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                                                                     EXHIBIT 4.2

       CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES
                                     OF THE
                      SERIES C CONVERTIBLE PREFERRED STOCK
                                       OF
                               THE VIALINK COMPANY

         The undersigned, the Chief Executive Officer of The viaLink Company, a
Delaware corporation (the "Company"), in accordance with the provisions of the
Delaware General Corporation Law, does hereby certify that, pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the following resolution creating a series of
Series C Convertible Preferred Stock, was duly adopted on December 12, 2001:

         RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company by provisions of the Certificate
of Incorporation of the Company (the "Certificate of Incorporation"), there
hereby is created out of the shares of Preferred Stock, par value $.001 per
share, of the Company authorized in Article IV of the Certificate of
Incorporation (the "Preferred Stock,"), a series of Preferred Stock of the
Company, to be named "Series C Convertible Preferred Stock," consisting of Seven
Hundred (700) shares, which series shall have the following designations,
powers, preferences and relative and other special rights and the following
qualifications, limitations and restrictions:

12.      DESIGNATION AND RANK. THE DESIGNATION OF SUCH SERIES OF THE PREFERRED
         STOCK SHALL BE THE SERIES C CONVERTIBLE PREFERRED STOCK, PAR VALUE
         $.001 PER SHARE (THE "SERIES C PREFERRED STOCK"). THE MAXIMUM NUMBER OF
         SHARES OF SERIES C PREFERRED STOCK SHALL BE SEVEN HUNDRED (700) SHARES.
         THE SERIES C PREFERRED STOCK SHALL RANK (i) PRIOR TO THE COMMON STOCK,
         PAR VALUE $.001 PER SHARE (THE "COMMON STOCK"), AND TO ALL OTHER
         CLASSES AND SERIES OF EQUITY SECURITIES OF THE COMPANY WHICH BY ITS
         TERMS DOES NOT RANK SENIOR TO THE SERIES C PREFERRED STOCK ("JUNIOR
         STOCK"); (ii) ON PARITY WITH THE SERIES B CONVERTIBLE PREFERRED STOCK,
         AND (iii) JUNIOR TO ANY CLASS OR SERIES OF EQUITY SECURITIES WHICH BY
         ITS TERMS SHALL RANK SENIOR TO THE SERIES C PREFERRED STOCK. THE SERIES
         C PREFERRED STOCK SHALL BE SUBORDINATE TO AND RANK JUNIOR TO ALL
         INDEBTEDNESS OF THE COMPANY NOW OR HEREAFTER OUTSTANDING.

13.      DIVIDENDS. THE HOLDERS OF RECORD OF SHARES OF SERIES C PREFERRED STOCK
         SHALL NOT BE ENTITLED TO RECEIVE ANY DIVIDENDS.

14.      VOTING RIGHTS.

         14.1.    CLASS VOTING RIGHTS. THE SERIES C PREFERRED STOCK SHALL HAVE
                  THE FOLLOWING CLASS VOTING RIGHTS (IN ADDITION TO THE VOTING
                  RIGHTS SET FORTH IN SECTION 3(b) HEREOF). SO LONG AS ANY
                  SHARES OF THE SERIES C PREFERRED STOCK REMAIN OUTSTANDING, THE
                  COMPANY SHALL NOT, WITHOUT THE AFFIRMATIVE VOTE OR CONSENT OF

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                  THE HOLDERS OF AT LEAST THREE-FOURTHS (3/4) OF THE SHARES OF
                  THE SERIES C PREFERRED STOCK OUTSTANDING AT THE TIME, GIVEN IN
                  PERSON OR BY PROXY, EITHER IN WRITING OR AT A MEETING, IN
                  WHICH THE HOLDERS OF THE SERIES C PREFERRED STOCK VOTE
                  SEPARATELY AS A CLASS: (i) AUTHORIZE, CREATE, ISSUE OR
                  INCREASE THE AUTHORIZED OR ISSUED AMOUNT OF ANY CLASS OR
                  SERIES OF STOCK, INCLUDING BUT NOT LIMITED TO THE ISSUANCE OF
                  ANY MORE SHARES OF PREVIOUSLY AUTHORIZED COMMON STOCK OR
                  PREFERRED STOCK, RANKING PRIOR TO THE SERIES C PREFERRED
                  STOCK, WITH RESPECT TO THE DISTRIBUTION OF ASSETS ON
                  LIQUIDATION, DISSOLUTION OR WINDING UP; (ii) AMEND, ALTER OR
                  REPEAL THE PROVISIONS OF THE SERIES C PREFERRED STOCK, WHETHER
                  BY MERGER, CONSOLIDATION OR OTHERWISE, SO AS TO ADVERSELY
                  AFFECT ANY RIGHT, PREFERENCE, PRIVILEGE OR VOTING POWER OF THE
                  SERIES C PREFERRED STOCK; PROVIDED, HOWEVER, THAT ANY CREATION
                  AND ISSUANCE OF ANOTHER SERIES OF JUNIOR STOCK SHALL NOT BE
                  DEEMED TO ADVERSELY AFFECT SUCH RIGHTS, PREFERENCES,
                  PRIVILEGES OR VOTING POWERS; (iii) REPURCHASE, REDEEM OR PAY
                  DIVIDENDS ON, SHARES OF THE COMPANY'S JUNIOR STOCK; (iv) AMEND
                  THE CERTIFICATE OF INCORPORATION OR BY-LAWS OF THE COMPANY SO
                  AS TO AFFECT MATERIALLY AND ADVERSELY ANY RIGHT, PREFERENCE,
                  PRIVILEGE OR VOTING POWER OF THE SERIES C PREFERRED STOCK;
                  PROVIDED, HOWEVER, THAT ANY CREATION AND ISSUANCE OF ANOTHER
                  SERIES OF JUNIOR STOCK OR ANY OTHER CLASS OR SERIES OF EQUITY
                  SECURITIES WHICH BY ITS TERMS SHALL RANK ON PARITY WITH THE
                  SERIES C PREFERRED STOCK SHALL NOT BE DEEMED TO MATERIALLY AND
                  ADVERSELY AFFECT SUCH RIGHTS, PREFERENCES, PRIVILEGES OR
                  VOTING POWERS; (v) EFFECT ANY DISTRIBUTION WITH RESPECT TO
                  JUNIOR STOCK; OR (vi) RECLASSIFY THE COMPANY'S OUTSTANDING
                  SECURITIES.

         14.2.    GENERAL VOTING RIGHTS. EXCEPT WITH RESPECT TO TRANSACTIONS
                  UPON WHICH THE SERIES C PREFERRED STOCK SHALL BE ENTITLED TO
                  VOTE SEPARATELY AS A CLASS PURSUANT TO SECTION 3(a) ABOVE AND
                  EXCEPT AS OTHERWISE REQUIRED BY DELAWARE LAW, THE SERIES C
                  PREFERRED STOCK SHALL HAVE NO VOTING RIGHTS. THE COMMON STOCK
                  INTO WHICH THE SERIES C PREFERRED STOCK IS CONVERTIBLE SHALL,
                  UPON ISSUANCE, HAVE ALL OF THE SAME VOTING RIGHTS AS OTHER
                  ISSUED AND OUTSTANDING COMMON STOCK OF THE COMPANY.

         14.3.    LIQUIDATION PREFERENCE.

         14.4.    IN THE EVENT OF THE LIQUIDATION, DISSOLUTION OR WINDING UP OF
                  THE AFFAIRS OF THE COMPANY, WHETHER VOLUNTARY OR INVOLUNTARY,
                  AFTER PAYMENT OR PROVISION FOR PAYMENT OF THE DEBTS AND OTHER
                  LIABILITIES OF THE COMPANY, THE HOLDERS OF SHARES OF THE
                  SERIES C PREFERRED STOCK THEN OUTSTANDING SHALL BE ENTITLED TO
                  RECEIVE, OUT OF THE ASSETS OF THE COMPANY WHETHER SUCH ASSETS
                  ARE CAPITAL OR SURPLUS OF ANY NATURE, AN AMOUNT EQUAL TO
                  $10,000 PER SHARE (THE "LIQUIDATION PREFERENCE AMOUNT") OF THE
                  SERIES C PREFERRED STOCK BEFORE ANY PAYMENT SHALL BE MADE OR
                  ANY ASSETS DISTRIBUTED TO THE HOLDERS OF THE COMMON STOCK OR
                  ANY OTHER JUNIOR STOCK. IF THE ASSETS OF THE COMPANY ARE NOT
                  SUFFICIENT TO PAY IN FULL THE LIQUIDATION PREFERENCE AMOUNT
                  PAYABLE TO THE HOLDERS OF OUTSTANDING SHARES OF

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                  THE SERIES C PREFERRED STOCK AND ANY SERIES OF PREFERRED STOCK
                  OR ANY OTHER CLASS OF STOCK ON A PARITY, AS TO RIGHTS ON
                  LIQUIDATION, DISSOLUTION OR WINDING UP, WITH THE SERIES C
                  PREFERRED STOCK, THEN ALL OF SAID ASSETS WILL BE DISTRIBUTED
                  AMONG THE HOLDERS OF THE SERIES C PREFERRED STOCK AND THE
                  OTHER CLASSES OF STOCK ON A PARITY WITH THE SERIES C PREFERRED
                  STOCK, IF ANY, RATABLY IN ACCORDANCE WITH THE RESPECTIVE
                  AMOUNTS THAT WOULD BE PAYABLE ON SUCH SHARES IF ALL AMOUNTS
                  PAYABLE THEREON WERE PAID IN FULL. THE LIQUIDATION PAYMENT
                  WITH RESPECT TO EACH OUTSTANDING FRACTIONAL SHARE OF SERIES C
                  PREFERRED STOCK SHALL BE EQUAL TO A RATABLY PROPORTIONATE
                  AMOUNT OF THE LIQUIDATION PAYMENT WITH RESPECT TO EACH
                  OUTSTANDING SHARE OF SERIES C PREFERRED STOCK. ALL PAYMENTS
                  FOR WHICH THIS SECTION 4(a) PROVIDES SHALL BE IN CASH,
                  PROPERTY (VALUED AT ITS FAIR MARKET VALUE AS DETERMINED BY THE
                  COMPANY'S INDEPENDENT, OUTSIDE ACCOUNTANT) OR A COMBINATION
                  THEREOF; PROVIDED, HOWEVER, THAT NO CASH SHALL BE PAID TO
                  HOLDERS OF JUNIOR STOCK UNLESS EACH HOLDER OF THE OUTSTANDING
                  SHARES OF SERIES C PREFERRED STOCK HAS BEEN PAID IN CASH THE
                  FULL LIQUIDATION PREFERENCE AMOUNT TO WHICH SUCH HOLDER IS
                  ENTITLED AS PROVIDED HEREIN. AFTER PAYMENT OF THE FULL
                  LIQUIDATION PREFERENCE AMOUNT TO WHICH EACH HOLDER IS
                  ENTITLED, SUCH HOLDERS OF SHARES OF SERIES C PREFERRED STOCK
                  WILL NOT BE ENTITLED TO ANY FURTHER PARTICIPATION AS SUCH IN
                  ANY DISTRIBUTION OF THE ASSETS OF THE COMPANY.

         14.5.    A CONSOLIDATION OR MERGER OF THE COMPANY WITH OR INTO ANY
                  OTHER CORPORATION OR CORPORATIONS, OR A SALE OF ALL OR
                  SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY, OR THE
                  EFFECTUATION BY THE COMPANY OF A TRANSACTION OR SERIES OF
                  TRANSACTIONS IN WHICH MORE THAN 50% OF THE VOTING SHARES OF
                  THE COMPANY IS DISPOSED OF OR CONVEYED, SHALL NOT BE DEEMED TO
                  BE A LIQUIDATION, DISSOLUTION, OR WINDING UP WITHIN THE
                  MEANING OF THIS SECTION 4. IN THE EVENT OF THE MERGER OR
                  CONSOLIDATION OF THE COMPANY WITH OR INTO ANOTHER CORPORATION,
                  THE SERIES C PREFERRED STOCK SHALL MAINTAIN ITS RELATIVE
                  POWERS, DESIGNATIONS AND PREFERENCES PROVIDED FOR HEREIN AND
                  NO MERGER SHALL RESULT INCONSISTENT THEREWITH.

         14.6.    WRITTEN NOTICE OF ANY VOLUNTARY OR INVOLUNTARY LIQUIDATION,
                  DISSOLUTION OR WINDING UP OF THE AFFAIRS OF THE COMPANY,
                  STATING A PAYMENT DATE AND THE PLACE WHERE THE DISTRIBUTABLE
                  AMOUNTS SHALL BE PAYABLE, SHALL BE GIVEN BY MAIL, POSTAGE
                  PREPAID, NO LESS THAN FORTY-FIVE (45) DAYS PRIOR TO THE
                  PAYMENT DATE STATED THEREIN, TO THE HOLDERS OF RECORD OF THE
                  SERIES C PREFERRED STOCK AT THEIR RESPECTIVE ADDRESSES AS THE
                  SAME SHALL APPEAR ON THE BOOKS OF THE COMPANY.

15.      CONVERSION. THE HOLDER OF SERIES C PREFERRED STOCK SHALL HAVE THE
         FOLLOWING CONVERSION RIGHTS (THE "CONVERSION RIGHTS"):

         15.1.    RIGHT TO CONVERT. COMMENCING ON JANUARY 31, 2002, THE HOLDER
                  OF ANY SUCH SHARES OF SERIES C PREFERRED STOCK MAY, AT SUCH
                  HOLDER'S OPTION, SUBJECT TO

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                  THE LIMITATIONS SET FORTH IN SECTION 7 HEREIN, ELECT TO
                  CONVERT (A "VOLUNTARY CONVERSION") ALL OR ANY PORTION OF THE
                  SHARES OF SERIES C PREFERRED STOCK HELD BY SUCH PERSON INTO A
                  NUMBER OF FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK
                  (THE "CONVERSION RATE") EQUAL TO THE QUOTIENT OF (i) THE
                  LIQUIDATION PREFERENCE AMOUNT OF THE SHARES OF SERIES C
                  PREFERRED STOCK BEING CONVERTED DIVIDED BY (ii) THE CONVERSION
                  PRICE (AS DEFINED IN SECTION 5(d)(iii) BELOW) THEN IN EFFECT
                  AS OF THE DATE OF THE DELIVERY BY SUCH HOLDER OF ITS NOTICE OF
                  ELECTION TO CONVERT. NOTWITHSTANDING THE FOREGOING, FOR THE
                  PERIOD FROM JANUARY 31, 2002 THROUGH MAY 6, 2002, THE HOLDERS
                  OF THE SERIES C PREFERRED STOCK SHALL NOT CONVERT IN EXCESS OF
                  ONE-THIRD (1/3) OF SUCH HOLDER'S SHARES OF SERIES C PREFERRED
                  STOCK DURING ANY TWENTY (20) TRADING DAY PERIOD; PROVIDED,
                  HOWEVER, THAT THIS RESTRICTION SHALL NOT APPLY IF (A) A
                  CONVERSION NOTICE (AS DEFINED BELOW) IS RECEIVED BY THE
                  COMPANY AT SUCH TIME WHEN THE CLOSING BID PRICE (AS DEFINED IN
                  SECTION 5(d) HEREOF) OF THE COMMON STOCK EXCEEDS $.50 DURING
                  ANY OF THE FIVE (5) TRADING DAYS PRIOR TO THE RECEIPT OF SUCH
                  CONVERSION NOTICE OR (B) THE COMPANY SHALL HAVE DELIVERED A
                  COMPANY REDEMPTION NOTICE PURSUANT TO SECTION 8(h) HEREOF.

         15.2.    MECHANICS OF VOLUNTARY CONVERSION. THE VOLUNTARY CONVERSION OF
                  SERIES C PREFERRED STOCK SHALL BE CONDUCTED IN THE FOLLOWING
                  MANNER:

                  15.2.1.  HOLDER'S DELIVERY REQUIREMENTS. TO CONVERT SERIES C
                           PREFERRED STOCK INTO FULL SHARES OF COMMON STOCK ON
                           ANY DATE (THE "VOLUNTARY CONVERSION DATE"), THE
                           HOLDER THEREOF SHALL (A) TRANSMIT BY FACSIMILE (OR
                           OTHERWISE DELIVER), FOR RECEIPT ON OR PRIOR TO 5:00
                           P.M., NEW YORK TIME ON SUCH DATE, A COPY OF A FULLY
                           EXECUTED NOTICE OF CONVERSION IN THE FORM ATTACHED
                           HERETO AS EXHIBIT I (THE "CONVERSION NOTICE"), TO THE
                           COMPANY, AND (B) SURRENDER TO A COMMON CARRIER FOR
                           DELIVERY TO THE COMPANY AS SOON AS PRACTICABLE
                           FOLLOWING SUCH VOLUNTARY CONVERSION DATE BUT IN NO
                           EVENT LATER THAN SIX (6) BUSINESS DAYS AFTER SUCH
                           DATE THE ORIGINAL CERTIFICATES REPRESENTING THE
                           SHARES OF SERIES C PREFERRED STOCK BEING CONVERTED
                           (OR AN INDEMNIFICATION UNDERTAKING WITH RESPECT TO
                           SUCH SHARES IN THE CASE OF THEIR LOSS, THEFT OR
                           DESTRUCTION) (THE "PREFERRED STOCK CERTIFICATES") AND
                           THE ORIGINALLY EXECUTED CONVERSION NOTICE.

