CERTIFICATE OF DESIGNATIONS, RIGHTS, PREFERENCES
                                 AND LIMITATIONS

                                       OF

                      SERIES C CONVERTIBLE PREFERRED STOCK

                                       OF

                            GLOBAL TECHNOLOGIES, LTD.

                                   ----------

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

                                   ----------

     Global  Technologies  Ltd., a corporation  organized and existing under the
General  Corporation  Law of the State of Delaware (the  "Corporation"),  hereby
certifies that the following  resolutions were adopted by the Board of Directors
of the  Corporation  on February ___, 2000 pursuant to authority of the Board of
Directors as required by Section 151 of the General Corporation Law of the State
of Delaware:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this  Corporation  (the "Board of  Directors" or the "Board") in
accordance  with the  provisions  of its Amended  and  Restated  Certificate  of
Incorporation,  the  Board  of  Directors  hereby  designates  a  series  of the
Corporation's  previously  authorized Preferred Stock, par value $0.01 per share
(the "Preferred Stock"), as its Series C Convertible Preferred Stock, and hereby
states the number of authorized  shares,  and the relative rights,  preferences,
limitations, privileges, powers and restrictions thereof are and shall be as set
forth on the attached Annex A.

     IN  WITNESS  WHEREOF,  the  Corporation  has  caused  this  Certificate  of
Designations,  Rights,  Preferences  and  Limitations  to be  signed by its duly
authorized officers on this ___ day of February, 2000.

                                    GLOBAL TECHNOLOGIES, LTD.


                                    By: /s/ S. Lance Silver
                                       -----------------------------------------
                                       Name: S. Lance Silver
                                       Title: Vice President and General Counsel
<PAGE>
                                     ANNEX A

     Section 1. DESIGNATION, AMOUNT AND PAR VALUE. The series of preferred stock
shall  be  designated  as its 5%  Series  C  Convertible  Preferred  Stock  (the
"PREFERRED  STOCK") and the number of shares so designated shall be 1,000 (which
shall not be subject  to  increase  without  the  consent of the  holders of the
Preferred Stock (each, a "HOLDER" and collectively,  the "HOLDERS")). Each share
of  Preferred  Stock shall have a par value of $.01 and a stated  value equal to
the sum of $10,000 plus all accrued  dividends to the date of  determination  to
the extent not previously  paid in cash in accordance with the terms hereof (the
"STATED VALUE").

     Section 2. DIVIDENDS.

     (a) Holders shall be entitled to receive,  out of funds  legally  available
therefor,  and the Company shall pay, cumulative dividends at the rate per share
(as a percentage of the Stated Value per share) of 5% per annum, payable on each
December 31, March 31, June 30 and  September 30 for so long as such share shall
be outstanding,  commencing March 31, 2000 (each such quarterly date is referred
to herein as a "DIVIDEND  PAYMENT DATE"),  in cash or by accretion of the Stated
Value.  Subject to the terms and  conditions  herein,  the  decision  whether to
accrete dividends  hereunder to the Stated Value or to pay for dividends in cash
shall be at the discretion of the Company. The Company shall provide the Holders
written  notice of its  intention to accrete  dividends  hereunder to the Stated
Value or pay  dividends  in cash not less than ten days  prior to each  Dividend
Payment  Date for so long as shares of  Preferred  Stock  are  outstanding  (the
Company may indicate in such notice that the  election  contained in such notice
shall continue for later periods until revised).  Failure to timely provide such
written  notice  shall be deemed (if  permitted  hereunder)  an  election by the
Company to accrete  dividends  hereunder to the Stated  Value.  Dividends on the
Preferred Stock shall be calculated on the basis of a 365-day year, shall accrue
daily commencing on the Original Issue Date (as defined in Section 8), and shall
be deemed to accrue from such date whether or not earned or declared and whether
or not  there  are  profits,  surplus  or  other  funds of the  Company  legally
available for the payment of dividends.  Except as otherwise provided herein, if
at any time the  Company  pays  less than the total  amount  of  dividends  then
accrued on account of the Preferred  Stock,  such payment  shall be  distributed
ratably  among the Holders  based upon the number of shares of  Preferred  Stock
held by each Holder.  Any  dividends to be paid in cash  hereunder  that are not
paid within  three  Trading  Days (as defined in Section 8) following a Dividend
Payment Date shall continue to accrue and shall entail a late fee, which must be
paid in cash,  at the rate of 18% per  annum or the  lesser  rate  permitted  by
applicable  law (such fees to accrue  daily,  from the date such dividend is due
hereunder through and including the date of payment).

     (b) Notwithstanding  anything to the contrary contained herein, the Company
must pay dividends in cash if:

          (i) the number of shares of Common  Stock (as defined in Section 8) at
the time authorized, unissued and unreserved for all purposes is insufficient to
accrete such  dividends to the Stated Value to permit  conversion in full of all
outstanding Stated Value;

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<PAGE>
          (ii) after the Dividend  Effectiveness Date (as defined in Section 8),
Underlying  Shares (as defined in Section 8) (x) are not  registered  for resale
pursuant to an effective Underlying Shares Registration Statement (as defined in
Section 8) and (y) may not be sold without volume restrictions  pursuant to Rule
144  promulgated  under  the  Securities  Act (as  defined  in  Section  8),  as
determined  by counsel to the  Company  pursuant  to a written  opinion  letter,
addressed to the Company's  transfer agent in the form and substance  acceptable
to the  applicable  Holder and such transfer  agent (if the Company is permitted
and elects to pay  dividends  in shares of Common  Stock  under this clause (ii)
prior to the Dividend  Effectiveness  Date and  thereafter an Underlying  Shares
Registration Statement shall be declared effective by the Commission (as defined
in Section 8), the Company  shall,  within three  Trading Days after the date of
such declaration of effectiveness, exchange such Underlying Shares for shares of
Common Stock that are free of restrictive legends of any kind);

          (iii) the  Common  Stock is not then  listed  or quoted on the  Nasdaq
National Market  ("NASDAQ"),  or on the New York Stock Exchange,  American Stock
Exchange or Nasdaq SmallCap Market (each, a "SUBSEQUENT MARKET"); or

          (iv)  the  accretion  of  such  dividends  to  the  Stated  Value  and
subsequent  conversions of all then  outstanding  Stated Value would result in a
violation  of Section  5(a)(iii)  or the rules of the Nasdaq Stock Market or any
other rules and regulations  governing any Subsequent Market on which the Common
Stock is then listed or quoted for trading.

     (c) So long as any Preferred  Stock shall remain  outstanding,  neither the
Company nor any subsidiary  thereof shall redeem,  purchase or otherwise acquire
directly  or  indirectly  any Junior  Securities  (as defined in Section 8), nor
shall the Company directly or indirectly pay or declare any dividend or make any
distribution  (other than a dividend or  distribution  described in Section 5 or
dividends due and paid in the ordinary  course on preferred stock of the Company
at such  times when the  Company is in  compliance  with its  payment  and other
obligations  hereunder and except for the three-for-two  stock split effected by
way of a  dividend  of one  share  for each two  shares  outstanding  to  become
effective as of February 29, 2000 (the "Stock  Dividend"))  upon,  nor shall any
distribution be made in respect of, any Junior Securities,  nor shall any monies
be set aside for or applied to the  purchase  or  redemption  (through a sinking
fund or  otherwise)  of any  Junior  Securities  or shares  pari  passu with the
Preferred Stock.  Notwithstanding the foregoing, on January 1, 2000, the Company
exercised a call option to  repurchase  387,610  shares of Common Stock owned by
certain  shareholders  pursuant  to an  agreement  with such  shareholders  (the
"Common Stock  Redemption").  This  repurchase is scheduled to close on February
28, 2000. A portion of the proceeds from the sale of the securities will be used
to satisfy the Company's obligation pursuant to such repurchase.

