THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") OR ANY STATE OR SECURITIES LAWS
AND NEITHER  THE  SECURITIES  NOR ANY  INTEREST  THEREIN  MAY BE OFFERED,  SOLD,
TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER SUCH  SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION  UNDER SUCH SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY
TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.

THE  TRANSFER  OR  EXCHANGE  OF  THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH EXHIBIT I REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                    5:00 P.M., NEW YORK TIME, AUGUST 20, 2002



No. __

                                          WARRANT TO PURCHASE [_________] SHARES
                                          OF SOFTWARE PUBLISHING CORPORATION
                                          HOLDINGS, INC. COMMON STOCK


                               WARRANT CERTIFICATE


          THIS WARRANT CERTIFICATE certifies that [___________________________],
or registered  assigns, is the registered holder of Warrants (the "Warrants") to
purchase  initially,  at any time from the date hereof until 5:00 p.m., New York
time, on August 20, 2002 ("Expiration Date"), up to [______________]  fully paid
and  nonassessable  shares of common stock,  $.001 par value ("Common Stock") of
Software Publishing Corporation Holdings,  Inc. (f/k/a Allegro New Media, Inc.),
a Delaware  corporation  (the  "Company"),  at the  exercise  price,  subject to
adjustment in certain  events (the  "Exercise  Price"),  of $3.0225 per share of
Common  Stock,  upon  surrender of this Warrant  Certificate  and payment of the
Exercise Price at the office of the Company  located at 3A Oak Road,  Fairfield,
New Jersey 07004 or any  successor  office,  but subject to the  conditions  set
forth  herein and in Exhibit I hereto.  Payment of the  Exercise  Price shall be
made by certified or official  bank check payable to the order of the Company or
may be made by tendering an amount of Warrants for cancellation  with a value as
determined  by the  difference  between  the then  current  market  price of the
underlying  shares of Common Stock as of the date of exercise  less the Exercise
Price of each Warrant.


<PAGE>

          No Warrant may be  exercised  after 5:00 p.m.,  New York time,  on the
Expiration Date, at which time all Warrants  evidenced hereby,  unless exercised
prior thereto,  shall  thereafter be void. If the  Expiration  Date shall in the
State of New York be a holiday or a day on which banks are  authorized to close,
then the Expiration Date shall mean 5:00 P.M., New York Time, the next following
day which, in the State of New York is not a holiday or a day on which banks are
authorized to close.

          The Warrants evidenced by this Warrant  Certificate are subject to the
provisions  of  Exhibit I hereto,  which  Exhibit  I is hereby  incorporated  by
reference in and made a part of this  instrument and is hereby referred to for a
description  of the  rights,  limitation  of  rights,  obligations,  duties  and
immunities  thereunder  of the Company and the holders  (the words  "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.

          Exhibit I hereto  provides that upon the  occurrence of certain events
the  Exercise  Price  and the type  and/or  number of the  Company's  securities
issuable  thereupon may,  subject to certain  conditions,  be adjusted.  In such
event,  the Company  will,  at the  request of the  holder,  issue a new Warrant
Certificate  evidencing  the  adjustment  in the  Exercise  Price and the number
and/or type of securities issuable upon the exercise of the Warrants;  provided,
however,  that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair the rights of the holder
as set forth in Exhibit I.

          Upon due  presentment  for  registration  of transfer of this  Warrant
Certificate at the office of the Company located at 3A Oak Road, Fairfield,  New
Jersey 07004,  or any successor  office,  a new Warrant  Certificate  or Warrant
Certificates  of like tenor and  evidencing  in the  aggregate  a like number of
Warrants  shall be issued to the  transferee(s)  in  exchange  for this  Warrant
Certificate,  subject  to the  limitations  provided  herein  and in  Exhibit I,
without any charge except for any tax or other  governmental  charge  imposed in
connection with such transfer.

          Upon the exercise of less than all of the  Warrants  evidenced by this
Certificate,  the  Company  shall  forthwith  issue to the  holder  hereof a new
Warrant Certificate representing such number of unexercised Warrants.

          The Company may deem and treat the registered  holder(s) hereof as the
absolute owner(s) of this Warrant Certificate  (notwithstanding  any notation of
ownership  or other  writing  hereon  made by  anyone),  for the  purpose of any
exercise hereof,  and of any distribution to the holder(s)  hereof,  and for all
other  purposes,  and the  Company  shall not be  affected  by any notice to the
contrary.

