CORRPRO COMPANIES INC /OH/
EX-10.1 WARRANT DATED MARCH 30, 2004
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>l06991aexv10w1.txt
<DESCRIPTION>EX-10.1 WARRANT DATED MARCH 30, 2004
<TEXT>
<PAGE>

                                                                    Exhibit 10.1

NEITHER THE WARRANT REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE THEREFOR.

Warrant No. X-1                                               12,113,744 Shares

Dated: March 30, 2004

                                     WARRANT
                       TO PURCHASE SHARES OF COMMON STOCK
                                       OF
                             CORRPRO COMPANIES, INC.

         THIS WARRANT (this "Warrant") certifies that, for value received,
CorrPro Investments, LLC, a Delaware limited liability company, or its
registered assigns (the "Holder"), is entitled to purchase from Corrpro
Companies, Inc., an Ohio corporation (the "Company"), at any time or from time
to time on or after the date hereof and prior to the Expiration Time (the
"Exercise Period"), up to an aggregate of 12,113,744 duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (subject to
adjustment as provided herein), at a purchase price of $0.001 per share (subject
to adjustment as provided herein, the "Exercise Price"), subject to the terms
and conditions set forth herein.

1. Definitions. For the purposes of this Warrant, the following terms shall have
the meanings set forth below:

         "Acquiring Company" shall have the meaning set forth in Section 3.9
hereof.

         "Acquirer's Common Stock" shall have the meaning set forth in Section
3.9 hereof.

         "Additional Shares of Common Stock" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or deemed to be issued or sold
pursuant to Section 3.6) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company; provided, however, that the
term "Additional Shares of Common Stock" shall not include (i) shares of Common
Stock issuable upon exercise of this Warrant, (ii) shares of Common Stock
issuable upon exercise of the Outstanding Warrants, (iii) shares of Common Stock
issuable upon exercise of the Lender Warrants and (iv) up to an aggregate of
4,542,654 shares of Common Stock issuable upon exercise of Options granted prior
to, on or after the date hereof under the Option Plans.

         "Adjustment Shares" shall have the meaning set forth in Section 3.13(b)
hereof.

         "Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with, such Person.

<PAGE>

         "Announcement Date" shall have the meaning set forth in Section 3.9
hereof.

         "Articles of Incorporation" shall mean the Amended and Restated
Articles of Incorporation of the Company.

         "Assignment Notice" shall have the meaning set forth in Section 4.1
hereof.

         "Board of Directors" shall mean the Board of Directors of the Company,
including any committees thereof.

         "Business Day" shall mean any day other than a Saturday, Sunday, public
holiday under the laws of the State of New York or any other day on which
banking institutions are authorized to close in New York City.

         "Code of Regulations" shall mean the Amended and Restated Code of
Regulations of the Company.

         "Common Stock" shall mean the common shares, without par value, of the
Company.

         "Company" shall have the meaning set forth in the preamble hereof.

         "Consummation Date" shall have the meaning set forth in Section 3.9
hereof.

         "Convertible Securities" shall mean any evidences of indebtedness,
shares of capital stock (other than Common Stock) or other securities directly
or indirectly convertible into or exchangeable for Additional Shares of Common
Stock.

         "Determined Value" shall mean with respect to any securities or other
property, the fair market value thereof as of a date which is within fifteen
(15) days of the date on which the determination of such fair market value is to
be made (i) determined by mutual agreement between the Company and the Holder,
or (ii) if the Company and the Holder fail to mutually agree, determined jointly
by an independent investment banking firm retained by the Company and by an
independent investment banking firm retained by the Holder, either of which
firms may be an independent investment banking firm regularly retained by the
Company, or (iii) if the Company or the Holder shall fail so to retain an
independent investment banking firm within ten (10) days of the retention of
such a firm by the Holder or the Company, as the case may be, determined solely
by the firm so retained, or (iv) if the independent investment banking firms so
retained by the Company and by the Holder shall be unable to reach a joint
determination within fifteen (15) days of the retention of the last firm so
retained, determined by another independent investment banking firm that is not
a regular investment banking firm of the Company chosen by the first two such
firms. The Company shall be responsible for the fees and expenses of all such
investment banking firms.

         "Disinterested Board Member" shall mean a member of the Board of
Directors that is not an officer, director, member or employee of CorrPro
Investments, LLC or its Affiliates (other than the Company and its
subsidiaries).

         "Division/Combination Notice" shall have the meaning set forth in
Section 4.2 hereof.

         "Excess Dilution Number" shall mean, with respect to any issuance or
adjustment, a number of shares of Common Stock that is equal to the increase in
the aggregate number of shares of Common Stock issuable upon exercise of the
Outstanding Warrants and the Lender Warrants attributable to anti-dilution

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<PAGE>

adjustments thereto in connection with any changes in the exercise price or
conversion rate or ratio of this Warrant, the Lender Warrants or the Outstanding
Warrants.

         "Exercise Date" shall have the meaning set forth in Section 2.1 hereof.

         "Exercise Notice" shall have the meaning set forth in Section 2.1
hereof.

         "Exercise Period" shall have the meaning set forth in the preamble
hereof.

         "Exercise Price" shall have the meaning set forth in the preamble
hereof.

         "Expiration Time" shall mean the tenth anniversary of the date hereof.

         "Extraordinary Transaction" shall have the meaning set forth in Section
3.9 hereof.

         "Fair Market Value" shall mean, with respect to a share of Common Stock
as of a particular date, the price first determined by the first of the
following clauses that applies: (i) if the Common Stock is then listed or quoted
on a national securities exchange, the NASDAQ National Market System or the
NASDAQ SmallCap Market, the last reported closing price per share of Common
Stock for such date on such national securities exchange, the NASDAQ National
Market System or the NASDAQ SmallCap Market, (ii) if the Common Stock is not
then listed or quoted on a national securities exchange, the NASDAQ National
Market System or the NASDAQ SmallCap Market and the Common Stock is then quoted
on the OTC Bulletin Board, the average of the closing bid and ask prices per
share of Common Stock for such date on the OTC Bulletin Board, (iii) if the
Common Stock is not then quoted on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the "Pink Sheets" published by the National
Quotation Bureau Incorporated (or a similar organization or agency succeeding to
its functions of reporting prices), the average of the closing bid and ask
prices per share of Common Stock on such date, or (iv) in all other cases, the
fair market value per share of Common Stock as determined in good faith by the
Board of Directors; provided, however, that any such determination by the Board
of Directors may be challenged in good faith by the Holder, and any such dispute
shall be resolved, at the non-prevailing party's cost, by the determination of
an investment banking firm of recognized national standing selected by the
Holder.