     Section  3.  VOTING  RIGHTS.  Except as  otherwise  provided  herein and as
otherwise  required by law,  the  Preferred  Stock shall have no voting  rights.
However,  so long as any shares of Preferred Stock are outstanding,  the Company
shall not,  without  the  affirmative  vote of the  Holders of a majority of the
shares of the Preferred Stock then  outstanding,  (a) alter or change  adversely
the powers, preferences or rights given to the Preferred Stock or alter or amend

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<PAGE>
this  Certificate  of  Designation,  (b)  authorize or create any class of stock
ranking as to dividends or distribution of assets upon a Liquidation (as defined
in Section 4) senior to or otherwise  pari passu with the Preferred  Stock,  (c)
amend its certificate or articles of incorporation or other charter documents so
as to affect  adversely any rights of the Holders,  (d) increase the  authorized
number of shares of  Preferred  Stock,  or (e)  enter  into any  agreement  with
respect to the foregoing.

     Section 4. LIQUIDATION. Upon any liquidation,  dissolution or winding-up of
the Company,  whether  voluntary or involuntary (a  "LIQUIDATION"),  the Holders
shall be  entitled  to receive out of the assets of the  Company,  whether  such
assets are capital or surplus, for each share of Preferred Stock an amount equal
to the Stated Value per share before any  distribution  or payment shall be made
to the holders of any Junior Securities,  and if the assets of the Company shall
be  insufficient  to pay in full  such  amounts,  then the  entire  assets to be
distributed  to the Holders shall be  distributed  among the Holders  ratably in
accordance  with the respective  amounts that would be payable on such shares if
all amounts payable thereon were paid in full. A sale, conveyance or disposition
of 50% or more of the assets of the Company or the  effectuation  by the Company
of a transaction or series of related transactions in which more than 33% of the
voting power of the Company is disposed of, or a consolidation  or merger of the
Company with or into any other company or companies  into one or more  companies
not  wholly-owned  by the  Company  shall not be treated as a  Liquidation,  but
instead shall be subject to the  provisions of Section 5. The Company shall mail
written  notice  of any such  Liquidation,  not less  than 45 days  prior to the
payment date stated therein, to each record Holder.

     Section 5. CONVERSION.

     (a)(i) CONVERSIONS AT OPTION OF HOLDER. Each share of Preferred Stock shall
be convertible into shares of Common Stock (subject to the limitations set forth
in Section 5(a)(iii)), at the Conversion Ratio (as defined in Section 8), at the
option of the  Holder at any time and from time to time from and after the later
to occur of (x) the  Original  Issue Date and (y) March 5, 2000.  Holders  shall
effect conversions by surrendering the certificate or certificates  representing
the shares of Preferred Stock to be converted to the Company,  together with the
form of conversion notice attached hereto as EXHIBIT A (a "CONVERSION  NOTICE").
Each Conversion  Notice shall specify the number of shares of Preferred Stock to
be converted and the date on which such conversion is to be effected, which date
may not be  prior  to the  date  the  Holder  delivers  such  Conversion  Notice
(including by  facsimile)  (the  "CONVERSION  DATE").  If no Conversion  Date is
specified in a Conversion  Notice,  the Conversion Date shall be the date that a
Conversion  Notice is deemed  delivered  hereunder.  If the Holder is converting
less than all  shares of  Preferred  Stock  represented  by the  certificate  or
certificates  tendered  by  the  Holder  with  the  Conversion  Notice,  or if a
conversion  hereunder  cannot be effected  in full for any  reason,  the Company
shall  promptly  deliver  to such  Holder (in the manner and within the time set
forth in  Section  5(b)) a  certificate  representing  the  number  of shares of
Preferred Stock as have not been converted.

          (ii) AUTOMATIC CONVERSION. Subject to the provisions of this paragraph
and Section  5(a)(iii)(C),  all outstanding  shares of Preferred Stock for which
conversion notices have not previously been received or for which redemption has

                                       4
<PAGE>
not been made or required  hereunder  shall be  automatically  converted  on the
third  anniversary of the Original Issue Date at the then applicable  Conversion
Price (as defined herein).  The conversion  contemplated by this paragraph shall
not occur at such time as (a)(1) an Underlying Shares Registration  Statement is
not then  effective  or (2) the  Holder is not  permitted  to resell  Underlying
Shares pursuant to Rule 144(k)  promulgated  under the Securities  Act,  without
volume restrictions,  as evidenced by an opinion letter of counsel acceptable to
the  Holder  and the  transfer  agent for the  Common  Stock;  (b) there are not
sufficient shares of Common Stock authorized and reserved for issuance upon such
conversion;  or (c) the Company shall have defaulted in any material  respect on
its  covenants  and  obligations  hereunder or under the  Purchase  Agreement or
Registration  Rights  Agreement (each as defined in Section 8).  Notwithstanding
the foregoing,  the three-year period for conversion under this Section shall be
extended (on a day-for-day  basis) for any Trading Days after the Effective Date
(as  defined  in the  Purchase  Agreement)  that a Holder  is  unable  to resell
Underlying Shares under an Underlying Shares  Registration  Statement due to (a)
the Common  Stock not being  listed or quoted  for  trading on the NASDAQ or any
Subsequent  Market,  (b) the  failure  of such  Underlying  Shares  Registration
Statement  to be declared  effective,  or if so  declared,  to remain  effective
during  the  Effectiveness   Period  (as  defined  in  the  Registration  Rights
Agreement) as to all  Underlying  Shares,  or (c) the suspension of the Holder's
right to  resell  Underlying  Shares  thereunder.  The  provisions  of  Sections
5(a)(iii)(A)  and (B) shall not apply to any  automatic  conversion  pursuant to
this Section 5(a)(ii). The provisions of Section 5(a)(iii)(C) shall apply to any
automatic conversion pursuant to this Section 5(a)(ii).

          (iii) CERTAIN CONVERSION RESTRICTIONS.

               (A) A Holder may not convert shares of Preferred Stock or receive
shares of Common  Stock as payment of  dividends  hereunder  to the extent  such
conversion  or receipt of such  dividend  payment  would  result in the  Holder,
together  with any  affiliate  thereof,  beneficially  owning (as  determined in
accordance  with Section 13(d) of the Exchange Act (as defined in Section 8) and
the rules  promulgated  thereunder)  in excess of 4.999% of the then  issued and
outstanding  shares of Common Stock,  including  shares issuable upon conversion
of, and  payment of  dividends  on, the shares of  Preferred  Stock held by such
Holder after application of this Section. Since the Holder will not be obligated
to report to the Company the number of shares of Common Stock it may hold at the
time of a conversion  hereunder,  unless the conversion at issue would result in
the  issuance  of  shares  of  Common  Stock in  excess  of  4.999%  of the then
outstanding  shares of Common Stock without regard to any other shares which may
be beneficially  owned by the Holder or an affiliate  thereof,  the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent
that  the  Holder  determines  that the  limitation  contained  in this  Section
applies, the determination of which portion of the shares of Preferred Stock are
convertible  shall be the  responsibility  and obligation of the Holder.  If the
Holder has  delivered a Conversion  Notice for shares of  Preferred  Stock that,
without  regard to any  other  shares  that the  Holder  or its  affiliates  may
beneficially own, would result in the issuance in excess of the permitted amount
hereunder,  the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum number of shares of Preferred  Stock  permitted to be
converted on such Conversion  Date in accordance  with the periods  described in
Section 5(b) and, at the option of the Holder, either retain shares of Preferred

