Document:

EXHIBIT 4.1

                       VITESSE SEMICONDUCTOR CORPORATION

                         REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the "Agreement") is made effective as
of ____________, 2001 (the "Effective Date"), by and among Vitesse
Semiconductor Corporation, a Delaware corporation (the "Parent") and all of the
shareholders and warrantholders in Exbit Technology A/S, a company organized
under the laws of the Kingdom of Denmark (the "Shareholders").

                                    RECITALS

     Parent, the Shareholders and Exbit Technologies A/S (the "Company") are
parties to the Share Purchase Agreement dated _________, 2001 (together with
the exhibits and schedules thereto, the "Purchase Agreement"; capitalized terms
used herein and not defined shall have the meanings ascribed thereto in the
Purchase Agreement), pursuant to which Parent shall acquire all outstanding
shares of capital stock and other actual or potential ownership interests of
the Company in exchange for shares of common stock of Parent (the "Shares").

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, all parties hereto agree as follows:

     1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:

     "Black-Out Period" means any period during which executive officers and
directors of Parent are generally prohibited from engaging in trades in
Parent's securities pursuant to Parent's Insider Trading Policy.

     "Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar Federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

     "Holder" means any of the Shareholders, for so long as such person holds
any Registrable Securities, or any person holding Registrable Securities to
whom the rights under this Agreement have been transferred in accordance with
Section 11 hereof.

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     "Insider Trading Policy" means the policy adopted by Parent's Board of
Directors, as such may be amended from time to time, relating to transactions
in Parent's securities by Parent's executive officers and directors.

     "Permitted Window" means the period during which a Holder entitled to sell
Registrable Securities pursuant to a registration statement under Section 5(a)
of this Agreement shall be permitted to sell Registrable Securities pursuant to
such a registration. Except as otherwise set forth in this Agreement, a
Permitted Window shall (i) commence upon the tenth business day following
receipt by Parent of a written notice from a Holder to Parent that such Holder
intends to sell Shares pursuant to such registration statement, or such earlier
date as Parent may agree to, and shall (ii) terminate upon the commencement of
a Black-Out Period.

     "Registrable Securities" means the Shares, exclusive of any Shares held in
escrow pursuant to the Purchase Agreement, and any Common Stock of Parent
issued or issuable in respect thereof upon any conversion, stock split, stock
dividend, recapitalization, merger or other reorganization; provided, however,
that securities shall only be treated as Registrable Securities if and so long
as they have not been registered or sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction.

     "Register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering of the effectiveness of
such registration statement.

     "Registration Expenses" means all expenses, except Selling Expenses,
incurred by Parent in complying with Section 5 hereof, including without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for Parent, fees and
disbursements of counsel for the Holders (which counsel shall be selected by
the Holders holding a majority of the Registrable Securities and shall be
satisfactory to Parent), blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of Parent which shall be paid in any event by
Parent).

     "Restricted Securities" means the securities of Parent required to bear a
legend as described in Section 3 hereof.

         "Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal rule or statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

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     "Selling Expenses" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by the Holders
and all fees and disbursements of counsel for any Holder; provided, however,
the fees and disbursements of one counsel for the Holders (which counsel shall
be selected by the Holders holding a majority of the Registrable Stock and
shall be satisfactory to Parent) shall not be included in the definition of
Selling Expenses.

     2. Restrictions on Transferability. The Restricted Securities and any
other securities issued in respect of such securities upon any stock split,
stock dividend, recapitalization, merger or other reorganization, shall not be
sold, assigned, transferred or pledged except upon the conditions specified in
this Agreement, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Each Holder or transferee will cause any
proposed purchaser, assignee, transferee, or pledgee of any such securities
held by the Holder or transferee to agree to take and hold such securities
subject to the restrictions and upon the conditions specified in this
Agreement, including without limitation the restrictions set forth in Section
4.

     3. Restrictive Legend. Each certificate representing the Shares or any
other securities issued in respect of such securities upon any stock split,
stock dividend, recapitalization, merger or other reorganization shall be
stamped or otherwise imprinted with the following legend:

     THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND
     HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
     SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS A REGISTRATION STATEMENT
     UNDER SAID ACT IS IN EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF
     COUNSEL SATISFACTORY TO THE ISSUER, SUCH TRANSFER MAY BE MADE WITHOUT
     REGISTRATION UNDER SAID ACT.

Each Holder consents to Parent making a notation on its records and giving
instructions to any transfer agent of its capital stock in order to implement
the restrictions on transfer established in this Agreement and the Merger
Agreement.

     4. Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 4. Without in any way limiting
the immediately preceding sentence or the provisions of Section 2, no sale,
assignment, transfer or pledge (other than (i) a sale made pursuant to a
registration statement filed under the Securities Act and declared effective by
the Commission or (ii) a sale made in accordance with the applicable provisions
of Rule 144) of

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Restricted Securities shall be made by any holder thereof to any person unless
such person shall first agree in writing to be bound by the restrictions of
this Agreement, including without limitation this Section 4. Prior to any
proposed sale, assignment, transfer or pledge of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to
Parent of such holder's intention to effect such transfer, sale, assignment or
pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and, if
requested by Parent, the holder shall also provide, at such holder's expense, a
written opinion of legal counsel (who shall be, and whose legal opinion shall
be, reasonably satisfactory to Parent) addressed to Parent, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act and under applicable state securities
laws and regulations. Upon delivery to Parent of such notice and, if required,
such opinion, the holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of such
notice. Parent agrees that it shall not request such an opinion of counsel with
respect to (i) a transfer not involving a change in beneficial ownership, (ii)
a transaction involving the transfer without consideration of Restricted
Securities by an individual holder during such holder's lifetime by way of gift
or on death by will or intestacy. Each certificate evidencing the Restricted
Securities transferred as above provided shall bear, except if such transfer is
made pursuant to Rule 144, the appropriate restrictive legend set forth in
Section 3 above, except that such certificate shall not bear such restrictive
legend if, in the opinion of counsel for such holder and counsel for Parent,
such legend is not required in order to establish or ensure compliance with any
provision of the Securities Act.

     5. Registration on Form S-3.

        (a) Registration. Parent shall use its commercially reasonable efforts
to cause a registration statement on Form S-3 (or any successor form,
collectively, a "Form S-3") covering all Registrable Securities to be filed and
declared effective no later than 45 days after the Closing under the Purchase
Agreement. Parent shall use its commercially reasonable efforts to keep such
registration statement effective until the first anniversary of the date of the
Closing under the Purchase Agreement, or such earlier date upon which (i) no
Holder holds any Registrable Securities or (ii) a Black-Out Period commences
that will include the first anniversary of the Closing under the Purchase
Agreement. Parent shall, prior to the commencement of the Permitted Window,
inform each of the Holders of the commencement of the Permitted Window. Parent
shall notify each of the Holders of the termination of a Permitted Window no
later than the time Parent notifies its executive officers and directors of the
corresponding Black-Out Period; provided, however, that Parent need not notify
the Holders of regularly scheduled Black-Out Periods relating to the closing of

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Parent's fiscal quarters, which periods commence on the fifteenth day prior to
the end of the last month of each fiscal quarter and terminate twenty-four
hours after Parent publicly announces its results for such quarter.

     (b) Limitations on Registration and Sale of Registrable Securities.
Notwithstanding anything in this Agreement to the contrary, Parent's
obligations and the Holders' rights under this Section 5 are subject to the
limitations and qualifications set forth below, which may be waived in writing
by Parent.

          (i) Parent shall have no obligation to keep effective a registration
     statement hereunder following such time as each Holder is eligible to sell
     any of its Registrable Securities pursuant to Rule 144(k) (or any similar
     provision then in force, but not Rule 144A).

          (ii) The Holders will sell Registrable Securities pursuant to a
     registration effected hereunder only during a Permitted Window.

          (iii) If Parent furnishes to the Holders a certificate signed by the
     President or Chief Financial Officer of Parent stating that, in the good
     faith judgment of the Board of Directors of Parent, it would be seriously
     detrimental to Parent for a Form S-3 registration to be effected, or a
     Permitted Window to be in effect, due to (A) the existence of a material
     development or potential material development involving Parent which
     Parent would be obligated to disclose in the prospectus contained in the
     Form S-3 registration statement, which disclosure would in the good faith
     judgment of the Board of Directors be premature or otherwise inadvisable,
     (B) the existence of other facts or circumstances as a result of which the
     prospectus contained or to be contained in the Form S-3 registration
     statement includes or would include an untrue statement of a material fact
     or omits or would omit to state a material fact required to be stated
     therein or necessary to make the statements therein not misleading in
     light of the circumstances under which they were made or then existing or
     (C) Parent's bona fide intention to effect the filing of a registration
     statement with the Commission within sixty (60) days of the receipt of a
     notice from a Holder that it intends to sell Registrable Securities during
     a Permitted Window, Parent may defer the filing of the Form S-3
     registration statement or delay the commencement of a Permitted Window or
     may effect an early termination of a Permitted Window that has commenced,
     as the case may be. Parent may elect to so defer, delay or terminate under
     clause (A) above only to the extent that the event described in clause (A)
     also gives rise to a Black-Out Period applicable to all of Parent's
     executive officers and directors under Parent's Insider Trading Policy. If
     Parent elects to so defer, delay or terminate under clause (B) above,
     Parent shall use its commercially reasonable efforts to amend the
     registration statement

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<PAGE>

     or take such other action as may be necessary to eliminate the situation
     described in clause (B) as soon as practicable. Any Holder receiving any
     notice from Parent with respect to the matters covered by this Section
     5(b)(iii) shall keep the fact and content of such notice, and the event or
     circumstances giving rise to such notice, confidential.

