Document:

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                                                                    EXHIBIT 10.5

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                                WARRANT AGREEMENT

                          Dated as of December 21, 2000

                                     between

                           PICCADILLY CAFETERIAS, INC.

                                       and

                     THE BANK OF NEW YORK, as Warrant Agent

               81,000 Warrants to Purchase Shares of Common Stock,

                             No Par Value Per Share

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                                TABLE OF CONTENTS

<TABLE>
                                                  ARTICLE I

                            ISSUANCE, FORM, EXECUTION, DELIVERY AND REGISTRATION
                                           OF WARRANT CERTIFICATES

<S>                                                                                                       <C>
SECTION 1.01 Issuance of Warrants.........................................................................2
SECTION 1.02 Form of Warrant Certificates.................................................................2
SECTION 1.03 Execution of Warrant Certificates............................................................2
SECTION 1.04 Authentication and Delivery..................................................................3
SECTION 1.05 Temporary Warrant Certificates...............................................................3
SECTION 1.06 Separation of Warrants and Notes.............................................................4
SECTION 1.07 Registration.................................................................................4
SECTION 1.08 Registration of Transfers and Exchanges......................................................5
SECTION 1.09 Obligations of the Warrant Agent............................................................10
SECTION 1.10 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates..........................11
SECTION 1.11 Offices for Exercise, etc...................................................................11

                                                 ARTICLE II

                              DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE

SECTION 2.01 Duration of Warrants........................................................................12
SECTION 2.02 Exercise, Exercise Price, Settlement and Delivery...........................................12
SECTION 2.03 Cancellation of Warrant Certificates........................................................14

                                                 ARTICLE III

                              OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF
                                                  WARRANTS

SECTION 3.01 Enforcement of Rights.......................................................................15
</TABLE>

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<TABLE>
<S>                                                                                                     <C>
                                                 ARTICLE IV

                                      CERTAIN COVENANTS OF THE COMPANY

SECTION 4.01 Payment of Taxes............................................................................15
SECTION 4.02 Notice of Expiration Date...................................................................15
SECTION 4.03 Reports to Holders..........................................................................16

                                                  ARTICLE V

                                                 ADJUSTMENTS

SECTION 5.01 Adjustment of Exercise Price and Number of Shares Issuable..................................16
SECTION 5.02 Fractional Interest.........................................................................22
SECTION 5.03 When Adjustment Not Required................................................................22
SECTION 5.04 Challenge to Good Faith Determination.......................................................22
SECTION 5.05 Treasury Stock..............................................................................23
SECTION 5.06 Notices to Warrant Holders..................................................................23

                                                 ARTICLE VI

                                        CONCERNING THE WARRANT AGENT

SECTION 6.01 Warrant Agent...............................................................................24
SECTION 6.02 Conditions of Warrant Agent's Obligations...................................................24
SECTION 6.03 Resignation and Appointment of Successor....................................................28

                                                 ARTICLE VII

                                                MISCELLANEOUS

SECTION 7.01 Amendment...................................................................................29
SECTION 7.02 Notices and Demands to the Company and Warrant Agent........................................30
SECTION 7.03 Address for Notices to the Company and for Transmission of
             Documents...................................................................................30
SECTION 7.04 Notices to Holders..........................................................................31
SECTION 7.05 APPLICABLE LAW..............................................................................31
SECTION 7.06 Obtaining of Governmental Approvals.........................................................31
SECTION 7.07 Persons Having Rights Under Agreement.......................................................32
SECTION 7.08 Headings....................................................................................32
SECTION 7.09 Counterparts................................................................................32
</TABLE>

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<TABLE>
<S>     <C>                                                                                              <C>
SECTION 7.10 Inspection of Agreement.....................................................................32

EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate to be Delivered Upon Exchange or Registration of Transfer of Warrants
EXHIBIT C - Transferee Letter of Representation
</TABLE>

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                             INDEX OF DEFINED TERMS

<TABLE>
<CAPTION>
DEFINED TERM                                                                                         SECTION
------------                                                                                         -------

<S>                                                                                                  <C>
Agreement........................................................................................    Recitals
Business Day.....................................................................................    2.01
Common Stock.....................................................................................    Recitals
Company..........................................................................................    Recitals
Conversions......................................................................................    5.01(g)
Convertible Securities...........................................................................    5.01(c)
Definitive Warrants..............................................................................    1.02
Depository.......................................................................................    1.02
Distribution.....................................................................................    5.01(c)
Election to Exercise.............................................................................    2.02(b)
Exchange Offer Registration Statement............................................................    1.06
Exercisability Date..............................................................................    2.02(a)
Exercise Date....................................................................................    2.02(d)
Exercise Price...................................................................................    2.02(a)
Expiration Date..................................................................................    2.01
Global Warrants..................................................................................    1.02
Indenture........................................................................................    Recitals
Initial Purchaser................................................................................    Recital
Issue Date.......................................................................................    1.08(a)
Majority Holders.................................................................................    5.04
Notes............................................................................................    Recitals
Warrants.........................................................................................    Recitals
Officers' Certificate............................................................................    1.08(f)
Options..........................................................................................    5.01(c)
Registrar........................................................................................    1.07
Registration Rights Agreement....................................................................    7.06
Redemption Warrants..............................................................................    Recitals
Related Parties..................................................................................    6.02(e)
Resale Restriction Termination Date..............................................................    1.08(a)
Securities Act...................................................................................    1.08(a)
Separability Date................................................................................    1.06
Shares...........................................................................................    1.01
Time of Determination............................................................................    5.01(g)
Trustee..........................................................................................    Recitals
Units............................................................................................    Recitals
Warrant Agent....................................................................................    Recitals
Warrant Agent Office.............................................................................    1.11
Warrant Certificates.............................................................................    Recitals
Warrant Register.................................................................................    1.07
Warrants.........................................................................................    Recitals
</TABLE>

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                                WARRANT AGREEMENT

     THIS WARRANT AGREEMENT ("Agreement"), dated as of December 21, 2000 is
executed and delivered by and between Piccadilly Cafeterias, Inc., a Louisiana
corporation (together with any successor thereto, the "Company"), and The Bank
of New York, a New York banking corporation, as warrant agent (together with any
successor warrant agent, the "Warrant Agent"), for the benefit of the holders
from time to time of the Warrant Certificates (as hereinafter defined).

     WHEREAS, the Company has entered into a purchase agreement dated December
12, 2000, as amended, (the "Purchase Agreement") with Jefferies & Company, Inc.
(the "Initial Purchaser") in which the Company has agreed, among other things,
to sell to the Initial Purchaser (i) an aggregate of 71,000 units (each a "Fixed
Rate Unit" and collectively, the "Fixed Rate Units"), each Fixed Rate Unit
consisting of $1,000 principal amount of the Company's Series A Senior Secured
Notes due 2007 (the "Fixed Rate Notes") and one warrant (each, a "Warrant," and,
collectively, the "Warrants") to purchase initially 10.51 shares of the
Company's common stock, no par value (the "Common Stock"), and (ii) an aggregate
of 4,500 units (each a "Term B Unit", collectively the "Term B Units" and
together with the Fixed Rate Units, the "Units"), each Term B Unit consisting of
$1,000 principal amount of its Series A Term B Notes due 2007 (the "Term B
Notes" and together with the Fixed Rate Notes, the "Notes") and one Warrant, and
the certificates evidencing the Warrants being hereinafter referred to as
"Warrant Certificates," subject to adjustment in accordance with the terms
hereof; and

     WHEREAS, the Warrants and the Notes comprising part of each issue of Units
shall be separately transferable on the Separability Date (as hereinafter
defined); and

     WHEREAS, in connection with the Company's $5.5 million Term Loan Credit
Agreement (the "Term Loan Credit Facility") dated the date hereof among the
Company, as borrower, Hibernia National Bank, as administrative agent, and each
lender named therein, the Company has issued 5,500 Warrants.

     WHEREAS, the Company and the Warrant Agent wish to set forth in this
Agreement, among other things, the terms and conditions on which the Warrants
may be issued, exchanged, canceled, replaced and exercised;

     NOW, THEREFORE, in consideration of the purchase of the Units by the
Initial Purchaser, the Company and the Warrant Agent execute and deliver this
Agreement for the benefit of the holders from time to time of the Warrant
Certificates.

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                                    ARTICLE I

             ISSUANCE, FORM, EXECUTION, DELIVERY AND REGISTRATION OF
                              WARRANT CERTIFICATES

SECTION 1.01 Issuance of Warrants.

     Each Warrant Certificate shall evidence the number of Warrants specified
therein, and each Warrant evidenced thereby shall represent the right, subject
to the provisions contained herein and therein, to purchase from the Company
(and the Company shall issue and sell to such holder of the Warrant) 10.51 fully
paid and non-assessable shares of the Company's Common Stock (the shares of
Common Stock purchasable upon exercise of a Warrant being hereinafter referred
to as the "Shares" and, where appropriate, such term shall also mean the other
securities or property purchasable and deliverable upon exercise of a Warrant as
provided in Article V) at the price specified herein and therein, in each case
subject to adjustment as provided herein and therein.

SECTION 1.02 Form of Warrant Certificates.

     The Warrant Certificates will initially be issued either in global form
(the "Global Warrants"), substantially in the form of Exhibit A hereto
(including footnote 1 thereto), or in registered form as definitive Warrant
certificates (the "Definitive Warrants"). The Warrant Certificates evidencing
the Global Warrants or the Definitive Warrants to be delivered pursuant to this
Agreement shall be substantially in the form set forth in Exhibit A attached
hereto. Such Global Warrants shall represent such of the outstanding Warrants as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Warrants from time to time endorsed thereon and
that the aggregate amount of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate. Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of outstanding Warrants represented thereby shall be made by the Warrant Agent
and Depositary (as defined below) in accordance with instructions given by the
holder thereof. The Depository Trust Company shall act as the depositary with
respect to the Global Warrants (the "Depositary") until a successor shall be
appointed by the Company. Upon written request, a Warrant holder may receive
from the Warrant Agent Definitive Warrants as set forth in Section 1.08 hereof.

SECTION 1.03 Execution of Warrant Certificates.

     The Warrant Certificates shall be executed on behalf of the Company by the
chairman of its Board of Directors, its president or any vice president. Such
signature may be the manual or facsimile signature of the present or any future
such officer. Typographical and other minor errors or defects in any such
signature shall not affect the validity or enforceability of any Warrant
Certificate that has been duly countersigned and delivered by the Warrant Agent.

     In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificate so
signed shall be delivered by the Warrant

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Agent or disposed of by the Company, such Warrant Certificate nevertheless may
be delivered or disposed of as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such person as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officer of the Company, although at the date of the execution and delivery of
this Agreement any such person was not such an officer.

SECTION 1.04 Authentication and Delivery.

     Subject to the immediately following paragraph, Warrant Certificates shall
be authenticated by manual signature and dated the date of authentication by the
Warrant Agent and shall not be valid for any purpose unless so authenticated and
dated. The Warrant Certificates shall be numbered and shall be registered in the
Warrant Register (as defined in Section 1.07 hereof).

     Upon the receipt by the Warrant Agent of a written order of the Company,
which order shall be signed by the chairman of its Board of Directors, its
president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated, whether
the Warrants are to be Global Warrants or Definitive Warrants, the date of such
Warrants and such other information as the Warrant Agent may reasonably request,
without any further action by the Company, the Warrant Agent is authorized, upon
receipt from the Company at any time and from time to time of the Warrant
Certificates, duly executed as provided in Section 1.03 hereof, to authenticate
the Warrant Certificates and deliver them. Such authentication shall be by a
duly authorized signatory of the Warrant Agent (although it shall not be
necessary for the same signatory to sign all Warrant Certificates).

     In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who authenticated such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
authenticated on behalf of the Warrant Agent by such persons as, at the actual
time of authentication of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.

     The Warrant Agent's authentication on all Warrant Certificates shall be in
substantially the form set forth in Exhibit A hereto.

SECTION 1.05 Temporary Warrant Certificates.

     Pending the preparation of definitive Warrant Certificates, the Company may
execute, and the Warrant Agent shall authenticate and deliver, temporary Warrant
Certificates, which are printed, lithographed, typewritten or otherwise
produced, substantially of the tenor of the definitive Warrant Certificates in
lieu of which they are issued and with such appropriate insertions, omissions,

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substitutions and other variations as the officers executing such Warrant
Certificates may determine, as evidenced by their execution of such Warrant
Certificates.

     If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.11 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall authenticate and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.

SECTION 1.06 Separation of Warrants and Notes.

     The Notes and the Warrants initially constituting part of the Units will
not be separately transferable until the date (the "Separability Date") which is
the earliest of (i) the effective date of the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement, (ii) 180 days from
the Issue Date (as defined in Section 1.08(a)(ii)(y) hereof) and (iii) such
earlier date as the Initial Purchaser shall determine. The promissory notes
evidencing the Loan (as defined in the Term Loan Credit Facility) and the
Warrants issued in connection with the Term Loan Credit Facility shall not be
separately transferable until the Separability Date.

SECTION 1.07 Registration.

     The Company will keep, at the office or agency maintained by the Company
for such purpose, a register or registers in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of, and registration of transfer and exchange of, Warrants as provided in this
Article. Each person designated by the Company from time to time as a person
authorized to register the transfer and exchange of the Warrants is hereinafter
called, individually and collectively, the "Registrar". Initially, the Company
shall act as Registrar. Upon written notice to the Warrant Agent and any acting
Registrar, the Company may appoint a successor Registrar for such purposes.

     The Company will at all times designate one person (who may be the Company
and who need not be a Registrar) to act as repository of a master list of names
and addresses of the holders of Warrants (the "Warrant Register"). The Company
will act as such repository unless and until some other person is, by written
notice from the Company to the Warrant Agent and the Registrar, designated by
the Company to act as such. The Company shall cause each Registrar to furnish to
such repository, on a current basis, such information as to all registrations of
transfer and exchanges effected by such Registrar, as may be necessary to enable
such repository to maintain the Warrant Register on as current a basis as is
practicable.

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SECTION 1.08 Registration of Transfers and Exchanges.

         (a) Transfer and Exchange of Definitive Warrants. When Definitive
Warrants are presented to the Warrant Agent with a request:

               (i) to register the transfer of the Definitive Warrants; or

               (ii) to exchange such Definitive Warrants for an equal number of
     Definitive Warrants, the Warrant Agent shall register the transfer or make
     the exchange as requested if the requirements under this Warrant Agreement
     as set forth in this Section 1.08 for such transactions are met; provided,
     however, that the Definitive Warrants presented or surrendered for
     registration of transfer or exchange:

               (x) shall be duly endorsed or accompanied by a written
         instruction of transfer in form satisfactory to the Company and the
         Warrant Agent, duly executed by the holder thereof or by its attorney,
         duly authorized in writing; and

               (y) in the case of Warrants the offer and sale of which has not
         been registered under the Securities Act of 1933, as amended, (the
         "Securities Act"), and are presented for transfer or exchange prior to
         (x) the date which is two years after the later of the date of original
         issue (the "Issue Date") and the last date on which the Company or any
         affiliate of the Company was the owner of such Warrant, or any
         predecessor thereto and (y) such later date, if any, as may be required
         by any subsequent change in applicable law (the "Resale Restriction
         Termination Date"), such Warrants shall be accompanied, in the sole
         discretion of the Company, by the following additional information and
         documents, as applicable:

                    (A) if such Warrant is being delivered to the Warrant Agent
         by a holder for registration in the name of such holder, without
         transfer, a certification from such holder to that effect (in
         substantially the form of Exhibit B hereto); or

                    (B) if such Warrant is being transferred to a qualified
         institutional buyer (as defined in Rule 144A under the Securities Act)
         in accordance with Rule 144A under the Securities Act or pursuant to an
         exemption from registration in accordance with Rule 144 or Regulation S
         under the Securities Act, a certification to that effect (in
         substantially the form of Exhibit B hereto); or

                    (C) if such Warrant is being transferred to an institutional
         "accredited investor" within the meaning of subparagraph (a)(l),
         (a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act, delivery
         of a certification to that effect (in substantially the form of Exhibit
         B hereto) and a letter of representation from the transferee in
         substantially the form of Exhibit C hereto; or

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                    (D) if such Warrant is being transferred in reliance on
         another exemption from the registration requirements of the Securities
         Act, a certification to that effect (in substantially the form of
         Exhibit B hereto) and an opinion of counsel reasonably acceptable to
         the Company to the effect that such transfer is in compliance with the
         Securities Act.

         (b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant. A Definitive Warrant may not be transferred for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with:

               (i) certification, substantially in the form of Exhibit B hereto,
     that such Definitive Warrant is being transferred to a "qualified
     institutional buyer" (as defined in Rule 144A under the Securities Act) in
     accordance with Rule 144A under the Securities Act;or

               (ii) certification, substantially in the form of Exhibit B
     hereto, that such Definitive Warrant is being transferred to an
     institutional "accredited investor" within the meaning of subparagraph
     (a)(l), (a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act, a
     letter of representation from the transferee in substantially the form of
     Exhibit C hereto and an opinion of counsel reasonably acceptable to the
     Company to the effect that such transfer is in compliance with the
     Securities Act; and

               (iii) written instructions directing the Warrant Agent to make,
     or to direct the Depositary to make, an endorsement on the Global Warrant
     to reflect an increase in the aggregate amount of the Warrants represented
     by the Global Warrant

then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be increased accordingly. If no
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall authenticate a new Global Warrant in the appropriate amount.

         (c) Transfer and Exchange of Global Warrants. The transfer and exchange
of Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Section 1.08 and the procedures of the
Depositary therefor.

         (d) Transfer of a Beneficial Interest in a Global Warrant for a
Definitive Warrant.

               (i) Any person having a beneficial interest in a Global Warrant
     may upon request transfer such beneficial interest for a Definitive
     Warrant. Upon receipt by the Warrant Agent of written instructions or such
     other form of instructions as is customary for the Depositary from the
     Depositary or its nominee on behalf of any person having a beneficial

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     interest in a Global Warrant and upon receipt by the Warrant Agent of a
     written order or such other form of instructions as is customary for the
     Depositary or the person designated by the Depositary as having such a
     beneficial interest containing registration instructions and, in the case
     of any such transfer or exchange prior to the Resale Restriction
     Termination Date, the following additional information and documents:

                    (A) if such beneficial interest is being transferred to the
         person designated by the Depositary as being the beneficial owner, a
         certification from such person to that effect (in substantially the
         form of Exhibit B hereto); or

                    (B) if such beneficial interest is being transferred to a
         qualified institutional buyer (as defined in Rule 144A under the
         Securities Act) in accordance with Rule 144A under the Securities Act
         or pursuant to an exemption from registration in accordance with Rule
         144 or Regulation S under the Securities Act, a certification to that
         effect from the transferee or transferor (in substantially the form of
         Exhibit B hereto); or

                    (C) if such beneficial interest is being transferred to an
         institutional "accredited investor" within the meaning of subparagraph
         (a)(l), (a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act,
         delivery of a certification to that effect (in substantially the form
         of Exhibit B hereto), a letter of representation from the transferee in
         substantially the form of Exhibit C hereto and an opinion of counsel
         reasonably acceptable to the Company to the effect that such transfer
         is in compliance with the Securities Act; or

                    (D) if such beneficial interest is being transferred in
         reliance on another exemption from the registration requirements of the
         Securities Act, a certification to that effect (in substantially the
         form of Exhibit B hereto) and an opinion of counsel reasonably
         acceptable to the Company to the effect that such transfer is in
         compliance with the Securities Act;

then the aggregate amount of the Global Warrant will be reduced by the
Depositary or its custodian and, following such reduction, the Company will
execute and, upon receipt of an authentication order in the form of an Officers'
Certificate (as defined), the Warrant Agent will authenticate and deliver to the
transferee a Definitive Warrant.