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<PAGE>
Stock  tendered for conversion in excess of the permitted  amount  hereunder for
future  conversions or return such excess shares of Preferred Stock permitted to
the Holder.  The  provisions of this Section may be waived by a Holder (but only
as to itself  and not to any  other  Holder)  upon not less  than 61 days  prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

               (B) A Holder may not convert shares of Preferred Stock or receive
shares of Common  Stock as payment of  dividends  hereunder  to the extent  such
conversion  or receipt of such  dividend  payment  would  result in the  Holder,
together  with any  affiliate  thereof,  beneficially  owning (as  determined in
accordance  with Section  13(d) of the  Exchange  Act and the rules  promulgated
thereunder)  in excess of 9.999% of the then  issued and  outstanding  shares of
Common  Stock,  including  shares  issuable upon  conversion  of, and payment of
dividends  on,  the  shares  of  Preferred  Stock  held  by  such  Holder  after
application of this Section. Since the Holder will not be obligated to report to
the  Company  the number of shares of Common  Stock it may hold at the time of a
conversion  hereunder,  unless  the  conversion  at issue  would  result  in the
issuance of shares of Common  Stock in excess of 9.999% of the then  outstanding
shares  of  Common  Stock  without  regard  to any  other  shares  which  may be
beneficially owned by the Holder or an affiliate thereof,  the Holder shall have
the authority and obligation to determine  whether the restriction  contained in
this Section will limit any  particular  conversion  hereunder and to the extent
that  the  Holder  determines  that the  limitation  contained  in this  Section
applies, the determination of which portion of the shares of Preferred Stock are
convertible  shall be the  responsibility  and obligation of the Holder.  If the
Holder has  delivered a Conversion  Notice for shares of  Preferred  Stock that,
without  regard to any  other  shares  that the  Holder  or its  affiliates  may
beneficially own, would result in the issuance in excess of the permitted amount
hereunder,  the Company shall notify the Holder of this fact and shall honor the
conversion for the maximum number of shares of Preferred  Stock  permitted to be
converted on such Conversion  Date in accordance  with the periods  described in
Section 5(b) and, at the option of the Holder, either retain shares of Preferred
Stock  tendered for conversion in excess of the permitted  amount  hereunder for
future  conversions or return such excess shares of Preferred Stock permitted to
the Holder.  The  provisions of this Section may be waived by a Holder (but only
as to itself  and not to any  other  Holder)  upon not less  than 61 days  prior
notice to the Company. Other Holders shall be unaffected by any such waiver.

               (C) If the Common  Stock is then listed for trading on the NASDAQ
or the Nasdaq  SmallCap  Market and the Company has not obtained the Shareholder
Approval  (as  defined  below),  then the  Company may not issue in excess of an
aggregate  of 1,439,730  shares of Common Stock (on or after  February 29, 2000,
the  effective  date of the  Stock  Dividend,  such  number  shall  increase  to
2,159,595) upon (i) any and all conversions of Preferred Stock and (ii) exercise
of  Redemption  Warrants (as defined in Section 8) at a price which is less than
the  closing  sales price of the Common  Stock on the  Trading  Day  immediately
preceding  the  Original  Issue  Date  (such  number of  shares,  the  "ISSUABLE
MAXIMUM"). The Issuable Maximum equals 19.999% of the number of shares of Common
Stock outstanding  immediately prior to the closing of transactions set forth in
the  Purchase  Agreement.  Each  Holder  shall be  entitled  to a portion of the
Issuable  Maximum  equal to the quotient  obtained by dividing (x) the number of
shares of Preferred  Stock issued and sold to such Holder on the Original  Issue
Date by (y) the  number of  shares of  Preferred  Stock  issued  and sold by the

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Company on the Original Issue Date. If any Holder shall no longer hold shares of
Preferred  Stock or Redemption  Warrants,  if any, then such Holder's  remaining
portion of the Issuable Maximum shall be allocated  pro-rata among the remaining
Holders. If on any Conversion Date (A) the shares of Common Stock are listed for
trading on the NASDAQ or the Nasdaq SmallCap  Market,  (B) the Conversion  Price
then in effect is such that the aggregate  number of shares of Common Stock that
would then be issuable upon conversion in full of all then outstanding shares of
Preferred Stock, together with any shares of Common Stock previously issued upon
conversion of shares of Preferred Stock and exercise of the Redemption Warrants,
if any,  at a price  which is less than the  closing  sales  price of the Common
Stock on the Trading Day  immediately  preceding the Original Issue Date,  would
exceed the  Issuable  Maximum,  and (C) the  Company  shall not have  previously
obtained the vote of shareholders (the "SHAREHOLDER  APPROVAL"),  if any, as may
be required by the applicable  rules and  regulations of the Nasdaq Stock Market
(or any successor entity) applicable to approve the issuance of shares of Common
Stock in excess of the Issuable Maximum  pursuant to the terms hereof,  then the
Company shall issue to the Holder  requesting a conversion a number of shares of
Common Stock equal to such Holder's  pro-rata portion (which shall be calculated
pursuant to the terms  hereof) of the Issuable  Maximum and, with respect to the
remainder of the  aggregate  Stated Value of the shares of Preferred  Stock then
held by such Holder for which a conversion  in  accordance  with the  Conversion
Price would  result in an  issuance of shares of Common  Stock in excess of such
Holder's  pro-rata  portion  (which  shall be  calculated  pursuant to the terms
hereof) of the Issuable  Maximum (the "EXCESS  STATED  VALUE"),  the  converting
Holder  shall have the option to require  the Company to either (1) use its best
efforts to obtain the Shareholder  Approval  applicable to such issuance as soon
as is possible, but in any event not later than the 75th day after such request,
or (2) pay cash to the  converting  Holder in an amount  equal to the  Mandatory
Redemption  Amount (as defined in Section 8) for the Excess Stated Value. If the
converting   Holder  shall  have  elected  the  first  option  pursuant  to  the
immediately  preceding  sentence and the Company shall have failed to obtain the
Shareholder Approval on or prior to the 75th day after such request, then within
three (3) days of such 75th day,  the Company  shall pay cash to the  converting
Holder an amount equal to the Mandatory  Redemption Amount for the Excess Stated
Value.  If the  Company  fails to pay the  Mandatory  Redemption  Amount in full
pursuant to this Section  within seven days after the date payable,  the Company
will pay  interest  thereon  at a rate of 18% per annum or such  lesser  maximum
amount that is permitted to be paid by applicable law, to the converting Holder,
accruing daily from the end of such seven-day period until such amount, plus all
such interest  thereon,  is paid in full. The Company and the Holder  understand
and agree that shares of Common Stock issued to and then held by the Holder as a
result of conversions of Preferred  Stock shall not be entitled to cast votes on
any resolution to obtain Shareholder Approval pursuant hereto.