          (iv) The obligations of Parent hereunder are conditioned upon its
     being eligible to register its securities on Form S-3 at the time any such
     registration is otherwise required hereunder.

          (v) At any time that Parent is obligated under this Agreement to
     permit the Holders to sell Registrable Securities pursuant to a
     registration statement on Form S-3, Parent may, instead of maintaining an
     effective registration statement on Form S-3 for the benefit of the
     Holders, include such Registrable Securities in a registration effected
     for the benefit of Parent and/or other selling stockholders. In the event
     that such registration is in connection with an underwritten offering, the
     Holders participating in such registration shall enter into an
     underwriting agreement in customary form with the managing underwriter
     selected by Parent, notwithstanding the provisions of Section 5(c).

          (vi) Notwithstanding anything to the contrary in this Agreement,
     Parent shall have no obligation to effect a registration hereunder, and no
     Permitted Window will exist, with respect to Registrable Securities that
     are subject to the escrow provisions of the Merger Agreement (including
     any agreement which is an exhibit thereto) during the time that such
     Registrable Securities are subject to such provisions and no Holder shall
     sell any such Registrable Securities pursuant to a registration hereunder,
     or pursuant to Rule 144, during any such period.

     (c) Underwriting. At the election of the Holders representing a majority
of the Registrable Securities that are proposed to be sold during a Permitted
Window (the "Deciding Holders"), all sales of Registrable Securities under this
Section 5 during such Permitted Window shall be made through an underwriting
managed by an underwriter selected by Parent and acceptable to Deciding Holders
(the "Managing Underwriter"). Parent shall, together with all Holders proposing
to distribute their Registrable Securities through such underwriting, enter
into an underwriting agreement in customary form with the Managing Underwriter.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
Parent. Any Holder so withdrawing shall not sell any Registrable Securities
pursuant to a registration effected under this Agreement until after the
completion of such underwritten distribution. Nothing in this

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section shall require the Holders to select and sell any of the Shares through
a Managing Underwriter.

     (d) Registration Procedures. In connection with any registration required
under this Agreement, Parent shall take the actions set forth below.

          (i) Prior to filing any registration statement, prospectus, amendment
     or supplement with the Commission in connection with any registration
     hereunder, Parent shall furnish to one counsel selected by the Holders of
     a majority of the Registrable Securities copies of such documents.

          (ii) Parent shall notify each Holder of any stop order issued or
     threatened by the Commission and will take all reasonable actions required
     to prevent the entry of such stop order or to remove it if entered.

          (iii) Parent shall comply with the provisions of the Securities Act
     with respect to the disposition of all securities covered by a
     registration statement filed pursuant to this Agreement with respect to
     the disposition of all Registrable Securities covered by such registration
     statement in accordance with the intended methods of disposition by the
     Holders as set forth in such registration statement.

          (iv) Parent shall furnish to each Holder and each underwriter, if
     any, of Registrable Securities covered by a registration statement filed
     pursuant to this Agreement such number of copies of such registration
     statement, each amendment and supplement thereto (in each case including
     all exhibits thereto), and the prospectus included in such registration
     statement (including each preliminary prospectus), in conformity with the
     requirements of the Securities Act, and such other documents as a selling
     Holder may reasonably request in order to facilitate the disposition of
     the Registrable Securities owned by such Holder.

          (v) Parent shall use its best efforts to register or qualify the
     Registrable Securities under the securities or "blue sky" laws of each
     State of the United States of America and shall do any and all other acts
     and things which may be reasonably necessary or advisable to enable each
     selling Holder and each underwriter, if any, to consummate the disposition
     in such States of the Registrable Securities owned by such selling
     Holders; provided that Parent shall not be required to (A) qualify
     generally to do business in any jurisdiction where it would not otherwise
     be required to qualify but for this subsection (v), (B) subject itself to
     taxation in any such jurisdiction or (C) consent to general service of
     process in any such jurisdiction.

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          (vi) Parent shall immediately notify each Holder entitled to sell
     Registrable Securities during a Permitted Window of the happening of any
     event which comes to Parent's attention if, as a result of such event, the
     prospectus included in the registration statement filed under this
     Agreement contains any untrue statement of a material fact or omits to
     state any material fact necessary to make the statements therein, in light
     of the circumstances under which they were made, not misleading, and
     Parent shall promptly prepare and furnish to each Holder and file with the
     Commission a supplement or amendment to such prospectus so that such
     prospectus will no longer contain any untrue statement of a material fact
     or omit to state any material fact necessary to make the statements
     therein, in light of the circumstances under which they were made, not
     misleading.

          (vii) Parent shall take all such other reasonable and customary
     actions as each Holder or the underwriters, if any, may reasonably request
     in order to expedite or facilitate the disposition of the Registrable
     Securities in accordance with the terms of this Agreement.

          (viii) Parent shall cause the officers, directors and employees of
     Parent and each of its subsidiaries to supply such information and respond
     to such inquiries as any Holder or underwriter may reasonably request or
     make for the purpose of confirming that such registration statement does
     not contain any untrue statement of a material fact or omit to state any
     material fact necessary to make the statements therein, in light of the
     circumstances under which they were made, not misleading, provided that
     Parent obtains reasonably satisfactory assurances that such information
     will be used solely for such purpose and will be held in confidence
     (except to the extent that it is included in the registration statement).

     6. Other Registration Rights. The Holders acknowledge that certain other
stockholders of Parent may now or hereafter have registration rights, and that
such other stockholders may be entitled to sell their securities at the same
time, or pursuant to the same registration and underwriting, as the Holders
hereunder.

     7. Expenses of Registration. All Registration Expenses incurred in
connection with Parent's obligations hereunder shall be borne by Parent. All
Selling Expenses relating to securities proposed to be registered hereunder and
all other registration expenses shall be borne by the Holders of such
securities pro rata on the basis of the number of shares proposed to be sold by
each of them during the applicable Permitted Window.

         8.       Indemnification.

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     (a) Parent will indemnify each Holder, each of its officers and directors
and partners, and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration has been
effected pursuant to this Agreement, against all expenses, claims, losses,
damages or liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any registration statement, prospectus,
offering circular or other document, or any amendment or supplement thereto,
incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading and Parent will reimburse each such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action (but not in excess of expenses
incurred in respect of one counsel and one local counsel for all of them
unless, in the reasonable judgment of an indemnified party there is potential
conflict of interest between any indemnified parties, which indemnified parties
may be represented by separate counsel and local counsel), provided that Parent
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to Parent by such Holder or
controlling person, and stated to be specifically for use therein; and
provided, further, that the foregoing indemnity Agreement is subject to the
condition that, insofar as it relates to any such untrue statement, alleged
untrue statement, omission or alleged omission made in a preliminary
prospectus, such indemnity agreement shall not inure to the benefit of any
person, if a copy of the final prospectus or an amended or supplemental
prospectus, as applicable, was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act, and if the final prospectus or the amended or supplemented
prospectus, as applicable, would have cured the defect giving rise to the loss,
liability, claim or damage. In no event, however, shall Parent have any
indemnification obligation to the extent that the expenses, claims, losses,
damages or liabilities as to which indemnification is sought are in connection
with an offer or sale made by any Holder in violation of the terms of this
Agreement (a "Violation"). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any such Holder, such
Holder's directors and officers, underwriter or controlling person, and shall
survive the transfer of such securities by such Holder.

     (b) Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which a registration hereunder is effected,

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indemnify Parent, each of its directors and officers, each person who controls
Parent within the meaning of Section 15 of the Securities Act, and each other
such Holder, each of its officers and directors and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on (i) a Violation by such Holder or (ii) any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other documents, or
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse Parent, such Holders, such directors, officers or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action (but not in excess of expenses incurred in respect of one counsel and
one local counsel for all of them unless, in the reasonable judgment to of an
indemnified party, there is a conflict of interest between any indemnified
parties, which indemnified parties may be represented by separate counsel and
local counsel), but, in the case of clause (ii) above, only to the extent that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to Parent by such Holder. Notwithstanding the foregoing, the
liability of each Holder under this subsection 8.7(b) shall be limited in an
amount equal to the net proceeds received by such Holder from the sale of
Registrable Securities covered by such registration statement.