               (ii) Definitive Warrants issued in exchange for a beneficial
     interest in a Global Warrant pursuant to this Section 1.08(d) shall be
     registered in such names and in such authorized denominations as the
     Depositary, pursuant to instructions from its direct or indirect
     participants or otherwise, shall instruct the Warrant Agent in writing. The
     Warrant Agent shall deliver such Definitive Warrants to the persons in
     whose names such Warrants are so registered.

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         (e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.

         (f) Authentication of Definitive Warrants in Absence of Depositary. If
at any time:

               (i) the Depositary for the Warrants notifies the Company that the
     Depositary is unwilling or unable to continue as Depositary for the Global
     Warrant and a successor Depositary for the Global Warrant is not appointed
     by the Company within 90 days after delivery of such notice or

               (ii) the Company, at its sole discretion, notifies the Warrant
     Agent in writing that it elects to cause the issuance of Definitive
     Warrants under this Warrant Agreement,

then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must be
the principal executive officer, principal financial officer or principal
accounting officer) (an "Officers' Certificate") requesting the authentication
and delivery of Definitive Warrants, will authenticate and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.

         (g) Legends.

               (i) Except to the extent permitted by the following paragraph
     (ii), each Warrant Certificate evidencing the Global Warrants and the
     Definitive Warrants (and all Warrants issued in exchange therefor or
     substitution thereof) shall bear a legend substantially to the following
     effect:

     THIS WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
     SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
     SECURITIES LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE OFFERED, SOLD,
     PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
     ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
     SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
     HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
     DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS
     ACQUIRED THIS WARRANT IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH

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     REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
     "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
     REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT IT WILL
     NOT RESELL OR OTHERWISE TRANSFER THIS WARRANT EXCEPT (A) TO THE ISSUER OR
     ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE HOLDER REASONABLY
     BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
     QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
     OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
     SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
     UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
     FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
     REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS WARRANT
     (THE FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN OPINION
     OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE
     WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
     OF COUNSEL ACCEPTABLE TO THE ISSUER), OR (G) PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN
     ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
     STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL
     DELIVER TO EACH PERSON TO WHOM THIS WARRANT OR AN INTEREST HEREIN IS
     TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

     To the extent a Warrant Certificate evidences a Global Warrant, such
Warrant Certificate shall also bear the legend with respect thereto
substantially in the form set forth on Exhibit A hereto.

               (ii) Upon any sale or transfer of a Warrant pursuant to Rule 144
     under the Securities Act in accordance with this Section 1.08 or an
     effective registration statement under the Securities Act:

                    (A) in the case of any Warrant that is a Definitive Warrant,
         the Warrant Agent shall permit the holder thereof to exchange such
         Warrant for a Definitive Warrant that does not bear the legend set
         forth above and rescind any related restriction on the transfer of such
         Warrant; and

                    (B) any such Warrant represented by a Global Warrant shall
         not be subject to the provisions set forth in (i) above (such sales or
         transfers being subject only to the provisions of Section 1.08(c)
         hereof); provided, however, that with

                                        9

<PAGE>   15

         respect to any request for an exchange of a Warrant that is represented
         by a Global Warrant for a Definitive Warrant that does not bear the
         first paragraph of the legend set forth above, which request is made in
         reliance upon Rule 144 under the Securities Act, the holder thereof
         shall certify in writing to the Warrant Agent that such request is
         being made pursuant to Rule 144 under the Securities Act (such
         certification to be substantially in the form of Exhibit B hereto).

         (h) Cancellation and/or Adjustment of a Global Warrant. At such time as
all beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to or retained and canceled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, redeemed, repurchased or canceled, the number
of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant by the Warrant Agent or the
Depositary to reflect such reduction.

         (i) Obligations with Respect to Transfers and Exchanges of Definitive
Warrants.

               (i) To permit registrations of transfers and exchanges, the
     Company shall execute, at the Warrant Agent's request, and the Warrant
     Agent shall authenticate Definitive Warrants and Global Warrants.

               (ii) All Definitive Warrants and Global Warrants issued upon any
     registration of transfer or exchange of Definitive Warrants or Global
     Warrants shall be the valid obligations of the Company, entitled to the
     same benefits under this Warrant Agreement as the Definitive Warrants or
     Global Warrants surrendered upon the registration of transfer or exchange.

               (iii) Prior to due presentment for registration of transfer of
     any Warrant, the Warrant Agent and the Company may deem and treat the
     person in whose name any Warrant is registered as the absolute owner of
     such Warrant, and neither the Warrant Agent nor the Company shall be
     affected by notice to the contrary.

         (j) Payment of Taxes. The Company or the Warrant Agent may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any exchange or transfer pursuant to this
Section 1.08.

SECTION 1.09 Obligations of the Warrant Agent.

     The Warrant Agent shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Warrant Agreement or under applicable law with respect to any transfer of any
interest in any Warrant (including any transfers between or among beneficial
owners of interests in any Global Warrant) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so

                                       10

<PAGE>   16

if and when expressly required by the terms of this Warrant Agreement and to
examine the same to determine substantial compliance as to form with the express
requirements hereof.

SECTION 1.10 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates.

     Upon receipt by the Company and the Warrant Agent (or any agent of the
Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity reasonably satisfactory to them and,
in the case of mutilation or defacement, upon surrender thereof to the Warrant
Agent for cancellation, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course, the Company shall execute, and an authorized
signatory of the Warrant Agent shall manually authenticate and deliver, in
exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of (but shall be subject to all the limitations of rights set forth
in) this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 1.10 are exclusive with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates and shall preclude (to the
extent lawful) any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.

     The Warrant Agent is hereby authorized to authenticate and deliver the new
Warrant Certificates required pursuant to the provisions of this Section.

SECTION 1.11 Offices for Exercise, etc.

     So long as any of the Warrants remain outstanding, the Company will
designate and maintain in the continental United States: (a) an office or agency
where the Warrant Certificates may be presented for exercise, (b) an office or
agency where the Warrant Certificates may be presented for registration of
transfer and for exchange (including the exchange of temporary Warrant
Certificates for definitive Warrant Certificates pursuant to Section 1.05
hereof), and (c) an office or agency where notices and demands to or upon the
Company in respect of the Warrants or of this Agreement may be served. The
Company may from time to time change or rescind such designation, as it may deem
desirable or expedient. The Company will give to the Warrant Agent written
notice of the location

                                       11

<PAGE>   17

of any such office or agency and of any change of location thereof. The Company
hereby designates the Warrant Agent at its office in the Borough of Manhattan,
The City of New York (the "Warrant Agent Office"), as the initial agency
maintained for each such purpose.

                                   ARTICLE II

                DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE

SECTION 2.01 Duration of Warrants.

     Subject to the terms and conditions established herein, the Warrants shall
expire at 5:00 p.m., New York City time, on November 1, 2007 (the "Expiration
Date"). Each Warrant may be exercised on any Business Day (as defined below) on
or after the Exercisability Date (as defined below) and on or prior to the
Expiration Date.

     Any Warrant not exercised before the close of business on the Expiration
Date relating to such Warrant shall become void, and all rights of the holder
under the Warrant Certificate evidencing such Warrant and under this Agreement
shall cease.

     "Business Day" shall mean any day on which (i) banks in the Borough of
Manhattan, The City of New York, (ii) the principal national securities exchange
or market on which the Common Stock is listed or admitted to trading and (iii)
the principal national securities exchange or market, if any, on which the
Warrants are listed or admitted to trading are open for business.

SECTION 2.02 Exercise, Exercise Price, Settlement and Delivery.

         (a) Subject to the provisions of this Agreement, a holder of Warrants
shall have the right to purchase from the Company on or after the Separability
Date (the "Exercisability Date") and on or prior to the Expiration Date 10.51
fully paid and non-assessable Shares per each Warrant such holder owns, subject
to adjustment in accordance with Article V hereof, at the initial purchase price
of $ 1.16875 for each Share purchased subject to adjustment in accordance with
Article V hereof (the "Exercise Price").

         (b) Warrants may be exercised on or after the Exercisability Date by
(i) surrendering at any Warrant Agent Office the Warrant Certificate evidencing
such Warrants with the form of election to purchase Shares set forth on the
reverse side of the Warrant Certificate (the "Election to Exercise") duly
completed and signed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney, and
(ii) paying in full the Exercise Price (by delivering the consideration
specified in Section 2.02(c)(i) or Section 2.02(g)) for each such Share
purchased and any other amounts required to be paid pursuant to Section 4.01
hereof.

         (c) Simultaneously with the exercise of each Warrant, payment in full
of the Exercise Price shall be made either (i) in cash or by certified or
official bank check payable to the

                                       12

<PAGE>   18

order of the Company, delivered to the office or agency where the Warrant
Certificate is being surrendered or (ii) by "cashless" or "net-issue" exercise
pursuant to Section 2.02(g). No payment or adjustment shall be made on account
of any dividends on the Shares issued upon exercise of a Warrant.

         (d) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Agent Office (other than any
Warrant Agent Office that also is an office of the Warrant Agent), such Warrant
Certificate and payment shall be promptly delivered to the Warrant Agent. The
"Exercise Date" for a Warrant shall be the date when all of the items referred
to in paragraph (b) and the first sentence of paragraph (c) of this Section 2.02
are received by the Warrant Agent at or prior to 2:00 p.m., New York City time,
on a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in paragraph (b) and the first sentence
of paragraph (c) are received after 2:00 p.m., New York City time, on a Business
Day, the exercise of the Warrants to which such item relates will be effective
on the next succeeding Business Day. Notwithstanding the foregoing, in the case
of an exercise of Warrants on the Expiration Date (as defined in Section 2.01),
if all of the items referred to in the first sentence of paragraphs (b) and (c)
are received by the Warrant Agent at or prior to 5:00 p.m., New York City time,
on such Expiration Date, the exercise of the Warrants to which such items relate
will be effective on the Expiration Date.

         (e) Subject to Section 2.02(g), upon the exercise of a Warrant in
accordance with the terms hereof, the receipt of a Warrant Certificate and
payment of the Exercise Price, the Warrant Agent shall: (i) cause an amount
equal to the Exercise Price to be paid to the Company by crediting the same to
the account designated by the Company in writing to the Warrant Agent for that
purpose; (ii) advise the Company promptly by telephone of the amount so
deposited to the Company's account and promptly confirm such telephonic advice
in writing; and (iii) as soon as practicable, advise the Company in writing of
the number of Warrants (giving effect to Section 5.01(o) below) exercised in
accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.

         (f) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Shares to which such
holder is entitled, in fully registered form, registered in such name or names
as may be directed by such holder pursuant to the Election to Exercise, as set
forth on the reverse of the Warrant Certificate. The Warrant Agent shall have no
obligation to ascertain the number of Shares to be issued with respect to the
exercised Warrant or Warrants. Such certificate or certificates evidencing the
Shares shall be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record of such
Shares as of the close of business on the Exercise Date. After such exercise of
any Warrant or Warrants, the Company shall also issue or cause to be issued to
or upon the written order of the registered holder of such Warrant Certificate,
a new

                                       13

<PAGE>   19

Warrant Certificate, countersigned by the Warrant Agent pursuant to the
Company's written instruction, evidencing the number of Warrants, if any,
remaining unexercised unless such Warrants shall have expired.

         (g) A holder of Warrants shall have the right to exercise such holder's
Warrants to receive whole shares of Common Stock in a "cashless or "net-issue"
exercise upon compliance with the exercise procedures in Section 2.02(b)(i),
without any payment in cash or certified or official bank check or otherwise, in
which event the Company shall issue to such holder a number of shares of Common
Stock computed using the following formula:

         X = Y (A-B)
             -------
                A

Where:   X = the number of shares of Common Stock to be issued to the holder,
         provided that no fractional shares shall be issued.

         Y = the number of shares of Common Stock with respect to which such
         holder has exercised Warrants.

         A = the current market price of the Common Stock (as determined by
         Section 5.01(g)).

         B = the Exercise Price.

SECTION 2.03 Cancellation of Warrant Certificates.

     In the event the Company shall purchase or otherwise acquire Warrants, the
Warrant Certificates evidencing such Warrants may thereupon be delivered to the
Warrant Agent, and if so delivered, shall be canceled by it and retired. The
Warrant Agent shall cancel all Warrant Certificates properly surrendered for
exchange, substitution, transfer or exercise. The Warrant Agent shall dispose of
canceled Warrant Certificates held by it in accordance with its procedures then
in effect for the disposition of canceled securities and deliver a certificate
of disposition to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the Company
all money received by the Warrant Agent for the purchase of Warrant Shares
through the exercise of such Warrants.

                                       14

<PAGE>   20

                                   ARTICLE III

           OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS

SECTION 3.01 Enforcement of Rights.

         (a) Notwithstanding any of the other provisions of this Agreement, any
holder of any Warrant Certificate, without the consent of the Warrant Agent, the
holder of any Shares or the holder of any other Warrant Certificate, may, in and
for its own behalf, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, its right to exercise the
Warrant or Warrants evidenced by its Warrant Certificate as provided in such
Warrant Certificate and in this Agreement.

         (b) Neither the Warrants nor any Warrant Certificate shall entitle the
holders thereof to any of the rights of a holder of Shares, including, without
limitation, the right to vote or to receive any dividends or other payments or
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or to share in the
assets of the Company in the event of the liquidation, dissolution or winding up
of the Company's affairs or any other matter, or any rights whatsoever as
stockholders of the Company.

                                   ARTICLE IV

                        CERTAIN COVENANTS OF THE COMPANY

SECTION 4.01 Payment of Taxes.

     The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrants and of the Shares upon the exercise of Warrants or
to the separation of the Warrants and Notes on the Separability Date; provided,
however, that the Company shall not be required to pay any tax or other
governmental charge which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Shares in a name
other than the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant. In any such case, the Company shall not be required to
issue or deliver such Warrant Certificate or certificate for Shares unless or
until the person or persons requesting issuance thereof shall have paid to the
Company the amount of such tax or other governmental charge or shall have
established to the satisfaction of the Company that such tax or other
governmental charge has been paid or an exemption is available therefrom.

SECTION 4.02 Notice of Expiration Date.

     The Company will give notice of the Expiration Date to all holders of the
then outstanding Warrants, not less than 90 nor more than 120 days prior to the
Expiration Date.

                                       15

<PAGE>   21

SECTION 4.03 Reports to Holders.

     (a) Whether or not required by Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company shall file
with the Securities and Exchange Commission (the "SEC") (i) within ninety (90)
days after the end of the last fiscal year such annual reports as would be
required by Sections 13 and 15(d) of the Exchange Act, (ii) within forty-five
(45) days after the end of each of the first three fiscal quarters of each
fiscal year such quarterly reports as would be required by Section 13 or 15(d)
of the Exchange Act and (iii) all other reports and information as would be
required by Sections 13 and 15(d) of the Exchange Act. Within fifteen (15) days
after the same shall be filed with the SEC, the Company shall file with the
Warrant Agent, and make available to each holder of Warrants, without cost to
such holder, copies of such reports or other information.

     (b) The Company shall provide the Warrant Agent with a sufficient number of
copies of all reports and other documents and information that the Warrant Agent
may be required to deliver to the holders of the Warrants under this Section
4.03. Delivery of such reports, information and documents to the Warrant Agent
is for informational purposes only and the Warrant Agent's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Warrant Agent is
entitled to rely exclusively on Officer's Certificates).

                                    ARTICLE V

                                   ADJUSTMENTS

SECTION 5.01 Adjustment of Exercise Price and Number of Shares Issuable.

     The number and kind of Shares purchasable upon the exercise of each Warrant
and the Exercise Price shall be subject to adjustment from time to time as
follows:

         (a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock or (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
the (a) number of Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the holder of any Warrant thereafter
exercised shall be entitled to receive the number of Shares which such holder
would have owned immediately following such action had such Warrant been
exercised immediately prior thereto, and (b) the Exercise Price shall be
adjusted by multiplying such Exercise Price immediately prior to such adjustment
by a fraction, of which the numerator shall be the number of Shares purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and of
which the denominator shall be the number of Shares purchasable immediately
thereafter. An adjustment made pursuant to this paragraph shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of

                                       16

<PAGE>   22

an adjustment made pursuant to this paragraph, the holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors of the Company
(whose determination shall be conclusive) shall determine the allocation of the
adjusted Exercise Price between or among shares of such classes of capital
stock.

         (b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock (other than as
set forth in paragraph (a) above and other than a change in par value, or from
par value to no par value, or from no par value to par value), or in case of any
consolidation or merger of the Company with or into another corporation or other
entity (other than a merger in which the Company is the continuing corporation
and which does not result in any reclassification or change (other than a change
in the number of outstanding shares that would not otherwise trigger an
adjustment hereunder) of the then-outstanding shares of Common Stock or other
capital stock of the Company (other than a change in par value, or from par
value to no par value, or from par value to par value or as a result of a
subdivision or combination)) or in case of any sale or conveyance to another
corporation or other entity of all or substantially all of the assets of the
Company, then, as a condition of such reclassification, change, consolidation,
merger, sale or conveyance, the Company or such a successor or purchasing
corporation or other entity, as the case may be, shall forthwith make lawful and
adequate provision whereby the holder of such Warrant then outstanding shall
have the right thereafter to receive on exercise of such Warrant the kind and
amount of shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock issuable upon exercise of such Warrant
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance and enter into a supplemental warrant agreement so providing. Such
provisions shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
V. If the issuer of securities deliverable upon exercise of Warrants under the
supplemental warrant agreement is an affiliate of the formed, surviving or
transferee corporation or other entity, that issuer shall join in the
supplemental warrant agreement. The above provisions of this paragraph (b) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.

     In case of any such reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation or other entity (if other than
the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant Agreement
to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of the Common Stock for
which each Warrant is exercisable, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Article V. The foregoing
provisions of this Section 5.01(b) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or dispositions of
assets.