     (b)(i) Not later than three Trading Days after each  Conversion  Date,  the
Company will deliver to the Holder (A) a certificate or certificates which shall
be free of  restrictive  legends  and  trading  restrictions  (other  than those
required by Section 3.1(b) of the Purchase Agreement) representing the number of
shares of Common Stock being acquired upon the conversion of shares of Preferred
Stock,  (B) one or more  certificates  representing  the  number  of  shares  of
Preferred  Stock not converted and (C) a bank check in the amount of accrued and
unpaid  dividends  (if the  Company  has  elected or is  required to pay accrued
dividends in cash).  Notwithstanding  the  foregoing or anything to the contrary

                                       7
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contained  herein,  the Company  shall not be  obligated  to issue  certificates
evidencing the shares of Common Stock issuable upon  conversion of any shares of
Preferred Stock until one Trading Day after certificates  evidencing such shares
of Preferred Stock are delivered for conversion to the Company, or the Holder of
such Preferred Stock notifies the Company that such certificates have been lost,
stolen or destroyed and provides a bond (or other adequate security)  reasonably
satisfactory  to the Company to indemnify  the Company from any loss incurred by
it in connection  therewith.  The Company shall,  upon request of the Holder, if
available,  use its best  efforts to deliver  any  certificate  or  certificates
required  to be  delivered  by the  Company  under this  Section  electronically
through  the  Depository  Trust  Corporation  or  another  established  clearing
corporation  performing  similar  functions.  If in the  case of any  Conversion
Notice such  certificate or certificates  are not delivered to or as directed by
the applicable  Holder by the third Trading Day after the  Conversion  Date, the
Holder  shall be entitled to elect by written  notice to the Company at any time
on or before its receipt of such  certificate  or  certificates  thereafter,  to
rescind such conversion, in which event the Company shall immediately return the
certificates representing the shares of Preferred Stock tendered for conversion.

          (ii) If the Company fails to deliver to the Holder such certificate or
certificates  pursuant to Section  5(b)(i),  by the third  Trading Day after the
Conversion  Date,  the Company shall pay to such Holder,  in cash, as liquidated
damages  and not as a  penalty,  $5,000  for each  Trading  Day after such third
Trading Day until such certificates are delivered.  Nothing herein shall limit a
Holder's  right to pursue actual  damages for the  Company's  failure to deliver
certificates  representing  shares of Common  Stock upon  conversion  within the
period  specified  herein  and such  Holder  shall  have the right to pursue all
remedies  available  to it  hereunder,  at law or in equity  including,  without
limitation, a decree of specific performance and/or injunctive relief.

          (iii) In addition to any other rights available to the Holder,  if the
Company fails to deliver to the Holder such certificate or certificates pursuant
to Section  5(b)(i),  by the third Trading Day after the Conversion Date, and if
after such third Trading Day the Holder purchases (in an open market transaction
or otherwise)  Common Stock to deliver in  satisfaction of a sale by such Holder
of the  Underlying  Shares  which the Holder was  entitled to receive  upon such
conversion  (a  "BUY-IN"),  then the Company shall (A) pay in cash to the Holder
the amount by which (x) the Holder's total purchase price  (including  brokerage
commissions,  if any) for the Common Stock so purchased  exceeds (y) the product
of (1) the  aggregate  number of shares of Common  Stock  that such  Holder  was
entitled to receive from the  conversion  at issue  multiplied by (2) the market
price of the Common  Stock at the time of the sale giving rise to such  purchase
obligation  and (B) at the  option of the  Holder,  either  return the shares of
Preferred  Stock for which such  conversion  was not  honored or deliver to such
Holder the number of shares of Common  Stock that would have been issued had the
Company  timely  complied with its  conversion  and delivery  obligations  under
Section  5(b)(i).  For example,  if the Holder  purchases  Common Stock having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of shares of Preferred  Stock with respect to which the market price
of the Underlying Shares on the date of conversion totaled $10,000, under clause
(A) of the immediately  preceding  sentence the Company shall be required to pay
the  Holder  $1,000.  The  Holder  shall  provide  the  Company  written  notice

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indicating  the  amounts  payable  to the  Holder in  respect  of the Buy-In and
provide  reasonable  evidence thereof (which shall consist solely of the records
evidencing the establishment of the position at issue) which shall be reasonably
satisfactory  to the Company.  Nothing  herein  shall limit a Holder's  right to
pursue  any  other  remedies  available  to it  hereunder,  at law or in  equity
including,   without  limitation,   a  decree  of  specific  performance  and/or
injunctive  relief  with  respect to the  Company's  failure  to timely  deliver
certificates  representing  shares of Common Stock upon conversion of the shares
of Preferred Stock as required pursuant to the terms hereof.

     (c)(i) The conversion  price for each share of Preferred Stock in effect on
any Conversion Date (the "CONVERSION PRICE") shall be determined, subject to the
provisions of this Section,  as follows:  Initially,  the Conversion Price shall
equal 120% of the average of the Per Share  Market  Values for the five  Trading
Days starting on and including March 1, 2000 (the "FIXED CONVERSION  PRICE"). On
the ninth month  anniversary of the Original  Issue Date and on each  subsequent
third month  anniversary  thereof (the ninth month  anniversary  of the Original
Issue Date and each third  month  anniversary  thereof,  being  measured  as the
actual date of such  anniversary  and not the  expiration  of the month in which
such date occurred, collectively, a "RESET DATE"), the Conversion Price shall be
the lesser of the Fixed  Conversion  Price and the lowest Reset Conversion Price
(as defined below)  calculated  hereunder.  A "RESET  CONVERSION PRICE" shall be
determined on each Reset Date and shall equal the average of the four (4) lowest
trading  prices of the Common Stock during the twenty  consecutive  Trading Days
immediately  preceding the  applicable  Reset Date,  PROVIDED,  that such twenty
Trading Day period  shall be extended for the number of Trading Days during such
period in which (A) trading in the Common  Stock is suspended by the NASDAQ or a
Subsequent  Market on which the Common  Stock is then  listed,  or (B) after the
date declared  effective by the Commission,  the Underlying Shares  Registration
Statement  is not  effective,  or (C) after the date  declared  effective by the
Commission,  the  Prospectus  included  in the  Underlying  Shares  Registration
Statement may not be used by the Holder for the resale of Underlying Shares.

          (ii) If the Company,  at any time while any shares of Preferred  Stock
are outstanding, shall (a) pay a stock dividend or otherwise make a distribution
or  distributions  on shares of its Junior  Securities or pari passu  securities
payable in shares of Common Stock,  (b) subdivide  outstanding  shares of Common
Stock into a larger number of shares,  (c) combine  outstanding shares of Common
Stock into a smaller  number of  shares,  or (d) issue by  reclassification  and
exchange of the Common Stock any shares of capital  stock of the  Company,  then
the Fixed  Conversion  Price  shall be  multiplied  by a  fraction  of which the
numerator shall be the number of shares of Common Stock outstanding  before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding  after such event.  Any  adjustment  made  pursuant to this  Section
5(c)(ii)  shall  become  effective  immediately  after the  record  date for the
determination of stockholders  entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision,  combination or re-classification.  Notwithstanding anything herein
to the contrary: (A) if the Stock Dividend shall become effective on or prior to
March 1, 2000 then the Fixed Conversion Price shall not be adjusted  pursuant to
this Section and (B) if the Stock Dividend shall become effective  subsequent to
March 1, 2000 then the Fixed Conversion Price shall be adjusted pursuant to this
Section.