          All  terms  used in this  Warrant  Certificate  which are  defined  in
Exhibit I hereto shall have the meanings assigned to them in Exhibit I hereto.


<PAGE>


          IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.


Dated: [______________, ____]


                                      SOFTWARE PUBLISHING CORPORATION
                                      HOLDINGS, INC.


                                      By:  __________________________________
                                            Mark E. Leininger, President
Attest:

By:  ____________________________
     Marc E. Jaffe, Secretary



<PAGE>


                          FORM OF ELECTION TO PURCHASE



          THE  UNDERSIGNED  hereby  irrevocably  elects to  exercise  the right,
represented  by this  Warrant  Certificate,  to purchase  ___________  shares of
Common Stock and herewith  tenders in payment for such securities a certified or
official  bank check  payable to the order of  Software  Publishing  Corporation
Holdings,  Inc. in the amount of $___________,  all in accordance with the terms
hereof.  The  undersigned  requests  that a certificate  for such  securities be
registered in

the name of ____________________________________________________________________

whose address is _______________________________________________________________

and that such Certificate be delivered to ______________________________________

whose address is ______________________________________________________________.


Dated: __________________


               Signature:   ____________________________________________________
                            (Signature must conform in all respects to the name
                             of holder as specified on the face of the Warrant
                             Certificate.)


                            ____________________________________________________
                            (Insert Social Security or Other Identifying Number
                            of Holder)


                            ____________________________________________________
                            Signature Guarantee



<PAGE>


                        FORM OF ASSIGNMENT

             (To be executed by the registered holder if such holder
                  desires to transfer the Warrant Certificate)


          FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto

               _________________________________________________________________
                    (Please print name and address of transferee)

this Warrant  Certificate,  together with all right, title and interest therein,
and does hereby  irrevocably  constitute and appoint  __________________________
Attorney,  to transfer the within Warrant Certificate on the books of the within
named Company, with full power of substitution.

Dated: __________________


               Signature:  _____________________________________________________
                           (Signature must conform in all respects to the name
                            of holder as specified on the face of the Warrant
                            Certificate.)


                           _____________________________________________________
                           (Insert Social Security or Other Identifying Number
                            of Holder)


                           _____________________________________________________
                           Signature Guarantee



<PAGE>


                                    EXHIBIT I

     Section 1. Exercise of Warrant.  The Warrants  initially are exercisable at
an aggregate  initial exercise price per share of common stock,  $.001 par value
per share (the "Common Stock") of Software Publishing Corporation Holdings, Inc.
(f/k/a  Allegro New Media,  Inc.) (the  "Company") set forth in Section 3 hereof
(subject to adjustment as provided in Section 5 hereof)  payable by certified or
official bank check.  Upon surrender of a Warrant  Certificate  with the annexed
Form of  Election  to  Purchase  duly  executed,  together  with  payment of the
Exercise Price (as hereinafter defined) for the shares of Common Stock purchased
at the Company's  principal offices in California  (presently  located at 3A Oak
Road,  Fairfield,   New  Jersey  07004,  the  registered  holder  of  a  Warrant
Certificate  ("Holder" or "Holders")  shall be entitled to receive a certificate
or certificates for the shares of Common Stock so purchased. The purchase rights
represented  by each Warrant  Certificate  are  exercisable at the option of the
Holder  thereof,  in whole or in part  (but not as to  fractional  shares of the
Common Stock underlying the Warrants).  In the case of the purchase of less than
all the shares (the  "Warrant  Shares") of Common  Stock  purchasable  under any
Warrant Certificate,  the Company shall cancel said Warrant Certificate upon the
surrender  thereof and shall  execute and deliver a new Warrant  Certificate  of
like tenor for the balance of the shares of Common Stock purchasable thereunder.

     Section 2. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for shares of Common Stock shall be made forthwith (and
in any event within ten (10) business  days  thereafter)  without  charge to the
Holder thereof including,  without  limitation,  any tax which may be payable in
respect of the issuance thereof,  and such  certificates  shall be issued in the
name of, or in such names as may be directed by, the Holder  thereof;  provided,
however,  that the  Company  shall not be  required  to pay any tax which may be
payable in respect of any transfer  involved in the issuance and delivery of any
such  certificates in a name other than that of the Holder and the Company shall
not be  required  to issue or  deliver  such  certificates  unless  or until the
persons  or  persons  requesting  the  issuance  thereof  shall have paid to the
Company the amount of such tax or shall have  established to the satisfaction of
the Company that such tax has been paid.