         "Holder" shall have the meaning set forth in the preamble hereof.

         "Initial Excess Dilution Number" shall mean a number of shares of
Common Stock that is equal to the increase in the aggregate number of shares of
Common Stock issuable upon exercise of the Outstanding Warrants attributable to
anti-dilution adjustments thereto in connection with the issuance of (i) this
Warrant, (ii) the Lender Warrants, (iii) shares of Common Stock issuable upon
exercise of outstanding options granted pursuant to the Option Plans, including
any repricings thereof, and (iv) options that may be granted pursuant to the
Option Plans.

         "Lender Warrants" shall mean the detachable warrants issued by the
Company pursuant to that certain Warrant, dated as of March 30, 2004 by and
between the Company and American Capital Strategies, Ltd.

         "Net Issue Election" shall have the meaning set forth in Section 2.6
hereof.

         "Option Plans" shall mean, collectively, (i) the 1997 Non-Employee
Directors' Stock Option Plan of the Company, as amended, (ii) the 1997 Long-Term
Incentive Plan of the Company, as amended, and

                                       3

<PAGE>

(iii) any other stock option plans of the Company adopted by the Board of
Directors and, to the extent required by applicable law, approved by the
shareholders of the Company.

         "Options" shall mean any rights, options or warrants to subscribe for,
purchase or otherwise acquire Additional Shares of Common Stock or Convertible
Securities.

         "Other Securities" shall mean any capital stock (other than Common
Stock) and any other securities of the Company or any other Person which the
Holder at any time shall be entitled to receive, or shall have received, upon
exercise of this Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 3.9 or
otherwise; provided, however, that the term "Other Securities" shall not include
(i) Additional Shares of Common Stock, (ii) Options, (iii) Convertible
Securities, (iv) shares of Common Stock issuable upon exercise of this Warrant,
(v) shares of Common Stock issuable upon exercise of the Lender Warrants or (vi)
shares of Common Stock issuable upon exercise of the Outstanding Warrants.

         "Outstanding Warrants" shall mean the warrants evidenced by (i) that
certain Warrant, dated as of September 23, 2002, issued by the Company to Bank
One, NA and (ii) that certain Warrant, dated as of September 23, 2002, issued by
the Company to The Prudential Insurance Company of America.

         "Parent" shall have the meaning set forth in Section 3.9 hereof.

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

         "Purchase Agreement" shall mean that certain Securities Purchase
Agreement, dated as of December 15, 2003, by and between the Company and CorrPro
Investments, LLC.

         "Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

         "Series B Preferred Stock" shall mean the Company's Series B Cumulative
Redeemable Voting Preferred Stock, without par value.

         "Warrant" shall have the meaning set forth in the preamble hereof.

         "Warrant Price" shall mean, with respect to each exercise of all or any
portion of this Warrant, an amount that is equal to (i) the number of shares of
Common Stock being purchased upon such exercise of this Warrant multiplied by
(ii) the Exercise Price in effect on the date of such exercise.

2.       Exercise of Warrant.

         2.1.     Manner of Exercise. At any time and from time to time during
the Exercise Period, the Holder may exercise this Warrant, in whole or in part,
by (i) delivering to the Company at its principal offices a written notice of
the Holder's election to exercise this Warrant in substantially the form
attached hereto as Exhibit A (an "Exercise Notice"), which Exercise Notice shall
be duly executed by the Holder or its duly authorized agent, (ii) surrendering
to the Company at its principal offices this Warrant, and (iii) paying to the
Company the Warrant Price for such exercise (the date on which such delivery,
surrender and payment shall have occurred is referred to herein as the "Exercise
Date").

                                       4

<PAGE>

         2.2.     Payment of Warrant Price. At the option of the Holder, payment
of any Warrant Price may be made (i) by delivery to the Company of a certified
check or bank draft or by wire transfer of immediately available funds to an
account designated by the Company, (ii) pursuant to the Net Issue Election set
forth in Section 2.6 hereof, or (iii) by any combination of the foregoing.

         2.3.     Delivery of Shares. As promptly as practicable after the
exercise of this Warrant, in whole or in part, and in any event within three (3)
Business Days after the Exercise Date, the Company shall, at its expense, issue
(or cause to be issued) and deliver (or cause to be delivered) to the Holder a
certificate or certificates representing the aggregate number of full shares of
Common Stock issuable to the Holder upon such exercise. The certificate or
certificates representing the shares of Common Stock issuable to the Holder upon
exercise of this Warrant shall be in such denomination or denominations as the
Holder shall request in the Exercise Notice and shall be registered in the name
of the Holder or such other name or names as the Holder shall designate in the
Exercise Notice, subject to the provisions of Section 5.1 hereof. This Warrant,
to the extent that it has been exercised, in whole or in part, by the Holder,
shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date, and the Holder shall be treated for all purposes
as the holder of record of the shares of Common Stock as of the close of
business on such Exercise Date.

         2.4.     Partial Exercise. In the event that this Warrant shall have
been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing the shares of Common Stock then being
issued in respect of such exercise, deliver to the Holder a new warrant
evidencing the right of the Holder to purchase the remaining number of shares of
Common Stock purchasable hereunder. All other terms and conditions of such new
warrant shall be identical in all respects to those contained in this Warrant.

         2.5.     Fractional Shares. No fractional shares of Common Stock shall
be issuable upon exercise of this Warrant. As to any fractional share of Common
Stock that the Holder would otherwise be entitled to receive upon exercise of
this Warrant, in lieu of issuing any such fractional share, the Company shall,
at the Company's option, either (i) round up such number of shares to the next
highest whole number or (ii) pay to the Holder an amount in cash that is equal
to the product of (1) the amount of such fraction multiplied by (2) the Fair
Market Value of a full share of Common Stock on the Exercise Date.

         2.6.     Net Issue Election. At the option of the Holder, in lieu of
paying any Warrant Price in cash, the Holder may elect (the "Net Issue
Election") to receive, without the payment by the Holder of any additional
consideration, a net number of shares of Common Stock upon exercise, in whole or
in part, of this Warrant by delivering to the Company at its principal offices a
written notice of such Net Issue Election in substantially the form attached
hereto as Exhibit B, duly executed by the Holder or its duly authorized agent.
The net number of shares of Common Stock to be issued to the Holder upon its
exercise of the Net Issue Election shall be 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 pursuant to this Section 2.6.

