Document:

AMENDMENT, dated as of April 10,
                                       2000  (the  "Agreement"),   between   ICG
                                       Communications,    Inc.,   a     Delaware
                                       corporation  (the  "Company"),   and  the
                                       Purchasers  whose signatures appear below
                                       (the "Purchasers").

                  WHEREAS,  reference is made to the Preferred Stock and Warrant
Purchase Agreement dated as of February 27, 2000 (the "Purchase Agreement"),  by
and between the Company and the  Purchasers.  Capitalized  terms used herein but
not  otherwise  defined  shall  be given  the  meaning  ascribed  to them in the
Purchase Agreement;

                  WHEREAS,  pursuant to an Assignment of Rights Under  Preferred
Stock  and  Warrant  Purchase  Agreement  dated  as of March  8,  2000,  HM4 ICG
Qualified  Fund, LLC, HM4 ICG Private Fund, LLC, HM PG-IV ICG, LLC, HM 4-SBS ICG
Coinvestors,  LLC, and HM 4-EQ ICG  Coinvestors  became  parties to the Purchase
Agreement;

                  WHEREAS,  in  accordance  with  Section  8.6 of  the  Purchase
Agreement,  the parties  hereto  desire to amend the Purchase  Agreement as more
fully set forth below in order to reflect (1) the  redesignation of the Series A
Preferred Stock into Series A-1 Preferred  Stock (as defined below),  Series A-2
Preferred  Stock (as defined  below) and Series A-3 Preferred  Stock (as defined
below),  (2) the  increase of the initial  Liquidation  Preference  per share of
Series A Preferred  Stock from  $1,000 to $10,000 per share and the  concomitant
reduction  in the number of shares of Series A Preferred  Stock being  issued by
the Company and purchased by the Purchasers and (3) related conforming changes;

                  NOW, THEREFORE, in consideration of the foregoing,  and of the
covenants and agreements contained herein, the parties hereby agree as follows:

         1.   Amendment of Recitals. The  recitals  of  the  Purchase  Agreement
shall be  amended  by deleting  the first "Whereas" clause  in its entirety  and
substituting, in lieu thereof, the following:

                  "WHEREAS,  the  Company  proposes,  subject  to the  terms and
                  conditions  set  forth  herein,  to  issue  and  sell  to  the
                  Purchasers  50,000  shares  of its 8% Series  A-1  Convertible
                  Preferred  Stock  due  2015,  initial  liquidation  preference
                  $10,000 per share,  par value $0.01 per share (the "Series A-1
                  Preferred  Stock"),   23,000  shares  of  its  8%  Series  A-2
                  Convertible  Preferred  Stock  due 2015,  initial  liquidation
                  preference  $10,000 per share,  par value $0.01 per share (the
                  "Series  A-2  Preferred  Stock")  and  2,000  shares of its 8%
                  Series  A-3  Convertible  Preferred  Stock due  2015,  initial
                  liquidation  preference $10,000 per share, par value $0.01 per
                  share (the "Series A-3 Preferred  Stock" and together with the
                  Series A-1 Preferred Stock and the Series A-2 Preferred Stock,
                  the "Series A Preferred Stock");"

<PAGE>

         2.   Amendment of Definitions.  Section  (a)  of Article  I  is  hereby
amended by inserting or amending, as the case may be, the following definitions:

                  ""Amending  Agreement"  means the Amendment  dated as of April
10, 2000 by and among the Company and the other parties  listed on the signature
pages thereof."

                  ""Equity  Documents"  means this Agreement,  the  Registration
Rights  Agreement,  the  Certificate  of  Designation,   the  Management  Rights
Agreements,  the  Share  Exchange  Agreement,  the  Warrants  and  the  Amending
Agreement."

                  ""HMTF Issued Series A Preferred Shares" shall mean the shares
of Series A-2 Preferred Stock issued to members of the HMTF Group on the Closing
Date under this Agreement."

                  ""Liberty  Issued  Series A Preferred  Shares"  shall mean the
shares of Series A-1  Preferred  Stock issued to members of the Liberty Group on
the Closing Date under this Agreement."

                  ""Registration Rights Agreement" means the Registration Rights
Agreement  dated  as of  April  7,  2000,  by and  among  the  Company  and  the
Purchasers, in the form attached hereto as Exhibit C."

                  ""Series A-1 Preferred Stock" has the meaning set forth in the
first recital to this Agreement."

                  ""Series A-2 Preferred Stock" has the meaning set forth in the
first recital to this Agreement."

                  ""Series A-3 Preferred Stock" has the meaning set forth in the
first recital to this Agreement."

         3.   Amendment of Section 2.1. The Purchase Agreement is hereby amended
by  deleting "one  thousand dollars ($1,000) per  share" in  the  fifth  line of
Section 2.1 and substituting, in lieu  thereof, "ten thousand  dollars ($10,000)
per share."

         4.   Amendment of Section 5.2.

               (a) The Purchase Agreement is hereby amended by deleting  Section
5.2(a) in its entirety and substituting, in lieu thereof, the following:

                  " For  so  long  as  the  members  of the  HMTF  Group  in the
                  aggregate  own any  combination  of shares of Common Stock and
                  Series A-2 Preferred  Stock  representing  an amount of Common
                  Stock (on an as-converted basis) that, taken together,  equals
                  at least 4,107,143 shares of Common Stock (as adjusted for any
                  stock  dividends,  splits and  combinations and similar events
                  affecting the Common Stock from time to time),  the holders of
                  a majority of the then  outstanding HMTF Shares shall have the
                  right to designate  one person for  election to the  Company's

                                       2
<PAGE>

                  Board of  Directors  or, if  greater,  such  number of persons
                  (rounded up to the next whole number) equal to 10% of the then
                  authorized  number  of  members  of  the  Company's  Board  of
                  Directors  (each such  person an "HMTF  Director");  provided,
                  however,  that the right to designate an HMTF  Director  under
                  this  Section  5.2  shall be  suspended  at any time  that the
                  holders of the Series  A-2  Preferred  Stock have the right to
                  elect a person  to the Board of  Directors  under the terms of
                  the Series A-2 Preferred Stock set forth in the Certificate of
                  Designation.  In the event the  holders of a  majority  of the
                  then  outstanding  HMTF Shares are entitled under this Section
                  5.2  to  designate  an  HMTF  Director  for  election  to  the
                  Company's   Board  of  Directors  and  so  designate  an  HMTF
                  Director,  they shall so notify the Company in writing and the
                  Company  shall use its best  efforts  (a) to cause the size of
                  the Board of  Directors to be increased by one and the vacancy
                  created  thereby to be filled by electing an HMTF Director and
                  (b) in  connection  with the  meeting of  stockholders  of the
                  Company  next  following  such  election,  to  cause  an  HMTF
                  Director  to be  nominated  for  election as a director by the
                  stockholders  and to cause the HMTF Director to be so elected.
                  If the  holders of a  majority  of the then  outstanding  HMTF
                  Shares are  entitled  under this  Section 5.2 to  designate an
                  HMTF Director for election to the Company's Board of Directors
                  and a vacancy  shall exist in the office of an HMTF  Director,
                  the holders of a majority of the then  outstanding HMTF Shares
                  shall be  entitled to  designate a successor  and the Board of
                  Directors  shall  use  its  best  efforts  to (x)  elect  such
                  successor   and  (y)  in   connection   with  the  meeting  of
                  stockholders  of the Company  next  following  such  election,
                  cause such  successor to be nominated for election as director
                  by the stockholders and to be elected."