     The Warrant  Certificates  and the  certificates  representing  the Warrant
Shares  shall be executed  on behalf of the  Company by the manual or  facsimile
signature  of the  then  present  Chairman  or Vice  Chairman  of the  Board  of
Directors  and  also  by the  Secretary  or by any two  Directors  or by any one
Director and the Secretary of the Company under its  corporate  seal  reproduced
thereon.

     Section 3.     Exercise Price.

     3.1 Initial and Adjusted  Exercise Price.  Except as otherwise  provided in
Section 5 hereof,  the exercise price of each Warrant shall be $3.0225 per share
of Common  Stock.  The  adjusted  exercise  price shall be the price which shall
result from time to time from any and all  adjustments  of the initial  exercise
price in accordance with the provisions of Section 5 hereof.

     3.2 Exercise Price. The term "Exercise Price" as used herein shall mean the
initial  exercise  price or the  adjusted  exercise  price,  depending  upon the
context.


<PAGE>

     Section 4.     Restrictions on Transfer; Registration Rights.

     4.1 Representations. The Holders of the Warrants agree to the following:

          (a) Each Holder understands that the Warrants,  or the Warrant Shares,
have not been registered under applicable state and federal securities laws, and
that such Warrants or Warrant Shares cannot be resold or transferred unless they
are so registered,  or unless such transfer qualifies for an exemption from such
registration;

          (b) Each Holder is  acquiring  the Warrants  for  investment  purposes
only, and not with a view towards resale or distribution;

          (c) Each Holder  understands that all certificates which represent the
Warrants  issued  to him or her will  bear a  legend  which  incorporates  these
restrictions; and

          (d) Each Holder is familiar with the business and financial  condition
of the  Company,  has been  provided  access  and an  opportunity  to review all
material  agreements,  books and records of the Company and has been afforded an
opportunity  to question the  executive  officers of the Company with respect to
the foregoing.

     4.2 Restrictions on Transfer.  Notwithstanding any provisions  contained in
the  Warrant   Certificate  to  the  contrary,   these  Warrants  shall  not  be
transferable  and the related  Warrant Shares shall not be  transferable  except
upon the conditions  specified in this Section 4, which conditions are intended,
among other things,  to ensure compliance with the provisions of the 1933 Act in
respect of the  transfer of the Warrants or the Warrant  Shares.  The Holders of
the Warrants further agree that they will not (a) transfer the Warrants prior to
delivery to the Company of an opinion of the Holder's counsel as provided for in
Section 4.3),  which opinion shall be acceptable to counsel for the Company,  or
(b) until registration of the Warrant Shares under the Securities Act has become
effective.

     4.3 Opinion of Counsel.  In connection with any transfer of the Warrants or
of the related Warrant Shares, the following provisions shall apply:

          (a) If in the opinion of counsel,  which  counsel and opinion shall be
acceptable to the Company,  the proposed transfer of the Warrants or the Warrant
Shares may be  effected  without  registration  of the  Warrants  of the Warrant
Shares  under the 1933 Act,  the  Holders  shall be  entitled  to  transfer  the
Warrants  or the  Warrant  Shares  in  accordance  with the  proposed  method of
disposition.

          (b) If in the opinion of counsel,  which  counsel and opinion shall be
acceptable to the Company,  the proposed transfer of the Warrants or the Warrant
Shares may not be effected without  registration of the Warrants or such Warrant
Shares  under  the  Securities  Act,  the  holder of the  Warrants  shall not be
entitled to transfer the Warrants or the Warrant  Shares until  registration  is
effective.


<PAGE>

     4.4  Subsequent   Holders.   Anything  contained  herein  to  the  contrary
notwithstanding,  the  provisions  of this  Section 4 shall be binding  upon all
subsequent holders of the Warrants and the Warrant Shares, and the Company shall
not be  required  to issue all or any  portion of the  Warrants  or the  Warrant
Shares to such Holder  unless  such Holder  agrees in writing in advance of such
issuance to be so bound.  The  provisions  of this  Section 4 shall  survive the
Expiration Date.

     4.5 Securities Act of 1933 Legend.  The Warrant and the Warrant Shares have
not been registered under the Securities Act. Upon exercise of the Warrants,  in
part or in whole,  the  certificates  representing the Warrant Shares shall bear
the following legend:

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT") OR ANY STATE SECURITIES LAWS AND
NEITHER  THE  SECURITIES  NOR  ANY  INTEREST  THEREIN  MAY  BE  OFFERED,   SOLD,
TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER SUCH  SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION  UNDER SUCH SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY
TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.

