Document:

EXHIBIT 4.2

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

                      SERIES B CONVERTIBLE PREFERRED STOCK

                                       OF

                             AUTO DATA NETWORK, INC.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

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

      Auto Data Network,  Inc., a corporation  organized and existing  under the
laws of the State of Delaware (the "Company"),  hereby certifies that,  pursuant
to the  authority  vested in the Board of Directors of the Company (the "Board")
by  the  Certificate  of  Incorporation  of the  Company  (the  "Certificate  of
Incorporation"),  as amended, the following resolution was adopted as of January
20,  2004  by  the  Board  pursuant  to  Section  141 of  the  Delaware  General
Corporation Law:

      RESOLVED,  that  pursuant  to the  authority  granted to and vested in the
Board in accordance with the provisions of the Certificate of Incorporation,  as
amended,  there shall be created a series of Preferred Stock,  $0.001 par value,
which series shall have the following  designations and number thereof,  powers,
preferences, rights, qualifications, limitations and restrictions:

      1.  Designation  and Number of Shares.  There shall  hereby be created and
established  a series of Preferred  Stock  designated  as "Series B  Convertible
Preferred  Stock" (the "Series B Preferred  Stock").  The  authorized  number of
shares of Series B Preferred Stock shall be 5,514,474;  provided,  that whatever
number of shares of Series B Preferred  Stock in excess of  4,342,105  shares is
not utilized to satisfy the  preemptive  rights of the holders of the  Company's
Series A-1  Preferred  Stock and Series  A-2  Preferred  Stock in respect of the
issuance  of the  Series B  Preferred  Stock  shall be  cancelled,  retired  and
eliminated  by the  Company  from the  shares of Series B  Preferred  Stock,  as
applicable,  which the Company shall be authorized to issue.  Any such shares of
Series B Preferred  Stock so cancelled,  retired and  eliminated  shall have the
status  of  authorized  and  unissued  shares of  Preferred  Stock  issuable  in
undesignated  Series and may be  redesignated  and  reissued in any series other
than as Series B Preferred Stock.

      2. Conversion.

      (a) Right to  Convert.  Each share of Series B  Preferred  Stock  shall be
convertible  into a number of shares of  Common  Stock  equal to the  applicable
Liquidation  Amount  (as  defined  in  Section  5  herein)  divided  by the then
applicable Conversion Price (as defined herein) upon the earlier to occur of (i)
the election of the holder to convert (an "Optional Conversion"), in whole or in
part, at any time, or from time to time, commencing with date of the issuance of
Series B Preferred Stock (the "Issuance  Date") or (ii) the earliest to occur of
the following dates (an "Automatic Conversion"): (A) the date, at any time after
the one year  anniversary of the Issuance Date,  upon which both (x) the average
of the Market  Price (as defined  herein) for a share of Common Stock for thirty
consecutive  Trading  Days  (as  defined  herein)  exceeds  $10.00  (subject  to
adjustment in the event of stock splits,  reverse stock splits, stock dividends,
recapitalizations  or similar  events) and (y) the average of the trading volume
for the Common Stock during such period exceeds  150,000 shares per day (subject
to  adjustment  in the  event of  stock  splits,  reverse  stock  splits,  stock
dividends,  recapitalizations  or similar events) shares per Trading Day; or (B)
upon the affirmative  vote of the holders of a majority of the then  outstanding
shares of Series B Preferred Stock.
<PAGE>

      (b) As used herein,  "Market  Price" means,  with respect to the shares of
Common  Stock,  (i) if the  shares  are listed or  admitted  for  trading on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap  Market,  the last reported sales price as reported on such exchange or
market;  (ii) if the  shares  are not  listed or  admitted  for  trading  on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap  Market,  the  average  of the  last  reported  closing  bid and  asked
quotation for the shares as reported on the National  Association  of Securities
Dealers Automated  Quotation System ("NASDAQ") or a similar service if NASDAQ is
not  reporting  such  information;  or (iii) if the  shares  are not  listed  or
admitted  for  trading on any  national  securities  exchange or included in The
Nasdaq  National  Market  or  Nasdaq  SmallCap  Market  or quoted by NASDAQ or a
similar  service,  the average of the last reported bid and asked  quotation for
the  shares as quoted by a market  maker in the shares (or if there is more than
one market maker,  the bid and asked quotation shall be obtained from two market
makers and the  average of the lowest bid and  highest  asked  quotation)  (such
applicable  trading  market to be  referred  to the  "Trading  Market").  In the
absence of any available public quotations for the Common Stock, the Board shall
determine in good faith the fair value of the Common Stock, which  determination
shall be set forth in a certificate by the Secretary of the Company.

      As used herein,  "Trading Day" means a day on which the principal  Trading
Market with respect to the Common Stock is open for the transaction of business.

      (c)  Effecting  a  Conversion.  Immediately  upon  the  occurrence  of  an
Automatic Conversion, each holder's shares of Series B Preferred Stock, shall be
deemed  to have  been  converted  into the  applicable  number  of shares of the
Company's Common Stock in accordance with the then applicable  Conversion Price,
and certificates  evidencing such shares of Common Stock shall be issued to such
holder within five business  days after receipt of the  applicable  certificates
evidencing such holder's shares of Series B Preferred Stock, together with other
customary  documentation  (including  delivery  instructions).  The holder shall
effect any Optional  Conversion by surrendering  the certificate or certificates
representing  the shares of Series B Preferred  Stock,  to be  converted  to the
Company,  together with written notice of its election to convert and specifying
the name or names (with  address) in which a  certificate  or  certificates  for
shares of Common  Stock are to be issued (a  "Stockholder  Conversion  Notice").
Each Stockholder  Conversion Notice shall specify the number of shares of Series
B Preferred Stock to be converted and the date on which such conversion is to be
effected,  which date may be neither prior to, nor more than 10 days after,  the
date the holder delivers such Stockholder  Conversion  Notice.  If no conversion
date is specified in a Stockholder  Conversion Notice, the conversion date shall
be  the  date  that  the  Stockholder  Conversion  Notice  is  delivered.   Each
Stockholder  Conversion Notice,  once given,  shall be irrevocable.  A holder of
Series B Preferred  Stock may only convert shares of Series B Preferred Stock in
blocks equal to not less than the lesser of (i) the number of shares of Series B
Preferred  Stock, as applicable,  convertible  into 5,000 shares of Common Stock
and (ii) all shares of Series B Preferred Stock then held by the stockholder. If
the holder is converting  less than all shares of Series B Preferred  Stock,  as
applicable,  represented  by the  certificate  or  certificates  tendered by the
holder with the  Stockholder  Conversion  Notice,  the Company shall convert the
number of shares of Series B Preferred  Stock so  specified  and shall  promptly
deliver  (but not more  than  fifteen  business  days  later)  to such  holder a
certificate  for such  number  of  shares  as have not been  converted.  Upon an
Automatic  Conversion,  the Company  shall  notify each holder  thereof and each
holder shall surrender the certificate or certificates  representing  all of the
shares of Series B  Preferred  Stock  owned by such  holder  and each  holder of
shares of Series B Preferred Stock shall be deemed to be the holder of record of
the Common Stock issued upon such Automatic  Conversion.  All fractional  shares
resulting from the  conversion of the Series B Preferred  Stock shall be rounded

                                       2
<PAGE>

up to the next highest  whole share.  All  certificates  representing  shares of
Series B Preferred Stock  surrendered  for conversion  shall be delivered to the
Company for  cancellation and canceled by it. As promptly as practicable (but no
more than five  business  days)  after the  surrender  of any shares of Series B
Preferred  Stock,  the Company shall (subject to compliance  with the applicable
provisions of federal and state  securities  laws) deliver to the holder of such
shares so surrendered  certificate(s)  representing the number of fully paid and
nonassessable  shares of Common  Stock into which such shares are entitled to be
converted.  Upon a conversion,  any accrued and unpaid  dividends  shall be paid
either in cash, to the extent funds are legally available therefor, or shares of
Common Stock valued at the Market Price, in the sole discretion of the Company.

      (d) Conversion Price. The initial conversion price per share of the Series
B Preferred  Stock, as applicable (the  "Conversion  Price"),  shall be equal to
$1.90 per share of Common  Stock  into  which  such  number of share of Series B
Preferred Stock is convertible, subject to adjustment as provided in Section 3.

      (e) Reservation of Shares. The Company covenants that it will at all times
reserve and keep  available  out of its  authorized  and  unissued  Common Stock
solely for the purpose of issuance upon conversion of Series B Preferred  Stock,
as herein provided,  free from preemptive  rights or any other actual contingent
purchase  rights of persons  other than the holders of Series B Preferred  Stock
pursuant to this clause,  not less than such number of shares of Common Stock as
shall be issuable  upon the  conversion  of all  outstanding  shares of Series B
Preferred  Stock.  The Company  covenants  that all shares of Common  Stock that
shall be so issuable shall, upon issue, be duly and validly  authorized,  issued
and fully paid, nonassessable and freely tradeable.

      If at any time the  number of  authorized  but  unissued  shares of Common
Stock shall not be sufficient to effect the  conversion of all then  outstanding
shares of Series B Preferred  Stock, in addition to such other remedies as shall
be available to the holders of such Series B Preferred  Stock,  the Company will
take such  corporate  action  necessary to increase its  authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient  for such
purposes.

      (f) Issue Taxes.  The Company shall pay all issue taxes, if any,  incurred
in respect of the issue of shares of Common Stock on conversion.  If a holder of
shares of Series B Preferred  Stock specifies that the shares of Common Stock to
be issued on Automatic Conversion are to be issued in a name or names other than
the name or names in which such Series B  Preferred  Stock stand or the names of
affiliates of the initial  holder of such shares,  then the Company shall not be
required to pay any additional transfer or other taxes incurred by reason of the
issuance  of such  shares of  Common  Stock to the name of  another,  and if the
appropriate  transfer  taxes  shall  not have been  paid to the  Company  or the
transfer agent for the Series B Preferred  Stock, as applicable,  at the time of
Automatic Conversion of the Series B Preferred Stock, as applicable,  the shares
of Common Stock issued upon conversion  thereof may be registered in the name or
names in which the Series B Preferred  Stock,  as applicable,  were  registered,
despite the instructions to the contrary.

                                       3
<PAGE>

      3. Adjustment of Conversion Price.

      (a)  Definition  of  Additional  Stock.  For  purposes of this  Section 3,
"Additional  Shares of Common Stock"  includes all shares of Common Stock issued
by the Company after the Issuance Date, other than:

            (i) The Shares of Series B Preferred  Stock, or the Shares of Common
      Stock issued upon  conversion of shares of Series B Preferred  Stock,  the
      Company's Series A-1 Preferred Stock or the Company's Series A-2 Preferred
      Stock;

            (ii) Shares of Common Stock (subject to  appropriate  adjustment for
      any  stock   dividend,   stock  split,   combination   or  other   similar
      recapitalization   affecting  such  shares)  issuable  or  issued  to  the
      Company's  employees,  directors or consultants pursuant to a stock option
      plan or restricted stock plan approved by the Board;

            (iii)  Shares  of  Common  Stock  issued  or  issuable  pursuant  to
      subsection 3(d) below;

            (iv)  Shares  of  Common  Stock or  Preferred  Stock  issuable  upon
      exercise of options, warrants or upon conversion of convertible securities
      or other rights outstanding as of the Issuance Date; and

            (v) Shares of  capital  stock or options  or  warrants  to  purchase
      capital  stock  issued  (a)  to  financial   institutions  or  lessors  in
      connections with commercial  credit  agreements,  equipment  financings or
      similar transactions or (b) to other corporations,  persons or entities in
      connection with  acquisitions,  mergers or similar business  combinations,
      partnership arrangements,  strategic alliances,  licensing arrangements or
      similar non-capital raising transactions approved by the Board,  including
      within this exception shares issued to raise capital provided that the use
      of proceeds is to consummate such non-capital raising transactions.