               (b) The Purchase Agreement is hereby amended by deleting  Section
5.2(b)(i) in its entirety and substituting, in lieu thereof, the following:

                  " For so long  as the  members  of the  Liberty  Group  in the
                  aggregate  own any  combination  of shares of Common Stock and
                  Series A-1 Preferred  Stock  representing  an amount of Common
                  Stock (on an as-converted basis) that, taken together,  equals
                  at least 2,687,571 shares of Common Stock (as adjusted for any
                  stock  dividends,  splits and  combinations and similar events
                  affecting the Common Stock from time to time),  the members of
                  the Liberty  Group,  voting  together  as a single  class by a
                  plurality  of the votes  cast or by the  written  consent of a
                  majority in interest  of such  members,  shall have a right to
                  designate  one person for election to the  Company's  Board of
                  Directors or, if greater,  such number of persons  (rounded up
                  to the next whole number) equal to 10% of the then  authorized
                  number of members of the  Company's  Board of Directors  (each

                                       3
<PAGE>

                  such person a "Liberty Director"); provided, however, that the
                  right to designate a Liberty  Director  under this Section 5.2
                  shall be  suspended at any time that the holders of the Series
                  A-1  Preferred  Stock  have the right to elect a person to the
                  Board of Directors under the terms of the Series A-1 Preferred
                  Stock  set forth in the  Certificate  of  Designation.  In the
                  event the members of the Liberty Group are entitled under this
                  Section 5.2 to designate the Liberty  Director for election to
                  the  Company's  Board of Directors and elect to so designate a
                  Liberty Director,  they shall so notify the Company in writing
                  and the  Company  shall use its best  efforts (a) to cause the
                  size of the Board of  Directors to be increased by one and the
                  vacancy  created  thereby  to be filled by  electing a Liberty
                  Director   and  (b)  in   connection   with  the   meeting  of
                  stockholders  of the Company next following such election,  to
                  cause a Liberty  Director  to be  nominated  for  election  as
                  director by the stockholders and to cause the Liberty Director
                  to be so  elected.  If the  members of the  Liberty  Group are
                  entitled  under  this  Section  5.2  to  designate  a  Liberty
                  Director for election to the Company's  Board of Directors and
                  a vacancy shall exist in the office of a Liberty Director, the
                  members of the  Liberty  Group,  voting  together  as a single
                  class  by a  plurality  of the  votes  cast or by the  written
                  consent of a majority in interest  of such  members,  shall be
                  entitled to  designate a successor  and the Board of Directors
                  shall use its best efforts to (x) elect such successor and (y)
                  in connection  with the meeting of stockholders of the Company
                  next  following  such  election,  cause such  successor  to be
                  nominated for election as director by the  stockholders and to
                  be elected."

               (c) The Purchase  Agreement is hereby amended by deleting Section
5.2(b)(ii) in its entirety and substituting, in lieu thereof, the following:

                  " For so long as the  members  of the  Liberty  Group  own any
                  combination of shares of Common Stock and Series A-1 Preferred
                  Shares   representing   an  amount  of  Common  Stock  (on  an
                  as-converted  basis) that,  taken together,  equals  8,928,571
                  shares of Common Stock (as  adjusted for any stock  dividends,
                  splits and  combinations  and  similar  events  affecting  the
                  Common  Stock from time to time),  the  members of the Liberty
                  Group, voting together as a single class by a plurality of the
                  votes cast or by the written consent of a majority in interest
                  of such members, shall have a right, in addition to the rights
                  set forth in clause (i) above,  to  designate  one  additional
                  person for election to the Company's Board of Directors or, if
                  greater,  such number of additional persons (rounded up to the
                  next whole number) equal to 10% of the then authorized  number
                  of  members of the  Company's  Board of  Directors  (each such
                  person an "Additional Liberty Director");  provided,  however,

                                       4
<PAGE>

                  that the right to designate  an  Additional  Liberty  Director
                  under this Section 5.2 shall be suspended at any time that the
                  holders of the Series  A-1  Preferred  Stock have the right to
                  elect a person  to the Board of  Directors  under the terms of
                  the Series A-1 Preferred Stock set forth in the Certificate of
                  Designation. In the event the members of the Liberty Group are
                  entitled  under this Section 5.2 to  designate  an  Additional
                  Liberty  Director  for  election  to the  Company's  Board  of
                  Directors  and elect to so  designate  an  Additional  Liberty
                  Director,  they shall so notify the Company in writing and the
                  Company  shall use its best  efforts  (a) to cause the size of
                  the Board of  Directors to be increased by one and the vacancy
                  created thereby to be filled by electing an Additional Liberty
                  Director   and  (b)  in   connection   with  the   meeting  of
                  stockholders  of the Company next following such election,  to
                  cause an  Additional  Liberty  Director  to be  nominated  for
                  election  as  director  by the  stockholders  and to  cause an
                  Additional  Liberty Director to be so elected.  If the members
                  of the Liberty  Group are  entitled  under this Section 5.2 to
                  designate an Additional  Liberty  Director for election to the
                  Company's  Board of Directors and a vacancy shall exist in the
                  office of an Additional  Liberty Director,  the members of the
                  Liberty  Group,  voting  together  as  a  single  class  by  a
                  plurality  of the votes  cast or by the  written  consent of a
                  majority  in interest  of such  members,  shall be entitled to
                  designate a successor and the Board of Directors shall use its
                  best efforts to (x) elect such successor and (y) in connection
                  with the meeting of stockholders of the Company next following
                  such  election,  cause  such  successor  to be  nominated  for
                  election as director by the stockholders and to be elected."

         5.   Amendment of Section 5.16.  Section 5.16 of the Purchase Agreement
is  hereby   amended  by  deleting   the  third  sentence  in  it  entirety  and
substituting, in lieu thereof, the following sentence:

                  " This  proportional  purchase right shall not apply to shares
                  issued pursuant to the Share Exchange Agreement, any rights or
                  obligations  referenced on Schedule 3.2, any shares of capital
                  stock  issued by the  Company  in lieu of any fees  payable in
                  connection  with the  Transaction  to the Company's  financial
                  advisors,  any shares issued pursuant to any stock option plan
                  or  arrangement  or  employee   benefit  plan  or  arrangement
                  existing  as of the date hereof or  hereafter  approved by the
                  Board of  Directors  of the  Company  or the  shares of Common
                  Stock issued from time to time upon conversion of the Series A
                  Preferred Stock or upon exercise of the Warrants."

         6.   Amendment of Schedule I.  Schedule I to  the Purchase Agreement is
hereby amended by deleting it in its entirety and substituting, in lieu thereof,
Schedule I attached hereto.

                                       5
<PAGE>

         7.   No Other Waivers.  Except as expressly provided in this Agreement,
each of the terms and provisions of the Purchase  Agreement shall remain in full
force and effect in accordance with its terms.

         8.   Counterparts.  This  Agreement  may  be  executed  in  one or more
counterparts, each of which shall be deemed to be an original,  but all of which
taken together shall constitute one and the same instrument.

         9.   Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving  effect to
principles of conflicts of law).

         10.  Headings.  The  headings  used  herein  are   for  convenience  of
reference only and shall not affect the construction of, nor shall they be taken
in consideration in interpreting, this Agreement.

                                       6
<PAGE>

                  IN WITNESS WHEREOF, the  undersigned  have  duly executed  and
delivered this Amendment as of the date first written above.

                                             ICG COMMUNICATIONS, INC.

                                             By: /s/ H. Don Teague
                                                --------------------------------
                                                Name: H. Don Teague
                                                Title:  Executive Vice President

<PAGE>

                                             HMTF BRIDGE ICG, LLC
                                             HM4 ICG QUALIFIED FUND, LLC
                                             HM4 ICG PRIVATE FUND, LLC
                                             HM PG-IV ICG, LLC
                                             HM 4-SBS ICG COINVESTORS, LLC
                                             HM 4-EQ ICG COINVESTORS, LLC

                                             By: /s/ David W. Knickel
                                                --------------------------------
                                                Name: David W. Knickel
                                                Title: President

<PAGE>

                                             Liberty Media Corporation

                                             By: /s/ Charles Y. Tanabe
                                                --------------------------------
                                                Name: Charles Y. Tanabe
                                                Title: Senior Vice President

<PAGE>

                                             GLEACHER/ICG INVESTORS, LLC

                                             By: /s/ Richard Trabulsi
                                                --------------------------------
                                                Name: Richard Trabulsi
                                                Title: Member

<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>

                                                  Number of
Purchasers                        Series of       Preferred     Number of    Purchase Price
                                  Preferred         Shares      Warrants      of the Shares

<S>                               <C>               <C>         <C>           <C>
Liberty Media Corporation         Series A-1        50,000      6,666,667     $500,000,000
HMTF Bridge ICG, LLC              Series A-2        11,500      1,533,334     $115,000,000
HM4 ICG Qualified Fund, LLC       Series A-2        10,464      1,395,253     $104,644,000
HM4 ICG Private Fund, LLC         Series A-2            74          9,885         $741,000
HM PG-IV ICG, LLC                 Series A-2           557         74,281       $5,571,000
HM 4-SBS ICG Coinvestors, LLC     Series A-2           251         33,412       $2,506,000
HM 4-EQ ICG Coinvestors, LLC      Series A-2           154         20,502       $1,538,000
Gleacher/ICG Investors LLC        Series A-3         2,000        266,666      $20,000,000
</TABLE>THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT") OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED  STATES.  SUCH  SECURITIES  MAY NOT BE  OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION  OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.