         (c) Issuance of Options or Convertible Securities. In the event the
Company shall, at any time or from time to time after the date hereof, issue,
sell, distribute or otherwise grant

                                       17

<PAGE>   23

in any manner (including by assumption) to all holders of the Common Stock any
rights to subscribe for or to purchase, or any warrants or options for the
purchase of, Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (any such rights, warrants or options being herein
called "Options" and any such convertible or exchangeable stock or securities
being herein called "Convertible Securities") or any Convertible Securities
(other than upon exercise of any Option), whether or not such Options or the
rights to convert or exchange such Convertible Securities are immediately
exercisable, and the price per share at which Common Stock is issuable upon the
exercise of such Options or upon the conversion or exchange of such Convertible
Securities (determined by dividing (i) the aggregate amount, if any, received or
receivable by the Company as consideration for the issuance, sale, distribution
or granting of all such Options or any such Convertible Security, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Options or upon conversion or exchange of
all such Convertible Securities, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of all such Options or upon the conversion or
exchange of all such Convertible Securities or upon the conversion or exchange
of all Convertible Securities issuable upon the exercise of all Options) shall
be less than the current market price per share of Common Stock (determined
pursuant to Section 5.01(g)) on the record date for the issuance, sale,
distribution or granting of such Options (any such event being herein called a
"Distribution") then, effective upon such Distribution, the Exercise Price shall
be reduced to the price (calculated to the nearest 1/1,000 of one cent)
determined by multiplying the Exercise Price in effect immediately prior to such
Distribution by a fraction, the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding (exclusive of any treasury shares)
immediately prior to such Distribution multiplied by the current market price
per share of Common Stock (determined pursuant to Section 5.01(g)) on the date
of such Distribution plus (ii) the consideration, if any, received by the
Company upon such Distribution, and the denominator of which shall be the
product of (A) the total number of shares of Common Stock outstanding (exclusive
of any treasury shares) immediately after such Distribution multiplied by (B)
the current market price per share of Common Stock (determined pursuant to
Section 5.01(g)) on the record date for such Distribution. For purposes of the
foregoing, the total maximum number of shares of Common Stock issuable upon
exercise of all such Options or upon the conversion or exchange of all such
Convertible Securities or upon the conversion or exchange of the total maximum
amount of the Convertible Securities issuable upon the exercise of all such
Options shall be deemed to have been issued as of the date of such Distribution
and thereafter shall be deemed to be outstanding and the Company shall be deemed
to have received as consideration therefor such price per share, determined as
provided above. Except as provided in paragraphs (j) and (k) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of the Convertible
Securities or upon the conversion or exchange of the Convertible Securities
issuable upon the exercise of such Options. Notwithstanding anything in this
Article V to the contrary, neither the exercise of any options granted to
management pursuant to an employee benefit plan approved by stockholders of the
Company, nor upon the exercise of any outstanding Warrants shall require any
adjustment to either the Exercise Price of the Warrants or the number of shares
issuable upon exercise of the Warrants.

                                       18

<PAGE>   24

         (d) Dividends and Distributions. In the event the Company shall, at any
time or from time to time after the date hereof, distribute to all the holders
of Common Stock any dividends or other distribution of cash, evidences of its
indebtedness, other securities or other properties or assets (in each case other
than (i) dividends payable in Common Stock, Options or Convertible Securities
and (ii) any cash dividend from net profits or surplus), or any options,
warrants or other rights to subscribe for or purchase any of the foregoing, then
the Exercise Price shall be decreased to a price determined by multiplying the
Exercise Price then in effect by a fraction, the numerator of which shall be the
current market price per share of Common Stock (determined pursuant to Section
5.01(g)) on the record date for such distribution less the sum of (X) the cash
portion, if any, of such distribution per share of Common Stock outstanding
(exclusive of any treasury shares) on the record date for such distribution plus
(Y) the then fair market value (as determined in good faith by the Board of
Directors of the Company) per share of Common Stock outstanding (exclusive of
any treasury shares) on the record date for such distribution of that portion,
if any, of such distribution consisting of evidences of indebtedness, other
securities, properties, assets (other than cash), options, warrants or
subscription or purchase rights, and the denominator of which shall be such
current market price per share of Common Stock. The adjustments required by this
paragraph (d) shall be made whenever any such distribution occurs retroactive to
the record date for the determination of stockholders entitled to receive such
distribution.

         (e) This paragraph intentionally omitted.

         (f) This paragraph intentionally omitted.

         (g) Current Market Price. For the purpose of any computation of current
market price, the current market price per share of Common Stock at any date
shall be (x) for purposes of Section 2.02(g) and 5.02, the closing sales price
on the trading day immediately prior to the exercise of the applicable Warrant
and (y) in all other cases, the average of the daily closing prices for the
shorter of (i) the 20 consecutive trading days ending on the last full trading
day on the exchange or market specified in the second succeeding sentence prior
to the Time of Determination (as defined below) and (ii) the period commencing
on the date next succeeding the first public announcement of the issuance, sale,
distribution or granting in question through such last full trading day prior to
the Time of Determination. The term "Time of Determination" as used herein shall
be the time and date of the earlier to occur of (A) the date as of which the
current market price is to be computed and (B) the last full trading day on such
exchange or market before the commencement of "ex-dividend" trading in the
Common Stock relating to the event giving rise to the adjustment required by
paragraph (a), (b), (c) or (d). The closing price for any day shall be the last
reported sale price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way for such
day, in each case (1) on the principal national securities exchange on which the
shares of Common Stock are listed or to which such shares are admitted to
trading or (2) if the Common Stock is not listed or admitted to trading on a
national securities exchange, in the over-the- counter market as reported by the
Nasdaq NMS or any comparable system or (3) if the Common Stock is not listed on
the Nasdaq NMS or a comparable system, as furnished by two members of the New
York Stock Exchange, Inc. selected from time to time in good faith by the Board
of Directors of the Company for that purpose. In the absence of all of the
foregoing, or if for any other reason

                                       19

<PAGE>   25

the current market price per share cannot be determined pursuant to the
foregoing provisions of this paragraph (g), the current market price per share
shall be the fair market value thereof as determined in good faith by the Board
of Directors of the Company.

         (h) Certain Distributions. If the Company shall pay a dividend or make
any other distribution payable in Options or Convertible Securities, then, for
purposes of paragraph (c) above, such Options or Convertible Securities shall be
deemed to have been issued or sold without consideration.

         (i) Consideration Received. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for a consideration
other than cash, the amount of the consideration other than cash received by the
Company in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration; provided, however, that if such Options have an exercise price
equal to or greater than the current market price of the Common Stock on the
date of issuance of such Options, then such Options shall be deemed to have been
issued for consideration equal to such exercise price.

         (j) Deferral of Certain Adjustments. No adjustment to the Exercise
Price (including the related adjustment to the number of Shares purchasable upon
the exercise of each Warrant) shall be required hereunder unless such
adjustment, together with other adjustments carried forward as provided below,
would result in an increase or decrease of at least one percent (1%) of the
Exercise Price; provided, however, that any adjustments which by reason of this
paragraph (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment need be made for a
change in the par value of the Common Stock. All calculations under this Section
shall be made to the nearest 1/1,000 of one cent or to the nearest l/1,000th of
a Share, as the case may be.

         (k) Changes in Options and Convertible Securities. If the exercise
price provided for in any Options referred to in paragraph (c) above, the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph (c) above, or the rate at which
any Convertible Securities referred to in paragraph (c) above are convertible
into or exchangeable for Common Stock shall change at any time (other than under
or by reason of provisions designed to protect against dilution upon an event
which results in a related adjustment pursuant to this Article V), the Exercise
Price then in effect and the number of Shares purchasable upon the exercise of
each Warrant shall forthwith be readjusted (effective only with respect to any
exercise of any Warrant after such readjustment) to the Exercise Price and
number of Shares so purchasable that would then be in effect had the adjustment
made upon the issuance, sale, distribution or granting of such Options or
Convertible Securities been made based upon such changed purchase price,
additional consideration or conversion rate, as the case may be, but only with
respect to such Options and Convertible Securities as then remain outstanding.

                                       20

<PAGE>   26

         (l) Expiration of Options and Convertible Securities. If, at any time
after any adjustment to the number of Shares purchasable upon the exercise of
each Warrant shall have been made pursuant to paragraph (c) or (k) above or this
paragraph (1), any Options or Convertible Securities shall have expired
unexercised, the number of such Shares purchasable by each Warrant shall, upon
such Expiration, be readjusted and shall thereafter be such as they would have
been had they been originally adjusted (or had the original adjustment not been
required, as the case may be) as if (i) the only shares of Common Stock deemed
to have been issued in connection with such Options or Convertible Securities
were the shares of Common Stock, if any, actually issued or sold upon the
exercise of such Options or Convertible Securities and (ii) 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, distribution or
granting of all such Options or Convertible Securities, whether or not
exercised; provided, however, that no such readjustment shall have the effect of
decreasing the number of such shares so purchasable by an amount (calculated by
adjusting such decrease to account for all other adjustments made pursuant to
this Article V following the date of the original adjustment referred to above)
in excess of the amount of the adjustment initially made in respect of the
issuance, sale, distribution or granting of such Options or Convertible
Securities.

         (m) Other Adjustments. In the event that at any time, as a result of an
adjustment made pursuant to this Article V, holders of Warrants shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of each Warrant and the Exercise Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Shares of
Common Stock contained in this Article V.

         (n) Other Action Affecting Common Stock. In case at any time or from
time to time the Company shall take any action in respect of its outstanding
shares of Common Stock, other than any action described in this Article V, then
the number of Shares for which each Warrant is exercisable shall be adjusted in
such manner as may be equitable in the circumstances. If the Company shall at
any time and from time to time issue or sell (i) any shares of any class of
common stock other than Common Stock, (ii) any evidences of its indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for such shares of common stock, with or without the payment of additional
consideration in cash or property, or (iii) any warrants or other rights to
subscribe for or purchase any such shares of common stock or any such evidences,
shares of stock or other securities referred to in (ii) above, then in each such
case such issuance shall be deemed to be of, or in respect of, Common Stock for
purposes of this Article V; provided, however, that, without limiting the
generality of the foregoing, if the Company shall establish a record date for
the purpose of entitling holders of its Common Stock to receive a dividend
payable in, or other distribution of, common stock other than Common Stock,
including shares of non-voting common stock, then the number of Shares for which
each Warrant is exercisable immediately after the occurrence of any such event
shall be adjusted to equal the aggregate number of shares of such common stock
and of Common Stock which a record holder of the same number of Shares for which

                                       21

<PAGE>   27

each Warrant is exercisable immediately prior to the occurrence of such event
would own or be entitled to receive after the happening of such event.

         (o) Statement of Warrant Certificates. Irrespective of any adjustment
in the number or kind of Shares issuable upon the exercise of each Warrant or
the Exercise Price, Warrant Certificates theretofore or thereafter issued shall
continue to express the same number and kind of Shares and Exercise Price as are
stated in the Warrant Certificates initially issuable pursuant to this
Agreement.

SECTION 5.02 Fractional Interest.

     The Company shall not be required to issue fractional shares of Common
Stock on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
shares of Common Stock which shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of shares of Common Stock
acquirable on exercise of the Warrants so presented. If any fraction of a share
of Common Stock would, except for the provisions of this Section, be issuable on
the exercise of any Warrant, the Company shall either (i) pay an amount in cash
calculated by the Company to equal the then current market price per share
(determined pursuant to Section 5.01(g)) multiplied by such fraction computed to
the nearest whole cent or (ii) aggregate all such fractional shares into a whole
number of shares and sell such aggregated fractional shares on behalf of the
holders entitled thereto in a public or private sale and distribute the net cash
proceeds from the sale thereof to such holders pro rata. While the Company will
endeavor to use its best efforts to secure the best available sales price for
such aggregated fractional shares, such price shall not necessarily be the
highest price obtainable for such shares. Holders of Warrants, by their
acceptances of the Warrant Certificates, expressly waive any and all rights to
receive any fraction of a share of Common Stock or a stock certificate or scrip
representing a fraction of a share of Common Stock.

SECTION 5.03 When Adjustment Not Required.

     If the Company shall establish a record date for the purpose of entitling
holders of its Common Stock to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution to stockholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the establishment of such record date
and any such adjustment previously made in respect thereof shall be rescinded
and annulled.

SECTION 5.04 Challenge to Good Faith Determination.

     Whenever the Board of Directors of the Company shall be required to make a
determination in good faith of the fair value of any item under this Article V,
such determination may be challenged in good faith by holders holding a majority
of the outstanding Warrants (the "Majority Holders"), and any dispute shall be
resolved by an investment banking firm of national standing selected by the
Company. The fee of such investment banking firm shall be paid by the Company,
unless such fair

                                       22

<PAGE>   28

market value as determined by the investment banking firm is more than 95% of
the fair market value determined by the Board of Directors of the Company, in
which case the challenging holders shall be jointly and severally liable for
such fee.

SECTION 5.05 Treasury Stock.

     The sale or other disposition of any issued shares of Common Stock owned or
held by or for the account of the Company shall be deemed an issuance thereof
and, except for a voluntary tender or exchange offer made by the Company or any
subsidiary of the Company subject to Section 13(e) of the Exchange Act, a
repurchase thereof and designation of such shares as treasury stock shall not be
deemed to be a redemption thereof for the purposes of this Agreement.

SECTION 5.06 Notices to Warrant Holders.

     In connection with any adjustment of the Exercise Price or in connection
with the Conversion of the Warrants pursuant to this Article V, the Company
shall (i) promptly after such adjustment or Conversion or, if earlier, at least
five (5) days prior to the date on which notice of such adjustment or Conversion
is required to be given, if at all, to The Depository Trust Company cause to be
filed with the Warrant Agent a certificate (A) in the case of any such
adjustment, of a firm of independent public accountants of national standing
selected by the Board of Directors of the Company (who may be the regular
auditors of the Company) setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of Shares
(or portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, or (B) in the
case of the Conversion of the Warrants, an Officers' Certificate stating that
the Conversion has become effective, which certificates shall be conclusive
evidence of the correctness of the matters set forth therein, and (ii) promptly
after such adjustment or Conversion cause to be given to each of the holders of
the Warrant Certificates notice of such adjustment or Conversion. The Warrant
Agent shall be entitled to conclusively rely on the above- referenced
certificates and shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same from time to time to any holder
desiring an inspection thereof during normal business hours upon reasonable
notice. The Warrant Agent shall not at any time be under any duty or
responsibility to any holder to determine whether any facts exist that may
require any adjustment of the number of Shares issuable on exercise of any
Warrant or the Exercise Price or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any Shares which
may be issuable on exercise of any Warrant or whether or not the Conversion has
taken place. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any Shares or
stock certificates or other common stock or property upon the exercise of any
Warrant.

     The Company shall, in addition, promptly notify the holders of the Warrant
Certificates of any determination of its Board of Directors pursuant to Section
5.01(n) that any actions affecting its Common Stock generally will not require
an adjustment to the Exercise Price or the number of Shares for which a Warrant
is exercisable, and shall specify in such notice the reasons for such
determination.

                                       23

<PAGE>   29

In the event that the Majority Holders shall challenge any of the calculations
set forth in such notice within 20 days after the Company's delivery thereof,
the Company shall retain a firm of independent certified public accountants of
national standing selected by the Company to prepare and execute a certificate
verifying that no adjustment is required. The Company shall promptly cause a
signed copy of any certificate prepared pursuant to this Section 5.06 to be
delivered to each holder. The Company shall keep at the Warrant Agent Office
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours upon reasonable notice by
any holder or any prospective purchaser of a Warrant designated by a holder
thereof.

                                   ARTICLE VI

                          CONCERNING THE WARRANT AGENT

SECTION 6.01 Warrant Agent.

     Initially, the Company hereby designates The Bank of New York as Warrant
Agent upon the terms and subject to the conditions herein and in the Warrant
Certificates set forth. The Warrant Agent shall have the powers and authority
specifically granted to and conferred upon it in the Warrant Certificates and
this Agreement and such further powers and authority to act on behalf of the
Company as the Company may hereafter grant to or confer upon it and it shall
accept in writing. All of the terms and provisions with respect to such powers
and authority contained in the Warrant Certificates are subject to and governed
by the terms and provisions hereof.

SECTION 6.02 Conditions of Warrant Agent's Obligations.

     The Warrant Agent accepts its obligations herein set forth upon the terms
and conditions hereof and in the Warrant Certificates, including the following,
to all of which the Company agrees and to all of which the rights hereunder of
the holders from time to time of the Warrant Certificates shall be subject:

         (a) The Warrant Agent shall be entitled to compensation to be agreed
upon with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent, each predecessor Warrant Agent, and their
respective directors, officers, affiliates, agents and employees for, and to
hold it and its directors, officers, affiliates, agents and employees harmless
against, any loss, liability or expense of any nature whatsoever (including,
without limitation, fees and expenses of counsel) incurred without gross
negligence or willful misconduct on the part of the Warrant Agent or predecessor
Warrant Agent, arising out of or in connection with its acting as such Warrant
Agent hereunder and its exercise or failure to exercise of its rights and
performance of its obligations hereunder. The obligations of the Company under
this Section 6.02 shall survive the exercise and the expiration of the Warrant
Certificates and the resignation and removal of the Warrant Agent.

                                       24

<PAGE>   30

         (b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.

         (c) The Warrant Agent may consult with counsel and any advice or
written opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion.

         (d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.

         (e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any interest
in, Warrant Certificates, shares or other obligations of the Company with the
same rights that it or they would have it if were not the Warrant Agent
hereunder and, to the extent permitted by applicable law, it or they may engage
or be interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of holders
of shares or other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent
the Warrant Agent or such Related Parties from acting in any other capacity for
the Company.

         (f) The Warrant Agent shall not be under any liability for interest on,
and shall not be required to invest, any money at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.

         (g) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement (or any term or provision hereof) or the
execution and delivery hereof or in respect of the validity or execution of any
Warrant Certificate (except its authentication thereof).

         (h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication thereon)
shall be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Warrant Certificates; provided, however, that the Warrant Agent shall not be
relieved of its duty to authenticate the Warrant Certificates as authorized by
this Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.

                                       25

<PAGE>   31

         (i) Before the Warrant Agent acts or refrains from acting with respect
to any matter contemplated by this Warrant Agreement, it may require:

               (1) an Officers' Certificate stating that, in the opinion of the
     signers, all conditions precedent, if any, provided for in this Warrant
     Agreement relating to the proposed action have been complied with; and

               (2) if reasonably necessary in the sole judgment of the Warrant
     Agent, an opinion of counsel for the Company stating that, in the opinion
     of such counsel, all such conditions precedent have been complied with.

