not be entitled to receive any notice of
any proceedings of the Company. Prior to the exercise of the Warrants evidenced
thereby, the holders of the Warrant Certificates shall not have any obligation
or any liability as stockholders of the Company, whether such obligation or
liabilities are asserted by the Company or by creditors of the Company.

         3.6. CUSIP NUMBER.

         The Company covenants and agrees to maintain:

                  (a) a private placement number in respect of the Warrants of
         each Series; and

                  (b) a CUSIP number in respect of the Common Stock;

in each case, from the CUSIP Service Bureau of Standard & Poor's, a division of
McGraw-Hill, Inc.

         3.7. RIGHT OF ACTION.

         All rights of action in respect of the Warrants are vested in the
respective registered holders of the Warrant Certificates, and any registered
holder of any Warrant Certificate, without the consent of the holder of any
other Warrant Certificate, may, on its own behalf and for its own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, its right to exercise
the Warrants evidenced

                                      -11-
<PAGE>   15

by such Warrant Certificate in the manner provided in such Warrant Certificate
and in this Agreement.

         3.8. RIGHT TO RECEIVE DISTRIBUTION OF SPINOFF WARRANTS.

              (a) RIGHT TO RECEIVE SPINOFF WARRANTS. In the event of a Spinoff,
         the Company shall, or shall cause the Distributed Entity to, distribute
         to each Person who was a registered holder of Warrants on the date of
         the Spinoff such holder's ratable share (based on the number of
         Warrants held by such holder on the date of the Spinoff) of an
         aggregate number of warrants to purchase Spinoff Shares of the
         Distributed Entity (the "Spinoff Warrants") equal to the Spinoff
         Warrant Number. The distribution of the Spinoff Warrants shall occur on
         a date fixed by the Company which is not later than five (5) Business
         Days after the Spinoff Calculation Date. The Spinoff Warrants shall:

                     (i) be immediately exercisable on the date of issuance
              thereof;

                     (ii) expire on the later of the Expiration Date and the
              date forty-five (45) days after the issuance thereof;

                     (iii) each represent (subject to adjustment as provided in
              the Spinoff Warrant Agreement) the right to purchase one (1)
              validly issued, fully paid and non-assessable Spinoff Share at a
              purchase price (subject to adjustment as provided in the Spinoff
              Warrant Agreement) equal to the Spinoff Warrant Purchase Price,
              payable (as set forth in the Spinoff Warrant Agreement) in cash,
              in Notes or in Spinoff Warrants (but not in Warrants); and

                     (iv) otherwise have terms and provisions substantially
              identical to those of the Warrants.

              (b) NOTICE OF DECLARATION. In the event of a Spinoff, the Company
         shall give written notice thereof to each holder of Warrants (or former
         holder of Warrants) entitled to receive a distribution of the Spinoff
         Warrants, within five (5) days after the declaration of the dividend or
         distribution or the announcement of such reclassification or other
         similar arrangement giving rise to such Spinoff, which notice shall:

                     (i) provide a detailed description of the Spinoff;

                     (ii) state the date the Spinoff will occur;

                     (iii) state the Spinoff Calculation Date;

                                      -12-
<PAGE>   16

                     (iv) explain that the Spinoff Warrant Number and the
              Spinoff Warrant Purchase Price shall be determined as of the
              Spinoff Calculation Date;

                     (v) state the date fixed for distribution of the Spinoff
              Warrants;

                     (vi) state the aggregate number of Spinoff Shares to be
              distributed, dividended, issued or deemed issued per share of
              Common Stock;

                     (vii) state the number of shares of Common Stock into which
              each Warrant is then exercisable; and

                     (viii) describe the right described in Section 3.8(a).

              (c) SPINOFF WARRANT AGREEMENT. On or prior to the date of the
         Spinoff, the Company shall cause the Distributed Entity to enter into a
         warrant agreement (the "SPINOFF WARRANT AGREEMENT") to govern the terms
         of the Spinoff Warrants. The terms and provisions of the Spinoff
         Warrant Agreement shall be substantially identical to those set forth
         in this Warrant Agreement, including, without limitation, substantially
         identical antidilution provisions and agreements of the Distributed
         Entity as contained herein with respect to the Company, and shall be in
         form acceptable to those holders of Warrants (or former holders of
         Warrants) entitled to receive a distribution of the majority of the
         Spinoff Warrants. The Company shall also cause to be delivered to each
         such holder or former holder an opinion, satisfactory in form and
         substance to those holders of Warrants (or former holders of Warrants)
         entitled to receive a distribution of the majority of the Spinoff
         Warrants, of independent counsel to the effect that such warrant
         agreement and the certificates representing the Spinoff Warrants to be
         issued thereunder are enforceable in accordance with their terms, that
         upon payment of the purchase price therefor the Distributed Entity's
         common stock to be issued upon exercise thereof shall be validly
         issued, fully paid and non-assessable, free and clear of any lien or
         encumbrance created by the Company or the Distributed Entity and as to
         such other matters as are customarily addressed in connection with an
         issuance of warrants as such holders may reasonably request.

              (d) NOTICE OF DISTRIBUTION. Two (2) Business Days following the
         Spinoff Calculation Date, the Company shall, or shall cause the
         Distributed Entity to, provide a written notice to each holder of
         Warrants (or former holder of Warrants) entitled to receive a
         distribution of the Spinoff Warrants, which notice shall:

                                      -13-
<PAGE>   17

                     (i) state the date fixed for distribution of the Spinoff
              Warrants;

                     (ii) state the Spinoff Warrant Number and the Spinoff
              Warrant Purchase Price, together with a detailed calculation of
              each;

                     (iii) provide a detailed calculation of the Market
              Capitalization of the Company, the Market Capitalization of the
              Distributed Entity, the Market Capitalization Percentage of the
              Company and the Market Capitalization Percentage of the
              Distributed Entity;

                     (iv) provide a detailed calculation of the Pre-Spinoff
              Ownership Percentage; and

                     (v) state the number of Spinoff Warrants being issued to
              each such holder.

         The Company shall, or shall cause the Distributed Entity to, distribute
the Spinoff Warrants to each holder of Warrants (or former holder of Warrants)
entitled to receive a distribution of the Spinoff Warrants on the date fixed
therefor.

              (e) DIVIDENDS PAID PARTLY IN SPINOFF SHARES. For purposes of this
         Section 3.8 and Section 4 hereof, any dividend or distribution declared
         or paid partly in Spinoff Shares and partly in Common Stock, other
         Securities or other Property shall be deemed to be a Spinoff subject to
         the provisions of this Section 3.8 to the extent made in Spinoff Shares
         and a separate dividend of Common Stock, other Securities or Property
         subject to the provisions of Section 4 hereof to the extent payable in
         Property other than Spinoff Shares.

4.       ANTIDILUTION ADJUSTMENTS.

         4.1. MECHANICAL ADJUSTMENTS.

         The number of shares of Common Stock purchasable upon the exercise of
each Warrant, and the Purchase Price, shall be subject to adjustment as set
forth in this Section 4.

         4.2. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS.

         In the event that the Company shall, on or after the date hereof:

              (a) pay a dividend in shares of Additional Common Stock or make a
         distribution in shares of Additional Common Stock;

                                      -14-
<PAGE>   18

              (b) reclassify by subdivision its outstanding shares of Common
         Stock into a greater number of shares; or

              (c) reclassify by combination its outstanding shares of Common
         Stock into a smaller number of shares;

then, and in each such case, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision or
combination shall be adjusted to that price determined by multiplying the
Purchase Price in effect immediately prior to such event by the quotient of:

                     (i) the total number of outstanding shares of Common Stock
              immediately prior to such event; divided by

                     (ii) the total number of outstanding shares of Common Stock
              immediately after such event.

An adjustment made pursuant to this Section 4.2 shall become effective on the
effective date of such event.

4.3.     DIVIDENDS AND DISTRIBUTIONS.

         In the event that the Company shall make or pay any dividend of, or
distribute to holders of shares of Common Stock (including, without limitation,
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) shares of capital stock (other than
Common Stock, which shall be subject to Section 4.2 and other than Spinoff
Shares, which shall be subject to Section 3.8) or rights, warrants or options
exercisable into such capital stock (other than Rights, which shall be subject
to Section 4.5 and other than Spinoff Shares, which shall be subject to Section
3.8), other Securities, evidences of its indebtedness or any of its Property
(other than cash dividends payable out of current net income or retained
earnings), then, in each case, the Purchase Price in effect after the record
date in respect of which such stock, rights, warrants, options, other
Securities, indebtedness or Property were dividended or distributed shall be
adjusted by multiplying the Purchase Price in effect immediately prior to such
record date by the quotient of:

              (a) the difference of:

                     (i) the Market Price on such record date; minus

                     (ii) the quotient of:

                                      -15-
<PAGE>   19

                           (A) the then fair value (as determined by the
                     Valuation Agent, whose determination, if so made, shall be
                     conclusive) of the shares of stock, rights, warrants,
                     options, other Securities, evidences of indebtedness or
                     Property so dividended or distributed; divided by

                           (B) the number of shares of Common Stock outstanding
                     on the record date;

         divided by

              (b) the Market Price on such record date.

Such adjustment shall be made whenever any such dividend or distribution is
made, and shall become effective on the date of such dividend or distribution.

         4.4. REPURCHASES OF COMMON STOCK OR RIGHTS.

         In the event that the Company shall repurchase, redeem, retire or
otherwise acquire shares of Common Stock or Rights for a Consideration Per Share
greater than the Closing Price in effect on the date immediately preceding the
date of such repurchase, redemption, retirement or acquisition, then the
Purchase Price in effect immediately after such event shall be adjusted by
multiplying the Purchase Price in effect immediately prior to such event by the
quotient of:

              (a) the difference of:

                     (i) the product of:

                           (A) the number of shares of Common Stock (calculated
                     on a Fully-Diluted Basis) immediately prior to such event;
                     multiplied by

                           (B) the Closing Price in effect on the date
                     immediately preceding such event;

                  minus

                     (ii) the Aggregate Consideration Paid;

         divided by

              (b) the product of:

                                      -16-
<PAGE>   20

                     (i) the Closing Price in effect on the date immediately
              preceding such event; multiplied by

                     (ii) the difference of:

                           (A) the number of shares of Common Stock (calculated
                     on a Fully-Diluted Basis) immediately prior to such event;
                     minus

                           (B) the number of shares of Common Stock (or
                     initially issuable pursuant to such Rights) so repurchased,
                     redeemed, retired or otherwise acquired.

         In the event that any of the Aggregate Consideration Paid consists of
Property other than cash, the value of such Property for purposes of computing
the Aggregate Consideration Paid shall be determined by the Valuation Agent as
of a date not more than thirty (30) days prior to the date of determination
thereof and shall be set forth in a written certificate of the Valuation Agent
which shall be delivered to the holders of the Warrants in the manner
contemplated by Section 8.6.

         4.5. ISSUANCES OF ADDITIONAL COMMON STOCK OR RIGHTS.

         In the event that the Company shall issue or sell shares of Additional
Common Stock or Rights (excluding Excluded Securities) for no consideration or
at a Consideration Per Share lower than the Market Price in effect on the date
of such issuance or sale, then the Purchase Price in effect immediately after
such event shall be adjusted by multiplying the Purchase Price in effect
immediately prior to such event by the quotient of:

              (a) the sum of:

                     (i) the number of shares of Common Stock outstanding
              immediately prior to such event; plus

                     (ii) the quotient of:

                            (A) the Aggregate Consideration Receivable; divided
                     by

                            (B) the Market Price;

                  in each case immediately prior to such event;

         divided by

              (b) the sum of:

                                      -17-
<PAGE>   21

                     (i) the number of shares of Common Stock outstanding
              immediately prior to such event; plus

                     (ii) the number of shares of Additional Common Stock so
              issued or sold (or initially issuable pursuant to such Rights).

         In the event that any of the Aggregate Consideration Receivable
consists of Property other than cash, the value of such Property for purposes of
computing the Aggregate Consideration Receivable shall be determined by the
Valuation Agent as of a date not more than thirty (30) days prior to the date of
determination thereof and shall be set forth in a written certificate of the
Valuation Agent which shall be delivered to the holders of the Warrants in the
manner contemplated by Section 8.6.

         4.6. EXPIRATION OF RIGHTS.

         Upon the expiration of any Rights in respect of the issuance of which
adjustment was made pursuant to Section 4.5, without the exercise thereof, the
Purchase Price and the number of shares of Common Stock purchasable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and shall
thereafter be such Purchase Price and such number of shares of Common Stock as
would have been had such Purchase Price and such number of shares of Common
Stock been originally adjusted (or had the original adjustment not been
required, as the case may be) as if:

              (a) the only shares of Common Stock so issued were the shares of
         Common Stock, if any, actually issued or sold upon the exercise of such
         Rights; and

              (b) such shares of Common Stock, if any, were issued or sold for
         the consideration actually received by the Company upon such exercise
         plus the aggregate consideration, if any, actually received by the
         Company for the issuance, sale or grant of all of such Rights, whether
         or not exercised; provided that no such readjustment shall have the
         effect of increasing the Purchase Price by an amount in excess of the
         amount of the reduction initially made in respect of the issuance,
         sale, or grant of such Rights.

         4.7. SPINOFF.

         In the event of a Spinoff, the Purchase Price of the Warrants in effect
immediately prior to the Spinoff Calculation Date shall be adjusted, effective
on the Spinoff Calculation Date, by multiplying the Purchase Price of the
Warrants in effect immediately prior to the Spinoff Calculation Date by the
Market

                                      -18-
<PAGE>   22

Capitalization Percentage of the Company, calculated as of the Spinoff
Calculation Date.