         Y    =     the number of shares of Common Stock covered by this Warrant
                    in respect of which the Net Issue Election is made.

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<PAGE>

         A    =     the Fair Market Value of one share of Common Stock on the
                    date on which the Net Issue Election is made.

         B    =     the Exercise Price in effect under this Warrant at the time
                    at which the Net Issue Election is made.

3.       Adjustments.

         3.1.     Dividends and Distributions Payable in Common Stock. If the
Company at any time or from time to time after the date hereof shall declare,
order, pay or make any dividend or other distribution to the holders of issued
and outstanding shares of Common Stock in additional shares of Common Stock,
then concurrently with the payment of such dividend or distribution,

                  (a)      the Exercise Price shall be decreased to an amount
that is equal to the product of (i) the Exercise Price in effect immediately
prior to the payment of such dividend or distribution multiplied by (ii) a
fraction, the numerator of which is equal to the total number of shares of
Common Stock issued and outstanding immediately prior to the payment of such
dividend or distribution and the denominator of which is equal to the total
number of shares of Common Stock issued and outstanding immediately after the
payment of such dividend or distribution; and

                  (b)      the number of shares of Common Stock issuable upon
exercise of this Warrant shall be increased to an amount that is equal to the
product of (i) the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to payment of such dividend or distribution
multiplied by (ii) a fraction, the numerator of which is equal to the total
number of shares of Common Stock issued and outstanding immediately after
payment of such dividend or distribution and the denominator of which is equal
to the total number of shares of Common Stock issued and outstanding immediately
prior to payment of such dividend or distribution.

         3.2.     Subdivisions and Splits. If the Company at any time or from
time to time after the date hereof shall subdivide or split the number of issued
and outstanding shares of Common Stock into a greater number of issued and
outstanding shares of Common Stock (by reclassification or otherwise), then
concurrently with such subdivision or split,

                  (a)      the Exercise Price shall be decreased to an amount
that is equal to the product of (i) the Exercise Price in effect immediately
prior to such subdivision or split multiplied by (ii) a fraction, the numerator
of which is equal to the total number of shares of Common Stock issued and
outstanding immediately prior to such subdivision or split and the denominator
of which is equal to the total number of shares of Common Stock issued and
outstanding immediately after such subdivision or split; and

                  (b)      the number of shares of Common Stock issuable upon
exercise of this Warrant shall be increased to an amount that is equal to the
product of (i) the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such subdivision or split multiplied by (ii) a
fraction, the numerator of which is equal to the total number of shares of
Common Stock issued and outstanding immediately after such subdivision or split
and the denominator of which is equal to the total number of shares of Common
Stock issued and outstanding immediately prior to such subdivision or split.

         3.3.     Combinations. If the Company at any time or from time to time
after the date hereof shall combine (including, without limitation, by way of a
reverse stock split) the number of issued and outstanding shares of Common Stock
into a smaller number of issued and outstanding shares of Common Stock, then
concurrently with such combination,

                                       6

<PAGE>

                  (a)      the Exercise Price shall be increased to an amount
that is equal to the product of (i) the Exercise Price in effect immediately
prior to such combination multiplied by (ii) a fraction, the numerator of which
is equal to the total number of shares of Common Stock issued and outstanding
immediately prior to such combination and the denominator of which is equal to
the total number of shares of Common Stock issued and outstanding immediately
after such combination; and

                  (b)      the number of shares of Common Stock issuable upon
exercise of this Warrant shall be decreased to an amount that is equal to the
product of (i) the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such combination multiplied by (ii) a
fraction, the numerator of which is equal to the total number of shares of
Common Stock issued and outstanding immediately after such combination and the
denominator of which is equal to the total number of shares of Common Stock
issued and outstanding immediately prior to such subdivision or split.

         3.4.     Other Distributions and Dividends. If the Company at any time
or from time to time after the date hereof shall declare, order, pay or make any
dividend or other distribution to the holders of issued and outstanding shares
of Common Stock, including, without limitation, any dividend or other
distribution of additional capital stock, Options, Convertible Securities,
securities, cash and/or other property (other than dividends and distributions
to which Section 3.1 hereof applies), then the Company shall concurrently make a
payment to the Holder in an amount that is equal to the amount of additional
capital stock, Options, Convertible Securities, securities, cash and/or other
property that would have been payable to the Holder had the Holder exercised
this Warrant immediately prior to the record date for such dividend or
distribution, or if no such record date is taken, immediately prior to the date
on which such dividend or distribution is paid by the Company.

         3.5.     Issuance or Sale of Additional Shares of Common Stock. If at
any time or from time to time after the date hereof the Company shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 3.6 hereof) without consideration
or for a consideration per share (as determined pursuant to Section 3.7 hereof)
that is less than the Fair Market Value in effect on the date of, and
immediately prior to, such issuance or sale, then concurrently with such
issuance or sale,

                  (a)      the Exercise Price shall be decreased to an amount
that is equal to the product of (i) the Exercise Price in effect immediately
prior to such issuance or sale multiplied by (ii) a fraction, (x) the numerator
of which is equal to the sum of (1) the total number of shares of Common Stock
issued and outstanding immediately prior to such issuance or sale plus (2) the
total number of shares of Common Stock that is equal to the quotient of (I) the
aggregate amount of consideration received by the Company in respect of such
issuance or sale of Additional Shares of Common Stock divided by (II) the Fair
Market Value per share of Common Stock on the date of such issuance or sale, and
(y) the denominator of which is equal to the total number of shares of Common
Stock issued and outstanding immediately after such issuance or sale; and

                  (b)      the number of shares of Common Stock issuable upon
exercise of this Warrant shall be increased to an amount that is equal to the
product of (i) the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such issuance or sale multiplied by (ii) a
fraction, (x) the numerator of which is equal to the total number of shares of
Common Stock issued and outstanding immediately after such issuance or sale and
(y) the denominator of which is equal to the sum of (1) the total number of
shares of Common Stock issued and outstanding immediately prior to such issuance
or sale plus (2) the total number of shares of Common Stock that is equal to the
quotient of (I) the aggregate amount of consideration received by the Company in
respect of such issuance or sale of

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Additional Shares of Common Stock divided by (II) the Fair Market Value per
share of Common Stock on the date of such issuance or sale.