                  15.2.2.  COMPANY'S RESPONSE. UPON RECEIPT BY THE COMPANY OF A
                           FACSIMILE COPY OF A CONVERSION NOTICE, THE COMPANY
                           SHALL IMMEDIATELY SEND, VIA FACSIMILE, A CONFIRMATION
                           OF RECEIPT OF SUCH CONVERSION NOTICE TO SUCH HOLDER.
                           UPON RECEIPT BY THE COMPANY OF THE PREFERRED STOCK
                           CERTIFICATES TO BE CONVERTED PURSUANT TO A CONVERSION
                           NOTICE, TOGETHER WITH THE ORIGINALLY EXECUTED
                           CONVERSION NOTICE, THE COMPANY OR ITS DESIGNATED
                           TRANSFER AGENT (THE "TRANSFER AGENT"), AS APPLICABLE,
                           SHALL, WITHIN THREE (3) BUSINESS DAYS FOLLOWING THE
                           DATE OF RECEIPT BY THE COMPANY OF BOTH, ISSUE AND
                           DELIVER TO THE DEPOSITORY TRUST COMPANY ("DTC")
                           ACCOUNT ON THE HOLDER'S BEHALF VIA THE

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                           DEPOSIT WITHDRAWAL AGENT COMMISSION SYSTEM ("DWAC")
                           AS SPECIFIED IN THE CONVERSION NOTICE, REGISTERED IN
                           THE NAME OF THE HOLDER OR ITS DESIGNEE, FOR THE
                           NUMBER OF SHARES OF COMMON STOCK TO WHICH THE HOLDER
                           SHALL BE ENTITLED. IF THE NUMBER OF SHARES OF
                           PREFERRED STOCK REPRESENTED BY THE PREFERRED STOCK
                           CERTIFICATE(S) SUBMITTED FOR CONVERSION IS GREATER
                           THAN THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK
                           BEING CONVERTED, THEN THE COMPANY SHALL, AS SOON AS
                           PRACTICABLE AND IN NO EVENT LATER THAN FIVE (5)
                           BUSINESS DAYS AFTER RECEIPT OF THE PREFERRED STOCK
                           CERTIFICATE(S) AND AT THE COMPANY'S EXPENSE, ISSUE
                           AND DELIVER TO THE HOLDER A NEW PREFERRED STOCK
                           CERTIFICATE REPRESENTING THE NUMBER OF SHARES OF
                           SERIES C PREFERRED STOCK NOT CONVERTED.

                  15.2.3.  DISPUTE RESOLUTION. IN THE CASE OF A DISPUTE AS TO
                           THE ARITHMETIC CALCULATION OF THE NUMBER OF SHARES OF
                           COMMON STOCK TO BE ISSUED UPON CONVERSION, THE
                           COMPANY SHALL PROMPTLY ISSUE TO THE HOLDER THE NUMBER
                           OF SHARES OF COMMON STOCK THAT IS NOT DISPUTED AND
                           SHALL SUBMIT THE ARITHMETIC CALCULATIONS TO THE
                           HOLDER VIA FACSIMILE AS SOON AS POSSIBLE, BUT IN NO
                           EVENT LATER THAN TWO (2) BUSINESS DAYS AFTER RECEIPT
                           OF SUCH HOLDER'S CONVERSION NOTICE. IF SUCH HOLDER
                           AND THE COMPANY ARE UNABLE TO AGREE UPON THE
                           ARITHMETIC CALCULATION OF THE NUMBER OF SHARES OF
                           COMMON STOCK TO BE ISSUED UPON SUCH CONVERSION WITHIN
                           ONE (1) BUSINESS DAY OF SUCH DISPUTED ARITHMETIC
                           CALCULATION BEING SUBMITTED TO THE HOLDER, THEN THE
                           COMPANY SHALL WITHIN ONE (1) BUSINESS DAY SUBMIT VIA
                           FACSIMILE THE DISPUTED ARITHMETIC CALCULATION OF THE
                           NUMBER OF SHARES OF COMMON STOCK TO BE ISSUED UPON
                           SUCH CONVERSION TO THE COMPANY'S INDEPENDENT, OUTSIDE
                           ACCOUNTANT. THE COMPANY SHALL CAUSE THE ACCOUNTANT TO
                           PERFORM THE CALCULATIONS AND NOTIFY THE COMPANY AND
                           THE HOLDER OF THE RESULTS NO LATER THAN SEVENTY-TWO
                           (72) HOURS FROM THE TIME IT RECEIVES THE DISPUTED
                           CALCULATIONS. SUCH ACCOUNTANT'S CALCULATION SHALL BE
                           BINDING UPON ALL PARTIES ABSENT MANIFEST ERROR. THE
                           REASONABLE EXPENSES OF SUCH ACCOUNTANT IN MAKING SUCH
                           DETERMINATION SHALL BE PAID BY THE COMPANY, IN THE
                           EVENT THE HOLDER'S CALCULATION WAS CORRECT, OR BY THE
                           HOLDER, IN THE EVENT THE COMPANY'S CALCULATION WAS
                           CORRECT, OR EQUALLY BY THE COMPANY AND THE HOLDER IN
                           THE EVENT THAT NEITHER THE COMPANY'S OR THE HOLDER'S
                           CALCULATION WAS CORRECT. THE PERIOD OF TIME IN WHICH
                           THE COMPANY IS REQUIRED TO EFFECT CONVERSIONS OR
                           REDEMPTIONS UNDER THIS CERTIFICATE OF DESIGNATION
                           SHALL BE TOLLED WITH RESPECT TO THE SUBJECT
                           CONVERSION OR REDEMPTION PENDING RESOLUTION OF ANY
                           DISPUTE BY THE COMPANY MADE IN GOOD FAITH AND IN
                           ACCORDANCE WITH THIS SECTION 5(b)(iii).

                  15.2.4.  RECORD HOLDER. THE PERSON OR PERSONS ENTITLED TO
                           RECEIVE THE SHARES OF COMMON STOCK ISSUABLE UPON A
                           CONVERSION OF THE SERIES C PREFERRED STOCK SHALL BE
                           TREATED FOR ALL PURPOSES AS THE RECORD HOLDER OR
                           HOLDERS OF SUCH SHARES OF COMMON STOCK ON THE
                           CONVERSION DATE.

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                  15.2.5.  COMPANY'S FAILURE TO TIMELY CONVERT. IF WITHIN THREE
                           (3) BUSINESS DAYS OF THE COMPANY'S RECEIPT OF THE
                           CONVERSION NOTICE AND THE PREFERRED STOCK
                           CERTIFICATES TO BE CONVERTED (THE "SHARE DELIVERY
                           PERIOD") THE COMPANY SHALL FAIL TO ISSUE AND DELIVER
                           TO A HOLDER THE NUMBER OF SHARES OF COMMON STOCK TO
                           WHICH SUCH HOLDER IS ENTITLED UPON SUCH HOLDER'S
                           CONVERSION OF THE SERIES C PREFERRED STOCK OR TO
                           ISSUE A NEW PREFERRED STOCK CERTIFICATE REPRESENTING
                           THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK TO
                           WHICH SUCH HOLDER IS ENTITLED PURSUANT TO SECTION
                           5(b)(ii) (A "CONVERSION FAILURE"), IN ADDITION TO ALL
                           OTHER AVAILABLE REMEDIES WHICH SUCH HOLDER MAY PURSUE
                           HEREUNDER AND UNDER THE PURCHASE AGREEMENT DATED AS
                           OF DECEMBER 28, 2001 BETWEEN THE COMPANY AND THE
                           INITIAL HOLDERS OF THE SERIES C PREFERRED STOCK (THE
                           "PURCHASE AGREEMENT") (INCLUDING INDEMNIFICATION
                           PURSUANT TO ARTICLE VIII THEREOF), THE COMPANY SHALL
                           PAY ADDITIONAL DAMAGES TO SUCH HOLDER ON EACH
                           BUSINESS DAY AFTER SUCH THIRD (3RD) BUSINESS DAY THAT
                           SUCH CONVERSION IS NOT TIMELY EFFECTED IN AN AMOUNT
                           EQUAL 0.5% OF THE PRODUCT OF (A) THE SUM OF THE
                           NUMBER OF SHARES OF COMMON STOCK NOT ISSUED TO THE
                           HOLDER ON A TIMELY BASIS PURSUANT TO SECTION 5(b)(ii)
                           AND TO WHICH SUCH HOLDER IS ENTITLED AND, IN THE
                           EVENT THE COMPANY HAS FAILED TO DELIVER A PREFERRED
                           STOCK CERTIFICATE TO THE HOLDER ON A TIMELY BASIS
                           PURSUANT TO SECTION 5(b)(ii), THE NUMBER OF SHARES OF
                           COMMON STOCK ISSUABLE UPON CONVERSION OF THE SHARES
                           OF SERIES C PREFERRED STOCK REPRESENTED BY SUCH
                           PREFERRED STOCK CERTIFICATE, AS OF THE LAST POSSIBLE
                           DATE WHICH THE COMPANY COULD HAVE ISSUED SUCH
                           PREFERRED STOCK CERTIFICATE TO SUCH HOLDER WITHOUT
                           VIOLATING SECTION 5(b)(ii) AND (B) THE CLOSING BID
                           PRICE (AS DEFINED IN SECTION 5(d) BELOW) OF THE
                           COMMON STOCK ON THE LAST POSSIBLE DATE WHICH THE
                           COMPANY COULD HAVE ISSUED SUCH COMMON STOCK AND SUCH
                           PREFERRED STOCK CERTIFICATE, AS THE CASE MAY BE, TO
                           SUCH HOLDER WITHOUT VIOLATING SECTION 5(b)(ii). IF
                           THE COMPANY FAILS TO PAY THE ADDITIONAL DAMAGES SET
                           FORTH IN THIS SECTION 5(b)(v) WITHIN FIVE (5)
                           BUSINESS DAYS OF THE DATE INCURRED, THEN SUCH PAYMENT
                           SHALL BEAR INTEREST AT THE RATE OF 2% PER MONTH (PRO
                           RATED FOR PARTIAL MONTHS) UNTIL SUCH PAYMENTS ARE
                           MADE.

         15.3.    MANDATORY CONVERSION.

                  15.3.1.  SUBJECT TO THE EXCHANGE CAP (AS DEFINED IN SECTION 7
                           HEREOF), EACH SHARE OF SERIES C PREFERRED STOCK
                           OUTSTANDING ON THE MANDATORY CONVERSION DATE SHALL,
                           AUTOMATICALLY AND WITHOUT ANY ACTION ON THE PART OF
                           THE HOLDER THEREOF, CONVERT INTO A NUMBER OF FULLY
                           PAID AND NONASSESSABLE SHARES OF COMMON STOCK EQUAL
                           TO THE QUOTIENT OF (i) THE LIQUIDATION PREFERENCE
                           AMOUNT OF THE SHARES OF SERIES C PREFERRED STOCK
                           OUTSTANDING ON THE MANDATORY CONVERSION DATE DIVIDED
                           BY (ii) THE CONVERSION PRICE IN EFFECT ON THE
                           MANDATORY CONVERSION DATE.

                  15.3.2.  AS USED HEREIN, A "MANDATORY CONVERSION DATE" SHALL
                           BE THE DATE WHICH IS AT LEAST EIGHTEEN (18) MONTHS
                           AFTER THE DATE OF ISSUANCE OF THE SERIES C

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                           PREFERRED STOCK (THE "ISSUANCE DATE"), PROVIDED, THAT
                           THE CLOSING BID PRICE OF THE COMMON STOCK EXCEEDS
                           $.80 FOR A PERIOD OF TWENTY (20) CONSECUTIVE TRADING
                           DAYS AND THE COMMON STOCK UNDERLYING THE SERIES C
                           PREFERRED STOCK IS REGISTERED PURSUANT TO AN
                           EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
                           ACT OF 1933, AS AMENDED; AND FURTHER PROVIDED THAT
                           THE MANDATORY CONVERSION DATE SHALL BE EXTENDED FOR
                           AS LONG AS (A) THE CONVERSION OF SUCH SHARE OF
                           PREFERRED STOCK WOULD VIOLATE SECTION 7, (B) A
                           TRIGGERING EVENT (AS DEFINED IN SECTION 8(d) HEREOF)
                           SHALL HAVE OCCURRED AND BE CONTINUING OR (C) ANY
                           EVENT SHALL HAVE OCCURRED AND BE CONTINUING WHICH
                           WITH THE PASSAGE OF TIME AND THE FAILURE TO CURE
                           WOULD RESULT IN A TRIGGERING EVENT. THE MANDATORY
                           CONVERSION DATE AND THE VOLUNTARY CONVERSION DATE
                           COLLECTIVELY ARE REFERRED TO IN THIS CERTIFICATE OF
                           DESIGNATION AS THE "CONVERSION DATE."

                  15.3.3.  ON THE MANDATORY CONVERSION DATE, THE OUTSTANDING
                           SHARES OF SERIES C PREFERRED STOCK SHALL BE CONVERTED
                           AUTOMATICALLY WITHOUT ANY FURTHER ACTION BY THE
                           HOLDERS OF SUCH SHARES AND WHETHER OR NOT THE
                           CERTIFICATES REPRESENTING SUCH SHARES ARE SURRENDERED
                           TO THE COMPANY OR ITS TRANSFER AGENT; PROVIDED,
                           HOWEVER, THAT THE COMPANY SHALL NOT BE OBLIGATED TO
                           ISSUE THE SHARES OF COMMON STOCK ISSUABLE UPON
                           CONVERSION OF ANY SHARES OF SERIES C PREFERRED STOCK
                           UNLESS CERTIFICATES EVIDENCING SUCH SHARES OF SERIES
                           C PREFERRED STOCK ARE EITHER DELIVERED TO THE COMPANY
                           OR THE HOLDER NOTIFIES THE COMPANY THAT SUCH
                           CERTIFICATES HAVE BEEN LOST, STOLEN, OR DESTROYED,
                           AND EXECUTES AN AGREEMENT SATISFACTORY TO THE COMPANY
                           TO INDEMNIFY THE COMPANY FROM ANY LOSS INCURRED BY IT
                           IN CONNECTION THEREWITH. UPON THE OCCURRENCE OF THE
                           AUTOMATIC CONVERSION OF THE SERIES C PREFERRED STOCK
                           PURSUANT TO THIS SECTION 5, THE HOLDERS OF THE SERIES
                           C PREFERRED STOCK SHALL SURRENDER THE PREFERRED STOCK
                           CERTIFICATES REPRESENTING THE SERIES C PREFERRED
                           STOCK FOR WHICH THE MANDATORY CONVERSION DATE HAS
                           OCCURRED TO THE COMPANY AND THE COMPANY SHALL DELIVER
                           THE SHARES OF COMMON STOCK ISSUABLE UPON SUCH
                           CONVERSION (IN THE SAME MANNER SET FORTH IN SECTION
                           5(b)(ii)) TO THE HOLDER WITHIN THREE (3) BUSINESS
                           DAYS OF THE HOLDER'S DELIVERY OF THE APPLICABLE
                           PREFERRED STOCK CERTIFICATES.

         15.4.    CONVERSION PRICE.

                  15.4.1.  THE TERM "CONVERSION PRICE" SHALL MEAN NINETY PERCENT
                           (90%) OF THE MARKET PRICE; PROVIDED, HOWEVER, THAT
                           THE CONVERSION PRICE SHALL NEVER BE LESS THAN 90% OF
                           THE FLOOR PRICE (AS DEFINED BELOW).

                  15.4.2.  THE TERM "MARKET PRICE" MEANS THE AVERAGE OF THE FIVE
                           (5) LOWEST VOLUME WEIGHTED AVERAGE PRICES (AS DEFINED
                           BELOW) FOR THE COMPANY'S COMMON STOCK DURING THE
                           FIFTEEN (15) TRADING DAYS IMMEDIATELY PRIOR TO THE
                           VOLUNTARY

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                           CONVERSION DATE, SUBJECT TO ADJUSTMENT UNDER SECTION
                           5(e) HEREOF; PROVIDED, THAT THE MARKET PRICE SHALL
                           NEVER BE GREATER THAN $.50.

                  15.4.3.  THE TERM "VOLUME WEIGHTED AVERAGE PRICE" SHALL MEAN
                           THE DAILY VOLUME WEIGHTED AVERAGE PRICE (BASED ON A
                           TRADING DAY FROM 9:30 A.M. TO 4:00 P.M., EASTERN
                           TIME) OF THE COMMON STOCK OF THE COMPANY ON THE
                           NASDAQ NATIONAL MARKET (OR ANY SUCCESSOR THERETO) AS
                           REPORTED BY BLOOMBERG FINANCIAL LP USING THE AQR
                           FUNCTION.

                  15.4.4.  THE TERM "FLOOR PRICE" SHALL MEAN 50% OF THE MARKET
                           PRICE; PROVIDED, HOWEVER, THAT THE FLOOR PRICE SHALL
                           NEVER BE CALCULATED TO BE LESS THAN $.12 (UNLESS
                           ADJUSTED PURSUANT TO SECTION 5(e) HEREOF) NOR GREATER
                           THAN $.20.

                  15.4.5.  THE TERM "CLOSING BID PRICE" SHALL MEAN, FOR ANY
                           SECURITY AS OF ANY DATE, THE LAST CLOSING BID PRICE
                           OF SUCH SECURITY IN THE NASDAQ NATIONAL MARKET FOR
                           SUCH SECURITY AS REPORTED BY BLOOMBERG, OR, IF NO
                           CLOSING BID PRICE IS REPORTED FOR SUCH SECURITY BY
                           BLOOMBERG, THE LAST CLOSING TRADE PRICE OF SUCH
                           SECURITY AS REPORTED BY BLOOMBERG, OR, IF NO LAST
                           CLOSING TRADE PRICE IS REPORTED FOR SUCH SECURITY BY
                           BLOOMBERG, THE AVERAGE OF THE BID PRICES OF ANY
                           MARKET MAKERS FOR SUCH SECURITY AS REPORTED IN THE
                           "PINK SHEETS" BY THE NATIONAL QUOTATION BUREAU, INC.
                           IF THE CLOSING BID PRICE CANNOT BE CALCULATED FOR
                           SUCH SECURITY ON SUCH DATE ON ANY OF THE FOREGOING
                           BASES, THE CLOSING BID PRICE OF SUCH SECURITY ON SUCH
                           DATE SHALL BE THE FAIR MARKET VALUE AS MUTUALLY
                           DETERMINED BY THE COMPANY AND THE HOLDERS OF A
                           MAJORITY OF THE OUTSTANDING SHARES OF SERIES C
                           PREFERRED STOCK.