                                       9
<PAGE>
          (iii) If the Company or any  subsidiary  thereof,  as applicable  with
respect to Common Stock  Equivalents (as defined  below),  at any time while any
shares of Preferred Stock are outstanding, shall issue shares of Common Stock or
rights,  warrants,  options or other securities or debt that is convertible into
or  exchangeable  for  shares  of Common  Stock  ("COMMON  STOCK  EQUIVALENTS"),
entitling any Person to acquire shares of Common Stock at a price per share less
than the  Conversion  Price (if the holder of the Common  Stock or Common  Stock
Equivalent so issued shall at any time,  whether by operation of purchase  price
adjustments, reset provisions,  floating conversion, exercise or exchange prices
or otherwise,  or due to warrants,  options or rights issued in connection  with
such  issuance,  be entitled to receive  shares of Common  Stock at a price less
than the  Conversion  Price,  such issuance shall be deemed to have occurred for
less than the Conversion  Price),  then the Conversion Price shall be multiplied
by a fraction,  the  numerator  of which shall be the number of shares of Common
Stock outstanding immediately prior to the issuance of such Common Stock or such
Common  Stock  Equivalents  plus the number of shares of Common  Stock which the
offering price for such shares of Common Stock or Common Stock Equivalents would
purchase at the Conversion  Price, and the denominator of which shall be the sum
of the number of shares of Common Stock  outstanding  immediately  prior to such
issuance  plus the  number  of shares  of  Common  Stock so issued or  issuable,
PROVIDED, that for purposes hereof, all shares of Common Stock that are issuable
upon  conversion,  exercise  or exchange of Common  Stock  Equivalents  shall be
deemed  outstanding   immediately  after  the  issuance  of  such  Common  Stock
Equivalents.  Such adjustment shall be made whenever such Common Stock or Common
Stock Equivalents are issued.  However,  upon the expiration of any Common Stock
Equivalents  the issuance of which  resulted in an adjustment in the  Conversion
Price  pursuant to this  Section,  if any such Common  Stock  Equivalents  shall
expire and shall not have been exercised, the Conversion Price shall immediately
upon  such  expiration  be  recomputed  and  effective   immediately  upon  such
expiration  be increased  to the price which it would have been (but  reflecting
any other adjustments in the Conversion Price made pursuant to the provisions of
this  Section  after the  issuance of such  Common  Stock  Equivalents)  had the
adjustment of the  Conversion  Price made upon the issuance of such Common Stock
Equivalents been made on the basis of offering for subscription or purchase only
that number of shares of the Common Stock  actually  purchased upon the exercise
of such Common Stock  Equivalents  actually  exercised.  The foregoing shall not
apply to any transaction  involving (i) issuances of securities as consideration
in a merger,  consolidation or acquisition of assets,  or in connection with any
strategic  partnership or joint venture (the primary  purpose of which is not to
raise equity capital),  or as  consideration  for the acquisition of a business,
product or license by the Company,  (ii) the issuance of securities  pursuant to
an  underwritten  public  offering,  (iii) the issuance of  securities  upon the
exercise or conversion of the Company's  options,  warrants or other convertible
securities  outstanding  as of the date hereof,  or (iv) the grant of additional
options or warrants,  or the issuance of additional  securities,  under any duly
authorized  Company stock option or restricted stock plan for the benefit of the
Company's employees or directors.

                                       10
<PAGE>
          (iv) If the Company,  at any time while shares of Preferred  Stock are
outstanding,  shall  distribute  to all  holders  of  Common  Stock  (and not to
Holders)  evidences  of its  indebtedness  or assets or  rights or  warrants  to
subscribe for or purchase any security  (excluding those referred to in Sections
5(c)(ii)-(iii) above), then in each such case the Conversion Price at which each
share of Preferred Stock shall thereafter be convertible  shall be determined by
multiplying the Conversion Price in effect  immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a  fraction  of which  the  denominator  shall  be the Per  Share  Market  Value
determined  as of the record date  mentioned  above,  and of which the numerator
shall be such Per  Share  Market  Value on such  record  date less the then fair
market  value at such  record  date of the portion of such assets or evidence of
indebtedness so distributed  applicable to one outstanding share of Common Stock
as determined by the Board of Directors, in its sole discretion,  in good faith.
In either case the adjustments shall be described in a statement provided to the
Holders of the portion of assets or evidences of  indebtedness so distributed or
such  subscription  rights  applicable  to  one  share  of  Common  Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

          (v) All calculations under this Section 5 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. The number of shares
of Common Stock  outstanding at any given time shall not include shares owned or
held by or for the  account  of the  Company,  and the  disposition  of any such
shares shall be considered an issue or sale of Common Stock.

          (vi)  Whenever the  Conversion  Price is adjusted  pursuant to Section
5(c)(ii),(iii)  or (iv) the Company shall promptly mail to each Holder, a notice
setting forth the  Conversion  Price after such  adjustment  and setting forth a
brief statement of the facts requiring such adjustment.

          (vii) In case of any  reclassification  of the  Common  Stock,  or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other securities,  cash or property (other than compulsory share exchanges which
constitute Change of Control  Transactions),  the Holders of the Preferred Stock
then  outstanding  shall have the right  thereafter  to convert such shares only
into the shares of stock and other securities, cash and property receivable upon
or deemed to be held by holders of Common Stock following such  reclassification
or share exchange, and the Holders of the Preferred Stock shall be entitled upon
such event to receive such amount of securities, cash or property as a holder of
the number of shares of Common  Stock of the  Company  into which such shares of
Preferred   Stock  could  have  been   converted   immediately   prior  to  such
reclassification  or share  exchange  would have been  entitled.  This provision
shall similarly apply to successive reclassifications or share exchanges.

          (viii) In case of any merger or  consolidation  of the Company with or
into another Person,  or sale by the Company of more than one-half of the assets
of  the  Company  (on  an as  valued  basis)  in  one  or a  series  of  related
transactions, a Holder shall have the right thereafter to (A) convert its shares
of  Preferred  Stock  into the  shares of stock and other  securities,  cash and
property  receivable  upon or  deemed  to be held by  holders  of  Common  Stock

                                       11
<PAGE>
following such merger,  consolidation or sale, and such Holder shall be entitled
upon  such  event or  series  of  related  events  to  receive  such  amount  of
securities,  cash and  property  as the  shares of Common  Stock into which such
shares of Preferred  Stock could have been converted  immediately  prior to such
merger,  consolidation  or sales would have been  entitled or (B)  exercise  its
rights to declare a  Triggering  Event (as  defined in  Section 7)  pursuant  to
Section 7.

          (ix) If (a)  the  Company  shall  declare  a  dividend  (or any  other
distribution)  on the Common  Stock  (other  than the Stock  Dividend),  (b) the
Company shall declare a special nonrecurring cash dividend on or a redemption of
the Common Stock, (c) the Company shall authorize the granting to all holders of
Common  Stock  rights or warrants  to  subscribe  for or purchase  any shares of
capital  stock  of  any  class  or of  any  rights,  (d)  the  approval  of  any
stockholders   of  the  Company  shall  be  required  in  connection   with  any
reclassification  of the Common Stock, any  consolidation or merger to which the
Company is a party,  any sale or  transfer  of all or  substantially  all of the
assets of the Company,  of any compulsory  share of exchange  whereby the Common
Stock is converted into other securities,  cash or property,  or (e) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company;  then the Company  shall notify the Holders at
their last  addresses  as they shall appear upon the stock books of the Company,
at least 20  calendar  days prior to the  applicable  record or  effective  date
hereinafter  specified, a notice stating (x) the date on which a record is to be
taken for the  purpose of such  dividend,  distribution,  redemption,  rights or
warrants, or if a record is not to be taken, the date as of which the holders of
Common  Stock  of  record  to  be  entitled  to  such  dividend,  distributions,
redemption,  rights or warrants  are to be  determined  or (y) the date on which
such reclassification,  consolidation,  merger, sale, transfer or share exchange
is  expected  to  become  effective  or  close,  and the  date as of which it is
expected  that  holders of Common  Stock of record shall be entitled to exchange
their Common Stock for securities,  cash or other property deliverable upon such
reclassification,  consolidation,  merger,  sale,  transfer  or share  exchange.
Holders are  entitled to convert  shares of  Preferred  Stock  during the 20-day
period  commencing  the date of such notice to the  effective  date of the event
triggering such notice.