     4.6  Required Registration.

          (a) Piggyback Registration. If the Company shall determine to register
any of its securities  (including any initial public offering of its securities)
either  for its own  account  or the  account  of a  security  holder or holders
exercising their respective demand registration rights other than a registration
relating solely to employee benefit plans, or a registration  relating solely to
a Rule 145  transaction  (including  securities  registered  on form S-8 or form
S-4), or a registration on any registration  form that does not permit secondary
sales, the Company will:

                (i)  promptly give to each Holder written notice thereof; and

                (ii)  use   its   best    efforts    to   include  in  any  such
     registration  and any  related  qualification  under blue sky laws or other
     compliance),  and in any  underwriting  involved  therein,  all the Warrant
     Shares  specified in a written request or requests,  made by any Holder and
     received by the Company  within  twenty (20) days after the written  notice
     from the Company  described  in clause (i) above is mailed or  delivered by
     the Company.  Such written  request may specify all or a part of a Holder's
     Warrant Shares.

     The  Holders  agree to sell their  Warrant  Shares on the same terms as the
sale of other  shares of Common  Stock in the offering and agree to execute such
documents  as shall be  reasonably  requested  by the  Company or its counsel in
connection with such offering.

     If the  registration  of which the Company gives notice is for a registered
public  offering  involving  an  underwriting,  the Company  shall so advise the
Holders as a part of the written notice given pursuant to this Section.  In such
event, the right of any Holder to registration pursuant to this


<PAGE>

Section  shall  be  conditioned   upon   such   Holder's  participation  in such
underwriting   and  the  inclusion   of  such   Holder's   Warrant  hares in the
underwriting   to  the  extent  provided  herein.   All  Holders   proposing  to
distribute  their securities  through such  underwriting  shall  (together  with
the Company and the other holders of securities of the Company with registration
rights to  participate  therein  distributing  their  securities   through  such
underwriting)   enter  into  an underwriting  agreement  in  customary form with
the  representative  of the underwriter or underwriters selected by the Company.

          (b) Expenses of Registration.  All registration  expenses  incurred in
connection with any registration,  qualification or compliance  pursuant to this
Section including filing fees,  printing  expenses,  blue sky fees, and fees and
expenses  of the  Company's  counsel  and  accountants)  shall  be  borne by the
Company.  All  expenses  incurred  by the  Holders  for  their  own  counsel  or
accountants  and all selling  expenses  relating  to  securities  so  registered
(including  underwriter discounts and commissions) shall be borne by the holders
of  securities  so registered on the basis of the number of shares of securities
so registered on their behalf.

          (c)  Indemnification

                    (i) The Company  will  indemnify  each  Holder,  each of its
     officers,  directors and partners,  legal counsel, and accountants and each
     person  controlling  such  Holder  within the  meaning of Section 15 of the
     Securities  Act,  with  respect to which  registration,  qualification,  or
     compliance   has  been  effected   pursuant  to  this  Section,   and  each
     underwriter,  if any,  and each person who  controls  within the meaning of
     Section 15 of the  Securities  Act any  underwriter,  against all expenses,
     claims,  losses,  damages,  and  liabilities (or actions,  proceedings,  or
     settlements  in  respect  thereof)  arising  out of or based on any  untrue
     statement (or alleged untrue statement) of a material fact contained in any
     prospectus,  offering  circular,  or other document  (including any related
     registration  statement,  notification,  or the like), incident to any such
     registration,  qualification,  or compliance,  or based on 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,  or any
     violation by the Company of the  Securities  Act or any rule or  regulation
     thereunder  applicable  to the Company  and  relating to action or inaction
     required  of  the  Company  in  connection  with  any  such   registration,
     qualification,  or compliance, and will reimburse each such Holder, each of
     its officers, directors,  partners, legal counsel, and accountants and each
     person controlling such Holder, each such underwriter,  and each person who
     controls  any  such  underwriter,  for any  legal  and any  other  expenses
     reasonably  incurred in  connection  with  investigating  and  defending or
     settling any such claim, loss, damage,  liability, or action, provided that
     the Company will not be liable in any such case to the extent that any such
     claim, loss, damage, liability, or expense arises out of or is based on any
     untrue  statement or omission based upon written  information  furnished to
     the Company by such Holder or underwriter and stated to be specifically for
     use therein.  It is agreed that the indemnity  agreement  contained in this
     Section  shall not apply to amounts  paid in  settlement  of any such loss,
     claim, damage,  liability, or action if such settlement is effected without
     the  consent  of the  Company  (which  consent  has not  been  unreasonably
     withheld).