         15.5.    ADJUSTMENTS OF CONVERSION PRICE.

                  15.5.1.  ADJUSTMENTS FOR STOCK SPLITS AND COMBINATIONS. IF THE
                           COMPANY SHALL AT ANY TIME OR FROM TIME TO TIME AFTER
                           THE ISSUANCE DATE, EFFECT A STOCK SPLIT OF THE
                           OUTSTANDING COMMON STOCK, THE CONVERSION PRICE SHALL
                           BE PROPORTIONATELY DECREASED. IF THE COMPANY SHALL AT
                           ANY TIME OR FROM TIME TO TIME AFTER THE ISSUANCE
                           DATE, COMBINE THE OUTSTANDING SHARES OF COMMON STOCK,
                           THE CONVERSION PRICE SHALL BE PROPORTIONATELY
                           INCREASED. ANY ADJUSTMENTS UNDER THIS SECTION 5(e)(i)
                           SHALL BE EFFECTIVE AT THE CLOSE OF BUSINESS ON THE
                           DATE THE STOCK SPLIT OR COMBINATION OCCURS.

                                      -8-
<PAGE>

                  15.5.2.  ADJUSTMENTS FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS.
                           IF THE COMPANY SHALL AT ANY TIME OR FROM TIME TO TIME
                           AFTER THE ISSUANCE DATE, MAKE OR ISSUE OR SET A
                           RECORD DATE FOR THE DETERMINATION OF HOLDERS OF
                           COMMON STOCK ENTITLED TO RECEIVE A DIVIDEND OR OTHER
                           DISTRIBUTION PAYABLE IN SHARES OF COMMON STOCK, THEN,
                           AND IN EACH EVENT, THE CONVERSION PRICE SHALL BE
                           DECREASED AS OF THE TIME OF SUCH ISSUANCE OR, IN THE
                           EVENT SUCH RECORD DATE SHALL HAVE BEEN FIXED, AS OF
                           THE CLOSE OF BUSINESS ON SUCH RECORD DATE, BY
                           MULTIPLYING, AS APPLICABLE, THE CONVERSION PRICE THEN
                           IN EFFECT BY A FRACTION:

                                    (1) the numerator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date; and

                                    (2) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus
the number of shares of Common Stock issuable in payment of such dividend or
distribution.

                  15.5.3.  ADJUSTMENT FOR OTHER DIVIDENDS AND DISTRIBUTIONS. IF
                           THE COMPANY SHALL AT ANY TIME OR FROM TIME TO TIME
                           AFTER THE ISSUANCE DATE, MAKE OR ISSUE OR SET A
                           RECORD DATE FOR THE DETERMINATION OF HOLDERS OF
                           COMMON STOCK ENTITLED TO RECEIVE A DIVIDEND OR OTHER
                           DISTRIBUTION PAYABLE IN OTHER THAN SHARES OF COMMON
                           STOCK, THEN, AND IN EACH EVENT, AN APPROPRIATE
                           REVISION TO THE APPLICABLE CONVERSION PRICE SHALL BE
                           MADE AND PROVISION SHALL BE MADE (BY ADJUSTMENTS OF
                           THE CONVERSION PRICE OR OTHERWISE) SO THAT THE
                           HOLDERS OF SERIES C PREFERRED STOCK SHALL RECEIVE
                           UPON CONVERSIONS THEREOF, IN ADDITION TO THE NUMBER
                           OF SHARES OF COMMON STOCK RECEIVABLE THEREON, THE
                           NUMBER OF SECURITIES OF THE COMPANY WHICH THEY WOULD
                           HAVE RECEIVED HAD THEIR SERIES C PREFERRED STOCK BEEN
                           CONVERTED INTO COMMON STOCK ON THE DATE OF SUCH EVENT
                           AND HAD THEREAFTER, DURING THE PERIOD FROM THE DATE
                           OF SUCH EVENT TO AND INCLUDING THE CONVERSION DATE,
                           RETAINED SUCH SECURITIES (TOGETHER WITH ANY
                           DISTRIBUTIONS PAYABLE THEREON DURING SUCH PERIOD),
                           GIVING APPLICATION TO ALL ADJUSTMENTS CALLED FOR
                           DURING SUCH PERIOD UNDER THIS SECTION 5(e)(iii) WITH
                           RESPECT TO THE RIGHTS OF THE HOLDERS OF THE SERIES C
                           PREFERRED STOCK.

                  15.5.4.  ADJUSTMENTS FOR RECLASSIFICATION, EXCHANGE OR
                           SUBSTITUTION. IF THE COMMON STOCK ISSUABLE UPON
                           CONVERSION OF THE SERIES C PREFERRED STOCK AT ANY
                           TIME OR FROM TIME TO TIME AFTER THE ISSUANCE DATE
                           SHALL BE CHANGED TO THE SAME OR DIFFERENT NUMBER OF
                           SHARES OF ANY CLASS OR CLASSES OF STOCK, WHETHER BY
                           RECLASSIFICATION, EXCHANGE, SUBSTITUTION OR OTHERWISE
                           (OTHER THAN BY WAY OF A STOCK SPLIT OR COMBINATION OF
                           SHARES OR STOCK DIVIDENDS PROVIDED FOR IN SECTIONS
                           5(e)(i), (ii) AND (iii), OR A REORGANIZATION, MERGER,
                           CONSOLIDATION, OR SALE OF ASSETS PROVIDED FOR IN
                           SECTION 5(e)(v)), THEN, AND IN EACH EVENT, AN
                           APPROPRIATE REVISION TO THE CONVERSION PRICE SHALL BE
                           MADE AND PROVISIONS SHALL BE MADE (BY ADJUSTMENTS OF
                           THE CONVERSION PRICE OR OTHERWISE) SO THAT

                                      -9-
<PAGE>

                           THE HOLDER OF EACH SHARE OF SERIES C PREFERRED STOCK
                           SHALL HAVE THE RIGHT THEREAFTER TO CONVERT SUCH SHARE
                           OF SERIES C PREFERRED STOCK INTO THE KIND AND AMOUNT
                           OF SHARES OF STOCK AND OTHER SECURITIES RECEIVABLE
                           UPON RECLASSIFICATION, EXCHANGE, SUBSTITUTION OR
                           OTHER CHANGE, BY HOLDERS OF THE NUMBER OF SHARES OF
                           COMMON STOCK INTO WHICH SUCH SHARE OF SERIES C
                           PREFERRED STOCK MIGHT HAVE BEEN CONVERTED IMMEDIATELY
                           PRIOR TO SUCH RECLASSIFICATION, EXCHANGE,
                           SUBSTITUTION OR OTHER CHANGE, ALL SUBJECT TO FURTHER
                           ADJUSTMENT AS PROVIDED HEREIN.

                  15.5.5.  ADJUSTMENTS FOR REORGANIZATION, MERGER, CONSOLIDATION
                           OR SALES OF ASSETS. IF AT ANY TIME OR FROM TIME TO
                           TIME AFTER THE ISSUANCE DATE THERE SHALL BE A CAPITAL
                           REORGANIZATION OF THE COMPANY (OTHER THAN BY WAY OF A
                           STOCK SPLIT OR COMBINATION OF SHARES OR STOCK
                           DIVIDENDS OR DISTRIBUTIONS PROVIDED FOR IN SECTION
                           5(e)(i), (ii) AND (iii), OR A RECLASSIFICATION,
                           EXCHANGE OR SUBSTITUTION OF SHARES PROVIDED FOR IN
                           SECTION 5(e)(iv)), OR A MERGER OR CONSOLIDATION OF
                           THE COMPANY WITH OR INTO ANOTHER CORPORATION, OR THE
                           SALE OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY'S
                           PROPERTIES OR ASSETS TO ANY OTHER PERSON (AN "ORGANIC
                           CHANGE"), THEN AS A PART OF SUCH ORGANIC CHANGE AN
                           APPROPRIATE REVISION TO THE CONVERSION PRICE SHALL BE
                           MADE AND PROVISION SHALL BE MADE (BY ADJUSTMENTS OF
                           THE CONVERSION PRICE OR OTHERWISE) SO THAT THE HOLDER
                           OF EACH SHARE OF SERIES C PREFERRED STOCK SHALL HAVE
                           THE RIGHT THEREAFTER TO CONVERT SUCH SHARE OF SERIES
                           C PREFERRED STOCK INTO THE KIND AND AMOUNT OF SHARES
                           OF STOCK AND OTHER SECURITIES OR PROPERTY OF THE
                           COMPANY OR ANY SUCCESSOR CORPORATION RESULTING FROM
                           ORGANIC CHANGE. IN ANY SUCH CASE, APPROPRIATE
                           ADJUSTMENT SHALL BE MADE IN THE APPLICATION OF THE
                           PROVISIONS OF THIS SECTION 5(e)(v) WITH RESPECT TO
                           THE RIGHTS OF THE HOLDERS OF THE SERIES C PREFERRED
                           STOCK AFTER THE ORGANIC CHANGE TO THE END THAT THE
                           PROVISIONS OF THIS SECTION 5(e)(v) (INCLUDING ANY
                           ADJUSTMENT IN THE CONVERSION PRICE THEN IN EFFECT AND
                           THE NUMBER OF SHARES OF STOCK OR OTHER SECURITIES
                           DELIVERABLE UPON CONVERSION OF THE SERIES C PREFERRED
                           STOCK) SHALL BE APPLIED AFTER THAT EVENT IN AS NEARLY
                           AN EQUIVALENT MANNER AS MAY BE PRACTICABLE.

                  15.5.6.  ADJUSTMENTS FOR ISSUANCE OF ADDITIONAL SHARES OF
                           COMMON STOCK. COMMENCING SIX MONTHS AFTER THE INITIAL
                           ISSUANCE OF THE SERIES C PREFERRED STOCK, IN THE
                           EVENT THE COMPANY SHALL ISSUE OR SELL ANY ADDITIONAL
                           SHARES OF COMMON STOCK (OTHERWISE THAN AS PROVIDED IN
                           THE FOREGOING SUBSECTIONS (i) THROUGH (v) OF THIS
                           SECTION 5(e)) (THE "ADDITIONAL SHARES OF COMMON
                           STOCK"), AT A PRICE PER SHARE LESS THAN THE FLOOR
                           PRICE THEN IN EFFECT OR WITHOUT CONSIDERATION, THE
                           FLOOR PRICE THEN IN EFFECT SHALL BE REDUCED TO A
                           PRICE EQUAL TO THE CONSIDERATION PER SHARE PAID FOR
                           SUCH ADDITIONAL SHARES OF COMMON STOCK.

                                      -10-
<PAGE>

                  15.5.7.  ISSUANCE OF COMMON STOCK EQUIVALENTS. IF THE COMPANY,
                           AT ANY TIME AFTER THE ISSUANCE DATE, SHALL ISSUE ANY
                           SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR,
                           DIRECTLY OR INDIRECTLY, COMMON STOCK ("CONVERTIBLE
                           SECURITIES"), OTHER THAN THE SERIES C PREFERRED
                           STOCK, OR ANY RIGHTS OR WARRANTS OR OPTIONS TO
                           PURCHASE ANY SUCH COMMON STOCK OR CONVERTIBLE
                           SECURITIES, SHALL BE ISSUED OR SOLD (COLLECTIVELY,
                           THE "COMMON STOCK EQUIVALENTS") AND THE PRICE PER
                           SHARE FOR WHICH ADDITIONAL SHARES OF COMMON STOCK MAY
                           BE ISSUABLE THEREAFTER PURSUANT TO SUCH COMMON STOCK
                           EQUIVALENT SHALL BE LESS THAN THE FLOOR PRICE THEN IN
                           EFFECT, THEN THE FLOOR PRICE UPON EACH SUCH ISSUANCE
                           OR AMENDMENT SHALL BE ADJUSTED AS PROVIDED IN THE
                           FIRST SENTENCE OF SUBSECTION (vi) OF THIS SECTION
                           5(e) ON THE BASIS THAT (1) THE MAXIMUM NUMBER OF
                           ADDITIONAL SHARES OF COMMON STOCK ISSUABLE PURSUANT
                           TO ALL SUCH COMMON STOCK EQUIVALENTS SHALL BE DEEMED
                           TO HAVE BEEN ISSUED (WHETHER OR NOT SUCH COMMON STOCK
                           EQUIVALENTS ARE ACTUALLY THEN EXERCISABLE,
                           CONVERTIBLE OR EXCHANGEABLE IN WHOLE OR IN PART) AS
                           OF THE EARLIER OF (A) THE DATE ON WHICH THE COMPANY
                           SHALL ENTER INTO A FIRM CONTRACT FOR THE ISSUANCE OF
                           SUCH COMMON STOCK EQUIVALENT, OR (B) THE DATE OF
                           ACTUAL ISSUANCE OF SUCH COMMON STOCK EQUIVALENT, AND
                           (2) THE AGGREGATE CONSIDERATION FOR SUCH MAXIMUM
                           NUMBER OF ADDITIONAL SHARES OF COMMON STOCK SHALL BE
                           DEEMED TO BE THE MINIMUM CONSIDERATION RECEIVED OR
                           RECEIVABLE BY THE COMPANY FOR THE ISSUANCE OF SUCH
                           ADDITIONAL SHARES OF COMMON STOCK PURSUANT TO SUCH
                           COMMON STOCK EQUIVALENT. NO ADJUSTMENT OF THE FLOOR
                           PRICE SHALL BE MADE UNDER THIS SUBSECTION (vii) UPON
                           THE ISSUANCE OF ANY CONVERTIBLE SECURITY WHICH IS
                           ISSUED PURSUANT TO THE EXERCISE OF ANY WARRANTS OR
                           OTHER SUBSCRIPTION OR PURCHASE RIGHTS THEREFOR, IF
                           ANY ADJUSTMENT SHALL PREVIOUSLY HAVE BEEN MADE TO THE
                           EXERCISE PRICE OF SUCH WARRANTS THEN IN EFFECT UPON
                           THE ISSUANCE OF SUCH WARRANTS OR OTHER RIGHTS
                           PURSUANT TO THIS SUBSECTION (vii).

                  15.5.8.  CONSIDERATION FOR STOCK. IN CASE ANY SHARES OF COMMON
                           STOCK OR CONVERTIBLE SECURITIES OTHER THAN THE SERIES
                           C PREFERRED STOCK, OR ANY RIGHTS OR WARRANTS OR
                           OPTIONS TO PURCHASE ANY SUCH COMMON STOCK OR
                           CONVERTIBLE SECURITIES, SHALL BE ISSUED OR SOLD:

                                    (3) in connection with any merger or
consolidation in which the Company is the surviving corporation (other than any
consolidation or merger in which the previously outstanding shares of Common
Stock of the Company shall be changed to or exchanged for the stock or other
securities of another corporation), the amount of consideration therefore shall
be, deemed to be the fair value, as determined reasonably and in good faith by
the Board of Directors of the Company, of such portion of the assets and
business of the nonsurviving corporation as such Board may determine to be
attributable to such shares of Common Stock, Convertible Securities, rights or
warrants or options, as the case may be; or

                                    (4) in the event of any consolidation or
merger of the Company in which the Company is not the surviving corporation or
in which the previously outstanding shares of Common Stock of the Company shall
be changed into or exchanged for the stock or other securities of

                                      -11-
<PAGE>

another corporation, or in the event of any sale of all or substantially all of
the assets of the Company for stock or other securities of any corporation, the
Company shall be deemed to have issued a number of shares of its Common Stock
for stock or securities or other property of the other corporation computed on
the basis of the actual exchange ratio on which the transaction was predicated,
and for a consideration equal to the fair market value on the date of such
transaction of all such stock or securities or other property of the other
corporation. If any such calculation results in adjustment of the applicable
Conversion Price, or the number of shares of Common Stock issuable upon
conversion of the Series C Preferred Stock, the determination of the applicable
Conversion Price or the number of shares of Common Stock issuable upon
conversion of the Series C Preferred Stock immediately prior to such merger,
consolidation or sale, shall be made after giving effect to such adjustment of
the number of shares of Common Stock issuable upon conversion of the Series C
Preferred Stock.

                  15.5.9.  RECORD DATE. IN CASE THE COMPANY SHALL TAKE RECORD OF
                           THE HOLDERS OF ITS COMMON STOCK OR ANY OTHER
                           PREFERRED STOCK FOR THE PURPOSE OF ENTITLING THEM TO
                           SUBSCRIBE FOR OR PURCHASE COMMON STOCK OR CONVERTIBLE
                           SECURITIES, THEN THE DATE OF THE ISSUE OR SALE OF THE
                           SHARES OF COMMON STOCK SHALL BE DEEMED TO BE SUCH
                           RECORD DATE.

                  15.5.10. CERTAIN ISSUES EXCEPTED. ANYTHING HEREIN TO THE
                           CONTRARY NOTWITHSTANDING, THE COMPANY SHALL NOT BE
                           REQUIRED TO MAKE ANY ADJUSTMENT OF THE CONVERSION
                           PRICE OR THE NUMBER OF SHARES OF COMMON STOCK
                           ISSUABLE UPON CONVERSION OF THE SERIES C PREFERRED
                           STOCK UPON THE GRANT AFTER THE ISSUANCE DATE OF, OR
                           THE EXERCISE AFTER THE ISSUANCE DATE OF, OPTIONS OR
                           WARRANTS OR RIGHTS TO PURCHASE STOCK UNDER OR
                           PURSUANT TO (A) THE COMPANY'S STOCK OPTION PLAN, (B)
                           EMPLOYEE, CONSULTANT AND SERVICE PROVIDER
                           COMPENSATION PAID BY THE COMPANY WITH SHARES OF
                           COMMON STOCK IN LIEU OF CASH AND (C) INVESTMENTS MADE
                           BY STRATEGIC PARTNERS IN THE COMPANY.