         4.8. CONSOLIDATION; MERGER; SALE; RECLASSIFICATION.

         In the event that there shall be:

              (a) any consolidation of the Company with, or merger of the
         Company with or into, another corporation in which either:

                     (i) the Company is not the surviving corporation;

                     (ii) the shares of Common Stock outstanding immediately
              prior to such merger or consolidation are reclassified or
              substantially changed); or

                     (iii) the holders of the Common Stock immediately prior to
              such consolidation or merger are issued cash, Securities of any
              Person other than the Company or Property (other than Securities
              of the Company) and the holder or holders of the common stock of
              the Person with whom the Company consolidates or merges become, as
              a result of such transaction, the holders of the Common Stock;

              (b) any sale or conveyance to another corporation of the Property
         of the Company substantially as an entirety;

              (c) any reclassification of the Common Stock that results in the
         issuance of other Securities of the Company; or

              (d) any detachment from the Common Stock of any Share Purchase
         Rights;

in each case, other than in a Spinoff, then, in each such case, lawful provision
shall be made as a part of the terms of such transaction so that the holders of
Warrants shall thereafter have the right to purchase the number and kind of
shares of stock, other Securities, Share Purchase Rights, cash, Property and
Rights receivable upon such consolidation, merger, sale, conveyance,
reclassification or detachment by a holder of such number of shares of Common
Stock as the holder of a Warrant would have had the right to acquire upon the
exercise of such Warrant immediately prior to such consolidation, merger, sale,
conveyance or reclassification, at the Purchase Price then in effect, and,
without further action on the part of any Person, each Warrant will thereafter
represent the right to receive, upon payment of the Purchase Price, such shares
of stock, other Securities, Share Purchase Rights, cash, Property and Rights as
are so receivable. The Company agrees that, as a condition

                                      -19-
<PAGE>   23

of proceeding with such consolidation, merger or sale, it shall cause the Person
surviving such merger or consolidation, the Person or Persons holding the shares
of the Common Stock of the Company immediately after such transaction or the
Person to whom such sale or conveyance is made, as the case may be, at the time
of such consolidation, merger or sale, to expressly assume the due and punctual
observance and performance of each and every provision of this Agreement and all
obligations and liabilities of the Company hereunder (subject to the foregoing
sentence), in each case, pursuant to such agreements and instruments as are
reasonably acceptable to the Required Warrantholders.

         4.9. DE MINIMIS CHANGES IN PURCHASE PRICE.

         No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Purchase Price; provided that any adjustments that, at the time of the
calculation thereof, are less than one percent (1%) of the Purchase Price at
such time and by reason of this Section 4.9 are not required to be made at such
time shall be carried forward and added to any subsequent adjustment or
adjustments for purposes of determining whether such subsequent adjustment or
adjustments, as so supplemented, exceed the one percent (1%) amount set forth in
this Section 4.9 and, if any such subsequent adjustment, as so supplemented or
otherwise, should exceed such one percent (1%) amount, all adjustments deferred
prior thereto and not previously made shall then be made. All calculations shall
be made to the nearest cent ($0.01).

         4.10. ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO WARRANTS.

         Upon each adjustment of the Purchase Price as a result of any
calculations made pursuant to Section 4.2, Section 4.3, Section 4.4, Section 4.5
or Section 4.13, each Warrant outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock (calculated to the nearest
share) obtained by multiplying the number of shares of Common Stock covered by
such Warrant immediately prior to such adjustment by the quotient of:

              (a) the Purchase Price in effect immediately prior to such
         adjustment, divided by

              (b) the Purchase Price in effect immediately after such
         adjustment.

All Warrants originally issued by the Company hereunder shall, subsequent to any
adjustment made to the Purchase Price hereunder, evidence the right to purchase,
at the adjusted Purchase Price, the number of shares of Common Stock determined

                                      -20-
<PAGE>   24

to be purchasable from time to time hereunder upon exercise of such Warrants,
all subject to further adjustment as provided herein. Each such adjustment shall
be valid and binding upon the Company and the holders of Warrants irrespective
of whether the Warrant Certificates theretofore and thereafter issued express
the Purchase Price per share of Common Stock and the number of shares of Common
Stock that were expressed upon the initial Warrant Certificates issued
hereunder.

         4.11. MISCELLANEOUS.

              (a) Adjustments shall be made pursuant to this Section 4
         successively whenever any of the events referred to in Section 4.2
         through Section 4.8, inclusive, shall occur.

              (b) If any Warrant shall be exercised subsequent to the record
         date for any of the events referred to in Section 4.2 through Section
         4.8, inclusive, but prior to the effective date thereof, appropriate
         adjustments shall be made immediately after such effective date so that
         the holder of such Warrant on such record date shall have received, in
         the aggregate, the kind and number of shares of Common Stock or other
         Securities or Property that it would have owned or been entitled to
         receive on such effective date had such Warrant been exercised prior to
         such record date.

              (c) Shares of Common Stock owned by or held for the account of the
         Company or any Subsidiary shall not, for purposes of the adjustments
         set forth in this Section 4, be deemed outstanding.

         4.12. OTHER SECURITIES.

         In the event that at any time, as a result of an adjustment made
pursuant to this Section 4, each holder of Warrants shall become entitled to
purchase any Securities of the Company other than shares of Common Stock, the
number or amount of such other Securities so purchasable and the Purchase Price
of such Securities shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions contained in
Section 4.2 through Section 4.8, inclusive, hereof, and all other relevant
provisions of this Section 4 that are applicable to shares of Common Stock shall
be applicable to such other Securities.

         4.13. ADDITIONAL AGREEMENTS OF THE COMPANY.

         The Company covenants and agrees that:

              (a) The Company shall not, by amendment to its Charter as in
         effect on the date hereof, or through any reorganization, transfer of
         assets,

                                      -21-
<PAGE>   25

         consolidation, merger, dissolution, liquidation, issuance or sale of
         Securities or any other voluntary action, avoid or seek to avoid the
         observance or performance of any of the terms to be observed or
         performed hereunder by the Company, or which would have the effect of
         circumventing or avoiding the provisions of this Section 4, but shall
         at all times in good faith assist in the carrying out of all the
         provisions of this Section 4 and in the taking of all such actions as
         may be necessary or appropriate in order to protect the rights of the
         holders of the Warrant Certificates against dilution or other
         impairment.

              (b) Before taking any action that would result in an adjustment to
         the then current Purchase Price to a price that would be below the then
         current par value of Common Stock issuable upon exercise of any
         Warrant, the Company will take or cause to be taken any and all
         necessary corporate or other action that may be necessary in order that
         the Company may validly and legally issue fully paid and nonassessable
         shares of Common Stock upon payment of such Purchase Price as so
         adjusted.

              (c) If the Company shall amend the provisions of any Rights (other
         than the Warrants), including, without limitation, the Outstanding
         Warrant or any outstanding stock options, or make any adjustment
         thereto (either in violation of this Section 4.13(c) or pursuant to any
         antidilution provision) so as to reduce the Consideration Per Share
         applicable thereto, increase the number of shares issuable upon
         exercise thereof or otherwise change the economic terms (such as the
         purchase price, exercise price, conversion price or conversion ratio)
         thereof, then the Company shall make appropriate adjustment, as nearly
         as practical to those that would be required by the provisions of
         Section 4.2 through Section 4.5, inclusive, most nearly analogous to
         the effect of such amendment, to the Purchase Price, and, pursuant to
         Section 4.10, to the number of shares of Common Stock issuable upon
         exercise of the Warrants, as shall be fair and equitable, such
         adjustment to be determined by the Valuation Agent.

              (d) In the event that any of the events described in any of
         Section 4.2 through Section 4.5, inclusive, give rise to an adjustment
         to the purchase, exercise or conversion price or conversion ratio, or
         number of shares of Common Stock issuable upon conversion or exercise,
         of any Rights (other than the Warrants), including, without limitation,
         the Outstanding Warrant or any outstanding stock options, then the
         adjustments provided for in Section 4.2 through Section 4.5, inclusive,
         in respect of such event shall give effect both to the event giving
         rise to such adjustment under this Agreement and to all such
         adjustments made in respect of such other Rights; provided, however,
         that no such adjustment shall duplicate any adjustment required to be
         made in respect thereof by virtue of the provisions of Section 4.13(c).

                                      -22-
<PAGE>   26

5.       REPORTING COVENANTS

         5.1. FINANCIAL AND BUSINESS INFORMATION.

         The Company shall deliver to each holder of Warrants:

              (a) QUARTERLY FINANCIAL STATEMENTS - as soon as practicable after
         the end of each quarterly fiscal period in each fiscal year of the
         Company (other than the last quarterly fiscal period of each such
         fiscal year), and in any event within fifty (50) days thereafter:

                     (i) a consolidated balance sheet as at the end of such
              quarter; and

                     (ii) consolidated statements of income, changes in
              shareholders' equity and cash flows for such quarter and (in the
              case of the second and third quarters) for the portion of the
              fiscal year ending with such quarter;

         for the Company and the Subsidiaries, setting forth in each case, in
         comparative form, the financial statements for the corresponding
         periods in the previous fiscal year, all in reasonable detail, prepared
         in accordance with GAAP applicable to quarterly financial statements
         generally, and certified as complete and correct by the chief financial
         officer of the Company; provided, that delivery of copies of the
         Company's Quarterly Report on Form 10-Q filed with the Securities and
         Exchange Commission within the time period specified above shall be
         deemed to satisfy the requirements of this Section 5.1(a) so long as
         such Quarterly Report contains or is accompanied by the information
         specified in this Section 5.1(a);

              (b) ANNUAL FINANCIAL STATEMENTS - as soon as practicable after the
         end of each fiscal year of the Company, and in any event within one
         hundred twenty (120) days thereafter:

                     (i) a consolidated balance sheets as at the end of such
              year; and

                     (ii) consolidated statements of income, changes in
              shareholders' equity and cash flows for such year;

         for the Company and the Subsidiaries, setting forth in comparative
         form, the financial statement for the previous fiscal year, all in
         reasonable detail, prepared in accordance with GAAP, and accompanied by
         an audit report thereon of independent certified public accountants of
         recognized national

                                      -23-
<PAGE>   27

         standing, which report shall state without qualification (including,
         without limitation, qualifications related to the scope of the audit,
         the compliance of the audit with generally accepted auditing standards,
         or the ability of the Company or a material subsidiary thereof to
         continue as a going concern), that such financial statements have been
         prepared and are in conformity with GAAP; provided, that the delivery
         of the Company's Annual Report on Form 10-K for such fiscal year filed
         with the Securities and Exchange Commission within the time period
         specified above shall be deemed to satisfy the requirements of this
         Section 5.1(b) so long as such Annual Report contains or is accompanied
         by the reports and other information otherwise specified in this
         Section 5.1(b);

              (c) SEC and Other Reports - promptly upon their becoming
         available:

                     (i) each financial statement, report, notice or proxy
              statement sent by the Company or any Subsidiary to stockholders
              generally; and

                     (ii) each regular or periodic report (including, without
              limitation, each Form 10-K, Form 10-Q and Form 8-K), and each
              amendment thereto filed by the Company or any Subsidiary with the
              Securities and Exchange Commission (and any successor agency); and

              (d) REQUESTED INFORMATION - with reasonable promptness, such other
         data and information as from time to time may be requested by any
         holder of Warrants.

         5.2. INFORMATION CONCERNING ANTIDILUTION ADJUSTMENTS.

              (a) NOTICE OF ADJUSTMENT. Whenever the number of shares of Common
         Stock issuable upon the exercise of Warrants is adjusted or the
         Purchase Price in respect thereof is adjusted, as herein provided, the
         Company shall promptly give to each holder of Warrants notice of such
         adjustment or adjustments and shall promptly deliver to each holder of
         Warrants a certificate of the chief financial officer of the Company
         setting forth:

                     (i) the number of shares of Common Stock issuable upon the
              exercise of each Warrant and the Purchase Price of such shares
              after such adjustment;

                     (ii) a brief statement of the facts requiring such
              adjustment; and

                     (iii) the computation by which such adjustment was made.

                                      -24-
<PAGE>   28

              (b) ANNUAL CERTIFICATE. So long as any Warrant is outstanding,
         within one hundred twenty (120) days of the end of each fiscal year of
         the Company, the Company shall deliver to each holder of Warrants a
         certificate of the chief financial officer of the Company setting
         forth:

                     (i) the number of shares of Common Stock issuable upon the
              exercise of each Warrant and the Purchase Price of such shares as
              of the end of such fiscal year;

                     (ii) a brief statement of the facts requiring each
              adjustment, if any, required to be made in such fiscal year; and

                     (iii) the computation by which each such adjustment was
              made.

              (c) CONFIRMATION BY ACCOUNTANTS. At the request of a holder of
         Warrants in connection with any dispute concerning the accuracy or
         validity of any certificate of the chief financial officer pursuant to
         Section 5.2(a) or Section 5.2(b), such certificate shall be confirmed
         by a certificate from the independent certified public accountants of
         the Company.

              (d) NOTICES OF CERTAIN EVENTS. Whenever the Company shall publicly
         announce the authorization of any Notice Event, the Company shall, not
         less than fifteen (15) days prior to the record date with respect to
         such event (or, if no record date for the same shall be fixed, not less
         than fifteen (15) days prior to the occurrence of such Notice Event),
         give to each holder of Warrants, written notice of such event setting
         forth any change in the number of shares of Common Stock the Company
         estimates will be issuable upon the exercise of each Warrant, the
         estimated Purchase Price after any adjustment required to be made
         hereunder and a brief statement of the facts requiring such adjustment
         and the computation by which the Company expects such adjustment will
         be made. Notwithstanding the foregoing, no failure of the Company to
         give any such notice shall affect the validity of the action taken
         unless such failure was in bad faith.

6.       REGISTRATION RIGHTS.

         6.1. SHELF REGISTRATION.

              (a) FILING AND EFFECTIVENESS. On or prior to the Shelf Filing
         Date, the Company will file a "shelf" registration statement (the
         "SHELF REGISTRATION") on form S-3 or such other appropriate form
         pursuant to Rule 415 under the Securities Act or any similar rule that
         may be adopted by the SEC with respect to dispositions of all of the
         Registrable Securities in such manner or manners specified by the
         holders thereof. The Company agrees to

                                      -25-
<PAGE>   29

         cause the Shelf Registration to be declared effective as promptly as is
         practicable after such filing (and in any event, prior to the Shelf
         Effective Date) and agrees to keep the Shelf Registration effective
         (and to take any and all other actions necessary in order to permit
         public resale of the Registrable Securities covered by the Shelf
         Registration) for a period (the "SHELF EFFECTIVE PERIOD") beginning on
         the date such Shelf Registration shall first be declared effective
         under the Securities Act and ending upon the Shelf Termination Date,
         subject to the terms and conditions set forth in this Agreement. The
         Company further agrees, if necessary, to supplement or make amendments
         to such Shelf Registration, if required by the registration form
         utilized by the Company for the Shelf Registration or by the
         instructions applicable to such registration form or by the Securities
         Act, and the Company agrees to furnish to the holders of the
         Registrable Securities covered by the Shelf Registration copies of any
         such supplement or amendment prior to its being used or filed with the
         SEC.