<PAGE>

                    (ii) Each  Holder  will,  if Warrant  Shares held by him are
     included in the securities as to which such registration, qualification, or
     compliance is being effected, indemnify the Company, each of its directors,
     officers,  partners,  legal  counsel,  and  accountants  and  each  of  its
     directors,  officers,  partners,  legal counsel,  and  accountants and each
     underwriter,  if  any,  of  the  Company's  securities  covered  by  such a
     registration  statement,  each  person  who  controls  the  Company or such
     underwriter  within the meaning of Section 15 of the  Securities  Act, each
     other  such  Holder  and  other  Shareholder,  and each of their  officers,
     directors,  and partners,  and each person controlling such Holder or other
     Shareholder,  against  all claims,  losses,  damages  and  liabilities  (or
     actions in respect thereof) arising out of or based on any untrue statement
     (or alleged  untrue  statement)  of a material  fact  contained in any such
     registration statement,  prospectus,  offering circular, or other document,
     or 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,  and will  reimburse the Company and such  Holders,  other
     Shareholders,   directors,   officers,   partners,   legal   counsel,   and
     accountants, persons, underwriters, or control persons for any legal or any
     other expenses  reasonably  incurred in connection  with  investigating  or
     defending any such claim, loss, damage,  liability, or action, in each case
     to the extent,  but only to the  extent,  that such  untrue  statement  (or
     alleged untrue statement) or omission (or alleged omission) is made in such
     registration statement, prospectus, offering circular, or other document in
     reliance upon and in conformity with written  information  furnished to the
     Company  by such  Holder  and stated to be  specifically  for use  therein,
     provided,  however, that the obligations of such Holder hereunder shall not
     apply to amounts paid in settlement of any such claims, losses, damages, or
     liabilities (or actions in respect  thereof) if such settlement is effected
     without the consent of such Holder (which consent shall not be unreasonably
     withheld),  and provided  that in no event shall any  indemnity  under this
     Section  exceed  the gross  proceeds  from the  offering  received  by such
     Holder.

     Section 5.     Adjustments to Exercise Price and Number of Shares.

     5.1 Subdivision and Combination. In case the Company shall at any time: (i)
subdivide the outstanding shares of Common Stock into a larger number of shares,
(ii) combine the  outstanding  shares of Common  Stock into a smaller  number of
shares,  (iii)  declare a dividend  on the  outstanding  shares of Common  Stock
payable  in shares of Common  Stock,  or (iv) issue by  reclassification  of its
Common  Stock any shares of its  capital  stock,  the  Exercise  Price in effect
immediately  after the record  date for such  dividend  or  distribution  or the
effective date of such  subdivision,  combination or  reclassification  shall be
adjusted so that it shall equal the price determined by multiplying the Exercise
Price in effect immediately prior thereto by a fraction,  of which the numerator
shall be the number of shares of Common  Stock  outstanding  immediately  before
such dividend, distribution,  subdivision, combination or reclassification,  and
of  which  the  denominator  shall be the  number  of  shares  of  Common  Stock
outstanding   immediately  after  such  dividend,   distribution,   subdivision,
combination or  reclassification.  Such  adjustment  shall be made  successively
whenever any event specified above shall occur.

     5.2  Adjustment in Number of Warrant  Shares.  Upon each  adjustment of the
Exercise  Price  pursuant  to the  provisions  of this  Section 5, the number of
Warrant  Shares  issuable upon the


<PAGE>

exercise of each Warrant shall be adjusted to  the  nearest full share  obtained
by  multiplying  a  number  equal  to  the Exercise Price in effect  immediately
prior  to  such   adjustment  by  the  number  of Warrant Shares  issuable  upon
exercise  of the  Warrants  immediately  prior  to  such adjustment and dividing
the product so obtained by the adjusted Exercise Price.

     5.3 Definition of Common Stock. For the purpose of this Agreement, the term
"Common Stock" shall mean: (i) the class of stock  designated as Common Stock in
the Certificate of Incorporation of the Company as may be amended as of the date
hereof,  or (ii) any other class of stock resulting from  successive  changes or
reclassifications  of such  Common  Stock  consisting  solely of  changes in par
value, or from par value to no par value or from no par value to par value.