                                      [[Name]]

                              COMMON STOCK WARRANT

                            Void after April 10, 2005

Warrant No. [[Certificate]]
                                                                  April 10, 2000

         This  certifies that, for  value received,  [[Name]] or  its  permitted
assigns  is  entitled,  subject  to  the terms and  conditions  set forth herein
(including  the  exercise  conditions  of   Section 2), to  purchase  from   ICG
Communications,  Inc., a  Delaware  corporation, up  to  [[No]] fully  paid  and
nonassessable  shares  (the "Shares") of  Common  Stock (as defined  herein)  at
the  exercise  price of  $34.00  per  share (the "Exercise Price"). The Exercise
Price  and  number of  Shares  is subject  to  adjustment  as  provided  in this
Warrant.  The term  "Warrant" as  used  herein  shall include  this  Warrant and
any warrants delivered in substitution or exchange therefor as provided herein.

    Section 1.     Definitions.

              As used in this Warrant,  the following  terms, unless the context
otherwise requires, have the following meanings:

          (a) "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking  institutions  in the City of New York
are authorized or obligated by law or executive order to be closed.

          (b) "Capital  Stock"  or "capital  stock"  means,  with respect to any
Person, any  and all shares, interests,  participations,  rights  in,  or  other
equivalents  (however  designated  and whether voting and/or non-voting) of such
Person's capital stock, whether outstanding on the date of the Warrant or issued
after the date of the  Warrant,  and any and all rights (other than any evidence
of indebtedness) or warrants exercisable or exchangeable for or convertible into
such  capital stock.

          (c) "Certificate of Designation"  means the Certificate of Designation
of the Powers, Preferences  and  Relative, Participating, Optional   and   Other
Special Rights, Qualifications, Limitations and Restrictions thereof relating to
the Series  A-1  Preferred  Stock,  Series  A-2 Preferred  Stock and  Series A-3
Preferred Stock.

                                       1
<PAGE>

          (d) "Common Stock"  means shares  of the Company's  common stock,  par
value $0.01 per share, and capital stock of any other class or series into which
the Common Stock may hereafter be changed.

          (e) "Company" means ICG Communications, Inc. and any Person that shall
succeed to or assume the obligations of the Company under this Warrant.

          (f) "Person" means any individual,  partnership,  corporation, limited
liability  company, joint  venture,  association,  joint-stock  company,  trust,
unincorporated  organization,  government  or  agency  or political  subdivision
thereof, or other entity.

          (g) "Series A Preferred  Stock" means  the Series A-1 Preferred Stock,
the Series A-2 Preferred Stock and the Series A-3 Preferred Stock.

          (h) Series  A-1 Preferred  Stock" means the 8% Series A-1  Convertible
Preferred  Stock due 2015,  initial  liquidation  preference  $10,000 per share,
par value $0.01 per share, of the Company.

          (i) "Series A-2 Preferred  Stock" means  the 8% Series A-2 Convertible
Preferred  Stock due 2015,  initial  liquidation  preference  $10,000 per share,
par value $0.01 per share, of the Company.

          (j) "Series A-3 Preferred  Stock" means  the 8% Series A-3 Convertible
Preferred  Stock due 2015,  initial  liquidation  preference  $10,000 per share,
par value $0.01 per share, of the Company.

          (k) "Warrantholder", "holder  of  Warrant", "holder", or similar terms
refers to the holder of this Warrant.

    Section 2.     Exercise Provisions.

          (a) Exercisability.

              The holder of  this Warrant may exercise it in whole or in part to
the extent then  exercisable  by  surrender  of this  Warrant,  with the form of
subscription  at the end of this  Warrant  duly  executed by the holder,  to the
Company  at its  principal  office  (or to the  office of the  Warrant  Agent as
contemplated in Section 6(b), if applicable),  accompanied by payment, in lawful
money of the United States,  of the amount  obtained by multiplying the Exercise
Price (as adjusted  from time to time  pursuant to the terms of this Warrant) by
the number of shares of Common Stock  designated in such completed  subscription
form. This Warrant shall be deemed to have been exercised  immediately  prior to
the close of business on the day of surrender of such Warrant, and the person or
persons  entitled to receive  shares of Common Stock  issuable  upon exercise of
this Warrant  shall be treated for all purposes as the record  holder or holders
of such shares of Common Stock at such time.

          (b) Payment of Exercise Price.

              Payment shall be made by check payable to the Company.

                                       2
<PAGE>

          (c) Net Issue Exercise.

              Notwithstanding  any  provisions  herein to  the contrary,  if the
fair  market  value (as defined  below) of one share of Common  Stock is greater
than the Exercise  Price (on the date of exercise of this  Warrant),  in lieu of
exercising  this Warrant in exchange for cash,  the holder may elect to exercise
all or a portion of this Warrant by  canceling  all or a portion of this Warrant
and receiving in exchange  therefor shares of Common Stock (as determined below)
equal to the value of this Warrant,  or the portion thereof being  canceled,  by
surrender of this Warrant at the principal  office of the Company (or the office
of the Warrant Agent contemplated by Section 6(b), if applicable)  together with
a duly executed form of subscription,  in which event the Company shall issue to
the  holder a number  of shares of Common  Stock  computed  using the  following
formula:

                                    X=Y(A-B)
                                      ------
                                        A

Where               X =              the number of shares of Common Stock to
                                     be issued to the holder
                    Y =              the number of shares of Common Stock
                                     purchasable under the Warrant or, if only a
                                     portion of the Warrant is being  exercised,
                                     under  the  portion  of the  Warrant  being
                                     exercised (on the date of exercise)

                    A =              the fair market value of one share of
                                     the Common Stock (on the date of
                                     exercise)
                    B =              the Exercise Price (as adjusted to the
                                     date of exercise)

For  purposes  of the above  calculation,  "fair  market  value" of one share of
Common Stock shall be  determined  by the  Company's  Board of Directors in good
faith;  provided,  however, where a public market exists for the Common Stock at
the time of such exercise,  the "fair market value", per share shall be equal to
the average for the five (5) trading days prior to the date of such  exercise of
the average of the closing bid and asked  prices of the Common  Stock  quoted in
the  Over-The-Counter  Market  Summary  or the last  reported  sale price of the
Common  Stock  quoted on the  Nasdaq  National  Market  System or the  principal
exchange on which the Common Stock is then listed,  whichever is applicable,  as
published in The Wall Street Journal.

          (d) Restrictions on Exercise.

              This  Warrant  is  exercisable  at any  time and from time to time
from the date  hereof,  provided  this  Warrant has not  terminated  pursuant to
Section 10.

                                       3
<PAGE>

    Section 3.     Delivery of Stock Certificates.

              As  soon  as  possible  after  full or  partial  exercise  of this
Warrant in  accordance  with the terms  hereof and in any event  within ten (10)
days after such exercise,  the Company, at its expense,  will cause to be issued
in the name of and  delivered to the holder of this Warrant,  a  certificate  or
certificates  for the  number of fully paid and  nonassessable  shares of Common
Stock to which that holder shall be entitled  upon such  exercise.  In the event
that this  Warrant is  exercised  in part,  the Company at its expense will also
execute and deliver a new  Warrant of like tenor  exercisable  for the number of
Shares for which this Warrant may then be  exercised.  No  fractional  shares or
scrip  representing  fractional  shares  will be issued  upon  exercise  of this
Warrant.  If upon any  exercise  of this  Warrant a  fraction  of a share  would
otherwise be issuable,  the Company  will, in lieu of issuing such fraction of a
share,  round down to the nearest whole share if such fraction is an amount less
than 0.5 and round up to the nearest  whole share if such  fraction is an amount
equal to or  greater  than 0.5 and shall  issue the  appropriate  number of full
shares of Common Stock that shall be issuable upon exercise of this Warrant.