     (c) Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure
to give such notice is materially prejudicial to an Indemnifying party's
ability to defend such action and provided further, that the Indemnifying Party
shall not assume the defense for matters as to which there is a conflict of
interest or there are separate and different defenses available to the
Indemnified Party and the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party (whose consent shall not be unreasonably withheld), consent
to entry of any judgment or enter into any

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settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.

     9. Information by Holder. The Holder or Holders of Registrable Securities
included in any registration hereunder shall furnish to Parent such information
regarding such Holder or Holders, the Registrable Securities held by them and
the distribution proposed by such Holder or Holders as Parent may request in
writing and as shall be required in connection with any registration referred
to in this Agreement.

     10. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of
the Restricted Securities to the public without registration Parent agrees to
use all reasonable efforts, at any time after the first anniversary of the
Effective Date, to:

     (a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act; and

     (b) File with the Commission in a timely manner all reports and other
documents required of Parent under the Securities Act and the Exchange Act.

     11. Transfer of Registration Rights. The rights to cause Parent to
register securities granted to Holders under Section 5 may be assigned to a
transferee or assignee reasonably acceptable to Parent in connection with any
transfer or assignment of Registrable Securities by the Holder, provided that
(i) such transfer is otherwise effected in accordance with applicable
securities laws and the terms of this Agreement, (ii) such assignee or
transferee acquires at least [number to be discussed] shares of Registrable
Securities (as adjusted for stock splits, stock dividends, stock combinations
and the like), (iii) written notice is promptly given to Parent and (iv) such
transferee agrees in writing to be bound by the provisions of this Agreement.
Notwithstanding the foregoing, the rights to cause Parent to register
securities may be assigned without compliance with item (ii) above to the legal
successor to an individual holder, or to a family member or trust for the
benefit of a Holder who is an individual, or a trust for the benefit of a
family member of such a Holder.

     12. Amendment. Except as otherwise provided above, any provision of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Parent and Holders of a
majority of the Registrable Securities remaining at the time such amendment or
waiver is made, provided such amendment or waiver affects all Holders
uniformly.

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     13. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California, without regard to conflict of laws provisions.

     14. Entire Agreement. This Agreement constitutes the full and entire
understanding and Agreement among the parties regarding the matters set forth
herein. Except as otherwise expressly provided herein, all other agreements
regarding the registration rights of the Company's shareholders shall hereby
expire. The provisions hereof shall inure to the benefit of, and be binding
upon the successors, assigns, heirs, executors and administrators of the
parties hereto.

     15. Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission, by hand or by messenger, addressed:

     (a) if to a Holder, at such Holder's address as set forth below such
Holder's signature on this Agreement, or at such other address as such Holder
shall have furnished to Parent with a copy to:

         Shearman & Sterling
         5 Appold Street
         London EC2A 2AP
         Fax:  +44 20 7655 5500
         Attn:  Alberto Luzarraga

     (b) if to Parent, to:

         Vitesse Semiconductor Corporation
         741 Calle Plano
         Camarillo, California 93012
         Fax:     (805) 388-7565
         Attn:    Yatin Mody

     or at such other address as Parent shall have furnished to the Holders,
     with a copy to:

         Davis Polk & Wardwell
         1600 El Camino Real
         Menlo Park, CA 94025
         Attn:    Francis S. Currie, Esq.
         Fax:     (650) 752-2111

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     Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally or by facsimile transmission, or, if sent by mail, at the
earlier of its receipt or 72 hours after the same has been deposited in a
regularly maintained receptacle for the deposit of the United States mail,
addressed and mailed as aforesaid.

     16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                  [Remainder of Page Intentionally Left Blank]

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

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<PAGE>

"PARENT'

Vitesse Semiconductor Corporation
a Delaware corporation

By:
Title:

"THE HOLDERS"

By:
Title:

Address:

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

                                      15<PAGE>

                                                                    Exhibit 4.01

                                                                       EXHIBIT A
                                                                       ---------

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES
LAWS OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS
OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR OTHER
FINANCING ARRANGEMENT SECURED BY THIS NOTE.  ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTION 2(d)(viii) HEREOF.
THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET
FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(d)(viii) OF THIS NOTE.

     CONVERTIBLE NOTE
     ----------------

_______ __, 2001  $____________

     FOR VALUE RECEIVED, AT HOME CORPORATION, a Delaware corporation (the
"Company"), hereby promises to pay to the order of __________________ or
registered assigns (the "Holder") the principal amount of ___________________
Dollars ($________________), when due, whether upon maturity, acceleration,
redemption or otherwise.

     (1)  Payments of Principal. All payments of principal of this Note (to the
          ---------------------
extent such principal is not converted into Common Stock (as defined below) in
accordance with the terms hereof) shall be made in lawful money of the United
States of America by wire transfer of immediately available funds to such
account as the Holder may from time to time designate by written notice in
accordance with the provisions of this Note. Whenever any amount expressed to be
due by the terms of this Note is due on an y day which is not a Business Day (as
defined below), the same shall instead be due on the next succeeding day which
is a Business Day. Each capitalized term used herein, and not otherwise
defined, shall have the meaning ascribed thereto in the Securities Purchase
Agreement, dated ______ __, 2001, pursuant to which this Note and the Other
Notes (as defined below) were originally issued (the "Securities Purchase
Agreement"). This Note and the Other Notes issued by the Company pursuant to the
Securities Purchase Agreement and all convertible notes issued in exchange
therefor or replacement thereof are collectively referred to in this Note as the
"Notes," and the Holder and the holders of the Other Notes are collectively
referred to in this Note as the "Holders."

     (2)  Conversion of this Note. This Note shall be convertible into shares of
          -----------------------
the Company's Series A Common Stock, par value $0.01 per share (the "Common
Stock"), on the terms and conditions set forth in this Section 2.
<PAGE>

     (a)  Certain Defined Terms.  For purposes of this Note, the following terms
          ---------------------
shall have the following meanings:

          (i)  "Automatic Amount" means, with respect to a Holder Anniversary
Conversion, the respective Holder Anniversary Conversion Amount and, with
respect to a Company Anniversary Conversion, the respective Company Anniversary
Conversion Amount.

          (ii) "Automatic Date" means each Holder Anniversary Conversion Date
and each Company Anniversary Conversion Date.

          (iii)"Anniversary Conversion Price" means, as of any date of
determination, the product of (A) 0.95 multiplied by (B) the arithmetic average
of the Weighted Average Price of the Common Stock on each trading day during the
ten (10) consecutive trading days immediately preceding the date of
determination, as appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.

          (iv) "Approved Stock Plan" means any employee benefit plan or
agreement which has been approved by the Board of Directors of the Company,
pursuant to which the Company's securities may be issued to any consultant or
other service provider, employee, officer or director for services provided to
the Company.

          (v)  "Business Day" means any day other than Saturday, Sunday or other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.

          (vi) "Closing Sale Price" means, for any security as of any date, the
last closing trade price for such security on the Principal Market as reported
by Bloomberg, or if the Principal Market begins to operate on an extended hours
basis, and does not designate the closing trade price, then the last trade price
at 4:00 p.m., New York City Time (or such other time as the Principal Market
publicly announces is the official close of trading), as reported by Bloomberg,
or if the foregoing do not apply, the last closing trade price of such security
in the over-the-counter market on the electronic bulletin board for such
security as reported by Bloomberg, or, if no last closing trade price is
reported for such security by Bloomberg, the last closing ask price of such
security as reported by Bloomberg, or, if no last closing ask price is reported
for such security by Bloomberg, the average of the highest bid price and the
lowest ask price of any market makers for such security as reported in the "pink
sheets" by the National Quotation Bureau, Inc. If the Closing Sale Price cannot
be calculated for such security on such date on any of the foregoing bases, the
Closing Sale Price of such security on such date shall be the fair market value
as mutually determined by the Company and the holders of the Notes. If the
Company and the holders of the Notes are unable to agree upon the fair market
value of the Common Stock, then such dispute shall be resolved pursuant to
Section 2(d)(iii) below. All such determinations to be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar
transaction during such period.

          (vii)"Common Stock Deemed Outstanding" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number

                                       2
<PAGE>

of shares of Common Stock issuable upon exercise of Options or conversion of
Convertible Securities (including the Notes) regardless of whether the Options
or Convertible Securities are actually exercisable or convertible at such time,
but excluding any shares of Common Stock owned or held by or for the account of
the Company.

         (viii) "Company Anniversary Conversion Date" means, with respect to a
Company Anniversary Date, each of the 30th, 20th and 10th trading days prior to
such Company Anniversary Date, such Company Anniversary Date, and the 10th,
20th, 30th and 40th trading days following such Company Anniversary Date, such
that there are a total of eight (8) Company Anniversary Conversion Dates with
respect to such Company Anniversary Date.

         (ix)   "Company Anniversary Date" means each of the date which is two
(2) years after the Issuance Date, the date which is three (3) years after the
Issuance Date and the date which is four (4) years after the Issuance Date.