      The number and kind of  securities  issuable  upon the  conversion  of the
Series B Preferred Stock and the Conversion Price shall be subject to adjustment
from time to time in accordance with the following provisions:

      (b)  Subdivision or  Combination of Shares.  In the event that the Company
shall at any time or from time to time,  prior to conversion of shares of Series
B Preferred  Stock (x) subdivide the  outstanding  shares of Common Stock into a
larger  number of shares or (y) combine the  outstanding  shares of Common Stock
into a smaller  number of shares,  then,  and in each such case,  the Conversion
Price in effect immediately prior to such event shall be adjusted (and any other
appropriate  actions  shall be taken by the  Company)  so that the holder of any
share of Series B Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock or other  securities of
the  Company  that such holder  would have owned or would have been  entitled to
receive upon or by reason of any of the events  described  above, had such share
of Series B Preferred Stock been converted  immediately  prior to the occurrence
of such event.  An  adjustment  made  pursuant to this Section 3(b) shall become
effective  retroactively in the case of any such subdivision or combination,  to
the close of  business  on the day upon  which  such  corporate  action  becomes
effective.

                                       4
<PAGE>

      (c) Stock Dividends.  In case Additional Shares of Common Stock are issued
as a dividend or other  distribution  on the Common  Stock (or such  dividend is
declared),  the  Conversion  Price shall be reduced,  as of the date a record is
taken of the holders of Common Stock for the purpose of receiving  such dividend
or other  distribution (or if no such record is taken, as at the earliest of the
date of such  declaration,  payment or other  distribution),  to the  Conversion
Price determined by multiplying the Conversion Price in effect immediately prior
to such  declaration,  payment  or  other  distribution  by a  fraction  (i) the
numerator  of which  shall be the number of shares of Common  Stock  outstanding
immediately  prior to the  declaration  or  payment  of such  dividend  or other
distribution,  and (ii) the  denominator  of which shall be the total  number of
shares of Common Stock outstanding  immediately after the declaration or payment
of such  dividend or other  distribution.  In the event that the  Company  shall
declare or pay any dividend on the Common Stock  payable in any right to acquire
Common Stock for no consideration, then the Company shall be deemed to have made
a dividend  payable in Common  Stock in an amount of shares equal to the maximum
number of shares issuable upon exercise of such rights to acquire Common Stock.

      (d)  Recapitalization  or Reclassification of Common Stock. In case of any
(i) capital  reorganization or any reclassification  (other than a change in par
value) of the capital  stock of the Company,  or (ii)  exchange or conversion of
the Common Stock for or into securities of another  corporation or other entity,
or (iii)  consolidation  or merger of the Company  with or into any other person
(other than a merger which does not result in any reclassification,  conversion,
exchange or  cancellation  of outstanding  shares of Common Stock) or (iv) sale,
lease or other  conveyance  of all or  substantially  all of the  assets  of the
Company,  then in each instance referred to in the preceding clauses (i) through
(iv),  except in the case of a "Change in Control  Transaction" (as such term is
hereinafter  defined in  Section  11),  the Board and the person  formed by such
consolidation or resulting from such capital reorganization, reclassification or
merger or which acquires (by sale, lease or other  conveyance)  such assets,  as
the case may be,  shall make  provision  such that the Series B Preferred  Stock
shall  thereafter  be  convertible  for the kind and  amount of shares of stock,
other  securities,   cash  and  other  property  receivable  upon  such  capital
reorganization,  reclassification,  consolidation,  merger, sale, lease or other
conveyance,  as the case may be, by a holder of shares of Common  Stock equal to
the number of shares of Common Stock underlying the Series B Preferred Stock, as
applicable,  issuable  upon  the  conversion  of the  Series B  Preferred  Stock
immediately  prior  to  the  effective  date  of  such  capital  reorganization,
reclassification, merger, consolidation, sale, lease or other conveyance and, in
each  instance  referred to in the preceding  clauses (i) through (iv) (each,  a
"Transaction"),  appropriate  adjustment (as reasonably determined in good faith
by the Board)  shall be made in the  application  of the  provisions  herein set
forth with  respect to rights and  interests  thereafter  of the  holders of the
Series B  Preferred  Stock,  to the end that the  provisions  set  forth  herein
(including  the  specified  changes  in and other  adjustments  of the number of
shares  underlying the Series B Preferred Stock) shall thereafter be applicable,
as near as  reasonably  may be, in relation to any such shares of stock or other
securities  or other  property  thereafter  deliverable  upon  conversion of the
Series B  Preferred  Stock.  The  Company  shall not enter into any  Transaction
unless effective  provision shall be made so as to give effect to the provisions
set forth in this subsection (d).

      The Company shall not effect any transaction  described in this subsection
3(d) unless (i) it first gives  twenty (20) days' prior  written  notice of such
merger, consolidation,  exchange of shares, recapitalization,  reorganization or
other similar event or sale of assets (during which time the holders of Series A
Preferred  Stock shall be entitled to convert the Series A Preferred  Stock) and
(ii) the resulting successor or acquiring entity (if not the Company) assumes by
written  instrument the obligations of this  subsection  3(d). The provisions of
this  subsection  3(d)  shall  similarly  apply  to  successive  consolidations,
reorganizations,  reclassifications,  exchanges,  conversions,  mergers,  sales,
leases and other conveyances.

                                       5
<PAGE>

      (e) Issuance of Stock at Less than Conversion  Price. If the Company shall
issue any Additional  Shares of Common Stock after the Issuance Date (other than
as  provided  in  the  foregoing   subsections   3(b)  through  3(d)),   for  no
consideration or for a consideration per share less than the Conversion Price in
effect on the date of and immediately  prior to such issue,  then in such event,
the Conversion Price shall be reduced,  concurrently with such issue, to a price
equal to the quotient obtained by dividing:

            (i) an  amount  equal to (x) the  total  number  of shares of Common
      Stock outstanding immediately prior to such issuance or sale multiplied by
      the Conversion Price in effect immediately prior to such issuance or sale,
      plus (y) the Aggregate  Consideration Received (as such term is defined in
      subsection  3(g)(v)) or deemed to be  received  by the  Company  upon such
      issuance or sale, by

            (ii)  the  total  number  of  shares  of  Common  Stock  outstanding
      immediately after such issuance or sale.

      (f)  Issuance of Options and  Convertible  Securities  Deemed  Issuance of
Additional  Shares of Common Stock. If the Company,  at any time or from time to
time after the Issuance  Date,  shall issue any  options,  warrants or rights to
purchase  Common Stock  (collectively,  "Options") or securities  that, by their
terms,  directly or indirectly,  are convertible into or exchangeable for shares
of Common Stock  ("Convertible  Securities")  or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible  Securities,  then the maximum number of shares of Common
Stock (as set forth in the  instrument  relating  thereto  without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or, in the case of Convertible  Securities and
Options  therefor,  the conversion or exchange of such  Convertible  Securities,
shall be  deemed to be  Additional  Shares of Common  Stock  issued  under  this
Certificate  as of the time of such  issue or, in case such a record  date shall
have been fixed, as of the close of business on such record date,  provided that
in any such case in which  Additional  Shares of Common  Stock are  deemed to be
issued:

            (i) no further adjustment in the Conversion Price shall be made upon
      the subsequent  issue of Convertible  Securities or shares of Common Stock
      upon the  exercise  of such  Options or  conversion  or  exchange  of such
      Convertible  Securities and, upon the expiration of any such Option or the
      termination  of any such  right to convert or  exchange  such  Convertible
      Securities,  the Conversion Price then in effect hereunder shall forthwith
      be  increased to the  Conversion  Price which would have been in effect at
      the time of such  expiration or termination had such Option or Convertible
      Securities, to the extent outstanding immediately prior to such expiration
      or  termination,   never  been  issued,  and  the  Common  Stock  issuable
      thereunder shall no longer be deemed to be outstanding;

                                       6
<PAGE>

            (ii) if such  Options  or  Convertible  Securities  by  their  terms
      provide,  with the passage of time or  otherwise,  for any increase in the
      consideration  payable to the Company, or decrease in the number of shares
      of Common  Stock  issuable,  upon the  exercise,  conversion  or  exchange
      thereof, the Conversion Price computed upon the original issue thereof (or
      upon the  occurrence  of a record  date  with  respect  thereto),  and any
      subsequent  adjustments  based thereon,  shall,  upon any such increase or
      decrease  becoming  effective,  be  recomputed to reflect such increase or
      decrease insofar as it affects such Options or the rights of conversion or
      exchange under such Convertible Securities,  provided that no readjustment
      pursuant  to this  clause  (B) shall  have the  effect of  increasing  the
      Conversion  Price  to an  amount  which  exceeds  the  lower  of  (i)  the
      Conversion  Price on the original  adjustment date, or (ii) the Conversion
      Price that would have resulted  from any issuance of Additional  Shares of
      Common Stock between the original  adjustment  date and such  readjustment
      date; and

            (iii) if such  Options  or  Convertible  Securities  by their  terms
      provide,  with the passage of time or  otherwise,  for any decrease in the
      consideration  payable to the Company, or increase in the number of shares
      of Common  Stock  issuable,  upon the  exercise,  conversion  or  exchange
      thereof, the Conversion Price computed upon the original issue thereof (or
      upon the  occurrence  of a record  date  with  respect  thereto),  and any
      subsequent  adjustments  based thereon,  shall,  upon any such decrease or
      increase  becoming  effective,  be  recomputed to reflect such decrease or
      increase insofar as it affects such Options or the rights of conversion or
      exchange under such Convertible Securities,  provided that no readjustment
      pursuant  to this  clause  (C) shall  have the  effect of  decreasing  the
      Conversion  Price  to an  amount  which  exceeds  the  lower  of  (i)  the
      Conversion  Price on the original  adjustment date, or (ii) the Conversion
      Price that would have resulted  from any issuance of Additional  Shares of
      Common Stock between the original  adjustment  date and such  readjustment
      date.

      (g) Other  Provisions  Applicable to Adjustment  Under this Section 3. The
following  provisions  shall be applicable to the  adjustments in the Conversion
Price as provided in this Section 3.

            (i)  Treasury  Shares.  The number of shares of Common  Stock at any
      time  outstanding  shall not include any shares  thereof then  directly or
      indirectly owned or held by or for the account of the Company.

            (ii) Other Action  Affecting Common Stock. If the Company shall take
      any action  affecting  the  outstanding  number of shares of Common  Stock
      other than an action  described in any of the foregoing  subsections  3(b)
      through 3(f) hereof, inclusive,  which would have an inequitable effect on
      the holders of the Series A Preferred  Stock,  then the  Conversion  Price
      shall be  adjusted  in such  manner  and at such times as the Board on the
      advice of the Company's  independent  public accountants may in good faith
      determine to be equitable in the circumstances.

            (iii) Minimum  Adjustment.  No adjustment  of the  Conversion  Price
      shall be made if the amount of any such adjustment would be an amount less
      than one percent (1%) of the Conversion Price then in effect, but any such
      amount shall be carried forward and an adjustment in respect thereof shall
      be made at the time of and together with any subsequent  adjustment which,
      together  with such  amount  and any other  amount or  amounts  so carried
      forward,  shall  aggregate  an increase or decrease of one percent (1%) or
      more.

            (iv) Certain Adjustments. The Conversion Price shall not be adjusted
      upward except in the event of a combination of the  outstanding  shares of
      Common Stock into a smaller number of shares of Common Stock.

                                       7
<PAGE>

            (v) Determination of Consideration.