     Each Officers' Certificate or, if requested, an opinion of counsel with
respect to compliance with a condition or covenant provided for in this Warrant
Agreement shall include:

         (1) a statement that the person making such certificate or opinion has
read such covenant or condition;

         (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

         (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

         (4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.

         (j) The Warrant Agent shall be obligated to perform such duties as are
herein and in the Warrant Certificates specifically set forth and no implied
duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement. The Warrant Agent shall have no
duty or responsibility in case of any default by the Company in the performance
of its covenants or agreements contained in the Warrant Certificates or in the
case of the receipt of any written demand from a holder of a Warrant Certificate
with respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 7.02 hereof,
to make any demand upon the Company. The Warrant Agent shall not be obligated to
perform any duty to the extent prohibited by law.

         (k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if
signed by its chairman of the Board of Directors, its president, its treasurer,
its controller or any vice president or its secretary or any assistant
secretary.

                                       26

<PAGE>   32

         (l) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.

         (m) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.

         (n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties hereunder
from any one of the chairman of the Board of Directors, the president, the
treasurer, the controller, any vice president or the secretary of the Company or
any other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or officials
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions with respect to any matter arising in connection
with the Warrant Agent's duties and obligations arising under this Agreement.
Such application by the Warrant Agent for written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such action
shall be taken and the Warrant Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall be not less than 10 Business
Days after the Company receives such application unless the Company consents to
a shorter period), provided that (i) such application includes a statement to
the effect that it is being made pursuant to this paragraph (n) and that unless
objected to prior to such date specified in the application, the Warrant Agent
will not be liable for any such action or omission to the extent set forth in
such application and (ii) prior to taking or omitting any such action, the
Warrant Agent has not received written instructions objecting to such proposed
action or omission.

         (o) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice president or
the secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and delivered to
the Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.

         (p) The Warrant Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.

                                       27

<PAGE>   33

SECTION 6.03 Resignation and Appointment of Successor.

         (a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that there shall at all times be a Warrant
Agent hereunder.

         (b) The Warrant Agent may at any time resign as Warrant Agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective, provided that such date
shall be at least 30 days after the date on which such notice is given unless
the Company agrees to accept less notice. Upon receiving such notice of
resignation, or in the event the Company shall determine not to continue to act
as its own Warrant Agent, the Company shall promptly appoint a successor Warrant
Agent, qualified as provided in Section 6.03(d) hereof, by written instrument in
duplicate signed on behalf of the Company, one copy of which shall be delivered
to the resigning Warrant Agent and one copy to the successor Warrant Agent. As
provided in Section 6.03(d) hereof, such resignation shall become effective upon
the earlier of (x) the acceptance of the appointment by the successor Warrant
Agent or (y) 30 days after receipt by the Company of notice of such resignation.
The Company may, at any time and for any reason, and shall, upon any event set
forth in the next succeeding sentence, remove the Warrant Agent and appoint a
successor Warrant Agent by written instrument in duplicate, specifying such
removal and the date on which it is intended to become effective, signed on
behalf of the Company, one copy of which shall be delivered to the Warrant Agent
being removed and one copy to the successor Warrant Agent. The Warrant Agent
shall be removed as aforesaid if it shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Warrant Agent or of
its property shall be appointed, or any public officer shall take charge or
control of it or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation. Any removal of the Warrant Agent and any
appointment of a successor Warrant Agent shall become effective upon acceptance
of appointment by the successor Warrant Agent as provided in Section 6.03(d). As
soon as practicable after appointment of the successor Warrant Agent, the
Company shall cause written notice of the change in the Warrant Agent to be
given to each of the registered holders of the Warrants in the manner provided
for in Section 7.04 hereof.

         (c) Upon resignation or removal of the Warrant Agent, if the Company
shall fail to appoint a successor Warrant Agent within a period of 30 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the Warrant Agent, at the Company's expense, may apply to a court
of competent jurisdiction for the appointment of a successor to the Warrant
Agent. Pending appointment of a successor to the Warrant Agent, either by the
Company or by such a court, the duties of the Warrant Agent shall be carried out
by the Company.

         (d) Any successor Warrant Agent, whether appointed by the Company or by
a court, shall be a bank or trust company in good standing, incorporated under
the laws of the United States of America or any State thereof and having, at the
time of its appointment, a combined capital surplus of at least $50 million.
Such successor Warrant Agent shall execute and deliver to its predecessor and to
the Company an instrument accepting such appointment hereunder and all the
provisions of this Agreement, and thereupon such successor Warrant Agent,
without any further act,

                                       28

<PAGE>   34

deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Warrant Agent hereunder, and such predecessor shall thereupon become
obligated to (i) transfer and deliver, and such successor Warrant Agent shall be
entitled to receive, all securities, records or other property on deposit with
or held by such predecessor as Warrant Agent hereunder and (ii) upon payment of
the amounts then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all money deposited with
or held by any predecessor Warrant Agent hereunder.

         (e) Any corporation or bank into which the Warrant Agent hereunder may
be merged or converted, or any corporation or bank with which the Warrant Agent
may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.

         (f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent or of the
Company.

                                   ARTICLE VII

                                  MISCELLANEOUS

SECTION 7.01 Amendment.

     This Agreement and the terms of the Warrants may be amended by the Company
and the Warrant Agent, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective or inconsistent provision contained herein or
therein or in any other manner which the Company may deem necessary or desirable
and which shall not adversely affect in any material respect the interests of
the holders of the Warrant Certificates.

     The Company and the Warrant Agent may modify this Agreement and the terms
of the Warrants with the consent of not less than a majority in number of the
then outstanding Warrants for the purpose of adding any provision to or changing
in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the holders of the outstanding Warrants;
provided, however, that no such modification that increases the Exercise Price,
reduces the period of time during which the Warrants are exercisable hereunder,
otherwise materially and adversely affects the exercise rights of the holders of
the Warrants, reduces the percentage required for modification, or effects any
change to this Section 7.01 may be made with respect to an outstanding Warrant
without the consent of the holder of such Warrant.

                                       29

<PAGE>   35

     Any modification or amendment made in accordance with this Agreement will
be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.

SECTION 7.02 Notices and Demands to the Company and Warrant Agent.

     If the Warrant Agent shall receive any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions hereof
or of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.

SECTION 7.03 Address for Notices to the Company and for Transmission of
             Documents.

         (a) Any request, notice, direction, authorization, consent, waiver,
demand or other communication permitted or authorized by this Agreement to be
made upon, given or furnished to or filed with the Company or the Warrant Agent
by the other party hereto or by any Holder shall be sufficient for every purpose
hereunder if in writing (including telecopy communication) and telecopied or
delivered by hand (including by courier service) as follows:

         If to the Company, to it at:

                  Piccadilly Cafeterias, Inc.
                  322 Sherwood Forest Boulevard
                  Baton Rouge, Louisiana 70816
                  Attention: Chief Financial Officer
                  Telecopy No. (212) 296-8332

                        or

                  If to the Warrant Agent, to it at:

                  The Bank of New York
                  101 Barclay Street
                  Floor 21 West
                  New York, New York 10286
                  Attention: Corporate Trust Administration
                  Telecopy No. (212) 815-5915

                                       30

<PAGE>   36

or, in either case, such other address as shall have been set forth in a notice
delivered in accordance with this Section 7.03(a).

     All such communications shall, when so telecopied or delivered by hand, be
effective when telecopied with confirmation of receipt or received by the
addressee, respectively.

     Any Person that telecopies any communication hereunder to any Person shall,
on the same date as such telecopy is transmitted, also send, by first class
mail, postage prepaid and addressed to such Person as specified above, an
original copy of the communication so transmitted.

         (b) Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Warrant Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.

SECTION 7.04 Notices to Holders.

     Notices to holders of Warrants shall be mailed to such holders at the
addresses of such holders as they appear in the Warrant Register. Any such
notice shall be sufficiently given if sent by first-class mail, postage prepaid.

SECTION 7.05 APPLICABLE LAW.

     THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND EACH
WARRANT ISSUED HEREUNDER AND OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.06 Obtaining of Governmental Approvals.

     The Company will from time to time take all action required to be taken by
it which may be necessary to obtain and keep effective any and all permits,
consents and approvals of governmental agencies and authorities and Securities
Acts filings under United States Federal and State laws, and the rules and
regulations of all stock exchanges on which the Warrants may be listed, which
may be or become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants or the
issuance, sale, transfer and delivery of the shares

                                       31

<PAGE>   37

issued upon exercise of the Warrants, it being understood, however, that the
only contractual registration rights of the holders of the Warrant Certificates
are those set forth in the Registration Rights Agreement dated as of the date
hereof (the "Registration Rights Agreement") between the Company and the Initial
Purchaser.

SECTION 7.07 Persons Having Rights Under Agreement.

     Nothing in this Agreement expressed or implied and nothing that may be
inferred from any of the provisions hereof is intended, or shall be construed,
to confer upon, or give to, any person other than the Company, the Warrant Agent
and the holders from time to time of the Warrant Certificates any right, remedy
or claim under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof; and all covenants, conditions,
stipulations, promises and agreements in this Agreement contained shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their
successors and of the holders from time to time of the Warrant Certificates.

SECTION 7.08 Headings.

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

SECTION 7.09 Counterparts.

     This Agreement may be executed in any number of Counterparts, each of which
so executed shall be deemed to be an original; but such Counterparts shall
together constitute but one and the same instrument.

SECTION 7.10 Inspection of Agreement.

     A copy of this Agreement shall be available at all reasonable times at the
Warrant Agent Office, for inspection by the holder of any Warrant Certificate.
The Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.

                                       32

<PAGE>   38

     IN WITNESS WHEREOF, this Agreement has been duly executed by the Company
and the Warrant Agent as of the day and year first above written.

                                       PICCADILLY CAFETERIAS, INC.

                                       By:
                                          ------------------------

                                       THE BANK OF NEW YORK

                                       By:
                                          ------------------------

                                Warrant Agreement
                                Signature Page 1

<PAGE>   39

                                                                       EXHIBIT A

                          [FORM OF WARRANT CERTIFICATE]

                                     [FACE]

[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.](1)

     [THIS WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS WARRANT IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS WARRANT EXCEPT (A) TO THE ISSUER
OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES
IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT,
(D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT AGENT A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS WARRANT (THE FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT
AGENT) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH

----------
(1)  Include this legend for Global Warrants.

                                       A-1

<PAGE>   40

TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER), OR (G) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS WARRANT OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]

                                       A-2

<PAGE>   41

                                                      CUSIP No. [719567 11 7](2)
                                                                [719567 12 5](3)

No.
[       ] Warrants

                               WARRANT CERTIFICATE

                           PICCADILLY CAFETERIAS, INC.

     This Warrant Certificate certifies that [       ], or registered assigns,
is the registered holder of [       ] Warrants (the "Warrants") to purchase
shares of Common Stock, no par value per share (the "Common Stock"), of
Piccadilly Cafeterias, Inc., a Louisiana corporation (the "Company"). Each
Warrant entitles the holder to purchase from the Company at any time on or after
the Separability Date and until 5:00 p.m., New York City time, on November 1,
2007 (the "Expiration Date"), 10.51 fully paid and non-assessable shares of
Common Stock (as such number may be adjusted from time to time, the "Shares",
which may also include any other securities or property purchasable upon
exercise of a Warrant, such adjustment and inclusion each as provided in the
Warrant Agreement) at the exercise price (the "Exercise Price") of $ 1.16875 per
Share upon surrender of this Warrant Certificate and payment of the Exercise
Price at any office or agency maintained for that purpose by the Company (the
"Warrant Agent Office"), subject to the conditions set forth herein and in the
Warrant Agreement.

     The Exercise Price shall be payable in cash or by certified or official
bank check in the lawful currency of the United States of America which as of
the time of payment is legal tender for payment of public or private debts. The
Company has initially designated the corporate trust offices of The Bank of New
York in the Borough of Manhattan, New York City, New York, as the initial
Warrant Agent Office. The number of Shares issuable upon exercise of the
Warrants ("Exercise Rate") is subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement.

     Any Warrants not exercised on or prior to 5:00 p.m., New York City time, on
November 1, 2007 shall thereafter be void.

     Reference is hereby made to the further provisions on the reverse hereof,
which provisions shall for all purposes have the same effect as though fully set
forth at this place. Capitalized terms used in this Warrant Certificate but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement.

     This Warrant Certificate shall not be valid unless authenticated by the
Warrant Agent, as such term is used in the Warrant Agreement. Initially, the
Company shall act as its own Warrant Agent.

----------

(2)  Include for Warrants sold to Qualified Institutional Buyers.

(3)  Include for Warrants sold to Institutional Accredited Investors.

                                       A-3

<PAGE>   42

     THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.

     WITNESS the signature of its duly authorized officer.

                                       PICCADILLY CAFETERIAS, INC.

                                       By:
                                          ------------------------

                                          Name:

                                          Title:

Certificate of Authentication: This is one of the
Warrants referred to in the within-mentioned
Warrant Agreement:

THE BANK OF NEW YORK, as Warrant Agent

By:
    ----------------------------------
    Authorized Signatory

Dated: December 21, 2000

                                       A-4

<PAGE>   43

                          [FORM OF WARRANT CERTIFICATE]

                                    [REVERSE]

                           PICCADILLY CAFETERIAS, INC.

     The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, each of which represents the right to purchase at
any time on or after Separability Date, and until 5:00 p.m., New York City time,
on November 1, 2007, 10.51 Shares, subject to adjustment as set forth in the
Warrant Agreement. The Warrants are issued pursuant to a Warrant Agreement dated
as of December 21, 2000 (the "Warrant Agreement"), duly executed and delivered
by the Company for the benefit of the holders from time to time of the Warrant
Certificates, which Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities thereunder
of the Warrant Agent, the Company and the holders (the words "holders" or
holder" meaning the registered holders or registered holder) of the Warrant
Certificates. Warrants may be exercised by (i) surrendering at any Warrant Agent
Office this Warrant Certificate with the form of Election to Exercise set forth
hereon duly completed and executed and (ii) paying in full the Exercise Price
for each such Warrant exercised and any other amounts required to be paid
pursuant to the Warrant Agreement.

     If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 2:00 p.m., New York
City time, on a Business Day, the exercise of the Warrant to which such items
relate will be effective on such Business Day. If any items referred to in the
last sentence of the preceding paragraph are received after 2:00 p.m., New York
City time, on a Business Day, the exercise of the Warrants to which such item
relates will be deemed to be effective on the next succeeding Business Day.
Notwithstanding the foregoing, in the case of an exercise of Warrants on the
Expiration Date, if all of the items referred to in the last sentence of the
preceding paragraph are received by the Warrant Agent at or prior to 5:00 p.m.,
New York City time, on such Expiration Date, the exercise of the Warrants to
which such items relate will be effective on the Expiration Date.

     Subject to the terms of the Warrant Agreement, as soon as practicable after
the exercise of any Warrant or Warrants, the Company shall issue or cause to be
issued to or upon the written order of the registered holder of this Warrant
Certificate, a certificate or certificates evidencing the Share or Shares to
which such holder is entitled, in fully registered form, registered in such name
or names as may be directed by such holder pursuant to the Election to Exercise,
as set forth on the reverse of this Warrant Certificate. Such certificate or
certificates evidencing the Share or Shares shall be deemed to have been issued
and any persons who are designated to be named therein shall be deemed to have
become the holder of record of such Share or Shares as of the close of business
on the date upon which the exercise of this Warrant was deemed to be effective
as provided in the preceding paragraph.

     The Company will not be required to issue fractional shares of Common Stock
upon exercise of the Warrants or distribute Share certificates that evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
there shall be paid to the registered Holder of this Warrant

                                       A-5

<PAGE>   44

Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the current market price per share of Common Stock
as determined in accordance with the Warrant Agreement.

     Warrant Certificates, when surrendered at any Warrant Agent Office by the
holder thereof in person or by legal representative or attorney duly authorized
in writing, may be exchanged for a new Warrant Certificate or new Warrant
Certificates evidencing in the aggregate a like number of Warrants, in the
manner and subject to the limitations provided in the Warrant Agreement, without
charge except for any tax or other governmental charge imposed in connection
therewith.

     Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection therewith.

     The Company and the Warrant Agent may deem and treat the registered holder
hereof as the absolute owner of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone) for the purpose of
any exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.

     The term "Business Day" shall mean any day on which (i) banks in New
Orleans, (ii) the principal national securities exchange or market on which the
Common Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.

                              ELECTION TO EXERCISE

     (To be executed upon exercise of Warrants on the Exercise Date)

     The undersigned hereby irrevocably elects to exercise _______________ of
the Warrants represented by this Warrant Certificate and purchase the whole
number of Shares issuable upon the exercise of such Warrants and, unless this
exercise is pursuant to Section 2.02(g) of the Warrant Agreement, herewith
tenders payment for such Shares in the amount of $_____in cash or by certified
or official bank check, in accordance with the terms hereof. The undersigned
requests that a certificate representing such Shares be registered in the name
of _________________, whose address is _____________, and that such certificate
be delivered to ____________, whose address is ____________________. Any cash
payments to be paid in lieu of a fractional Share should be made to __________,
whose address is _____________________, and the check representing payment
thereof should be delivered to _______________, whose address is
_______________________. If exercise made pursuant to Section 2.02(g) of the
Warrant Agreement, check this box [ ].

     Name of holder of Warrant Certificate:                       (Please Print)
                                            ---------------------

     Tax Identification or Social Security Number:
                                                   -----------------------------

                                       A-6

<PAGE>   45

     Signature:
                -----------------------------------------

     Note: The above signature must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.

     Dated               ,
           --------------  ----

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                       A-7

<PAGE>   46

                                   ASSIGNMENT

     For value received, _________________________________ hereby sells, assigns
and transfers unto _________________________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________________________
attorney, to transfer said Warrant Certificate on the books of the within-named
Company, with full power of substitution in the premises.

     Dated                  ,
           -----------------  ----

     Signature:
                ----------------------------------

     Note: The above signature must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                       A-8

<PAGE>   47

                 SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS(4)

     The following exchanges of a part of this Global Warrant for Definitive
Warrants have been made:

<TABLE>
<CAPTION>
                                                                                NUMBER OF
                                AMOUNT OF               AMOUNT OF           WARRANTS OF THIS           SIGNATURE OF
                               DECREASE IN             INCREASE IN           GLOBAL WARRANT             AUTHORIZED
                                NUMBER OF               NUMBER OF            FOLLOWING SUCH            SIGNATORY OF
                            WARRANTS OF THIS        WARRANTS OF THIS            DECREASE             WARRANT AGENT OR
DATE OF EXCHANGE             GLOBAL WARRANT          GLOBAL WARRANT          (OR INCREASE)              DEPOSITARY
----------------            ----------------        ----------------        ----------------         ----------------
<S>                         <C>                     <C>                     <C>                      <C>

</TABLE>

----------

(4)  This is to be included only if the Warrant Certificate is in global form.