         3.6.     Treatment of Options and Convertible Securities. If at any
time or from time to time after the date hereof the Company shall issue, sell,
grant or assume, or shall fix a record date for the determination of holders of
any class of securities entitled to receive, any Options or Convertible
Securities, whether or not such Options or Convertible Securities are
immediately exercisable, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, issuable upon the
conversion or exchange of such Convertible Securities (or the exercise of such
Options for Convertible Securities and the subsequent conversion or exchange of
the Convertible Securities issued upon exercise thereof), shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issuance, sale,
grant or assumption or, in case such a record date shall have been fixed, as of
the close of business on such record date; provided, however, that in any case
in which Additional Shares of Common Stock are deemed to be issued,

                  (a)      if an adjustment of the Exercise Price and the number
of shares of Common Stock issuable upon exercise of this Warrant shall be made
upon the fixing of a record date as referred to in the first sentence of this
Section 3.6, no further adjustments of the Exercise Price and the number of
shares of Common Stock issuable upon exercise of this Warrant shall be made as a
result of the subsequent issuance or sale of any Options or Convertible
Securities for the purpose for which such record date was set;

                  (b)      no further adjustment of the Exercise Price and the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
made upon the subsequent issuance or sale of Additional Shares of Common Stock
or Convertible Securities upon the exercise of such Options or the conversion or
exchange of such Convertible Securities;

                  (c)      if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any change in the
consideration payable to the Company, or change in the number of Additional
Shares of Common Stock issuable upon the exercise, conversion or exchange
thereof (by change of rate or otherwise), the Exercise Price and the number of
shares of Common Stock issuable upon exercise of this Warrant computed upon the
original issuance, sale, grant or assumption thereof (or upon the occurrence of
the record date with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such change becoming effective, be recomputed to
reflect such change insofar as it affects such Options, or the rights of
conversion or exchange under such Convertible Securities, which are outstanding
at such time;

                  (d)      upon the expiration of any such Options or of the
rights of conversion or exchange under any such Convertible Securities which
shall not have been exercised (or upon purchase by the Company and cancellation
or retirement of any such Options which shall not have been exercised or of any
such Convertible Securities the rights of conversion or exchange under which
shall not have been exercised), the Exercise Price and the number of shares of
Common Stock issuable upon exercise of this Warrant computed upon the original
issuance, sale, grant or assumption thereof (or upon the occurrence of the
record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon such expiration (or such cancellation or retirement, as the case may
be), be recomputed as if:

                           (i)      in the case of Options or Convertible
Securities, the only Additional Shares of Common Stock issued or sold (or deemed
to be issued or sold) were the Additional Shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or the conversion or

                                       8

<PAGE>

exchange of such Convertible Securities and the consideration received therefor
was equal (x) with respect to such Options, to an amount equal to (1) the
consideration actually received by the Company for the issuance, sale, grant or
assumption of all such Options, whether or not exercised, plus (2) the
consideration actually received by the Company upon such exercise, minus (3) the
consideration paid by the Company for any purchase of such Options which were
not exercised, or (y) with respect to such Convertible Securities, an amount
equal to (1) the consideration actually received by the Company for the
issuance, sale, grant or assumption of all such Convertible Securities which
were actually converted or exchanged, plus (2) the additional consideration, if
any, actually received by the Company upon such conversion or exchange, minus
(3) the excess, if any, of the consideration paid by the Company for any
purchase of such Convertible Securities, the rights of conversion or exchange
under which such Convertible Securities were not exercised, over an amount that
would be equal to the Determined Value of the Convertible Securities so
purchased if such Convertible Securities were not convertible into or
exchangeable for Additional Shares of Common Stock, and

                           (ii)     in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued or sold
upon the exercise of such Options were issued at the time of the issuance, sale,
grant or assumption of such Options, and the consideration received by the
Company for the Additional Shares of Common Stock deemed to have then been
issued was an amount equal to (x) the consideration actually received by the
Company for the issuance, sale, grant or assumption of all such Options, whether
or not exercised, plus (y) the consideration deemed to have been received by the
Company pursuant to Section 3.7 upon the issuance or sale of the Convertible
Securities with respect to which such Options were actually exercised, minus (z)
the consideration paid by the Company for any purchase of such Options which
were not exercised; and

                  (e)      no recomputation pursuant to Sections 3.7(c) or (d)
shall have the effect of increasing the Exercise Price then in effect or
decreasing the number of shares of Common Stock then issuable upon exercise of
this Warrant by an amount in excess of the amount of the adjustment thereof
originally made in respect of the issuance, sale, grant or assumption of such
Options or Convertible Securities.

         3.7.     Consideration for Additional Shares of Common Stock. For the
purposes of this Warrant:

                  (a)      The consideration for the issuance or sale of any
Additional Shares of Common Stock or for the issuance, sale, grant or assumption
of any Options or Convertible Securities, irrespective of the accounting
treatment of such consideration,

                           (i)      insofar as it consists of cash, shall be
computed as the amount of cash received by the Company therefor, and insofar as
it consists of securities or other property, shall be computed as of the date
immediately preceding such issuance, sale, grant or assumption based upon the
Determined Value of such consideration (or, if such consideration is received
for the issuance or sale of Additional Shares of Common Stock and the Fair
Market Value of such Additional Shares of Common Stock is less than the
Determined Value of such consideration, then such consideration shall be
computed as the Fair Market Value of such Additional Shares of Common Stock), in
each case before deducting any expenses paid or incurred by the Company, any
commissions or compensation paid or concessions or discounts allowed by the
Company to any underwriters, dealers or other performing similar services, and
any accrued interest or dividends in connection with such issuance or sale; and

                           (ii)     in the event Additional Shares of Common
Stock are issued or sold or Options or Convertible Securities are issued, sold,
granted or assumed together with other stock or securities or other assets of
the Company for a consideration which covers both, shall be computed as the

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<PAGE>

proportion of such consideration so received, determined as provided in clause
(i) above, allocable to such Additional Shares of Common Stock or Options or
Convertible Securities, as the case may be, all as determined in good faith by
the Board of Directors.