                  (A) For purposes of subsection 3(e), the "Effective  Price" of
            Additional Shares of Common Stock shall mean the quotient determined
            by dividing  the total number of  Additional  Shares of Common Stock
            issued  or sold,  or deemed  to have  been  issued  or sold,  by the
            Corporation under subsection 3(e), into the Aggregate  Consideration
            Received, or deemed to have been received, by the Company under this
            subsection  3(e), for the issue of such Additional  Shares of Common
            Stock

                  (B)  For  purposes  of this  Subsection  3(f),  the  Aggregate
            Consideration   Received  by  the  Company  for  the  issue  of  any
            Additional Shares of Common Stock shall be computed as follows:

                  (A) Cash and Property: Such consideration shall:

                        (1)   insofar as it consists of cash, be computed at the
                              aggregate  gross  amount of cash  received  by the
                              Company before  deduction of any  underwriting  or
                              similar  commissions,  compensation or concessions
                              paid or allowed by the Company in connection  with
                              such issue or sale and  without  deduction  of any
                              expenses  payable  by the  Company  and  excluding
                              amounts  paid or payable for  accrued  interest or
                              accrued dividends;

                        (2)   insofar  as it  consists  of  property  other than
                              cash, be computed at the fair market value thereof
                              at the time of such issue,  as  determined in good
                              faith by the Board; and

in the event  Additional  Shares of Common Stock are issued  together with other
shares or  securities  or other  assets of the Company for  consideration  which
covers both, be the proportion of such  consideration  so received,  computed as
provided in clauses (1) and (2) above, as determined in good faith by the Board.

                  (B) Options and Convertible Securities.  The consideration per
            share received by the Company for Additional  Shares of Common Stock
            deemed to have been issued pursuant to subsection 3(f)(ii), relating
            to  Options  and  Convertible  Securities,  shall be  determined  by
            dividing

                        (1)   the total amount,  if any,  received or receivable
                              by the Company as  consideration  for the issue of
                              such Options or Convertible  Securities,  plus the
                              minimum    aggregate    amount    of    additional
                              consideration  (as set  forth  in the  instruments
                              relating thereto,  without regard to any provision
                              contained  therein for a subsequent  adjustment of
                              such  consideration)  payable to the Company  upon
                              the exercise of such Options or the  conversion or
                              exchange of such Convertible Securities, or in the
                              case of Options for  Convertible  Securities,  the
                              exercise   of   such   Options   for   Convertible
                              Securities  and the conversion or exchange of such
                              Convertible Securities, by

                                       8
<PAGE>

                        (2)   the maximum  number of shares of Common  Stock (as
                              set  forth in the  instruments  relating  thereto,
                              without regard to any provision  contained therein
                              for  a  subsequent   adjustment  of  such  number)
                              issuable  upon the exercise of such Options or the
                              conversion   or  exchange   of  such   Convertible
                              Securities.

      (i) No Impairment.  The Company will 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 Section
3 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 B Preferred
Stock against impairment.

      (j) Notices of Adjustments.  Whenever the Conversion  Price is adjusted as
herein provided,  the Chief Financial Officer (or other senior executive officer
in the absence of such person) of the Company shall, in good faith,  compute the
adjusted Conversion Price in accordance with the foregoing  provisions and shall
prepare a written  certificate  setting forth such adjusted Conversion Price and
showing  in detail  the facts upon  which  such  adjustment  is based,  and such
written  instrument  shall  promptly be delivered  to each record  holder of the
Series B Preferred Stock.

      4. Ranking.

      The Series B  Preferred  Stock shall rank,  as to  dividends,  rights upon
liquidation,  dissolution or winding up, junior to the Company's  Series A-1 and
Series A-2  Preferred  Stock,  and shall rank senior and prior to (i) the Common
Stock  and (ii) each  other  class or series  of  capital  stock of the  Company
hereafter created which does not expressly rank pari passu with or senior to the
Series B Preferred Stock,  except as otherwise  approved by the affirmative vote
or consent of the  holders of a majority of the  outstanding  shares of Series B
Preferred  Stock  pursuant to Section 9 hereof.  (All equity  securities  of the
Company to which the Series B Preferred  Stock  ranks  senior to,  whether  with
respect  to  dividends,  rights  upon  liquidation,  dissolution,  winding up or
otherwise,  including the Common Stock, are  collectively  referred to herein as
"Junior  Securities," all equity securities of the Company to which the Series B
Preferred  Stock ranks on a parity  with,  whether  with respect to dividends or
upon  liquidation,  dissolution,  winding  up  or  otherwise,  are  collectively
referred  to herein as  "Parity  Securities"  and all equity  securities  of the
Company to which the Series B Preferred Stock ranks junior, whether with respect
to  dividends or upon  liquidation,  dissolution,  winding up or  otherwise  are
collectively referred to herein as "Senior Securities").

      5. Liquidation Rights.

            (a)  Liquidation   Preference.   Upon  a  voluntary  or  involuntary
liquidation,  under  applicable  bankruptcy or  reorganization  legislation,  or
dissolution  or winding up of the  Company  (each a  "Liquidation"),  before any
distribution  of assets shall be made to the holders of Junior  Securities,  the
holder of each share of Series B Preferred Stock then outstanding  shall be paid
out of the assets of the  Company  legally  available  for  distribution  to its
stockholders  (the  "Available  Assets")  an  amount  per  share  equal  to  the
"Liquidation  Amount." For purposes of a  Liquidation,  the  Liquidation  Amount
shall mean the  original  issue price per share of the Series B Preferred  Stock
($3.80,  as  adjusted  for  stock  splits,  dividends,   combinations  or  other
recapitalization of the Series B Preferred Stock) plus all dividends accrued but
unpaid on such share (whether or not declared) up to the date of the Liquidation
(the "Liquidation Preference"). Upon the completion of the distribution required
by this subsection 4(a), and any other distribution to any other class or series
of Senior Securities,  if assets remain in the Company,  the remaining assets of
the Company  available for  distribution  to  stockholders  shall be distributed
among the holders of shares of any other series of preferred stock in accordance
with their respective  terms, then to the holders of Common Stock pro rata based
on the number of shares of the Common  Stock  actually  outstanding  and held by
holders of shares of Common Stock.

                                       9
<PAGE>

            (b) Priority.  If the Available  Assets are  insufficient to pay the
holders of Series B Preferred Stock the full amount of the  Liquidation  Amount,
the holders of Series B Preferred Stock, in the aggregate, will share ratably in
the distribution of the Available Assets in proportion to the respective amounts
that would  otherwise be payable in respect of the shares held by them upon such
distribution  if all amounts payable on or with respect to such shares were paid
in full.

            (c) Notice.  The Company will send a written notice of a Liquidation
to the  holders of record of the  Series B  Preferred  Stock,  stating a payment
date, the Liquidation  Amount and the place where the Liquidation Amount will be
paid, using any of the following delivery methods: (i) in person; (ii) mailed by
certified  or  registered  mail,  return  receipt  requested;  or (iii)  sent by
national  courier,  not less  than 25 days  prior  to the  payment  date  stated
therein.  The notice will be addressed to each holder at its address as shown by
the records of the Company.

      6.  Appraisal.  If a majority  in  interest of the holders of the Series B
Preferred Stock, in the aggregate,  reasonably disagrees with any of the Board's
determinations  referred to in Section 2, Section 3 or Section 5 above (each,  a
"Determination"),  then the Company  and a majority in interest of such  holders
(the "Series B  Representative")  shall use good faith efforts to mutually agree
upon the designation of a single  Qualified  Appraiser (as defined below) within
seven (7) business  days of such event  requiring a  Determination.  The date of
such event requiring a Determination  shall be referred to as the "Determination
Date." If such a single  Qualified  Appraiser is  designated,  that person shall
make a Determination.  If the Company and the Series B Representative  do not so
agree upon the designation of a single  Qualified  Appraiser within such period,
then within five (5) business days following the end of such period, each of the
Company  and the Series B  Representative  by written  notice to the other shall
designate  a  Qualified  Appraiser  (or if any party fails to select a Qualified
Appraiser  within the time period  specified,  the person  selected by the other
party shall be the  Qualified  Appraiser)  and the two  Qualified  Appraisers so
designated  shall within ten (10)  business  days of their  designation  jointly
designate a third Qualified  Appraiser and solely such third Qualified Appraiser
so  designated  shall  independently  make a  Determination.  If there is only a
single  Qualified  Appraiser,  the fees and expenses of the Qualified  Appraiser
shall be paid equally by the Company and the Series B  Representative.  If three
Qualified Appraisers are appointed,  the Company shall pay the fees and expenses
of the Qualified Appraiser which it appoints,  the Series B Representative shall
pay the fees and expenses of the Qualified Appraiser which it appoints,  and the
fees and expenses of the third  Qualified  Appraiser  shall be shared equally by
the Company and the Series B Representative.  The designated Qualified Appraiser
shall make the Determination not later than ten (10) business days following the
Determination  Date. The Determination made by the Qualified  Appraiser shall be
final,  conclusive  and binding on the  parties  hereto.  None of the  Qualified
Appraisers  shall  be  affiliated  with  any  of  the  Company,   the  Series  B
Representative  or  another  Qualified  Appraiser.  For  the  purposes  of  this
Agreement,  "Qualified  Appraiser"  shall mean an individual who is engaged on a
regular basis  (although  not  necessarily  full time) in valuing  securities or
arrangements similar to this Agreement, as the case may be, and may include (but
shall not be limited to) professional business appraisers, investment bankers or
accountants.

                                       10
<PAGE>

      7. Dividends.

      Dividends  shall  accrue on each  outstanding  share of Series B Preferred
Stock  and on each  outstanding  share of Series B  Preferred  Stock at the rate
equal to 5% per annum  (pro  rated in the  first  annual  period if the  initial
Issuance Date is after the commencement of the initial quarterly payment period)
of the initial Liquidation  Preference per share of Series B Preferred Stock, as
applicable,  whether or not declared by the Board.  Such dividends  shall accrue
and,  if  declared,  shall be  payable  quarterly  in arrears on the 30th day of
January,  April,  July and  October of each year (each  such date,  a  "Dividend
Payment Date").  Dividends shall begin to accrue on the Series B Preferred Stock
as of the  Issuance  Date,  provided  that the  dividends  due in respect of the
initial  quarterly  period shall be pro rated if such Issuance Date is after the
commencement of such quarterly  period.  Dividends payable on shares of Series B
Preferred Stock shall be cumulative; therefore, if a full or partial dividend on
the  shares of Series B  Preferred  Stock  with  respect  to any  quarter is not
declared by the Board, the Company shall remain obligated to pay a full dividend
with respect to that quarter, provided, however, that any unpaid dividends shall
not bear  interest.  At the  election  of the  Company,  any  accrued but unpaid
dividends may be paid in cash at any time.

      At the  election of the Company,  each  dividend on the Series B Preferred
Stock may be paid in shares of Common Stock.  Dividends paid in shares of Common
Stock shall be paid in full shares only,  with a cash payment equal to the value
of any fractional  shares.  The issuance of such shares of Common Stock shall be
valued at the  average of the per share  Market  Price for the ten  Trading  Day
period  immediately  preceding the date on which the dividend  becomes due. Each
dividend  paid in capital  stock shall be mailed to the holders of record of the
Series B  Preferred  Stock as their  names  and  addresses  appear  on the share
register  of  the  Company  or at  the  office  of  the  transfer  agent  on the
corresponding  dividend  payment date.  Holders of Series B Preferred Stock will
receive  written  notification  from  the  Company  or the  transfer  agent if a
dividend is paid in kind, which  notification  will specify the number of shares
of Common Stock paid as a dividend. All holders of shares of Common Stock issued
as  dividends  shall be entitled to all of the rights and  benefits  relating to
shares  of  Common  Stock  as  set  forth  in  the  Company's   Certificate   of
Incorporation.

      After  payment of setting  aside of the payment of dividends  described in
this  Section 7, any  additional  dividends  (other  dividends  on Common  Stock
payable  solely in Common  Stock)  declared  or paid in any fiscal year shall be
declared or paid among the holders of Series B Preferred Stock, and Common Stock
then  outstanding  in proportion to the nearest whole number of shares of Common
Stock  which  would be held by each  such  holder  if all  holders  of  Series B
Preferred Stock were converted at the then-effective Conversion Rate.