         (x)    "Conversion Amount" means the principal amount of this Note to
be converted, redeemed or otherwise with respect to which this determination is
being made.

         (xi)   "Conversion Price" means (A) as of any Conversion Date or other
date of determination (other than with respect to (I) an Automatic Amount on an
Automatic Date, (II) a Holder Anniversary Redemption Amount on any date within
ten (10) days prior to the applicable Holder Anniversary Date, and (III) a
Conversion Amount subject to the Notice of Redemption at Option of Buyer during
a Deferred Triggering Event Payment Period (as defined in Section 3(d))) during
the period beginning on the Issuance Date and ending on and including the date
immediately preceding the Maturity Determination Date, the Fixed Conversion
Price, (B) as of any Conversion Date or other date of determination (other than
with respect to (I) an Automatic Amount on an Automatic Date, (II) a Holder
Anniversary Redemption Amount on any date within ten (10) days prior to the
applicable Holder Anniversary Date, and (III) a Conversion Amount subject to the
Notice of Redemption at Option of Buyer during a Deferred Triggering Event
Payment Period) on or after the Maturity Determination Date, the Maturity
Conversion Price, (C) with respect to any Automatic Amount, the Anniversary
Conversion Price on the Automatic Date with respect to which the determination
of the Conversion Price is being made, (D) with respect to a Holder Anniversary
Redemption Amount on any date within ten (10) days prior to the applicable
Holder Anniversary Date, 102% of the Fixed Conversion Price then in effect, and
(E) with respect to a Conversion Amount subject to a Notice of Redemption at
Option of Buyer during the Deferred Triggering Event Payment Period, 102% of the
Fixed Conversion Price then in effect, each in effect as of such date and
subject to adjustment as provided herein.

         (xii)  "Convertible Securities" means any stock or securities (other
than Options) directly or indirectly convertible into or exchangeable or
exercisable for Common Stock.

         (xiii) "Fixed Conversion Price" means, as of any Conversion Date or
other date of determination, 110% of the Weighted Average Price of the Common
Stock on the Issuance Date, subject to adjustment as provided herein.

                                       3
<PAGE>

          (xiv)   "Holder Anniversary Conversion Date" means, with respect to a
Holder Anniversary Date, each of the 30th, 20th and 10th trading days prior to
such Holder Anniversary Date, such Holder Anniversary Date, and the 10th, 20th,
30th and 40th trading days following such Holder Anniversary Date, such that
there are a total of eight (8) Holder Anniversary Conversion Dates with respect
to such Holder Anniversary Date.

          (xv)    "Holder Anniversary Date" means each of the date which is one
(1) year after the Issuance Date, the date which is two (2) years after the
Issuance Date, the date which is three (3) years after the Issuance Date and the
date which is four (4) years after the Issuance Date.

          (xvi)   "Issuance Date" means the date of issuance of this Note
pursuant to the Securities Purchase Agreement.

          (xvii)  "Maturity Date" means the Maturity Determination Date, unless
extended pursuant to Section 2(d)(vii).

          (xviii) "Maturity Conversion Price" means the product of (A) 0.95
multiplied by (B) the arithmetic average of the Weighted Average Price of the
Common Stock on each trading day during the 30 consecutive trading days
immediately following the date which is five (5) years after the Issuance Date,
as appropriately adjusted for any stock dividend, stock split, stock combination
or other similar transaction during such 30 trading day period or on or after
the Maturity Determination Date.

          (xix)   "Maturity Determination Date" means the date which is 31
trading days after the date which is five (5) years after the Issuance Date.

          (xx)    "Options" means any rights, warrants or options to subscribe
for or purchase Common Stock or Convertible Securities.

          (xxi)   "Other Notes" means the convertible notes, other than this
Note, issued by the Company pursuant to the Securities Purchase Agreement.

          (xxii)  "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

          (xxiii) "Principal" means the outstanding principal amount of this
Note as of any date of determination.

          (xxiv)  "Principal Market" means the Nasdaq National Market, or if the
Common Stock is not traded on the Nasdaq National Market, then the principal
securities exchange or trading market for the Common Stock.

          (xxv)   "Registration Rights Agreement" means that certain
registration rights agreement among the Company and the initial holders of the
Notes relating to the filing of a registration statement covering the resale of
the shares of Common Stock issuable upon

                                       4
<PAGE>

conversion of the Notes, as such agreement may be amended from time to time as
provided in such agreement.

          (xxvi)  "Security Agreement" means that certain security agreement
among the Company and the initial holders of the Notes relating to the granting
by the Company of a security interest in the assets of the Company, as such
agreement may be amended from time to time as provided in such agreement.

          (xxvii) "Weighted Average Price" means, for any security as of any
date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30 a.m., New York City Time
(or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00 p.m., New York City Time (or such other
time as the Principal Market publicly announces is the official close of
trading), as reported by Bloomberg through its "Volume at Price" functions or,
if the foregoing does not apply, the dollar volume-weighted average price of
such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30 a.m., New York City Time
(or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00 p.m., New York City Time (or such other
time as the Principal Market publicly announces is the official close of
trading), as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the
market makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If the Weighted Average Price cannot be calculated for
such security on such date on any of the foregoing bases, the Weighted Average
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holders of the Notes. If the Company and the
holders of the Notes are unable to agree upon the fair market value of the
Common Stock, then such dispute shall be resolved pursuant to Section 2(d)(iii)
below with the term "Weighted Average Price" being substituted for the term
"Closing Sale Price." All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during such period.

     (b)  Holder's Conversion Right; Mandatory Redemption or Conversion. Subject
          -------------------------------------------------------------
to the provisions of Section 5, at any time or times on or after the Issuance
Date, the Holder shall be entitled to convert (and pursuant to Section
2(d)(vii), Section 6 and Section 7, may be deemed to have converted) any part of
the Principal into fully paid and nonassessable shares of Common Stock in
accordance with Section 2(d) at the Conversion Rate (as defined below). If any
Principal remains outstanding on the Maturity Determination Date, then, pursuant
and subject to Section 2(d)(vii), all such Principal shall be converted at the
Conversion Rate on the Maturity Date in accordance with Section 2(d)(vii) or
redeemed by the Company on the Maturity Determination Date in accordance with
Section 2(d)(vii). The Company shall not issue any fraction of a share of Common
Stock upon any conversion. If the conversion would result in the issuance of a
fraction of a share of Common Stock, the Company shall round such fraction of a
share of Common Stock up or down to the nearest whole share.

                                       5
<PAGE>

     (c)  Conversion.  The number of shares of Common Stock issuable upon
          ----------
conversion of a Conversion Amount shall be determined according to the following
formula (the "Conversion Rate"):

                               Conversion Amount
                               -----------------
                               Conversion Price

     (d)  Mechanics of Conversion. The conversion of this Note shall be
          -----------------------
conducted in the following manner:

     (i)  Holder's Delivery Requirements. To convert a Conversion Amount into
          ------------------------------
shares of Common Stock on any date (the "Conversion Date"), the holder thereof
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 6:00 p.m., New York City Time, on such date, a copy of an executed notice of
conversion in the form attached hereto as Exhibit I (the "Conversion Notice") to
                                          ---------
the Company and the Company's designated transfer agent (the "Transfer Agent")
and (B) if required by Section 2(d)(viii), surrender to a common carrier for
delivery to the Company as soon as practicable following such date the original
Note being converted (or an indemnification undertaking with respect to this
Note in the case of its loss, theft or destruction).

     (ii) Company's Response. Upon receipt by the Company of a copy of a
          ------------------
Conversion Notice, the Company shall (I) as soon as practicable, but in no event
later than within two (2) Business Days, send, via facsimile, a confirmation of
receipt of such Conversion Notice to the Holder and the Transfer Agent, which
confirmation shall constitute an instruction to the Transfer Agent to process
such Conversion Notice in accordance with the terms herein and (II) either (A)
on or before the fourth (4th) Business Day following the date of receipt by the
Company of such Conversion Notice, issue and deliver to the address as specified
in the Conversion Notice, a certificate, registered in the name of the Holder or
its designee, for the number of shares of Common Stock to which the Holder shall
be entitled, or (B) on or before the second (2nd) Business Day following the
date of receipt by the Company of such Conversion Notice, provided the Transfer
Agent is participating in The Depository Trust Company ("DTC") Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder shall be entitled
to the Holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system (such second or fourth Business Day by which
the Company must deliver shares of Common Stock pursuant to this clause (II) is
referred to herein as the "Share Delivery Date"); provided that shares must be
delivered in accordance with clause (B) above, unless (a) the shares of Common
Stock to be issued pursuant to such conversion are required to have a
restrictive legend pursuant to Section 2(f) of the Securities Purchase
Agreement, (b) the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program or the DTC Fast Automated Securities Transfer
Program otherwise is not available for the transfer or (c) the Holder requests
that shares be delivered in accordance with clause (A) above. If this Note is
submitted for conversion, as may be required pursuant to Section 2(d)(viii), and
the Principal represented hereby is greater than the Conversion Amount being
converted, then the Company shall, as soon as practicable and in no event later
than five (5) Business Days after receipt of this Note (the "Note Delivery
Date") and at its own expense, issue and deliver to the Holder a new Note
representing the Principal not converted.

