DATA TRANSMISSION NETWORK CORPORATION











                          COMMON STOCK PURCHASE WARRANT











                           Expiring December 11, 2005









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                                TABLE OF CONTENTS

1.       Exercise of Warrant ................................................ 1

         1.1.     Manner of Exercise ........................................ 1
         1.2.     When Exercise Deemed Effected ............................. 2
         1.3.     Delivery of Stock Certificates, Etc. ...................... 2
         1.4.     Company to Reaffirm Obligations ........................... 3

2.       Adjustments ........................................................ 3

         2.1.     Number of Shares; Warrant Price ........................... 3
         2.2.     Adjustment of Warrant Price ............................... 3
                  2.2.1.   Issuance of Additional Shares of Common Stock..... 3
                  2.2.2.   Extraordinary Dividends and Distributions ........ 4
         2.3.     Treatment of Options and Convertible Securities ........... 4
         2.4.     Treatment of Stock Dividends, Stock Splits, Etc. .......... 7
         2.5.     Computation of Consideration .............................. 7
         2.6.     Adjustments for Combinations. Etc. ........................ 8
         2.7.     Dilution in Case of Other Securities ...................... 8
         2.8.     Minimum Adjustment of Warrant Price ....................... 9

3.       Consolidation, Merger, Sale of Assets, Reorganization, Etc. ........ 9
         3.1.     General Provisions......................................... 9
         3.2.     Assumption of Obligations .................................11

4.       Other Dilutive Events ..............................................11

5.       No Dilution or Impairment ..........................................11

6.       Accountants' Report as to Adjustments...............................12

7.       Notices of Corporate Action ........................................12

8.       Restrictions on Transfer ...........................................13
         8.1.     Restrictive Legends........................................13
         8.2.     Notice of Proposed Transfer; Opinions of Counsel ..........13
         8.3.     Termination of Restrictions................................14
         8.4      Holder's Representations and Warranties....................14

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9.       Registration Under Securities Act, Etc. ............................15
         9.1.     Incidental Registration ...................................15
         9.2.     Registration Procedures ...................................17
         9.3.     Underwritten Offerings ....................................21
                  9.3.1.   Incidental Underwritten Offerings ................21
                  9.3.2.   Holdback Agreements ..............................21
         9.4.     Preparation; Reasonable Investigation .....................22
         9.5.     Rights of Requesting Holders ..............................22
         9.6.     Indemnification ...........................................22
         9.7.     Adjustments Affecting Registrable Securities ..............25
         9.8.     Other Registration of Common Stock ........................25
         9.9.     Nominees for Beneficial Owners ............................25
         9.10.    Rule 144 and Rule 144A ....................................26

10.      Availability of Information ........................................26

11.      Reservation of Stock. Etc. .........................................26

12.      Listing on Securities Exchange .....................................26

13.      Ownership, Transfer and Substitution of Warrants ...................26
         13.1.    Ownership of Warrants .....................................26
         13.2.    Transfer and Exchange of Warrants .........................27
         13.3.    Replacement of Warrants ...................................27

14.      Definitions ........................................................27

15.      Remedies ...........................................................32

16.      No Rights or Liabilities as Stockholder ............................32

17.      Notices  ...........................................................33

18.      Expiration; Notice .................................................33

19.      Miscellaneous ......................................................33



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THIS WARRANT AND ANY SHARES  ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933 AND MAY NOT BE  TRANSFERRED
EXCEPT IN COMPLIANCE WITH SUCH ACT AND APPLICABLE  STATE  SECURITIES  LAWS. THIS
WARRANT  AND  SUCH  SHARES  ARE  ALSO   SUBJECT  TO  CERTAIN   RESTRICTIONS   ON
TRANSFERABILITY SET FORTH IN THIS WARRANT.



                          Common Stock Purchase Warrant
                           Expiring December 11, 2005


                                                                 Omaha, Nebraska
                                                               December 11, 1998


         DATA  TRANSMISSION  NETWORK  CORPORATION,  a Delaware  corporation (the
"Company"),  for value  received,  hereby  certifies  that Peter R. Leavitt,  or
registered  assigns,  is  entitled  to  purchase  from the  Company  5,176  duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock,
par value $.001 per share,  of the Company (the "Common  Stock") at the purchase
price per share of $34.00, at any time or from time to time prior to 3 P.M., New
York City time, on December 11, 2005,  all subject to the terms,  conditions and
adjustments set forth below in this Warrant.

         This Warrant is one of the Common  Stock  Purchase  Warrants  issued in
connection  with the Company's  acquisition of all of the issued and outstanding
capital  stock of Weather  Services  Corporation,  a  Massachusetts  corporation
("WSC"),  pursuant to the Agreement and Plan of Merger (the "Merger Agreement"),
dated as of November 12, 1998 between the  Company,  Merger Sub,  WSC, and ABRY.
Certain  capitalized  terms used in this Warrant are defined in Section 14. If a
capitalized term used in this Warrant is not defined in Section 14, or elsewhere
in this Warrant,  such term shall have the meaning given such term in the Merger
Agreement.

         1.   Exercise of Warrant.

              1.1.  Manner of Exercise.

              (a) This Warrant may be exercised by the holder  hereof,  in whole
         or in part,  during normal  business hours on any Business Day prior to
         the  expiration of this Warrant by surrender of this Warrant,  with the
         form of  subscription  at the end  hereof  (or a  reasonable  facsimile
         thereof) duly executed by such holder,  to the Company at its principal
         office  (or,  if  such  exercise   shall  be  in  connection   with  an
         underwritten  Public  Offering  of  shares  of  Common  Stock (or Other
         Securities)  subject  to this  Warrant,  at the  location  at which the
         Company  shall have  agreed to deliver  the shares of Common  Stock (or
         Other Securities) subject to such offering), accompanied by payment, in
 
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         cash or by certified or official bank check payable to the order of the
         Company, in the amount obtained by multiplying (a) the number of shares
         of Common  Stock  (without  giving  effect to any  adjustment  therein)
         designated in such form of subscription  by (b) the Warrant Price,  and
         such holder  shall  thereupon be entitled to receive the number of duly
         authorized,  validly  issued,  fully paid and  nonassessable  shares of
         Common Stock (or Other Securities) determined as provided in Sections 2
         through 4.

              (b)  Holder  may elect in  writing  delivered  to the  Company  as
         provided above to receive, without payment of additional consideration,
         shares  of  Common  Stock  equal to the  value of this  Warrant  or any
         portion  hereof by the surrender of this Warrant or such portion to the
         Company at its principal office.  Thereupon, the Company shall issue to
         such  holder  such  number of fully  paid and  nonassessable  shares of
         Common Stock as is computed using the following formula:
                                   
                                  X = Y (A-B)
                                         A
         where   X = the number of shares to be issued to such  holder  pursuant
                 to this subsection 1.1(b).

                 Y         = the  number of shares  covered  by this  Warrant in
                           respect  of  which  the net  issue  election  is made
                           pursuant to this subsection 1.1(b).

                 A         = the Market Price of one share of Common Stock as at
                           the time the net issue  election is made  pursuant to
                           this subsection 1.1(b).

                 B         = the Warrant  Price in effect  under this Warrant at
                           the time the net issue  election is made  pursuant to
                           this subsection 1.1(b).

              1.2. When Exercise Deemed Effected.  Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the  Business Day on which this Warrant  shall have been  surrendered  to the
Company as  provided in Section  1.1,  and at such time the person or persons in
whose name or names any certificate or  certificates  for shares of Common Stock
(or Other  Securities)  shall be  issuable  upon such  exercise  as  provided in
Section  1.3 shall be deemed to have  become  the  holder or  holders  of record
thereof.

              1.3. Delivery of Stock  Certificates,  Etc. As soon as practicable
after the exercise of this Warrant, in whole or in part, and in any event within
ten (10) Business Days  thereafter  (unless such exercise shall be in connection
with an  underwritten  Public  Offering  of  shares  of  Common  Stock (or Other
Securities)  subject to this  Warrant,  in which  event  concurrently  with such
exercise),  the Company at its expense (including the payment by it of any taxes
(other than transfer  taxes)  applicable to the Company) will cause to be issued

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in the name of and delivered to the holder  hereof or,  subject to Section 8, as
such holder (upon payment by such holder of any applicable  transfer  taxes) may
direct,

              (a)  a  certificate  or  certificates   for  the  number  of  duly
         authorized,  validly  issued,  fully paid and  nonassessable  shares of
         Common  Stock (or  Other  Securities)  to which  such  holder  shall be
         entitled upon such exercise  plus, in lieu of any  fractional  share to
         which such holder would otherwise be entitled,  cash in an amount equal
         to the same fraction of the Market Price per share of such Common Stock
         (or Other  Securities)  on the Business Day next  preceding the date of
         such exercise, and

              (b) in case such  exercise is in part only,  a new Warrant of like
         tenor,  calling in the  aggregate on the face thereof for the number of
         shares of Common Stock equal  (without  giving effect to any adjustment
         therein)  to the number of such  shares  called for on the face of this
         Warrant  minus the number of such shares  designated by the holder upon
         such exercise as provided in Section 1.1.

              1.4.  Company to Reaffirm  Obligations.  The Company  will, at the
time of or at any time after each exercise of this Warrant,  upon the request of
the holder hereof or of any shares of Common Stock (or Other Securities)  issued
upon such exercise,  acknowledge in writing its continuing  obligation to afford
to  such  holder  all  rights  (including,  without  limitation,  any  right  of
registration of any shares of Common Stock (or Other  Securities)  issuable upon
exercise  of this  Warrant  pursuant  to Section 9) to which such  holder  shall
continue to be entitled after such exercise in accordance with the terms of this
Warrant,  provided  that if any such holder shall fail to make any such request,
the failure shall not affect the continuing  obligation of the Company to afford
such rights to such holder.

         2.   Adjustments.

              2.1.  Number of  Shares;  Warrant  Price.  The number of shares of
Common Stock which the holder of this Warrant  shall be entitled to receive upon
each exercise  hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of this Section 2) be
issuable upon such  exercise,  as  designated  by the holder hereof  pursuant to
Section  1.1,  by a fraction of which (a) the  numerator  is $34.00 and (ii) the
denominator  is the Warrant  Price in effect on the date of such  exercise.  The
"Warrant Price" shall  initially be $34.00 per share,  and shall be adjusted and
readjusted  from time to time as provided in this  Section 2 and, as so adjusted
or readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by this Section 2.

              2.2. Adjustment of Warrant Price.

              2.2.1.  Issuance of Additional Shares of Common Stock. In case the
Company,  at any time or from time to time after December 11, 1998 (the "Initial
Date"),  shall  issue or sell  Additional  Shares  of  Common  Stock  (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2.3 or

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2.4) without  consideration or for a consideration  per share less than the Base
Price in effect,  in each  case,  on the date of and  immediately  prior to such
issue or sale, then, and in each such case, subject to Section 2.8, such Warrant
Price  shall be  reduced,  concurrently  with  such  issue  or sale,  to a price
(calculated  to the  nearest  .001 of a cent)  determined  by  multiplying  such
Warrant Price by a fraction,

              (a) the  numerator  of which  shall be (i) the number of shares of
         Common Stock  outstanding  immediately prior to such issue or sale plus
         (ii)  the  number  of  shares  of  Common  Stock  which  the  aggregate
         consideration  received  by the  Company  for the total  number of such
         Additional  Shares of Common Stock so issued or sold would  purchase at
         the Base Price, and

              (b) the  denominator  of which  shall be the  number  of shares of
         Common Stock outstanding immediately after such issue or sale,

provided that, for the purposes of this Section 2.2.1 (x) immediately  after any
Additional  Shares of Common  Stock are deemed to have been  issued  pursuant to
Section 2.3 or 2.4, such  Additional  Shares shall be deemed to be  outstanding,
and (y) treasury shares shall not be deemed to be outstanding.