         15.6.    NO IMPAIRMENT. THE COMPANY SHALL NOT, BY AMENDMENT OF ITS
                  CERTIFICATE OF INCORPORATION OR THROUGH ANY REORGANIZATION,
                  TRANSFER OF ASSETS, CONSOLIDATION, MERGER, 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 TO BE OBSERVED OR PERFORMED HEREUNDER BY THE COMPANY,
                  BUT WILL AT ALL TIMES IN GOOD FAITH, ASSIST IN THE CARRYING
                  OUT OF ALL THE PROVISIONS OF THIS SECTION 5 AND IN THE TAKING
                  OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER
                  TO PROTECT THE CONVERSION RIGHTS OF THE HOLDERS OF THE SERIES
                  C PREFERRED STOCK AGAINST IMPAIRMENT. IN THE EVENT A HOLDER
                  SHALL ELECT TO CONVERT ANY SHARES OF SERIES C PREFERRED STOCK
                  AS PROVIDED HEREIN, THE COMPANY CANNOT REFUSE CONVERSION BASED
                  ON ANY CLAIM THAT SUCH HOLDER OR ANY ONE ASSOCIATED OR
                  AFFILIATED WITH SUCH HOLDER HAS BEEN ENGAGED IN ANY VIOLATION
                  OF LAW, UNLESS, AN INJUNCTION FROM A COURT, ON NOTICE,
                  RESTRAINING AND/OR ADJOINING CONVERSION OF ALL OR OF SAID
                  SHARES OF SERIES C PREFERRED STOCK SHALL HAVE BEEN ISSUED AND
                  THE COMPANY POSTS A SURETY BOND FOR THE BENEFIT OF SUCH HOLDER
                  IN THE AMOUNT OF THE DIFFERENCE BETWEEN THE CONVERSION PRICE
                  AND THE CLOSING BID PRICE ON THE TRADING DAY

                                      -12-
<PAGE>

                  PRECEDING THE DATE OF THE ATTEMPTED CONVERSION MULTIPLIED BY
                  THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK SOUGHT TO BE
                  CONVERTED, WHICH BOND SHALL REMAIN IN EFFECT UNTIL THE
                  COMPLETION OF ARBITRATION/LITIGATION OF THE DISPUTE AND THE
                  PROCEEDS OF WHICH SHALL BE PAYABLE TO SUCH HOLDER IN THE EVENT
                  IT OBTAINS JUDGMENT.

         15.7.    CERTIFICATES AS TO ADJUSTMENTS. UPON OCCURRENCE OF EACH
                  ADJUSTMENT OR READJUSTMENT OF THE CONVERSION PRICE OR NUMBER
                  OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE
                  SERIES C PREFERRED STOCK PURSUANT TO THIS SECTION 5, THE
                  COMPANY AT ITS EXPENSE SHALL PROMPTLY COMPUTE SUCH ADJUSTMENT
                  OR READJUSTMENT IN ACCORDANCE WITH THE TERMS HEREOF AND
                  FURNISH TO EACH HOLDER OF SUCH SERIES C PREFERRED STOCK A
                  CERTIFICATE SETTING FORTH SUCH ADJUSTMENT AND READJUSTMENT,
                  SHOWING IN DETAIL THE FACTS UPON WHICH SUCH ADJUSTMENT OR
                  READJUSTMENT IS BASED. THE COMPANY SHALL, UPON WRITTEN REQUEST
                  OF THE HOLDER OF SUCH AFFECTED SERIES C PREFERRED STOCK, AT
                  ANY TIME, FURNISH OR CAUSE TO BE FURNISHED TO SUCH HOLDER A
                  LIKE CERTIFICATE SETTING FORTH SUCH ADJUSTMENTS AND
                  READJUSTMENTS, THE CONVERSION PRICE IN EFFECT AT THE TIME, AND
                  THE NUMBER OF SHARES OF COMMON STOCK AND THE AMOUNT, IF ANY,
                  OF OTHER SECURITIES OR PROPERTY WHICH AT THE TIME WOULD BE
                  RECEIVED UPON THE CONVERSION OF A SHARE OF SUCH SERIES C
                  PREFERRED STOCK. NOTWITHSTANDING THE FOREGOING, THE COMPANY
                  SHALL NOT BE OBLIGATED TO DELIVER A CERTIFICATE UNLESS SUCH
                  CERTIFICATE WOULD REFLECT AN INCREASE OR DECREASE OF AT LEAST
                  ONE PERCENT OF SUCH ADJUSTED AMOUNT.

         15.8.    ISSUE TAXES. THE COMPANY SHALL PAY ANY AND ALL ISSUE AND OTHER
                  TAXES, EXCLUDING FEDERAL, STATE OR LOCAL INCOME TAXES, THAT
                  MAY BE PAYABLE IN RESPECT OF ANY ISSUE OR DELIVERY OF SHARES
                  OF COMMON STOCK ON CONVERSION OF SHARES OF SERIES C PREFERRED
                  STOCK PURSUANT THERETO; PROVIDED, HOWEVER, THAT THE COMPANY
                  SHALL NOT BE OBLIGATED TO PAY ANY TRANSFER TAXES RESULTING
                  FROM ANY TRANSFER REQUESTED BY ANY HOLDER IN CONNECTION WITH
                  ANY SUCH CONVERSION.

         15.9.    NOTICES. ALL NOTICES AND OTHER COMMUNICATIONS HEREUNDER SHALL
                  BE IN WRITING AND SHALL BE DEEMED GIVEN IF DELIVERED
                  PERSONALLY OR BY FACSIMILE OR THREE (3) BUSINESS DAYS
                  FOLLOWING BEING MAILED BY CERTIFIED OR REGISTERED MAIL,
                  POSTAGE PREPAID, RETURN-RECEIPT REQUESTED, ADDRESSED TO THE
                  HOLDER OF RECORD AT ITS ADDRESS APPEARING ON THE BOOKS OF THE
                  COMPANY. THE COMPANY WILL GIVE WRITTEN NOTICE TO EACH HOLDER
                  OF SERIES C PREFERRED STOCK AT LEAST TWENTY (20) DAYS PRIOR TO
                  THE DATE ON WHICH THE COMPANY CLOSES ITS BOOKS OR TAKES A
                  RECORD (I) WITH RESPECT TO ANY DIVIDEND OR DISTRIBUTION UPON
                  THE COMMON STOCK, (II) WITH RESPECT TO ANY PRO RATA
                  SUBSCRIPTION OFFER TO HOLDERS OF COMMON STOCK OR (III) FOR
                  DETERMINING RIGHTS TO VOTE WITH RESPECT TO ANY ORGANIC CHANGE,
                  DISSOLUTION, LIQUIDATION OR WINDING-UP AND IN NO EVENT SHALL
                  SUCH NOTICE BE PROVIDED TO SUCH HOLDER PRIOR TO SUCH
                  INFORMATION BEING MADE KNOWN TO THE PUBLIC. THE COMPANY WILL
                  ALSO GIVE

                                      -13-
<PAGE>

                  WRITTEN NOTICE TO EACH HOLDER OF SERIES C PREFERRED STOCK AT
                  LEAST TWENTY (20) DAYS PRIOR TO THE DATE ON WHICH ANY ORGANIC
                  CHANGE, DISSOLUTION, LIQUIDATION OR WINDING-UP WILL TAKE PLACE
                  AND IN NO EVENT SHALL SUCH NOTICE BE PROVIDED TO SUCH HOLDER
                  PRIOR TO SUCH INFORMATION BEING MADE KNOWN TO THE PUBLIC.

         15.10.   FRACTIONAL SHARES. NO FRACTIONAL SHARES OF COMMON STOCK SHALL
                  BE ISSUED UPON CONVERSION OF THE SERIES C PREFERRED STOCK. IN
                  LIEU OF ANY FRACTIONAL SHARES TO WHICH THE HOLDER WOULD
                  OTHERWISE BE ENTITLED, THE COMPANY SHALL PAY CASH EQUAL TO THE
                  PRODUCT OF SUCH FRACTION MULTIPLIED BY THE AVERAGE OF THE
                  CLOSING BID PRICES OF THE COMMON STOCK FOR THE FIVE (5)
                  CONSECUTIVE TRADING DAYS IMMEDIATELY PRECEDING THE VOLUNTARY
                  CONVERSION DATE OR MANDATORY CONVERSION DATE, AS APPLICABLE.

         15.11.   RESERVATION OF COMMON STOCK. THE COMPANY SHALL, SO LONG AS ANY
                  SHARES OF SERIES C PREFERRED STOCK ARE OUTSTANDING, RESERVE
                  AND KEEP AVAILABLE OUT OF ITS AUTHORIZED AND UNISSUED COMMON
                  STOCK, SOLELY FOR THE PURPOSE OF EFFECTING THE CONVERSION OF
                  THE SERIES C PREFERRED STOCK, SUCH NUMBER OF SHARES OF COMMON
                  STOCK AS SHALL FROM TIME TO TIME BE SUFFICIENT TO EFFECT THE
                  CONVERSION OF ALL OF THE SERIES C PREFERRED STOCK THEN
                  OUTSTANDING; PROVIDED THAT THE NUMBER OF SHARES OF COMMON
                  STOCK SO RESERVED SHALL AT NO TIME BE LESS THAN 200% OF THE
                  NUMBER OF SHARES OF COMMON STOCK FOR WHICH THE SHARES OF
                  SERIES C PREFERRED STOCK ARE AT ANY TIME CONVERTIBLE. THE
                  INITIAL NUMBER OF SHARES OF COMMON STOCK RESERVED FOR
                  CONVERSIONS OF THE SERIES C PREFERRED STOCK AND EACH INCREASE
                  IN THE NUMBER OF SHARES SO RESERVED SHALL BE ALLOCATED PRO
                  RATA AMONG THE HOLDERS OF THE SERIES C PREFERRED STOCK BASED
                  ON THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK HELD BY
                  EACH HOLDER AT THE TIME OF ISSUANCE OF THE SERIES C PREFERRED
                  STOCK OR INCREASE IN THE NUMBER OF RESERVED SHARES, AS THE
                  CASE MAY BE. IN THE EVENT A HOLDER SHALL SELL OR OTHERWISE
                  TRANSFER ANY OF SUCH HOLDER'S SHARES OF SERIES C PREFERRED
                  STOCK, EACH TRANSFEREE SHALL BE ALLOCATED A PRO RATA PORTION
                  OF THE NUMBER OF RESERVED SHARES OF COMMON STOCK RESERVED FOR
                  SUCH TRANSFEROR. ANY SHARES OF COMMON STOCK RESERVED AND WHICH
                  REMAIN ALLOCATED TO ANY PERSON OR ENTITY WHICH DOES NOT HOLD
                  ANY SHARES OF SERIES C PREFERRED STOCK SHALL BE ALLOCATED TO
                  THE REMAINING HOLDERS OF SERIES C PREFERRED STOCK, PRO RATA
                  BASED ON THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK THEN
                  HELD BY SUCH HOLDER. THE COMPANY SHALL, FROM TIME TO TIME IN
                  ACCORDANCE WITH THE DELAWARE GENERAL CORPORATION LAW, AS
                  AMENDED, INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON
                  STOCK IF AT ANY TIME THE UNISSUED NUMBER OF AUTHORIZED SHARES
                  SHALL NOT BE SUFFICIENT TO SATISFY THE COMPANY'S OBLIGATIONS
                  UNDER THIS SECTION 5(k).

         15.12.   RETIREMENT OF SERIES C PREFERRED STOCK. CONVERSION OF SERIES C
                  PREFERRED STOCK SHALL BE DEEMED TO HAVE BEEN EFFECTED ON THE
                  APPLICABLE VOLUNTARY CONVERSION DATE OR MANDATORY CONVERSION
                  DATE, AND SUCH DATE IS REFERRED TO

                                      -14-
<PAGE>

                  HEREIN AS THE "CONVERSION DATE". UPON CONVERSION OF ONLY A
                  PORTION OF THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK
                  REPRESENTED BY A CERTIFICATE SURRENDERED FOR CONVERSION, THE
                  COMPANY SHALL ISSUE AND DELIVER TO SUCH HOLDER AT THE EXPENSE
                  OF THE COMPANY, A NEW CERTIFICATE COVERING THE NUMBER OF
                  SHARES OF SERIES C PREFERRED STOCK REPRESENTING THE
                  UNCONVERTED PORTION OF THE CERTIFICATE SO SURRENDERED AS
                  REQUIRED BY SECTION 5(b)(ii).

         15.13.   REGULATORY COMPLIANCE. IF ANY SHARES OF COMMON STOCK TO BE
                  RESERVED FOR THE PURPOSE OF CONVERSION OF SERIES C PREFERRED
                  STOCK REQUIRE REGISTRATION OR LISTING WITH OR APPROVAL OF ANY
                  GOVERNMENTAL AUTHORITY, STOCK EXCHANGE OR OTHER REGULATORY
                  BODY UNDER ANY FEDERAL OR STATE LAW OR REGULATION OR OTHERWISE
                  BEFORE SUCH SHARES MAY BE VALIDLY ISSUED OR DELIVERED UPON
                  CONVERSION, THE COMPANY SHALL, AT ITS SOLE COST AND EXPENSE,
                  IN GOOD FAITH AND AS EXPEDITIOUSLY AS POSSIBLE, ENDEAVOR TO
                  SECURE SUCH REGISTRATION, LISTING OR APPROVAL, AS THE CASE MAY
                  BE.

16.      NO PREEMPTIVE RIGHTS. EXCEPT AS PROVIDED IN SECTION 5 HEREOF AND IN THE
         PURCHASE AGREEMENT, NO HOLDER OF THE SERIES C PREFERRED STOCK SHALL BE
         ENTITLED TO RIGHTS TO SUBSCRIBE FOR, PURCHASE OR RECEIVE ANY PART OF
         ANY NEW OR ADDITIONAL SHARES OF ANY CLASS, WHETHER NOW OR HEREINAFTER
         AUTHORIZED, OR OF BONDS OR DEBENTURES, OR OTHER EVIDENCES OF
         INDEBTEDNESS CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES OF ANY CLASS,
         BUT ALL SUCH NEW OR ADDITIONAL SHARES OF ANY CLASS, OR ANY BOND,
         DEBENTURES OR OTHER EVIDENCES OF INDEBTEDNESS CONVERTIBLE INTO OR
         EXCHANGEABLE FOR SHARES, MAY BE ISSUED AND DISPOSED OF BY THE BOARD OF
         DIRECTORS ON SUCH TERMS AND FOR SUCH CONSIDERATION (TO THE EXTENT
         PERMITTED BY LAW), AND TO SUCH PERSON OR PERSONS AS THE BOARD OF
         DIRECTORS IN THEIR ABSOLUTE DISCRETION MAY DEEM ADVISABLE.

17.      CONVERSION RESTRICTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET
         FORTH IN SECTION 5 OF THIS CERTIFICATE OF DESIGNATION, AT NO TIME MAY A
         HOLDER OF SHARES OF SERIES C PREFERRED STOCK CONVERT SHARES OF THE
         SERIES C PREFERRED STOCK IF THE NUMBER OF SHARES OF COMMON STOCK TO BE
         ISSUED PURSUANT TO SUCH CONVERSION WOULD EXCEED, WHEN AGGREGATED WITH
         ALL OTHER SHARES OF COMMON STOCK OWNED BY SUCH HOLDER AT SUCH TIME, THE
         NUMBER OF SHARES OF COMMON STOCK WHICH WOULD RESULT IN SUCH HOLDER
         OWNING MORE THAN 4.99% OF ALL OF THE COMMON STOCK OUTSTANDING AT SUCH
         TIME; PROVIDED, HOWEVER, THAT UPON A HOLDER OF SERIES C PREFERRED STOCK
         PROVIDING THE COMPANY WITH SEVENTY-FIVE (75) DAYS NOTICE (PURSUANT TO
         SECTION 5(i) HEREOF) (THE "WAIVER NOTICE") THAT SUCH HOLDER WOULD LIKE
         TO WAIVE SECTION 7(b) OF THIS CERTIFICATE OF DESIGNATION WITH REGARD TO
         ANY OR ALL SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SERIES C
         PREFERRED STOCK, THIS SECTION 7(b) SHALL BE OF NO FORCE OR EFFECT WITH
         REGARD TO THOSE SHARES OF SERIES C PREFERRED STOCK REFERENCED IN THE
         WAIVER NOTICE.

                                      -15-
<PAGE>

18.      REDEMPTION.

         18.1.    REDEMPTION OPTION UPON MAJOR TRANSACTION. IN ADDITION TO ALL
                  OTHER RIGHTS OF THE HOLDERS OF SERIES C PREFERRED STOCK
                  CONTAINED HEREIN, SIMULTANEOUS WITH THE OCCURRENCE OF A MAJOR
                  TRANSACTION (AS DEFINED BELOW), EACH HOLDER OF SERIES C
                  PREFERRED STOCK SHALL HAVE THE RIGHT, AT SUCH HOLDER'S OPTION,
                  TO REQUIRE THE COMPANY TO REDEEM ALL OR A PORTION OF SUCH
                  HOLDER'S SHARES OF SERIES C PREFERRED STOCK AT A PRICE PER
                  SHARE OF SERIES C PREFERRED STOCK EQUAL TO THE GREATER OF (i)
                  120% OF THE LIQUIDATION PREFERENCE AMOUNT PLUS ANY LIQUIDATED
                  DAMAGES AND (ii) THE PRODUCT OF (A) THE CONVERSION RATE AND
                  (B) THE CLOSING BID PRICE OF THE COMMON STOCK ON THE TRADING
                  DATE IMMEDIATELY PRECEDING SUCH MAJOR TRANSACTION (THE "MAJOR
                  TRANSACTION REDEMPTION PRICE").

         18.2.    REDEMPTION OPTION UPON TRIGGERING EVENT. IN ADDITION TO ALL
                  OTHER RIGHTS OF THE HOLDERS OF SERIES C PREFERRED STOCK
                  CONTAINED HEREIN AND TO THE EXTENT THE HOLDERS OF THE SERIES C
                  PREFERRED STOCK HAVE NOT PREVIOUSLY CONVERTED, AFTER A
                  TRIGGERING EVENT (AS DEFINED BELOW), EACH HOLDER OF SERIES C
                  PREFERRED STOCK SHALL HAVE THE RIGHT, AT SUCH HOLDER'S OPTION,
                  TO REQUIRE THE COMPANY TO REDEEM ALL OR A PORTION OF SUCH
                  HOLDER'S SHARES OF SERIES C PREFERRED STOCK AS SHALL BE
                  OUTSTANDING ON SUCH DATE OF A TRIGGERING EVENT, AT A PRICE PER
                  SHARE OF SERIES C PREFERRED STOCK EQUAL TO 150% OF THE
                  LIQUIDATION PREFERENCE AMOUNT (THE "TRIGGERING EVENT
                  REDEMPTION PRICE" AND THE "MAJOR TRANSACTION REDEMPTION PRICE"
                  ARE SOMETIMES INDIVIDUALLY REFERRED TO HEREIN AS THE
                  "REDEMPTION PRICE").