                                       6
<PAGE>

     (iii)  Dispute Resolution. In the case of a dispute as to the determination
            ------------------
of the Closing Sale Price or the arithmetic calculation of the Conversion Rate,
the Company sha ll instruct the Transfer Agent to issue to the Holder the number
of shares of Common Stock that is not disputed and shall transmit an explanation
of the disputed determinations or arithmetic calculations to the Holder via
facsimile within two (2) Business Days of receipt of the Holder's Conversion
Notice or other date of determination. If the Holder and the Company are unable
to agree upon the determination of the Closing Sale Price or arithmetic
calculation of the Conversion Rate within two (2) Business Days of such disputed
determination or arithmetic calculation being transmitted to the Holder, then
the Company shall within two (2) Business Days submit via facsimile (A) the
disputed determination of the Closing Sale Price to an independent, reputable
"major bracket" or "bulge bracket" investment bank selected by the Company and
approved by the holders of Notes representing at least two-thirds (2/3) of the
aggregate principal amounts of the Notes then outstanding or (B) the disputed
arithmetic calculation of the Conversion Rate to the Company's independent,
outside accountant. The Company shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than two (2)
Business Days from the time it receives the disputed determinations or
calculations. Such investment bank's or accountant's determination or
calculation, as the case may be, shall be binding upon all parties absent
manifest error.

     (iv)   Record Holder. The person or persons entitled to receive the shares
            -------------
of Common Stock issuable upon a conversion of this Note shall be treated for all
purposes as the record holder or holders of such shares of Common Stock upon
delivery of the applicable Conversion Notice.

                                       7
<PAGE>

                  (v)   Company's Failure to Timely Convert.
                        -----------------------------------

                  ______(A)   Cash Damages. If (I) within five (5) Business Days
                              ------------
after the Company's receipt of the facsimile copy of a Conversion Notice the
Company shall fail to issue and deliver a certificate to the Holder or credit
the Holder's balance account with DTC for the number of shares of Common Stock
to which the Holder is entitled upon the Holder's conversion of this Note or
(II) within five (5) Business Days of the Company's receipt of this Note the
Company shall fail to issue and deliver a new Note representing the Principal to
which the Holder is entitled pursuant to Section 2(d)(ii), then in addition to
all other available remedies which the Holder may pursue hereunder and under the
Securities Purchase Agreement (including indemnification pursuant to Section 8
thereof), the Company shall pay additional damages to the Holder for each day
after the Share Delivery Date such conversion is not timely effected and/or each
day after the Note Delivery Date such Note is not delivered in an amount equal
to 0.5% of the product of (I) the sum of the number of shares of Common Stock
not issued to the holder on or prior to the Share Delivery Date and to which
such holder is entitled as set forth in the applicable Conversion Notice and, in
the event the Company has failed to deliver a Note to the Holder on or prior to
the Note Delivery Date, the number of shares of Common Stock issuable upon
conversion of the Principal represented by the Note as of the Note Delivery Date
and (II) the Closing Sale Price of the Common Stock on the Share Delivery Date,
in the case of the failure to deliver Common Stock, or the Note Delivery Date,
in the case of failure to deliver a Note. If the Company fails to pay the
additional damages set forth in this Section 2(d)(v) within five (5) Business
Days of the date incurred, then the Holder shall have the right at any time, so
long as the Company continues to fail to make such payments, to require the
Company, upon written notice, to promptly issue, in lieu of such cash damages,
the number of shares of Common Stock equal to the quotient of (X) the aggregate
amount of the damages payments described herein divided by (Y) the Conversion
Price in effect on such Conversion Date as specified by the Holder in the
Conversion Notice; provided that in no event shall cash damages accrue pursuant
to this Section 2(d)(v)(A) with respect to any portion of the Principal of this
Note during the period, if any, in which such Principal is the subject of a bona
fide dispute which is subject to and being resolved pursuant to, and in
compliance with the time periods and other provisions of, the dispute resolution
provisions of Section 2(d)(iii).

                        (B)   Void Conversion Notice; Adjustment of Fixed
                              -------------------------------------------
Conversion Price. If for any reason the Holder has not received all of the
----------------
shares of Common Stock on or prior to the tenth (10th) Business Day after the
Share Delivery Date that it is entitled to receive hereunder with respect to a
conversion of this Note, then the Holder, upon written notice to the Company
prior to the date of delivery of such shares, with a copy to the Transfer Agent,
may void its Conversion Notice with respect to, and retain or have returned, as
the case may be, any portion of this Note that has not been converted pursuant
to such Conversion Notice; provided that the voiding of a Conversion Notice
shall not affect the Company's obligations to make any payments which have
accrued prior to the date of such notice pursuant to Section 2(d)(v)(A) or
otherwise. Thereafter, the Fixed Conversion Price of such portion of this Note
that is returned or retained by the Holder for failure to timely convert shall
be adjusted to the lesser of (I) the Fixed Conversion Price as in effect on the
date on which the Holder voided the Conversion Notice and (II) the lowest
Weighted Average Price of the Common Stock during the period beginning on the
Conversion Date and ending on the date such holder voided the Conversion Notice,
subject to further adjustment as provided in this Note; provided that in no
event shall an adjustment to the

                                       8
<PAGE>

Fixed Conversion Price be made pursuant to this Section 2(d)(v)(B) with respect
to any portion of the Principal of this Note that is the subject of a bona fide
dispute which is subject to and being resolved pursuant to, and in compliance
with the time periods and other provisions of, the dispute resolution provisions
of Section 2(d)(iii) until such dispute is resolved pursuant to Section
2(d)(iii).

                        (C)   Conversion Failure. If for any reason the Holder
                              ------------------
has not received all of the shares of Common Stock on or prior to the latest of
(I) the tenth (10th) Business Day after the Share Delivery Date with respect to
a conversion of this Note, (II) the date which is five (5) Business Days after
the date on which the Holder delivered an additional copy of the Conversion
Notice with respect to a conversion of this Note, which additional copy is
delivered at least three (3) Business Days after the original delivery of the
Conversion Notice, and (III) the date which is five (5) Business Days after the
resolution of any bona fide dispute which is subject to and being (or has been)
resolved pursuant to, and in compliance with the time periods and other
provisions of, the dispute resolution provisions of Section 2(d)(iii) (a
"Conversion Failure"), then the Holder, upon written notice to the Company in
accordance with Section 3(c), may require that the Company redeem, in accordance
with Section 3, some or all of the Principal, including the Principal previously
submitted for conversion and with respect to which the Company has not delivered
shares of Common Stock; provided however that, notwithstanding the Holder's
delivery of an additional copy of the Conversion Notice, the Conversion Date
shall be the date the Holder first transmits a Conversion Notice by facsimile to
the Company in accordance with section 2(d)(i).

                 (vi)   Pro Rata Conversion. Subject to Section 14, in the event
                        -------------------
the Company receives a Conversion Notice from more than one holder of the Notes
for the same Conversion Date and the Company can convert some, but not all, of
such Notes, then the Company shall convert from each holder of the Notes
electing to have Notes converted at such time a pro rata amount of such holder's
Note submitted for conversion based on the principal amount of the Note
submitted for conversion on such date by such holder relative to the principal
amount of the Notes submitted for conversion on such date.

                 (vii)  Mandatory Redemption or Conversion at Maturity. If this
                        ----------------------------------------------
Note remains outstanding on the Maturity Determination Date, then the Company
shall either (I) convert this Note, in whole or in part, at the Conversion Rate
as of the Maturity Date without the Holder being required to give a Conversion
Notice on the Maturity Date (a "Maturity Date Mandatory Conversion"), or (II)
redeem this Note, in whole or part, for an amount in cash (the "Maturity Date
Redemption Price") equal to the Principal being redeemed (a "Maturity Date
Mandatory Redemption"); provided that all of the Principal must be converted or
redeemed by the Company. On or prior to the date which is 35 Business Days prior
to the Maturity Determination Date, the Company shall deliver written notice to
the Holder and each of the holders of the Other Notes then outstanding (a
"Maturity Date Election Notice"), which Maturity Date Election Notice shall
state (x) the portion of the Principal that the Company has elected to convert
on the Maturity Date pursuant to a Maturity Date Mandatory Conversion, (y) the
portion of the Principal that the Company has elected to redeem on the Maturity
Determination Date pursuant to a Maturity Date Mandatory Redemption, and (z) the
principal amount of each of the Notes with respect to which the Company has
elected a Maturity Date Mandatory Conversion and/or has elected a Maturity Date
Mandatory Redemption, based, if