              2.2.2.  Extraordinary  Dividends  and  Distributions.  In case the
Company at any time or from time to time after the Initial  Date shall  declare,
order,  pay  or  make a  dividend  or  other  distribution  (including,  without
limitation, any distribution of other or additional stock or other securities or
property  or  Options  by  way  of  dividend  or   spin-off,   reclassification,
recapitalization or similar corporate  rearrangement) on any Common Stock, other
than (a) a dividend  payable in Additional  Shares of Common Stock or in Options
for Common  Stock or (b) a  dividend  payable  in cash and  declared  out of the
earned surplus of the Company,  then, and in each such case,  subject to Section
2.8, the Warrant Price in effect  immediately  prior to the close of business on
the  record  date  fixed  for the  determination  of  holders  of any  class  of
securities  entitled to receive such dividend or distribution  shall be reduced,
effective  as of  the  close  of  business  on  such  record  date,  to a  price
(calculated  to the  nearest  .001 of a cent)  determined  by  multiplying  such
Warrant Price by a fraction,

                   (x) the numerator of which shall be the Current  Market Price
              in effect on such record date or, if the Common Stock trades on an
              ex-dividend  basis,  on the  date  prior  to the  commencement  of
              ex-dividend   trading,   less  the  value  of  such   dividend  or
              distribution  (as  determined  in  good  faith  by  the  Board  of
              Directors of the Company) applicable to one share of Common Stock,
              and

                   (y) the  denominator  of which shall be such  Current  Market
              Price.

              2.3. Treatment of Options and Convertible Securities.  In case the
Company at any time or from time to time  after the  Initial  Date 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,  then,  and in each such case,  the  maximum  number of

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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, the conversion or exchange
of such  Convertible  Securities,  shall be deemed to be issued for  purposes of
Section 2.2 as of the time of such issue,  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 (or, if the Common Stock trades on an ex-dividend basis, on the date
prior to the commencement of ex-dividend trading), provided that such Additional
Shares of Common  Stock  shall not be  deemed  to have been  issued  unless  the
consideration  per share  (determined  pursuant  to Section  2.5) of such shares
would be less than the Base  Price in effect,  in each case,  on the date of and
immediately prior to such issue,  sale, grant or assumption or immediately prior
to the close of business on such record date (or, if the Common  Stock trades on
an  ex-dividend  basis,  on the date prior to the  commencement  of  ex-dividend
trading),  as the case may be, and provided,  further,  that in any such case in
which Additional Shares of Common Stock are deemed to be issued,

              (a) no further  adjustment of the Warrant Price shall be made upon
         the  subsequent  issue 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;

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

              (c) 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
         Warrant  Price  computed  upon  the  original  issue,  sale,  grant  or
         assumption  thereof (or upon the occurrence of the record date, or date
         prior to the commencement of ex-dividend  trading,  as the case may be,
         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:

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                   (x) in the case of options for Common Stock or of Convertible
              Securities,  the only Additional  Shares of Common Stock 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 exchange of such Convertible  Securities and the  consideration
              received therefor was (i) an amount equal to (A) the consideration
              actually  received by the Company  for the issue,  sale,  grant or
              assumption of all such options, whether or not exercised, plus (B)
              the  consideration  actually  received  by the  Company  upon such
              exercise,  minus (C) the consideration paid by the Company for any
              purchase  of such  Options  which were not  exercised,  or (ii) an
              amount  equal to (A) the  consideration  actually  received by the
              Company  for the  issue,  sale,  grant or  assumption  of all such
              Convertible Securities which were actually converted or exchanged,
              plus (B) the additional  consideration,  if any, actually received
              by the Company upon such  conversion  or  exchange,  minus (C) the
              consideration  paid  by the  Company  for  any  purchase  of  such
              Convertible  Securities the rights of conversion or exchange under
              which were not exercised, and

                   (y) 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 issue,
              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 (i) the
              consideration  actually  received  by the  Company  for the issue,
              sale,  grant or  assumption  of all such  options,  whether or not
              exercised,  plus  (ii)  the  consideration  deemed  to  have  been
              received by the Company  (pursuant  to Section 2.4) upon the issue
              or sale of the  Convertible  Securities with respect to which such
              options were  actually  exercised,  minus (iii) the  consideration
              paid by the Company for any  purchase of such  Options  which were
              not exercised;

              (d) no readjustment pursuant to subdivision (b) or (c) above shall
         have the effect of increasing  the Warrant Price by an amount in excess
         of the amount of the adjustment  thereof  originally made in respect of
         the issue,  sale,  grant or assumption  of such Options or  Convertible
         Securities; and

              (e) in the case of any such  Options  which  expire by their terms
         not  more  than  30 days  after  the  date of  issue,  sale,  grant  or
         assumption  thereof,  no  adjustment of the Warrant Price shall be made
         until the  expiration or exercise of all such Options,  whereupon  such
         adjustment  shall be made in the manner  provided  in  subdivision  (c)
         above.

         In case at any  time  after  the  Initial  Date  the  Company  shall be
required to increase the number of Additional  Shares of Common Stock subject to
any Option or into which any  Convertible  Securities  (other than the Warrants)

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are  convertible  or  exchangeable  pursuant to the  operation of  anti-dilution
provisions  applicable thereto,  such Additional Shares of Common Stock shall be
deemed to be issued for purposes of Section 2.2 as of the time of such increase.

              2.4. Treatment of Stock Dividends,  Stock Splits, Etc. In case the
Company at any time or from time to time after the Initial Date shall declare or
pay any  dividend  or other  distribution  on any class of stock of the  Company
payable in Common Stock, or shall effect a subdivision of the outstanding shares
of  Common  Stock  into  a  greater   number  of  shares  of  Common  Stock  (by
reclassification  or otherwise  than by payment of a dividend in Common  Stock),
then, and in each such case,  Additional  Shares of Common Stock shall be deemed
to have been issued (a) in the case of any such dividend,  immediately after the
close of  business on the record  date for the  determination  of holders of any
class of securities entitled to receive such dividend, or (b) in the case of any
such  subdivision,  at the close of business on the day immediately prior to the
day upon which such corporate action becomes effective.

              2.5.  Computation  of  Consideration.  For  the  purposes  of this
Section 2:

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

                   (x) insofar as it consists of cash, be computed at the amount
              of cash  received by the Company,  without  deducting any expenses
              paid or incurred by the Company or any commissions or compensation
              paid or concessions or discounts allowed to underwriters,  dealers
              or others performing  similar services and any accrued interest or
              dividends in connection with such issue or sale,

                   (y)  insofar  as  it  consists  of  consideration  (including
              securities) other than cash, be computed at the fair value thereof
              at the time of such issue or sale,  as determined in good faith by
              the Board of  Directors  of the  Company,  without  deducting  any
              expenses  paid or incurred by the Company for any  commissions  or
              compensation   paid  or  concessions   or  discounts   allowed  to
              underwriters,  dealers or others  performing  similar services and
              any accrued interest or dividends in connection with such issue or
              sale, and

                   (z) in case  Additional  Shares of Common Stock are issued or
              sold 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,  be  the
              proportion of such consideration so received, computed as provided
              in  subdivisions  (x) and (y) above,  allocable to such Additional
              Shares of Common Stock or Convertible Securities,  as the case may
              be, all as  determined  in good faith by the Board of Directors of
              the Company.

              (b) All options  issued,  sold,  granted or assumed  together with
         other  stock  or  securities  or  other  assets  of the  Company  for a

                                       10
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         consideration which covers both, 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  than by payment of a
         dividend in Common  Stock) shall be deemed to have been issued  without
         consideration.

              (c)  Additional  Shares of Common Stock deemed to have been issued
         for  consideration  pursuant  to Section  2.3,  relating to Options and
         Convertible  Securities,  shall be  deemed to have  been  issued  for a
         consideration per share determined by dividing
                           
                   (x) the total amount,  if any, received and receivable by the
              Company as consideration for the issue,  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 the foregoing
              subdivision (a), by

                   (y) 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.

              (d)  Additional  Shares of Common  Stock  issued or deemed to have
         been  issued  pursuant to the  operation  of  anti-dilution  provisions
         applicable to Convertible Securities (other than the Warrants), Options
         or  other  securities  of  the  Company  (either  as a  result  of  the
         adjustments  provided for by the Warrants or otherwise) shall be deemed
         to have been issued without consideration.

              2.6.  Adjustments for  Combinations,  Etc. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise,  into a lesser number of shares of Common Stock, the Warrant Price in
effect   immediately   prior  to  such  combination  or   consolidation   shall,
concurrently  with the  effectiveness of such combination or  consolidation,  be
proportionately increased.

              2.7.  Dilution  in Case of Other  Securities.  In case  any  Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the  conversion  or exchange of any Common  Stock (or Other  Securities)  of the
Company (or any issuer of Other  Securities  or any other Person  referred to in
Section 3) or to  subscription,  purchase or other  acquisition  pursuant to any

                                       11
                                    - 359 -
<PAGE>

options  issued or granted by the Company  (or any such other  issuer or Person)
for a consideration  such as to dilute, on a basis consistent with the standards
established  in the other  provisions  of this  Section 2, the  purchase  rights
granted  by  this  Warrant,  then,  and in each  such  case,  the  computations,
adjustments and readjustments provided for in this Section 2 with respect to the
Warrant  Price 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 receivable
upon the exercise of this  Warrant,  so as to protect the holder of this Warrant
against the effect of such dilution.

              2.8.  Minimum  Adjustment of Warrant  Price.  If the amount of any
adjustment  of the Warrant  Price  required  pursuant to this Section 2 would be
less than  one-tenth  of one percent of the Warrant  Price in effect at the time
such  adjustment  is  otherwise  so  required to be made,  such amount  shall be
carried  forward and  adjustment  with  respect  thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried  forward,  shall aggregate at least one-tenth
of one percent of such Warrant Price;  provided that,  upon the exercise of this
Warrant,  all adjustments  carried  forward and not  theretofore  made up to and
including  the  date  of  such  exercise  shall  be  made  to  the  nearest  one
one-hundredth of a cent.