    Section 4.     Adjustment Provisions.

              The  Exercise  Price shall be  adjusted  from time to  time by the
Company as follows:

          (a) If  the  Company  shall   hereafter  pay  a  dividend  or  make  a
distribution to all holders of the outstanding  shares of Common Stock in shares
of Common Stock, the Exercise  Price in effect at the opening of business on the
date following  the date fixed for the determination of shareholders entitled to
receive  such  dividend or other  distribution  shall be reduced by  multiplying
such Exercise Price by a  fraction the numerator of which shall be the number of
shares of Common Stock outstanding  at the close of business on the Common Stock
Record Date (as defined in Section 4(f)) fixed for  such  determination  and the
denominator  of which  shall be the sum of such  number of shares  and the total
number  of  shares  constituting  such  dividend  or  other  distribution,  such
reduction to become effective  immediately  after the opening of business on the
day following the Common Stock Record Date. If any dividend or  distribution  of
the type described in this Section 4(a) is declared but not so paid or made, the
Exercise Price shall again be adjusted to the Exercise Price which would then be
in effect if such dividend or distribution had not been declared.

          (b)

              (i) In case the Company shall issue or sell any Common  Stock,  or
     securities  convertible  into or exercisable or exchangeable  for shares of
     Common Stock (other than Common Stock,  or securities  convertible  into or
     exercisable or exchangeable for shares of Common Stock, issued (A) pursuant
     to the  Company's  existing or future stock option plans or pursuant to any
     other  existing  or  future  Common  Stock-related   director  or  employee
     compensation  plan or arrangement  of the Company  approved by the Board of
     Directors  (provided  that, with respect to any stock option or other right
     granted after April 7, 2000, the per share exercise price of such option or
     right is equal to or greater than the per share Closing Price of the Common
     Stock on the  date of the  grant  thereof),  (B) as  consideration  for the
     acquisition of a business or of assets (provided that the fair market value

                                       4
<PAGE>

     of such business or assets, as determined by the Board of Directors in good
     faith,  is equal to or greater than the aggregate  Current  Market Price of
     the Common Stock to be issued as  consideration  for such  acquisition,  in
     each  case  determined  at the  time  the  Company  enters  into a  binding
     agreement  with  respect to such  acquisition),  (C)  pursuant  to warrants
     outstanding  on the date hereof,  (D) upon the  conversion of any shares of
     Series A Preferred  Stock  pursuant to Section 12(a) of the  Certificate of
     Designation,  (E) upon the  automatic  conversion  of shares of Series  A-1
     Preferred  Stock or Series A-2 Preferred Stock pursuant to Section 12(i) of
     the Certificate of  Designation,  or (F) upon exercise or conversion of any
     security the issuance of which caused an  adjustment  under the  provisions
     hereof or the issuance of which did not require adjustments hereunder), for
     a  consideration  per share (or, in the case of convertible or exchangeable
     securities having a conversion or exercise price per share of Common Stock)
     less than the Current  Market Price of the Common Stock on the date of such
     issuance,  the Exercise Price in effect  immediately prior to such issuance
     or sale  shall  be  reduced  effective  as of  immediately  following  such
     issuance or sale by multiplying such Exercise Price by a fraction,  (1) the
     numerator  of which  shall be the sum of (x) the number of shares of Common
     Stock  outstanding  immediately  prior to such issuance or sale and (y) the
     number  of  shares  of  Common  Stock  which  the  aggregate  consideration
     receivable  by the Company  for the total  number of  additional  shares of
     Common  Stock so issued or sold (or  issuable  on  conversion,  exercise or
     exchange) would purchase at the Current Market Price in effect  immediately
     prior to such  issuance or sale and (2) the  denominator  of which shall be
     the sum of the  number of shares of Common  Stock  outstanding  immediately
     prior to such  issuance  or sale and the  number  of  additional  shares of
     Common  Stock to be  issued  or sold  (or,  in the case of  convertible  or
     exchangeable securities, issuable on conversion, exercise or exchange).

              (ii) If the Company shall offer or issue rights or warrants to all
     holders  of its  outstanding  shares  of  Common  Stock  entitling  them to
     subscribe for or purchase  shares of Common Stock at a price per share less
     than the Current  Market  Price (as defined in Section  4(f)) on the Common
     Stock Record Date fixed for the  determination of shareholders  entitled to
     receive  such rights or warrants,  the Exercise  Price shall be adjusted so
     that the same shall equal the price  determined by multiplying the Exercise
     Price in effect at the  opening of  business  on the date after such Common
     Stock Record Date by a fraction of which the numerator  shall be the number
     of shares of  Common  Stock  outstanding  at the close of  business  on the
     Common  Stock  Record Date plus the number of shares of Common  Stock which
     the aggregate  offering price of the total number of shares of Common Stock
     subject to such rights or warrants  would  purchase at such Current  Market
     Price and of which the denominator  shall be the number of shares of Common
     Stock  outstanding at the close of business on the Common Stock Record Date
     plus the total number of additional  shares of Common Stock subject to such
     rights or warrants for  subscription  or purchase.  Such  adjustment  shall
     become  effective  immediately  after the  opening of  business  on the day
     following  the  Common  Stock  Record  Date  fixed  for   determination  of
     shareholders  entitled to purchase or receive such rights or  warrants.  To
     the extent that shares of Common Stock are not  delivered  pursuant to such
     rights or warrants,  upon the  expiration or  termination of such rights or
     warrants  the  Exercise  Price shall  again be adjusted to be the  Exercise
     Price  which  would  then be in effect  had the  adjustments  made upon the
     issuance of such  rights or warrants  been made on the basis of delivery of

                                       5
<PAGE>

     only the  number  of shares of Common  Stock  actually  delivered.  If such
     rights or warrants  are not so issued,  the  Exercise  Price shall again be
     adjusted  to be the  Exercise  Price  which would then be in effect if such
     date fixed for the  determination of shareholders  entitled to receive such
     rights or warrants had not been fixed. In determining whether any rights or
     warrants  entitle the holders to subscribe for or purchase shares of Common
     Stock at less  than such  Current  Market  Price,  and in  determining  the
     aggregate  offering  price of such shares of Common  Stock,  there shall be
     taken  into  account  (x) any  consideration  received  for such  rights or
     warrants,  with the  value of such  consideration  and the  amount  of such
     exercise or subscription price, if other than cash, to be determined by the
     Board of Directors and (y) the amount of any exercise price or subscription
     price required to be paid upon exercise of such warrants or rights.

          (c) If the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Exercise  Price in effect at the
opening  of  business on the day  following  the day upon which such subdivision
becomes  effective  shall  be proportionately  reduced, and, conversely,  if the
outstanding  shares of Common  Stock shall be combined into a smaller  number of
shares of Common  Stock, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day  following
the day upon which such subdivision or combination becomes effective.