     (d) The  Company  covenants  that it will at all  times  reserve  and  keep
available out of its authorized  and unissued  shares of Common Stock solely for
the purpose of issuance  upon  conversion  of  Preferred  Stock,  each as herein
provided,  free from preemptive rights or any other actual  contingent  purchase
rights of persons other than the Holders, not less than such number of shares of
Common Stock as shall be issuable (taking into account the provisions of Section
5(a) and  Section  5(c))  upon  the  conversion  of all  outstanding  shares  of
Preferred  Stock.  The Company  covenants  that all shares of Common  Stock that
shall be so issuable  shall,  upon issue,  be duly and  validly  authorized  and
issued and fully paid and nonassessable.

     (e) Upon a conversion  hereunder the Company shall not be required to issue
stock certificates  representing fractions of shares of Common Stock, but may if
otherwise  permitted,  make a cash payment in respect of any final fraction of a
share based on the Per Share  Market  Value at such time.  If any fraction of an
Underlying Share would,  except for the provisions of this Section,  be issuable
upon a conversion  hereunder,  the Company  shall pay an amount in cash equal to
the Conversion Ratio multiplied by such fraction.

                                       12
<PAGE>
     (f) The  issuance  of  certificates  for  Common  Stock  on  conversion  of
Preferred  Stock shall be made  without  charge to the  Holders  thereof for any
documentary  stamp or similar  taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any  transfer  involved  in the
issuance and delivery of any such  certificate  upon  conversion in a name other
than that of the Holder of such shares of Preferred Stock so converted.

     (g) Shares of Preferred  Stock  converted  into Common Stock or redeemed in
accordance with the terms hereof shall be canceled and may not be reissued.

     (h) Any  and all  notices  or  other  communications  or  deliveries  to be
provided by the Holders of the Preferred  Stock  hereunder,  including,  without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile  or sent by a  nationally  recognized  overnight  courier  service,
addressed  to the  attention  of the  Chief  Financial  Officer  of the  Company
addressed to 1811 Chestnut Street, Suite 120,  Philadelphia,  Pennsylvania 19103
or to facsimile  number (215)  972-8183,  or to such other  address or facsimile
number as shall be specified in writing by the Company for such purpose. Any and
all notices or other  communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally,  by facsimile or sent by
a nationally  recognized overnight courier service,  addressed to each Holder at
the facsimile  telephone number or address of such Holder appearing on the books
of the Company,  or if no such facsimile telephone number or address appears, at
the principal place of business of the Holder. Any notice or other communication
or deliveries  hereunder  shall be deemed given and effective on the earliest of
(i) the date of  transmission,  if such notice or communication is delivered via
facsimile and the party giving such notice has a  confirmation  of  transmission
setting  forth  the date and time of  transmission,  which was  produced  by the
facsimile  machine at the facsimile  telephone  number specified in this Section
prior to 8:00  p.m.  (New  York  City  time),  (ii) the date  after  the date of
transmission, if such notice or communication is delivered via facsimile and the
party giving such notice has a confirmation  of  transmission  setting forth the
date and time of  transmission,  which was produced by the facsimile  machine at
the facsimile  telephone  number  specified in this Section later than 8:00 p.m.
(New York City time) on any date and  earlier  than  11:59  p.m.  (New York City
time) on such  date,  (iii) upon  receipt,  if sent by a  nationally  recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.

     Section 6. OPTIONAL REDEMPTION.

     (a)  Subject  to the  provisions  of this  Section  6,  from and  after the
Original Issue Date, the Company shall have the right, upon thirty Trading Days'
notice (an "OPTIONAL  REDEMPTION  NOTICE" and the date such Optional  Redemption
Notice is received by a Holder,  an "OPTIONAL  REDEMPTION DATE") to the Holders,
to redeem all or any  portion of the shares of  Preferred  Stock  which have not
previously  been  redeemed or for which  Conversion  Notices shall not have been
delivered,  for a price  equal to the  Optional  Redemption  Price  (as  defined
below).  Notwithstanding  anything  herein to the  contrary,  together  with the
delivery of the Optional  Redemption  Notice, the Company shall also deliver the
Redemption  Warrants to the Holders of shares of Preferred  Stock to be redeemed

                                       13
<PAGE>
and the Optional  Redemption  Notice  shall only be valid if delivered  together
with  the  Redemption  Warrants.  The  Company  may  only  deliver  an  Optional
Redemption  Notice  if:  (i) the  number of  shares of Common  Stock at the time
authorized,  unissued and  unreserved  for all purposes is sufficient to satisfy
the  Company's  conversion  obligations  of all shares of  Preferred  Stock then
outstanding and the Company's  exercise  obligations  pursuant to the Redemption
Warrants and other common stock purchase  warrants  issued to the Holders on the
Original Issue Date, (ii) the Underlying  Shares then outstanding are registered
for resale pursuant to an effective  Underlying  Shares  Registration  Statement
pursuant to which the Holders are permitted to utilize to sell Underlying Shares
or the Underlying Shares may be resold without volume  restrictions  pursuant to
Rule 144(k)  promulgated under the Securities Act, and (iii) the Common Stock is
listed for trading on the NASDAQ or on a Subsequent Market.  Each of clauses (i)
- (iii) of the  immediately  preceding  sentence  must be true during the entire
thirty  Trading  Days  between the date of  delivery  of an Optional  Redemption
Notice  and  Redemption  Warrants  and  the  date  of  payment  of the  Optional
Redemption Price. A Holder may, subject to Section 5(a)(i) hereof,  convert (and
the Company shall honor such  conversions  in accordance  with the terms hereof)
any or all of the shares of Preferred  Stock  subject to an Optional  Redemption
Notice delivered for conversion on or prior to the 30th Trading Day following an
Optional Redemption Date.

     (b) Failure by the Company to pay the entire Optional  Redemption  Price by
the 30th Trading Day following an Optional  Redemption Date shall, at the option
of the Holders  subject  thereto,  result in the  invalidation  AB INITIO of the
unpaid portion of such optional redemption, and, notwithstanding anything herein
to the  contrary,  the  Company  shall  thereafter  have no  further  rights  to
optionally  redeem any shares of  Preferred  Stock.  In such event,  the Company
shall,  at the option of the Holder,  either,  (i) not later than three  Trading
Days from receipt of Holder's request therefor,  return to the Holder all of the
shares of Preferred Stock for which such Optional  Redemption Price has not been
paid in full (the  "UNPAID  REDEMPTION  SHARES")  or (ii)  convert of all or any
portion  of the Unpaid  Redemption  Shares in which  event the Per Share  Market
Value  for  such  shares  shall  be the  lower  of the Per  Share  Market  Value
calculated on the date the Optional  Redemption Price was originally due and the
Per Share Market Value as of the Holder's written demand for conversion.  If the
Holder elects option (ii) above,  the Company shall within three Trading Days of
its receipt of such  election  deliver to the Holder the shares of Common  Stock
issuable upon conversion of the Unpaid  Redemption Shares subject to such Holder
conversion demand and otherwise  perform its obligations  hereunder with respect
thereto.