         3.   Consolidation, Merger, Sale of Assets, Reorganization. Etc.

              3.1. General  Provisions.  In case the Company,  after the Initial
Date, (a) shall consolidate with or merge into any other Person and shall not be
the continuing or surviving  corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate  with or merge into the Company and
the Company shall be the continuing or surviving  Person but, in connection with
such consolidation or merger,  Common Stock or Other Securities shall be changed
into or exchanged for cash, stock or other securities of any other Person or any
other property, or (c) shall transfer all or substantially all of its properties
and assets to any other Person, or (d) shall effect a capital  reorganization or
reclassification  of  Common  Stock or Other  Securities  (other  than a capital
reorganization or  reclassification  resulting in the issue of additional Shares
of Common Stock for which adjustment in the Warrant Price is provided in Section
2.2.1 or 2.2.2),  then,  and in the case of each such  transaction,  the Company
shall give written notice thereof to the holder of this Warrant not less than 30
days prior to the  consummation  thereof and proper  provision  shall be made so
that, upon the basis and the terms and in the manner provided in this Section 3,
the  holder of this  Warrant,  upon the  exercise  hereof at any time  after the
consummation of such transaction, shall be entitled to receive, at the aggregate
Warrant  Price in effect at the time of such  consummation  for all Common Stock
(or other  Securities)  issuable  upon such exercise  immediately  prior to such
consummation,  in lieu of the Common Stock (or Other  Securities)  issuable upon
such  exercise  prior to such  consummation,  either of the  following,  as such
holder  shall  elect by  written  notice to the  Company  on or before  the date
immediately  preceding the date of the consummation of such transaction (and, in
the absence of such notice,  the  provisions of  subdivision  (y) below shall be
deemed to have been elected by such holder):

                                       12
                                    - 360 -
<PAGE>

                   (x) the highest amount of cash,  securities or other property
              to which  such  holder  would  actually  have been  entitled  as a
              shareholder  upon such  consummation  if such holder had exercised
              this Warrant  immediately  prior  thereto,  subject to adjustments
              (subsequent to such consummation) as nearly equivalent as possible
              to the  adjustments  provided for in Section 2 and this Section 3,
              provided that if a purchase,  tender or exchange  offer shall have
              been made to and  accepted  by the  holders of Common  Stock under
              circumstances in which,  upon completion of such purchase,  tender
              or exchange offer, the maker thereof, together with members of any
              group (within the meaning of Section 13(d)(3) of the Exchange Act)
              of which such maker is a part,  and together with any affiliate or
              associate  of such maker  (within  the meaning of Rule 12b-2 under
              the  Exchange  Act) and any members of any such group of which any
              such  affiliate or associate is a part, own  beneficially  (within
              the meaning of Rule 13d-3 under the Exchange Act) more than 50% of
              the outstanding  shares of Common Stock, and if the holder of this
              Warrant so  designates  in such notice given to the  Company,  the
              holder of this  Warrant  shall be  entitled to receive the highest
              amount of cash,  securities or other property to which such holder
              would  actually have been entitled as a shareholder  if the holder
              of this Warrant had exercised this Warrant prior to the expiration
              of such purchase,  tender or exchange  offer,  accepted such offer
              and all of the Common Stock held by such holder had been purchased
              pursuant to such purchase,  tender or exchange  offer,  subject to
              adjustments  (from and after the  consummation  of such  purchase,
              tender or exchange offer) as nearly  equivalent as possible to the
              adjustments provided for in Section 2 and this Section 3; or

                   (y)  the  number  of  shares  of  Voting   Common  Stock  (or
              equivalent  equity  interests) of the Acquiring  Person or, if the
              Acquiring  Person  fails  to  meet,  but  its  Parent  meets,  the
              requirements  set  forth  in the  proviso  below,  of its  Parent,
              subject to adjustments  (subsequent  to such corporate  action) as
              nearly  equivalent as possible to the adjustments  provided for in
              Section 2 and this  Section  3,  determined  by  dividing  (i) the
              product obtained by multiplying (A) the number of shares of Common
              Stock (or Other  Securities)  to which the holder of this  Warrant
              would have been  entitled had such holder  exercised  this Warrant
              immediately prior to the consummation of such  transaction,  times
              (B) the greater of the Acquisition  Price and the Warrant Price in
              effect  on  the  date  immediately  preceding  the  date  of  such
              consummation,  by (ii) the Current  Market  Price per share of the
              Voting  Common  Stock  (or  equivalent  equity  interests)  of the
              Acquiring  Person or its  Parent,  as the case may be, on the date
              immediately preceding the date of such consummation;

provided that the Company shall not effect any of the transactions  described in
subdivisions  (a) through (d) above  unless,  immediately  after the date of the
consummation of such transaction, the Acquiring Person or its Parent is required
to file,  by virtue of having an  outstanding  class of Voting  Common Stock (or
equivalent equity interests), reports with the Commission pursuant to Section 13
or  Section  15(d)  of the  Exchange  Act,  and such  Voting  Common  Stock  (or

                                       13
                                    - 361 -
<PAGE>

equivalent  equity  interest)  is listed or  admitted  to  trading on a national
securities  exchange or is quoted in the NASD automated quotation system. In the
event that the  Acquiring  Person  fulfills  the  requirements  contained in the
immediately  preceding proviso,  then, if the holder of this Warrant shall elect
(or shall be deemed to elect) to  receive  Voting  Common  Stock (or  equivalent
equity  interests)  pursuant to  subdivision  (y) above,  such  holder  shall be
entitled to receive,  upon the basis stated in such  subdivision  (y),  only the
Voting Common Stock (or equivalent equity interests) of the Acquiring Person.

              3.2. Assumption of Obligations. Notwithstanding anything contained
in this Warrant or the Merger  Agreement to the  contrary,  the Company will not
effect any of the  transactions  described  in  subdivisions  (a) through (d) of
Section 3.1 unless, prior to the consummation  thereof,  each Person (other than
the  Company)  which  may be  required  to  deliver  any  cash,  stock  or other
securities  or other  property  upon the  exercise  of this  Warrant as provided
herein  shall  assume,  by  written  instrument  delivered  to,  and  reasonably
satisfactory to, the holder of this Warrant,  (a) the obligations of the Company
under this Warrant (and if the Company  shall survive the  consummation  of such
transaction,  such assumption shall be in addition to, and shall not release the
Company from, any continuing  obligations of the Company under this Warrant) and
(b) the  obligation  to  deliver  to such  holder  such  cash,  stock  or  other
securities or other property as, in accordance with the foregoing  provisions of
this  Section 3, such holder may be entitled to receive,  and such Person  shall
have  similarly  delivered to such holder an opinion of counsel for such Person,
which counsel shall be reasonably satisfactory to such holder, stating that this
Warrant shall thereafter  continue in full force and effect and the terms hereof
(including,  without  limitation,  all of the  provisions  of Section 2 and this
Section 3) shall be applicable to the cash,  stock or other  securities or other
property  which such Person may be required to deliver upon any exercise of this
Warrant or the exercise of any rights pursuant hereto.

         4. Other Dilutive Events. In case any event shall occur as to which the
provisions of Section 2 or Section 3 are not strictly applicable but the failure
to make any adjustment would not fairly protect the purchase rights  represented
by this Warrant in accordance  with the essential  intent and principles of such
sections,  then,  in  each  such  case,  the  Company  shall  appoint  a firm of
independent public accountants of recognized national standing (which may be the
regular  auditors  of the  Company),  which  shall give their  opinion  upon the
adjustment,  if  any,  on a basis  consistent  with  the  essential  intent  and
principles  established  in Sections 2 and 3,  necessary  to  preserve,  without
dilution,  the purchase rights represented by this Warrant. Upon receipt of such
opinion  the Company  will  promptly  mail a copy  thereof to the holder of this
Warrant and shall make the adjustments described therein.

         5. No Dilution or Impairment. The Company will not, by amendment of its
certificate   of   incorporation   or   through   any   consolidation,   merger,
reorganization,  transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant,  but will 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 of
this  Warrant  against  dilution  or  other  impairment.  Without  limiting  the

                                       14
                                    - 362 -
<PAGE>

generality  of the  foregoing,  the Company (a) will not permit the par value of
any shares of stock  receivable  upon the exercise of this Warrant to exceed the
amount payable therefor upon such exercise, (b) will take all such action as may
be  necessary or  appropriate  in order that the Company may validly and legally
issue  fully paid and  nonassessable  shares of stock upon the  exercise  of all
outstanding warrants issued by the Company (including this Warrant) from time to
time,  and (c) will not take any action which  results in any  adjustment of the
Warrant  Price  if the  total  number  of  shares  of  Common  Stock  (or  Other
Securities)  issuable  after the action  upon the  exercise  of all  outstanding
warrants  issued by the Company  (including this Warrant) would exceed the total
number of shares of Common Stock (or other  Securities)  then  authorized by the
Company's  certificate of  incorporation  and available for the purpose of issue
upon such exercise.

         6.  Accountants'  Report  as  to  Adjustments.  In  each  case  of  any
adjustment or readjustment  in the shares of Common Stock (or Other  Securities)
issuable  upon the  exercise of this  Warrant,  the Company at its expense  will
promptly compute such adjustment or readjustment in accordance with the terms of
this Warrant,  and will prepare a certificate of the chief financial  officer of
the  Company  setting  forth such  adjustment  or  readjustment  and  showing in
reasonable  detail the method of  calculation  thereof  and the facts upon which
such  adjustment  or  readjustment  is based,  including  without  limitation  a
statement of (a) the consideration received or to be received by the Company for
any  Additional  Shares  of Common  Stock  issued or sold or deemed to have been
issued,  (b) the number of shares of Common  Stock  outstanding  or deemed to be
outstanding, and (c) the Warrant Price in effect immediately prior to such issue
or sale and as adjusted  and  readjusted  (if  required by Section 2) on account
thereof. The Company will forthwith mail a copy of each such certificate to each
holder of a Warrant and will, upon the written request at any time of the holder
of this  Warrant,  furnish to such holder a like  certificate  setting forth the
Warrant Price at the time in effect and showing in reasonable  detail how it was
calculated.  In addition,  with respect to any fiscal year of the Company during
which any such adjustment or readjustment shall have been made, the Company will
cause the independent public accountants  reporting upon the Company's financial
statements for such fiscal year to verify,  concurrently with their annual audit
of the Company's  financial  statements,  the  computations  made by the Company
during  such  fiscal  year and to  prepare  and to deliver to the holder of this
Warrant a report setting forth substantially the information  described above in
this  Section 6 with  respect to all such  adjustments  and  readjustments.  The
Company  will  also keep  copies of all such  certificates  and  reports  at its
principal  office and will cause the same to be available for inspection at such
office  during  normal  business  hours by the  holder  of this  Warrant  or any
prospective purchaser of this Warrant designated by the holder thereof.

         7. Notices of Corporate Action. In the event of

              (a) any taking by the  Company  of a record of the  holders of any
         class of securities for the purpose of determining  the holders thereof
         who are entitled to receive any dividend or other distribution,  or any
         right to subscribe  for,  purchase or  otherwise  acquire any shares of
         stock of any class or any other  securities or property,  or to receive
         any other right, or

                                       15
                                    - 363 -
<PAGE>

              (b)   any   capital    reorganization   of   the   Company,    any
         reclassification  or  recapitalization  of  the  capital  stock  of the
         Company or any  consolidation  or merger  involving the Company and any
         other Person or any transfer of all or substantially  all the assets of
         the Company to any other Person, or

              (c) any  voluntary  or  involuntary  dissolution,  liquidation  or
         winding-up of the Company,

the Company will mail to the holder of this Warrant a notice  specifying (x) the
date or expected date on which any such record is to be taken for the purpose of
such  dividend,  distribution  or right,  and the amount and  character  of such
dividend,  distribution or right, and (y) the date or expected date on which any
such reorganization, reclassification,  recapitalization, consolidation, merger,
transfer, dissolution,  liquidation or winding-up is to take place and the time,
if any such time is to be fixed,  as of which  the  holders  of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other  Securities)  for the securities or other  property  deliverable
upon such  reorganization,  reclassification,  recapitalization,  consolidation,
merger, transfer,  dissolution,  liquidation or winding-up. Such notice shall be
mailed at least 20 days prior to the date therein specified,  in the case of any
date referred to in the foregoing subdivision (x), and at least 30 days prior to
the date therein specified, in the case of the date referred to in the foregoing
subdivision (y).