                                       A-9

<PAGE>   48

                                                                       EXHIBIT B

                  CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
                      REGISTRATION OF TRANSFER OF WARRANTS

Re: Warrants to Purchase Common Stock (the "Warrants") of Piccadilly Cafeterias,
    Inc.

    This Certificate relates to _____ Warrants held in

    [ ] book-entry* or

    [ ] certificated form*

    by _________________ (the "Transferor").

    The Transferor:*

    [ ] has requested the Warrant Agent by written order to deliver in exchange
        for its beneficial interest in the Global Warrant held by the Depositary
        a Warrant or Warrants in definitive, registered form of authorized
        denominations and an aggregate number equal to its beneficial interest
        in such Global Warrant (or the portion thereof indicated above) or

    [ ] has requested the Warrant Agent by written order to exchange or register
        the transfer of a Warrant or Warrants.

    In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:

    [ ] Such Warrant is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 1.08(a)(ii)(y)(A) or Section 1.08(d)(i)(A)
of the Warrant Agreement).

    [ ] Such Warrant is being transferred to a qualified institutional buyer (as
defined in Rule 144A under the Act), in reliance on Rule 144A or in accordance
with Regulation S under the Act.

    [ ] Such Warrant is being transferred in accordance with Rule 144 under the
Act.

    [ ] Such Warrant is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Act, other than Rule 144A
or Rule 144 or Regulation S under the Act. An opinion of counsel to the effect
that such transfer does not require registration under the Act accompanies this
Certificate.

----------

*    Check applicable box.

                                       B-1

<PAGE>   49

                                       [INSERT NAME OF TRANSFEROR]

                                       By:
                                          ------------------------

Date:

                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

                                       B-2

<PAGE>   50

                                                                       EXHIBIT C

                   FORM OF TRANSFEREE LETTER OF REPRESENTATION

                                                                         , 200
                                                           --------------     -

The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286

Re:  Piccadilly Cafeterias, Inc. Warrants to Purchase Common Shares (the
     "Warrants")

     Reference is hereby made to the Warrant Agreement dated as of December 21,
2000 (the "Warrant Agreement") between Piccadilly Cafeterias, Inc. and The Bank
of New York, as Warrant Agent. Capitalized terms used but not defined herein
shall have the meanings given them in the Warrant Agreement.

     This letter relates to Warrants exercisable for an aggregate of _________
Common Shares ("Warrant Shares"), which Warrants are held in the name of [name
of transferor] (the "Transferor") to effect the transfer of the Warrants to the
undersigned.

     In connection with such request, and in respect of such Warrants, we
confirm that:

     1. We understand that any subsequent transfer of any of the Units, Warrants
and Warrant Shares or any interest therein is subject to certain restrictions
and conditions set forth in the Indenture and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer any of the Units, Warrants
and Warrant Shares or any interest therein except in compliance with, such
restrictions and conditions and the United States Securities Act of 1933, as
amended (the "Securities Act").

     2. We understand that the offer and sale of the Warrants and Warrant Shares
have not been registered under the Securities Act, and that the Warrants and
Warrant Shares and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter stated, that if we should
sell the Warrants and Warrant Shares or any interest therein, we will do so only
(A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Warrant or beneficial interest in a Global
Warrant from us in a transaction meeting the requirements of clauses (A) through
(E) of this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

                                       C-1

<PAGE>   51

     3. We understand that, on any proposed resale of the Warrants and Warrant
Shares or beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Warrants and
Warrant Shares purchased by us will bear a legend to the foregoing effect.

     4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Warrants and Warrant
Shares, and we and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.

     5. We are acquiring the Warrants and Warrant Shares or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.

     You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

                                       [Insert Name of Accredited Investor]

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

     Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:

Name:
     ------------------------------
Address:
        ---------------------------
Taxpayer ID Number:
                   ----------------

                                       C-2<PAGE>   1
                                                                    EXHIBIT 10.6

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of December 21, 2000, between PICCADILLY CAFETERIAS, INC., a
Louisiana corporation (the "Company") and JEFFERIES & COMPANY, INC. (the
"Initial Purchaser").

         This Agreement is made pursuant to the Purchase Agreement dated
December 12, 2000, as amended, among the Company and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchaser of (i) an aggregate of 71,000 units (each a "Fixed Rate Unit" and
collectively, the "Fixed Rate Units"), each Fixed Rate Unit consisting of $1,000
principal amount of the Company's Series A Senior Secured Notes due 2007 (the
"Fixed Rate Notes") and one warrant (collectively, the "Warrants") to purchase
initially 10.51 shares of the Company's common stock, no par value (the "Common
Stock"), at an initial purchase price per share equal to 110% of the last
reported sale price of the Common Stock on the New York Stock Exchange on
December 20, 2000, and (ii) an aggregate of 4,500 units (each a "Term B Unit",
collectively the "Term B Units" and together with the Fixed Rate Units, the
"Units") each Term B Unit consisting of $1,000 principal amount of its Series A
Term B Notes due 2007 (the "Term B Notes" and together with the Fixed Rate
Notes, the "Notes") and one Warrant. Additionally, in connection with the $5.5
million Term Loan Credit Agreement (the "Term Loan Credit Facility") dated the
date hereof among the Company, as borrower, Hibernia National Bank, as
administrative agent, and each lender named therein (each, a "Lender"), the
Company has issued 5,500 Warrants. The Notes will be issued pursuant to the
Indenture (as defined below) and the Warrants will be issued pursuant to a
warrant agreement, to be dated as of the date hereof, by and between the Company
and The Bank of New York, as warrant agent (the "Warrant Agent"), each in the
form previously furnished to the Initial Purchaser. The Notes and the Warrants
initially constituting part of the Units shall be detachable and separately
transferable on or after the Separation Date (as defined below). The promissory
notes evidencing the Loan (as defined in the Term Loan Credit Facility) and the
Warrants issued in connection with the Term Loan Credit Facility shall not be
separately transferable until the Separation Date. In order to induce the
Initial Purchaser to enter into the Purchase Agreement and in order to induce
each Lender to enter into the Term Loan Credit Facility, the Company has agreed
to provide to the Initial Purchaser and its direct and indirect transferees and
to each Lender the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.

         In consideration of the foregoing, the parties hereto agree, and all
other holders of the Units, Notes, Warrants and Warrant Shares from time to
time, by their acceptance thereof, shall be conclusively deemed to have agreed,
as follows:

SECTION 1. Definitions.

         As used in this Agreement, the following capitalized defined terms
shall have the following meanings:

<PAGE>   2

         "1933 Act" shall mean the Securities Act of 1933, as amended from time
to time.

         "1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.

         "Additional Interest" shall mean the interest payable on the
Registrable Notes pursuant to Section 2(d).

         "Agreement" shall have the meaning set forth in the preamble.

         "Closing Date" shall mean the date on which the Notes are originally
issued under the Indenture.

         "Company" shall have the meaning set forth in the preamble and also
includes the Company's successors.

         "Depositary" shall mean the Trustee, or any other exchange agent
appointed by the Company.

         "Effectiveness Target Date" shall have the meaning set forth in Section
2(d) hereof.

         "Exchange Offer" shall mean the exchange offers by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.

         "Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.

         "Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.

         "Exchange Notes" shall mean the Series B Fixed Rate Notes and the
Series B Term B Notes.

         "Fixed Rate Notes" shall have the meaning set forth in the preamble.

         "Fixed Rate Units" shall have the meaning set forth in the preamble.

         "Indenture" shall mean the Indenture relating to the Notes and the
Exchange Notes dated as of the date hereof between the Company and The Bank of
New York, as trustee, as the same may be amended from time to time in accordance
with the terms thereof.

         "Initial Purchaser" shall have the meaning set forth in the preamble.

         "Interest Payment Date" shall have the meaning assigned to it in the
Indenture.

                                       2
<PAGE>   3

         "Majority Note Holders" shall mean the Note Holders of a majority of
the aggregate principal amount of outstanding Registrable Notes; provided,
however, that whenever the consent or approval of the Note Holders of a
specified percentage of Registrable Notes is required hereunder, Registrable
Notes directly or indirectly held by the Company shall be disregarded in
determining whether such consent or approval was given by the Note Holders of
such required percentage or amount; and provided, further, that whenever the
consent or approval of Note Holders of Registrable Notes is required hereunder
with regard to matters related to a registered underwritten or similar offering
or with regard to matters pertaining to a Registration Statement, Registrable
Notes held by Note Holders not participating in such registered underwritten or
similar offering, or Registrable Notes not registered pursuant to such
Registration Statement (or, at any time prior to the filing of a Notes Shelf
Registration Statement and after the determination to file such Notes Shelf
Registration Statement is made, Registrable Notes whose Note Holders have not
requested that such Registrable Notes be included in such Notes Shelf
Registration Statement), as the case may be, shall be disregarded in determining
whether such consent or approval was given by the Note Holders of such required
percentage or amount.

         "Majority Warrant Holders" shall have the meaning set forth in Section
4(d) hereof.

         "Note Holders" shall mean the Initial Purchaser, for so long as it owns
any Registrable Notes, and each of its successors, assigns and direct and
indirect transferees who shall at the time be owners of Registrable Notes under
the Indenture; provided, however, that the term Note Holder shall exclude any
underwriter who purchased Registrable Notes for distribution in an underwritten
public offering pursuant to an effective Registration Statement.

         "Notes" shall have the meaning set forth in the preamble.

         "Notes Registration Default" shall have the meaning set forth in
Section 2(d) hereof.

         "Notes Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(i) or (ii)
of this Agreement which covers all of the Registrable Notes (except Registrable
Notes which the Note Holders have elected not to include in such Notes Shelf
Registration Statement or the Note Holders of which have not complied with their
obligations under the penultimate paragraph of Section 4 hereof or under the
ultimate sentence of Section 2(b) hereof) on an appropriate form under Rule 415
under the 1933 Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.

         "Participating Broker Dealer" shall have the meaning set forth in
Section 4(g)(i) hereof.

         "Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization, limited liability company, joint stock company,
joint venture, charitable foundation or other entity, or a government or any
agency or political subdivision thereof.

                                       3
<PAGE>   4

         "Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of (i) any portion of the
Registrable Notes covered by a Notes Shelf Registration Statement or (ii) any
portion of the Registrable Warrants or Registrable Warrant Shares covered by the
Warrants Shelf Registration Statement, and by all other amendments and
supplements to a prospectus, including post-effective amendments, and in each
case including all material incorporated or deemed to be incorporated by
reference therein.

         "Purchase Agreement" shall have the meaning set forth in the preamble.

         "Registrable Notes" shall mean the Fixed Rate Notes and the Term B
Notes; provided, however, that any Notes shall cease to be Registrable Notes
when (i) a Registration Statement with respect to such Notes shall have been
declared effective under the 1933 Act and such Notes shall have been disposed of
pursuant to such Registration Statement, (ii) such Notes shall have been sold to
the public pursuant to Rule 144 (or any similar provision then in force, but not
Rule 144A) under the 1933 Act, (iii) such Notes shall have become eligible for
resale pursuant to Rule 144(k) under the 1933 Act, (iv) such Notes shall have
ceased to be outstanding or (v) such Notes have been exchanged for Exchange
Notes upon consummation of the Exchange Offer.

         "Registrable Warrant" or "Registrable Warrant Share" shall mean,
subject to the last sentence of Section 3(c), each Warrant or Warrant Share,
until the earlier to occur of (i) the date on which such Warrant or Warrant
Share has been effectively registered under the 1933 Act and disposed of
pursuant to the Warrant Shelf Registration Statement (as defined below) or (ii)
such Warrant or Warrant Shares shall have become eligible for resale pursuant to
Rule 144(k) under the 1933 Act.

         "Registration Expenses" shall mean any and all expenses incident to the
performance of or compliance by the Company with this Agreement with respect to
the Registrable Notes, the Exchange Notes, the Registrable Warrants and the
Registrable Warrant Shares, including without limitation: (i) all SEC or
National Association of Securities Dealers, Inc. ("NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of one firm of legal counsel for any underwriters, Note Holders
and holders of the Warrants and Warrant Shares in connection with blue sky
qualification of any of the Exchange Notes, Registrable Notes, Warrants,
Registrable Warrants, Warrant Shares or Registrable Warrant Shares), (iii) all
expenses of printing and distributing any Registration Statement, any Prospectus
and any amendments or supplements thereto, (iv) all rating agency fees, (v) the
fees and disbursements of counsel(s) for the Company and of the independent
public accountants of the Company, including the expenses of "cold comfort"
letters required by this Agreement, (vi) the fees and expenses of the Trustee
and Warrant Agent, and any escrow agent or custodian, (vii) all fees and
expenses incurred in connection with listing the Notes or the Exchange Notes, as
the case may be, on any securities exchange or on any securities quotation
system, (viii) all fees and expenses incurred in connection with listing the
Warrants and the Warrant Shares on any securities exchange or on any securities
quotation system and (ix) the reasonable fees and expenses of any

                                       4
<PAGE>   5

special experts retained by the Company in connection with any Registration
Statement, but excluding fees of counsel to the underwriters or the Note Holders
and underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of (a) Registrable Notes, Registrable Warrants or
Registrable Warrant Shares by any holder.

         "Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes, Registrable Notes, Warrants,
Registrable Warrants, Warrant Shares or Registrable Warrant Shares pursuant to
the provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated or deemed to be incorporated by reference therein.

         "SEC" shall mean the Securities and Exchange Commission.

         "Series B Fixed Rate Notes" shall mean Series B Senior Secured Notes
due 2007 issued by the Company under the Indenture containing terms identical in
all material respects to the Fixed Rate Notes (except that (i) interest on the
Series B Fixed Rate Notes shall accrue from the last date on which interest was
paid or duly provided for on the Fixed Rate Notes or, if no such interest has
been paid, from December 21, 2000 and (ii) the transfer restrictions on the
Fixed Rate Notes shall be eliminated).

         "Series B Term B Notes" shall mean Series B Term B Notes due 2007
issued by the Company under the Indenture containing terms identical in all
material respects to the Term B Notes (except that (i) interest on the Series B
Term B Notes shall accrue from the last date on which interest was paid or duly
provided for on the Term B Notes or, if no such interest has been paid, from
December 21, 2000 and (ii) the transfer restrictions on the Term B Notes shall
be eliminated).

         "Shelf Filing Deadline" shall have the meaning set forth in Section
2(b)(A) hereof.

         "Shelf Registration Statement" shall mean the Notes Shelf Registration
Statement or the Warrants Shelf Registration Statement.

         "Separation Date" shall mean the earliest of (i) 180 days from the date
of this Agreement, (ii) the effective date of the Exchange Offer Registration
Statement and (iii) such earlier date as the Initial Purchaser shall determine.

         "Term B Notes" shall have the meaning set forth in the Preamble.

         "Term B Units" shall have the meaning set forth in the Preamble.

         "Trustee" shall mean the trustee with respect to the Notes under the
Indenture.

         "Units" shall have the meaning set forth in the preamble.

                                       5
<PAGE>   6

         "Warrants" shall have the meaning set forth in the preamble, and shall
include all Warrants including those issued as part of a Unit or issued to a
Lender under the Term Loan Credit Facility.

         "Warrant Agent" shall mean the warrant agent with respect to the
Warrants under the Warrant Agreement.

         "Warrant Agreement" shall mean the Warrant Agreement relating to the
Warrants dated as of the date hereof between the Company and The Bank of New
York, as warrant agent, as the same may be amended from time to time in
accordance with the terms thereof.

         "Warrant Registration Default" shall have the meaning set forth in
Section 3(c) hereof.

         "Warrant Shares" shall mean the shares of Common Stock issueable upon
exercise of the Warrants.

         "Warrant Shelf Registration Statement" shall have the meaning set forth
in Section 3 hereof.

         All references herein to information which is "included" or "contained"
in a Registration Statement or Prospectus, and all references of like import,
shall include the information (including financial statements) incorporated or
deemed to be incorporated by reference therein, and all references herein to
amendments or supplements to a Registration Statement or Prospectus shall
include any documents filed by the Company under the 1934 Act which are deemed
to be incorporated by reference therein.

SECTION 2. Registration Under the 1933 Act for the Registrable Notes.

         (a) Exchange Offer Registration. To the extent not prohibited by law
(including, without limitation, any applicable interpretation of the staff of
the SEC), the Company shall use its reasonable best efforts (i) to file within
60 days after the Closing Date an Exchange Offer Registration Statement covering
the offer by the Company to the Note Holders to exchange all of the Registrable
Notes (except Registrable Notes held by the Initial Purchaser and acquired
directly from the Company if such Initial Purchaser is not permitted, in the
reasonable opinion of counsel to the Initial Purchaser, pursuant to applicable
law or SEC interpretation, to participate in the Exchange Offer) which are Fixed
Rate Notes for Series B Fixed Rate Notes and those which are Term B Notes for
Series B Term B Notes, (ii) to cause such Exchange Offer Registration Statement
to be declared effective by the SEC within 120 days after the Closing Date,
(iii) to cause such Exchange Offer Registration Statement to remain effective
until the closing of the Exchange Offer and (iv) to consummate the Exchange
Offer within 180 days following the Closing Date. The Exchange Notes will be
issued under and made subject to the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Note Holder (other than Participating Broker-Dealers (as defined in Section 4(f)
hereof) and broker-dealers who purchased Notes directly from the Company to
resell pursuant to Rule 144A or any other available exemption under the 1933
Act) eligible and electing to exchange those

                                       6
<PAGE>   7

Registrable Notes which are Fixed Rate Notes for Series B Fixed Rate Notes and
those Registrable Notes which are Term B Notes for Series B Term B Notes
(assuming that such Note Holder is not an affiliate of the Company, acquires the
Exchange Notes in the ordinary course of such Note Holder's business and has no
arrangements or understandings with any person to participate in the
distribution (within the meaning of the 1933 Act) of Exchange Notes) to trade or
sell such Exchange Notes from and after their receipt without any limitations or
restrictions under the 1933 Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.

         In connection with the Exchange Offer, the Company shall:

                  (A) mail to each Note Holder a copy of the Prospectus forming
         part of the Exchange Offer Registration Statement, together with an
         appropriate letter of transmittal and related documents;

                  (B) keep the Exchange Offer open for not less than 20 days
         after the date notice thereof is mailed to the Note Holders (or longer
         if required by applicable law);

                  (C) use the services of the Depositary for the Exchange Offer;

                  (D) permit Note Holders to withdraw tendered Registrable Notes
         at any time prior to the close of business, New York City time, on the
         last business day on which the Exchange Offer shall remain open, by
         sending to the institution specified in the notice, a telegram, telex,
         facsimile transmission or letter setting forth the name of such Note
         Holder, the principal amount of Registrable Notes delivered for
         exchange, whether such Registrable Notes consist of Fixed Rate Notes or
         Term B Notes and a statement that such Note Holder is withdrawing his
         election to have such Notes exchanged; and

                  (E) otherwise comply in all respects with all applicable laws
         relating to the Exchange Offer.