      8. Voting Rights.

      Each holder of outstanding  shares of Series B Preferred Stock is entitled
to the number of votes equal to the number of whole  shares of Common Stock into
which the shares of Series B  Preferred  Stock held of record by such holder are
convertible at each meeting of  stockholders of the Company (and written actions
of  stockholders  in lieu  of  meetings)  with  respect  to any and all  matters
presented to the stockholders of the Company for their action or  consideration.
Except as provided by law and by the provisions of Section 9 below,  the holders
of shares of Series B Preferred  Stock shall vote  together  with the holders of
Common Stock as a single class.

                                       11
<PAGE>

      Notwithstanding the above, the Company shall provide each holder of Series
B  Preferred  Stock  with  prior  written  notification  of any  meeting  of the
stockholders  (and  copies  of proxy  materials  and other  information  sent to
stockholders). In the event of any undertaking by the Company of a record of its
stockholders  for the purpose of  determining  stockholders  who are entitled to
receive  payment of any dividend or other  distribution,  any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation or
recapitalization) any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining  stockholders  who
are entitled to vote in connection  with any proposed sale,  lease or conveyance
of all or  substantially  all of the  assets  of the  Company,  or any  proposed
liquidation,  dissolution or winding up of the Company, the Company shall mail a
notice to each holder, at least ten (10) days prior to the record date specified
therein (or twenty (20) days prior to the  consummation  of any  transaction  or
event,  whichever  is  earlier),  of the date on which any such  record is to be
taken for the purpose of such dividend,  distribution, right or other event, and
a  brief  statement  regarding  the  amount  and  character  of  such  dividend,
distribution, right or other event to the extent known at such time.

      To the extent that under the Delaware General Corporation Law ("DGCL") the
vote of the  holders of the Series B Preferred  Stock,  voting  separately  as a
class or series as  applicable,  is required to  authorize a given action of the
Company,  the affirmative  vote or consent of the holders of at least a majority
of the shares of the Series B Preferred Stock,  voting together in the aggregate
and not in separate series unless required under the DGCL, represented at a duly
held meeting at which a quorum is present or by written consent of a majority of
the shares of Series B  Preferred  Stock  (except as  otherwise  may be required
under the DGCL),  voting  together in the aggregate  and not in separate  series
unless required under the DGCL,  shall constitute the approval of such action by
the class or by both series,  as  applicable.  To the extent that under the DGCL
holders of the Series B  Preferred  Stock are  entitled to vote on a matter with
holders of Common Stock,  voting  together as one class,  each share of Series B
Preferred  Stock shall entitle the holder thereof to cast that a number of votes
per share as is equal to the  number of shares of Common  Stock into which it is
then  convertible  using the record date for determining the stockholders of the
Company  eligible to vote on such matters as the date as of which the Conversion
Price is calculated.  Holders of the Series B Preferred  Stock shall be entitled
to written notice of all stockholder meetings or written consents (and copies of
proxy  materials and other  information  sent to  stockholders)  with respect to
which they would be entitled by vote, which notice would be provided pursuant to
the Company's bylaws and the DGCL).

      9. Protective Provisions.

      (a) So long as the shares of Series B Preferred Stock are outstanding, the
Company  shall not,  take,  approve  or  otherwise  ratify any of the  following
actions  without  the  consent  of at least a majority  of the then  outstanding
shares of Series B Preferred Stock, voting as a separate series:

            (i) authorize, issue or agree to authorize or issue any new class or
      series of Senior  Securities or Parity  Securities or securities or rights
      of any kind  convertible  into or exercisable or exchangeable for any such
      Senior Securities or Parity Securities, or offer, sell or issue any Senior
      Securities  or  Parity  Securities  or  securities  or  rights of any kind
      convertible  into or  exercisable  or  exchangeable  for any  such  Senior
      Securities or Parity Securities;

                                       12
<PAGE>

            (ii) purchase, repurchase or redeem shares of (i) Common Stock, (ii)
      securities  or  rights  of any kind  convertible  into or  exercisable  or
      exchangeable  for Common Stock or (iii) other  securities  of the Company,
      (except in the case of a termination of an employee,  at which the Company
      may  repurchase or redeem such shares of Common Stock at cost and pursuant
      to any agreement under which such shares of Common Stock were issued);

            (iii) effect any merger, combination, reorganization of the Company,
      or any  sale  or  license  of all or  substantially  all of the  Company's
      assets, in either case other than a merger,  combination or reorganization
      or other transaction (or series of such transactions) in which 50% or more
      of the  voting  power  of the  Company  is  disposed  of or in  which  the
      stockholders   of  the   Company   immediately   prior  to  such   merger,
      reorganization  or consolidation own less than 50% of the Company's voting
      power immediately after; or

            (iv) declare or pay dividends or any other distribution on shares of
      Common  Stock  or any  other  capital  stock  of  the  Company  except  as
      contemplated herein; or

            (v) authorize, issue or agree to authorize or issue any new class or
      series  of  Senior   Securities  or  securities  or  rights  of  any  kind
      convertible  into or  exercisable  or  exchangeable  for any  such  Senior
      Securities, or offer, sell or issue any Senior Securities or securities or
      rights of any kind convertible into or exercisable or exchangeable for any
      such Senior Securities;

            (vi) increase the authorized  number of shares of Series B Preferred
      Stock; or

            (vii)  amend  the  Certificate  of  Incorporation  or  Bylaws of the
      Company or alter or change the rights,  preferences  or  privileges of the
      Series B Preferred Stock or any Parity  Securities or Senior Securities in
      each case so as to affect adversely the rights,  preferences or privileges
      of the Series B Preferred Stock.

      10. Preemptive Right.

      (a) The  Company  shall  not issue or sell any  shares of Common  Stock or
securities  convertible into or exercisable or exchangeable for shares of Common
Stock (the  securities  issued in such  transactions  being  referred  to as the
"Newly  Issued  Securities"),  other  than any such  issuance  or sale  which is
excluded from the  definition of "Newly Issued  Securities"  pursuant to Section
10(d),  unless prior to the issuance or sale of such Newly Issued Securities the
Company shall have set aside such additional securities as shall be necessary to
enable  each holder of Series B Preferred  Stock to have the  opportunity  (such
opportunity being herein referred to as the "Preemptive  Right") to purchase (on
the same terms as such Newly Issued  Securities are sold) the same proportion of
such Newly Issued  Securities sold by the Company as (x) the number of shares of
Common Stock  (calculated  solely on account of  outstanding  Series B Preferred
Stock on an as  converted  basis) held by such holder on the day  preceding  the
issuance and sale of such Newly Issued  Securities bears to (y) the total number
of shares of Common Stock  (calculated  on a fully diluted basis with respect to
the Series B Preferred  Stock and any other Common Stock  equivalents  which are
"in the money")  outstanding  on the day  preceding the date of the issuance and
sale of such Newly Issued Securities.

                                       13
<PAGE>

      (b)  Promptly  after the  issuance  and sale by the  Company  of any Newly
Issued   Securities,   the  Company  shall  give  written  notice  thereof  (the
"Preemptive  Notice") to each holder of Series B Preferred Stock. The Preemptive
Notice shall  specify (i) the number of such Newly Issued  Securities  issued or
sold, (ii) the price and other terms of their proposed  issuance or sale,  (iii)
the number of such Newly  Issued  Securities  which such  holder is  entitled to
purchase  (determined as provided in subsection (a) above),  and (iv) the period
during  which such holder may elect to purchase  such Newly  Issued  Securities,
which period shall extend for at least thirty (30) days following the receipt by
such holder of the Preemptive Notice (the "Preemptive Acceptance Period").  Each
holder  of Series B  Preferred  Stock  who  desires  to  purchase  Newly  Issued
Securities shall notify the Company within the Preemptive  Acceptance  Period of
the number of Newly Issued Securities such holder wishes to purchase, as well as
the number,  if any, of additional Newly Issued  Securities such holder would be
willing to purchase in the event that all of the Newly Issued Securities subject
to the Preemptive  Right are not subscribed for by the other holders of Series B
Preferred Stock, by completing, executing and delivering to the Company the form
of  Preemptive  Acceptance  Election  Notice  furnished  by the Company with the
Preemptive Notice, and depositing  sufficient cash, in accordance with the terms
set forth in the  Preemptive  Acceptance  Election  Notice,  to  consummate  the
purchase of the purchase of all the securities such holder has so indicated such
holder is willing to purchase. The Company, in its sole and absolute discretion,
may agree to  payment  deposit  arrangements  other  than those set forth in the
Preemptive  Acceptance  Election  Notice,  or may decline to accept  alternative
arrangements  for any reason or without reason.  (c) After the conclusion of the
Preemptive  Acceptance  Period,  the Company  shall  promptly take such steps to
issue and  deliver  securities  to holders of Series B Preferred  Stock,  accept
purchase price deposits and return unused  deposits  (without  interest and less
any payment transfer charges as may apply) as may be necessary or appropriate to
consummate the exercise of Preemptive Rights in accordance with this Section 10.

      (d) The term "Newly Issued Securities" shall not include:

            (i)  Shares of Common  Stock  issued  upon  conversion  of shares of
      Series  A-1  Preferred  Stock,  Series  A-2  Preferred  Stock or  Series B
      Preferred Stock;

            (ii) Shares of Common Stock (subject to  appropriate  adjustment for
      any  stock   dividend,   stock  split,   combination   or  other   similar
      recapitalization   affecting  such  shares)  issuable  or  issued  to  the
      Company's  employees,  directors or consultants pursuant to a stock option
      plan or restricted stock plan approved by the Board;

            (iii)  Shares  of  Common  Stock  issued  or  issuable  pursuant  to
      subsection 3(d);

            (iv)  Shares  of  Common  Stock or  Preferred  Stock  issuable  upon
      exercise of options, warrants or upon conversion of convertible securities
      or other rights outstanding as of the Issuance Date;

            (v) Shares of  capital  stock or options  or  warrants  to  purchase
      capital stock, issued to financial  institutions or lessors in connections
      with  commercial  credit  agreements,   equipment  financings  or  similar
      transactions or to other  corporations,  persons or entities in connection
      with acquisitions,  mergers or similar business combinations,  partnership
      arrangements,  strategic  alliances,  licensing  arrangements  or  similar
      non-capital raising transactions  approved by the Board,  including within
      this exception  from the definition of the term "Newly Issued  Securities"
      shares  issued to raise  capital  provided  that the use of proceeds is to
      consummate such non-capital raising transactions;

                                       14
<PAGE>

            (vi)  Shares of Common  Stock  issued in  connection  with any stock
      split, stock dividend or recapitalization of the Company;

            (vii)  Securities  that are  issued  by the  Company  pursuant  to a
      registration statement filed under the Securities Act;

            (viii) shares issued in exchange,  at fair market value,  for assets
      or equipment to be used by the Company in the ordinary course of business;
      and

            (ix) shares issued  pursuant to any of the Series B Preferred  Stock
      purchase  agreements  or any of the  other  documents  executed,  filed or
      delivered in connection therewith.

      11. Mandatory Redemption

      (a) On the date  which is five (5) years  after the  Issuance  Date  (such
fifth  anniversary,  the "Mandatory  Redemption Date"), the Company shall redeem
each then  outstanding  share of the Series B Preferred  Stock for an amount per
share equal to the Liquidation Amount.

      (b) Upon a Change of Control  Redemption  Event,  the Company shall redeem
each then  outstanding  share of the Series B Preferred  Stock for an amount per
share equal to either (x) the Liquidation Amount or (y) the property,  rights or
securities  which the holder of the shares of Common Stock into which such share
of Series B  Preferred  Stock  could have been  converted  would have  received,
whichever  is elected by the holder.  For purposes of this Section 11, a "Change
of Control  Redemption  Event" shall be deemed to have  occurred  upon a merger,
combination  or  reorganization  of the  Company  in which  more than 50% of the
voting power of the Company is disposed of, or in which the  stockholders of the
Company  immediately  prior to such merger,  reorganization or consolidation own
less than 50% of the Company's voting power immediately after, unless a majority
of the holders of the Series B  Preferred  Stock,  voting as a separate  series,
shall have approved of the transaction.