         8.   Restrictions on Transfer.

              8.1.  Restrictive  Legends.  Except as otherwise permitted by this
Section 8, each certificate for Common Stock (or Other  Securities)  issued upon
the  exercise  of this  Warrant and each  certificate  issued upon the direct or
indirect  Transfer  of any such  Common  Stock  (or Other  Securities)  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 and may not be transferred  except in
         compliance  with such Act and applicable  state  securities  laws. Such
         shares  are also  subject to certain  restrictions  on  transferability
         imposed by a Common Stock Purchase Warrant expiring  December 11, 2005,
         a copy of which is on file at the offices of the Company."

              8.2. Notice of Proposed  Transfer;  Opinions of Counsel.  Prior to
any Transfer of any  Restricted  Securities  which are not  registered  under an
effective registration statement under the Securities Act (other than a Transfer
pursuant to Rule 144 or any comparable  rule under such Act), the holder thereof
will give  written  notice to the Company of such  holder's  intention to effect
such  Transfer and to comply in all other  respects  with this Section 8.2. Each
such notice (a) shall  describe  the manner and  circumstances  of the  proposed
Transfer in sufficient  detail to enable counsel to render the opinions referred
to below, and (b) shall designate counsel for the holder giving such notice (who

                                       16
                                    - 364 -
<PAGE>

may be internal  counsel for such  holder).  The holder  giving such notice will
submit a copy thereof to the counsel  designated  in such notice and the Company
will promptly  submit a copy thereof to its counsel.  The  following  provisions
shall then apply:

                   (x) If in the  opinion  of such  counsel  for the  holder the
              proposed Transfer may be effected without  registration (a copy of
              which  opinion  shall be  delivered to the  Company),  and if such
              opinion is  reasonably  satisfactory  to the Company,  such holder
              shall thereupon be entitled to Transfer such Restricted Securities
              in  accordance  with the  terms of the  notice  delivered  by such
              holder to the Company. Each Warrant or certificate, if any, issued
              upon  or  in  connection   with  such  Transfer   shall  bear  the
              appropriate restrictive legend set forth in Section 8.1 unless, in
              the opinion of such counsel and the Company's counsel, such legend
              is no longer  required to insure  compliance  with the  Securities
              Act.

                   (y) If the  opinion of such  counsel for the holder is not to
              the effect  that the  proposed  Transfer  may  legally be effected
              without  registration  of such  Restricted  Securities  under  the
              Securities Act, such holder shall not be entitled to Transfer such
              Restricted  Securities  (other than in a Transfer pursuant to Rule
              144 or any  comparable  rule under the  Securities  Act) until the
              conditions  specified in subdivision  (x) above shall be satisfied
              or until  registration  of such  Restricted  Securities  under the
              Securities Act has become effective.

Notwithstanding the foregoing  provisions of this Section 8.2, the holder of any
Restricted  Securities  shall be  permitted  to  Transfer  any  such  Restricted
Securities  pursuant to Rule 144A under the Securities  Act,  provided that each
transferee  agrees in writing to be bound by all the restrictions on transfer of
such Restricted Securities contained in this Section 8.2.

              8.3. Termination of Restrictions. The restrictions imposed by this
Section 8 upon the  transferability  of  Restricted  Securities  shall cease and
terminate as to any particular  Restricted  Securities (a) when such  securities
shall have been effectively  registered under the Securities Act and disposed of
in  accordance  with  the  registration   statement   covering  such  Restricted
Securities, (a) when, in the opinions of both counsel for the holder thereof and
counsel for the Company,  such  restrictions  are no longer required in order to
insure  compliance  with the Securities  Act, or (c) when such securities may be
immediately sold by the holder as determined under Rule 144 under the Securities
Act. Whenever such restrictions shall terminate as to any Restricted Securities,
as soon as practicable thereafter and in any event within ten Business Days, the
holder  thereof shall be entitled to receive from the Company,  without  expense
(other than transfer  taxes,  if any),  new securities of like tenor not bearing
the applicable legend set forth in Section 8.1 hereof.

              8.4.  Holder's  Representations  and  Warranties.   Holder  hereby
represents and warrants to the Company as follows:


                                       17
                                    - 365 -
<PAGE>

              (a)  Holder is  acquiring  this  Warrant  and any shares of Common
         Stock  acquired upon exercise of this Warrant for its own account,  for
         investment and not with a view to any "distribution" within the meaning
         of the Securities Act.

              (b) Holder is  knowledgeable  and  experienced  in making  venture
         capital  investments,  is able to bear the economic risk of loss of its
         investment in the Company,  has been granted the opportunity to make an
         investigation  of  the  affairs  of  the  Company  and  has  used  such
         opportunity either directly or through its authorized representative.

              (c) Holder  understands  that  because the shares of Common  Stock
         issuable  under  this  Warrant  have  not  been  registered  under  the
         Securities  Act,  it  cannot  dispose  of any or all of such  shares of
         Common Stock unless such shares are  subsequently  registered under the
         Securities Act or exemptions from  registration  are available.  Holder
         acknowledges and understands  that, except as provided in this Warrant,
         it has no registration rights. By reason of these restrictions,  Holder
         understands that it may be required to hold such shares of Common Stock
         for an indefinite period of time.

              (d) Holder is an "accredited  investor" as such term is defined in
         Regulation D promulgated under the Securities Act.

              9. Registration under Securities Act, Etc.

              9.1. Incidental Registration.

              (a) Right to Include Registrable Securities. If the Company at any
         time on or prior to December  11, 2005  proposes to register any of its
         securities  under the Securities  Act (other than by a registration  on
         Form S-4 or S-8 or any successor or similar forms),  whether or not for
         sale for its own account,  in a manner which would permit  registration
         of  Registrable  Securities for sale to the public under the Securities
         Act, it will each such time give prompt  written  notice to all holders
         of  Registrable  Securities  of its  intention  to do so  and  of  such
         holders' rights under this Section 9.1. Upon the written request of any
         such holder made within 20 days after receipt of any such notice (which
         request  shall  specify  the  Registrable  Securities  intended  to  be
         disposed  of by such  holder  and the  intended  method of  disposition
         thereof),  the  Company  will  use  its  best  efforts  to  effect  the
         registration  under the  Securities Act of all  Registrable  Securities
         which the  Company  has been so  requested  to  register by the holders
         thereof,  to  the  extent  requisite  to  permit  the  disposition  (in
         accordance  with the  intended  methods  thereof as  aforesaid)  of the
         Registrable  Securities  so to be  registered,  by  inclusion  of  such
         Registrable  Securities in the registration  statement which covers the
         securities  which the Company  proposes to register,  provided that (x)
         the Company shall not be required to effect the  registration  pursuant
         to this  Section 9.1 of any  Warrants  (but shall be required to effect
         the registration of Registrable Securities described in clauses (b) and
         (c) of the  definition of  Registrable  Securities)  and (y) if, at any

                                       18
                                    - 366 -
<PAGE>

         time after  giving  written  notice of its  intention  to register  any
         securities  and  prior  to  the  effective  date  of  the  registration
         statement filed in connection with such registration, the Company shall
         determine  for any reason not to register or to delay  registration  of
         such securities,  the Company may, at its election, give written notice
         of such  determination  to each holder of Registrable  Securities  and,
         thereupon, (i) in the case of a determination not to register, shall be
         relieved of its  obligation to register any  Registrable  Securities in
         connection with such  registration  (but not from its obligation to pay
         the  Registration  Expenses in connection  therewith),  and (ii) in the
         case of a  determination  to delay  registering,  shall be permitted to
         delay registering any Registrable Securities for the same period as the
         delay in registering  such other  securities.  The Company will pay all
         Registration   Expenses  in  connection   with  each   registration  of
         Registrable Securities requested pursuant to this Section 9.1.

              (b)  Priority  in  Incidental  Registrations.  If  a  registration
         pursuant to this Section 9.1 involves an underwritten  offering and the
         managing  underwriter  advises  the  Company  in writing  that,  in its
         opinion,  that the  dollar  amount or  number of shares of  Registrable
         Securities  and other shares of Common Stock or Other  Securities to be
         included in the offering  exceeds the maximum  dollar  amount or number
         that  can be sold in such  offering  without  adversely  affecting  the
         proposed  offering price, the timing,  the  distribution  method or the
         probability  of  success  of such  offering  (the  "Maximum  Number  of
         Shares"), then the Company shall include in such registration:

                   (x)  if  the  registration  is a  primary  offering  for  the
              Company, (i) first, the shares of Common Stock or Other Securities
              that the Company proposes to sell for its own account which can be
              sold without exceeding the Maximum Number of Shares;  (ii) second,
              to the extent the  Maximum  Number of Shares has not been  reached
              under the  foregoing  clause  (i),  the shares of Common  Stock or
              Other Securities  requested to be included in such registration by
              the holders thereof with registration  rights granted prior to the
              date hereof which can be sold without exceeding the Maximum Number
              of Shares  (allocated pro rata among such other security  holders,
              as nearly as practicable,  on the basis of the number of shares of
              Common Stock or Other Securities  requested to be included in such
              offering by such other security holders);  and (iii) third, to the
              extent the Maximum Number of Shares has not been reached under the
              foregoing  clauses (i) and (ii),  the  Registrable  Securities and
              shares  of  Common  Stock  or  Other  Securities  requested  to be
              included in such  registration  by the holder of this  Warrant and
              other security holders with registration  rights which can be sold
              without exceeding the Maximum Number of Shares (allocated pro rata
              among  such  holder  and  other  security  holders,  as  nearly as
              practicable,  on the basis of the number of shares of  Registrable
              Securities  and Common Stock or Other  Securities  requested to be
              included in such  offering  by the holder and such other  security
              holders); and

                   (y) if the  registration is for a secondary  offering for any
              of the Company's  securityholders,  (i) first, if the registration
              was requested by other security  holders with demand  registration

                                       19
                                    - 367 -
<PAGE>

              rights,  then the shares of Common Stock or Other  Securities that
              such other security  holders have requested to be included in such
              offering which can be sold without exceeding the Maximum Number of
              Shares;  (ii) second,  to the extent the Maximum  Number of Shares
              has not been reached under the foregoing clause (i), the shares of
              Common Stock or Other Securities  requested to be included in such
              registration by other security  holders with  registration  rights
              granted  prior  to the  date  hereof  which  can be  sold  without
              exceeding the Maximum  Number of Shares  (allocated pro rata among
              such other  security  holders,  as nearly as  practicable,  on the
              basis of the number of shares of Common Stock or Other  Securities
              requested to be included in such  offering by such other  security
              holders);  and (iii)  third,  to the extent the Maximum  Number of
              Shares has not been reached  under the  foregoing  clauses (i) and
              (ii),  the  Registrable  Securities  and shares of Common Stock or
              Other Securities  requested to be included in such registration by
              the  holder  of this  Warrant  and  other  security  holders  with
              registration  rights  which  can be  sold  without  exceeding  the
              Maximum Number of Shares (allocated pro rata among such holder and
              other security holders, as nearly as practicable,  on the basis of
              the number of shares of Registrable Securities and Common Stock or
              Other Securities  requested to be included in such offering by the
              holder and such other security holders).