     5.4 Merger or Consolidation. (a) In case the Company after the date hereof:
(i) shall  consolidate  with or merge into any other person and shall not be the
continuing or surviving  corporation of such  consolidation  or merger,  or (ii)
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,  the  Common  Stock  shall be  changed  into or
exchanged for stock or other securities of any other person or cash or any other
property,  or (iii) shall transfer all or substantially all of its properties or
assets to any other  person,  or (iv) shall effect a capital  reorganization  or
reclassification  of the Common  Stock (other than a capital  reorganization  or
reclassification resulting in the issue of additional shares of Common Stock for
which adjustment in the Exercise Price is provided in this Section 5), then, and
in the case of each such  transaction,  proper  provision shall be made so that,
upon the basis and the terms and in the manner  provided in this  Agreement  and
the Warrants, the Holders of the Warrants, upon the exercise thereof at any time
after the consummation of such transaction, shall be entitled to receive (at the
aggregate  Exercise  Price in  effect at the time of such  consummation  for all
Common  Stock   issuable   upon  such   exercise   immediately   prior  to  such
consummation),  in lieu of the Common Stock,  the highest  amount of securities,
cash or other  property to which such Holders would  actually have been entitled
as shareholders  upon such consummation if such Holders had exercised the rights
represented by the Warrants  immediately  prior thereto,  subject to adjustments
(subsequent  to such  consummation)  as nearly  equivalent  as  possible  to the
adjustments provided for in this Section 5.

     5.5 Assumption of Obligations.  Notwithstanding  anything  contained in the
Warrants to the  contrary,  the Company will not effect any of the  transactions
described  in clauses  (i)  through  (iv) of Section  5.4  unless,  prior to the
consummation thereof, each person (other than the Company) which may be required
to deliver  any stock,  securities,  cash or property  upon the  exercise of the
Warrants as provided herein shall assume, by written instrument delivered to the
Holders of the  Warrants,  the  obligations  of the Company  under the  Warrants
(including this Exhibit I) (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 Exhibit I
and the Warrants) and such person shall have similarly delivered to such Holders
an opinion of counsel for such person  stating that the Warrants  including this
Exhibit  I) shall  thereafter  continue  in full  force and effect and the terms
hereof (including,  without limitation, all of the provisions of this Section 5)
shall be applicable to the stock, securities, cash or property which such person
may be required to deliver  upon any exercise of the Warrants or the exercise of
any rights pursuant hereto.


<PAGE>

     5.6 Dividends and Other Distributions. If, at any time or from time to time
after the date of this  Warrant,  the Company  shall issue or  distribute to the
holders of shares of Common  Stock,  evidences  of its  indebtedness,  any other
securities  of the Company or any cash,  property or other  assets  (excluding a
subdivision,  combination  or  reclassification,  or  dividend  or  distribution
payable  in  shares  of Common  Stock,  referred  to in  Section  5.1,  and also
excluding cash dividends or cash  distributions  paid out of net profits legally
available therefor if the full amount thereof,  together with the value of other
dividends  and  distributions  made  substantially   concurrently  therewith  or
pursuant to a plan which  includes  payment  thereof,  is equivalent to not more
than 5% of the  Company's net worth) (any such  non-excluded  event being herein
called  a  "Special  Dividend"),   the  Exercise  Price  shall  be  adjusted  by
multiplying  the Exercise  Price then in effect by a fraction,  the numerator of
which shall be the then current market price of the Common Stock (defined as the
average for the thirty consecutive business days immediately prior to the record
date of the daily  closing price of the Common Stock as reported by the national
securities  exchange upon which the Common Stock is then listed or if not listed
on any such  exchange,  the  average of the  closing  prices as  reported by the
National  Association of Securities  Dealers,  Inc. Automated  Quotations System
("NASDAQ") Stock Market's  National Market,  or if not then listed on the NASDAQ
National  Market,  the average of the highest  reported bid and lowest  reported
asked prices as reported by the NASDAQ,  or if not then publicly traded,  as the
fair market price as determined by the  Company's  Board of Directors)  less the
fair market value (as  determined  by the  Company's  Board of Directors) of the
evidences of indebtedness,  cash, securities or property, or other assets issued
or distributed in such Special Dividend  applicable to one share of Common Stock
and the denominator of which shall be the then current market price per share of
Common  Stock.  An  adjustment  made  pursuant to this  Section 5.6 shall become
effective immediately after the record date of any such Special Dividend.