                  (b)      Other than with respect to dividends, subdivisions,
splits, and distributions described in Sections 3.1, 3.2 and 3.4 for which an
adjustment to the Exercise Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made, all Additional Shares of
Common Stock, Options or Convertible Securities issued in payment of any
dividend or other distribution on any class of stock of the Company, and all
Additional Shares of Common Stock issued to effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise), shall be deemed to have been issued
without consideration.

                  (c)      Additional Shares of Common Stock deemed to have been
issued pursuant to Section 3.6 shall be deemed to have been issued for a
consideration per share determined by dividing

                           (i)      the total amount, if any, received and
receivable by the Company as consideration for the issuance, sale, grant or
assumption of the Options or Convertible Securities in question, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such consideration) payable to the Company upon
the exercise in full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, in each case computing such
consideration as provided in Section 3.7(a), by

                           (ii)     the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.

         3.8.     Adjustments for Issuances or Sales of Other Securities. If at
any time and from time to time after the date hereof any Other Securities shall
be issued or sold or shall become subject to issuance or sale upon the
conversion or exchange of any capital stock (or Other Securities) of the Company
(or any issuer of Other Securities or any other Person referred to in Section
3.9) or to subscription, purchase or other acquisition pursuant to any Options
issued or granted by the Company (or any such other Person) for a consideration
such as to dilute, on a basis to which the standards established in the other
provisions of this Warrant do not apply, the exercise rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this Warrant with respect to the Exercise Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made as nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time issuable upon the
exercise of this Warrant, so as to protect the holder of this Warrant against
the effect of such dilution.

         3.9.     Changes in Common Stock. If at any time and from time to time
after the date hereof the Company shall be a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution, winding-up,
reorganization or recapitalization) in which the previously outstanding Common
Stock shall be changed into or exchanged for different securities of the Company
or common stock or other securities of another Person or other property
(including cash) or any combination of any of the foregoing or in which the
Common Stock ceases to be a publicly traded security either listed on the
American Stock Exchange or quoted by the NASDAQ National Market System or NASDAQ
SmallCap Market or any successor thereto or quoted or published on the OTC
Bulletin Board or the "Pink Sheets", or any comparable system (each such

                                       10

<PAGE>

transaction, an "Extraordinary Transaction;" the date on which such
Extraordinary Transaction is first announced to the shareholders of the Company,
the "Announcement Date;" the date of consummation of any Extraordinary
Transaction, the "Consummation Date;" the Company (in the case of a
recapitalization of the Common Stock or any other Extraordinary Transaction in
which the Company retains substantially all of its assets and survives as a
corporation) or such other Person (in each other case), the "Acquiring Company;"
and the capital stock (or equivalent equity interest) of the Acquiring Company,
the "Acquirer's Common Stock;" except that if the Acquiring Company shall not
meet the requirements set forth in Sections 3.9(d), (e) and (f) below and a
Person which directly or indirectly controls the Acquiring Company (a "Parent")
meets such requirements, "Acquiring Company" shall refer to such Parent and
"Acquirer's Common Stock" shall refer to such Parent's capital stock (or
equivalent equity interests)) then, as a condition of the consummation of such
Extraordinary Transaction, lawful and adequate provisions (in form satisfactory
to the Holder) shall be made so that the Holder, upon exercise of this Warrant
at any time on or after the Consummation Date (but subject, in the case of an
election pursuant to Sections 3.9 (b) or (c) below, to the time limitation
hereinafter provided for such election),

                  (a)      shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of the Common Stock issuable
upon exercise hereof prior to the Consummation Date, shares of the Acquirer's
Common Stock at an Exercise Price per share equal to the lesser of (i) the
Exercise Price in effect immediately prior to the Consummation Date multiplied
by a fraction, the numerator of which is the Fair Market Value per share of the
Acquirer's Common Stock determined as of the Consummation Date and the
denominator of which is the Fair Market Value per share of the Common Stock
determined as of the Consummation Date, or (ii) the Fair Market Value per share
of the Acquirer's Common Stock determined as of the Consummation Date (subject
in each case to adjustments from and after the Consummation Date as nearly
equivalent as possible to the adjustments provided for in this Warrant), or at
the election of the Holder pursuant to notice given to the Company within thirty
(30) days after the Consummation Date;

                  (b)      shall be entitled to receive, and this Warrant shall
thereafter represent the right to receive, in lieu of each share of Common Stock
issuable upon exercise hereof prior to the Consummation Date, either (i) the
greatest amount of cash, securities or other property given to any shareholder
in consideration for any share of Common Stock at any time during the period
from and after the Announcement Date to and including the Consummation Date by
the Acquiring Company, the Company or any Affiliate of either thereof, or (ii)
an amount in cash equal to the product of (x) the number of shares of the
Acquirer's Common Stock purchasable upon the exercise or conversion of such
Warrant as shall result from adjustments thereto that would have been required
pursuant to Section 3.9(a) multiplied by (y) the Fair Market Value per share for
the Acquirer's Common Stock, determined as of the day within the period from and
after the Announcement Date to and including the Consummation Date for which the
amount determined as provided in the definition of Fair Market Value shall have
been the greatest; or

                  (c)      if neither the Acquiring Company nor the Parent meets
the requirements set forth in Sections 3.9 (d), (e) and (f) below, shall be
entitled to receive, within thirty (30) days after such election, in full
satisfaction of the exercise rights afforded to Holder hereunder, an amount
equal to the fair market value of such exercise rights as determined by an
independent investment banking firm (with an established national reputation as
a value of equity securities) selected by the Holder and reasonably acceptable
to the Company, such fair market value to be determined with regard to all
material relevant factors but without regard to any negative effects on such
value of the Extraordinary Transaction. The Company agrees to obtain, and
deliver to the Holder a copy of the determination of an independent investment
banking firm selected by the Holder to permit elections under this Section
3.9(c) within fifteen (15) days after the Consummation Date of any Extraordinary
Transaction to which this Section 3.9(c) is applicable.

                                       11

<PAGE>

The requirements referred to above in the case of the Acquiring Company or its
Parent are that immediately after the Consummation Date:

                  (d)      it is a solvent corporation organized under the laws
of any State of the United States of America having its capital stock listed on
the New York Stock Exchange or the American Stock Exchange or quoted by the
Nasdaq National Market or any successor thereto or comparable system or quoted
or published in the over-the-counter market, and such capital stock continues to
meet such requirements for such listing or quotation;

                  (e)      it is required to file, and in each of its three
fiscal years immediately preceding the Consummation Date has filed, reports with
the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended; and

                  (f)      in the case of the Parent, such Parent is required to
include the Acquiring Company in the consolidated financial statements contained
in the Parent's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission and is not itself included in the consolidated financial
statements of any other Person (other than its consolidated subsidiaries).