         18.3.    "MAJOR TRANSACTION". A "MAJOR TRANSACTION" SHALL BE DEEMED TO
                  HAVE OCCURRED AT SUCH TIME AS ANY OF THE FOLLOWING EVENTS:

                  18.3.1.  THE CONSOLIDATION, MERGER OR OTHER BUSINESS
                           COMBINATION OF THE COMPANY WITH OR INTO ANOTHER
                           PERSON (OTHER THAN (A) PURSUANT TO A MIGRATORY MERGER
                           EFFECTED SOLELY FOR THE PURPOSE OF CHANGING THE
                           JURISDICTION OF INCORPORATION OF THE COMPANY OR (B) A
                           CONSOLIDATION, MERGER OR OTHER BUSINESS COMBINATION
                           IN WHICH HOLDERS OF THE COMPANY'S VOTING POWER
                           IMMEDIATELY PRIOR TO THE TRANSACTION CONTINUE AFTER
                           THE TRANSACTION TO HOLD, DIRECTLY OR INDIRECTLY, THE
                           VOTING POWER OF THE SURVIVING ENTITY OR ENTITIES
                           NECESSARY TO ELECT A MAJORITY OF THE MEMBERS OF THE
                           BOARD OF DIRECTORS (OR THEIR EQUIVALENT IF OTHER THAN
                           A CORPORATION) OF SUCH ENTITY OR ENTITIES).

                  18.3.2.  THE SALE OR TRANSFER OF ALL OR SUBSTANTIALLY ALL OF
                           THE COMPANY'S ASSETS;

                                      -16-
<PAGE>

                  18.3.3.  CONSUMMATION OF A PURCHASE, TENDER OR EXCHANGE OFFER
                           MADE TO THE HOLDERS OF MORE THAN 30% OF THE
                           OUTSTANDING SHARES OF COMMON STOCK; OR

                  18.3.4.  CONSUMMATION OF A TRANSACTION WHEREBY THE COMPANY IS
                           NO LONGER A REPORTING COMPANY PURSUANT TO THE
                           SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

         18.4.    "TRIGGERING EVENT". A "TRIGGERING EVENT" SHALL BE DEEMED TO
                  HAVE OCCURRED AT SUCH TIME AS ANY OF THE FOLLOWING EVENTS:

                  18.4.1.  SO LONG AS ANY SHARES OF SERIES C PREFERRED STOCK ARE
                           OUTSTANDING, THE EFFECTIVENESS OF THE REGISTRATION
                           STATEMENT LAPSES FOR ANY REASON (INCLUDING, WITHOUT
                           LIMITATION, THE ISSUANCE OF A STOP ORDER) OR IS
                           UNAVAILABLE TO THE HOLDER OF THE SERIES C PREFERRED
                           STOCK FOR SALE OF THE SHARES OF COMMON STOCK, AND
                           SUCH LAPSE OR UNAVAILABILITY CONTINUES FOR A PERIOD
                           OF TEN CONSECUTIVE TRADING DAYS, PROVIDED THAT THE
                           CAUSE OF SUCH LAPSE OR UNAVAILABILITY IS NOT DUE TO
                           FACTORS SOLELY WITHIN THE CONTROL OF SUCH HOLDER OF
                           SERIES C PREFERRED STOCK;

                  18.4.2.  THE SUSPENSION FROM LISTING OR THE FAILURE OF THE
                           COMMON STOCK TO BE LISTED ON THE NASDAQ NATIONAL
                           MARKET, THE NASDAQ SMALLCAP MARKET, THE OTC BULLETIN
                           BOARD, THE NEW YORK STOCK EXCHANGE, INC. OR THE
                           AMERICAN STOCK EXCHANGE, INC., AS APPLICABLE, FOR A
                           PERIOD OF FIVE (5) CONSECUTIVE DAYS;

                  18.4.3.  THE COMPANY'S NOTICE TO ANY HOLDER OF SERIES C
                           PREFERRED STOCK, INCLUDING BY WAY OF PUBLIC
                           ANNOUNCEMENT, AT ANY TIME, OF ITS INABILITY TO COMPLY
                           (INCLUDING FOR ANY OF THE REASONS DESCRIBED IN
                           SECTION 9) OR ITS INTENTION NOT TO COMPLY WITH PROPER
                           REQUESTS FOR CONVERSION OF ANY SERIES C PREFERRED
                           STOCK INTO SHARES OF COMMON STOCK;

                  18.4.4.  THE COMPANY'S FAILURE TO COMPLY WITH A CONVERSION
                           NOTICE TENDERED IN ACCORDANCE WITH THE PROVISIONS OF
                           THIS CERTIFICATE OF DESIGNATION WITHIN TEN (10)
                           BUSINESS DAYS AFTER THE RECEIPT BY THE COMPANY OF THE
                           CONVERSION NOTICE AND THE PREFERRED STOCK
                           CERTIFICATES; OR

                  18.4.5.  THE COMPANY BREACHES ANY REPRESENTATION, WARRANTY,
                           COVENANT OR OTHER TERM OR CONDITION OF THE PURCHASE
                           AGREEMENT, THIS CERTIFICATE OF DESIGNATION OR ANY
                           OTHER AGREEMENT, DOCUMENT, CERTIFICATE OR OTHER
                           INSTRUMENT DELIVERED

                                      -17-
<PAGE>

                           IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
                           THEREBY OR HEREBY, EXCEPT TO THE EXTENT THAT SUCH
                           BREACH WOULD NOT HAVE A MATERIAL ADVERSE EFFECT (AS
                           DEFINED IN THE PURCHASE AGREEMENT) AND EXCEPT, IN THE
                           CASE OF A BREACH OF A COVENANT WHICH IS CURABLE, ONLY
                           IF SUCH BREACH CONTINUES FOR A PERIOD OF A LEAST TEN
                           (10) DAYS.

         18.5.    MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
                  TRANSACTION. NO SOONER THAN FIFTEEN (15) DAYS NOR LATER THAN
                  TEN (10) DAYS PRIOR TO THE CONSUMMATION OF A MAJOR
                  TRANSACTION, BUT NOT PRIOR TO THE PUBLIC ANNOUNCEMENT OF SUCH
                  MAJOR TRANSACTION, THE COMPANY SHALL DELIVER WRITTEN NOTICE
                  THEREOF VIA FACSIMILE AND OVERNIGHT COURIER ("NOTICE OF MAJOR
                  TRANSACTION") TO EACH HOLDER OF SERIES C PREFERRED STOCK. AT
                  ANY TIME AFTER RECEIPT OF A NOTICE OF MAJOR TRANSACTION (OR,
                  IN THE EVENT A NOTICE OF MAJOR TRANSACTION IS NOT DELIVERED AT
                  LEAST TEN (10) DAYS PRIOR TO A MAJOR TRANSACTION, AT ANY TIME
                  WITHIN TEN (10) DAYS PRIOR TO A MAJOR TRANSACTION), ANY HOLDER
                  OF SERIES C PREFERRED STOCK THEN OUTSTANDING MAY REQUIRE THE
                  COMPANY TO REDEEM, EFFECTIVE IMMEDIATELY PRIOR TO THE
                  CONSUMMATION OF SUCH MAJOR TRANSACTION, ALL OF THE HOLDER'S
                  SERIES C PREFERRED STOCK THEN OUTSTANDING BY DELIVERING
                  WRITTEN NOTICE THEREOF VIA FACSIMILE AND OVERNIGHT COURIER
                  ("NOTICE OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
                  TRANSACTION") TO THE COMPANY, WHICH NOTICE OF REDEMPTION AT
                  OPTION OF BUYER UPON MAJOR TRANSACTION SHALL INDICATE (i) THE
                  NUMBER OF SHARES OF SERIES C PREFERRED STOCK THAT SUCH HOLDER
                  IS ELECTING TO REDEEM AND (ii) THE APPLICABLE MAJOR
                  TRANSACTION REDEMPTION PRICE, AS CALCULATED PURSUANT TO
                  SECTION 8(a) ABOVE.

         18.6.    MECHANICS OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING
                  EVENT. WITHIN ONE (1) DAY AFTER THE OCCURRENCE OF A TRIGGERING
                  EVENT, THE COMPANY SHALL DELIVER WRITTEN NOTICE THEREOF VIA
                  FACSIMILE AND OVERNIGHT COURIER ("NOTICE OF TRIGGERING EVENT")
                  TO EACH HOLDER OF SERIES C PREFERRED STOCK. AT ANY TIME AFTER
                  THE EARLIER OF A HOLDER'S RECEIPT OF A NOTICE OF TRIGGERING
                  EVENT AND SUCH HOLDER BECOMING AWARE OF A TRIGGERING EVENT,
                  ANY HOLDER OF SERIES C PREFERRED STOCK THEN OUTSTANDING MAY
                  REQUIRE THE COMPANY TO REDEEM ALL OF THE SERIES C PREFERRED
                  STOCK BY DELIVERING WRITTEN NOTICE THEREOF VIA FACSIMILE AND
                  OVERNIGHT COURIER ("NOTICE OF REDEMPTION AT OPTION OF BUYER
                  UPON TRIGGERING EVENT") TO THE COMPANY, WHICH NOTICE OF
                  REDEMPTION AT OPTION OF BUYER UPON TRIGGERING EVENT SHALL
                  INDICATE (i) THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK
                  THAT SUCH HOLDER IS ELECTING TO REDEEM AND (ii) THE APPLICABLE
                  TRIGGERING EVENT REDEMPTION PRICE, AS CALCULATED PURSUANT TO
                  SECTION 8(b) ABOVE.

         18.7.    PAYMENT OF REDEMPTION PRICE. UPON THE COMPANY'S RECEIPT OF A
                  NOTICE(S) OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING
                  EVENT OR A NOTICE(S) OF REDEMPTION AT OPTION OF BUYER UPON
                  MAJOR TRANSACTION FROM ANY HOLDER OF SERIES C PREFERRED STOCK,
                  THE COMPANY SHALL IMMEDIATELY NOTIFY EACH HOLDER OF SERIES C

                                      -18-
<PAGE>

                  PREFERRED STOCK BY FACSIMILE OF THE COMPANY'S RECEIPT OF SUCH
                  NOTICE(S) OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING
                  EVENT OR NOTICE(S) OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
                  TRANSACTION AND EACH HOLDER WHICH HAS SENT SUCH A NOTICE SHALL
                  PROMPTLY SUBMIT TO THE COMPANY SUCH HOLDER'S PREFERRED STOCK
                  CERTIFICATES WHICH SUCH HOLDER HAS ELECTED TO HAVE REDEEMED.
                  THE COMPANY SHALL DELIVER THE APPLICABLE MAJOR TRANSACTION
                  REDEMPTION PRICE IMMEDIATELY PRIOR TO THE CONSUMMATION OF THE
                  MAJOR TRANSACTION; PROVIDED THAT A HOLDER'S PREFERRED STOCK
                  CERTIFICATES SHALL HAVE BEEN SO DELIVERED TO THE COMPANY;
                  PROVIDED FURTHER THAT IF THE COMPANY IS UNABLE TO REDEEM ALL
                  OF THE SERIES C PREFERRED STOCK TO BE REDEEMED, THE COMPANY
                  SHALL REDEEM AN AMOUNT FROM EACH HOLDER OF SERIES C PREFERRED
                  STOCK BEING REDEEMED EQUAL TO SUCH HOLDER'S PRO-RATA AMOUNT
                  (BASED ON THE NUMBER OF SHARES OF SERIES C PREFERRED STOCK
                  HELD BY SUCH HOLDER RELATIVE TO THE NUMBER OF SHARES OF SERIES
                  C PREFERRED STOCK OUTSTANDING) OF ALL SERIES C PREFERRED STOCK
                  BEING REDEEMED. IF THE COMPANY SHALL FAIL TO REDEEM ALL OF THE
                  SERIES C PREFERRED STOCK SUBMITTED FOR REDEMPTION (OTHER THAN
                  PURSUANT TO A DISPUTE AS TO THE ARITHMETIC CALCULATION OF THE
                  REDEMPTION PRICE), IN ADDITION TO ANY REMEDY SUCH HOLDER OF
                  SERIES C PREFERRED STOCK MAY HAVE UNDER THIS CERTIFICATE OF
                  DESIGNATION AND THE PURCHASE AGREEMENT, THE APPLICABLE
                  REDEMPTION PRICE PAYABLE IN RESPECT OF SUCH UNREDEEMED SERIES
                  C PREFERRED STOCK SHALL BEAR INTEREST AT THE RATE OF 2.0% PER
                  MONTH (PRORATED FOR PARTIAL MONTHS), COMMENCING, IN THE CASE
                  OF A REDEMPTION AT OPTION OF BUYER UPON MAJOR TRANSACTION,
                  UPON THE CLOSING OF THE MAJOR TRANSACTION TRIGGERING THE
                  BUYER'S OPTION, UNTIL PAID IN FULL. UNTIL THE COMPANY PAYS
                  SUCH UNPAID APPLICABLE REDEMPTION PRICE IN FULL TO A HOLDER OF
                  SHARES OF SERIES C PREFERRED STOCK SUBMITTED FOR REDEMPTION,
                  SUCH HOLDER SHALL HAVE THE OPTION (THE "VOID OPTIONAL
                  REDEMPTION OPTION") TO, IN LIEU OF REDEMPTION, REQUIRE THE
                  COMPANY TO PROMPTLY RETURN TO SUCH HOLDER(S) ALL OF THE SHARES
                  OF SERIES C PREFERRED STOCK THAT WERE SUBMITTED FOR REDEMPTION
                  BY SUCH HOLDER(S) UNDER THIS SECTION 8 AND FOR WHICH THE
                  APPLICABLE REDEMPTION PRICE HAS NOT BEEN PAID, BY SENDING
                  WRITTEN NOTICE THEREOF TO THE COMPANY VIA FACSIMILE (THE "VOID
                  OPTIONAL REDEMPTION NOTICE"). UPON THE COMPANY'S RECEIPT OF
                  SUCH VOID OPTIONAL REDEMPTION NOTICE(S) AND PRIOR TO PAYMENT
                  OF THE FULL APPLICABLE REDEMPTION PRICE TO SUCH HOLDER, (i)
                  THE NOTICE(S) OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
                  TRANSACTION SHALL BE NULL AND VOID WITH RESPECT TO THOSE
                  SHARES OF SERIES C PREFERRED STOCK SUBMITTED FOR REDEMPTION
                  AND FOR WHICH THE APPLICABLE REDEMPTION PRICE HAS NOT BEEN
                  PAID, (ii) THE COMPANY SHALL IMMEDIATELY RETURN ANY SERIES C
                  PREFERRED STOCK SUBMITTED TO THE COMPANY BY EACH HOLDER FOR
                  REDEMPTION UNDER THIS SECTION 8(d) AND FOR WHICH THE
                  APPLICABLE REDEMPTION PRICE HAS NOT BEEN PAID AND (iii) THE
                  CONVERSION PRICE OF SUCH RETURNED SHARES OF SERIES C PREFERRED
                  STOCK SHALL BE ADJUSTED TO THE LESSER OF (A) THE CONVERSION
                  PRICE AND (B) THE VOLUME WEIGHTED AVERAGE PRICE DURING THE
                  PERIOD BEGINNING ON THE DATE ON WHICH THE NOTICE(S) OF
                  REDEMPTION OF OPTION OF BUYER UPON MAJOR TRANSACTION IS
                  DELIVERED TO THE COMPANY AND ENDING ON THE DATE ON WHICH THE
                  VOID OPTIONAL REDEMPTION NOTICE(S) IS DELIVERED TO THE
                  COMPANY; PROVIDED THAT NO ADJUSTMENT SHALL BE MADE IF SUCH
                  ADJUSTMENT WOULD RESULT IN AN INCREASE OF THE CONVERSION PRICE
                  THEN IN EFFECT. A HOLDER'S DELIVERY OF A VOID OPTIONAL
                  REDEMPTION NOTICE AND EXERCISE OF ITS RIGHTS FOLLOWING SUCH
                  NOTICE SHALL NOT EFFECT THE COMPANY'S OBLIGATIONS TO MAKE ANY
                  PAYMENTS WHICH HAVE ACCRUED PRIOR TO THE DATE OF SUCH NOTICE.

                                      -19-
<PAGE>

                  PAYMENTS PROVIDED FOR IN THIS SECTION 8 SHALL HAVE PRIORITY TO
                  PAYMENTS TO OTHER STOCKHOLDERS IN CONNECTION WITH A MAJOR
                  TRANSACTION.