              9.2. Registration  Procedures.  If and whenever (x) the Company is
required to use its best efforts to effect the  registration  of any Registrable
Securities under the Securities Act as provided in Section 9.1 or (y) there is a
Requesting  Holder in connection  with any other  proposed  registration  by the
Company under the Securities Act, the Company will as expeditiously as possible:

              (a)  prepare   and  file  with  the   Commission   the   requisite
         registration  statement (including such audited financial statements as
         may be  required  by the  Securities  Act or the rules and  regulations
         promulgated  thereunder) to effect such  registration  and use its best
         efforts  to cause  such  registration  statement  to become  effective,
         provided  that  before  filing  such  registration   statement  or  any
         amendments thereto, the Company will furnish to the counsel selected by
         the holders of Registrable  Securities whose Registrable Securities are
         to be  included  in such  registration  copies  of all  such  documents
         proposed to be filed,  which documents will be subject to the review of
         such counsel, and provided,  further,  that the Company may discontinue
         any registration of its securities which are not Registrable Securities
         at any time prior to the effective date of the  registration  statement
         relating thereto;

              (b)  prepare  and file with the  Commission  such  amendments  and
         supplements to such  registration  statement and the prospectus used in
         connection  therewith as may be necessary to maintain the effectiveness
         of such registration statement and to comply with the provisions of the
         Securities  Act  with  respect  to the  disposition  of all  securities
         covered by such  registration  statement until the earlier of such time
         as all of such  securities have been disposed of in accordance with the
         intended  methods of disposition  by the seller or sellers  thereof set
         forth in such  registration  statement  and the  expiration  of 90 days

                                       20
                                    - 368 -
<PAGE>

         after  such  registration  statement  becomes  effective,  except  with
         respect to any such  registration  statement filed pursuant to Rule 415
         (or any successor  Rule) under the  Securities  Act, in which case such
         period shall be 2 years;

              (c) furnish to each seller of  Registrable  Securities  covered by
         such  registration  statement and each Requesting Holder such number of
         conformed  copies  of such  registration  statement  and of  each  such
         amendment and supplement thereto (in each case including all exhibits),
         such number of copies of the prospectus  contained in such registration
         statement  (including  each  preliminary  prospectus  and  any  summary
         prospectus)  and any other  prospectus  filed  under Rule 424 under the
         Securities Act, in conformity  with the  requirements of the Securities
         Act, and such other documents, as such seller may reasonably request;

              (d) use its best  efforts to register  or qualify all  Registrable
         Securities and other securities covered by such registration  statement
         under such other  securities or blue sky laws of such  jurisdictions as
         each  seller  thereof  and  each  Requesting  Holder  shall  reasonably
         request,  to keep such  registration or  qualification in effect for so
         long as such  registration  statement  remains in effect,  and take any
         other action which may be  reasonably  necessary or advisable to enable
         such seller to consummate the disposition in such  jurisdictions of the
         securities owned by such seller,  except that the Company shall not for
         any such  purpose be required to qualify  generally to do business as a
         foreign  corporation in any  jurisdiction  wherein it would not but for
         the  requirements  of  this  subdivision  (d)  be  obligated  to  be so
         qualified  or to  consent  to  general  service  of process in any such
         jurisdiction;

              (e) use its best  efforts  to  cause  all  Registrable  Securities
         covered  by  such  registration  statement  to be  registered  with  or
         approved by such other  governmental  agencies or authorities as may be
         necessary  to enable the seller or sellers  thereof to  consummate  the
         disposition of such Registrable Securities;

              (f)  furnish to each  seller of  Registrable  Securities  and each
         Requesting Holder a signed  counterpart,  addressed to such seller (and
         the underwriters, if any), of

                   (x)  an  opinion  of  counsel  for  the  Company,  dated  the
              effective  date  of  such  registration  statement  (and,  if such
              registration  includes an underwritten Public Offering,  dated the
              date of any closing under the underwriting agreement),  reasonably
              satisfactory in form and substance to such seller, and

                   (y) a  "comfort"  letter,  dated the  effective  date of such
              registration  statement  (and,  if such  registration  includes an
              underwritten Public Offering,  dated the date of any closing under
              the  underwriting  agreement),  signed by the  independent  public
              accountants who have certified the Company's financial  statements
              included in such registration  statement (it being understood that
              such  letter,   if  the  cost   thereof  does  not   constitute  a
              "Registration Expense", is to be delivered only at the request of,


                                       21
                                    - 369 -
<PAGE>

              and at the expense  of, any seller of  Registrable  Securities  or
              Requesting Holder),

covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case  of the
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten Public
Offerings of securities and, in the case of the accountants'  letter, such other
financial matters,  as such seller (or the underwriters,  if any) may reasonably
request;

              (g) immediately notify each seller of such Registrable Securities,
         and (if  requested by any such seller)  confirm such advice in writing,
         (w) when the prospectus or any prospectus  supplement or post-effective
         amendment  has  been  filed,  and,  with  respect  to the  registration
         statement  or any  post-effective  amendment,  when the same has become
         effective,  (x) of any  request by the  Commission  for  amendments  or
         supplements  to the  registration  statement or the  prospectus  or for
         additional  information,  (y) of the issuance by the  Commission of any
         stop order suspending the  effectiveness of the registration  statement
         or the initiation of any proceedings  for that purpose,  and (z) of the
         receipt  by  the  Company  of  any  notification  with  respect  to the
         suspension of the qualification of the Registrable  Securities for sale
         in any  jurisdiction or the initiation or threatening of any proceeding
         for such purpose;

              (h) use its  reasonable  best efforts to obtain the  withdrawal of
         any order suspending the effectiveness of the registration statement at
         the earliest possible time;

              (i)  immediately  notify  each  holder of  Registrable  Securities
         covered by such registration  statement and each Requesting  Holder, at
         any time when a prospectus relating thereto is required to be delivered
         under the Securities  Act, of the happening of any event as a result of
         which the prospectus included in such registration  statement,  as then
         in effect,  includes an untrue statement of a material fact or omits to
         state any material fact  required to be stated  therein or necessary to
         make  the  statements  therein  not  misleading  in  the  light  of the
         circumstances  under  which they were made,  and at the  request of any
         such holder  promptly  prepare and furnish to such seller a  reasonable
         number of copies of a supplement to or an amendment of such  prospectus
         as may be necessary so that, as thereafter  delivered to the purchasers
         of such  securities,  such  prospectus  shall  not  include  an  untrue
         statement of a material  fact or omit to state a material fact required
         to be stated  therein or necessary to make the  statements  therein not
         misleading  in the light of the  circumstances  under  which  they were
         made;

              (j) otherwise  use its best efforts to comply with all  applicable
         rules and  regulations  of the  Commission,  and make  available to its
         security  holders,  as  soon as  reasonably  practicable,  an  earnings
         statement  covering the period of at least twelve months,  but not more
         than eighteen  months,  beginning  with the first full  calendar  month

                                       22
                                    - 370 -
<PAGE>

         after the effective date of such registration statement, which earnings
         statement  shall  satisfy  the  provisions  of  Section  11(a)  of  the
         Securities  Act,  and not  file any  amendment  or  supplement  to such
         registration  statement or  prospectus  to which any such seller or any
         Requesting  Holder shall have  reasonably  objected on the grounds that
         such amendment or supplement  does not comply in all material  respects
         with  the  requirements  of  the  Securities  Act or of  the  rules  or
         regulations  thereunder,  having been  furnished with a copy thereof at
         least five (5) business days prior to the filing thereof;

              (k)  provide  and  cause to be  maintained  a  transfer  agent and
         registrar for all Registrable  Securities  covered by such registration
         statement  not  later  than  the  effective  date of such  registration
         statement;

              (1) cooperate with the sellers of such  Registrable  Securities to
         facilitate  the  timely   preparation   and  delivery  of  certificates
         representing  Registrable Securities to be sold, which securities shall
         not bear any  restrictive  legends and shall be in a form  eligible for
         deposit with The Depository Trust Company;  and enable such Registrable
         Securities to be in such  denominations and registered in such names as
         such sellers may request at least two  business  days prior to any sale
         of Registrable Securities;

              (m) use  its  best  efforts  (x) to  cause  all  such  Registrable
         Securities  covered by such  registration  statement  to be listed on a
         national  securities  exchange (if such Registrable  Securities are not
         already so listed) and on each additional  national securities exchange
         on which similar  securities  issued by the Company are then listed, if
         the listing of such Registrable  Securities is then permitted under the
         rules  of such  exchange,  or (y) to  secure  designation  of all  such
         Registrable  Securities  covered by such  registration  statement  as a
         NASDAQ  "national  market system  security"  within the meaning of Rule
         llAa2-1 of the Commission or, failing that, secure NASDAQ authorization
         for such Registrable Securities and, without limiting the generality of
         the foregoing, to arrange for at least two market makers to register as
         such with respect to such Registrable Securities with the NASD;

              (n) provide a CUSIP  number for all  Registrable  Securities,  not
         later than the effective date of the applicable registration statement;
         and

              (o) enter into such  agreements and take such other actions as the
         Requisite  Holders  shall  reasonably  request in order to  expedite or
         facilitate the disposition of such Registrable Securities.

The Company may require each holder of  Registrable  Securities  as to which any
registration is being effected to furnish the Company such information regarding
such holder and the distribution of such securities as the Company may from time
to time reasonably request in writing.

                                       23
                                    - 371 -
<PAGE>


              9.3. Underwritten Offerings.

              9.3.1.  Incidental  Underwritten  Offerings. If the Company at any
time  proposes to register any of its  securities  under the  Securities  Act as
contemplated  by Section 9.1 and such  securities  are to be  distributed  by or
through one or more underwriters, the Company will, subject to the provisions of
Section 9.1(b), use its best efforts,  if requested by any holder of Registrable
Securities,  to  arrange  for  such  underwriters  to  include  the  Registrable
Securities  to be offered and sold by such  holder  among the  securities  to be
distributed by such  underwriters.  The holders of Registrable  Securities to be
distributed by such underwriters shall be parties to the underwriting  agreement
between the Company and such underwriters and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters  shall also
be made to and for the benefit of such  holders of  Registrable  Securities  and
that  any or all  of  the  conditions  precedent  to  the  obligations  of  such
underwriters  under such underwriting  agreement be conditions  precedent to the
obligations of such holders of Registrable Securities.  No holder of Registrable
Securities  shall be required to make any  representations  or  warranties to or
agreements  with the  Company or the  underwriters  other than  representations,
warranties or agreements regarding such holder and such holder's intended method
of distribution and any other representation required by law.

              9.3.2. Holdback Agreements.

                   (x) Each  holder  of  Registrable  Securities  agrees,  if so
              required  by the  managing  underwriter,  not to effect any public
              sale or  distribution  of  securities  of the  Company of the same
              class as the securities  included in such Registration  Statement,
              during the seven days prior to the date on which any  underwritten
              registration  pursuant to Section 9.1 has become effective and the
              90  days   thereafter,   except  as  part  of  such   underwritten
              registration  or to the extent that such holder is  prohibited  by
              applicable  law from agreeing to withhold  Registrable  Securities
              from  sale or is  acting  in its  capacity  as a  fiduciary  or an
              investment  adviser.  Without  limiting  the  scope  of  the  term
              "fiduciary,"  a holder shall be deemed to be acting as a fiduciary
              or an  investment  adviser  if  its  actions  or  the  Registrable
              Securities   proposed  to  be  sold  are  subject  to  ERISA,  the
              Investment  Company Act of 1940 or the Investment  Advisers Act of
              1940 or if such  Registrable  Securities  are  held in a  separate
              account under applicable insurance law or regulation.