                                       9
<PAGE>

applicable, on each holder's Maturity Allocation Percentage (as defined below).
If the Company has elected more than one of the Maturity Date Mandatory
Conversion and Maturity Date Mandatory Redemption, then the Company shall redeem
the Notes and/or convert the Notes pro rata from the holders of the Notes then
outstanding (based on the principal amount of the Notes issued to such holder on
the Issuance Date relative to the total principal amount of the Notes issued to
all such holders on the Issuance Date (such relative amount being referred to
herein as each such holder's "Maturity Allocation Percentage")). In the event
that any initial holder of the Notes shall sell or otherwise transfer any of
such holder's Notes, then the transferee shall be allocated a pro rata portion
of such holder's Maturity Allocation Percentage. If the Company fails to deliver
to the Holder and each of the holders of the Other Notes then outstanding a
Maturity Date Election Notice at least 35 Business Days prior to the Maturity
Determination Date, then the Company shall be deemed to have elected a Maturity
Date Mandatory Conversion for all of the Principal and the principal amount of
all of the Other Notes then outstanding. If the Company elects a Maturity Date
Mandatory Redemption, then on the Maturity Determination Date, the Company shall
pay to the Holder, by wire transfer of immediately available funds, an amount
equal to the Maturity Date Redemption Price. If the Company elects a Maturity
Date Mandatory Redemption and fails to redeem any Principal selected for
redemption which is outstanding on the Maturity Determination Date, by payment
of the Maturity Date Redemption Price, then in addition to any remedy the Holder
may have under this Note, the Securities Purchase Agreement and the Registration
Rights Agreement, (X) the Maturity Date Redemption Price payable in respect of
such unredeemed Principal shall bear interest at the rate of 1.5% per month,
prorated for partial months, until paid in full, and (Y) the Holder shall have
the option to require the Company to convert any or all of this Note that the
Company elected to redeem under this Section 2(d)(vii) and for which the
Maturity Date Redemption Price (together with any interest thereon ) has not
been paid into shares of Common Stock equal to the number which results from
dividing the applicable Maturity Date Redemption Price (together with any
interest thereon) by the Conversion Price then in effect. If the Company has
elected or is deemed to have elected a Maturity Date Mandatory Conversion, then
the Principal with respect to which the Company has elected a Maturity Date
Mandatory Conversion which remains outstanding on the Maturity Date shall be
converted at the Conversion Rate on the Maturity Date as if the Holder had
delivered a Conversion Notice with respect to such Principal on the Maturity
Date. Promptly following the Maturity Date, the Holder shall surrender this
Note, duly endorsed for cancellation, to the Company or the Transfer Agent. If
the Company has elected, or is deemed to have elected pursuant to this Section
2(d)(vii), a Maturity Date Mandatory Conversion or has failed to pay the
Maturity Date Redemption Price in a timely manner as described above, then the
Maturity Date shall be extended for this Note for as long as (A) the conversion
of this Note would violate the provisions of Section 5 and/or Section 14, (B) a
Triggering Event shall have occurred and be continuing, or (C) an event shall
have occurred and be continuing which with the passage of time and the failure
to cure would result in a Triggering Event. Notwithstanding anything to the
contrary in this Section 2(d)(vii), the Holder may convert this Note, but
subject to Section 5 and Section 14, into shares of Common Stock at the Fixed
Conversion Price then in effect pursuant to Section 2(b) on or prior to the date
immediately preceding the Maturity Date. In the event the Holder delivers a
Conversion Notice to the Company after the Holder's receipt of a Maturity Date
Election Notice and the Company has elected in such Maturity Date Election
Notice more than one of the Maturity Date Mandatory Conversion and Maturity Date
Mandatory Redemption, then such Conversion Amount shall be deducted, first, from
the Principal, if any, designated by the Company as being subject to a Maturity
Date Mandatory Conversion in such

                                       10
<PAGE>

Maturity Date Election Notice, and then from the Principal, if any, designated
by the Company as being subject to a Maturity Date Mandatory Redemption in such
Maturity Date Election Notice.

               (viii) Book-Entry. Notwithstanding anything to the contrary set
                      ----------
forth herein, upon conversion of this Note in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Note to the
Company unless all of the Principal is being converted. The Holder and the
Company shall maintain records showing the principal amount converted and the
dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon each such conversion. In the event of any dispute or
discrepancy, such records of the Company establishing the Principal to which the
Holder is entitled shall be controlling and determinative in the absence of
error. Notwithstanding the foregoing, if this Note is converted as aforesaid,
the Holder may not transfer this Note unless the Holder first physically
surrenders this Note to the Company, whereupon the Company will forthwith issue
and deliver upon the order of the Holder a new Note of like tenor, registered as
the Holder may request, representing in the aggregate the remaining Principal
represented by this Note. The Holder and any assignee, by acceptance of this
Note, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of any portion of this Note, the Principal of this Note may
be less than the principal amount stated on the face hereof. Each Note shall
bear the following legend:

          ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS
          NOTE, INCLUDING SECTION 2(d)(viii) HEREOF.  THE PRINCIPAL AMOUNT
          REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE
          FACE HEREOF PURSUANT TO SECTION 2(d)(viii) OF THIS NOTE.

          (e) Taxes. The Company shall pay any and all documentary, stamp,
              -----
transfer and other similar taxes that may be payable with respect to the
issuance and delivery of Common Stock upon the conversion of this Note (but not
any such taxes that may result upon any transfer of this Note).

          (f) Adjustments to Conversion Price. The Conversion Price will be
              -------------------------------
subject to adjustment from time to time as provided in this Section 2(f).

                                       11
<PAGE>

               (i)    Adjustment of Fixed Conversion Price upon Issuance of
                      -----------------------------------------------------
Common Stock. If and whenever on or after the Issuance Date, the Company issues
------------
or sells, or in accordance with this Section 2(f) is deemed to have issued or
sold, any shares of Common Stock (including the issuance or sale of shares of
Common Stock owned or held by or for the account of the Company, but excluding
shares of Common Stock: (i) deemed to have been issued by the Company to its
employees, advisors, officers or directors (or those of any of its subsidiaries)
in connection with an Approved Stock Plan; (ii) issued upon conversion of the
Notes; (iii) issued or deemed issued either (A) to parties that are suppliers,
customers or strategic partners investing in connection with a commercial
relationship with the Company, the primary purpose of which is not to raise
capital, or (B) as consideration for mergers or consolidations or the
acquisition of businesses or their tangible or intangible assets (each an
"Acquisition Transaction"), excluding Acquisition Transactions in which cash or
cash equivalents represent a majority of the assets acquired; provided that such
issuances or deemed issuances pursuant to this clause (iii) shall not exceed
15,000,000 shares of Common Stock in the aggregate (subject to adjustments for
stock splits, stock dividends, stock combinations or other similar transactions)
prior to the date which is one (1) year after the Issuance Date; (iv) issued
upon conversion of shares of the Company's preferred stock or Series B common
stock, provided such shares of preferred stock or Series B common stock were
issued and outstanding on the Issuance Date; and (v) issued upon exercise of
options or warrants to purchase shares of Common Stock which are outstanding on
the date immediately preceding the Issuance Date, for a consideration per share
less than a price (the "Applicable Price") equal to the Fixed Conversion Price
in effect immediately prior to such time, then immediately after such issue or
sale, the Fixed Conversion Price then in effect shall be reduced to an amount
equal to the product of (x) the Fixed Conversion Price in effect immediately
prior to such issue or sale and (y) the quotient of (1) the sum of (I) the
product of the Applicable Price and the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale and (II) the consideration,
if any, received by the Company upon such issue or sale, divided by (2) the
product of (I) the Applicable Price multiplied by (II) the number of shares of
Common Stock Deemed Outstanding immediately after such issue or sale; provided,
however, that the Fixed Conversion Price shall not be reduced pursuant to this
Section 2(f)(i) at any time that the amount of such reduction would be an amount
less than 2% of the Fixed Conversion Price immediately preceding such reduction,
but any such amount shall be carried forward and a reduction in the Fixed
Conversion Price pursuant to this Section 2(f)(i) shall be made with respect to
such amount at the earlier of (a) such time as all such amounts which have been
carried forward pursuant to this proviso aggregate 2% or more of the Fixed
Conversion Price then in effect and (b) the next reduction of the Fixed
Conversion Price pursuant to this Section 2(f)(i). For purposes of determining
the adjusted Fixed Conversion Price under this Section 2(f)(i), the following
shall be applicable:

                                       12
<PAGE>

               (A)    Issuance of Options. If the Company in any manner grants
                      -------------------
or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon
conversion, exchange or exercise of any Convertible Securities issuable upon
exercise of such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 2(f)(i)(A), the "lowest price per share
for which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exchange or exercise of any Convertible Securities
issuable upon exercise of such Option" shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon granting or sale of the Option,
upon exercise of the Option and upon conversion, exchange or exercise of any
Convertible Security issuable upon exercise of such Option. No further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance
of such Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such Common Stock upon conversion,
exchange or exercise of such Convertible Securities.