          (d)

              (i) If the Company shall, by dividend or otherwise,  distribute to
     all holders of its shares of Common Stock any class of capital stock of the
     Company  (other than any dividends or  distributions  to which Section 4(a)
     applies) or evidences of its indebtedness,  cash or other assets (including
     securities,  but  excluding any rights or warrants of a type referred to in
     Section 4(b)(ii) and dividends and  distributions  paid exclusively in cash
     and excluding any capital stock, evidences of indebtedness,  cash or assets
     distributed  upon a merger or  consolidation to which Section 4(k) applies)
     (the  foregoing  hereinafter  in this Section 4(d) called the  "Distributed
     Securities"),  then, in each such case, the Exercise Price shall be reduced
     so that the same shall be equal to the price  determined by multiplying the
     Exercise Price in effect  immediately prior to the close of business on the
     Common Stock Record Date (as defined in Section  4(f)) with respect to such
     distribution  by a fraction  of which the  numerator  shall be the  Current
     Market Price (determined as provided in Section 4(f)) on such date less the
     fair market  value (as  determined  by the Board of  Directors,  whose good
     faith  determination  shall be conclusive  and described in a resolution of
     the Board of  Directors)  on such date of the  portion  of the  Distributed
     Securities so  distributed  applicable to one share of Common Stock and the
     denominator  shall be such Current  Market Price,  such reduction to become
     effective immediately prior to the opening of business on the day following
     the Common Stock Record Date;  provided,  however,  that,  in the event the
     then fair market value (as so determined) of the portion of the Distributed
     Securities so distributed  applicable to one share of Common Stock is equal
     to or greater  than the Current  Market  Price on the Common  Stock  Record
     Date, in lieu of the foregoing adjustment, adequate provision shall be made
     so that a  Warrantholder  shall have the right to receive upon  exercise of

                                       6
<PAGE>

     this Warrant (or any portion thereof) the amount of Distributed  Securities
     such holder would have received had such holder  exercised this Warrant (or
     portion  thereof)  immediately  prior to such Common Stock Record Date.  If
     such dividend or  distribution  is not so paid or made,  the Exercise Price
     shall  again be adjusted  to be the  Exercise  Price which would then be in
     effect if such dividend or distribution had not been declared. If the Board
     of  Directors  determines  the fair market  value of any  distribution  for
     purposes of this  Section  4(d) by  reference  to the actual or when issued
     trading  market  for  any  securities  constituting  all or  part  of  such
     distribution,  it must in doing so consider  the prices in such market over
     the same period used in  computing  the Current  Market  Price  pursuant to
     Section 4(f)) to the extent possible.

               (ii) Rights or warrants distributed by the Company to all holders
     of shares of Common Stock entitling the holders thereof to subscribe for or
     purchase shares of the Company's  capital stock (either  initially or under
     certain circumstances), which rights or warrants, until the occurrence of a
     specified event or events ("Dilution Trigger Event"):  (A) are deemed to be
     transferred with such shares of Common Stock; (B) are not exercisable;  and
     (C) are also  issued in  respect  of future  issuances  of shares of Common
     Stock,  shall be deemed not to have been  distributed  for purposes of this
     Section 4(d) (and no  adjustment  to the Exercise  Price under this Section
     4(d) shall be  required)  until the  occurrence  of the  earliest  Dilution
     Trigger  Event,  whereupon such rights and warrants shall be deemed to have
     been distributed and an appropriate  adjustment to the Exercise Price under
     this Section 4(d) shall be made. If any such rights or warrants,  including
     any such  existing  rights  or  warrants  distributed  prior  to the  first
     issuance  of the  Warrants,  are  subject to  subsequent  events,  upon the
     occurrence  of  each  of  which  such  rights  or  warrants   shall  become
     exercisable  to purchase  securities,  evidences of  indebtedness  or other
     assets,  then the  occurrence of each such event shall be deemed to be such
     date of  issuance  and record  date with  respect to new rights or warrants
     (and a  termination  or  expiration  of the  existing  rights or  warrants,
     without exercise by the holder thereof).  In addition,  in the event of any
     distribution  (or  deemed  distribution)  of  rights  or  warrants,  or any
     Dilution Trigger Event with respect thereto,  that was counted for purposes
     of  calculating  a  distribution  amount  for  which an  adjustment  to the
     Exercise  Price under this  Section  4(d) was made,  (1) in the case of any
     such rights or warrants  which shall all have been redeemed or  repurchased
     without  exercise  by any  holders  thereof,  the  Exercise  Price shall be
     readjusted upon such final  redemption or repurchase to give effect to such
     distribution  or Dilution  Trigger Event,  as the case may be, as though it
     were a cash distribution to which this Section 4(d) were applicable,  equal
     to the per share  redemption  or repurchase  price  received by a holder or
     holders of shares of Common  Stock with  respect to such rights or warrants
     (assuming  such holder had retained such rights or  warrants),  made to all
     holders  of  shares of Common  Stock as of the date of such  redemption  or
     repurchase, and (2) in the case of such rights or warrants which shall have
     expired or been terminated  without  exercise by any holders  thereof,  the
     Exercise  Price shall be  readjusted as if such rights and warrants had not
     been issued.

              (iii)  Notwithstanding any other provision of this Section 4(d) to
     the contrary, rights, warrants, evidences of indebtedness, other securities
     cash or other assets (including, without limitation, any rights distributed
     pursuant to any  shareholder  rights plan) shall be deemed not to have been
     distributed  for purposes of this Section 4(d) if the Company  makes proper

                                       7
<PAGE>

     provision  so that a  Warrantholder  who  exercises  this  Warrant  (or any
     portion  thereof) after the date fixed for  determination  of  shareholders
     entitled to receive  such  distribution  shall be entitled to receive  upon
     such exercise, in addition to the shares of Common Stock issuable upon such
     exercise, the amount and kind of such distributions that such Warrantholder
     would have been entitled to receive if such holder had immediately prior to
     such determination date, exercised this Warrant.

              (iv) For purposes of this Section 4(d) and Sections 4(a) and 4(b),
     any  dividend or distribution to which this Section 4(d) is applicable that
     also includes  shares of Common  Stock, or rights or  warrants to subscribe
     for or  purchase  shares of Common Stock  to which 4(b) applies (or  both),
     shall be  deemed  instead  to  be (A) a  dividend or  distribution  of  the
     evidences  of  indebtedness,  assets,  shares of capital  stock,  rights or
     warrants other than such shares of Common  Stock or rights or  warrants  to
     which  Section 4(b) applies (and any Exercise Price reduction  required  by
     this Section  4(d) with  respect to such  dividend  or  distribution  shall
     then  be made) immediately  followed by (B) a dividend  or distribution  of
     such shares of  Common  Stock or such  rights or warrants  (and any further
     Exercise Price reduction required by Sections  4(a) or 4(b) with respect to
     such dividend  or  distribution  shall then be made),  except  that (1) the
     Common  Stock  Record  Date  of such  dividend  or  distribution  shall  be
     substituted  as "the  date fixed for  the  determination  of   shareholders
     entitled to receive such dividend or other distribution", "the Common Stock
     Record  Date fixed  for such  determination"  and "the Common Stock  Record
     Date" within the meaning of Section 4(a) and as "the  date  fixed  for  the
     determination of shareholders entitled to receive such rights or warrants",
     "the  Common  Stock  Record  Date  fixed  for  the   determination  of  the
     shareholders  entitled to receive such rights or warrants" and "such Common
     Stock  Record  Date" for purposes  of Section  4(b), and (2) any  shares of
     Common Stock  included in such dividend or distribution shall not be deemed
     "outstanding  at  the  close  of  business  on  the  date  fixed   for such
     determination"  for the purposes of Section 4(a).

          (e) If a tender offer made by  the Company or any of its  subsidiaries
for all or  any portion of  the Common  Stock  expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased  Shares) of an  aggregate consideration  having a fair market value
(as determined by the Board of Directors, whose good faith  determination  shall
be conclusive and  described in a resolution  of the Board of  Directors)  that,
combined  together with the aggregate of the cash plus the fair market value (as
determined by the Board of Directors,  whose good faith  determination  shall be
conclusive  and  described in a resolution  of the Board of Directors) as of the
expiration  of such tender  offer,  of  consideration  payable in respect of any
other  tender  offers by the Company or any of its  subsidiaries  for all or any
portion of the shares of Common Stock  expiring  within the 12 months  preceding
the  expiration  of such  tender  offer and in  respect  of which no  adjustment
pursuant to this Section 4(e) has been made, exceeds 5% of the net income of the
Company  reported  for the 12 month period  ending with the fiscal  quarter next
preceding  such payment (the "12 Month Net Income")  (determined  as of the last
time (the  "Expiration  Time")  tenders  could have been made  pursuant  to such
tender offer (as it may be amended)),  then, and in each such case,  immediately
prior to the  opening of  business  on the day after the date of the  Expiration
Time,  the  Exercise  Price  shall be  adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect  immediately  prior

                                       8
<PAGE>

to the close of  business  on the date of the  Expiration  Time by a fraction of
which the  numerator  shall be the number of shares of Common Stock  outstanding
(including any tendered shares) at the Expiration Time multiplied by the Current
Market Price of a share of Common Stock on the trading day next  succeeding  the
Expiration  Time and the  denominator  shall  be the sum of (x) the fair  market
value  (determined  as  aforesaid)  of the  aggregate  consideration  payable to
shareholders  based on the acceptance (up to any maximum  specified in the terms
of the tender offer) of all shares validly  tendered and not withdrawn as of the
Expiration  Time (the shares deemed so accepted,  up to any such maximum,  being
referred  to as the  "Purchased  Shares")  and (y) the  product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Current  Market  Price of the shares of Common Stock on the trading
day next  succeeding  the  Expiration  Time,  such  reduction (if any) to become
effective  immediately prior to the opening of business on the day following the
Expiration  Time. If the Company is obligated to purchase shares pursuant to any
such tender offer,  but the Company is  permanently  prevented by applicable law
from  effecting  any such  purchases or all such  purchases are  rescinded,  the
Exercise Price shall again be adjusted to be the Exercise Price which would then
be in effect if such tender offer had not been made. If the  application of this
Section  4(e) to any tender  offer would  result in an increase in the  Exercise
Price,  no  adjustment  shall be made for such tender  offer under this  Section
4(e).