                   (y) The  Company  agrees (i) not to effect any public sale or
              distribution  of its equity  securities or securities  convertible
              into or  exchangeable  or exercisable  for any of such  securities
              during  the  seven  (7)  days  prior  to the  date  on  which  any
              underwritten  registration  pursuant  to  Section  9.1 has  become
              effective  and  the 90  days  thereafter,  except  as part of such
              underwritten  registration and except pursuant to registrations on
              Form S-4 or S-8 or any  successor or similar  forms  thereto,  and
              (ii) to cause  each  holder  of its  equity  securities  or of any
              securities convertible into or exchangeable or exercisable for any

                                       24
                                    - 372 -
<PAGE>

              of such securities, in each case purchased from the Company at any
              time  after  the date of this  Agreement  (other  than in a Public
              Offering),  to  agree  not to  effect  any  such  public  sale  or
              distribution  of such  securities,  during such period,  except as
              part of such underwritten registration.

              9.4. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration  statement under the Securities Act,
the Company will give the holders of  Registrable  Securities  registered  under
such registration statement, their underwriters,  if any, each Requesting Holder
and their respective counsel and accountants,  the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission,  and each amendment thereof or supplement thereto,
and will  give  each of them such  access  to its  books  and  records  and such
opportunities  to discuss the  business of the Company with its officers and the
independent  public  accountants who have certified its financial  statements as
shall be  necessary,  in the  opinion of such  holders'  and such  underwriters'
respective counsel, to conduct a reasonable  investigation within the meaning of
the Securities Act.

              9.5. Rights of Requesting  Holders.  The Company will not file any
registration  statement  under the  Securities  Act,  whether or not pursuant to
registration  rights  granted to other holders of its  securities and whether or
not for sale for its own account (other than by a registration  on Form S-4, S-8
or any successor form thereto),  unless it shall first have given to each Person
which holds any Registrable  Securities  issued by the Company at least 30 days'
prior written  notice  thereof.  Any such holder who shall so request  within 30
days  after  such  notice (a  "Requesting  Holder")  shall  have the rights of a
Requesting  Holder  provided in Sections  9.2, 9.4 and 9.6. In addition,  if any
registration  statement refers to any Requesting  Holder by name or otherwise as
the holder of any  securities  of the  Company,  then such holder shall have the
right to require (a) the  insertion  therein of language,  in form and substance
reasonably satisfactory to such holder, to the effect that, if true, the holding
by such  holder of such  securities  does not  necessarily  make  such  holder a
"controlling person" of the Company within the meaning of the Securities Act and
is not to be  construed  as a  recommendation  by such holder of the  investment
quality of the Company's debt or equity securities covered thereby and that such
holding  does not imply  that such  holder  will  assist in  meeting  any future
financial  requirements of the Company,  or (b) in the event that such reference
to such holder by name or otherwise is not required by the Securities Act or any
rules and regulations promulgated  thereunder,  the deletion of the reference to
such holder.

              9.6. Indemnification.

              (a) The Company will,  and hereby does,  indemnify,  to the extent
         permitted by applicable law, each holder of Registrable  Securities and
         its Affiliates and their respective officers and directors, if any, and
         each Person,  if any, who  controls  such holder  within the meaning of
         Section 15 of the Securities Act, against all losses, claims,  damages,
         liabilities (or proceedings in respect thereof) and expenses (under the
         Securities Act or common law or otherwise), joint or several, caused by

                                       25
                                    - 373 -
<PAGE>

         any untrue  statement or alleged  untrue  statement of a material  fact
         contained in any  registration  statement or prospectus (and as amended
         or  supplemented  if the Company shall have furnished any amendments or
         supplements  thereto) or any  preliminary  prospectus  or caused by any
         omission or alleged  omission to state therein a material fact required
         to be stated  therein or necessary to make the  statements  therein not
         misleading, except insofar as such losses, claims, damages, liabilities
         (or  proceedings  in respect  thereof)  or  expenses  are caused by any
         untrue  statement or alleged  untrue  statement  contained in or by any
         omission or alleged omission from  information  furnished in writing to
         the Company by such holder  expressly for use therein.  If the offering
         pursuant to any registration  statement provided for under this Warrant
         is made through  underwriters,  no action or failure to act on the part
         of  such  underwriters  (whether  or not  any  such  underwriter  is an
         Affiliate  of any holder of  Registrable  Securities)  shall affect the
         obligations  of the  Company to  indemnify  any  holder of  Registrable
         Securities or any other Person pursuant to the preceding  sentence.  If
         the offering pursuant to any registration  statement provided for under
         this  Agreement is made  through  underwriters,  the Company  agrees to
         enter  into an  underwriting  agreement  in  customary  form  with such
         underwriters  and the Company  agrees to indemnify  such  underwriters,
         their  officers and  directors,  if any,  and each Person,  if any, who
         controls  such  underwriters  within  the  meaning of Section 15 of the
         Securities Act to the same extent as hereinbefore provided with respect
         to  the  indemnification  of the  holders  of  Registrable  Securities;
         provided  that the Company  shall not be required to indemnify any such
         underwriter,  or any  officer or director  of such  underwriter  or any
         Person who controls such  underwriter  within the meaning of Section 15
         of the  Securities  Act,  to the extent that the loss,  claim,  damage,
         liability  (or  proceedings  in respect  thereof)  or expense for which
         indemnification is claimed results from such  underwriter's  failure to
         send or give a copy of the amended or supplemented  final prospectus to
         the Person asserting an untrue statement or alleged untrue statement or
         omission or alleged omission at or prior to the written confirmation of
         the sale of Registrable  Securities to such Person if such statement or
         omission was corrected in such amended or supplemented final prospectus
         prior to such written confirmation and the underwriter was given notice
         of the availability of such amended or supplemented final prospectus.

              (b) In  connection  with  any  registration  statement  in which a
         holder of  Registrable  Securities is  participating,  each such holder
         will indemnify, to the extent permitted by applicable law, the Company,
         its officers and  directors  and each Person,  if any, who controls the
         Company within the meaning of Section 15 of the Securities Act, against
         any losses,  claims,  damages,  liabilities  (or proceedings in respect
         thereof) and expenses  resulting  from any untrue  statement or alleged
         untrue statement of a material fact or any omission or alleged omission
         of a material fact required to be stated in the registration  statement
         or prospectus  or  preliminary  prospectus or any amendment  thereof or
         supplement  thereto or  necessary  to make the  statements  therein not
         misleading,  but only to the  extent  that  such  untrue  statement  is
         contained  in or such  omission is from  information  so  furnished  in
         writing by such holder  expressly  for use therein,  provided that such
         holder's  obligations  hereunder shall be limited to an amount equal to

                                       26
                                    - 374 -
<PAGE>

         the proceeds to such holder of the Registrable Securities sold pursuant
         to such registration statement.

              (c) Any Person entitled to indemnification under the provisions of
         this Section 9.6 shall (x) give prompt notice to the indemnifying party
         of any claim with  respect to which it seeks  indemnification  (but the
         failure of any  indemnified  party to give  notice as  provided  herein
         shall not relieve the indemnifying  party of its obligations  under the
         preceding  subdivisions  of this Section 9.6, except to the extent that
         the indemnifying party is actually  prejudiced by such failure) and (y)
         unless in such indemnified  party's  reasonable  judgment a conflict of
         interest between such indemnified and indemnifying parties may exist in
         respect of such  claim,  permit such  indemnifying  party to assume the
         defense of such claim,  with  counsel  reasonably  satisfactory  to the
         indemnified party; and if such defense is so assumed, such indemnifying
         party  shall not enter into any  settlement  without the consent of the
         indemnified  party  if  such  settlement  attributes  liability  to the
         indemnified party and such  indemnifying  party shall not be subject to
         any liability for any settlement  made without its consent (which shall
         not be unreasonably  withheld);  and any underwriting agreement entered
         into with respect to any registration statement provided for under this
         Agreement shall so provide.  In the event an  indemnifying  party shall
         not be entitled,  or elects not, to assume the defense of a claim, such
         indemnifying  party shall not be obligated to pay the fees and expenses
         of more than one counsel or firm of counsel for all parties indemnified
         by such  indemnifying  party in  respect of such  claim,  unless in the
         reasonable  judgment  of any  such  indemnified  party  a  conflict  of
         interest may exist between such indemnified party and any other of such
         indemnified  parties in respect to such  claim.  Such  indemnity  shall
         remain in full force and effect regardless of any investigation made by
         or on behalf of a participating holder of Registrable  Securities,  its
         officers,  directors or any Person, if any, who controls such holder as
         aforesaid,  and shall  survive the transfer of such  securities by such
         holder.

              (d) If the indemnification  provided for in this Section 9.6 shall
         for any reason be held by a court to be  unavailable  to an indemnified
         party under Section 9.6(a) or (b) hereof in respect of any loss, claim,
         damage or liability, or any action in respect thereof, then, in lieu of
         the amount paid or payable under Section 9.6(a) or (b), the indemnified
         party and the  indemnifying  party  under  Section  9.6(a) or (b) shall
         contribute to the aggregate  losses,  claims,  damages and  liabilities
         (including  legal or other expenses  reasonably  incurred in connection
         with  investigating the same), (x) in such proportion as is appropriate
         to  reflect  the  relative  fault of the  Company  and the  prospective
         sellers of Registrable Securities covered by the registration statement
         which resulted in such loss, claim,  damage or liability,  or action or
         proceeding  in  respect  thereof,  with  respect to the  statements  or
         omissions which resulted in such loss, claim,  damage or liability,  or
         action or proceeding in respect thereof,  as well as any other relevant
         equitable  considerations  or (y) if the allocation  provided by clause
         (x) above is not  permitted by  applicable  law, in such  proportion as
         shall be appropriate to reflect the relative  benefits  received by the
         Company  and  such  prospective   sellers  from  the  offering  of  the
         securities covered by such registration  statement,  provided, that for
         purposes of clauses (x) or (y), the relative  benefits  received by the

                                       27
                                    - 375 -
<PAGE>

         prospective  sellers  shall be  deemed  not to  exceed  the  amount  of
         proceeds  received  by  such  prospective  sellers  and  no  holder  of
         Registrable  Securities  shall be required to contribute  any amount in
         excess of the amount such holder could have been  required to pay to an
         indemnified party if the indemnity under subsection (a) of this Section
         9.6 was  available.  No Person guilty of  fraudulent  misrepresentation
         (within the meaning of Section  11(f) of the  Securities  Act) shall be
         entitled  to  contribution  from any  Person who was not guilty of such
         fraudulent  misrepresentation.  Such sellers' obligations to contribute
         as provided in this  Section  9.6(d) are several in  proportion  to the
         relative value of their respective  Registrable  Securities  covered by
         such registration statement and not joint. In addition, no Person shall
         be obligated  to  contribute  hereunder  any amounts in payment for any
         settlement  of any  action  or claim  effected  without  such  Person's
         consent, which consent shall not be unreasonably withheld.

              (e) Indemnification and contribution  similar to that specified in
         the  preceding  subdivisions  of this  Section  9.6  (with  appropriate
         modifications)  shall be  given  by the  Company  and  each  seller  of
         Registrable  Securities  with respect to any required  registration  or
         other  qualification  of  securities  under any federal or state law or
         regulation of any governmental authority other than the Securities Act.

              (f) An  indemnifying  party  shall make  payments  of all  amounts
         required  to be  made  pursuant  to the  foregoing  provisions  of this
         Section 9.6 to or for the account of the indemnified party from time to
         time  promptly  upon receipt of bills or invoices  relating  thereto or
         when otherwise due or payable.