     5.7 Other  Dilutive  Events.  In case any event shall occur as to which the
other  provisions of this Section 5 are similar to, but not strictly  applicable
but as to which the failure to make any adjustment  would not fairly protect the
purchase  rights  represented  by the  Warrants  including  this  Exhibit  1) in
accordance  with the essential  intent and principles  hereof then, in each such
case,  the  Holders  collectively  may  appoint  a firm  of  independent  public
accountants  of  recognized  national  standing  reasonably  acceptable  to  the
Company, which shall give their opinion as to the adjustment, if any, on a basis
consistent  with  the  essential  intent  and  principles   established  herein,
necessary to preserve the purchase rights  represented by the Warrants including
this Exhibit I). Upon receipt of such opinion the Company will  promptly  mail a
copy thereof to the Holders and shall make the  adjustments  described  therein.
The fees and expenses of such independent  public  accountants shall be borne by
the Company. The issuance by the Company of shares of capital stock,  including,
without  limitation,  shares of Common Stock,  for  consideration  less than the
Exercise  Price,  or  the  issuance  of  convertible  securities  or  derivative
securities,  convertible  into shares of capital stock at a conversion  price or
exercise  price  less than the  Exercise  Price  shall be  deemed an event  that
requires an adjustment under this Section 5.7.

     5.8 Notice of  Adjustment  Events.  Whenever the Company  contemplates  the
occurrence of an event which would give rise to  adjustments  under this Section
5, the Company shall mail to each Holder, at least thirty (30) days prior to the
record  date  with  resect  to  such  event  or,  if no  record  date  shall  be
established, at least thirty (30) days prior to such event, a notice specifying:
(i)


<PAGE>

the  nature  of  the  contemplated event, (ii) the date of which any such record
is to be taken for the purpose of such event, (iii) the date on which such event
is expected to become  effective and (iv) the time, if any is to be fixed,  when
the holders of record of Common Stock shall be entitled to exchange their shares
of Common Stock for securities or other property  deliverable in connection with
such event.

     5.9  Notice of  Adjustments.  Whenever  the  Exercise  Price or the kind of
securities or property issuable upon exercise of the Warrants, or both, shall be
adjusted pursuant to this Section 5, the Company shall make a certificate signed
by its  President  or a Vice  President  and by  its  Chief  Financial  Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method of which such
adjustment  was  calculated  (including a description  of the basis on which the
Company made any determination  hereunder),  and the Exercise Price and the kind
of  securities or property  issuable upon exercise of the Warrants  after giving
effect to such  adjustment,  and shall cause  copies of such  certificate  to be
mailed (by first class mail postage  prepaid) to each Holder promptly after each
adjustment.

     5.10  Preservation  of Rights.  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 the  Warrants  (including  this  Exhibit 1) or the rights
represented  thereby, 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  Holders of the  Warrants
against dilution or other impairment.

     5.11 When No Adjustment Required. No adjustment in the Exercise Price shall
be required unless such  adjustment  would require an increase or decrease of at
least $0.05 per share of Common Stock;  provided,  however, that any adjustments
which by  reason  of this  Section  5.11 are not  required  to be made  shall be
carried  forward and taken into account in any subsequent  adjustment;  provided
further, however, that adjustments shall be required and made in accordance with
the  provisions  of this Section 5 (other than this Section 5.11) not later than
such time as may be  required  in order to  preserve  the  tax-free  nature of a
distribution to the Holders of the Warrants. All calculations under this Section
5 shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be.  Anything in this  Section 5 to the contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Exercise  Price,  in
addition to those required by this Section 5, as it in its discretion shall deem
to be  advisable  in order  that any stock  dividend,  subdivision  of shares or
distribution   of  rights  to  purchase  stock  or  securities   convertible  or
exchangeable for stock hereafter made by the Company to its  shareholders  shall
not be taxable.

     Section 6. Exchange and Replacement of Warrant  Certificates.  Each Warrant
Certificate is exchangeable  without expense,  upon the surrender thereof by the
registered Holder at the principal executive of office of the Company, for a new
Warrant  Certificate  of like tenor and date  representing  in the aggregate the
right to purchase  the same number of Warrant  Shares in such  denominations  as
shall be designated by the Holder thereof at the time of such surrender.


<PAGE>

     Upon receipt by the Company of evidence  reasonably  satisfactory  to it of
the loss, theft,  destruction or mutilation of any Warrant Certificate,  and, in
case of  loss,  theft  or  destruction,  of  indemnity  or  security  reasonably
satisfactory to it, and reimbursement to the Company of all reasonable  expenses
incidental  thereto,  and upon surrender and  cancellation  of the Warrants,  if
mutilated,  the Company will make and deliver a new Warrant  Certificate of like
tenor, in lieu thereof.