          (f) For purposes of this Section 4, the following terms shall have the
meaning indicated:

                         "Closing  Price" with respect to any  securities on any
        day means the closing  sale price as of 4:00 p.m.  Eastern  Time on such
        day or any earlier  final  closing on such day or, if no such sale takes
        place on such day, the average of the  reported  high and low bid prices
        on such day, in each case on the Nasdaq National Market, or the New York
        Stock  Exchange,  as  applicable,  or, if such security is not listed or
        admitted to trading on such national market or exchange, on the national
        stock  exchange or Commission  recognized  trading  market in the United
        States on which  such  security  is quoted  or  listed  or  admitted  to
        trading,  or, if not  quoted or listed or  admitted  to  trading  on any
        national stock exchange or Commission  recognized  trading market in the
        United  States,  the  average  of the  high and low bid  prices  of such
        security  on the  over-the-counter  market  on the  day in  question  as
        reported by the  National  Quotation  Bureau  Incorporated  or a similar
        generally accepted reporting service in the United States, or, if not so
        available,  in such manner as furnished  by any New York Stock  Exchange
        member firm  selected  from time to time by the Board of  Directors  for
        that  purpose,  or a price  determined  in good  faith  by the  Board of
        Directors,  whose  determination  shall be conclusive and described in a
        resolution of the Board of Directors.

                         "Common  Stock Record Date" means,  with respect to any
        dividend,  distribution  or other  transaction  or  event  in which  the
        holders of Common  Stock have the right to receive any cash,  securities
        or other  property  or in which the  Common  Stock (or other  applicable
        security) is exchanged for or converted  into any  combination  of cash,
        securities  or other  property,  the date  fixed  for  determination  of
        shareholders entitled to receive such cash, securities or other property
        (whether  such date is fixed by the Board of  Directors  or by  statute,
        contract or otherwise).

                                       9
<PAGE>

                         "Current  Market  Price" means the average of the daily
        Closing Prices per share of Common Stock for the 10 consecutive  trading
        days immediately prior to the date in question;  provided, however, that
        (A) if the "ex" date (as hereinafter  defined) for any event (other than
        the issuance or distribution  requiring such  computation) that requires
        an adjustment  to the Exercise  Price  pursuant to Section  4(a),  4(b),
        4(c),  4(d) or 4(e) occurs during such 10 consecutive  trading days, the
        Closing Price for each trading day prior to the "ex" date for such other
        event shall be adjusted by  multiplying  such Closing  Price by the same
        fraction by which the Exercise  Price is so required to be adjusted as a
        result of such other  event,  (B) if the "ex" date for any event  (other
        than the  issuance or  distribution  requiring  such  computation)  that
        requires an adjustment to the Exercise  Price  pursuant to Section 4(a),
        4(b),  4(c),  4(d) or 4(e)  occurs  on or after  the  "ex"  date for the
        issuance or distribution requiring such computation and prior to the day
        in  question,  the Closing  Price for each  trading day on and after the
        "ex" date for such other event shall be  adjusted  by  multiplying  such
        Closing  Price by the  reciprocal  of the fraction by which the Exercise
        Price is so  required to be adjusted as a result of such other event and
        (C) if the "ex" date for the  issuance or  distribution  requiring  such
        computation  is prior to the day in question,  after taking into account
        any adjustment  required  pursuant to clause (A) or (B) of this proviso,
        the Closing  Price for each trading day on or after such "ex" date shall
        be adjusted by adding thereto the amount of any cash and the fair market
        value (as  determined  by the Board of Directors in a manner  consistent
        with any good faith  determination of such value for purposes of Section
        4(d), whose good faith  determination  shall be conclusive and described
        in a  resolution  of  the  Board  of  Directors)  of  the  evidences  of
        indebtedness,  shares  of  capital  stock or  assets  being  distributed
        applicable  to one share of Common  Stock as of the close of business on
        the day before such "ex" date.  For  purposes of any  computation  under
        Section 4(e), the Current Market Price on any date shall be deemed to be
        the average of the daily  Closing  Prices per share of Common  Stock for
        such day and the next two succeeding  trading days;  provided,  however,
        that,  if the "ex"  date for any  event  (other  than the  tender  offer
        requiring such  computation) that requires an adjustment to the Exercise
        Price pursuant to Section 4(a),  4(b),  4(c),  4(d) or 4(e) occurs on or
        after the  Expiration  Time for the tender or exchange  offer  requiring
        such computation and prior to the day in question, the Closing Price for
        each  trading  day on and after the "ex" date for such other event shall
        be adjusted by  multiplying  such Closing Price by the reciprocal of the
        fraction by which the Exercise  Price is so required to be adjusted as a
        result of such other  event.  For purposes of this  paragraph,  the term
        "ex" date (1) when used with  respect to any  issuance or  distribution,
        means the first date on which the shares of Common  Stock trade  regular
        way on the relevant  exchange or in the  relevant  market from which the
        Closing Price was obtained without the right to receive such issuance or
        distribution,   (2)  when  used  with  respect  to  any  subdivision  or
        combination of shares of Common Stock, means the first date on which the
        shares of Common  Stock trade  regular  way on such  exchange or in such
        market after the time at which such  subdivision or combination  becomes
        effective and (3) when used with respect to any tender or exchange offer
        means the first date on which the shares of Common  Stock trade  regular
        way on such exchange or in such market after the Expiration Time of such
        offer. Notwithstanding the foregoing, whenever successive adjustments to
        the  Exercise  Price are called  for  pursuant  to this  Section 4, such
        adjustments  shall  be  made  to  the  Current  Market  Price  as may be
        necessary or  appropriate to effectuate the intent of this Section 4 and

                                       10
<PAGE>

        to avoid unjust or inequitable  results,  as determined in good faith by
        the Board of Directors.

                         "Fair  Market  Value"  means the amount which a willing
        buyer would pay a willing seller in an arm's-length transaction.

          (g) No adjustment in the Exercise  Price shall be required unless such
adjustment would  require an increase  or decrease of at least 1% in such price;
provided, however, that any  adjustments which by  reason of this  Section  4(g)
are not required  to be made shall be carried  forward and taken into account in
any subsequent adjustment.  All calculations  under this Section 4 shall be made
by the Company and shall be made to the nearest cent. No adjustment need be made
for a change in the par value or no par value of the Common Stock.

          (h)  Whenever the Exercise Price is adjusted as herein  provided,  the
Company  shall  promptly  file with the Warrant  Agent an Officer's  Certificate
setting forth the Exercise Price after such adjustment  and the number of shares
of Common Stock for which this Warrant will be exercisable after such adjustment
pursuant  to  Section  4(l) and  setting  forth a brief  statement  of the facts
requiring such  adjustment.  Promptly after  delivery of such  certificate,  the
Company shall prepare a notice of such  adjustment of the Exercise Price setting
forth the adjusted Exercise Price and the date on which each adjustment  becomes
effective and shall mail such notice of such adjustment of the Exercise Price to
each  Warrantholder  at such holder's last address  appearing on the register of
holders maintained for that purpose within 20 days of the effective date of such
adjustment.  Failure to deliver  such  notice  shall not affect the  legality or
validity of any such adjustment.