              (b) APPROVAL OF SHELF REGISTRATIONS. If the Requisite Holders
         shall have approved the filing of any Shelf Registration as provided in
         Section 6.4(a), but any holder of Registrable Securities objects to
         such filing on the grounds that the disclosure contained in the Shelf
         Registration contains any misstatement of a material fact or omits to
         state a fact required to be stated therein or necessary to make the
         statements therein not misleading, then such holder shall have the
         right, in its sole discretion, to withdraw from the Shelf Registration.
         If the Company receives notice of such withdrawal from any holder
         wishing to withdraw from the Shelf Registration, then the Company shall
         not name such holder in the registration statement or, in the case of
         withdrawal in connection with any amendment or supplement to a
         registration statement in which such holder is already named, shall
         amend such registration statement to delete references to such holder,
         and to withdraw the Registrable Securities of such holder, from the
         registration statement. The Shelf Registration shall not be considered
         effective with respect to any such withdrawing holder.

              (c) SELECTION OF UNDERWRITERS. If any offering pursuant to a Shelf
         Registration is in the form of an underwritten offering, the
         underwriters of such offering shall be one or more underwriting firms
         of recognized standing selected by the Requisite Holders and reasonably
         acceptable to the Company. In the event of an underwritten offering
         pursuant to the Shelf Registration, no securities of the Company (other
         than the Registrable Securities) shall be included in any such offering
         without the prior written consent of all holders of Registrable
         Securities participating in such offering.

              (d) TEMPORARY SUSPENSION OF USE OF REGISTRATION STATEMENT.
         Notwithstanding anything to the contrary in this Section 6, if at any
         time

                                      -26-
<PAGE>   30

         and from time to time after the first date of effectiveness of the
         Shelf Registration, the Company may notify the holders of Registrable
         Securities in writing in the manner contemplated by Section 8.6 hereof
         of a Potential Material Event, which notice shall inform the holders of
         Registrable Securities that they shall not offer or sell any
         Registrable Securities as described in the following sentence. From the
         time of receipt of such notice to the earliest to occur of:

                     (i) the public disclosure by the Company of the Potential
              Material Event;

                     (ii) receipt of written notice from the Company that such
              Potential Material Event no longer exists; and

                     (iii) the date thirty (30) days after the date of the
              notice of such Potential Material Event;

         the holders of Registrable Securities shall not offer or sell any
         Registrable Securities pursuant to the Shelf Registration; provided,
         however, that the Company may not:

                             (A) deliver more than one (1) notice of a Potential
                     Material Event in respect of any one (1) Potential Material
                     Event; or

                             (B) deliver any notice of a Potential Material
                     Event for a period of sixty (60) days following the
                     expiration or earlier termination of any other period
                     during which the holders of Registrable Securities may not
                     by virtue of the provisions of this Section 6.11 sell or
                     offer to sell Registrable Securities.

         The Company shall promptly (and in no event more than two (2) Business
         Days after the occurrence of such event) notify each holder of the
         occurrence of any event described in Section 6.1(d)(i) or Section
         6.1(d)(iii); and any such notice and any notice given pursuant to
         Section 6.1(d)(ii) shall state that each holder of Registrable
         Securities may resume offers and sales of the Registrable Securities
         under the Shelf Registration. If any amended prospectus or prospectus
         supplement shall be necessary as a result of the occurrence of the
         Potential Material Event so that the prospectus does not contain any
         untrue statement of any material fact or omit to state any material
         fact required to be stated therein or necessary to make the statements
         therein, in light of the circumstances under which they were made, not
         misleading, the Company shall supply such amended prospectus or
         prospectus supplement to each holder of Registrable Securities together
         with

                                      -27-
<PAGE>   31

         such notice, and such notice shall inform the holders of Registrable
         Securities concerning use of such amended prospectus or prospectus
         supplement. The Company shall file each amended prospectus or
         prospectus with the SEC in compliance with the provisions of Rule 424
         under the Securities Act.

         6.2. INCIDENTAL REGISTRATION.

              (a) FILING OF REGISTRATION STATEMENT. If the Company at any time
         proposes to register any of its Common Stock (an "INCIDENTAL
         REGISTRATION") under the Securities Act (other than pursuant to a
         registration statement on Form S-4 or Form S-8 or any successor forms
         thereto, in connection with an offer made solely to existing Security
         holders or employees of the Company), for sale in an underwritten
         Public Offering, it will each such time give prompt written notice to
         all holders of Registrable Securities of its intention to do so, which
         notice shall be given to all such holders at least fifteen (15)
         Business Days prior to the date that a registration statement relating
         to such registration is proposed to be filed with the SEC. Upon the
         written request of any such holder to include its shares under such
         registration statement (which request shall be made within ten (10)
         Business Days after the receipt of any such notice and shall specify
         the Registrable Securities intended to be disposed of by such holder),
         the Company will use its best efforts to effect the registration of all
         Registrable Securities that the Company has been so requested to
         register by such holder; provided, however, that if, at any time after
         giving written notice of its intention to register any Securities for
         sale in connection with an underwritten Public Offering and prior to
         the effective date of the registration statement filed in connection
         with such registration, the Company shall determine for any reason not
         to register such Securities, the Company may, at its election, give
         written notice of such determination to each such holder and,
         thereupon, shall be relieved of its obligation to register any
         Registrable Securities of such Persons in connection with such
         registration.

              (b) SELECTION OF UNDERWRITERS. Notice of the Company's intention
         to register such Securities shall designate the proposed underwriters
         of such offering (which shall be one or more underwriting firms of
         recognized standing) and shall contain the Company's agreement to use
         its best efforts, if requested to do so, to arrange for such
         underwriters to include in such underwriting the Registrable Securities
         that the Company has been so requested to register pursuant to this
         Section 6.2, it being understood that the holders of Registrable
         Securities shall have no right to select different underwriters for the
         disposition of their Registrable Securities.

                                      -28-
<PAGE>   32

              (c) PRIORITY ON INCIDENTAL REGISTRATIONS. If the managing
         underwriter shall advise the Company in writing (with a copy to each
         holder of Registrable Securities requesting sale) that, in such
         underwriter's opinion, the number of shares or Securities requested to
         be included in such Incidental Registration exceeds the number that can
         be sold in such offering within a price range acceptable to the Company
         (such writing to state the basis of such opinion and the approximate
         number of shares or Securities that may be included in such offering
         without such effect), the Company will include in such Incidental
         Registration, to the extent of the number of shares of Securities that
         the Company is so advised can be sold in such offering:

                     (i) in the case of any registration initiated by the
              Company for the purpose of selling Securities for its own account:

                             (A) first, shares that the Company proposes to
                     issue and sell for its own account; and

                             (B) second, Registrable Securities requested to be
                     sold by the holders thereof pursuant to this Section 6.2
                     and all Securities proposed to be registered by the Other
                     Stockholders, pro rata among such holders on the basis of
                     the number of shares requested to be so registered by such
                     holders; and

                     (ii) in the case of a registration initiated by any Other
              Stockholder pursuant to demand or required registration rights in
              favor of such Other Stockholder:

                             (A) first, Securities requested to be sold by the
                     Other Stockholders requesting such Registration;

                             (B) second, Registrable Securities requested to be
                     sold by the holders thereof pursuant to this Section 6.2
                     and all Securities proposed to be registered by the Other
                     Stockholders (other than those referred to in Section
                     6.2(c)(ii)(A)), pro rata among such holders on the basis of
                     the number of shares requested to be so registered by such
                     holders; and

                             (C) third, shares that the Company proposes to
                     issue and sell for its own account.

         6.3. COMPANIES REGISTRATION.

         If the Securities Act (whether by statutory amendment, amendment of the
rules and regulations thereunder or both) is amended after the date hereof to

                                      -29-
<PAGE>   33

provide for a Companies Registration Scheme, and the Company is or becomes
eligible to participate in the Companies Registration Scheme, then the Company,
promptly following the request of the Required Holders, shall use its reasonable
best efforts to register promptly under the Companies Registration Scheme so as
to facilitate the resale under the registration statement contemplated by such
Companies Registration Scheme of the Registrable Securities in accordance with
the method or methods of distribution contemplated by the Holders.

         6.4. REGISTRATION PROCEDURES.

         The Company will use its best efforts to effect each Registration, and
to cooperate with the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and the
Company will as expeditiously as possible:

              (a) subject, in the case of an Incidental Registration, to the
         proviso to Section 6.2(a), prepare and file with the SEC the
         registration statement and use its best efforts to cause the
         Registration to become effective; provided, however, that:

                     (i) before the initial filing of any registration
              statement, the Company will furnish to the holders of the
              Registrable Securities covered by such registration statement,
              their counsel, and the underwriters, if any, and their counsel,
              copies of all such documents proposed to be filed at least ten
              (10) days prior thereto, which documents will be subject to the
              reasonable review, within such ten (10) day period, of such
              holders, their counsel and the underwriters; and

                     (ii) before filing any prospectus or any amendments or
              supplements to any registration statement or prospectus, the
              Company will furnish to the holders of the Registrable Securities
              covered by such registration statement, their counsel, and the
              underwriters, if any, and their counsel, copies of all such
              documents proposed to be filed a reasonable period of time (in
              light of the nature of the amendments or changes contained
              therein, which shall in every event be at least one (1) day and
              shall never be required to be more than ten (10) days) prior
              thereto, which documents will be subject to the reasonable review,
              within such period, of such holders, their counsel and the
              underwriters;

              (b) subject, in the case of an Incidental Registration, to the
         proviso to Section 6.2(a), prepare and file with the SEC such
         amendments and post-effective amendments to any registration statement
         and any prospectus used

                                      -30-
<PAGE>   34

         in connection therewith as may be necessary to keep such registration
         statement effective and to comply with the provisions of the Securities
         Act with respect to the disposition of all Registrable Securities
         covered by such registration statement; and cause the prospectus to be
         supplemented by any required prospectus supplement, and as so
         supplemented to be filed pursuant to Rule 424 under the Securities Act;

              (c) furnish to each holder of Registrable Securities included in
         such Registration and the underwriter or underwriters, if any, without
         charge, at least one signed copy of the registration statement and any
         post-effective amendment thereto, upon request, and such number of
         conformed copies thereof and such number of copies of the prospectus
         (including each preliminary prospectus and each prospectus filed under
         Rule 424 under the Securities Act), any amendments or supplements
         thereto and any documents incorporated by reference therein, as such
         holder or underwriter may reasonably request in order to facilitate the
         disposition of the Registrable Securities being sold by such holder (it
         being understood that the Company consents to the use of the prospectus
         and any amendment or supplement thereto by each holder of Registrable
         Securities covered by such registration statement and the underwriter
         or underwriters, if any, in connection with the offering and sale of
         the Registrable Securities covered by the prospectus or any amendment
         or supplement thereto);

              (d) notify each holder of the Registrable Securities of any stop
         order or other order suspending the effectiveness of any registration
         statement, issued or threatened by the SEC in connection therewith, and
         take all reasonable actions required to prevent the entry of such stop
         order or to remove it or obtain withdrawal of it at the earliest
         possible moment if entered;

              (e) if requested by the managing underwriter or underwriters, if
         any, or any holder of Registrable Securities in connection with any
         sale pursuant to a registration statement, promptly incorporate in a
         prospectus supplement or post-effective amendment such information
         relating to such underwriting as the managing underwriter or
         underwriters, if any, or such holder reasonably requests to be included
         therein; and make all required filings of such prospectus supplement or
         post-effective amendment as soon as practicable after being notified of
         the matters incorporated in such prospectus supplement or
         post-effective amendment;

              (f) on or prior to the date on which a Registration is declared
         effective, use its best efforts to register or qualify, and cooperate
         with the holders of Registrable Securities included in such
         Registration, the underwriter or underwriters, if any, and their
         counsel, in connection with any necessary registration or qualification
         of the Registrable Securities covered by such

                                      -31-
<PAGE>   35

         Registration for offer and sale under the securities or "blue sky" laws
         of each state and other jurisdiction of the United States as any such
         holder or the managing underwriter, if any, reasonably requests in
         writing; use its best efforts to keep each such registration or
         qualification effective, including through new filings, or amendments
         or renewals, during the period such registration statement is required
         to be kept effective; and do any and all other acts or things necessary
         or advisable to enable the disposition in all such jurisdictions
         reasonably requested of the Registrable Securities covered by such
         Registration; provided, however, that the Company will not be required
         to qualify generally to do business in any jurisdiction where it is not
         then so qualified or to take any action which would subject it to
         general service of process in any such jurisdiction where it is not
         then so subject;

              (g) in connection with any sale pursuant to a Registration,
         cooperate with the holders of Registrable Securities and the managing
         underwriter or underwriters, if any, to facilitate the timely
         preparation and delivery of certificates (not bearing any restrictive
         legends) representing Securities to be sold under such Registration,
         and enable such Securities to be in such denominations and registered
         in such names as the managing underwriter or underwriters, if any, or
         such holders may request;

              (h) use its best efforts to cause the Registrable Securities to be
         registered with or approved by such other governmental agencies or
         authorities within the United States and having jurisdiction over the
         Company or any Subsidiary as may reasonably be necessary to enable the
         seller or sellers thereof or the underwriter or underwriters, if any,
         to consummate the disposition of such Securities;

              (i) enter into such agreements (including underwriting agreements
         in customary form) and take such other actions as the Requisite Holders
         shall reasonably request in order to expedite or facilitate the
         disposition of such Registrable Securities;

              (j) use its best efforts to obtain:

                     (i) at the time of effectiveness of each Registration, a
              "comfort letter" from the Company's independent certified public
              accountants covering such matters of the type customarily covered
              by "cold comfort letters" as the Requisite Holders and the
              underwriters reasonably request; and

                     (ii) at the time of any underwritten sale pursuant to the
              registration statement, a "bring-down comfort letter," dated as of
              the date of such sale, from the Company's independent certified
              public

                                      -32-
<PAGE>   36

              accountants covering such matters of the type customarily covered
              by comfort letters as the Requisite Holders and the underwriters
              reasonably request;

              (k) use its best efforts to obtain, at the time of any
         underwritten sale pursuant to each Registration, an opinion or
         opinions, favorable to the Requisite Holders in form and scope, from
         counsel for the Company in customary form;

              (l) notify each seller of Registrable Securities covered by such
         Registration, upon discovery that, or upon the happening of any event
         as a result of which, the prospectus included in such Registration, as
         then in effect, includes an untrue statement of a material fact or
         omits to state any material fact required to be stated therein or
         necessary to make the statements therein not misleading, and promptly
         prepare, file with the SEC and furnish to such seller or holder a
         reasonable number of copies of a supplement to or an amendment of such
         prospectus as may be necessary so that, as thereafter delivered to the
         purchasers or prospective purchasers of such Securities, such
         prospectus shall not include an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances under which they are made;

              (m) otherwise comply with all applicable rules and regulations of
         the SEC, and make generally available to its security holders (as
         contemplated by Section 11(a) under the Securities Act) an earnings
         statement satisfying the provisions of Rule 158 under the Securities
         Act no later than ninety (90) days after the end of the twelve (12)
         month period beginning with the first month of the Company's first
         fiscal quarter commencing after the effective date of the registration
         statement, which statement shall cover said twelve (12) month period;

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

              (o) obtain and maintain the registration of the Common Stock under
         either section 12(b) or section 12(g) of the Exchange Act; and use its
         best efforts to cause all Registrable Securities covered by each
         Registration to be listed subject to notice of issuance, prior to the
         date of first sale of such Registrable Securities pursuant to such
         Registration, on:

                     (i) either the New York Stock Exchange, Inc., or the NASDAQ
              National Market; and

                                      -33-
<PAGE>   37

                     (ii) each other securities exchange, if any, on which the
              Common Stock is then listed.

The Company may require each holder of Registrable Securities that will be
included in such Registration to furnish the Company with such information in
respect of such holder of its Registrable Securities that will be included in
such Registration as the Company may reasonably request in writing and as is
required by applicable laws or regulations.

         6.5. REASONABLE INVESTIGATION.

         The Company shall:

              (a) give the holders of Registrable Securities, their
         underwriters, if any, and their respective counsel and accountants the
         opportunity to participate in the preparation of the registration
         statement, each prospectus included therein or filed with the SEC and
         each amendment thereof or supplement thereto;

              (b) give each such holder and underwriter reasonable opportunities
         to discuss the business of the Company with its officers, counsel and
         the independent public accountants who have certified its financial
         statements;

              (c) make available for inspection by any holder of Registrable
         Securities included in any Registration, any underwriter participating
         in any disposition pursuant to any Registration, and any attorney,
         accountant or other agent retained by any such seller or underwriter,
         all financial and other records, pertinent corporate documents and
         properties of the Company reasonably requested by any such Person; and

              (d) cause the Company's officers, directors and employees to
         supply all information reasonably requested by any such Person in
         connection with such Registration;

in each such case, as shall be reasonably necessary, in the good faith opinion
of such holder or such underwriter, to enable it to conduct a "reasonable
investigation" within the meaning of section 11(b)(3) of the Securities Act and
to satisfy the requirement of reasonable care imposed by section 12(a)(2) of the
Securities Act.

                                      -34-
<PAGE>   38

         6.6. REGISTRATION EXPENSES.

         The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities, including, without limitation, any such
registration not effected by the Company.

         6.7. INDEMNIFICATION; CONTRIBUTION.

              (a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify,
         to the fullest extent permitted by law, each holder of Registrable
         Securities, its officers, directors and agents, if any, and each
         Person, if any, who controls such holder within the meaning of section
         15 of the Securities Act, against all losses, claims, damages,
         liabilities (or proceedings in respect thereof) and expenses (under the
         Securities Act or common law or otherwise), joint or several, resulting
         from any violation by the Company of the provisions of the Securities
         Act or any untrue statement or alleged untrue statement of a material
         fact contained in any registration statement or prospectus (and as
         amended or supplemented if amended or supplemented) or any preliminary
         prospectus or caused by any omission or alleged omission to state
         therein a material fact required to be stated therein or necessary to
         make the statements therein (in the case of any prospectus, in light of
         the circumstances under which they were made) not misleading, except to
         the extent that such losses, claims, damages, liabilities (or
         proceedings in respect thereof) or expenses are caused by any untrue
         statement or alleged untrue statement contained in or by any omission
         or alleged omission from information concerning any holder furnished in
         writing to the Company by such holder expressly for use therein. If the
         offering pursuant to any registration statement provided for under this
         Section 6 is made through underwriters, no action or failure to act on
         the part of such underwriters (whether or not such underwriter is an
         Affiliate of any holder of Registrable Securities) shall affect the
         obligations of the Company to indemnify any holder of Registrable
         Securities or any other Person pursuant to the preceding sentence. If
         the offering pursuant to any registration statement provided for under
         this Section 6 is made through underwriters, the Company agrees, to the
         extent required by such underwriters, to enter into an underwriting or
         other agreement providing for indemnity of such underwriters, their
         officers, directors and agents, if any, and each Person, if any, who
         controls such underwriters within the meaning of section 15 of the
         Securities Act to the same extent as hereinbefore provided with respect
         to the indemnification of the holders of Registrable Securities;
         provided that the Company shall not be required to indemnify any such
         underwriter, or any officer or director of such underwriter or any
         Person who controls such underwriter within the meaning of section 15
         of the Securities Act, to the extent that the loss, claim, damage,
         liability (or proceedings in respect

                                      -35-
<PAGE>   39

         thereof) or expense for which indemnification is claimed results from
         such underwriter's failure to send or give a copy of an amended or
         supplemented final prospectus to the Person asserting an untrue
         statement or alleged untrue statement or omission or alleged omission
         at or prior to the written confirmation of the sale of Registrable
         Securities to such Person if such statement or omission was corrected
         in such amended or supplemented final prospectus prior to such written
         confirmation and the underwriter was provided with such amended or
         supplemented final prospectus.

              (b) INDEMNIFICATION BY THE HOLDERS. In connection with any
         registration statement in which a holder of Registrable Securities is
         participating, each such holder, severally and not jointly, shall
         indemnify, to the fullest extent permitted by law, the Company, each
         underwriter (if the underwriter so requires) and their respective
         officers, directors and agents, if any, and each Person, if any, who
         controls the Company or such underwriter within the meaning of section
         15 of the Securities Act, against any losses, claims, damages,
         liabilities (or proceedings in respect thereof) and expenses resulting
         from any untrue statement or alleged untrue statement of a material
         fact or any omission or alleged omission of a material fact required to
         be stated in the registration statement or prospectus or preliminary
         prospectus or any amendment thereof or supplement thereto or necessary
         to make the statements therein (in the case of any prospectus, in light
         of the circumstances under which they were made) not misleading, but
         only to the extent that such untrue statement is contained in or such
         omission is from information so concerning a holder furnished in
         writing by such holder expressly for use therein; provided, however,
         that such holder's obligations hereunder shall be limited to an amount
         equal to the proceeds to such holder of the Registrable Securities sold
         pursuant to such registration statement.

              (c) CONTROL OF DEFENSE. Any Person entitled to indemnification
         under the provisions of this Section 6.7 shall give prompt notice to
         the indemnifying party of any claim with respect to which it seeks
         indemnification and unless in such indemnified party's reasonable
         judgment a conflict of interest between such indemnified and
         indemnifying parties may exist in respect of such claim, permit such
         indemnifying party to assume the defense of such claim, with counsel
         reasonably satisfactory to the indemnified party; and if such defense
         is so assumed, such indemnifying party shall not enter into any
         settlement without the consent of the indemnified party if such
         settlement attributes liability to the indemnified party and such
         indemnifying party shall not be subject to any liability for any
         settlement made without its consent (which shall not be unreasonably
         withheld); and any underwriting agreement entered into with respect to
         any registration statement provided for under this Section 6 shall so
         provide. In the event an indemnifying party shall not be entitled, or
         elects not, to assume the defense of a claim, such

                                      -36-
<PAGE>   40

         indemnifying party shall not be obligated to pay the fees and expenses
         of more than one counsel or firm of counsel for all parties indemnified
         by such indemnifying party in respect of such claim, unless in the
         reasonable judgment of any such indemnified party a conflict of
         interest may exist between such indemnified party and any other of such
         indemnified parties in respect to such claim.

              (d) CONTRIBUTION. If for any reason the foregoing indemnity is
         unenforceable, then the indemnifying party shall contribute to the
         amount paid or payable by the indemnified party as a result of such
         losses, claims, damages, liabilities or expenses:

                     (i) in such proportion as is appropriate to reflect the
              relative benefits received by the indemnifying party on the one
              hand and the indemnified party on the other; or

                     (ii) if the allocation provided by clause (i) above is not
              permitted by applicable law or provides a lesser sum to the
              indemnified party than the amount hereinafter calculated, in such
              proportion as is appropriate to reflect not only the relative
              benefits received by the indemnifying party on the one hand and
              the indemnified party on the other but also the relative fault of
              the indemnifying party and the indemnified party as well as any
              other relevant equitable considerations.

         Notwithstanding the foregoing, no holder of Registrable Securities
         shall be required to contribute any amount in excess of the amount such
         holder would have been required to pay to an indemnified party if the
         indemnity under Section 6.7(b) hereof was enforceable. No Person guilty
         of fraudulent misrepresentation (within the meaning of section 11(f) of
         the Securities Act) shall be entitled to contribution from any Person
         who was not guilty of such fraudulent misrepresentation. The obligation
         of any Person to contribute pursuant to this Section 6.7 shall be
         several and not joint.

              (e) ADVANCEMENT OF EXPENSES. An indemnifying party shall make
         payments of all amounts required to be made pursuant to the foregoing
         provisions of this Section 6.7 to or for the account of the indemnified
         party from time to time promptly upon receipt of bills or invoices
         relating thereto or when otherwise due or payable. Without limiting the
         generality of the foregoing, each indemnifying party, as an interim
         measure during the pendency of any claim, action, investigation,
         inquiry or proceeding arising out of or based upon any matter or
         subject for which indemnity (or contribution in lieu thereof) would be
         available to any indemnified party under any provision of this Section
         6.7, shall promptly reimburse each indemnified

                                      -37-
<PAGE>   41

         party, as often as invoiced therefor (but in no event more often than
         monthly), for all reasonable legal or other expenses incurred in
         connection with the investigation or defense of any such claim, action,
         investigation, inquiry or proceeding, notwithstanding the absence of
         any judicial determination as to the propriety or enforceability of the
         indemnifying party's obligation to reimburse the indemnified party for
         such expenses and notwithstanding the possibility that the obligations
         to pay such expenses might later have been held to be improper by a
         court of competent jurisdiction. To the extent that any such interim
         reimbursement is held to be improper, the indemnified party agrees to
         promptly return the amount so advanced to the indemnifying party,
         together with interest, compounded monthly, at the prime rate (or other
         commercial lending rate for borrowers of the highest credit standing)
         listed from time to time in The Wall Street Journal which represents
         the base rate on corporate loans posted by a substantial majority of
         the nation's thirty (30) largest banks. Any such interim reimbursement
         payments which are not made to the indemnified party within thirty (30)
         days of a request therefor shall bear interest at such prime rate from
         the date of such request to the extent such reimbursement payments are
         ultimately determined to be proper obligations of the indemnifying
         party. To the extent required by any underwriter in connection with the
         execution of any underwriting agreement pursuant to which the holders
         of Registrable Securities shall be selling any shares of Common Stock,
         the Company shall agree to advancement of the expenses of such
         underwriter to at least the same extent as provided in this Section
         6.7(e).

              (f) SURVIVAL. The indemnity and contribution agreements contained
         in this Section 6.7 shall remain in full force and effect regardless of
         any investigation made by or on behalf of a participating holder of
         Registrable Securities, its officers, directors, agents or any Person,
         if any, who controls such holder as aforesaid, and shall survive the
         transfer of such Securities by such holder.

         6.8. HOLDBACK AGREEMENTS; REGISTRATION RIGHTS TO OTHERS.

              (a) In connection with each underwritten sale of Registrable
         Securities, the Company agrees, and each holder of Registrable
         Securities by acquisition of such Registrable Securities agrees, to
         enter into customary holdback agreements concerning sale or
         distribution of Registrable Securities and other equity Securities of
         the Company, except, in the case of any holder of Registrable
         Securities, to the extent that such holder is prohibited by applicable
         law or exercise of fiduciary duties from agreeing to withhold
         Registrable Securities from sale or is acting in its capacity as a
         fiduciary or investment adviser. Without limiting the scope of the term
         "fiduciary," a holder shall be deemed to be acting as a fiduciary or an
         investment adviser if

                                      -38-
<PAGE>   42

         its actions or the Registrable Securities proposed to be sold are
         subject to the Employee Retirement Income Security Act of 1974, as
         amended, or the Investment Company Act of 1940, as amended, or if such
         Registrable Securities are held in a separate account under applicable
         insurance law or regulation.

              (b) If the Company shall at any time after the date hereof provide
         to any holder of any Securities of the Company rights with respect to
         the registration of such Securities under the Securities Act, such
         rights shall not be in conflict with or adversely affect any of the
         rights provided in this Section 6 to the holders of Registrable
         Securities.

         6.9. OTHER REGISTRATION OF COMMON STOCK.

         If any shares of Common Stock required to be reserved for purposes of
exercise of Warrants or conversion of any class of Common Stock into any other
class of Common Stock require registration with or approval of any governmental
authority under any federal or state law (other than the Securities Act) before
such shares may be issued upon conversion, the Company will, at its expense and
as expeditiously as possible, use its best efforts to cause such shares to be
duly registered or approved, as the case may be.