         Notwithstanding anything contained herein to the contrary, the Company
shall not effect any Extraordinary Transaction unless prior to the consummation
thereof each Person (other than the Company) that may be required to deliver any
securities or other property upon the exercise of this Warrant shall assume, by
written instrument delivered to the Holder, the obligation to deliver to the
Holder such securities or other property as to which, in accordance with the
foregoing provisions, the Holder may be entitled, and such Person shall have
similarly delivered to the Holder an opinion of counsel for such Person,
reasonably satisfactory to the Holder, which opinion shall state that this
Warrant shall thereafter continue in full force and effect and shall be
enforceable against such Person in accordance with the terms hereof and thereof,
together with such other matters as the Holder may reasonably request.

         3.10.    Certain Events. If any event occurs as to which, in the good
faith judgment of the Board of Directors, the other provisions of this Warrant
are not strictly applicable or if strictly applicable would not fairly protect
the exercise rights of the Holder in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall appoint its
regular independent auditors or another firm of independent public accountants
of recognized national standing which shall give their opinion upon the
adjustment, if any, on a basis consistent with such essential intent and
principles, necessary to preserve, without dilution, the rights of the Holder.
Upon receipt of such opinion, the Board of Directors shall forthwith make the
adjustments described therein; provided, however, that no such adjustment shall
have the effect of increasing the Exercise Price or decreasing the number of
shares of Common Stock issuable upon exercise of this Warrant, as otherwise
determined pursuant to this Warrant. The Company, acting by and through a
committee of Disinterested Board Members, may make such reductions in the
Exercise Price as it deems advisable, including any reductions necessary to
ensure that any event treated for federal income tax purposes as a distribution
of stock or stock rights not be taxable to the recipients thereof.

         3.11.    Other Provisions Applicable to Adjustments. The following
provisions shall be applicable to the adjustments provided for under this
Section 3:

                  (a)      The adjustments required by this Section 3 shall be
made whenever and as often as any specified event requiring such an adjustment
shall occur. For the purpose of any such adjustment, any specified event shall
be deemed to have occurred at the close of business on the date of its
occurrence. In computing the adjustments under this Section 3, fractional
interests in shares of Common Stock shall be taken into account to the nearest
1/100th of a share.

                                       12

<PAGE>

                  (b)      If the Company shall take a record of the holders of
shares of Common Stock for purposes of any specified event requiring any
adjustment under this Section 3, but shall, thereafter and before the
consummation of any such specified event, legally abandon its plan therefor,
then no adjustment under this Section 3 shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.

         3.12.    Adjustment Certificate. Upon the occurrence of any specified
event requiring any adjustment under this Section 3, the Company shall, at its
expense, take all action necessary to cause its regular independent auditors to
(i) compute the amount of any such adjustment in accordance with the terms
hereof and (ii) deliver to the Holder, as promptly as practicable after the date
of any such specified event and in any event not more than ten (10) Business
Days after the occurrence of any such specified event, a certificate describing
in reasonable detail (1) the transaction or transactions giving rise to any such
adjustment and the basis upon which any such adjustment is made, (2) the
Exercise Price immediately after giving effect to any such adjustment and (3)
the number of shares of Common Stock issuable upon exercise of this Warrant
immediately after giving effect to any such adjustment.

         3.13.    Excess Dilution Number Adjustments.

                  (a)      Notwithstanding anything to the contrary contained
herein, if the Initial Excess Dilution Number exceeds 453,186, then the number
of shares of Common Stock issuable upon exercise of this Warrant shall be
increased by a number of shares of Common Stock which is equal to the product of
(i) 9.8634 multiplied by (ii) the difference of the Initial Excess Dilution
Number minus 453,186.

                  (b)      Notwithstanding anything to the contrary contained
herein, upon any issuance or adjustment that results in an Excess Dilution
Number (other than with respect to the Initial Excess Dilution Number), then the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
increased by a number of shares of Common Stock (the "Adjustment Shares") which
is equal to the product of 40% multiplied by the sum of (i) such Excess Dilution
Number plus (ii) the Adjustment Shares.

4.       Transfer; Division; Combination.

         4.1.     Transfer. Subject to compliance with the provisions of
Sections 4 and 5 hereof, each transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the principal
offices of the Company and delivery of a written assignment of this Warrant in
substantially the form attached hereto as Exhibit C (an "Assignment Notice"),
duly executed by the Holder or its duly authorized agent. Upon such surrender
and delivery, the Company shall execute and deliver a new warrant or warrants,
the terms and conditions of which shall be identical to those contained in this
Warrant, in the name of the assignee or assignees and in the denomination or
denominations specified in such Assignment Notice, and shall issue to the
assignor a new warrant, the terms and conditions of which shall be identical to
those contained in this Warrant, evidencing the portion of this Warrant not so
assigned and this Warrant shall promptly be cancelled.

         4.2.     Division and Combination. Subject to compliance with the
provisions of Sections 4 and 5 hereof, this Warrant may be divided or combined
with any other warrant or warrants, the terms and conditions of which are
identical to those contained in this Warrant, upon surrender of this Warrant at
the principal offices of the Company and delivery of a written notice (a
"Division/Combination Notice") specifying the name or names and the denomination
or denominations in which such new warrant or warrants are to be issued upon
such division or combination, duly executed by the Holder or its duly

                                       13

<PAGE>

authorized agent. Upon such surrender and delivery, the Company shall execute
and deliver a new warrant or warrants, the terms and conditions of which shall
be identical to those contained in this Warrant, in accordance with the terms of
such Division/Combination Notice.

5.       Restrictions on Transfer.

         5.1.     Securities Laws Restrictions. Neither this Warrant nor any
shares of Common Stock issued upon exercise hereof may be offered, sold,
transferred, pledged, hypothecated or otherwise disposed of, other than pursuant
to (i) an effective registration statement under the Securities Act or (ii) an
exemption from the registration requirements thereof. If requested by the
Company, the Holder will deliver an opinion of counsel to the effect that any
proposed offer, sale, transfer, pledge, hypothecation or other disposition of
this Warrant and/or any shares of Common Stock issuable upon exercise hereof
pursuant to clause (ii) of the preceding sentence (other than a transfer
described in Section 5.4 hereof) is exempt from the registration requirements of
the Securities Act.