          (i) In any case in  which this Section 4  provides that an  adjustment
shall become  effective  immediately  after a  Common  Stock Record  Date for an
event, the Company may defer until the occurrence of such event  issuing  to the
holder of any  Warrant  exercised after such Common Stock Record Date and before
the occurrence of such event the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment  required by such event over and above
the shares of Common Stock issuable upon such exercise before giving  effect  to
such adjustment.

          (j) For purposes  of this Section 4, the  number of  shares of  Common
Stock at any  time outstanding  shall not include shares held in the treasury of
the Company  or by any  of its  subsidiaries.  The  Company  shall  not pay  any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company or by any of its subsidiaries.

          (k) In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or in case of any merger of another Person  into
the Company (other than a merger that does not  result in any  reclassification,
conversion,  exchange or cancellation  of outstanding  shares of Common Stock of
the  Company),  or in  case  of  any  sale,  conveyance  or  transfer  of all or
substantially all the assets of the Company,  the Warrantholders  shall have the
right  thereafter,  during the  period  such  Warrant  shall be  exercisable  as
specified in Section  2(d), to convert such Warrants into the kind and amount of
securities, cash and other property receivable upon such consolidation,  merger,
conveyance  or transfer  by a holder of the number of shares of Common  Stock of
the Company for which the Warrants might have been exercised  immediately  prior

                                       11
<PAGE>

to such consolidation,  merger, conveyance or transfer,  assuming such holder of
shares of Common Stock of the Company failed to exercise his rights of election,
if any,  as to the  kind or  amount  of  securities,  cash  and  other  property
receivable upon such  consolidation,  merger,  conveyance or transfer  (provided
that, if the kind or amount of securities,  cash and other  property  receivable
upon such consolidation, merger, conveyance or transfer is not the same for each
share of Common Stock of the Company in respect of which such rights of election
shall not have been  exercised  ("nonelecting  share"),  then for the purpose of
this Section  4(k) the kind and amount of  securities,  cash and other  property
receivable  upon such  consolidation,  merger,  conveyance  or  transfer by each
nonelecting  share shall be deemed to be the kind and amount so  receivable  per
share by a plurality of the nonelecting  shares).  Such securities shall provide
for  adjustments  which,  for events  subsequent  to the  effective  date of the
triggering  event,  shall be as nearly  equivalent as may be  practicable to the
adjustments  provided for in this Section  4(k).  The above  provisions  of this
Section  4(k)  shall  similarly  apply to  successive  consolidations,  mergers,
conveyances or transfers.

          (l) Upon  each  adjustment of  the Exercise  Price as  a result of the
operation of this Section 4, this Warrant shall thereafter evidence the right to
purchase, at the adjusted Exercise Price,  that number of shares of Common Stock
obtained by multiplying the number of shares covered by this Warrant immediately
prior to this adjustment by the Exercise Price in  effect  immediately  prior to
such  adjustment  and dividing the product so  obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.

          (m) In the  event that a  Warrantholder would be  entitled to  receive
upon exercise  hereof any  Redeemable  Capital  Stock and the  Company  redeems,
exchanges or otherwise acquires all of the outstanding shares or other  units of
such  Redeemable Capital  Stock (such event  being a "Redemption Event"),  then,
from and  after the effective date of such Redemption  Event, the  Warrantholder
shall be  entitled to receive upon exercise, in lieu  of shares or units of such
Redeemable  Capital  Stock,  the kind and  amount of shares  of stock  and other
securities and property receivable upon the Redemption Event by a holder  of the
number of  shares or units  of such  Redeemable  Capital  Stock  for which  this
Warrant could  have been  exercised  immediately  prior to the effective date of
such Redemption  Event (assuming,  to the  extent applicable,  that  such holder
failed to exercise any rights of election with respect  thereto and received per
share or unit of such Redeemable  Capital Stock the kind and amount of stock and
other securities and property received per share or unit by a  plurality  of the
non-electing  shares  or units of such  Redeemable  Capital  Stock),  and  (from
and after the effective date of such Redemption Event) the  Warrantholder  shall
have no other purchase rights under this Warrant with respect to such Redeemable
Capital Stock.  For  purposes of this Section 4(m)  "Redeemable  Capital  Stock"
means a class or series of capital  stock of the  Company  that  provides by its
terms a right  in favor of the  Company to call,  redeem, exchange  or otherwise
acquire all of the outstanding shares or units of such class or series.

    Section 5.     Notice of Certain Events.

               In case:

          (a) the Company shall  declare a  dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its earned surplus; or

                                       12
<PAGE>

          (b) the Company  shall  authorize  the  granting to all holders of its
shares of Common  Stock of rights or warrants to  subscribe  for or purchase any
shares of capital stock of any class or of any other rights; or

          (c) of  any  reclassification  of  the  Common  Stock  (other  than  a
subdivision or combination of the Company's outstanding shares of Common Stock),
or of any consolidation  or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or the sale, conveyance
or transfer of all or substantially all the assets of the Company;

          (d) of  the  voluntary  or  involuntary  dissolution,  liquidation  or
winding-up of the Company; or

          (e) of the taking of any other action referred to in Section 4;

then the Company  shall cause to be mailed to all  Warrantholders  at their last
addresses as they shall appear on the books of the Company, at least 20 Business
Days (or 10  Business  Days in any case  specified  in clause  (a) or (b) above)
prior to the applicable  date  hereinafter  specified,  a notice stating (x) the
date  on  which a  record  is to be  taken  for the  purpose  of such  dividend,
distribution,  rights or warrants,  or, if a record is not to be taken, the date
as of which the  holders of shares of Common  Stock of record to be  entitled to
such dividend, distribution,  rights or warrants are to be determined or (y) the
date on which such  reclassification,  consolidation,  merger,  sale,  transfer,
dissolution,  liquidation or winding-up is expected to become effective, and the
date as of which it is expected that holders of shares of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,  cash
or other property deliverable upon such reclassification, consolidation, merger,
sale,  transfer,  dissolution,  liquidation or  winding-up.  Failure to give the
notice  required by this  Section 5 or any defect  therein  shall not affect the
legality  or   validity  of  any   dividend,   distribution,   right,   warrant,
reclassification,    consolidation,   merger,   sale,   transfer,   dissolution,
liquidation or winding-up, or the vote upon any such action.

    Section 6.     Transfer of Warrants.

          (a) Warrant Register.

         The  Company   shall  maintain  a  register  (the  "Warrant  Register")
containing  the names,  addresses and facsimile  numbers of the  holder(s).  Any
holder of this Warrant or any portion thereof may change its address as shown on
the Warrant Register by written notice to the Company  requesting such a change.
Until this Warrant is transferred on the Warrant Register, the Company may treat
the  holder  as shown on the  Warrant  Register  as the  absolute  owner of this
Warrant for all purposes, notwithstanding any notice to the contrary.

          (b) Warrant Agent.

         The  Company   may, by  written  notice  to  the  holder,   appoint  an
agent for the purpose of maintaining the Warrant Register referred to in Section
6(a) above, issuing any other securities then issuable upon the exercise of this
Warrant,  exchanging  this Warrant,  replacing this Warrant or any or all of the

                                       13
<PAGE>

foregoing.  Thereafter, any such registration,  issuance or replacement,  as the
case may be, shall be made at the office of such agent.

          (c) Transferability and Negotiability of Warrant.

         Title  to this  Warrant  may  be  transferred  by  endorsement  (by the
holder  executing the Assignment Form attached  hereto) and delivery in the same
manner as negotiable instruments transferable by endorsement and delivery.

          (d) Exchange of Warrant Upon a Transfer.

         On  surrender of  this  Warrant  for  exchange,  properly  endorsed  on
the  Assignment  Form and subject to the provisions of this Warrant with respect
to compliance with the Securities Act, the Company at its expense shall issue to
or on the order of the holder a new warrant or  warrants  of like tenor,  in the
name of the holder or as the holders (on payment by the holder of any applicable
transfer  taxes) may direct,  exercisable for the number of Shares issuable upon
the exercise hereof.