         6.10. AVAILABILITY OF INFORMATION.

         At any time that any class of the Common Stock is registered under
section 12(b) or section 12(g) of the Exchange Act, the Company will comply with
the reporting requirements of sections 13 and 15(d) of the Exchange Act (whether
or not it shall be required to do so pursuant to such Sections) and will comply
with all other public information reporting requirements of the SEC from time to
time in effect. In addition, the Company shall file such reports and
information, and shall make available to the public and to the holders of
Registrable Securities such information, as shall be necessary to permit such
holders to offer and sell Registrable Securities pursuant to the provisions of
Rules 144 promulgated under the Securities Act. The Company will also cooperate
with each such holder in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the SEC as a condition to the availability of an exemption
from the registration provisions of the Securities Act in connection with the
sale of any Registrable Securities. The Company will furnish to each such
holder, promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by the Company to its stockholders, and copies of all regular and
periodic reports and all registration statements and prospectuses filed by the
Company with any securities exchange or with the SEC.

                                      -39-
<PAGE>   43

7.       INTERPRETATION OF THIS AGREEMENT.

         7.1. CERTAIN DEFINED TERMS.

         For the purpose of this Agreement, the following terms shall have the
meanings set forth below or set forth in the Section hereof following such term:

         ACQUIRING PERSON - means and includes, with respect to any Share
Purchase Rights, any holders of Common Stock or other persons (as such term is
used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in effect on
the date hereof) or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the date hereof)
participating in or sponsoring one or more Share Purchase Triggering Events
specified in the Share Purchase Rights Plan.

         ADDITIONAL COMMON STOCK - means Common Stock, including treasury
shares, issued after the date hereof, except Common Stock issued upon the
exercise of any one or more Warrants.

         AFFILIATE - means, at any time, a Person (other than a Subsidiary or
the Holders):

              (a) that directly or indirectly through one or more intermediaries
         controls, or is controlled by, or is under common control with, the
         Company;

              (b) that beneficially owns or holds ten percent (10%) or more of
         any class of the Voting Stock of the Company; or

              (c) ten percent (10%) or more of the Voting Stock (or in the case
         of a Person that is not a corporation, ten percent (10%) or more of the
         equity interest) of which is beneficially owned or held by the Company
         or any Subsidiary;

at such time.

As used in this definition,

                  control - means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

         AGREEMENT, THIS - and references thereto shall mean this Warrant
Agreement as it may from time to time be amended or supplemented.

                                      -40-
<PAGE>   44

         AGGREGATE CONSIDERATION PAID - means, in the case of a repurchase,
redemption, retirement or acquisition of shares of Common Stock, the aggregate
amount paid by the Company in connection therewith and, in the case of a
repurchase, redemption, retirement or acquisition of Rights, the sum of:

              (a) the aggregate amount paid by the Company for such Rights; plus

              (b) the aggregate consideration or premiums stated in such Rights
to be payable for the shares of Common Stock covered thereby.

         For purposes of clause (a) above, in the event of the repurchase,
redemption, retirement or acquisition of any Rights together with other
Securities or obligations of the Company or any other Person in which the
purchase price for the Rights and such other Securities or obligations is
expressed as a single purchase price (including, without limitation, upon the
issuance or sale of Preferred Stock or debt Securities which are convertible
into Common Stock), the aggregate amount paid by the Company for such Rights
shall include only the portion of such single purchase price attributable to
such Rights, and not the portion attributable to such other Securities or
obligations. The portion of such purchase price attributable to such Rights in
such case shall be equal to the product of:

              (i)  such single purchase price; multiplied by

              (ii) the quotient of:

                  (A) the fair market value (as determined by the
Valuation Agent) of such Right, independent of the value of such other
Securities or obligations (computed using the Black-Scholes option pricing model
or such other pricing model as the Valuation Agent determines is appropriate,
and applying such reasonable assumptions concerning price variances with respect
to the Common Stock and such other variables as the Valuation Agent considers
appropriate); divided by

                  (B) the fair market value (as determined by the
Valuation Agent) of such Right together with such other Securities or
obligations (computed using such methodology and making such assumptions as the
Valuation Agent determines is appropriate).

         AGGREGATE CONSIDERATION RECEIVABLE - means, in the case of an issuance
or sale of shares of Additional Common Stock, the aggregate amount paid to the
Company in connection therewith and, in the case of an issuance or sale of
Rights, or any amendment thereto, the sum of:

                                      -41-
<PAGE>   45

              (a) the aggregate amount paid to the Company for such Rights; plus

              (b) the aggregate consideration or premiums stated in such Rights
to be payable for the shares of Additional Common Stock covered thereby;

in each case without deduction for any fees, expenses or underwriters discounts.

         For purposes of clause (a) above, in the event of the issuance or sale
of any Rights together with other Securities or obligations of the Company or
any other Person in which the purchase price for the Rights and such other
Securities or obligations is expressed as a single purchase price (including,
without limitation, upon the issuance or sale of Preferred Stock or debt
Securities which are convertible into Common Stock), the aggregate amount paid
to the Company for such Rights shall include only the portion of such single
purchase price attributable to such Rights, and not the portion attributable to
such other Securities or obligations. The portion of such purchase price
attributable to such Rights in such case shall be equal to the product of:

                     (i) such single purchase price; multiplied by

                     (ii) the quotient of:

                          (A) the fair market value (as determined by the
Valuation Agent) of such Right, independent of the value of such other
Securities or obligations (computed using the Black-Scholes option pricing model
or such other pricing model as the Valuation Agent determines is appropriate,
and applying such reasonable assumptions concerning price variances with respect
to the Common Stock and such other variables as the Valuation Agent considers
appropriate); divided by

                          (B) the fair market value (as determined by the
Valuation Agent) of such Right together with such other Securities or
obligations (computed using such methodology and making such assumptions as the
Valuation Agent determines is appropriate).

         AGREEMENT, THIS - shall have the meaning specified in the introductory
paragraph hereof.

         BOARD OF DIRECTORS - means the board of directors of the Company or any
committee thereof that, in the instance, shall have the lawful power to exercise
the power and authority of such board of directors.

         BUSINESS DAY - means a day other than a Saturday, a Sunday or a day on
which banks in the State of New York are required or permitted by law (other
than

                                      -42-
<PAGE>   46

a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.

         CHARTER - means the Restated Articles of Incorporation of the Company.

         CLOSING PRICE - means, on any date with respect to any share of common
stock of any Person:

              (a) the last sale price, regular way, on such date or, if no such
sale takes place on such date, the average of the closing bid and asked prices
on such date, in each case as officially reported on the principal national
securities exchange on which such common stock is then listed or admitted to
trading; and

              (b) if no such common stock is then listed or admitted to trading
on any national securities exchange, but is listed on the NASDAQ National Market
or the NASDAQ SmallCap Market, as the case may be, the last trading price of
such common stock on such date as reported by NASDAQ, or if there shall have
been no trading on such date, the average of the reported closing bid and asked
prices on such date as shown by NASDAQ.

When used in this Agreement without reference to a particular Person or common
stock, "Closing Price" means the Closing Price of the Common Stock.

         COMMON STOCK - means the Common Stock, par value $0.01 per share, of
the Company; provided, however, that subsequent to any creation or issuance by
the Company of any Share Purchase Rights and prior to the earlier of the Share
Purchase Right Detachment Date and the Share Purchase Right Termination Date,
the term "Common Stock," and references to any shares thereof, shall in each
case include the attached Share Purchase Rights.

         COMPANIES REGISTRATION SCHEME - means an amendment or amendment to the
Securities Act (whether by statutory amendment, amendment of the rules and
regulations thereunder or both), such as, without limitation, as proposed in the
Report of the Advisory Committee on the Capital Formation and Regulatory
Processes of the Securities and Exchange Commission, dated July 24, 1996,
pursuant to which:

              (a) issuers of Securities are permitted to register all issuances
of securities on an integrated company registration statement; and

              (b) under the provisions of such amendment, such registration
could cover the re-offering or resale by the holders thereof of shares of Common
Stock issued upon the exercise of the Warrants, if any, outstanding at such
time.

                                      -43-
<PAGE>   47

         COMPANY - shall have the meaning specified in the introductory
paragraph hereof.

         CONSIDERATION PER SHARE - means, with respect to shares of Common Stock
or Rights, the quotient of:

              (a) the Aggregate Consideration Paid (in the case of a repurchase,
redemption, retirement or other acquisition for value of Common Stock or Rights)
or the Aggregate Consideration Receivable (in the case of an issuance or sale of
Common Stock or Rights by the Company), as the case may be, in respect of such
shares of Common Stock or such Rights; divided by

              (b) the total number of such shares of Common Stock or, in the
case of Rights, the total number of shares of Common Stock into which such
Rights are exercisable or convertible.

         DISTRIBUTED ENTITY - means any subsidiary or other Person in which the
Company owns any ownership interest at any time, the capital stock, the Spinoff
Shares of which are dividended or otherwise distributed (including, without
limitation, in any recapitalization) to the stockholders of the Company in
respect of the Common Stock in a Spinoff.

         EXCHANGE ACT - means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         EXCLUDED SECURITIES - means and includes:

              (a) shares of Common Stock or Rights issued in any of the
transactions described in Section 4.2 through Section 4.8, inclusive, hereof,
and in respect of which an adjustment has been made pursuant to such Section;

              (b) the Series A Warrants and the Series B Warrants, shares of
Common Stock issuable upon exercise of the Warrants or any other Rights
(including, without limitation, the Outstanding Warrant and outstanding stock
options) outstanding on the date hereof;

              (c) shares of Common Stock issued to the public in a bona fide
public offering registered under the Securities Act to Persons other than:

                     (i) Affiliates;

                     (ii) employees of the Company; or

                     (iii) existing holders of Common Stock or Rights;

                                      -44-
<PAGE>   48

provided, however, that a bona fide public offering sold through an underwriter
and held open to the public generally shall not fail to meet the requirements of
this clause (c) merely by virtue of the fact that one or more Affiliates,
employees or existing holders of Common Stock or Rights may have been purchasers
from the underwriters therein so long as no pre-existing arrangement or
agreement to so purchase shares in connection with such offering was in
existence or in effect; and

                  (d) shares of Common Stock issued as the consideration in
a transaction involving a bona fide acquisition by the Company of another Person
(whether by acquisition of capital stock of such Person or all or substantially
all of the Property of such Person, or by merger or consolidation of such Person
into the Company or any Subsidiary) so long as the economic terms of such
acquisition were negotiated at arm's length and so long as neither such Person
nor the Person or Persons to whom such Common Stock is issued are:

                     (i) Affiliates;

                     (ii) employees of the Company; or

                     (iii) existing holders of Common Stock or Rights;

         provided, however, that in the event that the acquired Person is a
corporation the common stock of which is registered under either section 12(b)
or section 12(g) of the Exchange Act, the issuance of shares of Common Stock to
all stockholders of the acquired Person in a bona fide acquisition shall not
fail to meet the requirements of this clause (d) merely by virtue of the fact
that one or more Affiliates, employees or existing holders of Common Stock or
Rights may have been the beneficial owners (as such term is defined in Rule
13d-3 under the Exchange Act, 17 C.F.R. Section 240.13d-3) of five percent (5%)
or less of the common stock of such acquired Person and so long as no
pre-existing arrangement or agreement to so issue shares in connection with such
offering was in existence or in effect;

                  (e) Rights consisting of stock options granted with an
exercise price not less than the Closing Price thereof as of the date of the
grant issued to employees, consultants or independent contractors of the Company
pursuant to any stock option plan approved by the Board of Directors at any
time, so long as, and to the extent that:

                      (i) the aggregate number of shares of Common Stock
issuable upon exercise of all such outstanding stock options (whether or not
then currently exercisable) does not at any time exceed fifteen percent (15%) of
the aggregate number of shares of Common Stock on a Fully Diluted Basis at such
time,

                                      -45-
<PAGE>   49

such number of shares to be appropriately adjusted in respect of the occurrence
of any of the events described in Section 4 hereof; and

                      (ii) no other holder of any Rights or any other Securities
of the Company shall have the right to any preemptive, subscription or similar
right in respect of such issuance;

         and shares of Common Stock issuable upon the exercise of such stock
options; provided, however, that the Company may at any time reduce the exercise
price of any such options to a price which, on the date of such reduction, is
not less than the Closing Price calculated as of such date; and

                  (f) Share Purchase Right Securities issued or sold by the
Company or any Acquiring Person upon exercise of any Share Purchase Rights in
accordance with the provisions of any Share Purchase Right Agreement, and any
Common Stock, if any, issued upon the exercise or conversion of any such Share
Purchase Right Securities in accordance with the provisions of the Share
Purchase Rights and the Share Purchase Right Agreement.

         EXPIRATION DATE - means the later to occur of:

                  (a) August 31, 2007; and

                  (b) the date that is one hundred twenty (120) days after
the first date upon which the entire then-remaining principal amount of the
Notes, together with all accrued and unpaid interest thereon and all other
amounts due in respect thereof, is fully and finally paid in cash, and all
amounts in respect of the Series C Preferred Stock (including the Redemption
Price) and all accrued and unpaid dividends with respect thereto are fully and
finally paid in cash.

         FAIR VALUE - means, with respect to any share of common stock of any
Person at any time, the quotient of:

                  (a) the difference of:

                      (i) the sum of:

                          (A) the fair salable value of such Person as a going
concern, giving effect to all Property thereof and subject to all liabilities
thereof, that would be realized in an arm's length sale between an informed and
willing buyer and an informed and willing seller, under no compulsion to buy or
sell, respectively, as of a date that is within fifteen (15) days of the date as
of which the determination is to be made, determined by agreement among the
holders of the Warrants and the Company and, if, in the Company's view after
reasonable

                                      -46-
<PAGE>   50

negotiation no such agreement can be reached, by the Valuation Agent, such
determination in either case to be made without regard to the absence of a
liquid or ready market for such common stock; plus

                          (B) the aggregate exercise or conversion price of all
Warrants and all other Valuable Rights of such Person (including, without
limitation, Valuable Rights of such Person in respect of any shares of Preferred
Stock convertible at such time into shares of common stock of such Person) in
existence and remaining unexercised on such date;

                  minus

                      (ii) if there shall then exist any outstanding shares of
Preferred Stock (other than Preferred Stock convertible at such time into shares
of common stock of such Person, which shares represent Valuable Rights of such
Person at such time), the aggregate liquidation preference of (or, if less, the
aggregate price, if any, at which such Person could elect to redeem) such shares
of Preferred Stock (together with all accrued and unpaid dividends thereon);

         divided by

                  (b) the sum of:

                      (i) the total number of shares of common stock then
outstanding; plus

                      (ii) the aggregate number of shares of common stock
issuable in respect of all Valuable Rights of such Person (including, without
limitation, Valuable Rights of such Person in respect of any shares of Preferred
Stock convertible at such time into shares of common stock of such Person) at
such time.