                                      -20-
<PAGE>

         18.8.    COMPANY'S REDEMPTION OPTION. THE COMPANY MAY REDEEM ALL OR A
                  PORTION OF THE SERIES C PREFERRED STOCK OUTSTANDING UPON TEN
                  (10) TRADING DAYS PRIOR WRITTEN NOTICE (THE "COMPANY'S
                  REDEMPTION NOTICE") AT A PRICE PER SHARE OF SERIES C PREFERRED
                  STOCK EQUAL TO 150% OF THE LIQUIDATION PREFERENCE AMOUNT PLUS
                  ANY LIQUIDATED DAMAGES; PROVIDED, THAT IF A HOLDER HAS
                  DELIVERED A CONVERSION NOTICE TO THE COMPANY OR DELIVERS A
                  CONVERSION NOTICE WITHIN FORTY-EIGHT (48) HOURS OF RECEIPT OF
                  THE COMPANY'S REDEMPTION NOTICE, THE SHARES OF SERIES C
                  PREFERRED STOCK DESIGNATED TO BE REDEEMED MAY BE CONVERTED BY
                  SUCH HOLDER; PROVIDED FURTHER THAT IF DURING THE PERIOD
                  BETWEEN DELIVERY OF THE COMPANY'S REDEMPTION NOTICE AND THE
                  REDEMPTION DATE A HOLDER SHALL BECOME ENTITLED TO DELIVER A
                  NOTICE OF REDEMPTION AT OPTION OF BUYER UPON MAJOR
                  TRANSACTION, THEN THE RIGHT OF SUCH HOLDER SHALL TAKE
                  PRECEDENCE OVER THE PREVIOUSLY DELIVERED COMPANY REDEMPTION
                  NOTICE. THE COMPANY'S REDEMPTION NOTICE SHALL STATE THE DATE
                  OF REDEMPTION WHICH DATE SHALL BE THE SIXTH (6TH) DAY AFTER
                  THE COMPANY HAS DELIVERED THE COMPANY'S REDEMPTION NOTICE (THE
                  "COMPANY'S REDEMPTION DATE"), THE COMPANY'S REDEMPTION PRICE
                  AND THE NUMBER OF SHARES TO BE REDEEMED BY THE COMPANY. THE
                  COMPANY SHALL NOT SEND A COMPANY'S REDEMPTION NOTICE UNLESS IT
                  HAS GOOD AND CLEAR FUNDS FOR A MINIMUM OF THE AMOUNT IT
                  INTENDS TO REDEEM IN A BANK ACCOUNT CONTROLLED BY THE COMPANY;
                  PROVIDED THAT IF THE REDEMPTION IS EXPECTED TO BE MADE
                  CONTEMPORANEOUS WITH THE CLOSING OF A PUBLIC UNDERWRITTEN
                  OFFERING OF THE COMPANY, THEN THE COMPANY MAY NOT HAVE GOOD
                  AND CLEAR FUNDS IN THE BANK ACCOUNT AT THE TIME OF THE
                  COMPANY'S REDEMPTION NOTICE AND MAY NOT SEND ANY SUCH
                  COMPANY'S REDEMPTION NOTICE EARLIER THAN THE DAY IMMEDIATELY
                  PRIOR TO THE DATE THE PUBLIC OFFERING IS PRICED. THE COMPANY
                  SHALL DELIVER THE COMPANY'S REDEMPTION PRICE TO THE HOLDER(S)
                  WITHIN FIVE (5) BUSINESS DAYS AFTER THE COMPANY HAS DELIVERED
                  THE COMPANY'S REDEMPTION NOTICE, PROVIDED, THAT IF THE
                  HOLDER(S) DELIVERS A CONVERSION NOTICE BEFORE THE COMPANY'S
                  REDEMPTION DATE, THEN THE PORTION OF THE COMPANY'S REDEMPTION
                  PRICE WHICH WOULD BE PAID TO REDEEM THE SHARES OF SERIES C
                  PREFERRED STOCK COVERED BY SUCH CONVERSION NOTICE SHALL BE
                  RETURNED TO THE COMPANY UPON DELIVERY OF THE COMMON STOCK
                  ISSUABLE IN CONNECTION WITH SUCH CONVERSION NOTICE TO THE
                  HOLDER(S). ON THE REDEMPTION DATE, THE COMPANY SHALL PAY THE
                  COMPANY'S REDEMPTION PRICE, SUBJECT TO ANY ADJUSTMENT PURSUANT
                  TO THE IMMEDIATELY PRECEDING SENTENCE, TO THE HOLDER(S) ON A
                  PRO RATA BASIS, PROVIDED, HOWEVER, THAT UPON RECEIPT BY THE
                  COMPANY OF THE PREFERRED STOCK CERTIFICATES TO BE REDEEMED
                  PURSUANT TO THIS SECTION 8(e), THE COMPANY SHALL, ON THE NEXT
                  BUSINESS DAY FOLLOWING THE DATE OF RECEIPT BY THE COMPANY OF
                  SUCH PREFERRED STOCK CERTIFICATES, PAY THE COMPANY'S
                  REDEMPTION PRICE TO THE HOLDER(S) ON A PRO RATA BASIS. IF THE
                  COMPANY FAILS TO PAY THE COMPANY'S REDEMPTION PRICE BY THE
                  SIXTH (6TH) BUSINESS DAY AFTER THE COMPANY HAS DELIVERED THE
                  COMPANY'S REDEMPTION NOTICE (OR IN THE CASE OF A PUBLIC
                  OFFERING, THE CLOSING OF THE PUBLIC OFFERING), THE REDEMPTION
                  WILL BE DECLARED NULL AND VOID AND THE COMPANY SHALL LOSE ITS
                  RIGHT TO SERVE A COMPANY'S REDEMPTION NOTICE IN THE FUTURE.

                                      -21-
<PAGE>

19.      INABILITY TO FULLY CONVERT.

         19.1.    HOLDER'S OPTION IF COMPANY CANNOT FULLY CONVERT. IF, UPON THE
                  COMPANY'S RECEIPT OF A CONVERSION NOTICE OR ON THE MANDATORY
                  CONVERSION DATE, THE COMPANY CANNOT ISSUE SHARES OF COMMON
                  STOCK REGISTERED FOR RESALE UNDER THE REGISTRATION STATEMENT
                  FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, BECAUSE THE
                  COMPANY (w) DOES NOT HAVE A SUFFICIENT NUMBER OF SHARES OF
                  COMMON STOCK AUTHORIZED AND AVAILABLE, (x) FAILED TO CALL THE
                  STOCKHOLDER MEETING WITHIN THE TIME PERIOD SET FORTH IN
                  SECTION 7 HEREOF, (y) IS OTHERWISE PROHIBITED BY APPLICABLE
                  LAW OR BY THE RULES OR REGULATIONS OF ANY STOCK EXCHANGE,
                  INTERDEALER QUOTATION SYSTEM OR OTHER SELF-REGULATORY
                  ORGANIZATION WITH JURISDICTION OVER THE COMPANY OR ITS
                  SECURITIES FROM ISSUING ALL OF THE COMMON STOCK WHICH IS TO BE
                  ISSUED TO A HOLDER OF SERIES C PREFERRED STOCK PURSUANT TO A
                  CONVERSION NOTICE OR (z) FAILS TO HAVE A SUFFICIENT NUMBER OF
                  SHARES OF COMMON STOCK REGISTERED FOR RESALE UNDER THE
                  REGISTRATION STATEMENT, THEN THE COMPANY SHALL ISSUE AS MANY
                  SHARES OF COMMON STOCK AS IT IS ABLE TO ISSUE IN ACCORDANCE
                  WITH SUCH HOLDER'S CONVERSION NOTICE AND PURSUANT TO SECTION
                  5(b)(ii) ABOVE AND, WITH RESPECT TO THE UNCONVERTED SERIES C
                  PREFERRED STOCK, THE HOLDER, SOLELY AT SUCH HOLDER'S OPTION,
                  CAN ELECT, WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF
                  NOTICE FROM THE COMPANY THEREOF TO:

                  19.1.1.  REQUIRE THE COMPANY TO REDEEM FROM SUCH HOLDER THOSE
                           SERIES C PREFERRED STOCK FOR WHICH THE COMPANY IS
                           UNABLE TO ISSUE COMMON STOCK IN ACCORDANCE WITH SUCH
                           HOLDER'S CONVERSION NOTICE ("MANDATORY REDEMPTION")
                           AT A PRICE PER SHARE EQUAL TO THE MAJOR TRANSACTION
                           REDEMPTION PRICE AS OF SUCH CONVERSION DATE (THE
                           "MANDATORY REDEMPTION PRICE");

                  19.1.2.  IF THE COMPANY'S INABILITY TO FULLY CONVERT SERIES C
                           PREFERRED STOCK IS PURSUANT TO SECTION 9(a)(z) ABOVE,
                           REQUIRE THE COMPANY TO ISSUE RESTRICTED SHARES OF
                           COMMON STOCK IN ACCORDANCE WITH SUCH HOLDER'S
                           CONVERSION NOTICE AND PURSUANT TO SECTION 5(b)(ii)
                           ABOVE;

                  19.1.3.  VOID ITS CONVERSION NOTICE AND RETAIN OR HAVE
                           RETURNED, AS THE CASE MAY BE, THE SHARES OF SERIES C
                           PREFERRED STOCK THAT WERE TO BE CONVERTED PURSUANT TO
                           SUCH HOLDER'S CONVERSION NOTICE (PROVIDED THAT A
                           HOLDER'S VOIDING ITS CONVERSION NOTICE SHALL NOT
                           EFFECT THE COMPANY'S OBLIGATIONS TO MAKE ANY PAYMENTS
                           WHICH HAVE ACCRUED PRIOR TO THE DATE OF SUCH NOTICE).

         19.2.    MECHANICS OF FULFILLING HOLDER'S ELECTION. THE COMPANY SHALL
                  IMMEDIATELY SEND VIA FACSIMILE TO A HOLDER OF SERIES C
                  PREFERRED STOCK, UPON RECEIPT OF A FACSIMILE COPY OF A
                  CONVERSION NOTICE FROM SUCH HOLDER WHICH CANNOT BE FULLY
                  SATISFIED AS DESCRIBED IN SECTION 9(a) ABOVE, A NOTICE OF THE
                  COMPANY'S INABILITY TO FULLY SATISFY SUCH HOLDER'S CONVERSION
                  NOTICE (THE "INABILITY TO FULLY CONVERT NOTICE"). SUCH
                  INABILITY TO FULLY CONVERT NOTICE SHALL INDICATE (i) THE
                  REASON WHY THE COMPANY IS UNABLE TO FULLY SATISFY SUCH
                  HOLDER'S CONVERSION NOTICE, (ii) THE

                                      -22-
<PAGE>

                  NUMBER OF SERIES C PREFERRED STOCK WHICH CANNOT BE CONVERTED
                  AND (iii) THE APPLICABLE MANDATORY REDEMPTION PRICE. SUCH
                  HOLDER SHALL NOTIFY THE COMPANY OF ITS ELECTION PURSUANT TO
                  SECTION 9(a) ABOVE BY DELIVERING WRITTEN NOTICE VIA FACSIMILE
                  TO THE COMPANY ("NOTICE IN RESPONSE TO INABILITY TO CONVERT").

         19.3.    PAYMENT OF REDEMPTION PRICE. IF SUCH HOLDER SHALL ELECT TO
                  HAVE ITS SHARES REDEEMED PURSUANT TO SECTION 9(A)(I) ABOVE,
                  THE COMPANY SHALL PAY THE MANDATORY REDEMPTION PRICE IN CASH
                  TO SUCH HOLDER WITHIN THIRTY (30) DAYS OF THE COMPANY'S
                  RECEIPT OF THE HOLDER'S NOTICE IN RESPONSE TO INABILITY TO
                  CONVERT, PROVIDED THAT PRIOR TO THE COMPANY'S RECEIPT OF THE
                  HOLDER'S NOTICE IN RESPONSE TO INABILITY TO CONVERT THE
                  COMPANY HAS NOT DELIVERED A NOTICE TO SUCH HOLDER STATING, TO
                  THE SATISFACTION OF THE HOLDER, THAT THE EVENT OR CONDITION
                  RESULTING IN THE MANDATORY REDEMPTION HAS BEEN CURED AND ALL
                  CONVERSION SHARES ISSUABLE TO SUCH HOLDER CAN AND WILL BE
                  DELIVERED TO THE HOLDER IN ACCORDANCE WITH THE TERMS OF
                  SECTION 2(g). IF THE COMPANY SHALL FAIL TO PAY THE APPLICABLE
                  MANDATORY REDEMPTION PRICE TO SUCH HOLDER ON A TIMELY BASIS AS
                  DESCRIBED IN THIS SECTION 9(c) (OTHER THAN PURSUANT TO A
                  DISPUTE AS TO THE DETERMINATION OF THE ARITHMETIC CALCULATION
                  OF THE REDEMPTION PRICE), IN ADDITION TO ANY REMEDY SUCH
                  HOLDER OF SERIES C PREFERRED STOCK MAY HAVE UNDER THIS
                  CERTIFICATE OF DESIGNATION AND THE PURCHASE AGREEMENT, SUCH
                  UNPAID AMOUNT SHALL BEAR INTEREST AT THE RATE OF 2.0% PER
                  MONTH (PRORATED FOR PARTIAL MONTHS) UNTIL PAID IN FULL. UNTIL
                  THE FULL MANDATORY REDEMPTION PRICE IS PAID IN FULL TO SUCH
                  HOLDER, SUCH HOLDER MAY (i) VOID THE MANDATORY REDEMPTION WITH
                  RESPECT TO THOSE SERIES C PREFERRED STOCK FOR WHICH THE FULL
                  MANDATORY REDEMPTION PRICE HAS NOT BEEN PAID, (ii) RECEIVE
                  BACK SUCH SERIES C PREFERRED STOCK, AND (iii) REQUIRE THAT THE
                  CONVERSION PRICE OF SUCH RETURNED SERIES C PREFERRED STOCK BE
                  ADJUSTED TO THE LESSER OF (A) THE CONVERSION PRICE AND (B) THE
                  LOWEST CLOSING BID PRICE DURING THE PERIOD BEGINNING ON THE
                  CONVERSION DATE AND ENDING ON THE DATE THE HOLDER VOIDED THE
                  MANDATORY REDEMPTION.

         19.4.    PRO-RATA CONVERSION AND REDEMPTION. IN THE EVENT THE COMPANY
                  RECEIVES A CONVERSION NOTICE FROM MORE THAN ONE HOLDER OF
                  SERIES C PREFERRED STOCK ON THE SAME DAY AND THE COMPANY CAN
                  CONVERT AND REDEEM SOME, BUT NOT ALL, OF THE SERIES C
                  PREFERRED STOCK PURSUANT TO THIS SECTION 9, THE COMPANY SHALL
                  CONVERT AND REDEEM FROM EACH HOLDER OF SERIES A CONVERTIBLE
                  PREFERRED STOCK ELECTING TO HAVE SERIES C PREFERRED STOCK
                  CONVERTED AND REDEEMED AT SUCH TIME AN AMOUNT EQUAL TO SUCH
                  HOLDER'S PRO-RATA AMOUNT (BASED ON THE NUMBER SHARES OF SERIES
                  C PREFERRED STOCK HELD BY SUCH HOLDER RELATIVE TO THE NUMBER
                  SHARES OF SERIES C PREFERRED STOCK OUTSTANDING) OF ALL SHARES
                  OF SERIES C PREFERRED STOCK BEING CONVERTED AND REDEEMED AT
                  SUCH TIME.

20.      VOTE TO CHANGE THE TERMS OF OR ISSUE PREFERRED STOCK. THE AFFIRMATIVE
         VOTE AT A MEETING DULY CALLED FOR SUCH PURPOSE OR THE WRITTEN CONSENT
         WITHOUT A MEETING, OF THE

                                      -23-
<PAGE>

         HOLDERS OF NOT LESS THAN THREE-FOURTHS (3/4) OF THE THEN OUTSTANDING
         SHARES OF SERIES C PREFERRED STOCK, SHALL BE REQUIRED (a) FOR ANY
         CHANGE TO THIS CERTIFICATE OF DESIGNATION OR THE COMPANY'S CERTIFICATE
         OF INCORPORATION WHICH WOULD AMEND, ALTER, CHANGE OR REPEAL ANY OF THE
         POWERS, DESIGNATIONS, PREFERENCES AND RIGHTS OF THE SERIES C PREFERRED
         STOCK OR (b) FOR THE ISSUANCE OF SHARES OF SERIES C PREFERRED STOCK
         OTHER THAN PURSUANT TO THE PURCHASE AGREEMENT.

21.      LOST OR STOLEN CERTIFICATES. UPON RECEIPT BY THE COMPANY OF EVIDENCE
         SATISFACTORY TO THE COMPANY OF THE LOSS, THEFT, DESTRUCTION OR
         MUTILATION OF ANY PREFERRED STOCK CERTIFICATES REPRESENTING THE SHARES
         OF SERIES C PREFERRED STOCK, AND, IN THE CASE OF LOSS, THEFT OR
         DESTRUCTION, OF ANY INDEMNIFICATION UNDERTAKING BY THE HOLDER TO THE
         COMPANY AND, IN THE CASE OF MUTILATION, UPON SURRENDER AND CANCELLATION
         OF THE PREFERRED STOCK CERTIFICATE(S), THE COMPANY SHALL EXECUTE AND
         DELIVER NEW PREFERRED STOCK CERTIFICATE(S) OF LIKE TENOR AND DATE;
         PROVIDED, HOWEVER, THE COMPANY SHALL NOT BE OBLIGATED TO RE-ISSUE
         PREFERRED STOCK CERTIFICATES IF THE HOLDER CONTEMPORANEOUSLY REQUESTS
         THE COMPANY TO CONVERT SUCH SHARES OF SERIES C PREFERRED STOCK INTO
         COMMON STOCK.

22.      REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
         RELIEF. THE REMEDIES PROVIDED IN THIS CERTIFICATE OF DESIGNATION SHALL
         BE CUMULATIVE AND IN ADDITION TO ALL OTHER REMEDIES AVAILABLE UNDER
         THIS CERTIFICATE OF DESIGNATION, AT LAW OR IN EQUITY (INCLUDING A
         DECREE OF SPECIFIC PERFORMANCE AND/OR OTHER INJUNCTIVE RELIEF), NO
         REMEDY CONTAINED HEREIN SHALL BE DEEMED A WAIVER OF COMPLIANCE WITH THE
         PROVISIONS GIVING RISE TO SUCH REMEDY AND NOTHING HEREIN SHALL LIMIT A
         HOLDER'S RIGHT TO PURSUE ACTUAL DAMAGES FOR ANY FAILURE BY THE COMPANY
         TO COMPLY WITH THE TERMS OF THIS CERTIFICATE OF DESIGNATION. AMOUNTS
         SET FORTH OR PROVIDED FOR HEREIN WITH RESPECT TO PAYMENTS, CONVERSION
         AND THE LIKE (AND THE COMPUTATION THEREOF) SHALL BE THE AMOUNTS TO BE
         RECEIVED BY THE HOLDER THEREOF AND SHALL NOT, EXCEPT AS EXPRESSLY
         PROVIDED HEREIN, BE SUBJECT TO ANY OTHER OBLIGATION OF THE COMPANY (OR
         THE PERFORMANCE THEREOF). THE COMPANY ACKNOWLEDGES THAT A BREACH BY IT
         OF ITS OBLIGATIONS HEREUNDER WILL CAUSE IRREPARABLE HARM TO THE HOLDERS
         OF THE SERIES C PREFERRED STOCK AND THAT THE REMEDY AT LAW FOR ANY SUCH
         BREACH MAY BE INADEQUATE. THE COMPANY THEREFORE AGREES THAT, IN THE
         EVENT OF ANY SUCH BREACH OR THREATENED BREACH, THE HOLDERS OF THE
         SERIES C PREFERRED STOCK SHALL BE ENTITLED, IN ADDITION TO ALL OTHER
         AVAILABLE REMEDIES, TO AN INJUNCTION RESTRAINING ANY BREACH, WITHOUT
         THE NECESSITY OF SHOWING ECONOMIC LOSS AND WITHOUT ANY BOND OR OTHER
         SECURITY BEING REQUIRED.