         5.2.     Restrictive Legends. Except as otherwise provided in this
Section 5, each certificate for shares of Common Stock issued upon exercise of
this Warrant, and each certificate for shares of Common Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:

         THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
         SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
         HYPOTHECATED UNLESS SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION
         IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
         OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
         COMPANY THAT SUCH PROPOSED OFFER, SALE, TRANSFER, PLEDGE OR
         HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT
         AND IS IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.

         5.3.     Termination of Securities Law Restrictions. Notwithstanding
the foregoing provisions of this Section 5, the restrictions imposed by Section
5.1 hereof and the legend requirements of Section 5.2 hereof shall terminate
with respect to this Warrant and the shares of Common Stock issuable upon
exercise hereof if (i) the Company shall have received from the Holder an
opinion of counsel to the effect that this Warrant and the shares of Common
Stock issuable upon exercise hereof are no longer subject to the restrictions
contained in this Section 5, the Securities Act and applicable state securities
laws or (ii) any proposed offer, sale, transfer, pledge, hypothecation or other
disposition of this Warrant and/or the shares of Common Stock issuable upon
exercise hereof shall have been registered by the Company under the Securities
Act. Whenever the restrictions imposed by this Section 5 shall terminate as to
this Warrant, the Holder shall be entitled to receive from the Company, at the
Company's expense, a new Warrant bearing the following legend in place of the
restrictive legend set forth hereon:

         THE RESTRICTIONS ON THE OFFER, SALE, TRANSFER, PLEDGE AND HYPOTHECATION
         OF THIS WARRANT CONTAINED IN SECTION 5 HEREOF TERMINATED ON
         ______________ ____, ______, AND ARE OF NO FURTHER FORCE AND EFFECT.

Each new Warrant issued upon registration of transfer, division or combination
of, or in substitution for, this Warrant entitled to bear such legend shall have
a similar legend endorsed thereon. Wherever the

                                       14

<PAGE>

restrictions imposed by this Section 5 shall terminate as to any share of Common
Stock issuable upon exercise of this Warrant, the Holder shall be entitled to
receive from the Company, at the Company's expense, a new certificate
representing such shares of Common Stock that does not bear any restrictive
legends.

         5.4.     Transfers to Affiliates. Notwithstanding anything contained
herein to the contrary, the Holder shall have the right at any time and from
time to time, to transfer all or any portion of this Warrant and/or the shares
of Common Stock issuable upon exercise hereof to any of its Affiliates if then
permitted under applicable law.

6.       Reservation  of Shares;  Valid  Issuance.  The Company  shall take all
actions necessary to ensure that the shares of Common Stock to be issued to the
Holder upon exercise of this Warrant shall, without any further action by the
Holder, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens, charges and preemptive or similar rights with
respect to the issuance thereof. The Company shall at all times from and after
the date hereof reserve and keep available for issuance out of its authorized
Common Stock such number of shares of Common Stock as shall be sufficient to
permit the exercise of this Warrant in full. If the number of shares of Common
Stock so reserved shall be insufficient to permit the exercise of this Warrant
in full, the Company shall promptly take any corporate action that is necessary
to make available a sufficient number of authorized but unissued shares of
Common Stock to permit the exercise of this Warrant in full.

7.       Loss, Theft,  Destruction or Mutilation.  Upon receipt by the Company
from the Holder of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and, in the case of such loss,
theft or destruction of this Warrant, an indemnity bond or agreement reasonably
satisfactory to the Company or, in the case of such mutilation, upon surrender
and cancellation of this Warrant, the Company shall issue and deliver in lieu
hereof a new warrant, the terms and conditions of which shall be identical to
those contained in this Warrant, to the Holder; provided, however, that in the
case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.

8.       No Rights or  Liabilities as  Shareholder.  Until such time as this
Warrant shall have been exercised, the Holder shall not, by virtue of this
Warrant, (i) be entitled to any rights as a shareholder of the Company, either
at law or equity, except as expressly provided herein or (ii) be subject to any
liability as a shareholder of the Company, whether or not such liability shall
be asserted by the Company, creditors of the Company or otherwise. Except as
expressly provided herein, until such time as this Warrant shall have been
exercised, this Warrant shall not be construed as conferring upon the Holder the
right to vote on, consent to, or receive notices with respect to, any matter as
a shareholder of the Company.

9.       Expenses;  Taxes;  Charges.  The Company shall pay any and all issue
and other similar taxes, expenses and/or charges payable in respect of any
issuance or delivery of this Warrant, including, without limitation, any new
warrant or warrants issued upon combination or division hereof, and/or shares of
Common Stock issuable upon exercise of this Warrant.

10.      Notice of  Corporation  Actions.  The Company shall not take (or cause
to be taken) or effect (or cause to be effected) any of the following actions
unless the Company shall have provided the Holder with not less than ten (10)
days prior written notice thereof: (i) any amendment, modification, alteration
or restatement of any provision of the Articles of Incorporation or the Code of
Regulations, (ii) any merger or consolidation by the Company with one or more
Persons, (iii) any liquidation, dissolution or winding-up of the Company, (iv)
any sale of all or substantially all of the assets of the Company, (v) any
recapitalization or reorganization of the Company, (vi) any material acquisition
or series of acquisitions,

                                       15

<PAGE>

joint venture or strategic alliance involving the Company, (vii) any payment of
dividends or distributions on any securities of the Company, except for
dividends and distributions payable on the Company's Series B Cumulative
Redeemable Voting Preferred Stock, (viii) the taking by the Company of any
record of the holders of its securities for the purpose of entitling such
holders to receive (1) any dividend or other distribution on any securities of
the Company, except for dividends or other distributions payable on the
Company's Series B Cumulative Redeemable Voting Preferred Stock (2) any right to
subscribe for or purchase any securities of the Company, or (3) any other right,
or (ix) the consummation of, or the occurrence of, an Extraordinary Transaction.

11.      Warrant Register. The Company shall maintain at its principal offices a
register for the registration and transfer of this Warrant, which register shall
contain the name and address of the Holder. The Holder may change its address as
shown on such register by providing written notice to the Company at its
principal offices.