    Section 7.     Registration Rights.

              If the  holder of this  Warrant is a party to, or an  assignee  of
rights under, that certain  Registration  Rights Agreement,  dated April 7, 2000
(the "Registration Rights Agreement"),  such holder shall be entitled to include
any shares of Common Stock or other  securities  received  upon  exercise of the
Warrant with such holder's  Registrable  Securities  (as such term is defined in
the Registration Rights Agreement),  on the terms and conditions as set forth in
the Registration Rights Agreement.

    Section 8.     Amendment and Waivers.

              No amendment,  modification  or  termination of this Warrant shall
be binding  unless  executed  in writing by the  Company  and the  Warrantholder
intending to be bound thereby.

    Section 9.     Waivers and Extensions.

              Any  provision of this Warrant may be amended,  waived or modified
only if such amendment,  waiver or modification is in writing,  is signed by the
party intending to be bound,  and specifically  refers to this Warrant.  Waivers
may be made in  advance  or after the right  waived  has arisen or the breach or
default  waived has occurred.  Any waiver may be  conditional.  No waiver of any
breach of any agreement or provision  herein  contained shall be deemed a waiver
of any  preceding or  succeeding  breach  thereof nor of any other  agreement or
provision  herein  contained.  No waiver or extension of time for performance of
any  obligations  or acts shall be deemed a waiver or  extension of the time for
performance of any other obligations or acts.

                                       14
<PAGE>

    Section 10.    Termination.

              The  right to exercise this Warrant shall expire and shall be void
at 5:00 p.m., New York City time on April 10, 2005.

    Section 11.    Reservation of Stock.

              The Company  covenants that  it will at all times reserve and keep
available,  solely for issuance  upon  exercise of this  Warrant,  all shares of
Common Stock or other  securities  from time to time  issuable  upon exercise of
this Warrant and, subject to any existing contractual limitations,  from time to
time, will take all steps necessary to amend its Certificate of Incorporation to
provide  sufficient  reserves  of  shares of  Common  Stock or other  securities
issuable upon exercise of this Warrant.  The Company further  covenants that all
shares  that may be  issued  upon the  exercise  of rights  represented  by this
Warrant and payment of the Exercise  Price,  as set forth herein,  will be fully
paid and non-assessable and free from all taxes, liens and charges in respect of
the issue  thereof.  The Company  also agrees that its  issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon exercise of this Warrant.

    Section 12.    Replacement.

               On receipt of evidence reasonably  satisfactory to the Company of
the loss, theft, destruction,  or mutilation of this Warrant and, in the case of
loss,  theft,  or  destruction,  on delivery of any indemnity  agreement or bond
reasonably  satisfactory  in form and amount to the  Company  or, in the case of
mutilation,  on surrender and  cancellation of this Warrant,  the Company at its
expense will execute and deliver, in lieu of this Warrant, a new Warrant of like
tenor.

    Section 13.    No Rights as Stockholder.

              Except  as  provided  in Section 2 or Section 4, no holder of this
Warrant,  as  such,  shall  be  entitled  to vote  or  receive  dividends  or be
considered a stockholder  of the Company for any purpose,  nor shall anything in
this Warrant be  construed to confer on any holder of this Warrant as such,  any
rights of a  stockholder  of the Company or any right to vote,  give or withhold
consent to any corporate  action,  to receive notice of meeting of stockholders,
to receive dividends or subscription rights or otherwise.

    Section 14.    Miscellaneous Provisions.

          (a) Governing Law.

              This  Warrant  shall  be  governed   by,  interpreted  under,  and
construed in  accordance  with the laws of the State of New York,  regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

          (b) Notices.

                                       15
<PAGE>

              All  notices,  demands,  requests,   consents,  approvals or other
communications  (collectively,  "Notices")  required  or  permitted  to be given
hereunder or which are given with  respect to this  Warrant  shall be in writing
and shall be personally served,  delivered by reputable air courier service with
charges prepaid, or transmitted by hand delivery,  telegram, telex or facsimile,
to such  address as such party  shall have  specified  most  recently by written
notice.  Notice shall be deemed given on the date of service or  transmission if
personally  served  or  transmitted  by  telegram,  telex or  facsimile.  Notice
otherwise sent as provided herein shall be deemed given on the next business day
following delivery of such notice to a reputable air courier service.

          (c) Binding Effect.

              The  provisions of this Warrant  shall be binding upon the Company
and its successors and assigns.

          (d) Remedies.

              In the event  of a breach of this  Warrant,  the  holder  shall be
entitled to injunctive relief and specific  performance of its rights under this
Warrant,  in addition to all of its rights  granted by law,  including,  without
limitation,  recovery of damages. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach of this
Warrant  by the  Company  and  hereby  waives  any  defense  in any  action  for
injunctive  relief  or  specific  performance  that a  remedy  at law  would  be
adequate.

          (e) Headings.

              Titles  and   headings  of  sections  of  this  Warrant   are  for
convenience  only and shall not affect the construction of any provision of this
Warrant.

                                       16
<PAGE>

               IN WITNESS  WHEREOF,  the Company has executed this Warrant as of
the date set forth above.

                                            ICG COMMUNICATIONS, INC.

                                            By:_____________________________
                                                 Name: H. Don Teague
                                                 Title: Executive Vice President

<PAGE>

                                SUBSCRIPTION FORM

                  (To be signed only upon exercise of Warrant)

To:  ICG Communications, Inc.
Attention:  Secretary

     1. The undersigned,  the holder of the attached Warrant, hereby irrevocably
elects to [exercise the purchase right  represented by that Warrant for, and  to
purchase  under that Warrant,  ___________1  shares of Common Stock and herewith
tenders any necessary payment of the purchase price in such number  of shares in
full.] [to exercise  [all][a  portion] of  the  purchase  right  represented  by
that  Warrant by  canceling  the  Warrant  with  respect to  ___________  shares
of Common  Stock in exchange for a number of shares of Common Stock equal to the
value [as determined  pursuant to the Warrant] as  the [portion of the]  Warrant
[being canceled].

     2. In  exercising  the  Warrant,  the  undersigned  hereby   confirms   and
acknowledges  that the shares of Common Stock or other  securities  to be issued
upon  exercise  thereof  are  being  acquired  solely  for   the account  of the
undersigned and not as  a nominee for any other party, and that the  undersigned
will not sell, offer for sale, pledge,  hypothecate or otherwise  dispose of any
shares of Common  Stock,  except under  circumstances that  will not result in a
violation  of the Securities  Act of 1933, as  amended, or any  applicable state
securities laws.

     3. Please issue a certificate(s) representing  said shares of Common  Stock
in the name of the undersigned or in the name of the transferee specified below.

     4. Please issue a  new Warrant for  the unexercised  portion in the name of
the undersigned or in the name of the permitted transferee specified below.

     5. Please deliver any certificate(s) or Warrant to the following address.

Name:___________________________
Address:_________________________
Attention:________________________

Dated:
                                             By:  ______________________________
                                                  Name

1 Insert here the number of shares called for on the face of the Warrant (or, in
the case of  partial  exercise,  the  portion  as to which the  Warrant is being
exercised),  without making any adjustment for additional shares of Common Stock
or any other  securities or property which,  under the adjustment  provisions of
the Warrant, may be deliverable upon exercise.

<PAGE>

                                 ASSIGNMENT FORM

               FOR  VALUE  RECEIVED  the  undersigned  registered  owner of this
Warrant hereby sells, assigns and transfers unto the assignee named below all of
the rights of the undersigned under this Warrant,  with respect to the number of
shares of Common Stock set forth below:

Name and Address of Assignee                            No. of Shares of
                                                        Common Stock

and does  hereby  irrevocably  constitute  and  appoint  _______________________
attorney-in-fact to register such transfer onto the books of ICG Communications,
Inc.  maintained  for the  purpose,  with  full  power  of  substitution  in the
premises.

Date:                                             Print Name:

                                                  Signature:
                                                  Witness:

NOTICE:  The  signature  on this  assignment  must  correspond  with the name as
written  upon the  face of the  within  Warrant  in  every  particular,  without
alteration or enlargement or any change whatsoever.

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