         FULLY DILUTED BASIS - means, with respect to any calculation of the
number of shares of common stock of any Person at any time, the sum of:

                  (a) the number of shares of common stock of such Person
outstanding at such time; plus

                  (b) the aggregate number of shares of common stock of
such Person issuable upon the exercise, conversion or exchange, as the case may
be, of all Rights of such Person outstanding at such time, regardless of whether
such Rights of such Person are then exercisable, convertible or exchangeable
and, with respect to any Rights of such Person, regardless of whether the
consideration given up by the holder of such Right of such Person in connection
with the exercise, conversion or

                                      -47-
<PAGE>   51

exchange thereof would exceed the value of the common stock of such Person
received upon such exercise, conversion or exchange.

         GAAP - means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.

         HOLDERS - shall have the meaning specified in the introductory
paragraph hereto.

         INCIDENTAL REGISTRATION - Section 6.2.

         INITIAL PURCHASE PRICE - means Three Dollars and Twenty-Five Cents
($3.25) per share.

         INITIAL PURCHASERS - shall have the meaning specified in the Recitals
hereto.

         INITIAL SECURITIES PURCHASE AGREEMENT - shall have the meaning
specified in the Recitals hereto.

         INITIAL WARRANT AGREEMENT - shall have the meaning specified in the
Recitals hereto.

         INITIAL WARRANTS - shall have the meaning specified in the Recitals
hereto.

         INITIATING HOLDERS - means, at any time, the holders (other than the
Company or any Affiliate thereof) of at least fifty-one percent (51%) (by number
of shares) of the Registrable Securities at such time (excluding any Registrable
Securities held directly or indirectly by the Company or any Affiliate thereof).

         LIEN - means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property (for purposes of
this definition, the "Owner"), whether such interest is based on the common law,
statute or contract, and includes but is not limited to:

                  (a) the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes, and the filing of any financing statement
under the Uniform Commercial Code of any jurisdiction, or an agreement to give
any of the foregoing;

                                      -48-
<PAGE>   52

                  (b) reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting real Property;

                  (c) stockholder agreements, voting trust agreements,
buy-back agreements and all similar arrangements affecting the Owner's rights in
stock owned by the Owner; and

                  (d) any interest in any Property held by the Owner
evidenced by a conditional sale agreement, capitalized lease or other
arrangement pursuant to which title to such Property has been retained by or
vested in some other Person for security purposes.

The term "Lien" does not include negative pledge clauses in loan agreements and
equal and ratable security clauses in loan agreements.

         MARKET CAPITALIZATION - means, with respect to any Person, at any time
of determination, the product of:

                  (a) the Market Price of the common stock of such Person at
such time of determination; multiplied by

                  (b) the number of shares of the common stock of such
Person outstanding at such time.

         MARKET CAPITALIZATION PERCENTAGE - means, with respect to any Person,
at any time of determination, the quotient of:

                  (a) the Market Capitalization of such Person as of the Spinoff
Calculation Date; divided by

                  (b) the sum of:

                      (i) the Market Capitalization of the Distributed Entity as
of the Spinoff Calculation Date; plus

                      (ii) the Market Capitalization of the Company as of the
Spinoff Calculation Date.

         MARKET PRICE - means, per share of common stock of any Person, as of
any date of determination, the arithmetic mean of the daily Closing Prices for
the twenty (20) consecutive trading days before such date of determination;
provided that if such common stock is then neither listed or admitted to trading
on any

                                      -49-
<PAGE>   53

national securities exchange, the NASDAQ National Market or the NASDAQ SmallCap
Market, then "Market Price" means the Fair Value of one share of such common
stock, as determined by the Valuation Agent as of the date of determination.
When used in this Agreement without reference to a particular Person or common
stock, "Market Price" means the Market Price of the Common Stock.

         NASD - means the National Association of Securities Dealers, Inc.

         NASDAQ - means the NASDAQ Stock Market, Inc., a subsidiary of the NASD.

         NASDAQ NATIONAL MARKET - has the meaning ascribed thereto in Rule
4200(r) of NASDAQ.

         NASDAQ SMALLCAP MARKET - has the meaning ascribed thereto in Rule
4200(t) of NASDAQ.

         NOTE AGREEMENT - means the Amended and Restated Note Agreement, dated
as of the date hereof, among the Company and the Initial Purchasers, pursuant to
which the Notes were issued.

         NOTES - means the 12% Senior Subordinated Notes due May 1, 2007 issued
pursuant to the Initial Securities Purchase Agreement and the Note Agreement, as
amended, restated or modified from time to time.

         NOTICE EVENT - means any event that would require an adjustment in the
Purchase Price pursuant to Section 4 hereof.

         OTHER STOCKHOLDERS - means and includes, at any time, all holders of
Securities of the Company at such time (other than the holders of Registrable
Securities).

         OUTSTANDING WARRANT - means that certain warrant to purchase five
thousand (5,000) shares of the Common Stock issued to Henri Morris & Associates.

         PERSON - means an individual, partnership, corporation, limited
liability company, joint venture, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

         POTENTIAL MATERIAL EVENT shall mean and include the following:

                  (a) the possession by the Company of material undisclosed
information not ripe for disclosure in a registration statement; or

                                      -50-
<PAGE>   54

                  (b) any undisclosed material engagement or material
activity by the Company which would, in the good faith determination of the
Board of Directors of the Company, be adversely affected by disclosure in a
registration statement at such time.

         PREFERRED STOCK - means and includes, with respect to any Person, all
capital stock of such Person of any class which is preferred as to payment upon
a liquidation or dissolution of such Person or both, over the common stock of
such Person.

         PRE-SPINOFF OWNERSHIP PERCENTAGE - means, with respect to any Spinoff,
the quotient, expressed as a percentage, of:

                  (a) the number of shares of Common Stock issuable
immediately prior to the Spinoff upon exercise of all Warrants remaining
outstanding at such time; divided by

                  (b) the aggregate number of shares of Common Stock at such
time calculated on a Fully Diluted Basis.

         PROPERTY - means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.

         PUBLIC OFFERING - shall mean any sale of Common Stock in a transaction
either registered under, or requiring registration under, section 5 of the
Securities Act.

         PURCHASE PRICE - means, prior to any adjustment pursuant to Section 4
of this Agreement, the Initial Purchase Price and thereafter, the Initial
Purchase Price as thereafter successively adjusted and readjusted from time to
time.

         PURCHASERS - shall have the meaning specified in the Recitals hereto.

         REDEMPTION PRICE - means the redemption price of the Series C Preferred
Stock as set forth in the Charter.

         REGISTRABLE SECURITIES - means, at any time:

                  (a) any shares of Common Stock that have been issued upon the
exercise of any Warrant;

                  (b) any shares of Common Stock into which such shares of
Common Stock shall have been converted at any time; and

                                      -51-
<PAGE>   55

                  (c) any shares of Common Stock that are issuable upon the
exercise of the Warrants or the conversion of Common Stock referred to in clause
(a) or clause (b) above.

For purposes of Section 6 hereof and the definitions of "Initiating Holders" and
"Requisite Holders" herein, holders of Warrants at any time shall be deemed to
be holders of Registrable Securities described in clauses (b) and (c) of this
definition that are at such time issuable upon exercise in full of such
Warrants, whether or not such holders are then entitled so to exercise such
Warrants pursuant to the terms thereof.

         As to any particular Registrable Securities once issued, such
Securities shall cease to be Registrable Securities:

                      (i) when a registration statement with respect to the sale
of such Securities shall have become effective under the Securities Act and such
Securities shall have been disposed of in accordance with such registration
statement;

                      (ii) when they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act;

                      (iii) when they shall have been otherwise transferred and
subsequent disposition of them shall not require registration or qualification
under the Securities Act or any similar state law then in force; or

                      (iv) when they shall have ceased to be outstanding or
(with respect to Registrable Securities described in clause (c) of this
definition) issuable upon exercise of the Warrants.

         REGISTRATION - means the Shelf Registration and each Incidental
Registration.

         REGISTRATION EXPENSES - means all expenses incident to the Company's
performance of or compliance with Section 6.1 through Section 6.5, inclusive,
including, without limitation:

                  (a) all registration and filing fees;

                  (b) fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities);

                                      -52-
<PAGE>   56

                  (c) expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with Depositary Trust Company;

                  (d) messenger and delivery expenses;

                  (e) internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties);

                  (f) fees and disbursements of counsel for the Company and
its independent certified public accountants (including the expenses of any
management review, cold comfort letters or any special audits required by or
incident to such performance and compliance);

                  (g) securities acts liability insurance (if the Company elects
to obtain such insurance);

                  (h) the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration;

                  (i) fees and expenses of other Persons retained by the
Company; and

                  (j) reasonable fees and expenses of counsel for holders of
Registrable Securities, selected by the Requisite Holders;

but not including any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities or fees and expenses of more than one
counsel representing the holders of Registrable Securities or any other selling
expenses, discounts or commissions incurred in connection with the sale of
Registrable Securities.

         REQUIRED WARRANTHOLDERS - means, at any time, the holders of at least
fifty-one percent (51%) of all Warrants outstanding (excluding any Warrants
directly or indirectly held by the Company, any Subsidiary or any Affiliate) at
such time.

         REQUISITE HOLDERS - means, with respect to any registration or proposed
registration of Registrable Securities pursuant to Section 6 hereof, any holder
or holders (other than the Company or any Affiliate or Subsidiary) holding at
least fifty-one percent (51%) of the shares of Registrable Securities (excluding
any shares of Registrable Securities directly or indirectly held by the Company
or any Affiliate or Subsidiary) to be so registered.

         RIGHT - means and includes:

                                      -53-
<PAGE>   57

                  (a) any warrant (including, without limitation, in the
case of the Company, any Warrant and the Outstanding Warrant) or any option
(including, without limitation, employee stock options) to acquire common stock
of such Person;

                  (b) any right issued to holders of the common stock of
such Person, or any class thereof, permitting the holders thereof to subscribe
to shares of Additional Common Stock (in the case of the Company) or additional
common stock or additional Rights of such Person (pursuant to a rights offering
or otherwise);

                  (c) any right to acquire common stock of such Person
pursuant to the provisions of any Security convertible or exchangeable into such
common stock; and

                  (d) any similar right permitting the holder thereof to
subscribe for or purchase shares of common stock of such Person.

References in this Agreement to a Right or Rights of a Person means a Right or
Rights, regardless of whether or not issued by such Person, relating to the
common stock of such Person. When used in this Agreement without reference to a
particular Person, "Right" means a Right of the Company.

         RULE 144 - means Rule 144 under the Securities Act, 17 C.F.R.
Section 230.144, and any similar successor provision; and references to
subsections of Rule 144 (e.g., "Rule 144(k)") shall be to the indicated
subsection of such Rule 144.

         SECURITIES PURCHASE AGREEMENT - shall have the meaning specified in the
Recitals hereto.

         SERIES C PREFERRED STOCK - means the Series C Cumulative Redeemable
Preferred Stock, par value $1.00 per share, with a stated value of $100.00 per
share, of the Company.

         SEC - means, at any time, the Securities and Exchange Commission or any
other federal agency at such time administering the Securities Act.

         SECURITIES ACT - means the Securities Act of 1933, as amended.

         SECURITY - shall have the meaning specified in section 2(1) of the
Securities Act.

         SERIES - means the series of the Series A Warrants and/or the Series B
Warrants.

                                      -54-
<PAGE>   58

         SERIES A WARRANT - shall have the meaning specified in the Recitals
hereto.

         SERIES A WARRANT CERTIFICATE - shall have the meaning specified in
Section 1.1 hereof.

         SERIES B WARRANT - shall have the meaning specified in the Recitals
hereto.

         SERIES B WARRANT CERTIFICATE - shall have the meaning specified in
Section 1.1 hereof.

         SHARE PURCHASE RIGHT - means any Right created by the Company after the
date hereof which meets the following criteria:

                  (a) such Right is distributed to each holder of the Common
Stock as of the record date for the distribution thereof;

                  (b) such Right remains attached to each share of Common
Stock (including, without limitation, shares issued on or after the record date
for the distribution thereof but prior to any date of detachment thereof)
pending the occurrence of one or more Share Purchase Triggering Events;

                  (c) such Right shall become detached from, and may be
transferred separately from, the shares of Common Stock upon the occurrence of
one or more Share Purchase Triggering Events; and

                  (d) such Right shall become exercisable by all holders
thereof other than an Acquiring Person, upon the occurrence of one or more Share
Purchase Triggering Events (which may or may not be the Share Purchase giving
rise to the detachment of the Share Purchase Rights) specified in the Share
Purchase Rights Plan, into Share Purchase Right Securities.

         SHARE PURCHASE RIGHT DETACHMENT DATE - means the date upon which any
Share Purchase Right becomes detached from, and may be transferred separately
from, the shares of Common Stock.

         SHARE PURCHASE RIGHT TERMINATION DATE - means the earlier to occur of
the expiration, termination or redemption by the Company of all Share Purchase
Rights.

         SHARE PURCHASE RIGHT PLAN - means the plan or agreement pursuant to
which the Share Purchase Rights are issued and governing the terms thereof.