         As soon as practicable after the close of the Exchange Offer, the
Company shall:

                  (x) accept for exchange Registrable Notes duly tendered and
         not validly withdrawn pursuant to the Exchange Offer in accordance with
         the terms of the Exchange Offer Registration Statement and the letter
         of transmittal which is an exhibit thereto;

                  (y) deliver, or cause to be delivered, to the Trustee for
         cancellation all Registrable Notes so accepted for exchange by the
         Company; and

                  (z) cause the Trustee promptly to authenticate and deliver
         Exchange Notes of the applicable series to each Note Holder of
         Registrable Notes equal in amount to the Registrable Notes of such Note
         Holder so accepted for exchange.

                                       7
<PAGE>   8

         Interest on each Exchange Note will accrue from the last date on which
interest was paid or duly provided for on such series of Registrable Note
surrendered in exchange therefor or, if no interest has been paid on the
Registrable Notes, from December 21, 2000. The Exchange Offer shall not be
subject to any conditions, other than (1) that the Exchange Offer, or the making
of any exchange by a Note Holder, does not violate applicable law or any
applicable interpretation of the staff of the SEC, (2) that no action or
proceeding shall have been instituted or threatened in any court or by or before
any governmental agency or body with respect to the Exchange Offer, (3) that
there shall not have been adopted or enacted any law, statute, rule or
regulation prohibiting or limiting the Exchange Offer, (4) that there shall not
have been declared by United States federal or New York state authorities a
banking moratorium, (5) that trading on the New York Stock Exchange or generally
in the United States over-the-counter market shall not have been suspended by
order of the SEC or any other governmental authority and (6) such other
conditions as may be reasonably acceptable to the Initial Purchaser which, in
the Company's judgment, would reasonably be expected to impair the ability of
the Company to proceed with the Exchange Offer. In addition, each Note Holder
(other than Participating Broker-Dealers) who wishes to exchange such
Registrable Notes for Exchange Notes in the Exchange Offer will be required to
represent that (I) it is not an affiliate of the Company or a broker-dealer who
intends to tender Registrable Securities acquired directly from the Company for
its own account, (II) any Exchange Notes to be received by it were acquired in
the ordinary course of business and (III) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any person to
participate in, the distribution (within the meaning of the 1933 Act) of the
Exchange Notes. Each Participating Broker-Dealer shall be required to make such
representations as, in the reasonable judgment of the Company, may be necessary
under applicable SEC rules, regulations or interpretations or customary in
connection with similar exchange offers. Each Note Holder (including
Participating Broker-Dealers) shall be required to make such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available and will be required to agree to
comply with their agreements and covenants set forth in this Agreement. The
Exchange Offer shall be subject to the further condition that no stop order,
injunction or similar order shall have been issued or obtained by the SEC or any
state securities authority suspending the effectiveness of the Exchange Offer
Registration Statement and no proceedings shall have been initiated or, to the
knowledge of the Company, threatened for that purpose. To the extent permitted
by law, the Company shall, upon request of the Initial Purchaser, inform the
Initial Purchaser of the names and addresses of the Note Holders to whom the
Exchange Offer is made, and the Initial Purchaser shall have the right to, and,
if requested by the Company, shall, contact such Note Holders and otherwise
facilitate the tender of Registrable Notes in the Exchange Offer.

         Prior to effectiveness of the Exchange Offer Registration Statement,
the Company shall, if requested by the staff of the SEC, provide a supplemental
letter to the SEC (aa) stating that the Company is registering the Exchange
Offer in reliance on the position of the SEC enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) and Morgan Stanley and Co., Inc.
(available June 5, 1991) and (bb) including a representation that the Company
has not entered into any arrangement or understanding with any Person to
distribute the Exchange Notes and that, to the best of the Company's information
and belief, each Note Holder participating in

                                       8
<PAGE>   9

the Exchange Offer is acquiring the Exchange Notes in its ordinary course of
business and has no arrangement or understanding with any Person to participate
in the distribution of the Exchange Notes received in the Exchange Offer.

         If in the opinion of counsel to the Company there is a question as to
whether the Exchange Offer is permitted by applicable law, the Company hereby
agrees to seek a no-action letter or other favorable decision from the SEC
allowing the Company to consummate the Exchange Offer. The Company hereby agrees
to pursue the issuance of such a decision to the SEC staff level, but shall not
be required to take action to effect a change of stated or recognized SEC
policy. The Company hereby agrees, however, to (xx) participate in telephonic
conferences with the SEC and the staff of the SEC, (yy) deliver to the staff of
the SEC an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that the Exchange Offer
should be permitted and (zz) diligently pursue a resolution (which need not be
favorable) by the staff of the SEC of such submission.

         (b) Notes Shelf Registration Statement. (i) If, because of any change
in law or applicable interpretations thereof by the staff of the SEC, the
Company is not permitted to effect the Exchange Offer as contemplated by Section
2(a) hereof, or (ii) if any Note Holder notifies the Company prior to the 20th
day following the consummation of the Exchange Offer (A) that such Note Holder
is prohibited by applicable law or SEC policy from participating in the Exchange
Offer, or (B) that such Note Holder may not resell the Exchange Notes acquired
by it in the Exchange Offer to the public without delivering a prospectus and
that the Prospectus contained in the Exchange Offer Registration Statement is
not available for such resales by such Note Holder, then the Company shall, at
its cost:

                  (A) As promptly as practicable (but in no event later than the
         earliest to occur of (x) the 60th day after the date on which the
         Company determined that it is not permitted to effect the Exchange
         Offer as contemplated by Section 2(a) hereof and (y) the 60th day after
         the date on which the Company receives notice from a Note Holder as
         contemplated by clause (ii) above (the earliest such date being the
         "Shelf Filing Deadline")), use its best efforts to file with the SEC a
         Notes Shelf Registration Statement relating to the offer and sale of
         the Registrable Notes (other than Registrable Notes owned by Note
         Holders who have elected not to include such Registrable Notes in such
         Notes Shelf Registration Statement or who have not complied with their
         obligations under the penultimate paragraph of Section 4 hereof or
         under the ultimate sentence of this Section 2(b)) by the Note Holders
         from time to time in accordance with the methods of distribution
         elected by the Majority Note Holders of such Registrable Notes and set
         forth in such Notes Shelf Registration Statement, and use its best
         efforts to cause such Notes Shelf Registration Statement to be declared
         effective by the SEC on or before the 60th day after the Shelf Filing
         Deadline;

                  (B) use its best efforts to keep the Notes Shelf Registration
         Statement continuously effective in order to permit the Prospectus
         forming part thereof to be usable by Note Holders for a period of two
         years from the date a Notes Shelf Registration Statement is declared
         effective by the SEC or such shorter period which will terminate

                                       9
<PAGE>   10

         when all of the Registrable Notes covered by the Notes Shelf
         Registration Statement have been sold pursuant to such Notes Shelf
         Registration Statement or otherwise are no longer Registrable Notes;
         and

                  (C) notwithstanding any other provisions hereof, use its best
         efforts to ensure that (x) any Notes Shelf Registration Statement and
         any amendment thereto and any Prospectus forming part thereof and any
         supplement thereto complies in all material respects with the 1933 Act
         and the rules and regulations thereunder, (y) any Notes Shelf
         Registration Statement and any amendment thereto does not, when it
         becomes effective, contain 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 and (z) any
         Prospectus forming part of any Notes Shelf Registration Statement, and
         any supplement to such Prospectus (as amended or supplemented from time
         to time), does not include an untrue statement of a material fact or
         omit to state a material fact necessary in order to make the
         statements, in light of the circumstances under which they were made,
         not misleading.

         To the extent permitted by law, the Company further agrees, if
necessary, to supplement or amend the Notes Shelf Registration Statement (if
reasonably requested by (i) one firm of legal counsel selected by the Majority
Note Holders or (ii) the Initial Purchaser) with respect to information relating
to the Note Holders or the Initial Purchaser, respectively, and otherwise as
required by Section 4(b) below, to use its best efforts to cause any such
amendment to become effective and such Notes Shelf Registration Statement to
become usable as soon as thereafter practicable and to furnish to the Note
Holders of Registrable Notes registered thereby or the Initial Purchaser, as the
case may be, copies of any such supplement or amendment promptly after its being
used or filed with the SEC. The Company may require, as a condition to including
the Registrable Notes of any Note Holder in any Notes Shelf Registration
Statement, that such Note Holder shall have furnished to the Company a written
agreement to the effect that such Note Holder agrees to comply with and be bound
by the provisions of this Agreement.

         (c) Effective Registration Statement. (i) The Company will be deemed
not to have used its best efforts to cause the Exchange Offer Registration
Statement or any Notes Shelf Registration Statement, as the case may be, to
become, or to remain, effective during the requisite period if the Company
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Note Holders of Registrable
Notes covered thereby not being able to exchange or offer and sell such
Registrable Notes during that period unless such action is, in the reasonable
judgment of the Company, required by applicable law (including, without
limitation, any interpretation of the SEC); provided, further, that the forgoing
shall not apply to actions if the Company determines, in its reasonable
judgment, upon advice of counsel, as authorized by a resolution of its Board of
Directors, that the continued effectiveness and usability of the Notes Shelf
Registration Statement would (A) require the disclosure of material information,
which the Company has a bona fide business reason for preserving as
confidential, or (B) interfere with any financing, acquisition, corporate
reorganization or other material transaction involving the Company of any of its
Affiliates (as determined in the rules and regulations adopted under the 1934
Act); provided, however, that the

                                       10
<PAGE>   11

failure to keep the Notes Shelf Registration Statement effective and usable for
offers and sales of Registrable Notes for such reasons shall last no longer than
60 days in any 12-month period (whereafter Additional Interest shall accrue and
be payable).

                  (ii) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Notes Shelf Registration Statement pursuant to Section
2(b) hereof will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that if, after it has been
declared effective, the offering of Registrable Notes pursuant to such Notes
Shelf Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any other governmental agency or court,
such Notes Shelf Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Notes pursuant to such Notes Shelf Registration Statement may
legally resume.

         (d) Increase in Interest Rate. Subject to Section 2(c) above, if (i)
any of the Registration Statements required by Sections 2(a) or (b) of this
Agreement to be filed is not filed with the SEC on or prior to the date
specified for such filing in this Agreement, (ii) any of such Registration
Statements has not been declared effective by the SEC on or prior to the date
specified for such effectiveness in this Agreement (the "Effectiveness Target
Date"), whether or not the Company has breached any obligation to use its best
efforts to cause such Registration Statement to be declared effective, (iii) the
Exchange Offer, if permitted, has not been consummated within 180 days of the
Closing Date or (iv) any Registration Statement required by Sections 2(a) or (b)
of this Agreement to be filed is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective on or prior to the Effectiveness Target Date (each such event referred
to in clauses (i) through (iv), a "Notes Registration Default"), then from and
after occurrence of such Notes Registration Default, the annual interest rate
borne by the Registrable Notes for any period during the continuance of such
Notes Registration Default will increase by 0.5% per annum; provided, however,
that if a Notes Registration Default has occurred and it continues for 180 days,
then from and after that date, the annual interest rate borne by the Registrable
Notes for any such period during the continuance of such Notes Registration
Default will increase by an additional 0.5% per annum; provided, however, that
the aggregate amount of any such increase in such interest rate will in no event
exceed 1.0% per annum. All accrued Additional Interest shall be paid by the
Company on each Interest Payment Date following the accrual thereof, in the same
manner as provided in the Indenture and the Notes for the payment of interest on
the Notes. Following the cure of all Notes Registration Defaults relating to any
particular Registrable Notes, the accrual of Additional Interest with respect to
such Registrable Notes shall cease. All obligations of the Company set forth in
the this paragraph that are outstanding with respect to any Registrable Notes at
the time such security ceases to be a Registrable Note shall survive until such
time as all such obligations with respect to such security shall have been
satisfied in full.

         (e) Specific Enforcement. Without limiting the remedies available to
the Initial Purchaser and the Note Holders, the Company acknowledges that any
failure by the Company to

                                       11
<PAGE>   12

comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Initial Purchaser or the Note
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchaser or any Holder may, to the extent
permitted by law, obtain such relief as may be required to specifically enforce
the Company's obligations under Section 2(a) and Section 2(b) hereof.

SECTION 3. Warrants Shelf Registration.

         (a) Warrants Shelf Registration Statement. Promptly (and in any event
not more than 60 days) following the Closing Date, the Company shall file with
the SEC and thereafter use its best efforts to have declared effective not later
than 120 days after the Closing Date a registration statement on an appropriate
form under the 1933 Act relating to (i) the offer and sale of the Registrable
Warrant Shares by the Company to the holders of the Registrable Warrants upon
exercise thereof and (ii) the offer and sale of the Registrable Warrants and
Registrable Warrant Shares by the holders thereof, in each case from time to
time in accordance with the methods of distribution set forth in such
registration statement and Rule 415 under the 1933 Act (the "Warrants Shelf
Registration Statement").

         (b) Effectiveness. The Company agrees to use its best efforts to keep
the Warrants Shelf Registration Statement continuously effective in order to
permit the Prospectus included therein to be usable by the holders of the
Registrable Warrants and the Registrable Warrant Shares for eight years from the
Closing Date or such shorter period that will terminate when all Registrable
Warrants and Registrable Warrant Shares covered by the Warrants Registration
Statement have been sold pursuant to such registration statement, provided, that
the Company shall be deemed not to have used its best efforts to keep the
Warrants Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in holders of the Registrable
Warrants and Registrable Warrant Shares covered thereby not being able to offer
and sell such Registrable Warrants and Registrable Warrant Shares during that
period, unless such action is required by applicable law, and provided, further,
that the foregoing shall not apply to actions if the Company determines, in its
reasonable judgment, upon advice of counsel, as authorized by a resolution of
its Board of Directors, that the continued effectiveness and usability of such
registration statement would (i) require the disclosure of material information,
which the Company has a bona fide business reason for preserving as
confidential, or (ii) interfere with any financing, acquisition, corporate
reorganization or other material transaction involving the Company or any of its
Affiliates (as defined in the rules and regulations adopted under the 1934 Act):
provided, however, that the failure to keep the registration statement effective
and usable for offers and sales of Registrable Warrants and Registrable Warrant
Shares for such reasons shall last no longer than 60 days in any 12-month period
(whereafter Warrant Liquidated Damages (as defined in Section 3(c)) shall accrue
and be payable).

         (c) Warrants Liquidated Damages. If the Company fails to file within 60
days, or cause to become effective within 120 days, the Warrants Shelf
Registration Statement, or (subject to Section 3(b)) the Warrants Shelf
Registration Statement is declared effective but

                                       12
<PAGE>   13

thereafter ceases to be effective in connection with resales of the Registrable
Warrants or Registrable Warrant Shares (each, a "Warrant Registration Default"),
then the Company agrees to pay to each holder of Registrable Warrants or
Registrable Warrant Shares, liquidated damages in an amount equal to (i)
one-tenth of one cent ($0.001) per day per Registrable Warrant or such
Registrable Warrant Share held by such holder during the two week period
immediately following a Warrant Registration Default, (ii) three-tenths of one
cent ($.003) per day per Registrable Warrant or such Registrable Warrant Share
held by such holder during the four week period immediately following the two
week period referred to in clause (i) and (iii) thereafter, five-tenths of one
cent ($.005) per day per Registrable Warrant or such Registrable Warrant Share
held by such holder (the "Warrant Liquidated Damages"), accruing in each case
from the date of such Warrant Registration Default and ceasing to accrue on the
date such Warrant Registration Default has been cured by, as applicable, the
filing, declaration of effectiveness or withdrawal of suspension of
effectiveness of the applicable Registration Statement. The Company shall
deliver the Warrant Liquidated Damages to the Warrant Agent on the first day of
each month next following a month as to which Warrant Liquidated Damages have
accrued for the benefit of the holders of Registrable Warrants and to a paying
agent (which may be the Company) for the benefit of the holders of Registrable
Warrant Shares and cause the Warrant Agent and such paying agent to promptly
deliver such funds to the holders of Registrable Warrants and Registrable
Warrant Shares entitled thereto. For purposes of this Agreement, the term
"Warrant Registration Default" shall not include the failure of the Company to
register the offer and sale of the Registrable Warrant Shares of the Company to
the holders of the Registrable Warrants as set forth under Section 3(a)(i)
hereof if such registration is against the current policies of the staff of the
SEC.

         (d) Notwithstanding any other provisions of this Agreement to the
contrary, the Company will cause the Warrants Shelf Registration Statement and
the related Prospectus and any amendment or supplement thereto, as of the
effective date of such Registration Statement, amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the 1933 Act
and the rules and regulations of the Commission and (ii) not to contain any
untrue statement of a material fact or omit to state a material fact required to
be stated herein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

         (e) Specific Enforcement. Without limiting the remedies available to
the Initial Purchaser and the holders of the Warrants and Warrant Shares, the
Company acknowledges that any failure by the Company to comply with its
obligations under this Section 3 may result in material irreparable injury to
the Initial Purchaser or the holders of the Warrants and Warrant Shares for
which there is not adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchaser or any holder of Warrants or Warrant Shares may,
to the extent permitted by law, obtain such relief as may be required to
specifically enforce the Company's obligations under this Section 3.

                                       13
<PAGE>   14

SECTION 4. Registration Procedures.