               (B)    Issuance of Convertible Securities. If the Company in any
                      ----------------------------------
manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon such conversion, exchange
or exercise thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance of sale of such Convertible Securities for
such price per share. For the purposes of this Section 2(f)(i)(B), the "lowest
price per share for which one share of Common Stock is issuable upon such
conversion, exchange or exercise" shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the issuance or sale of the
Convertible Security and upon the conversion, exchange or exercise of such
Convertible Security. No further adjustment of the Fixed Conversion Price shall
be made upon the actual issuance of such Common Stock upon conversion, exchange
or exercise of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options for which
adjustment of the Fixed Conversion Price had been or are to be made pursuant to
other provisions of this Section 2(f)(i), no further adjustment of the Fixed
Conversion Price shall be made by reason of such issue or sale.

               (C)    Change in Option Price or Rate of Conversion. If the
                      --------------------------------------------
purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exchange or exercise
of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exchangeable or exercisable for Common Stock changes at
any time, the Fixed Conversion Price in effect at the time of such change shall
be adjusted to the Fixed Conversion Price which would have been in effect at
such time had such Options or Convertible Securities provided for such changed
purchase price, additional consideration or changed conversion rate, as the case
may be, at the time initially granted, issued or sold. For purposes of this
Section 2(f)(i)(C), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Note are changed in the manner
described in the immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise, conversion or
exchange thereof

                                       13
<PAGE>

shall be deemed to have been issued as of the date of such change. No adjustment
shall be made if such adjustment would result in an increase of the Fixed
Conversion Price then in effect.

               (D)    Calculation of Consideration Received. In case any Option
                      -------------------------------------
is issued in connection with the issue or sale of other securities of the
Company, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $0.01. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed
to be the gross amount received by the Company therefor, less expenses in excess
of 5% of the gross amount received. If any Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the arithmetic average of the Closing Sale Prices of such securities
during the 10 consecutive trading days ending on the date of receipt of such
securities. The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the holders of Notes representing
at least two-thirds (2/3) of the aggregate principal amounts of the Notes then
outstanding. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined based on the number of
shares of Common Stock issued or deemed issued in exchange for such
consideration other than cash or securities, valued at the average of the
Weighted Average Price of the Common Stock on each of the five (5) trading days
immediately prior to such issuance or deemed issuance.

               (E)    Record Date. If the Company takes a record of the holders
                      -----------
of Common Stock for the purpose of entitling them (I) to receive a dividend or
other distribution payable in Common Stock, Options or Convertible Securities or
(II) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

          (ii)  Adjustment of Fixed Conversion Price upon Subdivision or
                --------------------------------------------------------
Combination of Common Stock. If the Company at any time subdivides (by any stock
---------------------------
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Fixed
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Fixed Conversion Price in
effect immediately prior to such combination will be proportionately increased.

          (iii) Holder's Right of Alternative Conversion Price Following
                --------------------------------------------------------
Issuance of Convertible Securities. If the Company in any manner issues or sells
----------------------------------
any Options or Convertible Securities after the Issuance Date (other than
Convertible Securities with like terms to this Note issued to persons that may
be deemed to have preemptive rights as disclosed in the schedules to the
Securities Purchase Agreement) that are convertible into or exchangeable or

                                       14
<PAGE>

exercisable for Common Stock at a price which varies or may vary with the market
price of the Common Stock, including by way of one or more reset(s) to a fixed
price, or at a price which upon the passage of time or the occurrence of certain
events is automatically reduced or is adjusted to a price which is based on some
formulation of the then current market price of the Common Stock (each of the
formulations for such variable price being herein referred to as, the "Variable
Price;" provided, however, that a price which upon the passage of time or the
occurrence of certain events is automatically reduced or is adjusted to a price
which is based on some formulation of the then current market price of the
Common Stock shall not constitute a Variable Price until the passage of such
time or the occurrence of such event, as the case may be), the Company shall
provide written notice thereof via facsimile and overnight courier to the Holder
("Variable Notice") on the date of issuance of such Convertible Securities or
Options. From and after the date the Company issues any such Convertible
Securities or Options with a Variable Price, the Holder shall have the right,
but not the obligation, in its sole discretion to substitute the Variable Price
for the Conversion Price upon conversion of this Note by designating in the
Conversion Notice delivered upon conversion of this Note that solely for
purposes of such conversion the Holder is relying on the Variable Price rather
than the Conversion Price then in effect. The Holder's election to rely on a
Variable Price for a particular conversion of this Note shall not obligate the
Holder to rely on a Variable Price for any future conversions of this Note.
Notwithstanding the foregoing, the Holder shall have no right to use or
substitute such Variable Price unless (A) in the event the conversion, exchange
or exercise at such Variable Price is at the election of the Company, the
Company actually makes such election at any time prior to the date which is two
(2) years after the Issuance Date, (B) in the event the conversion, exchange or
exercise at such Variable Price is at the election of the holder of such Options
or Securities, such holder has the right (whether or not exercised) to convert,
exchange or exercise such Options or Securities prior to the date which is two
(2) years after the Issuance Date, or (C) the Variable Price includes provision
for one or more resets (whether automatic or dependent on certain trading prices
of the Common Stock or subject to some other variable) prior to the date which
is two (2) years after the Issuance Date.

          (iv) Other Events. If any event occurs of the type contemplated by the
               ------------
provisions of this Section 2(f) but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features other than
Options issued pursuant to an Approved Stock Plan), then the Company's Board of
Directors will make an appropriate adjustment in the Conversion Price so as to
protect the rights of the Holder; provided that no such adjustment will increase
the Conversion Price as otherwise determined pursuant to this Section 2(f).

          (v)  Notices.
               -------

               (A) Promptly upon any adjustment of the Conversion Price pursuant
to this Section 2(f), the Company will give written notice thereof to the
Holder, setting forth in reasonable detail, and certifying, the calculation of
such adjustment.

               (B) The Company will give written notice to the Holder at least
ten (10) Business Days prior to the date on which the Company closes its books
or takes a record (I) with respect to any dividend or distribution upon the
Common Stock, (II) with respect to any pro rata subscription offer to holders of
Common Stock or (III) for determining rights to vote

                                       15
<PAGE>

with respect to any Organic Change (as defined in Section 4(a)), dissolution or
liquidation, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holder.

               (C) The Company will also give written notice to the Holder at
least ten (10) Business Days prior to the date on which any Organic Change,
dissolution or liquidation will take place, provided that such information shall
be made known to the public prior to or in conjunction with such notice being
provided to the Holder.

          (3)  Redemption at Option of the Holder.
               ----------------------------------

               (a)  Redemption Option Upon Triggering Event. In addition to all
                    ---------------------------------------
other rights of the Holder contained herein, after a Triggering Event (as
defined below), the Holder shall have the right, at the Holder's option, to
require the Company to redeem all or a portion of the Principal at a price equal
to the greater of (i) the Conversion Amount and (ii) the product of (A) the
Conversion Rate in effect at such time as such holder delivers a Notice of
Redemption at Option of Buyer (as defined below) and (B) the Closing Sale Price
of the Common Stock on the trading day immediately preceding such Triggering
Event on which the Principal Market is open for trading or if no Closing Sale
Price is reported by the Principal Market on such trading day, then the most
recently reported Closing Sale Price (the "Redemption Price"); provided that
with respect to a Triggering Event described in Section 3(b)(i) below, if the
applicable Notice of Redemption at Option of Buyer (as defined below) is
delivered prior to the date which is 365 days after the Issuance Date, then the
Redemption Price shall be the Conversion Amount.

          (b) "Triggering Event". A "Triggering Event" shall be deemed to have
               ----------------
occurred at such time as any of the following events:

               (i)    the failure of the Registration Statement to be declared
effective by the SEC on or prior to the date that is 270 days after the Issuance
Date;

               (ii)   the suspension from trading or failure of the Common Stock
to be listed on the Nasdaq National Market or The New York Stock Exchange, Inc.
for a period of five (5) consecutive trading days or for more than an aggregate
of 10 trading days in any 365-day period;

               (iii)  the Company's notice or the Transfer Agent's notice, at
the Company's direction, to any holder of the Notes, including by way of public
announcement, at any time, of its intention not to comply with a request for
conversion of any Notes into shares of Common Stock that is tendered in
accordance with the provisions of the Notes, excluding, however, notices that
relate solely to a bona fide dispute which is subject to and being resolved
pursuant to, and in compliance with the time periods and other provisions of,
the dispute resolution provisions of Section 2(d)(iii) provided neither such
dispute nor such notice is publicly disclosed unless required by law;

               (iv)   a Conversion Failure (as defined in Section 2(d)(v)(C));

                                       16
<PAGE>

               (v)    upon the Company's receipt of a Conversion Notice or
deemed receipt of a Conversion Notice, whether in connection with an election or
deemed election of a Maturity Date Mandatory Conversion or a Holder Anniversary
Conversion (as defined in Section 6(a)) or a Company Anniversary Conversion (as
defined in Section 7(a)) or otherwise, the Company shall not be obligated to
issue shares of Common Stock upon such conversion due to the provisions of
Section 14; or

               (vi)   unless otherwise provided under Sections 3(b)(i) through
3(b)(v), above, the Company breaches any representation, warranty, covenant or
other term or condition of the Securities Purchase Agreement (except for a
breach of Sections 4(e), 9(j) or 9(k) of the Securities Purchase Agreement), the
Registration Rights Agreement (except for a breach of Sections 3(d), 3(q) or
11(i) of the Registration Rights Agreement), the Security Agreement or this
Note, except to the extent that such breach would not have a Material Adverse
Effect (as defined in Section 3(a) of the Securities Purchase Agreement) and
except, in the case of a breach of a covenant which is curable, only if such
breach continues for a period of at least 30 Business Days after the Company's
knowledge of such breach or notice by the Holder to the Company of such breach.