      (b) From and after the  latest  to occur of (i) the  Mandatory  Redemption
Date or a Change of Control  Redemption  Event, and (ii) the date upon which the
Company irrevocably  deposits the aggregate  Liquidation Amount or the property,
rights or  securities  which the holder of the shares of Common Stock into which
such share of Series B  Preferred  Stock  could have been  converted  would have
received,  whichever is elected by the  applicable  holder within the applicable
time period (or the  Liquidation  Amount if no such  election is made within the
applicable  time period),  in respect of the shares of Series B Preferred  Stock
being redeemed in an account for  disbursement  to holders of shares of Series B
Preferred  Stock, as applicable,  upon receipt of certificates  evidencing their
respective  shares and other customary  documentation  for such  redemption,  no
holder of such Series B Preferred Stock shall have any rights in respect of such
shares  other than to receive  the  applicable  Liquidation  Amount per share in
respect of such holder's shares.

      12. No Reissuance of Series B Preferred Stock.

      No share or shares of Series B Preferred  Stock acquired by the Company by
reason of redemption,  purchase,  conversion or otherwise shall be reissued, and
all such shares of Series B  Preferred  Stock  shall be  cancelled,  retired and
eliminated from the shares of Series B Preferred Stock, as applicable, which the
Company  shall be  authorized  to issue.  Any such  shares of Series B Preferred
Stock  acquired by the Company shall have the status of authorized  and unissued
shares  of  Preferred  Stock  issuable  in   undesignated   Series  and  may  be
redesignated and reissued in any series other than as Series B Preferred Stock.

                                       15
<PAGE>

      13. Registered Holders.

      A holder of Series B Preferred  Stock  registered on the  Company's  stock
transfer  books  as the  owner  of  shares  of  Series  B  Preferred  Stock,  as
applicable,  shall be treated as the owner of such shares of all  purposes.  All
notices and all payments required to be mailed to a holder of shares of Series B
Preferred  Stock  shall be mailed to such  holder's  registered  address  on the
Company's stock transfer books,  and all dividends and redemption  payments to a
holder of Series B Preferred  Stock made hereunder shall be deemed to be paid in
compliance  hereof  on the  date  such  payments  are  deposited  into  the mail
addressed to such holder at such  holder's  registered  address on the Company's
stock transfer books.

      14. Certain Remedies.

      Any  registered  holder of shares of  Series B  Preferred  Stock  shall be
entitled to an injunction or injunctions  to prevent  breaches of the provisions
of this  Certificate of Designations  and to enforce  specifically the terms and
provisions of this Certificate of Designations in any court of the United States
or any state thereof  having  jurisdiction,  this being in addition to any other
remedy to which such holder may be entitled at law or in equity.

      15. Headings of Subdivisions.

      The headings of the various  subdivisions  hereof are for  convenience  of
reference only and shall not affect the  interpretation of any of the provisions
hereof.

      16. Severability of Provisions.

      If any right, preference or limitation of the Series B Preferred Stock set
forth  herein (as may be  amended)  from time to time is  invalid,  unlawful  or
incapable of being enforced by reason of any rule of law or public policy,  such
right,  preference or limitation  (including,  without limitation,  the dividend
rate) shall be enforced to the  maximum  extent  permitted  by law and all other
rights,  preferences  and limitations set forth herein (as so amended) which can
be given effect without the invalid, unlawful or unenforceable right, preference
or  limitation  herein set forth shall be deemed  dependent  upon any other such
right, preference or limitation unless so expressed herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       16
<PAGE>

      IN WITNESS WHEREOF,  the undersigned,  being the President of the Company,
has executed this Certificate of Designation as of January 20, 2004.

                                              AUTO DATA NETWORK, INC.

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

                                       17EXHIBIT 4.3

                                PURCHASE WARRANT

NEITHER THIS WARRANT NOR THE SECURITIES  ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE  ASSIGNED  UNLESS SO REGISTERED OR AN EXEMPTION  FROM  REGISTRATION
UNDER THE  SECURITIES  ACT IS AVAILABLE.  THIS LEGEND SHALL BE ENDORSED UPON ANY
WARRANT ISSUED IN EXCHANGE FOR THIS WARRANT.

                                WARRANT AGREEMENT

                               FOR COMMON STOCK OF

                             AUTO DATA NETWORK, INC.

Warrant No. B-[__]                           Warrant to purchase an aggregate of

Date of Issuance: March 11, 2004             [__________] shares of Common Stock

      THIS CERTIFIES that, for value received,  [_________________________],  or
his/her/its  permitted  transferees,  successors or assigns  (collectively,  the
"Holder"),  is entitled to purchase  from AUTO DATA  NETWORK,  INC.,  a Delaware
corporation  (the  "Company"),  at any time,  and from time to time,  during the
exercise  period  referred to in Section 1 hereof,  [__________________________]
([____________])  fully  paid,  validly  issued and  nonassessable  shares  (the
"Warrant  Shares") of common  stock of the  Company,  par value $0.00l per share
(the  "Common  Stock"),  at the  exercise  price of Two  Dollars and Fifty Cents
($2.50) per share (the "Warrant Share Price"). Securities issuable upon exercise
of this  Warrant and the Warrant  Share Price  payable  therefor  are subject to
adjustment from time to time as hereinafter set forth. As used herein,  the term
"Warrant" shall include any warrant or warrants  hereafter issued in consequence
of the exercise of this Warrant Agreement in part or transfer of this Warrant in
whole or in  part.  Capitalized  terms  used  herein  and not  defined  have the
respective meanings given to them in that certain Securities Purchase Agreement,
dated the date  hereof,  by and  among the  Company,  the  Holder  and the other
parties named therein.

      The Company shall register this Warrant,  upon records to be maintained by
the Company for that purpose (the "Warrant Register"), in the name of the record
Holder hereof from time to time.  The Company may deem and treat the  registered
Holder of this  Warrant as the  absolute  owner  hereof  for the  purpose of any
exercise hereof or any  distribution to the Holder,  and for all other purposes,
and the Company shall not be affected by notice to the contrary.

      Subject to Section 4 of this Warrant and the applicable  provisions of the
Securities Purchase Agreement and applicable law, the Company shall register the
transfer of any portion of

<PAGE>

this Warrant in the Warrant Register,  upon surrender of this Warrant,  with the
Form of Assignment  attached  hereto duly completed and signed,  to the Transfer
Agent (as  defined  herein) or to the  Company.  Upon any such  registration  or
transfer,  a new warrant to purchase Common Stock, in substantially  the form of
this Warrant (any such new warrant, a "New Warrant"),  evidencing the portion of
this Warrant so transferred  shall be issued to the transferee and a New Warrant
evidencing  the remaining  portion of this Warrant not so  transferred,  if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by
the transferee  thereof shall be deemed the acceptance by such transferee of all
of the  rights  and  obligations  of a holder  of a  Warrant.  Any  transfer  or
assignment of this Warrant and Warrant Shares obtained by the Holder in exercise
of this Warrant is subject to any applicable  restrictions  under the Securities
Purchase  Agreement,  if any,  and the  requirements  that  such  securities  be
registered  under the  Securities Act and applicable  state  securities  laws or
exempt from registration under such laws.

      1. Exercise; Payment for Ownership Interest.

            (a) Upon the terms and subject to the  conditions  set forth herein,
this Warrant may be  exercised  in whole or in part by the Holder  hereof at any
time,  or from time to time,  on or after the date  hereof  and on or prior to 5
p.m. New York local time on the earliest date to occur (the  "Expiration  Date")
of (x)  March  10,  2009  (the  "Expiration  Maturity  Date")  and (y) the Early
Expiration  Date, as such term is defined herein,  by presentation and surrender
of this Warrant to the principal offices of the Company, or at the office of its
Transfer  Agent, if any,  together with the Purchase Form annexed  hereto,  duly
executed,  and  accompanied  by payment to the Company of an amount equal to the
Warrant Share Price  multiplied by the number of Warrant Shares as to which this
Warrant is then being  exercised in U.S.  dollars by certified or official  bank
check or wire  transfer  of  immediately  available  funds of the cash  purchase
price;  provided,  however,  that in each case,  the  minimum  number of Warrant
Shares as to which this  Warrant is being  exercised  shall be the lesser of (i)
1,000 Warrant Shares or (ii) all Warrant Shares then held by the Holder on an as
exercised  basis;   provided,   further,  that  in  the  event  of  any  merger,
consolidation  or sale,  lease or  transfer of all or  substantially  all of the
assets of the Company,  prior to the Expiration  Date, the Holder shall have the
right to exercise this Warrant  commencing  at such time through the  Expiration
Date into the kind and  amount of  shares  of stock  and  other  securities  and
property  (including  cash)  receivable  by a holder of the  number of shares of
Common Stock into which this  Warrant  might have been  exercisable  immediately
prior thereto. Any transfer of Warrant Shares obtained by the Holder in exercise
of  this  Warrant  is  subject  to the  requirement  that  such  transfer  be in
compliance with the applicable  provisions of the Securities Purchase Agreement,
if any, and that such  securities be registered  under the  Securities  Act, and
applicable  state securities laws or exempt from  registration  under such laws.
The Holder of this Warrant  shall be deemed to be a  stockholder  of the Warrant
Shares as to which this Warrant is exercised in  accordance  herewith  effective
immediately  after the close of business  on the date on which the Holder  shall
have  delivered  to the Company  this  Warrant in proper form for  exercise  and
payment in U.S.  dollars by certified or official bank check or wire transfer of
immediately available funds of the cash purchase price for the number of Warrant
Shares as to which the  exercise is being made,  notwithstanding  that the stock
transfer  books  of the  Company  shall  be then  closed  or  that  certificates
representing  such Warrant Shares shall not then be physically  delivered to the
Holder.  The  Company  shall not enter into any merger,  consolidation  or sale,
lease or  transfer  of all or  substantially  all of the  assets of the  Company
unless effective  provision shall be made so as to

                                      -2-
<PAGE>

give effect to the provisions set forth in this subsection (a).

            (i) As used  herein,  "Early  Expiration  Date"  means the date upon
      which the average of the Market  Price (as defined  herein) for a share of
      Common  Stock for thirty  consecutive  Trading  Days (as  defined  herein)
      exceeds Four Hundred Percent (400%) of the  then-applicable  Warrant Share
      Price.  Notwithstanding  the foregoing,  there can be no "Early Expiration
      Date"  if the  Warrant  Shares  are not  either  covered  by an  effective
      registration statement under the Securities Act or an applicable exemption
      from registration under the Securities Act;

            (ii) As used  herein,  "Market  Price"  means,  with  respect to the
      shares of Common  Stock,  (i) if the  shares are  listed or  admitted  for
      trading on any  national  securities  exchange  or  included in The Nasdaq
      National Market or Nasdaq SmallCap  Market,  the last reported sales price
      as reported on such exchange or market;  (ii) if the shares are not listed
      or admitted for trading on any national securities exchange or included in
      The Nasdaq National Market or Nasdaq SmallCap  Market,  the average of the
      last reported  closing bid and asked  quotation for the shares as reported
      on the National  Association  of Securities  Dealers  Automated  Quotation
      System  ("NASDAQ") or a similar  service if NASDAQ is not  reporting  such
      information; or (iii) if the shares are not listed or admitted for trading
      on any  national  securities  exchange or included in The Nasdaq  National
      Market or Nasdaq SmallCap Market or quoted by NASDAQ or a similar service,
      the average of the last reported bid and asked quotation for the shares as
      quoted  by a market  maker  in the  shares  (or if there is more  than one
      market  maker,  the bid and asked  quotation  shall be  obtained  from two
      market  makers  and  the  average  of the  lowest  bid and  highest  asked
      quotation)  (such  applicable  trading  market  to be  referred  to as the
      "Trading  Market").  In the absence of any available public quotations for
      the Common Stock,  the Board shall  determine in good faith the fair value
      of  the  Common  Stock,  which  determination  shall  be  set  forth  in a
      certificate by the Secretary of the Company.