         In connection with the obligations of the Company with respect to the
Exchange Offer Registration Statement pursuant to Sections 2(a), the Notes Shelf
Registration Statement pursuant to Section 2(b) and the Warrants Shelf
Registration Statement pursuant to Section 3(a) hereof, but only so long as the
Company shall have an obligation under this Agreement to keep a Registration
Statement effective, the Company shall:

         (a) use its best efforts to prepare and file with the SEC a
Registration Statement within the relevant time period specified in Section 2 or
3, on the appropriate form under the 1933 Act, which form (i) shall be selected
by the Company, (ii) shall, in the case of a Notes Shelf Registration, be
available for the sale of the Registrable Notes by the selling Note Holders
thereof, (iii) shall, in the case of a Warrants Shelf Registration Statement, be
available for the sale of the Registrable Warrants and Registrable Warrant
Shares by the selling holders thereof, and (iv) shall comply as to form in all
material respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to be
filed therewith, and use its best efforts to cause such Registration Statement
to become effective and use its best efforts to cause such Registration
Statement to remain effective in accordance with Section 2 or 3 hereof;

         (b) to the extent permitted by law, use its best efforts to (i) prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary under applicable law to keep such
Registration Statement effective for the applicable period, (ii) cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed (if required) pursuant to Rule 424 under the 1933 Act,
and (iii) comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Note Holders or selling holders of the Registrable
Warrants or Registrable Warrant Shares;

         (c) in the case of a Notes Shelf Registration Statement, (i) notify
each Note Holder, at least ten business days prior to filing, that the Shelf
Registration Statement with respect to the Registrable Notes is being filed and
advising such Note Holders that the distribution of Registrable Notes will be
made in accordance with the method elected by the Majority Note Holders; and
(ii) furnish to each holder of Registrable Notes registered under the Notes
Shelf Registration Statement, to a single firm of legal counsel for the Note
Holders (including the Initial Purchaser) and to the managing underwriters of an
underwritten offering of Registrable Notes, if any, and their counsel, without
charge, as many copies of each Prospectus, including each preliminary
prospectus, and any amendment or supplement thereto and documents incorporated
by reference therein as such Note Holder, counsel or underwriters may reasonably
request and, if the Note Holder so requests, all exhibits thereto (including
those incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Notes; and (iii) subject to Section 4(m) hereof
and the last paragraph of this Section 4, hereby consent to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Note
Holders of Registrable Notes in connection with the offering and sale of the
Registrable Notes

                                       14
<PAGE>   15

covered by the Prospectus or any amendment or supplement thereto but only during
the period of time that the Company is required to keep the Shelf Registration
Statement effective pursuant to this Agreement;

         (d) in the case of a Warrants Shelf Registration Statement, (i) notify
each holder of Registrable Warrants and Registrable Warrant Shares, at least 10
business days prior to filing, that the Warrants Shelf Registration Statement
with respect to the Registrable Warrants and Registrable Warrant Shares is being
filed and advising such holders that the distribution of Registrable Warrants
and Registrable Warrant Shares will be made in accordance with the method
elected by the majority of the holders of the Registrable Warrants and
Registrable Warrant Shares acting as a single class (the "Majority Warrant
Holders") and (ii) furnish to each holder of Registrable Warrants and
Registrable Warrant Shares registered under the Warrants Shelf Registration
Statement, to a single firm of legal counsel for the holders of the Registrable
Warrants and Registrable Warrant Shares (including the Initial Purchaser) and to
the managing underwriters of an underwritten offering of Registrable Warrants
and Registrable Warrant Shares, if any, and their counsel, without charge, as
many copies of each Prospectus, including each preliminary prospectus, and any
amendment or supplement thereto and documents incorporated by reference therein
as such holders of Registrable Warrants and Registrable Warrant Shares, such
holders' counsel or underwriters may reasonably request and, if such holders so
request, all exhibits thereto (including those incorporated by reference) in
order to facilitate the public sale or other disposition of the Registrable
Warrants and Registrable Warrant Shares; and (iii) subject to Section 4(m)
hereof and the last paragraph of this Section 4, hereby consent to the use of
the Prospectus or any amendment or supplement thereto by each of the selling
holders of Registrable Warrants and Registrable Warrant Shares in connection
with the offering and sale of the Registrable Warrants and Registrable Warrant
Shares covered by the Prospectus or any amendment or supplement thereto but only
during the period of time that the Company is required to keep the Warrants
Shelf Registration Statement effective pursuant to this Agreement;

         (e) use its best efforts to register or qualify the Registrable Notes,
Registrable Warrants and Registrable Warrant Shares under all applicable state
securities or "blue sky" laws, to the extent not preempted by federal law, of
such jurisdictions in the United States as (i) the Majority Note Holders of
Registrable Notes covered by a Registration Statement and the managing
underwriter of an underwritten offering of Registrable Notes and (ii) the
Majority Warrant Holders covered by the Warrants Shelf Registration Statement
shall reasonably request prior to the time the applicable Registration Statement
is declared effective by the SEC, to cooperate with the Note Holders and holders
of the Registrable Warrants and Registrable Warrant Shares in connection with
any filings required to be made with the NASD, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such holder to
consummate the disposition of such Registrable Notes, Registrable Warrants and
Registrable Warrant Shares in the jurisdiction of such holder pursuant to such
Registration Statement; provided, however, that the Company shall not be
required to (a) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 4(e) or (b) take any action that would subject it to general
service of process or taxation in any such jurisdiction if it is not then so
subject;

                                       15
<PAGE>   16

         (f) in the case of a Shelf Registration Statement, promptly notify a
single firm of legal counsel for the Note Holders or the holders of Registrable
Warrants and Registrable Warrant Shares, as the case may be, registered thereby
and the Initial Purchaser and, if requested by such counsel or the Initial
Purchaser, promptly confirm such advice in writing (by notice to such counsel or
the Initial Purchaser) (i) when such Registration Statement has become effective
and when any post-effective amendments thereto become effective, (ii) of any
request by the SEC or any state securities authority for post-effective
amendments and supplements to such Registration Statement and the related
Prospectus or for additional information after such Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose, (iv) if,
between the effective date of such Registration Statement and the closing of any
sale of Registrable Notes or Registrable Warrants and Registrable Warrant Shares
covered thereby pursuant to an underwriting agreement to which the Company is a
party, the representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Notes or Registrable Warrants
and Registrable Warrant Shares covered by such Registration Statement for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (vi) upon the Company becoming aware thereof, of the happening of
any event or the discovery of any facts during the period such Registration
Statement is effective which (A) makes any statement made in such Registration
Statement or the related Prospectus untrue in any material respect or (B) causes
such Registration Statement or the related Prospectus to omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;

         (g) (i) in the case of the Exchange Offer, (A) include in the Exchange
Offer Registration Statement a "Plan of Distribution" section covering the use
of the Prospectus included in the Exchange Offer Registration Statement by
Participating Broker-Dealers (as defined below) who have exchanged their
Registrable Notes for the applicable series of Exchange Notes for the resale of
such Exchange Notes, (B) furnish to each Participating Broker-Dealer who
notifies the Company in writing that it desires to participate in the Exchange
Offer, without charge, as many copies of each Prospectus included in the
Exchange Offer Registration Statement, including any preliminary prospectus, and
any amendment or supplement thereto, as such broker-dealer may reasonably
request, (C) include in the Exchange Offer Registration Statement a statement
that any broker-dealer who holds Registrable Notes acquired for its own account
as a result of market-making activities or other trading activities (a
"Participating Broker-Dealer"), and who receives Series B Fixed Rate Notes or
Series B Term B Notes for Registrable Notes pursuant to the Exchange Offer, may
be a statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such Exchange
Notes, (D) subject to Section 4(m) hereof and the last paragraph of this Section
4, hereby consent to the use of the Prospectus forming part of the Exchange
Offer Registration Statement or any amendment or supplement thereto by any
Participating Broker-Dealer in connection with the sale or transfer of the
Exchange Notes covered by the Prospectus or any amendment or supplement thereto
for a period ending 180 days following consummation of the Exchange Offer or, if
earlier, when all Exchange Notes received by such Participating Broker-

                                       16
<PAGE>   17
Dealer in exchange for Registrable Notes acquired for their own account as a
result of market-making or other trading activities have been disposed of by
such Participating Broker-Dealer, and (E) include in the letter of transmittal
or similar documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer a provision substantially in the following
form (or such similar provision as is reasonably acceptable to counsel for the
Initial Purchaser and as, in the reasonable opinion of the Company, may at the
time be required by applicable law or SEC interpretation):

                  "If the undersigned is not a broker-dealer, the
                  undersigned represents that it is not engaged
                  in, and does not intend to engage in, a
                  distribution of Exchange Notes. If the
                  undersigned is a broker-dealer that will
                  receive Exchange Notes for its own account in
                  exchange for Registrable Notes, it represents
                  that the Registrable Notes to be exchanged for
                  Exchange Notes were acquired by it as a result
                  of market-making activities or other trading
                  activities and acknowledges that it will
                  deliver a prospectus meeting the requirements
                  of the Securities Act of 1933 in connection
                  with any resale of such Exchange Notes pursuant
                  to the Exchange Offer; however, by so
                  acknowledging and by delivering a prospectus,
                  the undersigned will not be deemed to admit
                  that it is an "underwriter" within the meaning
                  of the Securities Act of 1933"; and

                           (ii) to the extent any Participating Broker-Dealer
         participates in the Exchange Offer, the Company shall use its best
         efforts to cause to be delivered at the request of an entity
         representing the Participating Broker-Dealers (which entity shall be
         the Initial Purchaser) (A) a "cold comfort" letter addressed to the
         Participating Broker-Dealers from the Company's independent certified
         public accountants with respect to the Prospectus in the Exchange Offer
         Registration Statement in the form existing on the last date for which
         exchanges are accepted pursuant to the Exchange Offer and (B) an
         opinion of counsel to the Company addressed to the Participating
         Broker-Dealers in customary form relating to the Exchange Notes; and

                           (iii) to the extent any Participating Broker-Dealer
         participates in the Exchange Offer and notifies the Company or causes
         the Company to be notified in writing that it is a Participating
         Broker-Dealer, the Company shall use its best efforts to maintain the
         effectiveness of the Exchange Offer Registration Statement for a period
         of 180 days following the last date on which exchanges are accepted
         pursuant to the Exchange Offer, or, if earlier, when all Exchange Notes
         received by Participating Broker-Dealers in exchange for Registrable
         Notes acquired for their own account as a result of market-making or
         other trading activities have been disposed of by such Participating
         Broker-Dealers; and

                           (iv) not be required, however, to amend or supplement
         the Prospectus contained in the Exchange Offer Registration Statement
         as would otherwise be contemplated by Section 4(b) hereof, or take any
         other action as a result of this

                                       17
<PAGE>   18

         Section 4(g), at any time after 180 days after the last date for which
         exchanges are accepted pursuant to the Exchange Offer (or such earlier
         date referred to in Paragraph (C) above), and Participating Broker-
         Dealers shall not be authorized by the Company to, and shall not,
         deliver such Prospectus after such period in connection with resales
         contemplated by this Section 4 or otherwise;

         it being understood that, notwithstanding anything in this Agreement to
the contrary, the Company shall not be required to comply with any provision of
this Section 4(g) or any other provision of this Agreement relating to the
distribution of Exchange Notes by Participating Broker-Dealers, to the extent
that the Company reasonably concludes (with the consent of Jefferies & Company,
Inc. not to be unreasonably withheld) that compliance with such provision is no
longer required by applicable law or interpretation of the staff of the SEC;

         (h) in the case of an Exchange Offer, furnish to one firm of legal
counsel for the Initial Purchaser and in the case of a Shelf Registration
Statement, furnish to one firm of legal counsel for the Note Holders or one firm
of legal counsel for the holders of the Registrable Warrants and Registrable
Warrant Shares, as the case may be, covered thereby copies of any request
received by or on behalf of the Company, from the SEC or any state securities
authority for amendments or supplements to the relevant Registration Statement
and Prospectus or for additional information;

         (i) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide prompt notice to one firm of legal counsel for the Note Holders or
holders of the Registrable Warrants and Registrable Warrant Shares, as the case
may be, of the withdrawal of any such order;

         (j) in the case of a Shelf Registration Statement, furnish to each
Holder of Registrable Notes or holders of the Registrable Warrants and
Registrable Warrant Shares, as the case may be, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);

         (k) in the case of a Notes Shelf Registration Statement cooperate with
the selling Note Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates representing applicable Registrable
Notes to be sold and not bearing any restrictive legend (except any customary
legend borne by securities held through The Depository Trust Company or any
similar depository); and cause such Registrable Notes to be in such
denominations (consistent with the provisions of the Indenture) and registered
in such names as the selling Note Holders or the underwriters, if any, may
request at least two business days prior to the closing of any sale of
Registrable Notes;

         (l) in the case of a Warrants Shelf Registration Statement, cooperate
with the selling holders of the Registrable Warrants and Registrable Warrant
Shares to facilitate the timely preparation and delivery of certificates
representing Registrable Warrants and Registrable Warrant Shares to be sold and
not bearing any restrictive legend (except any customary legend borne by
securities held through the Depository Trust Company or any similar depository);
and

                                       18
<PAGE>   19

cause such Registrable Warrants and Registrable Warrant Shares to be in such
denominations (consistent with the provisions of the Warrant Agreement) and
registered in such names as the selling holders of the Registrable Warrants and
Registrable Warrant Shares or the underwriters, if any, may request at least two
business days prior to the closing of any sale of Registrable Warrants and
Registrable Warrant Shares;

         (m) in the case of a Shelf Registration, upon the Company becoming
aware of the occurrence of any event or the discovery of any facts, each as
contemplated by Section 4(f)(vi) hereof, use its best efforts to prepare a
supplement or post-effective amendment to the relevant Registration Statement or
the related Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Notes or purchasers of the Registrable Warrants and
Registrable Warrant Shares, as the case may be, such Prospectus will not contain
at the time of such delivery any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company agrees to
notify each Note Holder registered under the relevant Shelf Registration
Statement to suspend use of the Prospectus as promptly as practicable after the
Company becomes aware of the occurrence of such an event, and each Note Holder
registered under the relevant Shelf Registration Statement hereby agrees to
suspend use of the Prospectus after receipt of such notice until the Company has
amended or supplemented the Prospectus to correct such misstatement or omission
or has advised such holders that use of such Prospectus may be resumed. At such
time as such public disclosure is otherwise made or the Company determines that
such disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, or the Company otherwise
determines that use of such Prospectus may be resumed, the Company agrees
promptly to notify each holder registered under the relevant Shelf Registration
Statement of such determination and (if applicable) to furnish each such holder
such numbers of copies of the Prospectus, as amended or supplemented, as such
holder may reasonably request;

         (n) not later than the effective date of the applicable registration
statement, the Company will provide a CUSIP number for the Fixed Rate Notes, the
Term B Notes, the Series B Fixed Rate Notes, the Series B Term B Notes, the
Registrable Warrants or the Registrable Warrant Shares, as the case may be, and
provide (x) the Trustee or Warrant Agent with printed certificates for the Fixed
Rate Notes, the Term B Notes, the Series B Fixed Rate Notes, the Series B Term B
Notes, the Registrable Warrants or the Registrable Warrant Shares, as the case
may be, and (y) the transfer agent and registrar for the Common Stock with
printed certificates for the Registrable Warrants Shares in a form eligible for
deposit with The Depository Trust Company; provided, however, that the Company
shall not be required to provide printed certificates for any Fixed Rate Notes,
Term B Notes, Series B Fixed Rate Notes or Series B Term B Notes to be so-called
"book-entry only" securities;

         (o) unless the Indenture, as it relates to the Exchange Notes or the
Registrable Notes, as the case may be, has already been so qualified, use its
best efforts to (i) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes or Registrable Notes, as the case may be,
(ii) cooperate

                                       19
<PAGE>   20

with the Trustee and the Note Holders to effect such changes to the Indenture as
may be required for the Indenture to be so qualified in accordance with the
terms of the TIA and (iii) execute, and use its best efforts to cause the
Trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;

         (p) in the case of a Shelf Registration Statement, take all customary
and appropriate actions reasonably required (including those reasonably
requested by the Majority Note Holders or Majority Warrant Holders, as the case
may be) in order to expedite or facilitate the disposition of the Registrable
Notes or Registrable Warrants and Registrable Warrant Shares, as the case may
be, registered thereby. If requested as set forth below, the Company agrees that
it will in good faith negotiate the terms of an underwriting agreement, which
shall be in form and scope as is customary for similar offerings of notes with
similar credit ratings (including, without limitation, representations and
warranties to the underwriters) and shall otherwise be reasonably satisfactory
to the Company and the managing underwriters; and:

                           (i) if requested by the managing underwriters, obtain
         opinions of counsel to the Company (which counsel shall be reasonably
         satisfactory to the managing underwriters) addressed to such
         underwriters, covering the matters customarily covered in opinions
         requested in underwritten sales of securities in substantially the
         forms specified in the underwriting agreement;

                           (ii) if requested by the managing underwriters,
         obtain a "cold comfort" letter and an update thereto not later than two
         weeks after the date of the original letter (or if not available under
         applicable accounting pronouncements or standards, a single
         "procedures" letter and a single update thereto) from the Company's
         independent certified public accountants addressed to the underwriters
         named in the underwriting agreement and use its best efforts to have
         such letter addressed to the selling Note Holders or selling holders of
         Registrable Warrants and Registrable Warrant Shares, as the case may be
         (provided, however, that such letter need not be addressed to any Note
         Holders or holders of Registrable Warrants and Registrable Warrant
         Shares, as the case may be, to whom, in the reasonable opinion of the
         Company's independent certified public accountants, addressing such
         letter is not permissible under applicable accounting standards), such
         letters to be in customary form and covering matters of the type
         customarily covered in "cold comfort" (or "procedures") letters to
         underwriters in connection with similar underwritten offerings; and

                           (iii) deliver such documents and certificates as may
         be reasonably requested and as are customarily delivered in similar
         underwritten offerings.