                                      -24-
<PAGE>

23.      SPECIFIC SHALL NOT LIMIT GENERAL; CONSTRUCTION. NO SPECIFIC PROVISION
         CONTAINED IN THIS CERTIFICATE OF DESIGNATION SHALL LIMIT OR MODIFY ANY
         MORE GENERAL PROVISION CONTAINED HEREIN. THIS CERTIFICATE OF
         DESIGNATION SHALL BE DEEMED TO BE JOINTLY DRAFTED BY THE COMPANY AND
         ALL INITIAL PURCHASERS OF THE SERIES C PREFERRED STOCK AND SHALL NOT BE
         CONSTRUED AGAINST ANY PERSON AS THE DRAFTER HEREOF.

24.      FAILURE OR INDULGENCE NOT WAIVER. NO FAILURE OR DELAY ON THE PART OF A
         HOLDER OF SERIES C PREFERRED STOCK IN THE EXERCISE OF ANY POWER, RIGHT
         OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY
         SINGLE OR PARTIAL EXERCISE OF ANY SUCH POWER, RIGHT OR PRIVILEGE
         PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR OF ANY OTHER RIGHT, POWER
         OR PRIVILEGE.

                                      -25-
<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this 28th day of December,
2001.

                                               THE VIALINK COMPANY

                                               By:
                                                  ------------------------------
                                                  Name:  Warren D. Jones
                                                  Title: Chief Executive Officer

                                      -26-
<PAGE>

                                                                       EXHIBIT I

                               THE VIALINK COMPANY
                                CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series C Preferred Stock of The viaLink Company (the
"Certificate of Designation"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series C Preferred Stock, par value $.001 per share (the "Preferred
Shares"), of The viaLink Company, a Delaware corporation (the "Company"),
indicated below into shares of Common Stock, par value $.001 per share (the
"Common Stock"), of the Company, by tendering the stock certificate(s)
representing the share(s) of Preferred Shares specified below as of the date
specified below.

         Date of Conversion:
                            ----------------------------------------------------

         Number of Preferred Shares to be converted:
                                                    ----------------------------

         Stock certificate no(s). of Preferred Shares to be converted:
                                                                      ----------

         The Common Stock have been sold pursuant to the Registration Statement
(as defined in the Purchase Agreement): YES        NO
                                            ----     ----

Please confirm the following information:

         Conversion Price:
                                                    ----------------------------

         Number of shares of Common Stock
         to be issued:
                                                    ----------------------------

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

         Issue to:
                                                    ----------------------------

         Facsimile Number:
                                                    ----------------------------

         Authorization:
                                                    ----------------------------
                                                    By:
                                                       -------------------------
                                                    Title:
                                                          ----------------------

         Dated:

                                 PRICES ATTACHED

                                      -1-<PAGE>
                                                                    EXHIBIT 4.3

                          SERIES A WARRANT TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                               THE VIALINK COMPANY

                            Expires December 28, 2006

No.: W-A-__                                    Number of Shares:
Date of Issuance: December 28, 2001                             --------------

         FOR VALUE RECEIVED, subject to the provisions hereinafter set forth,
the undersigned, The viaLink Company, a Delaware corporation (together with its
successors and assigns, the "Issuer"), hereby certifies that
___________________________ or its registered assigns is entitled to subscribe
for and purchase, during the period specified in this Series A Warrant, up to
_____________________________ (_____________) shares (subject to adjustment as
hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable Common Stock of the Issuer, at an exercise price per share equal
to the Warrant Price then in effect, subject, however, to the provisions and
upon the terms and conditions hereinafter set forth. Capitalized terms used in
this Warrant and not otherwise defined herein shall have the respective meanings
specified in Section 8 hereof.

         1. Term. The right to subscribe for and purchase shares of Warrant
Stock represented hereby shall commence on the date of issuance of this Warrant
and shall expire at 5:00 p.m., eastern time, on December 28, 2006 (such period
being the "Term").

         2. Method of Exercise Payment; Issuance of New Warrant; Transfer and
Exchange.

         (a) Time of Exercise. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during
the Term.

         (b) Method of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number of
shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Issuer, (ii) if shares
of Common Stock issuable upon exercise of this Warrant are not registered
pursuant to an effective registration statement under the Securities Act, by
"cashless exercise" by surrender to the Issuer for cancellation of a portion of
this Warrant representing that number of unissued shares of Warrant Stock which
is equal to the quotient obtained by dividing (A) the product obtained by
multiplying the Warrant Price by the number of shares of Warrant Stock being
purchased upon such exercise by (B) the Per Share Market Value as of the date of
such exercise, or (iii) by a combination of the foregoing methods of payment
selected by the Holder of this Warrant. In any case where the consideration
payable upon such exercise is being paid in whole or in part pursuant to the
provisions of clause

                                      -1-
<PAGE>

(ii) of this subsection (b), such exercise shall be accompanied by written
notice from the Holder of this Warrant specifying the manner of payment thereof
and containing a calculation showing the number of shares of Warrant Stock with
respect to which rights are being surrendered thereunder and the net number of
shares to be issued after giving effect to such surrender.

         (c) Issuance of Stock Certificates. In the event of any exercise of the
rights represented by this Warrant in accordance with and subject to the terms
and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
hereof within a reasonable time, not exceeding three (3) Trading Days after such
exercise or, at the request of the Holder, issued and delivered to the
Depository Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC") within a reasonable time, not
exceeding three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the Holder of the shares of Warrant Stock
so purchased as of the date of such exercise and (ii) unless this Warrant has
expired, a new Warrant representing the number of shares of Warrant Stock, if
any, with respect to which this Warrant shall not then have been exercised (less
any amount thereof which shall have been canceled in payment or partial payment
of the Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer's expense within such time.

         (d) Transferability of Warrant. Subject to Section 2(e), this Warrant
may be transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of subsection (e) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.

         (e) Continuing Rights of Holder. The Issuer will, at the time of or at
any time after each exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing the extent, if any, of its continuing obligation
to afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.

                                      -2-
<PAGE>

         3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

         (a) Stock Fully Paid. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise of
this Warrant or otherwise hereunder will, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges created by or through Issuer. The Issuer further covenants and agrees
that during the period within which this Warrant may be exercised, the Issuer
will at all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

         (b) Reservation. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

         (c) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and
restrictions (other than as provided herein) upon the exercise of this Warrant,
and (iv) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
reasonably necessary to enable the Issuer to perform its obligations under this
Warrant.

         (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or

                                      -3-
<PAGE>

mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same number of shares of Common Stock.

         4. Adjustment of Warrant Price and Warrant Share Number. The number of
shares of Common Stock for which this Warrant is exercisable, and the price at
which such shares may be purchased upon exercise of this Warrant, shall be
subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 in accordance with Section 5.

         (a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale.

                  (i) In case the Issuer after the Original Issue Date shall do
         any of the following (each, a "Triggering Event"): (a) consolidate with
         or merge into any other Person and the Issuer shall not be the
         continuing or surviving corporation of such consolidation or merger, or
         (b) permit any other Person to consolidate with or merge into the
         Issuer and the Issuer shall be the continuing or surviving Person but,
         in connection with such consolidation or merger, any Capital Stock of
         the Issuer shall be changed into or exchanged for Securities of any
         other Person or cash or any other property, or (c) transfer all or
         substantially all of its properties or assets to any other Person, or
         (d) effect a capital reorganization or reclassification of its Capital
         Stock, then, and in the case of each such Triggering Event, proper
         provision shall be made so that, upon the basis and the terms and in
         the manner provided in this Warrant, the Holder of this Warrant shall
         be entitled (x) upon the exercise hereof at any time after the
         consummation of such Triggering Event, to the extent this Warrant is
         not exercised prior to such Triggering Event, to receive at the Warrant
         Price in effect at the time immediately prior to the consummation of
         such Triggering Event in lieu of the Common Stock issuable upon such
         exercise of this Warrant prior to such Triggering Event, the
         Securities, cash and property to which such Holder would have been
         entitled upon the consummation of such Triggering Event if such Holder
         had exercised the rights represented by this Warrant immediately prior
         thereto, subject to adjustments (subsequent to such corporate action)
         as nearly equivalent as possible to the adjustments provided for
         elsewhere in this Section 4 or (y) to sell this Warrant (or, at such
         Holder's election, a portion hereof) concurrently with the Triggering
         Event to the Person continuing after or surviving such Triggering
         Event, or to the Issuer (if Issuer is the continuing or surviving
         Person) at a sales price equal to the amount of cash, property and/or
         Securities to which a holder of the number of shares of Common Stock
         which would otherwise have been delivered upon the exercise of this
         Warrant would have been entitled upon the effective date or closing of
         any such Triggering Event (the "Event Consideration"), less the amount
         or portion of such Event Consideration having a fair value equal to the
         aggregate Warrant Price applicable to this Warrant or the portion
         hereof so sold.

                  (ii) Notwithstanding anything contained in this Warrant to the
         contrary, the Issuer will not effect any Triggering Event unless, prior
         to the consummation thereof, each Person (other than the Issuer) which
         may be required to deliver any Securities, cash or property upon the
         exercise of this Warrant as provided herein shall assume, by written
         instrument delivered to, and reasonably satisfactory to, the Holder of
         this Warrant, (A) the obligations of the Issuer under this Warrant (and
         if the Issuer shall survive the consummation of such Triggering Event,
         such assumption shall be in addition to, and shall not release the
         Issuer from, any continuing obligations of the Issuer under this
         Warrant) and (B) the obligation to deliver to such Holder such shares
         of Securities, cash or property as, in accordance with the foregoing
         provisions of this

                                      -4-
<PAGE>

         subsection (a), such Holder shall be entitled to receive, and such
         Person shall have similarly delivered to such Holder an opinion of
         counsel for such Person, which counsel shall be reasonably satisfactory
         to such Holder, or in the alternative, a written acknowledgement
         executed by the Chief Executive Officer or Chief Financial Officer of
         the Company, stating that this Warrant shall thereafter continue in
         full force and effect and the terms hereof (including, without
         limitation, all of the provisions of this subsection (a)) shall be
         applicable to the Securities, cash or property which such Person may be
         required to deliver upon any exercise of this Warrant or the exercise
         of any rights pursuant hereto.

                  (iii) If with respect to any Triggering Event, the Holder of
         this Warrant has exercised its right as provided in clause (y) of
         subparagraph (i) of this subsection (a) to sell this Warrant or a
         portion thereof, the Issuer agrees that as a condition to the
         consummation of any such Triggering Event the Issuer shall secure such
         right of Holder to sell this Warrant to the Person continuing after or
         surviving such Triggering Event and the Issuer shall not effect any
         such Triggering Event unless upon or prior to the consummation thereof
         the amounts of cash, property and/or Securities required under such
         clause (y) are delivered to the Holder of this Warrant. The obligation
         of the Issuer to secure such right of the Holder to sell this Warrant
         shall be subject to such Holder's cooperation with the Issuer,
         including, without limitation, the giving of customary representations
         and warranties to the purchaser in connection with any such sale. Prior
         notice of any Triggering Event shall be given to the Holder of this
         Warrant in accordance with Section 12 hereof.

         (b) Stock Dividends, Subdivisions and Combinations. If at any time the
Issuer shall:

                  (i) take a record of the holders of its Common Stock for the
         purpose of entitling them to receive a dividend payable in, or other
         distribution of, Additional Shares of Common Stock,

                  (ii) subdivide its outstanding shares of Common Stock into a
         larger number of shares of Common Stock, or

                  (iii) combine its outstanding shares of Common Stock into a
         smaller number of shares of Common Stock,

then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.

         (c) Certain Other Distributions. If at any time the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:

                                      -5-
<PAGE>

                  (i) cash (other than a cash dividend payable out of earnings
         or earned surplus legally available for the payment of dividends under
         the laws of the jurisdiction of incorporation of the Issuer),

                  (ii) any evidences of its indebtedness, any shares of stock of
         any class or any other securities or property of any nature whatsoever
         (other than cash, Common Stock Equivalents or Additional Shares of
         Common Stock), or

                  (iii) any warrants or other rights to subscribe for or
         purchase any evidences of its indebtedness, any shares of stock of any
         class or any other securities or property of any nature whatsoever
         (other than cash, Common Stock Equivalents or Additional Shares of
         Common Stock),

then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion from an investment banking firm of recognized
national standing acceptable to the Holder) of any and all such evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (2) the Warrant Price then
in effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment. A reclassification of the Common Stock (other than a change in
par value, or from par value to no par value or from no par value to par value)
into shares of Common Stock and shares of any other class of stock shall be
deemed a distribution by the Issuer to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this Section 4(c) and,
if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification,
such change shall be deemed a subdivision or combination, as the case may be, of
the outstanding shares of Common Stock within the meaning of Section 4(b).

         (d) Issuance of Additional Shares of Common Stock. Commencing six
months after the Original Issue Date, in the event the Issuer, shall, at any
time, from time to time, issue or sell any Additional Shares of Common Stock
(including Treasury Shares) for a consideration per share less than the Warrant
Price then in effect for the Warrant immediately prior to the time of such issue
or sale, then, forthwith upon such issue or sale, the Warrant Price then in
effect for the Warrants shall be reduced to a price equal to the consideration
per share paid for such Additional Shares of Common Stock and the number of
shares of Common Stock for which this Warrant is exercisable shall be increased
by the product of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such issuance or sale multiplied by the
Dilution Percentage. "Dilution Percentage" shall mean the percentage by which
the Warrant Price then in effect is reduced pursuant to this Section 4(d).

         (e) Issuance of Warrants or Other Rights. If at any time the Issuer
shall take a record of the Holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Issuer is the surviving
corporation) issue or sell, any Common Stock Equivalents (or issue

                                      -6-
<PAGE>

any warrant or other rights therefor), whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of such Common Stock
Equivalents (or any warrant or other rights therefor) shall be less than the
Warrant Price in effect immediately prior to the time of such issue or sale,
then the number of shares for which this Warrant is exercisable and the Warrant
Price then in effect shall be adjusted as provided in Section 4(d) on the basis
that the maximum number of Additional Shares of Common Stock issuable pursuant
to all such Common Stock Equivalents (or upon the issuance of any warrant or
other rights therefor) shall be deemed to have been issued and outstanding and
the Issuer shall have received all of the consideration payable therefor, if
any, as of the date of the actual issuance of such warrants or other rights. No
adjustments of the Warrant Price then in effect or the number of Warrant Shares
for which this Warrant is exercisable shall be made upon the actual issue of
such Common Stock or of such Common Stock Equivalents upon exercise of such
warrants or other rights or upon the actual issue of such Common Stock upon such
conversion or exchange of such Common Stock Equivalents.

         (f) Issuance of Common Stock Equivalents. If at any time the Issuer
shall take a record of the Holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which the Issuer is the surviving
corporation) issue or sell, any Common Stock Equivalents, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Warrant Price in effect immediately prior to the
time of such issue or sale, then the number of shares of Common Stock for which
this Warrant is exercisable and the Warrant Price then in effect shall be
adjusted as provided in Section 4(d) on the basis that the maximum number of
Additional Shares of Common Stock necessary to effect the conversion or exchange
of all such Common Stock Equivalents shall be deemed to have been issued and
outstanding and the Issuer shall have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such Common Stock
Equivalents. No further adjustment of the number of shares of Common Stock for
which this Warrant is exercisable and the Warrant Price then in effect shall be
made under this Section 4(f) upon the issuance of any Common Stock Equivalents
which are issued pursuant to the exercise of any warrants or other subscription
or purchase rights therefor, if any such adjustment shall previously have been
made upon the issuance of such warrants or other rights pursuant to Section
4(e). No further adjustments of the number of shares of Common Stock for which
this Warrant is exercisable and the Warrant Price then in effect shall be made
upon the actual issue of such Common Stock upon conversion or exchange of such
Common Stock Equivalents.

         (g) Superseding Adjustment. If, at any time after any adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall have been made pursuant to Section 4(e) or
Section 4(f) as the result of any issuance of warrants, other rights or Common
Stock Equivalents, and (i) such warrants or other rights, or the right of
conversion or exchange in such other Common Stock Equivalents, shall expire, and
all or a portion of such warrants or other rights, or the right of conversion or
exchange with respect to all or a portion of such other Common Stock
Equivalents, as the case may be shall not have been exercised, or (ii) the
consideration per share for which shares of Common Stock are issuable pursuant
to such Common Stock Equivalents, shall be increased solely by virtue of
provisions therein contained for an automatic increase in such consideration per
share upon the occurrence of a specified date or event, then for each
outstanding Warrant such previous adjustment shall be rescinded and annulled and
the Additional Shares of Common Stock which were deemed to have been issued by
virtue of the computation made in

                                      -7-
<PAGE>

connection with the adjustment so rescinded and annulled shall no longer be
deemed to have been issued by virtue of such computation. Upon the occurrence of
an event set forth in this Section 4(g) above, there shall be a recomputation
made of the effect of such Common Stock Equivalents on the basis of: (i)
treating the number of Additional Shares of Common Stock or other property, if
any, theretofore actually issued or issuable pursuant to the previous exercise
of any such warrants or other rights or any such right of conversion or
exchange, as having been issued on the date or dates of any such exercise and
for the consideration actually received and receivable therefor, and (ii)
treating any such Common Stock Equivalents which then remain outstanding as
having been granted or issued immediately after the time of such increase of the
consideration per share for which shares of Common Stock or other property are
issuable under such Common Stock Equivalents; whereupon a new adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall be made, which new adjustment shall supersede
the previous adjustment so rescinded and annulled.

