DATA TRANSMISSION NETWORK CORPORATION











                          COMMON STOCK PURCHASE WARRANT











                           Expiring December 11, 2005










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                                TABLE OF CONTENTS

                                                                           Page

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 ABRY Broadcast  Partners
II, L.P., a Delaware limited partnership,  or registered assigns, is entitled to
purchase from the Company 14,824 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

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      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 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 in the name

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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 2.4)
without  consideration or for a consideration per share less than the Base Price

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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 Additional  Shares of Common

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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)
are  convertible  or  exchangeable  pursuant to the  operation of  anti-dilution

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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  consideration
      which covers  both,  all  Additional  Shares of Common  Stock,  Options or

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      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 options issued

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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
                                    - 398 -
<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


                                    
                                       13
                                    - 399 -
<PAGE>

or  Section  15(d)  of the  Exchange  Act,  and such  Voting  Common  Stock  (or
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


                                       14
                                    - 400 -
<PAGE>

      or other impairment. Without limiting the 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
                                    - 401 -
<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
                                    - 402 -
<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
                                    - 403 -
<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 time after
      giving  written  notice of its  intention to register any  securities  and


                                       18
                                    - 404 -
<PAGE>

      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 rights,
            then the shares of Common Stock or Other  Securities that such other


                                       19
                                    - 405 -
<PAGE>

            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  after  such


                                       20
                                    - 406 -
<PAGE>

      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


                                       21
                                    - 407 -
<PAGE>

            Expense",  is to be  delivered  only at the  request  of, 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 after the effective


                                       22
                                    - 408 -
<PAGE>

      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
                                    - 409 -
<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 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


                                       24
                                    - 410 -
<PAGE>

            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 any  untrue
      statement or alleged untrue  statement of a material fact contained in any


                                       25
                                    - 411 -
<PAGE>

      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


                                       26
                                    - 412 -
<PAGE>

      hereunder  shall be limited  to an amount  equal to the  proceeds  to such
      holder of the Registrable  Securities  sold pursuant to such  registration
      statement.

            (c) 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


                                       27
                                    - 413 -
<PAGE>

      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 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


                                       28
                                    - 414 -
<PAGE>

contemplated  by this  Section  9. If the  beneficial  owner of any  Registrable
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,  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


                                       29
                                    - 415 -
<PAGE>

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
Stock:  (A) the Market Price of the Common  Stock and (B) the highest  amount of


                                       30
                                    - 416 -
<PAGE>

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
                                    - 417 -
<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 national


                                       32
                                    - 418 -
<PAGE>

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
                                    - 419 -
<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
                                    - 420 -
<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


                                       35
                                    - 421 -
<PAGE>

      of the Company, 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: /s/ Joseph M. Urzendowski
                                          Its: Vice President - Operations




                                       36
                                    - 422 -
<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
                                    - 423 -
<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
                                    - 424 -