         SHARE PURCHASE RIGHT SECURITIES - means and includes any of the
following Securities issuable upon exercise of a Share Purchase Right:

                                      -55-
<PAGE>   59

                  (a) shares of Common Stock or Rights of the Company, or
Securities containing Rights of the Company;

                  (b) shares of other capital stock of the Company or other
Securities convertible or exchangeable into capital stock of the Company; or

                  (c) shares of capital stock of an Acquiring Person or any
Affiliate thereof or other Securities convertible or exchangeable into any such
capital stock.

         SHARE PURCHASE TRIGGERING EVENT - means and includes any and all of the
following:

                  (a) the acquisition by any Acquiring Person of a percentage of
the outstanding Common Stock specified in the Share Purchase Right Plan (but in
no event less than ten percent (10%) of the outstanding Common Stock);

                  (b) the making by any Acquiring Person of a tender offer for
the Common Stock or any substantial portion thereof;

                  (c) the commencement of, or the occurrence of any event in
furtherance of, any actual or threatened election contest (as contemplated by
Rule 14a-11 under the Exchange Act) or other actual or threatened solicitation
of proxies or contest by or on behalf of a Person other than the Board of
Directors which, if fully completed, would result in a majority of the directors
of the Company following consummation of such contest or proposal and the
election or elections of directors at which such contest or proposal is directed
being Persons who were not directors immediately prior to the commencement of
such contest or proposal; or

                  (d) any similar or other action which would, if completed,
result in an Acquiring Person either owning a majority of the Common Stock or
controlling the Board of Directors.

         SHELF EFFECTIVE DATE - means July 31, 2000.

         SHELF EFFECTIVE PERIOD - Section 6.1(a).

         SHELF FILING DATE - means May 31, 2000.

         SHELF REGISTRATION - Section 6.1(a).

         SHELF TERMINATION DATE - means the earliest to occur of:

                  (a) April 30, 2009;

                                      -56-
<PAGE>   60

                  (b) such date after May 1, 2002 on which the Company shall
         deliver to each holder of Registrable Securities an opinion of Hughes &
         Luce, LLP, or other nationally recognized securities counsel to the
         effect that each such holder may freely resell all shares of Common
         Stock issued or issuable upon exercise of the Warrants without
         restriction pursuant to Rule 144(k) so long as the Purchase Price is
         made pursuant to Section 2.1(c), Section 2.1(d) or Section 2.1(e);
         provided, however, that such opinion shall not make any assumption or
         contain any qualification concerning whether any holder of Warrants of
         Common Stock issued upon the exercise thereof is an "affiliate," as
         defined in Rule 144(a)(1), of the Company; and

                  (c) such date as no Registrable Securities shall remain.

         SPINOFF - means and includes:

                  (a) any payment or making of any dividend in, or making of any
distribution of, any Spinoff Shares to the stockholders of the Company in
respect of the Common Stock; or

                  (b) any reclassification of the Common Stock in any
manner or other similar arrangement such that Spinoff Shares are issued to or
deemed issued to the Company's stockholders.

         SPINOFF CALCULATION DATE - means, with respect to any Spinoff, the
thirtieth (30th) trading day following the consummation of such Spinoff.

         SPINOFF SHARES - means and includes any capital stock, partnership or
membership interest, or warrant, option or other right to acquire any such
capital stock, partnership or membership interests, or other similar equity
interest of any Distributed Entity, in each case, which is dividended or
otherwise distributed (including, without limitation, in any recapitalization)
to the stockholders of the Company in respect of the Common Stock in a Spinoff.

         SPINOFF WARRANT AGREEMENT - Section 3.8(c).

         SPINOFF WARRANT NUMBER - means, at any time, with respect to any
Spinoff, the quotient of:

                  (a) the product of:

                      (i) the Pre-Spinoff Ownership Percentage; multiplied by

                                      -57-
<PAGE>   61

                      (ii) the aggregate number of Spinoff Shares, calculated as
of the Spinoff Calculation Date on a Fully Diluted Basis (but prior to giving
effect to the issuance of the Spinoff Warrants);

         divided by

                  (b) the difference of:

                      (i) one hundred percent (100%); minus

                      (ii) the Pre-Spinoff Ownership Percentage.

         SPINOFF WARRANT PURCHASE PRICE - means, on any date of determination,
with respect to any Spinoff, the quotient of:

                  (a) the product of:

                      (i) the Market Capitalization Percentage of the
Distributed Entity as of such date; multiplied by

                      (ii) the number of Warrants outstanding on such date;
multiplied by

                      (iii) the Purchase Price on such date prior to giving
effect to any adjustment in the Purchase Price (including, without limitation,
that required by Section 4.7) resulting from the Spinoff;

         divided by

                  (b) the Spinoff Warrant Number.

         SPINOFF WARRANTS - Section 3.8(a).

         SUBSIDIARY - means, at any time, each corporation, association, limited
liability company or other business entity which qualifies as a subsidiary of
the Company that is properly included in a consolidated financial statement of
the Company and its subsidiaries in accordance with GAAP at such time.

         TRANSFEREE - means any registered transferee of all or any part of any
one or more Warrant Certificates acquired by any Initial Purchaser or Holder
under this Agreement.

         VALUABLE RIGHT - means, with respect to any Person at any time, a
Right, the effective conversion, exercise or purchase price of which on the date
of

                                      -58-
<PAGE>   62

determination is less than the Market Price in respect of the shares of common
stock of such Person issuable upon conversion, exercise or purchase pursuant to
such Right on such date.

         VALUATION AGENT - means the Board of Directors, unless the Required
Warrantholders shall disagree in good faith with the determination of the Board
of Directors, in which case the determination shall be made by a firm of
independent certified public accountants, an investment banking firm or
appraisal firm (which firm shall own no material amount of Securities of, and
shall not be an Affiliate, Subsidiary or a related Person of, the Company) of
recognized national standing retained by the Company and reasonably acceptable
to the Required Warrantholders.

         VOTING STOCK - means, with respect to any corporation, any shares of
stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time any stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency), and, in the case of the Company, shall include the Common Stock.

         WARRANTS - shall have the meaning specified in the Recitals hereto.

         WARRANT CERTIFICATE - Section 1.1.

         7.2. DESCRIPTIVE HEADINGS.

         The descriptive headings of the several Sections of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

         7.3. GOVERNING LAW.

         THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.

8.       MISCELLANEOUS.

         8.1. EXPENSES.

         The Company agrees to pay, and save the Holders and any Transferees
harmless against liability for the payment of, all out-of-pocket expenses
(including, without limitation, the reasonable fees and disbursements of special
counsel for the

                                      -59-
<PAGE>   63

Holders and any Transferee) arising in connection with the transactions herein
contemplated, including, without limitation:

               (a) the cost, if any, of complying with Section 3.6 hereof;

               (b) any subsequent proposed modification of, or proposed consent
         requested or initiated by or on behalf of the Company under, this
         Agreement, the Warrant Certificates or the Warrants, whether or not
         such proposed modification shall be effected or proposed consent
         granted (including, without limitation, all document production and
         duplication charges and the reasonable fees and expenses of one special
         counsel engaged by the holders of Warrants in connection therewith);
         and

               (c) the enforcement of (or determination of whether or how to
         enforce) any rights under this Agreement, the Warrant Certificates or
         the Warrants or in responding to any subpoena or other legal process or
         informal investigative demand issued in connection with this Agreement
         or the transactions contemplated hereby or by reason of the Holders' or
         any Transferee's having acquired any Warrant Certificate, including,
         without limitation, the reasonable fees and expenses of one special
         counsel engaged by the holders of the Warrants and incurred by the
         holders of the Warrants and the costs and expenses incurred in any
         bankruptcy case involving the Company or any Subsidiary.

The obligations of the Company under this Section 8.1 shall survive the transfer
of any Warrant Certificate or portion thereof or interest therein by any Holder
or any Transferee and the exercise or expiration of any Warrant.

         8.2. AMENDMENT AND WAIVER.

         This Agreement may be amended, and the observance of any term of this
Agreement may be waived, with and only with the written consent of the Company
and:

               (a) in the case of Section 1 through Section 5, Section 7.2,
         Section 7.3 or Section 8 hereof (other than this Section 8.2), or of
         any term defined in Section 7.1 to the extent used therein, the written
         consent of the Required Warrantholders;

               (b) the provisions of Section 6 hereof, and of any term defined
         in Section 7.1 hereof as used in Section 6 hereof, may be amended,
         modified or supplemented only by a writing duly executed by or on
         behalf of the Initiating Holders and the Company; provided, however,
         that compliance by

                                      -60-
<PAGE>   64

         the Company with the provisions of Section 6 hereof, with respect to
         any particular registration, may be waived by the Requisite Holders;
         and

              (c) in the case of this Section 8.2, or of any term defined in
         Section 7.1 to the extent used herein, the written consent of all
         holders of Warrants then outstanding and all Registrable Securities
         then outstanding (excluding any Warrants or Registrable Securities
         directly or indirectly held by the Company, any Subsidiary or any
         Affiliate);

provided, however, that:

                     (i) no such amendment or waiver of any of the provisions of
              this Agreement pertaining to the Purchase Price or the number or
              kind of shares of Common Stock that may be purchased upon exercise
              of each Warrant; and

                     (ii) no change or accelerating the occurrence of the
              Expiration Date;

shall be effective as to the holder of any Warrant unless consented to in
writing by such holder.

         8.3. DIRECTLY OR INDIRECTLY.

         Where any provision in this Agreement refers to any action to be taken
by any Person, or that such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such
Person, including actions taken by or on behalf of any partnership in which such
Person is a general partner.

         8.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations and warranties contained herein and in the
Securities Purchase Agreement in connection herewith shall survive the execution
and delivery of this Agreement and the Warrant Certificates, the transfer by any
Holder of any Warrant Certificate or portion thereof or interest therein and the
exercise or expiration of any Warrant, and may be relied upon by the Holders or
any Transferee, regardless of any investigation made at any time by or on behalf
of such Holder or Transferee. Subject to the preceding sentence, this Agreement
and the Warrant Certificates embody the entire agreement and understanding among
the Company and the Holders, and supersede all prior agreements and
under-standings, relating to the subject matter hereof.

                                      -61-
<PAGE>   65

         8.5. SUCCESSORS AND ASSIGNS.

         All covenants and other agreements in this Agreement contained by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including, without
limitation, any Transferee) whether so expressed or not. Notwithstanding the
foregoing sentence, the Company may not assign any of its rights, duties or
obligations hereunder or under the Warrants without the prior written consent of
all holders of the Warrants then outstanding.

         8.6. NOTICES.

         All communications hereunder or under the Warrants shall be in writing
and shall be delivered either by national overnight courier or by facsimile
transmission (confirmed by delivery by national overnight courier sent on the
day of the sending of such facsimile transmission), and shall be addressed to
the following addresses:

               (a) if to a Holder, at its address set forth on Annex 1 to this
         Agreement, or at such other address as such Holder shall have specified
         to the Company in writing;

               (b) if to any other holder of any Warrant Certificate, addressed
         to such other holder at such address as such other holder shall have
         specified to the Company in writing or, if any such other holder shall
         not have so specified an address to the Company, then addressed to such
         other holder in care of the last holder of such Warrant Certificate
         that shall have so specified an address to the Company; and

               (c) if to the Company, at the address set forth on Annex 2 to
         this Agreement, or at such other address as the Company shall have
         specified to each holder of Warrants in writing.

Any communication addressed and delivered as herein provided shall be deemed to
be received when actually delivered to the address of the addressee (whether or
not delivery is accepted) or received by the telecopy machine of the recipient.
Any communication not so addressed and delivered shall be ineffective.

         8.7. SATISFACTION REQUIREMENT.

         If any agreement, certificate or other writing, or any action taken or
to be taken, is by the terms of this Agreement required to be satisfactory to
the Holders or to any holder or holders of Warrant Certificates, the
determination of such satisfaction shall, unless specifically required herein in
any instance to be "reasonable" or words to similar effect, be made by such
Holders, holder or holders,

                                      -62-
<PAGE>   66

as the case may be, in the sole and exclusive judgment (exercised in good faith)
of the Person or Persons making such determination.

         8.8. SEVERABILITY.

         Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         8.9. COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument.

         8.10. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; ETC.

               (a) WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
         INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY
         IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION
         WITH THIS AGREEMENT, THE WARRANTS OR ANY OF THE DOCUMENTS, AGREEMENTS
         OR TRANSACTIONS CONTEMPLATED HEREBY.

               (b) CONSENT TO JURISDICTION. ANY SUIT, ACTION OR PROCEEDING
         ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE WARRANTS OR ANY OF
         THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY
         ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN
         RESPECT OF ANY BREACH UNDER THIS AGREEMENT, THE WARRANTS OR ANY
         DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY MAY BE BROUGHT BY SUCH PARTY
         IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK, OR
         ANY NEW YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK AS SUCH
         PARTY MAY IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND
         DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO IRREVOCABLY AND
         UNCONDITIONALLY SUBMIT TO THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF
         EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES AND
         AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF
         MOTION, AS A DEFENSE OR

                                      -63-
<PAGE>   67

         OTHER-WISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM
         JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE PARTIES HERETO
         IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
         OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN
         ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
         AGREEMENT OR ANY DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY
         BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT
         ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
         BROUGHT IN AN INCONVENIENT FORUM.

               (c) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY AGREES THAT
         PROCESS PERSONALLY SERVED OR SERVED BY U.S. REGISTERED MAIL AT THE
         ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL CONSTITUTE, TO THE EXTENT
         PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
         PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE WARRANTS
         OR ANY DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY
         ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN
         RESPECT OF ANY BREACH HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT
         CONTEMPLATED HEREBY. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY
         PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED
         STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE.

               (d) OTHER FORUMS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
         LIMIT THE ABILITY OF ANY PURCHASER TO SERVE ANY WRITS, PROCESS OR
         SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
         JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH
         OTHER MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW.

  [Remainder of page intentionally left blank; next page is a signature page.]

                                      -64-
<PAGE>   68

         WITNESS the signature of a proper officer of the Company as of the date
first above written.

                                         FRESH AMERICA CORP.