            (iii)  As  used  herein,  "Trading  Day"  means a day on  which  the
      principal  Trading Market with respect to the Common Stock is open for the
      transaction of business.

            (b) If this Warrant  shall be  exercised in part only,  the Company,
upon  surrender of this  Warrant for  cancellation,  shall  execute and deliver,
promptly (but in no event more than ten business days after such  surrender),  a
new Warrant  evidencing the rights of the Holder thereof to purchase the balance
of the Warrant Shares purchasable hereunder as to which the Warrant has not been
exercised.  If this Warrant is exercised in part,  such exercise  shall be for a
whole number of Warrant Shares. Upon any exercise and surrender of this Warrant,
the  Company  (i)  will  issue  and  deliver  to the  Holder  a  certificate  or
certificates  in the name of the Holder for the largest  whole number of Warrant
Shares to which the Holder  shall be entitled  and, if this Warrant is exercised
in whole, in lieu of any fractional  Warrant Share to which the Holder otherwise
might be entitled,  cash in an amount equal to the fair value of such fractional
Warrant Share  (determined in such reasonable and equitable  manner as the Board
of Directors of the Company (the "Board")  shall in good faith  determine),  and
(ii) will deliver  promptly  thereafter  (but in no event more than ten business
days thereafter) to the Holder such other securities,  properties and cash which
the Holder may be entitled to receive upon such exercise,  or the  proportionate
part

                                      -3-
<PAGE>

thereof if this Warrant is exercised in part, pursuant to the provisions of this
Warrant.

            (c) If at any time after one year from the date of  issuance of this
Warrant there is no effective  Registration  Statement registering the resale of
the Warrant  Shares by the Holder,  this  Warrant may also be  exercised at such
time by means of a "cashless  exercise"  in which the Holder shall tender to the
Company  the  Warrant  for the  amount of  Warrant  Shares for which it is being
exercised,  along with the written  notice of exercise,  and the Holder shall be
entitled to receive a certificate  for the number of Warrant Shares equal to the
quotient obtained by dividing [(A-B) (X)] by (A), where:

            (A) = the Market Price on the Trading Day immediately  preceding the
                  date of such election;

            (B) = the Warrant Share Price of this Warrant, as adjusted; and

            (X) = the number of Warrant  Shares  issuable  upon exercise of this
                  Warrant in accordance with  the terms of this Warrant by means
                  of a cash exercise rather than a cashless exercise.

      2. Anti-Dilution Provisions. The Warrant Share Price in effect at any time
and the number and kind of  securities  issuable  upon  exercise of this Warrant
shall be subject to  adjustment  from time to time upon the happening of certain
events as follows:

            2.1 Adjustments.

            (a) Definition of Additional  Stock. The term "Additional  Shares of
Common  Stock"  includes all shares of Common Stock issued by the Company  after
the Date of Issuance, other than:

            (i) Shares of Common Stock  (subject to  appropriate  adjustment for
      any  stock   dividend,   stock  split,   combination   or  other   similar
      recapitalization   affecting  such  shares)  issuable  or  issued  to  the
      Company's  employees,  directors or consultants pursuant to a stock option
      plan or restricted stock plan or other  compensation  plan approved by the
      Board;

            (ii)  Shares  of  Common  Stock  issued  or  issuable   pursuant  to
      securities outstanding at the Date of Issuance or agreements to issue such
      securities  or  underlying  shares of Common  Stock which  agreements  are
      outstanding at the Date of Issuance;

            (iii)  Shares  of  Common  Stock  issued  or  issuable  pursuant  to
      subsection 2.1(b)(iv) below;

            (iv) Shares of Common  Stock  issuable  upon  exercise of options or
      warrants,  or upon  conversion of convertible  securities or other rights,
      outstanding as of the Date of Issuance; and

            (v) Shares of  capital  stock or options  or  warrants  to  purchase
      capital stock

                                      -4-
<PAGE>

      issued to financial institutions or lessors in connections with commercial
      credit  agreements,  equipment  financings or similar  transactions  or to
      other  corporations,  persons or entities in connection with acquisitions,
      mergers  or  similar  business  combinations,   partnership  arrangements,
      strategic alliances, licensing arrangements or similar non-capital raising
      transactions approved by the Board, including within this exception shares
      issued to raise capital provided that the use of proceeds is to consummate
      such non-capital raising transactions.

      (b)  Dividend,  Subdivision,  Combination  or  Reclassification  of Common
Stock.  In the  event  that the  Company  shall at any time or from time to time
after the issuance of this Warrant but prior to the exercise hereof:

            (i) make a dividend or  distribution  on the  outstanding  shares of
Common Stock payable in capital stock;

            (ii) subdivide or reclassify or reorganize its outstanding shares of
Common Stock into a greater number of shares;

            (iii) combine or reclassify or reorganize its outstanding  shares of
Common Stock into a smaller number of shares; or

            (iv)  issue,  by  reclassification  of its  Common  Stock  or  other
reorganization, any Additional Shares of Common Stock;

then the number and kind of Warrant  Shares  purchasable  upon  exercise of this
Warrant  shall be  adjusted  so that the Holder upon  exercise  hereof  shall be
entitled to receive the kind and number of Warrant Shares or other securities of
the Company  that the Holder  would have owned or have been  entitled to receive
after the happening of any of the events  described  above had this Warrant been
exercised  immediately  prior to the  happening of such event or any record date
with respect  thereto.  Whenever the number of Warrant Shares  purchasable  upon
exercise  hereof is adjusted  as herein  provided,  the  Warrant  Price shall be
adjusted by multiplying the Warrant Price by a fraction,  the numerator of which
is equal to the  number  of  shares of  Common  Stock  purchasable  prior to the
adjustment  and the  denominator  of which is equal to the  number  of shares of
Common Stock  purchasable  after the adjustment.  An adjustment made pursuant to
this Section 2.1(b) shall become effective  immediately after the record date in
the case of a dividend or distribution  and shall become  effective  immediately
after the effective date in the case of a subdivision,  combination or issuance.
If, as a result of an  adjustment  made  pursuant to this  Section  2.1(b),  the
Holder of this Warrant thereafter surrendered for exercise shall become entitled
to receive  shares of two or more  classes of capital  stock or shares of Common
Stock and any other class of capital stock of the Company, the Board (whose good
faith  determination  shall be  applied  fairly and  ratably  to all  holders of
Warrants and shall be conclusive  and shall be described in a written  notice to
all holders of Warrants  promptly after such adjustment) shall determine in good
faith the  allocation  of the adjusted  Warrant Share Price between or among the
shares of such classes of capital stock or shares of Common Stock and such other
class of capital stock.

                                      -5-
<PAGE>

      The  adjustment  to the  number of  Warrant  Shares  purchasable  upon the
exercise of this Warrant  described  in this  Section  2.1(b) shall be made each
time any event listed in  paragraphs  (i) through  (iv) of this  Section  2.1(b)
occurs.

      (c) Issuance of Common  Stock Below  Warrant  Share Price.  If the Company
shall  issue  any  Additional  Shares  of Common  Stock  after  the date  hereof
(excluding any such issuance for which an adjustment is made under the foregoing
subsection (b)), for no consideration or for a consideration per share less than
the Warrant Share Price in effect on the date of and  immediately  prior to such
issue,   then  in  such  event,  the  Warrant  Share  Price  shall  be  reduced,
concurrently  with such  issue,  to a price  equal to the  quotient  obtained by
dividing:

            (A) an  amount  equal to (x) the  total  number  of shares of Common
      Stock outstanding immediately prior to such issuance or sale multiplied by
      the Market  Price in effect  immediately  prior to such  issuance or sale,
      plus (y) the aggregate  consideration received or deemed to be received by
      the Company upon such issuance or sale, by

            (B)  the  total  number  of  shares  of  Common  Stock   outstanding
      immediately after such issuance or sale.

      (d)  Issuance of Options and  Convertible  Securities  Deemed  Issuance of
Additional  Shares of Common Stock. If the Company,  at any time or from time to
time after the Date of  Issuance,  shall  issue any  options,  warrants or other
rights to purchase Common Stock (collectively, "Options") or securities that, by
their terms,  directly or indirectly,  are convertible  into or exchangeable for
shares of Common Stock ("Convertible Securities") or shall fix a record date for
the determination of holders of any class of securities  entitled to receive any
such Options or  Convertible  Securities,  then the maximum  number of shares of
Common Stock (as set forth in the instrument  relating thereto without regard to
any  provision  contained  therein for a subsequent  adjustment  of such number)
issuable  upon the  exercise  of such  Options  or,  in the case of  Convertible
Securities and Options therefor,  the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed,  as
of the close of business on such record date,  provided that in any such case in
which Additional Shares of Common Stock are deemed to be issued pursuant to this
Section 2.1(d):

            (i) no further  adjustment  in the Warrant Share Price shall be made
      upon the subsequent  issue of  Convertible  Securities or shares of Common
      Stock upon the exercise of such Options or  conversion or exchange of such
      Convertible  Securities and, upon the expiration of any such Option or the
      termination  of any such  right to convert or  exchange  such  Convertible
      Securities,  the  Warrant  Share  Price  then in  effect  hereunder  shall
      forthwith be increased to the Warrant Share Price which would have been in
      effect at the time of such  expiration or  termination  had such Option or
      Convertible  Securities,  to the extent  outstanding  immediately prior to
      such  expiration or termination,  never been issued,  and the Common Stock
      issuable thereunder shall no longer be deemed to be outstanding;

            (ii) if such  Options  or  Convertible  Securities  by  their  terms
      provide, with the

                                      -6-
<PAGE>

      passage  of  time or  otherwise,  for any  increase  in the  consideration
      payable  to the  Company,  or  decrease  in the number of shares of Common
      Stock issuable,  upon the exercise,  conversion or exchange  thereof,  the
      Warrant Share Price  computed upon the original issue thereof (or upon the
      occurrence  of a record date with  respect  thereto),  and any  subsequent
      adjustments  based  thereon,  shall,  upon any such  increase  or decrease
      becoming  effective,  be  recomputed  to reflect such increase or decrease
      insofar as it affects such Options or the rights of conversion or exchange
      under such Convertible Securities,  provided that no readjustment pursuant
      to this clause (ii) shall have the effect of increasing  the Warrant Share
      Price to an amount which  exceeds the lower of (A) the Warrant Share Price
      on the original adjustment date, or (B) the Warrant Share Price that would
      have  resulted  from any  issuance of  Additional  Shares of Common  Stock
      between the original adjustment date and such readjustment date;

            (iii) if such  Options  or  Convertible  Securities  by their  terms
      provide,  with the passage of time or  otherwise,  for any decrease in the
      consideration  payable to the Company, or increase in the number of shares
      of Common  Stock  issuable,  upon the  exercise,  conversion  or  exchange
      thereof,  the Warrant Share Price computed upon the original issue thereof
      (or upon the  occurrence of a record date with respect  thereto),  and any
      subsequent  adjustments  based thereon,  shall,  upon any such decrease or
      increase  becoming  effective,  be  recomputed to reflect such decrease or
      increase insofar as it affects such Options or the rights of conversion or
      exchange under such Convertible Securities,  provided that no readjustment
      pursuant to this  clause  (iii)  shall have the effect of  decreasing  the
      Warrant  Share  Price to an  amount  which  exceeds  the  lower of (A) the
      Warrant  Share Price on the original  adjustment  date, or (B) the Warrant
      Share  Price that would have  resulted  from any  issuance  of  Additional
      Shares of Common  Stock  between  the  original  adjustment  date and such
      readjustment date; and

            (iv) if such Options or  Convertible  Securities  cover shares which
      are excluded from the  definition of Additional  Shares of Common Stock by
      Section  2.1(a),  then  this  Section  2.1(d)  shall  not  apply  to those
      underlying shares.