         (h) Purchase of Common Stock by the Issuer. If the Issuer at any time
while this Warrant is outstanding shall, directly or indirectly through a
Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of
Common Stock at a price per share greater than the Per Share Market Value, then
the Warrant Price upon each such purchase, redemption or acquisition shall be
adjusted to that price determined by multiplying such Warrant Price by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such purchase, redemption or acquisition
minus the number of shares of Common Stock which the aggregate consideration for
the total number of such shares of Common Stock so purchased, redeemed or
acquired would purchase at the Per Share Market Value; and (ii) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such purchase, redemption or acquisition. For the purposes of this
subsection (h), the date as of which the Per Share Market Price shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock. For the purposes of this subsection (h), a purchase, redemption or
acquisition of a Common Stock Equivalent shall be deemed to be a purchase of the
underlying Common Stock, and the computation herein required shall be made on
the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.

         (i) Other Provisions applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect provided for in this Section 4:

                  (i) Computation of Consideration. To the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents (or any
warrants or other rights therefor) shall be issued for cash consideration, the
consideration received by the Issuer therefor shall be the amount of the cash
received by the Issuer therefor, or, if such Additional Shares of Common Stock
or Common Stock Equivalents are offered by the Issuer for subscription, the
subscription price, or, if such Additional Shares of Common Stock or Common
Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued
dividends and without taking into account any compensation, discounts or
expenses paid or incurred by the Issuer for and in the underwriting of, or
otherwise in connection with, the

                                      -8-
<PAGE>

issuance thereof). To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided, the amount
of such consideration shall be deemed to be the fair value of such consideration
at the time of such issuance as determined in good faith by the Board of
Directors of the Issuer. In case any Additional Shares of Common Stock or any
Common Stock Equivalents (or any warrants or other rights therefor) shall be
issued in connection with any merger in which the Issuer issues any securities,
the amount of consideration therefor shall be deemed to be the fair value, as
determined in good faith by the Board of Directors of the Issuer, of such
portion of the assets and business of the nonsurviving corporation as such Board
in good faith shall determine to be attributable to such Additional Shares of
Common Stock, Common Stock Equivalents, or any warrants or other rights
therefor, as the case may be. The consideration for any Additional Shares of
Common Stock issuable pursuant to any warrants or other rights to subscribe for
or purchase the same shall be the consideration received by the Issuer for
issuing such warrants or other rights plus the additional consideration payable
to the Issuer upon exercise of such warrants or other rights. The consideration
for any Additional Shares of Common Stock issuable pursuant to the terms of any
Common Stock Equivalents shall be the consideration received by the Issuer for
issuing warrants or other rights to subscribe for or purchase such Common Stock
Equivalents, plus the consideration paid or payable to the Issuer in respect of
the subscription for or purchase of such Common Stock Equivalents, plus the
additional consideration, if any, payable to the Issuer upon the exercise of the
right of conversion or exchange in such Common Stock Equivalents. In case of the
issuance at any time of any Additional Shares of Common Stock or Common Stock
Equivalents in payment or satisfaction of any dividends upon any class of stock
other than Common Stock, the Issuer shall be deemed to have received for such
Additional Shares of Common Stock or Common Stock Equivalents a consideration
equal to the amount of such dividend so paid or satisfied.

                  (ii) When Adjustments to Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that any adjustment of the number of
shares of Common Stock for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of a subdivision or
combination of shares of the Common Stock, as provided for in Section 4(b)) up
to, but not beyond the date of exercise if such adjustment either by itself or
with other adjustments not previously made adds or subtracts less than one
percent (1%) of the shares of Common Stock for which this Warrant is exercisable
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount (except as aforesaid) which is
postponed shall be carried forward and made as soon as such adjustment, together
with other adjustments required by this Section 4 and not previously made, would
result in a minimum adjustment or on the date of exercise. For the purpose of
any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.

                  (iii) Fractional Interests. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken into account
to the nearest one one-hundredth (1/100th) of a share.

                  (iv) When Adjustment Not Required. If the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be

                                      -9-
<PAGE>

rescinded and annulled. In addition, no adjustment shall be required under any
circumstances in the event the Issuer issues or sells Additional Shares (A) in a
transaction whose primary purpose is to establish a relationship with the
recipient thereof for strategic reasons and not to raise capital, (B) in payment
of employee, consultant and service provider compensation in lieu of cash, and
(C) pursuant to exercises by option holders under grants made pursuant to the
Issuer's stock option plan.

         (j) Form of Warrant after Adjustments. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

         (k) Escrow of Warrant Stock. If after any property becomes
distributable pursuant to this Section 4 by reason of the taking of any record
of the holders of Common Stock, but prior to the occurrence of the event for
which such record is taken, and the Holder exercises this Warrant, any shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Issuer to be issued
to the Holder upon and to the extent that the event actually takes place, upon
payment of the current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

         5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms currently known as the "big five" selected by the Holder,
provided that the Issuer shall have ten (10) days after receipt of notice from
such Holder of its selection of such firm to object thereto, in which case such
Holder shall select another such firm and the Issuer shall have no such right of
objection. The firm selected by the Holder of this Warrant as provided in the
preceding sentence shall be instructed to deliver a written opinion as to such
matters to the Issuer and such Holder within thirty (30) days after submission
to it of such dispute. Such opinion shall be final and binding on the parties
hereto. The fees and expenses of such accounting firm shall be paid by the
Issuer.

         6. Fractional Shares. No fractional shares of Warrant Stock will be
issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value then
in effect.

         7. Ownership Cap and Certain Exercise Restrictions.

         (a) Notwithstanding anything to the contrary set forth in this Warrant,
at no time may a holder of this Warrant exercise this Warrant if the number of
shares of Common Stock to be

                                      -10-
<PAGE>

issued pursuant to such exercise would exceed, when aggregated with all other
shares of Common Stock owned by such holder at such time, the number of shares
of Common Stock which would result in such holder owning more than 4.999% of all
of the Common Stock outstanding at such time; provided, however, that upon a
holder of this Warrant providing the Issuer with seventy-five (75) days notice
(pursuant to Section 12 hereof) (the "Waiver Notice") that such holder would
like to waive this Section 7(a) with regard to any or all shares of Common Stock
issuable upon exercise of this Warrant, this Section 7(a) will be of no force or
effect with regard to all or a portion of the Warrant referenced in the Waiver
Notice.

         (b) The Holder may not exercise the Warrant hereunder to the extent
such exercise would result in the Holder beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder) in
excess of 9.999% of the then issued and outstanding shares of Common Stock,
including shares issuable upon exercise of the Warrant held by the Holder after
application of this Section.

         8. Definitions. For the purposes of this Warrant, the following terms
have the following meanings:

                  "Additional Shares of Common Stock" means all shares of Common
         Stock issued by the Issuer after the Original Issue Date, and all
         shares of Other Common, if any, issued by the Issuer after the Original
         Issue Date, except (i) the Warrant Stock, (ii) issuances of shares of
         Common Stock pursuant to the events set forth in Section 4(i)(iv)
         hereof; and (iii) the issuance of shares of Common Stock in connection
         with the conversion of the series B convertible preferred stock, the
         series C convertible preferred stock, the Warrants and any other
         existing class or series of preferred stock or any other options,
         warrants or other convertible securities outstanding on the Original
         Issue Date.

                  "Board" shall mean the Board of Directors of the Issuer.

                  "Capital Stock" means and includes (i) any and all shares,
         interests, participations or other equivalents of or interests in
         (however designated) corporate stock, including, without limitation,
         shares of preferred or preference stock, (ii) all partnership interests
         (whether general or limited) in any Person which is a partnership,
         (iii) all membership interests or limited liability company interests
         in any limited liability company, and (iv) all equity or ownership
         interests in any Person of any other type.

                  "Certificate of Incorporation" means the Certificate of
         Incorporation of the Issuer as in effect on the Original Issue Date,
         and as hereafter from time to time amended, modified, supplemented or
         restated in accordance with the terms hereof and thereof and pursuant
         to applicable law.

                  "Common Stock" means the Common Stock, par value $.001 per
         share, of the Issuer and any other Capital Stock into which such stock
         may hereafter be changed.

                  "Common Stock Equivalent" means any Convertible Security or
         warrant, option or other right to subscribe for or purchase any
         Additional Shares of Common Stock or any Convertible Security.

                  "Convertible Securities" means evidences of Indebtedness,
         shares of Capital Stock or other Securities which are or may be at any
         time convertible into or

                                      -11-
<PAGE>

         exchangeable for Additional Shares of Common Stock. The term
         "Convertible Security" means one of the Convertible Securities.

                  "Governmental Authority" means any governmental, regulatory or
         self-regulatory entity, department, body, official, authority,
         commission, board, agency or instrumentality, whether federal, state or
         local, and whether domestic or foreign.

                  "Holders" mean the Persons who shall from time to time own any
         Warrant. The term "Holder" means one of the Holders.

                  "Independent Appraiser" means a nationally recognized or major
         regional investment banking firm or firm of independent certified
         public accountants of recognized standing (which may be the firm that
         regularly examines the financial statements of the Issuer) that is
         regularly engaged in the business of appraising the Capital Stock or
         assets of corporations or other entities as going concerns, and which
         is not affiliated with either the Issuer or the Holder of any Warrant.

                  "Issuer" means The viaLink Company, a Delaware corporation,
         and its successors.

                  "Majority Holders" means at any time the Holders of Warrants
         exercisable for a majority of the shares of Warrant Stock issuable
         under the Warrants at the time outstanding.

                  "Nasdaq" means the Nasdaq National Market.

                  "Original Issue Date" means December 28, 2001.

                  "OTC Bulletin Board" means the over-the-counter electronic
         bulletin board.

                  "Other Common" means any other Capital Stock of the Issuer of
         any class which shall be authorized at any time after the date of this
         Warrant (other than Common Stock) and which shall have the right to
         participate in the distribution of earnings and assets of the Issuer
         without limitation as to amount.

                  "Person" means an individual, corporation, limited liability
         company, partnership, joint stock company, trust, unincorporated
         organization, joint venture, Governmental Authority or other entity of
         whatever nature.

                  "Per Share Market Value" means on any particular date (a) the
         closing bid price per share of the Common Stock on such date on Nasdaq
         or another registered national stock exchange on which the Common Stock
         is then listed, or if there is no such price on such date, then the
         closing bid price on such exchange or quotation system on the date
         nearest preceding such date, or (b) if the Common Stock is not listed
         then on Nasdaq or any registered national stock exchange, the closing
         bid price for a share of Common Stock in the over-the-counter market,
         as reported by the OTC Bulletin Board or in the National Quotation
         Bureau Incorporated or similar organization or agency succeeding to its
         functions of reporting prices) at the close of business on such date,
         or (c) if the Common Stock is not then reported by the OTC Bulletin
         Board or the National Quotation Bureau Incorporated (or similar
         organization or agency succeeding to its functions of reporting
         prices), then the average of the "Pink Sheet" quotes for the relevant
         conversion

                                      -12-
<PAGE>

         period, as determined in good faith by the holder, or (d) if the Common
         Stock is not then publicly traded the fair market value of a share of
         Common Stock as determined by an Independent Appraiser selected in good
         faith by the Majority Holders; provided, however, that the Issuer,
         after receipt of the determination by such Independent Appraiser, shall
         have the right to select an additional Independent Appraiser, in which
         case, the fair market value shall be equal to the average of the
         determinations by each such Independent Appraiser; and provided,
         further that all determinations of the Per Share Market Value shall be
         appropriately adjusted for any stock dividends, stock splits or other
         similar transactions during such period. The determination of fair
         market value by an Independent Appraiser shall be based upon the fair
         market value of the Issuer determined on a going concern basis as
         between a willing buyer and a willing seller and taking into account
         all relevant factors determinative of value, and shall be final and
         binding on all parties. In determining the fair market value of any
         shares of Common Stock, no consideration shall be given to any
         restrictions on transfer of the Common Stock imposed by agreement or by
         federal or state securities laws, or to the existence or absence of, or
         any limitations on, voting rights.

                  "Purchase Agreement" means the Purchase Agreement dated as of
         December 28, 2001 among the Issuer and the Holder.

                  "Securities" means any debt or equity securities of the
         Issuer, whether now or hereafter authorized, any instrument convertible
         into or exchangeable for Securities or a Security, and any option,
         warrant or other right to purchase or acquire any Security. "Security"
         means one of the Securities.

                  "Securities Act" means the Securities Act of 1933, as amended,
         or any similar federal statute then in effect.

                  "Subsidiary" means any corporation at least 50% of whose
         outstanding Voting Stock shall at the time be owned directly or
         indirectly by the Issuer or by one or more of its Subsidiaries, or by
         the Issuer and one or more of its Subsidiaries.

                  "Term" has the meaning specified in Section 1 hereof.

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

                  "Voting Stock" means, as applied to the Capital Stock of any
         corporation, Capital Stock of any class or classes (however designated)
         having ordinary voting power for the election of a majority of the
         members of the Board of Directors (or other governing body)

                                      -13-
<PAGE>

         of such corporation, other than Capital Stock having such power only by
         reason of the happening of a contingency.

                  "Warrants" means the Warrants issued and sold pursuant to the
         Purchase Agreement, including, without limitation, this Warrant, and
         any other warrants of like tenor issued in substitution or exchange for
         any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e)
         hereof or of any of such other Warrants.

                  "Warrant Price" means U.S. $.40, as such price may be adjusted
         from time to time as shall result from the adjustments specified in
         this Warrant, including Section 4 hereto.

                  "Warrant Share Number" means at any time the aggregate number
         of shares of Warrant Stock which may at such time be purchased upon
         exercise of this Warrant, after giving effect to all prior adjustments
         and increases to such number made or required to be made under the
         terms hereof.

                  "Warrant Stock" means Common Stock issuable upon exercise of
         any Warrant or Warrants or otherwise issuable pursuant to any Warrant
         or Warrants.

         9. Other Notices. In case at any time:

                  (A)      the Issuer shall make any distributions to the
                           holders of Common Stock; or

                  (B)      the Issuer shall authorize the granting to all
                           holders of its Common Stock of rights to subscribe
                           for or purchase any shares of Capital Stock of any
                           class or of any Common Stock Equivalents or other
                           rights; or

                  (C)      there shall be any reclassification of the Capital
                           Stock of the Issuer; or

                  (D)      there shall be any capital reorganization by the
                           Issuer; or

                  (E)      there shall be any (i) consolidation or merger
                           involving the Issuer or (ii) sale, transfer or other
                           disposition of all or substantially all of the
                           Issuer's property, assets or business (except a
                           merger or other reorganization in which the Issuer
                           shall be the surviving corporation and its shares of
                           Capital Stock shall continue to be outstanding and
                           unchanged and except a consolidation, merger, sale,
                           transfer or other disposition involving a
                           wholly-owned Subsidiary); or

                  (F)      there shall be a voluntary or involuntary
                           dissolution, liquidation or winding-up of the Issuer
                           or any partial liquidation of the Issuer or
                           distribution to holders of Common Stock;

                                      -14-
<PAGE>

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than twenty (20) days
prior to the record date or the date on which the Issuer's transfer books are
closed in respect thereto. The Issuer shall give to the Holder notice of all
meetings and actions by written consent of its stockholders, at the same time in
the same manner as notice of any meetings of stockholders is required to be
given to stockholders who do not waive such notice (or, if such requires no
notice, then two (2) Trading Days written notice thereof describing the matters
upon which action is to be taken). The Holder shall have the right to send two
(2) representatives selected by it to each meeting, who shall be permitted to
attend, but not vote at, such meeting and any adjournments thereof. This Warrant
entitles the Holder to receive copies of all financial and other information
distributed or required to be distributed to the holders of the Common Stock.

         10. Amendment and Waiver. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Majority Holders; provided, however, that no such amendment or
waiver shall reduce the Warrant Share Number, increase the Warrant Price,
shorten the period during which this Warrant may be exercised or modify any
provision of this Section 10 without the consent of the Holder of this Warrant.

         11. Governing Law. THIS WARRANT 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.

         12. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service or
(iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Stock issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Issuer maintained for such purposes, or with respect to the Issuer,
addressed to:

                 The viaLink Company
                 13155 Noel Road
                 Suite 700
                 Dallas, Texas 75240
                 Tel. No.: (972) 934-5500
                 Fax No.:  (972) 934-5583
                 Attention: Chief Executive Officer and Chief Financial Officer

                                      -15-
<PAGE>

Copies of notices to the Holder shall be sent to Jenkens & Gilchrist Parker
Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, New York
10174, Attention: Christopher S. Auguste, Esq., facsimile no.: (212) 704-6288.
Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

         13. Warrant Agent. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.

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

         15. Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.

         16. Modification and Severability. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

         17. Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                                      -16-
<PAGE>

         IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.

                                          THE VIALINK COMPANY

                                          By:
                                             ---------------------------------
                                             Name:
                                             Title:

                                      -17-
<PAGE>

                                  EXERCISE FORM

                               THE VIALINK COMPANY

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of The viaLink
Company covered by the within Warrant.

Dated:                                Signature
       ------------------                       ------------------------------

                                      Address
                                                --------------------------

                                                --------------------------

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated:                                Signature
       ------------------                       ------------------------------

                                      Address
                                                --------------------------

                                                --------------------------

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated:                                Signature
       ------------------                       ------------------------------

                                      Address
                                                --------------------------

                                                --------------------------

                           FOR USE BY THE ISSUER ONLY:

                  This Warrant No. W-_____ canceled (or transferred or
exchanged) this _____ day of ___________, _____, shares of Common Stock issued
therefor in the name of _______________, Warrant No. W-_____ issued for ____
shares of Common Stock in the name of _______________.

                                      -18-

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