              9.7. Adjustments  Affecting  Registrable  Securities.  The Company
will not  effect or permit to occur any  combination  or  subdivision  of shares
which  would  materially  and  adversely  affect the  ability of the  holders of
Registrable   Securities   to  include  such   Registrable   Securities  in  any
registration   of  its  securities   contemplated  by  this  Section  9  or  the
marketability of such Registrable Securities under any such registration.

              9.8.  Other  Registration  of Common  Stock.  If any shares of the
Common Stock  required to be reserved for purposes of issuance  upon exercise of
this Warrant in connection with their sale in a registration pursuant to Section
9.1 require  registration  with or approval of any governmental  authority under
any federal or state law (other than the Securities  Act) before such shares may
be  issued  upon  such  exercise,  the  Company  will,  at  its  expense  and as
expeditiously as possible,  use its best efforts to cause such shares to be duly
registered or approved, as the case may be.

              9.9. Nominees for Beneficial  Owners. For purposes of this Section
9, in the event that any  Registrable  Securities  are held by a nominee for the
beneficial owner thereof, the beneficial owner thereof may, at its election,  be
treated as the holder of such Registrable Securities for purposes of any request
or other action by any holder or holders of Registrable  Securities  pursuant to
this Section 9 or any  determination  of any number or  percentage  of shares of
Registrable  Securities held by any holder or holders of Registrable  Securities
contemplated  by this  Section  9. If the  beneficial  owner of any  Registrable

                                       28
                                    - 376 -
<PAGE>

Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.

              9.10.  Rule 144 and Rule 144A.  The Company shall take all actions
reasonably  necessary to enable holders of  Registrable  Securities to sell such
securities  without  registration under the Securities Act within the limitation
of the  provisions of Rule 144 and Rule 144A under the  Securities  Act, as such
rules may be amended  from time to time,  or any  similar  rules or  regulations
hereafter adopted by the Commission,  including, without limitation, filing on a
timely basis all reports required to be filed pursuant to the Exchange Act.

         10.  Availability of Information.  The Company will cooperate with each
holder of any  Restricted  Securities in supplying  such  information  as may be
necessary for such holder to complete and file any  information  reporting forms
presently  or  hereafter  required  by  the  Commission  as a  condition  to the
availability  of an  exemption  from  the  Securities  Act for  the  sale of any
Restricted  Securities.  The Company will furnish to the holder of this Warrant,
promptly upon their  becoming  available,  copies of all  financial  statements,
reports,  notices and proxy  statements sent or made available  generally by the
Company to its stockholders,  and copies of all regular and periodic reports and
all  registration  statements  and  prospectuses  filed by the Company  with any
securities exchange or with the Commission.

         11.  Reservation  of Stock,  Etc. The Company will at all times reserve
and keep  available,  solely for  issuance and  delivery  upon  exercise of this
Warrant, the number of shares of Common Stock (or Other Securities) from time to
time issuable upon exercise of this Warrant at the time outstanding.  All shares
of Common Stock (or Other  Securities) shall be duly authorized and, when issued
upon such exercise,  shall be validly  issued and, in the case of shares,  fully
paid and nonassessable, with no liability on the part of the holders thereof.

         12. Listing on Securities  Exchange.  The Company will (a) list on each
national  securities  exchange  on which  any  Common  Stock  may at any time be
listed,  subject to official  notice of issuance  upon exercise of this Warrant,
and will  maintain such listing of, all shares of Common Stock from time to time
issuable upon exercise of this Warrant or (b) secure and maintain designation of
all shares of Common  Stock from time to time  issuable  upon  exercise  of this
Warrant as a NASDAQ "national market system security" within the meaning of Rule
llAa2-1 of the Commission or, failing that, secure NASDAQ authorization for such
shares of Common Stock.

         13. Ownership, Transfer and Substitution of Warrants.

              13.1.  Ownership of Warrants.  The Company may treat the person in
whose name this  Warrant is  registered  on the register  kept at the  principal
office  of the  Company  as the  owner  and  holder  thereof  for all  purposes,

                                       29
                                    - 377 -
<PAGE>

notwithstanding any notice to the contrary, except that, if and when any Warrant
is properly  assigned in blank,  the Company may (but shall not be obligated to)
treat  the  bearer  thereof  as the  owner  of such  Warrant  for all  purposes,
notwithstanding any notice to the contrary.  Subject to Section 8, a Warrant, if
properly  assigned,  may be exercised by a new holder without first having a new
Warrant issued.

              13.2. Transfer and Exchange of Warrants. Upon the surrender of any
Warrant,  properly endorsed, for registration of transfer or for exchange at the
principal  office of the Company,  the Company at its expense  will  (subject to
compliance  with  Section 8, if  applicable)  execute and deliver to or upon the
order of the  holder  thereof  a new  Warrant  or  Warrants  of like  tenor,  in
denominations  of at least 1,000  shares,  in the name of such holder or as such
holder  (upon  payment  by such  holder of any  applicable  transfer  taxes) may
direct,  calling in the aggregate on the face or faces thereof for the number of
shares  of  Common  Stock  called  for on the face or faces  of the  Warrant  or
Warrants so surrendered.

              13.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss,  theft or  destruction of any Warrant
held by a Person other than the Purchaser or any  institutional  investor,  upon
delivery of indemnity reasonably  satisfactory to the Company in form and amount
or, in the case of any such  mutilation,  upon  surrender  of such  Warrant  for
cancellation at the principal office of the Company,  the Company at its expense
will execute and deliver, in lieu thereof, a new Warrant of like tenor.

         14. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

              Acquiring Person: the continuing or surviving corporation or other
entity  of a  consolidation  or  merger  with the  Company  (if  other  than the
Company),  the transferee of  substantially  all of the properties and assets of
the Company,  the corporation or other entity consolidating with or merging into
the Company in a  consolidation  or merger in  connection  with which the Common
Stock is changed into or exchanged  for stock or other  securities  of any other
Person  or  cash  or  any  other  property,   or,  in  the  case  of  a  capital
reorganization or reclassification, the Company.

              Acquisition Price: as applied to the Common Stock, with respect to
any transaction to which Section 3 applies, (a) the price per share equal to the
greater of the  following,  determined  in each case as of the date  immediately
preceding the date of consummation of such transaction:  (x) the Market Price of
the Common  Stock and (y) the highest  amount of cash plus the Fair Value of the
highest  amount of securities or other property which the holder of this Warrant
would have been entitled as a shareholder to receive upon such  consummation  if
such holder had exercised this Warrant  immediately  prior thereto,  or (b) if a
purchase, tender or an exchange offer is made by the Acquiring Person (or by any
of its affiliates) to the holders of the Common Stock and such offer is accepted
by the holders of more than 50% of the outstanding  shares of Common Stock,  the
greater of (i) the price determined in accordance with the foregoing subdivision
(a),  and (ii) the  price  per  share  equal to the  greater  of the  following,
determined in each case as of the date  immediately  preceding the acceptance of
such offer by the holders of more than 50% of the  outstanding  shares of Common

                                       30
                                    - 378 -
<PAGE>

Stock:  (A) the Market Price of the Common  Stock and (B) the highest  amount of
cash plus the Fair Value of the highest  amount of securities or other  property
which the holder of this Warrant would be entitled as a  shareholder  to receive
pursuant to such offer if such holder had  exercised  this  Warrant  immediately
prior to the expiration of such offer and accepted the same.

              Additional Shares of Common Stock: all shares (including  treasury
shares) of Common  Stock  issued or sold (or,  pursuant  to Section  2.3 or 2.4,
deemed to be issued)  by the  Company  after the  Initial  Date,  whether or not
subsequently  reacquired  or  retired by the  Company,  other than (a) shares of
Common  Stock  issued upon the  exercise of any  Warrants  and (b) not more than
3,010,000  shares of Common  Stock  issued upon the  exercise  of stock  options
granted to directors,  officers and other  employees of the Company  pursuant to
the DTN Stock Option Plan of 1989, as amended, and the DTN Non-Employee Director
Option Plan, as amended, and (c) 75,000 shares of Common Stock issuable upon the
exercise of existing warrants.

              Base Price:  on any date specified  herein,  the lesser of (a) the
Current Market Price or (b) the Warrant Price.

              Business  Day:  any day other than a Saturday or a Sunday or a day
on which commercial banking  institutions in the City of New York are authorized
by law to be closed,  provided  that,  in  determining  the period  within which
certificates or Warrants are to be issued and delivered  pursuant to Section 1.3
at a time when  shares of Common  Stock  (or  Other  Securities)  are  listed or
admitted   to  trading  on  any   national   securities   exchange   or  in  the
over-the-counter  market and in  determining  the Market Price of any securities
listed or  admitted  to trading on any  national  securities  exchange or in the
over-the-counter  market,  "Business  Day" shall mean any day when the principal
exchange in which  securities are then listed or admitted to trading is open for
trading or, if such securities are traded in the over-the-counter  market in the
United States, such system is open for trading, and provided,  further, that any
reference to "days"  (unless  Business Days are  specified)  shall mean calendar
days.

              Commission:  the Securities  and Exchange  Commission or any other
Federal agency at the time administering the Securities Act or the Exchange Act,
whichever is the relevant statute for the particular purpose.

              Common  Stock:  the Company's  common  stock,  par value $.001 per
share, as constituted on the date hereof, any stock into which such common stock
shall have been changed or any stock resulting from any reclassification of such
common stock, and all other stock of any class or classes  (however  designated)
of the  Company the holders of which have the right,  without  limitation  as to
amount,  either to all or to a share of the  balance  of current  dividends  and
liquidating  dividends after the payment of dividends and  distributions  on any
shares entitled to preference.

              Company:   Data  Transmission  Network  Corporation,   a  Delaware
corporation.

                                       31
                                    - 379 -
<PAGE>

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

              Current  Market  Price:  on any date  specified  herein,  (a) with
respect  to  Common  Stock or to  Voting  Common  Stock  (or  equivalent  equity
interests)  of an Acquiring  Person or its Parent,  (x) the average daily Market
Price during the period of the most recent 20  consecutive  Business Days ending
on such date,  or (y) if shares of Common Stock or such Voting  Common Stock (or
equivalent  equity  interests),  as the case  may be,  are not  then  listed  or
admitted to trading on any national  securities  exchange and if the closing bid
and  asked   prices   thereof   are  not  then  quoted  or   published   in  the
over-the-counter  market, the Market Price on such date; and (b) with respect to
any other securities, the Market Price on such date.

              Exchange Act: the Securities  Exchange Act of 1934, or any similar
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time of determination.

              Fair Value: with respect to any securities or other property,  the
fair value  thereof as of a date which is within 15 days of the date as of which
the  determination  is to be made (a)  determined  by an  agreement  between the
Company  and the  Requisite  Holders  or (b) if the  Company  and the  Requisite
Holders fail to agree,  determined jointly by an independent  investment banking
firm  retained by the  Company and by an  independent  investment  banking  firm
retained by the Requisite  Holders,  either of which firms may be an independent
investment  banking firm regularly retained by the Company or any such holder or
(c) if the  Company  or such  holders  shall  fail so to retain  an  independent
investment  banking firm within five Business Days of the retention of such firm
by such holders or the  Company,  as the case may be,  determined  solely by the
firm so  retained  or (d) if the firms so  retained  by the  Company and by such
holders shall be unable to . reach a joint determination within 15 Business Days
of the retention of the last firm so retained, determined by another independent
investment  banking firm which is not a regular  investment  banking firm of the
Company  or any such  holder  chosen by the first  two such  firms.  Each of the
Company and the holders of the Warrants  shall be  responsible  for the fees and
expenses of the  investment  banking firm  retained by them under the  foregoing
clause (b) and shall  share  equally  the fees and  expenses  of any  investment
banking firm retained under the foregoing clause (d).