     Section 7.  Elimination of Fractional  Interests.  The Company shall not be
required to issue certificates  representing fractions of shares of Common Stock
upon the  exercise of the  Warrants,  nor shall it be required to issue scrip or
pay cash in lieu of  fractional  interests,  it being the intent of the  parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock.

     Section  8.  Reservation  of  Securities.  The  Company  shall at all times
reserve and keep available out of its authorized shares of Common Stock,  solely
for the purpose of issuance  upon the exercise of the  Warrants,  such number of
shares of Common  Stock as shall be  issuable  upon the  exercise  thereof.  The
Company  covenants and agrees that, upon exercise of the Warrants and payment of
the  Exercise  Price  therefor,  all  shares of Common  Stock  shall be duly and
validly  issued,  fully paid,  nonassessable  and not subject to the  preemptive
rights of any shareholder.

     Section 9. Notices to Warrant Holders.  Nothing contained in this Exhibit I
shall be  construed  as  conferring  upon the  Holders  the  right to vote or to
consent or to receive  notice as a  shareholder  in respect of any  meetings  of
shareholders for the election of directors or any other matter, or as having any
rights  whatsoever as a shareholder  of the Company.  If,  however,  at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:

          (a) the  Company  shall take a record of the  holders of its shares of
Common Stock for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution payable; or

          (b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or

          (c) a voluntary or involuntary dissolution,  liquidation or winding-up
of the Company (other than in connection with a consolidation  or merger) or any
capital reorganization, recapitalization or reclassification or a sale of all or
substantially  all of its property,  assets and business as an entirety shall be
proposed;

then, in any one or more of said events, the Company will mail to each Holder of
a Warrant a notice  specifying  (i) 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 a amount and character of such dividend, distribution or right, and (ii)
the date or expected  date on which any such  reorganization,  reclassification,
recapitalization,  consolidation,  merger,  sale,  dissolution,  liquidation  or
winding-up is to take place


<PAGE>

and the time, if any such time is to be fixed, as of which the holders of record
of  Common Stock shall be entitled to exchange  their shares of Common Stock for
the   securities  or  other   property   deliverable   upon such reorganization,
reclassification,   recapitalization, consolidation, merger, sale,  dissolution,
liquidation  or   winding-up.   Such notice shall be mailed at least thirty (30)
days prior to the date therein specified.

     Section 10.    Notices.

     All notices, requests, consents and other communications hereunder shall be
in  writing  and shall be  deemed  to have  been duly  given or made at the time
delivered by hand if personally  delivered;  five calendar days after mailing if
sent by registered or certified mail; when receipt is confirmed,  if telecopied;
and the next  business  day after  timely  delivery to the  courier,  if sent by
overnight air courier  guaranteeing  next day delivery  (except that a notice of
change of address shall not be deemed to have been given until actually received
by the addressee):

          (a) If to the  registered  Holder of the  Warrants,  to the address of
such Holder as shown on the books of the Company; or

          (b) If to the Company, to the address set forth in Section 1 hereof or
to such other address as the Company may designate by notice to the Holders.

     Section 11.   Successors.  All the covenants and provisions of this Exhibit
I shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.

     Section  12.  Governing  Law.  This  Exhibit  I and each  Warrant  shall be
governed  and  construed  in  accordance  with the laws of the State of New York
applicable  to  contracts  made and  performed  in the State of New York without
giving effect to the principles of conflicts of law thereof.

     Section 13. Entire Agreement;  Modification.  This Exhibit I (including the
Warrant  Certificate  and the agreements  with respect to  registration  rights)
contains the entire understanding between the parties hereto with respect to the
subject  matter  hereof and may not be modified  or amended  except by a writing
duly  signed  by the party  against  whom  enforcement  of the  modification  or
amendment is sought.

     Section 14. Severability.  If any provision of this Exhibit I shall be held
to be invalid or unenforceable,  such invalidity or  unenforceability  shall not
affect any other provision of this Exhibit I.

     Section 15. Captions.  The caption headings of the Sections of this Exhibit
I are for  convenience  of reference only and are not intended to be, nor should
they be construed  as, part of this Exhibit I and shall be given no  substantive
effect.


<PAGE>

     Section 16.  Benefits of This Exhibit I. Nothing in this Exhibit I shall be
construed  to give any  person or  corporation  other than the  Company  and the
registered  Holder(s) of the Warrant Certificates or Warrant Shares any legal or
equitable right,  remedy or claim under this Exhibit I; and this Exhibit I shall
be for the  sole  and  exclusive  benefit  of the  Company  and  any  registered
Holder(s) of the Warrant Certificates or Warrant Shares.