                                         By:
                                            -----------------------------------
                                            Name:  John H. Gray
                                            Title: Executive Vice President

           [SIGNATURE PAGE TO AMENDED AND RESTATED WARRANT AGREEMENT]

<PAGE>   69

                                         JOHN HANCOCK LIFE
                                         INSURANCE COMPANY

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

           [SIGNATURE PAGE TO AMENDED AND RESTATED WARRANT AGREEMENT]

<PAGE>   70

                                         JOHN HANCOCK VARIABLE
                                         LIFE INSURANCE COMPANY

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

           [SIGNATURE PAGE TO AMENDED AND RESTATED WARRANT AGREEMENT]

<PAGE>   71

                                         SIGNATURE (1A) CAYMAN, LTD.
                                         BY:  JOHN HANCOCK LIFE INSURANCE
                                                 COMPANY, PORTFOLIO ADVISOR

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

           [SIGNATURE PAGE TO AMENDED AND RESTATED WARRANT AGREEMENT]

<PAGE>   72

                                         INVESTORS PARTNER LIFE
                                         INSURANCE COMPANY

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

           [SIGNATURE PAGE TO AMENDED AND RESTATED WARRANT AGREEMENT]

<PAGE>   73

                                     ANNEX 1
                             ADDRESSES OF PURCHASERS

<PAGE>   74

                                     ANNEX 2
                               ADDRESS OF COMPANY

Fresh America Corp.
6600 LBJ Freeway, Suite 180
Dallas, Texas 75240
Attention:   John H. Gray,
             Executive Vice President and Chief Financial Officer
             Telephone:   (972) 774-0575
             Facsimile:   (972) 774-0515

<PAGE>   75

                                                                   ATTACHMENT A1

                     [FORM OF SERIES A WARRANT CERTIFICATE]

  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
       EXCEPT IN A TRANSACTION REGISTERED UNDER SUCH ACT OR PURSUANT TO AN
            EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.

                          SERIES A WARRANT CERTIFICATE

                               FRESH AMERICA CORP.

No. WRA-___                                                    ________ Warrants
Date:  ________                                            PPN:  35803R 2* 5

         This Warrant Certificate certifies that ___________________, or
registered assigns, is the registered holder of ___________ (________) Warrants.
Each Warrant entitles the owner thereof to purchase at any time on or prior to
the Expiration Date, one (1) fully paid and nonassessable share of Common Stock,
par value $0.01 per share (the "Common Stock"), of FRESH AMERICA CORP., a Texas
corporation (together with its successors and assigns, the "Company"), at a
Purchase Price (subject to adjustment as provided therein) of Three Dollars and
Twenty-Five Cents ($3.25) per share upon presentation and surrender of this
Warrant Certificate with a form of election to purchase duly executed and
delivery to the Company of the payment of the Purchase Price in the manner set
forth in the Warrant Agreement. The number of shares of Common Stock that may be
purchased upon exercise of each Warrant and the Purchase Price are the number
and the Purchase Price as of the date hereof, and are subject to adjustment as
referred to below.

         The Series A Warrants are issued pursuant to the Amended and Restated
Warrant Agreement (as it may from time to time be amended or supplemented, the
"Warrant Agreement"), dated as of April 15, 2000, among the Company and the
investors named therein, and are subject to all of the terms, provisions and
conditions thereof, which Warrant Agreement is hereby incorporated herein by
reference and made a part hereof and to which Warrant Agreement reference is
hereby made for a full description of the rights, obligations, duties and
immunities of the Company and the holders of the Warrant Certificates.
Capitalized terms used, but not defined, herein have the respective meanings
ascribed to them in the Warrant Agreement.

<PAGE>   76

         As provided in the Warrant Agreement, the Purchase Price and the number
of shares of Common Stock that may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment. Except as otherwise set
forth in, and subject to, the Warrant Agreement, the Expiration Date of this
Warrant Certificate is August 31, 2007.

         This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time (but not, in the case
of any exercise in part, to the extent such exercise would result in the
issuance of the lesser of one hundred (100) whole shares of Common Stock and
such lesser number of shares as is issuable by virtue of the exercise of all
Warrants held by such holder). If this Warrant Certificate shall be exercised in
part, the holder shall be entitled to receive, upon surrender hereof, another
Warrant Certificate or Warrant Certificates for the number of Warrants not
exercised. Subject to the provisions of the Warrant Agreement, this Warrant
Certificate, with or without other Warrant Certificates representing Warrants of
the same Series, upon surrender in the manner set forth in the Warrant
Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants of the same Series entitling the
holder to purchase a like aggregate number of shares of Common Stock as the
Warrants evidenced by the Warrant Certificate or Warrant Certificates
surrendered shall have entitled such holder to purchase.

         Except as expressly set forth in the Warrant Agreement, no holder of
this Warrant Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Common Stock or of any other
Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Common Stock in the Company or any right to vote upon any
matter submitted to holders of shares of Common Stock at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of Securities, change of
par value, consolidation, merger, conveyance, or otherwise), or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by this Warrant Certificate shall have been exercised as provided in
the Warrant Agreement.

         THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.

                                      -2-
<PAGE>   77

         WITNESS the signature of a proper officer of the Company as of the date
first above written.

                                           FRESH AMERICA CORP.

                                           By:
                                              ----------------------------------
                                                Name:  John H. Gray
                                                Title: Executive Vice President

<PAGE>   78

                              [FORM OF ASSIGNMENT]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
            SUCH HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)

         FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfers unto

--------------------------------------------------------------------------------
(Please print name and address of transferee.)

the accompanying Series A Warrant Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint:

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

attorney, to transfer the accompanying Series A Warrant Certificate on the books
of the Company with full power of substitution.

Dated:                     ,         .
       --------------------  --------

                                       [HOLDER]

                                       By
                                         ---------------------------------------

                                     NOTICE

         The signature to the foregoing Assignment must correspond to the name
as written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.

<PAGE>   79

                         [FORM OF ELECTION TO PURCHASE]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
            SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)

To FRESH AMERICA CORP.:

         The undersigned hereby irrevocably elects to exercise
______________________________ Series A Warrants represented by the accompanying
Warrant Certificate to purchase the shares of Common Stock issuable upon the
exercise of such Warrants and requests that certificates for such shares be
issued in the name of:

------------------------------------------------------------------------------
(Please print name and address.)

-----------------------------------------------------------
(Please insert social security or other identifying number.)

If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:

--------------------------------------------------------------------------------
(Please print name and address.)

-----------------------------------------------------------
(Please insert social security or other identifying number.)

 The undersigned is paying the Purchase Price for the shares of Common Stock to
be issued on exercise of the foregoing Warrants:

         [ ]   in cash pursuant to Section 2.1(a)(i) of the Warrant Agreement;

<PAGE>   80

         [ ]   in Notes (as defined in the Warrant Agreement) pursuant to
Section 2.1(a)(ii) of the Warrant Agreement;

         [ ]   in shares of Series C Preferred Stock (as defined in the Warrant
Agreement) pursuant to Section 2.1(a)(iii) of the Warrant Agreement;

         [ ]   in cash in the amount of $____________ , a principal amount of
Notes equal to $___________ and/or _________ shares of Series C Preferred Stock
having a Redemption Price equal to $___________ pursuant to Section 2.1 (a)(iv)
of the Warrant Agreement; or

         [ ]   by net exercise of the Warrants being exercised pursuant to
Section 2.1(a)(v) of the Warrant Agreement.

Dated:                    ,       .
        ------------------  ------

                                            [HOLDER]

                                            By
                                              ----------------------------------

                                     NOTICE

         The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.

                                      -2-
<PAGE>   81

                                                                   ATTACHMENT A2

                     [FORM OF SERIES B WARRANT CERTIFICATE]

  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD
       EXCEPT IN A TRANSACTION REGISTERED UNDER SUCH ACT OR PURSUANT TO AN
            EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.

                          SERIES B WARRANT CERTIFICATE

                               FRESH AMERICA CORP.

No. WRB-___                                                    ________ Warrants
Date:  ________                                          PPN:

         This Warrant Certificate certifies that ___________________, or
registered assigns, is the registered holder of ___________ (________) Warrants.
Each Warrant entitles the owner thereof to purchase at any time on or prior to
the Expiration Date, one (1) fully paid and nonassessable share of Common Stock,
par value $0.01 per share (the "Common Stock"), of FRESH AMERICA CORP., a Texas
corporation (together with its successors and assigns, the "Company"), at a
Purchase Price (subject to adjustment as provided therein) of Three Dollars and
Twenty-Five Cents ($3.25) per share upon presentation and surrender of this
Warrant Certificate with a form of election to purchase duly executed and
delivery to the Company of the payment of the Purchase Price in the manner set
forth in the Warrant Agreement. The number of shares of Common Stock that may be
purchased upon exercise of each Warrant and the Purchase Price are the number
and the Purchase Price as of the date hereof, and are subject to adjustment as
referred to below.

         The Series B Warrants are issued pursuant to the Amended and Restated
Warrant Agreement (as it may from time to time be amended or supplemented, the
"Warrant Agreement"), dated as of April 15, 2000, among the Company and the
investors named therein, and are subject to all of the terms, provisions and
conditions thereof, which Warrant Agreement is hereby incorporated herein by
reference and made a part hereof and to which Warrant Agreement reference is
hereby made for a full description of the rights, obligations, duties and
immunities of the Company and the holders of the Warrant Certificates.
Capitalized terms used, but not defined, herein have the respective meanings
ascribed to them in the Warrant Agreement.

<PAGE>   82

         As provided in the Warrant Agreement, the Purchase Price and the number
of shares of Common Stock that may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment. Except as otherwise set
forth in, and subject to, the Warrant Agreement, the Expiration Date of this
Warrant Certificate is August 31, 2007.

         This Warrant Certificate shall be exercisable, at the election of the
holder, either as an entirety or in part from time to time (but not, in the case
of any exercise in part, to the extent such exercise would result in the
issuance of the lesser of one hundred (100) whole shares of Common Stock and
such lesser number of shares as is issuable by virtue of the exercise of all
Warrants held by such holder). If this Warrant Certificate shall be exercised in
part, the holder shall be entitled to receive, upon surrender hereof, another
Warrant Certificate or Warrant Certificates for the number of Warrants not
exercised. Subject to the provisions of the Warrant Agreement, this Warrant
Certificate, with or without other Warrant Certificates representing Warrants of
the same Series, upon surrender in the manner set forth in the Warrant
Agreement, may be exchanged for another Warrant Certificate or Warrant
Certificates of like tenor evidencing Warrants of the same Series entitling the
holder to purchase a like aggregate number of shares of Common Stock as the
Warrants evidenced by the Warrant Certificate or Warrant Certificates
surrendered shall have entitled such holder to purchase.

         Except as expressly set forth in the Warrant Agreement, no holder of
this Warrant Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Common Stock or of any other
Securities of the Company that may at any time be issued upon the exercise
hereof, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
holder of a share of Common Stock in the Company or any right to vote upon any
matter submitted to holders of shares of Common Stock at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of Securities, change of
par value, consolidation, merger, conveyance, or otherwise), or to receive
dividends or subscription rights, or otherwise, until the Warrant or Warrants
evidenced by this Warrant Certificate shall have been exercised as provided in
the Warrant Agreement.

         THIS WARRANT CERTIFICATE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE COMPANY AND THE HOLDER HEREOF SHALL BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.

                                      -2-
<PAGE>   83

         WITNESS the signature of a proper officer of the Company as of the date
first above written.

                                       FRESH AMERICA CORP.

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

                                      -3-
<PAGE>   84

                              [FORM OF ASSIGNMENT]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
            SUCH HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)

         FOR VALUE RECEIVED, _______________________________________ hereby
sells, assigns and transfers unto

--------------------------------------------------------------------------------
(Please print name and address of transferee.)

the accompanying Series B Warrant Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint:

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

attorney, to transfer the accompanying Series B Warrant Certificate on the books
of the Company with full power of substitution.

Dated:                    ,       .
        ------------------  ------

                                            [HOLDER]

                                            By
                                              ----------------------------------

                                     NOTICE

         The signature to the foregoing Assignment must correspond to the name
as written upon the face of the accompanying Warrant Certificate or any prior
assignment thereof in every particular, without alteration or enlargement or any
change whatsoever.

<PAGE>   85

                         [FORM OF ELECTION TO PURCHASE]
                   (TO BE EXECUTED BY THE REGISTERED HOLDER IF
            SUCH HOLDER DESIRES TO EXERCISE THE WARRANT CERTIFICATE)

To FRESH AMERICA CORP.:

         The undersigned hereby irrevocably elects to exercise
______________________________ Series B Warrants represented by the accompanying
Warrant Certificate to purchase the shares of Common Stock issuable upon the
exercise of such Warrants and requests that certificates for such shares be
issued in the name of:

--------------------------------------------------------------------------------
(Please print name and address.)

-----------------------------------------------------------
(Please insert social security or other identifying number.)

If such number of Warrants shall not be all the Warrants evidenced by the
accompanying Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Warrants shall be registered in the name of and delivered to:

--------------------------------------------------------------------------------
(Please print name and address.)

-----------------------------------------------------------
(Please insert social security or other identifying number.)

 The undersigned is paying the Purchase Price for the shares of Common Stock to
be issued on exercise of the foregoing Warrants:

         [ ]     in cash pursuant to Section 2.1(a)(i) of the Warrant Agreement;

<PAGE>   86

         [ ]     in Notes (as defined in the Warrant Agreement) pursuant to
Section 2.1(a)(ii) of the Warrant Agreement;

         [ ]     in shares of Series C Preferred Stock (as defined in the
Warrant Agreement) pursuant to Section 2.1(a)(iii) of the Warrant Agreement;

         [ ]     in cash in the amount of $____________ , a principal amount of
Notes equal to $___________ and/or _________ shares of Series C Preferred Stock
having a Redemption Price equal to $___________ pursuant to Section 2.1(a)(iv)
of the Warrant Agreement; or

         [ ]     by net exercise of the Warrants being exercised pursuant to
Section 2.1(a)(v) of the Warrant Agreement.

Dated:                    ,       .
        ------------------  ------

                                            [HOLDER]

                                            By
                                              ----------------------------------

                                     NOTICE

         The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of the accompanying Warrant Certificate or any
prior assignment thereof in every particular, without alteration or enlargement
or any change whatsoever.

                                      -2-

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