     (c)(i) Except if the provisions of Section  6(c)(ii)  apply,  the "OPTIONAL
REDEMPTION PRICE"  applicable for such Optional  Redemption Date shall equal the
sum of (i) the greater of (A) the product of the  Optional  Redemption  Rate (as
defined  in Section 8) and the  aggregate  of the Stated  Value of the shares of
Preferred  Stock to be redeemed and (B) the product of (x) the aggregate  number
of Shares to be redeemed and (y) the product of (1) the average of the Per Share
Market Values for the five Trading Days preceding the Optional  Redemption Date,
and (2) the Conversion  Ratio  calculated on the Optional  Redemption  Date, and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
such shares of Preferred Stock.

                                       14
<PAGE>
          (ii) If the Per Share Market Value for each of the twenty Trading Days
preceding an Optional  Redemption Date is equal to or greater than the Threshold
Price  (as  defined  in  Section  8),  then  the  "OPTIONAL  REDEMPTION  PRICE "
applicable  for such  Optional  Redemption  Date shall  equal the sum of (i) the
product of (A) the product of (x) the number of shares of Preferred  Stock to be
redeemed and (y) the Conversion Ratio calculated on the Optional Redemption Date
and (B) the Threshold  Price,  and (ii) all other amounts,  costs,  expenses and
liquidated damages due in respect of such shares of Preferred Stock.

     Section 7. REDEMPTION UPON TRIGGERING EVENTS.

     (a) Upon the  occurrence  of a  Triggering  Event,  each  Holder  shall (in
addition to all other  rights it may have  hereunder or under  applicable  law),
have the right,  exercisable  at the sole option of such Holder,  to require the
Company  to redeem  all or a portion  of the  Preferred  Stock then held by such
Holder for a redemption  price,  in cash,  equal to the sum of (i) the Mandatory
Redemption  Amount plus (ii) the product of (A) the number of Underlying  Shares
issued in respect of  conversions  hereunder and then held by the Holder and (B)
the Per Share Market Value on the date such  redemption  is demanded or the date
the redemption price hereunder is paid in full,  whichever is greater (such sum,
the "REDEMPTION  PRICE").  The Redemption  Price shall be due and payable within
five  Trading  Days of the date on which the notice for the payment  therefor is
provided by a Holder. If the Company fails to pay the Redemption Price hereunder
in full  pursuant to this  Section on the date such amount is due in  accordance
with this  Section,  the Company will pay interest  thereon at a rate of 18% per
annum (or the lesser amount  permitted by applicable  law),  accruing daily from
such date until the Redemption Price, plus all such interest thereon, is paid in
full.  For purposes of this Section,  a share of Preferred  Stock is outstanding
until  such date as the Holder  shall have  received  Underlying  Shares  upon a
conversion (or attempted conversion) thereof that meets the requirements hereof.

     A  "Triggering  Event"  means  any  one or  more  of the  following  events
(whatever  the  reason and  whether  it shall be  voluntary  or  involuntary  or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order,  rule or regulation of any  administrative  or governmental
body):

          (i) the failure of an Underlying Shares  Registration  Statement to be
declared  effective  by the  Commission  on or prior to the  180th day after the
Original Issue Date;

          (ii) if, during the  Effectiveness  Period,  the  effectiveness of the
Underlying Shares Registration  Statement lapses for any reason for more than an
aggregate of ten consecutive  Trading Days, or the Holder shall not be permitted
to resell  Registrable  Securities  under  the  Underlying  Shares  Registration
Statement for more than ten consecutive Trading Days;

          (iii) the failure of the Common  Stock to be listed for trading on the
NASDAQ or on a  Subsequent  Market or the  suspension  of the Common  Stock from
trading on the NASDAQ or on a Subsequent  Market,  in either case, for more than
three consecutive Trading Days;

                                       15
<PAGE>
          (iv) the  Company  shall fail for any  reason to deliver  certificates
representing  Underlying Shares issuable upon a conversion hereunder that comply
with the provisions  hereof prior to the tenth day after the Conversion  Date or
the  Company  shall  provide  notice to any Holder,  including  by way of public
announcement,  at any time,  of its  intention  not to comply with  requests for
conversion of any shares of Preferred Stock in accordance with the terms hereof;

          (v) the Company shall be a party to any Change of Control Transaction,
or shall  redeem more than 5% of the  outstanding  Common  Stock or other Junior
Securities  (other than  redemptions  of Underlying  Shares and the Common Stock
Redemption);

          (vi) an Event (as defined in the Registration  Rights Agreement) shall
not have been cured to the  satisfaction  of the Holders prior to the expiration
of 60 days from the Event Date (as defined in the Registration Rights Agreement)
relating  thereto (other than an Event resulting from a failure of an Underlying
Shares  Registration  Statement to be declared effective by the Commission on or
prior to the 180th day after the Original Issue Date,  which shall be covered by
Section 7(a)(i));

          (vii) the Company  shall fail for any reason to pay in full the amount
of cash due  pursuant to a Buy-In  within  seven days after  notice  therefor is
delivered hereunder or shall fail to pay all amounts owed on account of an Event
within seven Business Days of the date due;

          (viii) the Company shall fail to have available a sufficient number of
authorized and unreserved  shares of Common Stock to issue to such Holder upon a
conversion hereunder; or

          (ix) the Company shall fail to observe or perform any other  covenant,
agreement  or  warranty  contained  in, or  otherwise  commit  any breach of the
Transaction  Documents  (as  defined in Section  8), and such  failure or breach
shall not, if subject to the  possibility  of a cure by the  Company,  have been
remedied within ten Business Days after the date on which written notice of such
failure or breach shall have been given.


Definitions.  For the  purposes  hereof,  the  following  terms  shall  have the
following meanings:

     "CHANGE  OF  CONTROL  TRANSACTION"  means the  occurrence  of any of (i) an
acquisition  after the date hereof by an  individual  or legal entity or "group"
(as  described  in Rule  13d-5(b)(1)  promulgated  under  the  Exchange  Act) of
effective  control  (whether  through legal or  beneficial  ownership of capital
stock of the  Company,  by  contract  or  otherwise)  of in excess of 50% of the
voting securities of the Company, (ii) a replacement at one time or over time of
more than one-half of the members of the Company's  board of directors  which is
not approved by a majority of those  individuals who are members of the board of

                                       16
<PAGE>
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was  approved  by a majority of the  members of the board of  directors  who are
members  on the date  hereof),  (iii)  the  merger of the  Company  with or into
another entity that is not wholly-owned by the Company, consolidation or sale of
50% or  more  of the  assets  of the  Company  in  one or a  series  of  related
transactions,  or (iv) the execution by the Company of an agreement to which the
Company is a party or by which it is bound,  providing for any of the events set
forth above in (i), (ii) or (iii).

     "COMMISSION" means the Securities and Exchange Commission.

     "COMMON STOCK" means the Company's Class A common stock, par value $.01 per
share,  and stock of any other class into which such shares may  hereafter  have
been reclassified or changed.

     "CONVERSION  RATIO" means, at any time, a fraction,  the numerator of which
is Stated Value (or Excess Stated Value, as the case may be) and the denominator
of which is the Conversion Price at such time.