         Notwithstanding anything herein to the contrary, the Company shall have
no obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Notes or Registrable Warrants and Registrable Warrant
Shares unless a request therefor shall have been received from the Majority Note
Holders or the Majority Warrant Holders, as the case may be, then outstanding
within ten business days of the date of the notice from the Company as required

                                       20
<PAGE>   21

by Section 4(c) or 4(d). In the case of such a request for an underwritten
offering, the Company shall provide reasonable advance written notice to the
Note Holders or holders of Registrable Warrants and Registrable Warrant Shares,
as the case may be, of such proposed underwritten offering. Such notice shall
(A) offer each such holder the right to participate in such underwritten
offering (but may indicate that whether or not all Registrable Notes or all
Registrable Warrants and Registrable Warrant Shares, as the case may be, are
included will be at the discretion of the underwriters), (B) specify a date,
which shall be no earlier than ten business days following the date of such
notice, by which such holder must inform the Company of its intent to
participate in such underwritten offering and (C) include the instructions such
holder must follow in order to participate in such underwritten offering;

         (q) in the case of a Shelf Registration (in the case of a Notes Shelf
Registration Statement, to the extent customary in connection with a "due
diligence" investigation for an offering of notes with a similar credit rating
to that of the Registrable Notes), make available for inspection by
representatives appointed by the Majority Note Holders or the Majority Warrant
Holders, as the case may be, and any underwriters participating in any
disposition pursuant to a Shelf Registration Statement and one firm of legal
counsel retained for all Note Holders or holders of Registrable Warrants and
Registrable Warrant Shares, as the case may be, participating in such Shelf
Registration, and one firm of legal counsel to the underwriters, if any, all
financial and other records, pertinent corporate documents and properties of the
Company reasonably requested by any such persons, and cause the respective
officers, employees and any other agents of the Company to supply all
information reasonably requested by any such representative, underwriters or
counsel in connection with the Shelf Registration Statement; provided, however,
that, if any such records, documents or other information relates to pending or
proposed acquisitions or dispositions, or otherwise relates to matters
reasonably considered by the Company to constitute sensitive or proprietary
information, the Company need not provide such records, documents or information
unless the foregoing parties enter into a confidentiality agreement in customary
form and reasonably acceptable to such parties and the Company;

         (r) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial Purchaser, and make
such changes in any such document prior to the filing thereof as the Initial
Purchaser or its counsel may reasonably request; (ii) in the case of a Shelf
Registration Statement, a reasonable time prior to filing any Shelf Registration
Statement, any Prospectus forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to such Prospectus, provide
copies of such document to the Initial Purchaser, one firm of legal counsel
appointed by the Majority Note Holders or Majority Warrant Holders to represent
the Note Holders or the Majority Warrant Holders, as the case may be,
participating in such Shelf Registration Statement, the managing underwriters of
an underwritten offering of Registrable Notes or Registrable Warrants and
Registrable Warrant Shares, as the case may be, if any, and their counsel, and
make such changes in any such document prior to the filing thereof as the
Initial Purchaser, such one firm of legal counsel for the Note Holders or
holders of Registrable Warrants and Registrable Warrant Shares, as the case may
be, such managing underwriters or their counsel may reasonably request; and
(iii) cause the

                                       21
<PAGE>   22

representatives of the Company to be available for discussion of such document
as shall be reasonably requested by the Initial Purchaser, one firm of legal
counsel to the Note Holders, the holders of the Registrable Warrants and
Registrable Warrant Shares, the managing underwriters and their counsel; and
shall not at any time make any filing of any such document of which the Initial
Purchaser, one firm of legal counsel to the Note Holders, the holders of the
Registrable Warrants and Registrable Warrant Shares, the managing underwriters
and their counsel shall not have previously been advised and furnished a copy or
to which the Initial Purchaser, one firm of legal counsel to the Note Holders,
the holders of the Registrable Warrants and Registrable Warrant Shares, the
managing underwriters and their counsel shall reasonably object: provided,
however, that the provisions of this paragraph (p) shall not apply to any
document filed by the Company pursuant to the 1934 Act which is incorporated or
deemed to be incorporated by reference in any Registration Statement or
Prospectus;

         (s) in the case of a Shelf Registration Statement and if requested by
the managing underwriters, if any, or the Majority Note Holders or the Majority
Warrant Holders, as the case may be, (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information or revisions
to information therein relating to such underwriters, selling Note Holders or
selling holders of the Registrable Warrants and Registrable Warrant Shares, as
the case may be, as the managing underwriters, if any, or such holders or their
counsel reasonably request to be included or made therein, (ii) make all
required filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such prospectus supplement or post-effective
amendment and (iii) if required, supplement or make amendments to such Shelf
Registration Statement;

         (t) upon delivery of the Registrable Notes by Note Holders to the
Company (or to such other Person as directed by the Company) in exchange for the
applicable Exchange Notes, the Company shall mark, or cause to be marked, on
such Registrable Notes that such Registrable Notes are being canceled in
exchange for the Exchange Notes; in no event shall such Registrable Notes be
marked as paid or otherwise satisfied;

         (u) use its best efforts to cause the Series B Fixed Rate Notes and
Series B Term B Notes, if applicable, and, in the event of a Shelf Registration
Statement, the Fixed Rate Notes and Term B Notes, to be rated with not more than
two rating agencies selected by the Company, if so requested by the Majority
Note Holders or by the managing underwriters of an underwritten offering of
Registrable Notes, if any, unless the Series B Fixed Rate Notes and Series B
Term B Notes, as the case may be, or the Fixed Rate Notes and Term B Notes, as
the case may be, are already so rated or unless the Company has obtained such
ratings for its long-term notes generally;

         (v) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC and make available to its security holders, as soon
as reasonably practicable, an earnings statement covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder; and

                                       22
<PAGE>   23

         (w) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter and its counsel (including any "qualified independent underwriter"
that is required to be retained in accordance with the rules and regulations of
the NASD).

         In the case of a Shelf Registration Statement, the Company may (as a
condition to such holder's participation in the Shelf Registration Statement)
(i) require each holder of Registrable Notes, Registrable Warrants or
Registrable Warrant Shares to furnish to the Company such information regarding
such holder and the proposed distribution by such Holder of such Registrable
Notes, Registrable Warrants or Registrable Warrant Shares as the Company may
from time to time reasonably request in writing and such other information as,
in the reasonable opinion of the Company, is required for inclusion in the Shelf
Registration Statement, and (ii) further require each holder of Registrable
Notes, Registrable Warrants or Registrable Warrant Shares through one firm of
legal counsel on behalf of all such holders of Registrable Notes, Registrable
Warrants or Registrable Warrant Shares, to furnish to the Company any comments
on the Shelf Registration Statement and the Prospectus included therein or any
amendment or supplement to any of the foregoing not later than such times as the
Company reasonably may request. Each holder of securities included in a Shelf
Registration Statement agrees promptly to notify the Company of any inaccuracy
or change in information previously furnished to the Company or the occurrence
of any event, in either case, as a result of which the relevant Registration
Statement or the related Prospectus contains or would contain an untrue
statement of a material fact or omits or would omit to state any material fact
regarding such Holder, its intended method of distribution of Registrable Notes,
Registrable Warrants or Registrable Warrant Shares or otherwise that is required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing. As soon as practicable, the Company
will, subject to the reasonable approval of its counsel, incorporate in a
supplement or post-effective amendment to the relevant Registration Statement or
related Prospectus such information furnished in writing to the Company and
requested to be included therein, and furnish to such holder copies of the
Prospectus, as amended or supplemented, as reasonably requested.

         In the case of a Shelf Registration Statement, each holder agrees and,
in the case of the Exchange Offer Registration Statement, each Participating
Broker-Dealer agrees that, upon receipt of any notice from the Company of the
happening of any event or the discovery of any facts, each of the kind described
in Section 4(f)(ii)-(vi) or Section 4(m) hereof (it being understood and agreed
that, for purposes of this paragraph, a references in Sections 4(f)(ii)-(vi) and
Section 4(m) to a "Shelf Registration Statement" or a "Registration Statement"
shall be deemed to mean and include a Shelf Registration Statement, the Exchange
Offer Registration Statement or all or any combination thereof (as the context
requires), such holder or Participating Broker-Dealer, as the case may be, will
forthwith discontinue disposition of Registrable Notes, Registrable Warrants or
Registrable Warrant Shares pursuant to such Registration Statement and
discontinue use of the Prospectus included therein until such holder's or
Participating Broker-Dealer's receipt, as the case may be, of (A) copies of the
supplemented or amended Prospectus contemplated by Section 4(m) hereof or (B)
notice from the Company that the sale of the Registrable Notes, Registrable
Warrants or Registrable Warrant Shares may be resumed, and, if

                                       23
<PAGE>   24

so directed by the Company, such holder or Participating Broker-Dealer, as the
case may be, will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in its possession, of the
Prospectus covering such Registrable Notes, Registrable Warrants or Registrable
Warrant Shares current at the time of receipt of such notice. If the Company
shall give any such notice to suspend the disposition of Registrable Notes,
Registrable Warrants or Registrable Warrant Shares pursuant to a Registration
Statement as a result of the happening of any event or the discovery of any
facts, each of the kind described in Section 4(f) (ii)-(vi) or 4(m) hereof, the
Company shall be deemed to have used its best efforts to keep such Registration
Statement effective during such period of suspension, provided that the Company
shall use its best efforts to file and have declared effective (if an amendment)
as soon as practicable an amendment or supplement to such Registration Statement
or the related Prospectus and shall extend the period during which such
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Note Holders or holders
of the Registrable Warrants or Registrable Warrant Shares shall have received
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or the date on which the Company has given notice that the sale of
Registrable Notes or Registrable Warrants and Registrable Warrant Shares may be
resumed, as the case may be. Each holder of Registrable Notes or Registrable
Warrants and Registrable Warrant Shares hereby agrees that it will at all times
use the then most current Prospectus, as then amended or supplemented, which has
been provided to it by the Company in connection with the resale or transfer of
any Registrable Notes or Registrable Warrants and Registrable Warrant Shares
pursuant to a Registration Statement or Prospectus.

SECTION 5. Expenses.

         The Company (i) shall pay all Registration Expenses in connection with
the performance of its obligations under Section 2, Section 3 and Section 4, and
(ii) in connection with the Exchange Offer Registration Statement and the Notes
Shelf Registration Statement, shall reimburse the Note Holders of Registrable
Notes being tendered in the Exchange Offer and/or resold pursuant to the "Plan
of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Notes Shelf Registration Statement, as applicable (or
to the extent such fees and disbursements are paid to such counsel by the
Initial Purchaser, the Initial Purchaser), for the reasonable fees and
disbursements of not more than one counsel, to be chosen by the Note Holders of
a majority in principal amount of the Registrable Notes for whose benefit such
Registration Statement is being prepared. Each Note Holder (including each
Initial Purchaser) shall pay all expenses of its counsel other than as set forth
in the preceding sentence, underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Note Holder's
Registrable Notes pursuant to any Notes Shelf Registration Statement or the
exchange of its Registrable Notes pursuant to any Exchange Offer Registration
Statement. Notwithstanding anything in this Agreement to the contrary, the
Company shall not be required to pay the fees and disbursements of legal counsel
for any Note Holders or holder of Registrable Warrants or Registrable Warrant
Shares (including the Initial Purchaser) except (A) as provided in clause (ii)
of the first sentence of this paragraph, (B) to the extent such fees and
disbursements constitute Registration Expenses which the Company is required to
pay

                                       24
<PAGE>   25

pursuant to the other provisions of this Agreement and (C) to the extent
required by Section 7 hereof. In the case of the Warrants Shelf Registration
Statement, the Company shall bear or reimburse the holders of the Registrable
Warrants and the Registrable Warrant Shares for the reasonable fees and expenses
of the one firm of counsel designated by holders of a majority of the
Registrable Warrants or Warrant Shares (voting together as a class) to act as
counsel.

SECTION 6. Underwritten Registrations.

         If any of the Registrable Notes or Registrable Warrants and Registrable
Warrant Shares covered by a Shelf Registration Statement are to be sold in an
underwritten offering, the underwriter or underwriters and manager or managers
that will manage the offering will be selected by the Company and shall be
reasonably acceptable to the Majority Note Holders or the Majority Warrant
Holders included in such offering, as the case may be.

         No holder of Registrable Notes or Registrable Warrants and Registrable
Warrant Shares may participate in any underwritten offering hereunder unless
such holder (a) agrees to sell such holder's Registrable Notes or Registrable
Warrants and Registrable Warrant Shares on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

SECTION 7. Indemnification and Contribution.

         (a) The Company, agrees to indemnify and hold harmless (i) each Note
Holder and holder of Exchange Notes, Warrants and Warrant Shares, (ii) the
Initial Purchaser, (iii) each person, if any, who controls any such holder or
the Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act and (iv) the respective officers, directors,
partners, employees, representatives and agents of any such holder or the
Initial Purchaser or any controlling person (any person referred to in clauses
(i) -(iv) may hereinafter be referred to as an "Indemnified Holder"), to the
fullest extent lawful, from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), to which they or any of them may
become subject under the 1933 Act, the 1934 Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or Prospectus
(including any preliminary Prospectus), or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company will
not be liable in any such case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or

                                       25
<PAGE>   26

alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the any of the
Indemnified Holders expressly for use therein. This indemnity agreement will be
in addition to any liability that the Company may otherwise have, including
under this Agreement.

         (b) In the case of a Notes Shelf Registration Statement or a Warrants
Registration Statement, each Note Holder and holders of Warrants or Warrant
Shares, as the case may be, agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Initial Purchaser, each underwriter who
participates in an offering of Registrable Notes, Registrable Warrants or
Registrable Warrant Shares and the other Note Holders and holders of Warrants or
Warrant Shares, as the case may be, and each Person, if any, who controls the
Company, the Initial Purchaser, any underwriter or any other Note Holder or
holder of Warrants or Warrant Shares, within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act, and each of their respective
officers, directors, employers, partners, representatives and agents to the same
extent as the foregoing indemnity to each of the Indemnified Holders, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in any Registration Statement or Prospectus (including any
preliminary Prospectus), or in any supplement thereto or amendment thereof, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such holder expressly for use in any such
Registration Statement or Prospectus (including any preliminary Prospectus), or
in any supplement thereto or amendment thereof; provided, however, that no such
holder shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such holder from the sale of securities pursuant to such
Registration Statement.

         (c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability that it may
have under this Section 7 or otherwise except to the extent that it has been
prejudiced in any material respect by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume and control the defense thereof with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it that are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which
events such

                                       26
<PAGE>   27

fees and expenses of counsel shall be borne by the indemnifying parties;
provided, however, that the indemnifying party under subsection (a) or (b) above
shall only be liable for the legal expenses of one counsel (in addition to any
local counsel) for all indemnified parties. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written consent;
provided, that such consent was not unreasonably withheld.

         (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is for
any reason held to be unavailable or is insufficient to hold harmless a party
hereunder, the Company, the Initial Purchaser, the Note Holders and the holders
of the Warrants and Warrant Shares shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from Persons, other than the Initial
Purchaser, the Note Holders and holders of the Warrants and Warrant Shares, who
may also be liable for contribution, including persons who control the Company
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act) to which the Company, the Initial Purchaser, the Note Holders, or the
holders of the Warrants or the Warrant Shares may be subject, (i) in such
proportion as is appropriate to reflect the relative fault of the Company on one
hand, the Initial Purchaser on another hand, and the Note Holders and the
holders of the Warrants and the Warrant Shares, on another hand, in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative fault referred to in clause (i) above but also other relevant
equitable considerations. The relative fault of the Company on one hand, the
Initial Purchaser, on another hand, and the Note Holders and the holders of the
Warrants and the Warrant Shares, on another hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Initial Purchaser or such
Note Holder or holder or Warrants or Warrant Shares and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Initial Purchaser, each Note Holder
and each holder of Warrants and Warrant Shares agrees that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall any Note Holder or Holder of
Warrants or Warrant Shares be required to contribute any amount in excess of the
amount by which the proceeds received by such Note Holder or holder of Warrants
or Warrant Shares upon the sale of the securities giving rise to such obligation
exceeds the amount of any damages that such Note Holder or holder of Warrants or
Warrant Shares has otherwise been required to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent

                                       27
<PAGE>   28

misrepresentation. For purposes of this Section 7, (A) each Person, if any, who
controls any of the Note Holders or the holders of Warrants or Warrant Shares
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act and (B) the respective officers, directors, partners, employees,
representatives and agents of such Note Holder or holder of Warrants or Warrant
Shares or any controlling Person shall have the same rights to contribution as
the Note Holders and the holders of Warrants and Warrant Shares, and each
Person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7(d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its prior written consent; provided that such written consent was not
unreasonably withheld.

SECTION 8. Miscellaneous.

         (a) Rule 144 and Rule 144A. Until the earliest of (i) the completion of
the Exchange Offer, (ii) two years following the Closing Date (or such shorter
period as may be specified in Rule 144(k) as then amended) and (iii) the date
when all Registrable Notes have been sold pursuant to the Notes Shelf
Registration Statement or are no longer Registrable Notes, the Company covenants
that it will file the reports required to be filed by it under Section 13(a) or
15(d) of the 1934 Act and the rules and regulations adopted by the SEC
thereunder for so long as the Company is subject to the reporting requirements
of Section 13 or 15 of the 1934 Act, and if the Company ceases to be so required
to file such reports, it will upon the request of any holder of Registrable
Notes, Registrable Warrants or Registrable Warrant Shares (i) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the 1933 Act, (ii) deliver such information to a prospective purchaser as
is necessary to permit sales pursuant to Rule 144A under the 1933 Act and (iii)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable such holder to sell its
Registrable Notes, Registrable Warrants or Registrable Warrant Shares without
registration under the 1933 Act within the limitation of the exemptions provided
by (A) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (B) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time, or (C) any similar rules or regulations hereafter adopted by the SEC
(provided that the obligations of the Company under any such similar rules or
regulations shall not be more burdensome in any substantial respect than those
referred to in clauses (A) or (B)). Upon the request of any holder of
Registrable Notes, Registrable Warrants or Registrable Warrant Shares, the
Company will deliver to such holder a written statement as to whether it has
compiled with such requirements.

         (b) No Inconsistent Agreements. The Company has not entered into nor
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the holders of Registrable
Notes, Registrable Warrants or Registrable

                                       28
<PAGE>   29

Warrant Shares in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Note Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities under any such agreements.

         (c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Note Holders of at
least a majority in aggregate principal amount of the outstanding Registrable
Notes affected by such amendment, modification, supplement, waiver or departure;
provided, however, to the extent any provision of this Agreement relates to the
Initial Purchaser, such provision may be amended, modified or supplemented, and
waivers or consents to departures from such provisions thereof may be given, by
Jefferies & Company, Inc.; and provided, further, that no amendment,
modification, supplement or waiver or consent to any departure from the
provisions of Section 7 hereof shall be effective as against any holder of
Registrable Notes, Registrable Warrants or Registrable Warrant Shares unless
consented to in writing by such holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Jefferies &
Company, Inc. to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate to
comply with applicable law (including any interpretation of the staff of the
SEC) or any change therein.

         (d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered or
certified first-class mail, telecopier or any courier providing overnight
delivery (i) if to a Note Holder, at its address appearing in the register of
the Notes and/or Exchange Notes kept by the Registrar (as defined in the
Indenture) or at such other address as shall have been given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 8(d), which address initially is, with respect to the Initial Purchaser,
the address set forth in the Purchase Agreement, if to a holder of a Warrant or
Warrant Shares, at its address appearing in the register kept by the Warrant
Agent and (iii) if to the Company initially at or in care of the Company's
address set forth in the Purchase Agreement, or in each case to such other
address notice of which is given in accordance with the provisions of this
Section 6(d).

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telecopied; and on the next business day if timely delivered
to an air courier providing overnight delivery.

         (e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Note Holders; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms hereof or of the Purchase Agreement,

                                       29
<PAGE>   30

the Indenture or the Offering Memorandum dated December 12, 2000; and provided,
further, that Note Holders may not assign their rights under this Agreement
except in connection with the permitted transfer of Registrable Notes and then
only insofar as relates to such Registrable Notes. If any transferee of any
Holder shall acquire Registrable Notes, in any manner, whether by operation of
law or otherwise, such Registrable Notes shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Notes, such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.

         (f) Third-Party Beneficiary. The holders of the Notes, Warrants and
Warrant Shares from time to time shall each be a third-party beneficiary to the
agreements made hereunder between the Company, on the one hand, and the Initial
Purchaser, on the other hand, and Jefferies & Company, Inc. shall have the right
to enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of such holders
hereunder.

         (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof

         (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       30
<PAGE>   31

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                        PICCADILLY CAFETERIAS, INC.

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

                                        JEFFERIES & COMPANY, INC.

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

                          Registration Rights Agreement
                                Signature Page 1

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