12.      No Impairment. The Company shall not, by any action set forth in
Section 10 hereof or otherwise, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but shall at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder hereunder against impairment. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Exercise
Price then in effect, (ii) shall take all such action as may be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of all Warrants from time
to time outstanding, (iii) shall not take any action which results in any
adjustment of the Exercise Price or the shares of Common Stock issuable upon
exercise of this Warrant if the total number of shares of Common Stock or Other
Securities issuable after the action upon the exercise of all of the Warrants
would exceed the total number of shares of Common Stock or Other Securities then
authorized by the Articles of Incorporation and available for the purpose of
issue upon such conversion, and (iv) shall not issue any capital stock of any
class (other than the Series B Preferred Stock) which has the right to more than
one vote per share or any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or involuntary
dissolution, liquidation or winding-up, unless the rights of the holders thereof
shall be limited to a fixed sum or percentage (or floating rate related to
market yields) of par value or stated value in respect of participation in
dividends and a fixed sum or percentage of par value or stated value in any such
distribution of assets. The Company's obligations to issue and deliver shares of
Common Stock to the Holder in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction of the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
any breach or alleged breach by the Holder or any other Person of any obligation
to the Company, or any violation or alleged violation of any applicable law by
the Holder or any other Person, and irrespective of any other circumstance that
may otherwise limit the obligations of the Company to the Holder in connection
with the issuance of shares of Common Stock upon exercise of this Warrant.
Nothing contained herein shall limit the Holder's right to pursue any other
remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to any failure by the Company to timely deliver a certificate or
certificates to the Holder representing the shares of Common Stock to be issued
upon exercise of this Warrant.

13.      Miscellaneous.

         13.1.    Notices Generally. Except as otherwise provided herein, all
notices referred to herein shall be in writing, and all notices hereunder shall
be deemed to have been given upon the earlier of receipt of such notice or two
(2) Business Days after the mailing of such notice if sent by registered mail

                                       16

<PAGE>

(unless first-class mail shall be specifically permitted for such notice under
the terms hereof) with postage prepaid, addressed: (i) if to the Company, to its
offices at 1090 Enterprise Drive, Medina, Ohio 44256, Attention: Secretary or to
an agent of the Company designated as permitted by the Articles of Incorporation
or (ii) if to the Holder, to its address listed in the record books of the
Company (which may include the records of any transfer agent for this Warrant),
or to such other address as the Company or the Holder, as the case may be, shall
have designated by notice similarly given.

         13.2.    Amendments. This Warrant may be amended or modified only upon
the written consent of the Company and the Holder hereof.

         13.3.    Governing Law. This Warrant shall be governed by and construed
under the laws of the State of Delaware, excluding the application of any
conflicts of laws principles which would require the application of the laws of
another state.

         13.4.    Headings. The headings used in this Warrant are used for
convenience only and are not to be considered in construing or interpreting this
Warrant.

         13.5.    Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Warrant shall inure to the benefit of, and be
binding upon, the respective permitted successors and assigns of the parties
hereto. Nothing contained in this Warrant, express or implied, is intended to
confer upon any Person, other than the parties hereto and their respective
permitted successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant, except as expressly provided
herein.

         13.6.    Severability. Whenever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision.

         13.7.    Interpretation. As used in this Warrant, (i) the term
"includes" and the word "including" and words of similar import shall be deemed
to be followed by the words "without limitation"; (ii) "control" (including its
correlative meanings, "controlled by" and "under common control with") shall
mean the possession, directly or indirectly, of the power to (A) vote ten
percent (10%) or more of the securities having ordinary voting power for the
election of directors of a Person or (B) direct or cause the direction of
management or policies of a Person, whether through the ownership of securities
or partnership or other interests, by contract or otherwise; (iii) definitions
contained in this Warrant apply to singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter genders of such
terms; (iv) words in the singular shall be held to include the plural and vice
versa, and words of one gender shall be held to include the other gender as the
context requires; (v) the terms "hereof," "herein," and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Article, Section, subsection, paragraph, Schedule and Exhibit references are to
the Articles, Sections, subsections, paragraphs, Schedules and Exhibits to this
Warrant unless otherwise specified; and (vi) the word "or" shall not be
exclusive.

         13.8.    Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Company or the Holder shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of such Person.

         13.9.    Representations and Warranties. The Company represents and
warrants to the Holder as follows:

                                       17

<PAGE>

                  (a)      The execution and delivery by the Company of this
Warrant, and the consummation by it of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action of the Company;

                  (b)      This Warrant has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting creditors'
rights generally, and (ii) general equitable principles; and

                  (c)      The execution and delivery by the Company of this
Warrant, and the performance by it of the transactions contemplated hereby, do
not and will not (i) conflict with or result in a violation of any provision of
the Articles of Incorporation, the Code of Regulations or the charter, bylaws,
or other governing instruments of any subsidiary of the Company, (ii) except as
set forth on Schedule 3.11 of the Purchase Agreement, conflict with or result in
a violation of any provision of, constitute (with or without the giving of
notice or the passage of time or both) a default or event of default under, give
rise (with or without the giving of notice or the passage of time or both) to
any loss of any benefit under, give rise to any right of termination,
modification, cancellation, prepayment, suspension, limitation, revocation or
acceleration under, or require any consent under, any Material Contract (as
defined in the Purchase Agreement), (iii) result in the creation or imposition
of any Lien (as defined in the Purchase Agreement) upon the properties of the
Company or any of its subsidiaries, or (iv) violate in any respect any Law (as
defined in the Purchase Agreement) binding upon the Company or any of its
subsidiaries or any rules, regulations or published policies of the American
Stock Exchange.

         13.10.   Rights Offering. In the event the Company shall effect an
offering of the Common Stock, Options or Convertible Securities pro rata to the
holders of the Common Stock, the Holder shall be entitled, at its option, to
elect to participate in each and every such offering as if this Warrant had been
exercised and the Holder was, immediately prior to any such rights offering,
then a holder of that number of shares of Common Stock to which the Holder would
then be entitled to receive upon exercise of this Warrant.

                                  * * * * * * *

                                       18

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary.

                                                     CORRPRO COMPANIES, INC.

                                                     By: /s/ John D. Moran
                                                         -----------------------
                                                         Name:  John D. Moran
                                                         Title:  Senior VP/Sec.

[SEAL]

Attest:

By: /s/ Denise K. Patterson
    --------------------------
    Name: Denise K. Patterson
    Title: Asst. Sec.


</TEXT>
</DOCUMENT>