     "DIVIDEND  EFFECTIVENESS  DATE"  means  the  earlier  to  occur  of (x) the
Effectiveness Date (as defined in the Registration Rights Agreement) and (y) the
date that an Underlying Shares  Registration  Statement is declared effective by
the Commission.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "JUNIOR  SECURITIES" means the Common Stock and all other equity securities
of the Company other than those  securities that are outstanding on the Original
Issue Date and which are explicitly  senior in rights or liquidation  preference
to the Preferred Stock.

     "MANDATORY  REDEMPTION  AMOUNT" for each share of Preferred Stock means the
sum of (i) the greater of (A) 120% of the Stated Value (or Excess  Stated Value,
as the case may be) and (B) the  product  of (a) the lesser of (I) the Per Share
Market  Value  on the  Trading  Day  immediately  preceding  (x) the date of the
Triggering  Event or the Conversion Date, as the case may be, or (y) the date of
payment in full by the Company of the applicable redemption price,  whichever is
greater, and (II) the Threshold Price and (b) the Conversion Ratio calculated on
the date of the Triggering  Event,  or the Conversion  Date, as the case may be,
and (ii) all other  amounts,  costs,  expenses  and  liquidated  damages  due in
respect of such share of Preferred Stock.

     "OPTIONAL REDEMPTION RATE" means (i) for the period from the Original Issue
Date until and including the 90th day following the Original  Issue Date,  105%,
(ii) for the period from the 91st day  following  the Original  Issue Date until
and including the 180th day following the Original Issue Date,  110%,  (iii) for
the  period  from the 181st day  following  the  Original  Issue  Date until and
including the 270th day following the Original Issue Date, 115%, and (iv) on and
after the 271st day following the Original Issue Date, 120%.

     "ORIGINAL  ISSUE  DATE " shall mean the date of the first  issuance  of any
shares of the  Preferred  Stock  regardless  of the number of  transfers  of any
particular   shares  of  Preferred   Stock  and  regardless  of  the  number  of
certificates which may be issued to evidence such Preferred Stock.

                                       17
<PAGE>
     "PER SHARE MARKET VALUE" means on any  particular  date (a) the closing bid
price per share of Common Stock on such date on the NASDAQ or on the  Subsequent
Market on which the Common  Stock is then  listed or  quoted,  or if there is no
such price on such  date,  then the  closing  bid price on the NASDAQ or on such
Subsequent  Market on the date nearest preceding such date, or (b) if the Common
Stock is not then listed or quoted on the NASDAQ or on a Subsequent  Market, the
closing bid price for a shares of Common Stock in the  over-the-counter  market,
as  reported  by  the  National   Quotation   Bureau   Incorporated  or  similar
organization or agency  succeeding to its functions of reporting  prices) at the
close of business on such date,  or (c) if the Common Stock is not then reported
by the National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices),  then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in good faith by
the Holder,  or (d) if the Common  Stock are not then  publicly  traded the fair
market value of a share of Common Stock as determined  by an Appraiser  selected
in good faith by the Holders of a majority of the shares of the Preferred Stock.

     "PERSON" means a corporation, an association, a partnership,  organization,
a business,  an individual,  a government or political  subdivision thereof or a
governmental agency.

     "PURCHASE  AGREEMENT"  means  the  Convertible   Preferred  Stock  Purchase
Agreement,  dated as of the  Original  Issue Date,  to which the Company and the
original Holder are parties,  as amended,  modified or supplemented from time to
time in accordance with its terms.

     "REDEMPTION WARRANTS" shall mean common stock purchase warrants issuable by
the  Company  together  with an  Optional  Redemption  Notice  to the  Holder of
Preferred  Stock to be redeemed  to purchase a number of shares of Common  Stock
equal to 5% of the  quotient  obtained by dividing  (x) the Stated  Value of the
Preferred Stock to be redeemed pursuant to an Optional  Redemption Notice by (y)
the average of the Per Share Market Values for the five Trading Days starting on
and  including  March 1,  2000.  If the Per Share  Market  Value for each of the
twenty (20) Trading Days  preceding an Optional  Redemption  Date is equal to or
greater than the  Threshold  Price,  then the  Redemption  Warrants  issuable in
connection  with an  Optional  Redemption  Notice  shall  entitle  the Holder to
acquire an additional  100,000  shares of Common Stock in addition to the number
of shares of Common Stock set forth in the immediately preceding sentence.  Such
warrants  shall  be  substantially  in the form  attached  as  EXHIBIT  D to the
Purchase  Agreement and shall entitle the holders  thereof to purchase shares of
Common  Stock at any time during the five year  period  following  the  Original
Issue Date at an exercise price per share equal to the Fixed Conversion Price.

     "REGISTRATION  RIGHTS  AGREEMENT" means the Registration  Rights Agreement,
dated as of the  Original  Issue Date,  to which the  Company  and the  original
Holder are parties,  as amended,  modified or supplemented  from time to time in
accordance with its terms.

                                       18
<PAGE>
     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "THRESHOLD PRICE" means 150% of the Fixed Conversion Price.

     "TRADING  DAY" means (a) a day on which the  Common  Stock is traded on the
NASDAQ or on the  Subsequent  Market on which the Common Stock is then listed or
quoted,  as the case may be,  or (b) if the  Common  Stock is not  listed on the
NASDAQ or on a Subsequent  Market,  a day on which the Common Stock is traded in
the  over-the-counter  market,  as reported by the OTC Bulletin Board, or (c) if
the Common  Stock is not quoted on the OTC  Bulletin  Board,  a day on which the
Common  Stock is  quoted  in the  over-the-counter  market  as  reported  by the
National  Quotation Bureau  Incorporated (or any similar  organization or agency
succeeding its functions of reporting prices);  PROVIDED,  HOWEVER,  that in the
event that the Common Stock is not listed or quoted as set forth in (a), (b) and
(c) hereof, then Trading Day shall mean any day except Saturday,  Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other  government  action
to close.

     "TRANSACTION  DOCUMENTS"  shall have the meaning set forth in the  Purchase
Agreement.

     "UNDERLYING  SHARES" means,  collectively,  the shares of Common Stock into
which the shares of Preferred Stock are convertible in accordance with the terms
hereof.

     "UNDERLYING SHARES REGISTRATION  STATEMENT" means a registration  statement
that meets the requirements of the  Registration  Rights Agreement and registers
the  resale  of all  Underlying  Shares by the  Holder,  who shall be named as a
"selling stockholder" thereunder.

                                       19
<PAGE>
                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be Executed by the Registered Holder
in order to Convert shares of Preferred Stock)

The  undersigned  hereby  elects to convert  the number of shares of 5% Series A
Convertible  Preferred  Stock  indicated  below,  into  shares of Class A common
stock,  par value $.01 per share (the "COMMON STOCK"),  of Global  Technologies,
Ltd.,  a Delaware  corporation  (the  "COMPANY"),  according  to the  conditions
hereof,  as of the date written below. If shares are to be issued in the name of
a person other than  undersigned,  the  undersigned  will pay all transfer taxes
payable with respect thereto and is delivering  herewith such  certificates  and
opinions as reasonably requested by the Company in accordance therewith.  No fee
will be  charged  to the Holder  for any  conversion,  except for such  transfer
taxes, if any.

Conversion calculations:

     Date to Effect Conversion


     Number of shares of Preferred Stock to be Converted


     Stated Value of shares of Preferred Stock to be Converted


     Number of shares of Common Stock to be Issued


     Applicable Conversion Price


     Signature


     Name


     Address

     Check box, if applicable:

     [ ] The Holder intends to sell the shares of Common Stock issuable
         hereunder pursuant to Rule 144 promulgated under the Securities
         Act of 1933, as amended.

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