            (iv) Determination of Consideration. For purposes of this Subsection
      2.1(d),  the  consideration  received  by the Company for the issue of any
      Additional Shares of Common Stock shall be computed as follows:

                 (A) Cash and Property: Such consideration shall:

                        (1)   insofar as it consists of cash, be computed at the
                              aggregate   of  cash   received  by  the  Company,
                              excluding  amounts  paid or  payable  for  accrued
                              interest or accrued dividends;

                        (2)   insofar  as it  consists  of  property  other than
                              cash, be computed at the fair market value thereof
                              at the time of such issue,  as  determined in good
                              faith by the Board; and

                                      -7-
<PAGE>

in the event  Additional  Shares of Common Stock are issued  together with other
shares or  securities  or other  assets of the Company for  consideration  which
covers both, be the proportion of such  consideration  so received,  computed as
provided in clauses (1) and (2) above, as determined in good faith by the Board.

                  (B) Options and Convertible Securities.  The consideration per
      share received by the Company for Additional Shares of Common Stock deemed
      to have been issued pursuant to Subsection 2.1(d)(ii), relating to Options
      and Convertible Securities, shall be determined by dividing

                        (1)   the total amount,  if any,  received or receivable
                              by the Company as  consideration  for the issue of
                              such Options or Convertible  Securities,  plus the
                              minimum    aggregate    amount    of    additional
                              consideration  (as set  forth  in the  instruments
                              relating thereto,  without regard to any provision
                              contained  therein for a subsequent  adjustment of
                              such  consideration)  payable to the Company  upon
                              the exercise of such Options or the  conversion or
                              exchange of such Convertible Securities, or in the
                              case of Options for  Convertible  Securities,  the
                              exercise   of   such   Options   for   Convertible
                              Securities  and the conversion or exchange of such
                              Convertible Securities, by

                        (2)   the maximum  number of shares of Common  Stock (as
                              set  forth in the  instruments  relating  thereto,
                              without regard to any provision  contained therein
                              for  a  subsequent   adjustment  of  such  number)
                              issuable  upon the exercise of such Options or the
                              conversion   or  exchange   of  such   Convertible
                              Securities.

      In the event that at any time, as a result of an adjustment  made pursuant
to this Section 2.1, the Holder of this Warrant thereafter shall become entitled
to receive any shares of the Company,  other than Common Stock,  thereafter  the
number of such other shares so receivable upon exercise of this Warrant shall be
subject  to  adjustment  from  time to time in a manner  and on terms as  nearly
equivalent as  practicable  to the  provisions  with respect to the Common Stock
contained herein.

      (e) Extraordinary Distributions.  In case the Company shall at any time or
from time to time,  after the  issuance of the Warrant but prior to the exercise
hereof,  distribute  to all  holders of its  Common  Stock  (including  any such
distribution  made in  connection  with a  consolidation  or merger in which the
Company is the continuing or surviving  corporation  and the Common Stock is not
changed or  exchanged)  cash,  evidences of  indebtedness,  securities  or other
property or assets  (excluding any such event for which adjustment is made under
Section  2) or  rights or  warrants  to  subscribe  for or  purchase  any of the
foregoing,  then,  and in each  such  case,  the  Holder  shall be  entitled  to
participate  in any such  distribution  based on the  number of shares of Common
Stock it would have been  entitled  to receive had the  Warrant  been  exercised

                                      -8-
<PAGE>

immediately prior to the occurrence of such distribution,  as if the Holder were
the  owner of such  shares  of  Common  Stock at the time of such  distribution.
Notwithstanding  the  foregoing,  this  Section  2.1(e)  shall be of no force or
effect until and unless such time as the Company  shall grant a similar right to
holders of  warrants  issued  after the date  hereof,  at which time the Holders
shall be entitled to the same protection for extraordinary  dividends as granted
to such future holders of warrants, if any.

            2.2 Other Action Affecting  Warrant Shares. If the Company takes any
action affecting its shares of Common Stock after the date hereof, that would be
covered  by  Section  2.1 but for the  manner in which  such  action is taken or
structured,  which would in any way diminish the value of this Warrant, then the
Warrant  Share Price shall be adjusted in such manner as the Board shall in good
faith determine to be equitable under the circumstances.

            2.3 Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment  of the Warrant Share Price pursuant to this Section 2, the Company
at its expense  will as promptly as  possible,  but in any event within ten (10)
business days,  compute such  adjustment or  readjustment in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment or
readjustment,  including  a statement  of the  adjusted  Warrant  Share Price or
adjusted  number of shares of Common  Stock,  if any,  issuable upon exercise of
each Warrant,  describing in reasonable  detail the  transaction  giving rise to
such  adjustments  and showing in detail the facts upon which such adjustment or
readjustment  is based.  The Company will  forthwith  mail, by first class mail,
postage  prepaid,  a copy of each such certificate to the Holder of this Warrant
at the address of such Holder as shown on the books of the  Company,  and to its
Transfer Agent.

            2.4 Other Notices. If at any time:

            (a) the  Company  shall (i) offer for  subscription  pro rata to the
holders of shares of the Common  Stock any  additional  equity in the Company or
other rights; or (ii) pay a dividend in additional shares of the Common Stock or
distribute  securities  or other  property or assets to the holders of shares of
the Common Stock (including, without limitation, cash, evidences of indebtedness
and equity and debt securities);

            (b) there shall be any capital reorganization or reclassification or
consolidation  or merger of the Company with, or sale,  transfer or lease of all
or substantially all of its assets to, another entity; or

            (c)  there  shall  be  a  voluntary  or   involuntary   dissolution,
liquidation or winding up of the Company;

then,  in any one or more of said cases,  the Company shall give, by first class
mail,  postage  prepaid,  to the Holder of this  Warrant at the  address of such
Holder as shown on the books of the Company, (x) at least 10 days' prior written
notice  of the date on which the books of the  Company  shall  close or a record
shall be taken for such subscription rights, dividend, distribution or issuance;
provided that such ten (10) day period shall be increased to thirty (30) days in
the case of Section 2.4(a)(ii),  and (y) in the case of any such reorganization,
reclassification,

                                      -9-
<PAGE>

consolidation, merger, sale, dissolution, liquidation or winding up, at least 10
days'  prior  written  notice of the date when the same  shall  take place if no
stockholder  vote is required and at least 10 days' prior written  notice of the
record date for stockholders  entitled to vote upon such matter if a stockholder
vote is required.  Such notice in accordance with the foregoing clause (x) shall
also specify, in the case of any such subscription rights, the date on which the
holders of shares of Common  Stock shall be entitled  to exercise  their  rights
with respect  thereto,  and such notice in accordance with the foregoing  clause
(y) shall also  specify the date on which the holders of shares of Common  Stock
shall be entitled to exchange  their  shares of Common Stock for  securities  or
other  property   deliverable   upon  such   reorganization,   reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, as the case
may be.

            2.5  Adjustment  Calculations.  No  adjustment  in the Warrant Share
Price shall be  required  unless such  adjustment  would  require an increase or
decrease of at least one cent ($0.01) in such price; provided, however, that any
adjustments  which by reason of this  Section  2.5 are not  required  to be made
shall be carried  forward and taken into  account in any  subsequent  adjustment
required to be made hereunder.  All  calculations  under this Section 2 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.

            2.6 Appraisal.  If a majority in interest of the Holders  reasonably
disagrees with any of the Board's  determinations  referred to in this Section 2
(each, a "Determination"), and such majority of Holders shall notify the Company
of its  disagreement by furnishing to the Company a written notice setting forth
in reasonable detail the fact of such dispute,  the basis for such dispute,  and
such Holders'  alternative  calculation  (such notice, a "Determination  Dispute
Notice"),  and such  Determination  Dispute  Notice is  received  by the Company
within seven (7) days of the Company having given notice of the Determination to
the  Holders,  then the Company and a majority in interest of such  Holders (the
"Warrant Representative") shall resolve such Determination Dispute in accordance
with the terms and  provisions  of this Section 2.6. The Holders agree that this
Section 2.6 sets forth the exclusive  mechanism for the Holders to make any such
dispute  and to resolve  the same,  and shall not be  entitled  to make any such
dispute in any other manner.  The Company and the Warrant  Representative  shall
use good  faith  efforts to  mutually  agree  upon the  designation  of a single
Qualified  Appraiser  (as defined  below)  within seven (7) business days of the
receipt by the Company of a valid  Determination  Dispute Notice received by the
Company in within the time period set forth above in this Section 2.6. If such a
single   Qualified   Appraiser   is   designated,   that  person  shall  make  a
Determination.  If the Company and the  Warrant  Representative  do not so agree
upon the designation of a single Qualified  Appraiser  within such period,  then
within five (5) business  days  following  the end of such  period,  each of the
Company  and the  Warrant  Representative  by written  notice to the other shall
designate a Qualified  Appraiser (or if any party fails to so select a Qualified
Appraiser  within the time period  specified,  the Person  selected by the other
party shall be the  Qualified  Appraiser)  and the two  Qualified  Appraisers so
designated  shall within ten (10)  business  days of their  designation  jointly
designate a third Qualified  Appraiser,  and such third  Qualified  Appraiser so
designated,  solely,  shall independently make a Determination.  The parties may
submit the basis for their respective views to the Appraiser in writing. In such
event,  each party shall  furnish its  submission to the other party at the same
time as the  submission is furnished to the Qualified  Appraiser,  and the other
party shall have two (2) business days within which to furnish a single rebuttal
to such original submission. The Qualified Appraiser may consider such

                                      -10-
<PAGE>

submissions in reaching the  Determination.  If there is only a single Qualified
Appraiser,  the fees  and  expenses  of the  Qualified  Appraiser  shall be paid
equally  by the  Company  and the  Warrant  Representative.  If three  Qualified
Appraisers  are  appointed,  the Company  shall pay the fees and expenses of the
Qualified Appraiser which it appoints,  the Warrant Representative shall pay the
fees and expenses of the Qualified Appraiser which it appoints, and the fees and
expenses of the third Qualified Appraiser shall be shared equally by the Company
and the Warrant  Representative.  The designated  Qualified Appraiser shall make
the   Determination  not  later  than  ten  (10)  business  days  following  the
appointment  of  the  Qualified   Appraiser   making  the   Determination.   The
Determination  made  by the  applicable  Qualified  Appraiser  shall  be  final,
conclusive and binding on the parties hereto.  None of the Qualified  Appraisers
shall be  affiliated  with any of the  Company,  the Warrant  Representative  or
another  Qualified  Appraiser.  For the purposes of this  Agreement,  "Qualified
Appraiser"  shall mean an individual who is engaged on a regular basis (although
not necessarily full time) in valuing securities or arrangements similar to this
Agreement,  as the case may be, and may  include  (but shall not be limited  to)
professional business appraisers, investment bankers or accountants.

      3. No Voting Rights as Stockholders  or  Liabilities.  Except as otherwise
provided herein,  this Warrant shall not be deemed to confer upon the Holder any
right  to vote or to  consent  to or  receive  notice  as a  stockholder  of the
Company, as such, in respect of any matters  whatsoever,  or any other rights or
liabilities as a stockholder, prior to the exercise hereof. Nothing contained in
this  Warrant  shall be deemed as  imposing  any  liabilities  on the  Holder to
purchase any securities  whether such liabilities are asserted by the Company or
by creditors or stockholders of the Company or otherwise.