              Initial Date: the meaning specified in Section 2.2.

              Market Price:  on any date specified  herein,  (a) with respect to
Common Stock or to Voting Common Stock (or  equivalent  equity  interests) of an
Acquiring Person or its Parent,  the amount per share equal to (x) the last sale
price of shares of such security,  regular way, on such date or, if no such sale
takes  place on such date,  the  average  of the  closing  bid and asked  prices
thereof on such  date,  in each case as  officially  reported  on the  principal
national  securities  exchange  on which the same are then listed or admitted to
trading,  or (y) if no shares of such  security  are then  listed or admitted to
trading on any national securities exchange but such security is designated as a

                                       32
                                    - 380 -
<PAGE>

national  market  system  security by the NASD,  the last trading  price of such
security on such date, or if such security is not so designated,  the average of
the reported  closing bid and asked prices  thereof on such date as shown by the
NASDAQ  system  or, if no shares  thereof  are then  quoted in such  system,  as
published  by the  National  Quotation  Bureau,  Incorporated  or any  successor
organization,  and in either case as reported by any member firm of the New York
Stock Exchange selected by the Company, or (z) if no shares of such security are
then listed or admitted to trading on any national  exchange or  designated as a
national  market system  security and if no closing bid and asked prices thereof
are then so quoted or published in the  over-the-counter  market,  the higher of
(x) the book value thereof as  determined  by agreement  between the Company and
the  Requisite  Holders,  or if the Company and the  Requisite  Holders  fail to
agree,  by any firm of independent  public  accountants  of recognized  standing
selected by the Board of  Directors  of the  Company,  as of the last day of any
month ending within 60 days preceding the date as of which the  determination is
to be made and (y) the fair value thereof  determined in good faith by the Board
of Directors of the Company  thereof as of a date which is within 15 days of the
date as of which the  determination  is to be made;  and (b) with respect to any
other securities,  the fair value thereof  determined in good faith by the Board
of  Directors of the Company as of a date which is within 15 days of the date as
of which the determination is to be made.

              Maximum Number of Shares: the meaning specified in Section 9.1(b).

              Merger Agreement:  the meaning specified in the opening paragraphs
of this Warrant.

              NASD: the National Association of Securities Dealers.

              NASDAO: the Automated Quotation System of the NASD.

              Options: rights, options or warrants to subscribe for, purchase or
otherwise  acquire  either  Additional  Shares  of Common  Stock or  Convertible
Securities.

              Other  Securities:  any stock (other than Common  Stock) and other
securities of the Company or any other Person (corporate or otherwise) which the
holder of this  Warrant at any time shall be entitled to receive,  or shall have
received, upon the 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 or otherwise.

              Parent:  as to any  Acquiring  Person,  any  corporation  or other
Person which (a) controls the Acquiring  Person  directly or indirectly  through
one or more  intermediaries,  (b) is required to include the Acquiring Person in
its  consolidated  financial  statements  under  generally  accepted  accounting
principles  and  (c) is  not  itself  included  in  the  consolidated  financial
statements of any other Person (other than its consolidated subsidiaries).

                                       33
                                    - 381 -
<PAGE>

              Person: an individual,  a partnership,  limited liability company,
an  association,  a joint  venture,  a  corporation,  a  business,  a trust,  an
unincorporated  organization  or a  government  or  any  department,  agency  or
subdivision thereof.

              Public  Offering:  any  offering  of  Common  Stock to the  public
pursuant to an effective registration statement under the Securities Act.

              Registrable Securities: (a) this Warrant, (b) any shares of Common
Stock or Other  Securities  issued or issuable upon exercise of this Warrant and
(c) any securities  issued or issuable with respect to any Common Stock or Other
Securities  referred  to in  subdivision  (b) by way of stock  dividend or stock
split or in connection with a combination of shares,  recapitalization,  merger,
consolidation  or  other  reorganization  or  otherwise.  As to  any  particular
Registrable   Securities,   once  issued  such  securities  shall  cease  to  be
Registrable  Securities  when (x) a  registration  statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement,  (y) they  shall have been sold as  permitted  under Rule 144 (or any
successor  provision) under the Securities Act, or (z) they shall have ceased to
be outstanding.

              Registration  Expenses:  all  expenses  incident to the  Company's
performance of or compliance with Section 9, including,  without limitation, all
registration,  filing and NASD fees,  all fees and  expenses of  complying  with
securities  or blue sky laws,  all word  processing,  duplicating  and  printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for  the  Company  and of its  independent  public  accountants,  including  the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance  (provided that "Registration  Expenses" will
not  include  any "cold  comfort"  letter  requested  solely by the  holders  of
Registrable  Securities in connection with any registration if the Company shall
not have  elected or been  required  by the  underwriters  with  respect to such
registration  to cause such a letter to be delivered),  the reasonable  fees and
disbursements of a single counsel and single firm of accountants retained by the
holders of the Registrable Securities being registered, premiums and other costs
of policies of insurance against  liabilities arising out of the public offering
of the Registrable Securities being registered and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting  discounts and commissions  and transfer  taxes,  if any,  provided
that,  in any  case  where  Registration  Expenses  are not to be  borne  by the
Company,  such  expenses  shall not  include  salaries of Company  personnel  or
general  overhead  expenses of the  Company,  auditing  fees,  premiums or other
expenses  relating  to  liability  insurance  required  by  underwriters  of the
Company, or other expenses for the preparation of financial  statements or other
data normally  prepared by the Company in the ordinary course of its business or
which the Company would have incurred in any event.

              Requesting Holder: the meaning specified in Section 9.5.

              Requisite Holders: the holders of more than 50% of the Registrable
Securities issued and outstanding at such time.

                                       34
                                    - 382 -
<PAGE>

              Restricted  Securities:  (a) any Warrants  bearing the  applicable
legend  set forth in  Section  8.1,  (b) any  shares  of Common  Stock (or Other
Securities)  which have been issued upon the  exercise of Warrants and which are
evidenced by a certificate or  certificates  bearing the  applicable  legend set
forth in such Section 8.1, and (c) unless the context  otherwise  requires,  any
shares of Common Stock (or Other Securities) which are at the time issuable upon
the  exercise of Warrants  and which,  when so issued,  will be  evidenced  by a
certificate or certificates  bearing the applicable  legend set forth in Section
8.1.

              Securities Act: the Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder,  all as the
same shall be in effect at the time of determination.

              Subsidiary: any corporation,  association or other business entity
a majority  (by number of votes) of the Voting  Common  Stock of which is at the
time owned by the Company or by one or more  Subsidiaries  or by the Company and
one or more Subsidiaries.

              Transfer:   unless  the  context  otherwise  requires,  any  sale,
assignment,  pledge or other  disposition  of any  security,  or of any interest
therein, which could constitute a "sale" as that term is defined in Section 2(3)
of the Securities Act.

              Voting Common Stock: with respect to any corporation,  association
or other business entity, stock of any class or classes (or equivalent interest)
, if the holders of the stock of such class or classes (or equivalent interests)
are  ordinarily,  in the  absence  of  contingencies,  entitled  to vote for the
election  of  a  majority  of  the  directors  (or  persons  performing  similar
functions) of such  corporation,  association  or business  entity,  even if the
right so to vote has been suspended by the happening of such a contingency.

              Warrant Price: the meaning specified in Section 2.1.

              Warrants: the Common Stock Purchase Warrants issued by the Company
under the Merger Agreement.

         15.  Remedies.  The Company  stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened  default by the
Company  in the  performance  of or  compliance  with  any of the  terms of this
Warrant  are not and  will not be  adequate  and  that,  to the  fullest  extent
permitted by law,  such terms may be  specifically  enforced by a decree for the
specific  performance  of any  agreement  contained  herein or by an  injunction
against a violation of any of the terms hereof or otherwise.

         16. No Rights or Liabilities as Stockholder.  Nothing contained in this
Warrant  shall be construed as  conferring  upon the holder hereof any voting or
other rights as a stockholder  of the Company or as imposing any  liabilities on
such holder to purchase  any  securities  or as a  stockholder  of the  Company,

                                       35
                                    - 383 -
<PAGE>

whether  such  liabilities  are  asserted  by the  Company  or by  creditors  or
stockholders of the Company or otherwise.

         17. Notices.  All notices and other  communications  under this Warrant
shall be in writing and shall be mailed by registered or certified mail,  return
receipt requested,  addressed (a) if to the holder of this Warrant or any holder
of any Common Stock (or Other  Securities),  at the  registered  address of such
holder as set forth in the register kept at the principal office of the Company,
or (b) if to the Company, to the attention of its Chief Financial Officer at its
principal office, provided that the exercise of any Warrant shall be effected in
the manner provided in Section 1.

         18.  Expiration;  Notice.  The  Company  will  give the  holder of this
Warrant no less than 45 days' nor more than 90 days' notice of the expiration of
the right to exercise  this  Warrant.  The right to exercise  this Warrant shall
expire at 3 P.M., New York City time, December 11, 2005. The registration rights
provided in Section 9 shall expire at 3 P.M.,  New York City time,  December 11,
2005 with respect to any shares of Common Stock issued  previously  to such time
upon the exercise hereof.

         19.  Miscellaneous.  This  Warrant  and any term hereof may be changed,
waived,  discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.  The  agreements of the Company  contained in this Warrant other than
those  applicable  solely to the Warrants and the holders thereof shall inure to
the  benefit of and be  enforceable  by any holder or holders at the time of any
Common Stock (or Other Securities) issued upon the exercise of Warrants, whether
so expressed or not.  This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of New York. The section  headings in
this Warrant are for  purposes of  convenience  only and shall not  constitute a
part hereof.


                                           DATA TRANSMISSION NETWORK CORPORATION



                                           By: ________________________________
                                           Its: _______________________________




                                       36
                                    - 384 -
<PAGE>



                              FORM OF SUBSCRIPTION

(To be executed only upon exercise of Warrant)

To:  _______________________

         The  undersigned   registered  holder  of  the  within  Warrant  hereby
irrevocably exercises such Warrant for, and purchases  thereunder,  ____________
shares of Common  Stock of Data  Transmission  Network  Corporation,  a Delaware
corporation,  and herewith makes payment of $____________ therefor, and requests
that   the   certificates   for  such   shares   be   issued   in  the  name  of
____________________________, and delivered to __________________, whose address
is ____________________________.

Dated:  ___________________.



                                      ------------------------------------
                                      (Signature  must  conform in all respects
                                      to the name of holder as specified on the
                                      face of this Warrant)

                                      [insert address]

                                       37
                                    - 385 -
<PAGE>

                               FORM OF ASSIGNMENT

(To be executed only upon transfer of Warrant)

         For value  received,  the undersigned  registered  holder of the within
Warrant hereby sells,  assigns and transfers  unto  ____________________________
the right represented by such Warrant to purchase shares of Common Stock of Data
Transmission Network Corporation, a Delaware corporation,  to which such Warrant
relates, and appoints  ______________________  Attorney to make such transfer on
the books of _________________  maintained for such purpose,  with full power of
substitution in the premises.

Dated:  _________________.



                                     ------------------------------------
                                     (Signature  must  conform in all respects 
                                     to the name of holder as specified on the
                                     face of this Warrant)

                                     [insert address]

Signed in the presence of:


----------------------------
                                       38
                                    - 386 -