      4. Warrants  Transferable.  Subject to the terms hereof,  this Warrant and
all rights  hereunder are  transferable,  subject to the applicable terms of the
Securities Purchase Agreement,  if any, and applicable law, in whole or in part,
upon  surrender of this Warrant with a properly  executed  Form of Assignment at
the principal offices of the Company.  This Warrant and the underlying shares of
Common Stock may not be offered,  sold or transferred  except in compliance with
the  applicable  terms of the  Securities  Purchase  Agreement,  if any, and the
Securities  Act,  and any  applicable  state  securities  laws,  or an exception
therefrom,  and then only against  receipt of an agreement of the person to whom
such offer or sale or  transfer is made to comply  with the  provisions  of this
Warrant  with  respect to any resale or other  disposition  of such  securities;
provided that no such  agreement  shall be required  from any person  purchasing
this Warrant or the underlying shares of Common Stock pursuant to a registration
statement  effective under the Securities Act. No such  disposition  shall occur
without an opinion of such Holder's  counsel,  which opinion shall be reasonably
satisfactory to the Company's counsel.

      5. Warrants Exchangeable;  Assignment; Loss, Theft, Destruction, Etc. This
Warrant is exchangeable,  without  expense,  upon surrender hereof by the Holder
hereof at the principal offices of the Company, or at the office of its Transfer
Agent, if any, for new Warrants of like tenor  representing in the aggregate the
right to subscribe  for and purchase the Warrant  Shares which may be subscribed
for and  purchased  hereunder,  each such new Warrant to represent  the right to
subscribe  for and purchase  such Warrant  Shares as shall be designated by such
Holder hereof at the time of such  surrender.  Upon surrender of this Warrant to
the Company at its principal  office, or at the office of its Transfer Agent, if
any, with an instrument of assignment

                                      -11-
<PAGE>

duly executed and funds  sufficient to pay any transfer tax, the Company  shall,
without  charge,  execute and deliver a new Warrant in the name of the  assignee
named in such  instrument  of  assignment  and this  Warrant  shall  promptly be
cancelled.  This Warrant may be divided or combined  with other  warrants  which
carry the same rights upon  presentation  hereof at the principal  office of the
Company, or at the office of its Transfer Agent, if any, together with a written
notice  specifying the names and  denominations  in which new Warrants are to be
issued  and signed by the  Holder  hereof.  The term  "Warrant"  as used  herein
includes any Warrants into which this Warrant may be divided or exchanged.  Upon
receipt of evidence  reasonably  satisfactory to the Company of the loss, theft,
destruction  or  mutilation  of this  Warrant and, in the case of any such loss,
theft or destruction,  upon delivery of indemnity reasonably satisfactory to the
Company, or, in the case of any such mutilation,  upon surrender or cancellation
of this  Warrant,  the Company will issue to the Holder  hereof a new Warrant of
like tenor, in lieu of this Warrant, representing the right to subscribe for and
purchase the Warrant Shares which may be subscribed for and purchased hereunder.
Any such new Warrant  executed and  delivered  shall  constitute  an  additional
contractual  obligation  of the  Company,  whether or not this  Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.

      6. Legends;  Investment  Representations.  Any certificate  evidencing the
securities  issued  upon  exercise  of  this  Warrant  shall  bear a  legend  in
substantially the following form:

      THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED
UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY
OTHER  SECURITIES   LAWS,  AND  SUCH  SECURITIES  MAY  NOT  BE  OFFERED,   SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED UNLESS SO REGISTERED OR
AN  EXEMPTION  FROM  REGISTRATION  UNDER  SAID  ACT  AND  ANY  OTHER  APPLICABLE
SECURITIES LAWS IS AVAILABLE.

      7. Modifications and Waivers.  The Holder of this Warrant acknowledges and
agrees that the terms of this Warrant may be amended, modified or waived only by
the written agreement between the Holder and the Company.

      8. Expenses.  The Company shall pay all expenses and other charges payable
in connection  with the  preparation,  issuance and delivery of this Warrant and
all substitute  Warrants.  The Holder shall pay all taxes in connection with any
sale, assignment or other transfer of this Warrant.

      9.  Books.  The  Company  shall  maintain,  at the office or agency of the
Company  maintained by the Company,  books for the  registration and transfer of
the Warrant.

      10.  Reservation of Warrant Shares.  The Company covenants and agrees that
it will at all times reserve and keep available,  free from  preemptive  rights,
out  of the  aggregate  of its  authorized  but  unissued  Common  Stock  or its
authorized and issued Common Stock held in its treasury,  solely for the purpose
of enabling it to satisfy any  obligation to issue Warrant  Shares upon exercise
of this Warrant,  the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of this Warrant. The Company or, if appointed, the
transfer

                                      -12-
<PAGE>

agent for the Common Stock (the "Transfer Agent"), and every subsequent transfer
agent for any shares of the Company's  capital stock  issuable upon the exercise
of any of the rights of purchase  aforesaid will be  irrevocably  authorized and
directed at all times to reserve  such number of  authorized  shares as shall be
required for such purpose.  The Company will keep a copy of this Warrant on file
with the Transfer Agent and with every subsequent  transfer agent for any shares
of the  Company's  capital  stock  issuable  upon the  exercise of the rights of
purchase  represented  by this  Warrant.  The Company will furnish such Transfer
Agent a copy of all notices of  adjustments  and  certificates  related  thereto
transmitted to the Holder pursuant to Section 2.5 hereof.  The Company covenants
that all Warrant  Shares which may be issued upon exercise of this Warrant will,
upon issue, be validly issued, fully paid and nonassessable,  not subject to any
preemptive rights, and free from all taxes, liens, security interests,  charges,
and other encumbrances with respect to the issuance thereof.

      11.  Registration.  The Warrant Shares are required to be registered under
the Securities Act, to the extent provided in that certain  Registration  Rights
Agreement  of even date  herewith,  by and between the Company and the Holder of
this Warrant.

      12. Listing on Securities Exchanges; Registration. If, and so long as, any
class of the Company's  Common Stock shall be listed on any national  securities
exchange (as defined in the Exchange  Act) or NASDAQ,  the Company shall use its
reasonable best efforts to, at its expense, obtain and maintain the approval for
listing upon official  notice of issuance of all Warrant Shares and maintain the
listing of Warrant Shares after their issuance;  and the Company will so list on
such national securities exchange or NASDAQ, if applicable,  will register under
the Exchange Act (or any similar statute then in effect), and will maintain such
listing of, any other  securities that at any time are issuable upon exercise of
this Warrant if and at the time any securities of the same class shall be listed
on such national securities exchange or NASDAQ by the Company.

      13. No Dilution or Impairment. The Company will not act for the purpose of
avoiding or seeking to avoid the  observance or  performance of any of the terms
of this Warrant, by amendment of its certificate or articles of incorporation or
other  organizational  documents  or through  any  reorganization,  transfer  of
assets, consolidation,  merger, dissolution,  issue or sale of securities or any
other action, but will, at all times, in good faith,  assist in the carrying out
of all such terms. Without limiting the generality of the foregoing, the Company
will not  increase  the par  value of any  shares  of  stock  receivable  on the
exercise of this Warrant above the amount payable therefor on such exercise.

      14. Miscellaneous.

            14.1 Notices.  All notices and other  communications shall be mailed
by first-class  certified or registered mail, postage prepaid, sent by reputable
overnight delivery, delivered by hand or sent by facsimile as follows:

                                      -13-
<PAGE>

                           If to the Company:

                           Auto Data Network, Inc.
                           712 Fifth Avenue, 19th Floor
                           New York, New York  10019
                           Attention:  Chief Executive Officer
                           Telephone:  (212) 561 1837

                  If to the Holder: The address  and/or  facsimile  furnished to
                                    the   Company   in   writing   by  the  last
                                    registered  Holder of this Warrant who shall
                                    have furnished an address  and/or  facsimile
                                    to the Company in writing.

except that any of the foregoing may from time to time by written  notice to the
other  designate  another  address  which shall  thereupon  become its effective
address for the purposes of this  paragraph.  Any notices,  requests or consents
hereunder shall be deemed given, and any instruments delivered,  five days after
they have been mailed by  first-class  certified  or  registered  mail,  postage
prepaid,  or upon receipt if delivered  by a reputable  overnight  courier or if
delivered personally or by facsimile transmission.

            14.2 Entire  Agreement.  This  Warrant,  including  the exhibits and
documents  referred  to  herein  which are a part  hereof,  contain  the  entire
understanding  of the parties  hereto with respect to the subject matter and may
be amended only by a written instrument  executed by the parties hereto or their
successors or assigns.  Any paragraph  headings  contained in this Agreement are
for  reference  purposes  only and shall not  affect in any way the  meaning  or
interpretation of this Warrant.

            14.3  Governing Law. This Warrant shall be governed by and construed
in  accordance  with the laws of the State of New York with respect to contracts
made and to be fully performed therein,  without regard to the conflicts of laws
principles thereof.  The parties hereto hereby agree that any suit or proceeding
arising  under this  Warrant,  or in  connection  with the  consummation  of the
transactions  contemplated hereby, shall be brought solely in a federal or state
court  located in the County of New York and State of New York. By its execution
hereof,  both the Company and the  undersigned  hereby  consent and  irrevocably
submit to the in personam  jurisdiction  of the federal and state courts located
in the  County of New York and State of New York and agree  that any  process in
any suit or proceeding commenced in such courts under this Warrant may be served
upon it personally or by certified or registered mail, return receipt requested,
or by Federal Express or other courier  service,  with the same force and effect
as if personally served upon the applicable party in New York and in the city or
county in which such other court is located.  The parties  hereto each waive any
claim that any such  jurisdiction is not a convenient forum for any such suit or
proceeding  and any defense of lack of in  personam  jurisdiction  with  respect
thereto.

            14.4  Headings.  The  headings of this  Warrant are for  purposes of
reference  only and shall not  limit or  otherwise  affect  the  meaning  of any
provision of this Warrant.

                                      -14-
<PAGE>

            IN WITNESS WHEREOF,  this Warrant  Agreement has been executed as of
the date first written above.

                                                 AUTO DATA NETWORK, INC.

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

                                      -15-
<PAGE>

                                  PURCHASE FORM

Dated: __________

      The undersigned  hereby  irrevocably elects to exercise the within Warrant
to the extent of  purchasing  _____  Warrant  Shares and hereby  makes full cash
payment of $_____________ in payment of the exercise price thereof.

      The  undersigned  has had the  opportunity to ask questions of and receive
answers  from the officers of the Company  regarding  the affairs of the Company
and  related  matters,   and  has  had  the  opportunity  to  obtain  additional
information necessary to verify the accuracy of all information so obtained.

      [The  undersigned  understands  that the shares  have not been  registered
under the  Securities  Act of 1933, as amended,  or the  securities  laws of any
other jurisdiction, and hereby represents to the Company that the undersigned is
acquiring the shares for its own account,  for  investment,  and not with a view
to, or for sale in connection  with, the distribution of any such shares.] [THIS
MAY NOT APPLY DEPENDING UPON WHETHER A REGISTRATION STATEMENT IS EFFECTIVE.]

                                              -------------------------------
                                                   (Signature)

                                              -------------------------------
                                                   (Print or type name)

                                              -------------------------------
                                                   (Address)

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

<PAGE>

                               FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant)

      FOR VALUE RECEIVED,  the undersigned  hereby sells,  assigns and transfers
unto  ______________________  the right  represented  by the  within  Warrant to
purchase  ________ shares of Common Stock of  _____________  to which the within
Warrant  relates and appoints  _____________  attorney to transfer said right on
the  books  of  ___________________  with  full  power  of  substitution  in the
premises.

Dated: __________________   ___,  200__

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

                                          Address of Transferee:

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

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

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

In the presence of:

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

                               CONSENT OF ASSIGNEE

         I HEREBY  CONSENT  to abide by the terms and  conditions  of the within
Warrant.

Dated:
       ----------------------             ---------------------------------
                                          (Signature of Assignee)

                                          ---------------------------------
                                          (Print or type name)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]