          (c)  Mechanics of Redemption at Option of Buyer. Within two (2)
               ------------------------------------------
Business Days after the occurrence of a Triggering Event, the Company shall
deliver written notice thereof via facsimile and overnight courier ("Notice of
Triggering Event") to the Holder and each holder of the Other Notes. At any time
after the earlier of the Holder's receipt of a Notice of Triggering Event and
the Holder becoming aware of a Triggering Event, the Holder may require the
Company to redeem up to all of the Principal (subject to the limitations set
forth in the last sentence of this Section 3(c)) by delivering written notice
thereof via facsimile and overnight courier ("Notice of Redemption at Option of
Buyer") to the Company, provided that the Holder shall not be entitled to send
such Notice of Redemption at Option of Buyer after the date which is five (5)
Business Days after the date on which such Triggering Event is cured and the
Holder receives written notice from the Company confirming such Triggering Event
has been cured. A Notice of Redemption at Option of Buyer shall indicate the
Principal that the Holder is electing to redeem. With respect to a Triggering
Event described in Section 3(b)(v), the Holder shall only be entitled to deliver
a Notice of Redemption at Option of Buyer with respect to the portion of the
Principal which cannot be converted, whether pursuant to the Conversion Notice
which has been delivered or deemed delivered or otherwise, due to the provisions
of Section 14.

          (d)  Payment of Redemption Price. Upon the Company's receipt of a
               ---------------------------
Notice(s) of Redemption at Option of Buyer from any holder of the Other Notes,
the Company shall promptly notify the Holder by facsimile of the Company's
receipt of such notice(s). Except with respect to a Triggering Event described
in Section 3(b)(i), the Company shall deliver the Redemption Price to the Holder
within five (5) Business Days after the Company's receipt of a Notice of
Redemption at Option of Buyer from the Holder. With respect to a Triggering
Event described in Section 3(b)(i) for which the Holder delivers a Notice of
Redemption at Option of Buyer prior to the date which is 365 days after the
Issuance Date, the Company shall deliver the Redemption Price to the Holder
within 30 Business Days after the Company's receipt of such Notice of Redemption
at Option of Buyer; provided, however, that if the Company chooses to deliver
the Redemption Price to the Holder prior to such 30th Business Day, the Company
shall give written notice to the Holder at least three (3) Business Days prior
to the date on which the

                                       17
<PAGE>

Company shall pay the Redemption Price (the periodbeginning on the date the
Holder delivers such Notice of Redemption at Option of Buyer and ending on the
earlier of (x) the 30/th/ Business Day after the Company's receipt of such
Notice of Redemption at Option of Buyer and (y) the day the Company pays the
Redemption Price for the Principal set forth in such Notice of Redemption at
Option of Buyer is referred to herein as the "Deferred Triggering Event Payment
Period"). With respect to a Triggering Event described in Section 3(b)(i) for
which the Holder delivers a Notice of Redemption at Option of Buyer on or after
the date which is 365 days after the Issuance Date, the Company shall deliver
the Redemption Price to the Holder within five (5) Business Days after the
Company's receipt of such Notice of Redemption at Option of Buyer. If the
Company is unable to redeem all of the Notes submitted for redemption, the
Company shall (i) redeem a pro rata amount from each holder of the Notes based
on the principal amount of the Note submitted for redemption by such holder
relative to the total principal amount of the Notes submitted for redemption by
all holders of the Notes and (ii) in addition to any remedy the Holder may have
under this Note and the Securities Purchase Agreement, pay to the Holder
interest at the rate of 1.5% per month (prorated for partial months) in respect
of the unredeemed Principal until paid in full. Notwithstanding anything to the
contrary in this Section 3, but subject to Section 5 and 13, during the Deferred
Triggering Event Payment Period the Holder may, until the Redemption Price is
paid in full, convert the Principal set forth in the Notice of Redemption at
Option of Buyer pursuant to Section 2(b).

          (e)  Void Redemption.  In the event that the Company does not pay the
               ---------------
Redemption Price within the time period set forth in Section 3(d), at any time
thereafter and until the Company pays such unpaid Redemption Price in full, the
Holder shall have the option (the "Void Optional Redemption Option") to, in lieu
of redemption, require the Company to promptly return to the Holder any or all
of the Notes representing the Principal that was submitted for redemption by the
Holder under this Section 3 and for which the Redemption Price (together with
any interest thereon) has not been paid, by sending written notice thereof to
the Company via facsimile (the "Void Optional Redemption Notice").  Upon the
Company's receipt of such Void Optional Redemption Notice, (i) the Notice of
Redemption at Option of Buyer shall be null and void with respect to the
Principal subject to the Void Optional Redemption Notice, (ii) the Company shall
promptly return this Note, and (iii) the Fixed Conversion Price of such returned
Principal shall be adjusted to the lesser of (A) the Fixed Conversion Price as
in effect on the date on which the Void Optional Redemption Notice is delivered
to the Company and (B) the lowest Weighted Average Price of the Common Stock
during the period beginning on the date on which the Notice of Redemption at
Option of Buyer is delivered to the Company and ending on the date on which the
Void Optional Redemption Notice is delivered to the Company.

          (f)  Disputes; Miscellaneous.  In the event of a dispute as to the
               -----------------------
determination of the arithmetic calculation of the Redemption Price, such
dispute shall be resolved pursuant to Section 2(d)(iii) above with the term
"Redemption Price" being substituted for the term "Conversion Rate".  The
Holder's delivery of a Void Optional Redemption Notice and exercise of its
rights following such notice shall not affect the Company's obligations to make
any payments other than the Redemption Price which have accrued prior to the
date of such notice.  In the event of a redemption pursuant to this Section 3 of
less than all of the Principal, the Company shall promptly cause to be issued
and delivered to the Holder a Note representing the remaining Principal which
has not been redeemed, if necessary.

                                       18
<PAGE>

     (4)  Other Rights of Holders.
          -----------------------

          (a)  Reorganization, Reclassification, Consolidation, Merger or Sale.
               ---------------------------------------------------------------
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets to another Person or
other transaction which, in each case, is effected in such a way that holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets (including cash) with respect to or in
exchange for Common Stock is referred to herein as "Organic Change." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person constituting an Organic Change or (ii) other
Organic Change following which the Company is not a surviving entity, the
Company will secure from the Person purchasing such assets or the successor
resulting from such Organic Change (in each case, the "Acquiring Entity") a
written agreement to deliver to the Holder in exchange for this Note, concurrent
with the consummation of such Organic Change, a security of the Acquiring Entity
evidenced by a written instrument of like form, tenor and terms as this Note and
which may have such modifications to the form, tenor and terms of this Note as
are reasonably satisfactory to the holders of at least two-thirds (2/3) of the
principal amount then outstanding under the Notes. Prior to the consummation of
any other Organic Change, the holder will thereafter have, and the Company shall
make appropriate provision to ensure that the Holder will thereafter have, the
right to acquire and receive in lieu of or in addition to (as the case may be)
the shares of Common Stock immediately theretofore acquirable and receivable
upon the conversion of this Note such shares of stock, securities or assets that
would have been issued or payable in such Organic Change with respect to or in
exchange for the number of shares of Common Stock which would have been
acquirable and receivable upon the conversion of this Note as of the date of
such Organic Change (without taking into account any limitations or restrictions
on the convertibility of this Note).

          (b)  Optional Redemption Upon Change of Control. In addition to the
               ------------------------------------------
rights of the Holder under Section 4(a), upon a Change of Control (as defined
below) of the Company the Holder shall have the right, at the Holder's option,
to require the Company to redeem all or a portion of the Principal at a price
equal to the Conversion Amount ("Change of Control Redemption Price"). No sooner
than 20 Business Days nor later than ten (10) Business Days prior to the
consummation of a Change of Control, but not prior to the public announcement of
such Change of Control, the Company shall deliver written notice thereof via
facsimile and overnight courier (a "Notice of Change of Control") to the Holder.
At any time during the period beginning after receipt of a Notice of Change of
Control in accordance with this Section 4(b) (or, in the event a Notice of
Change of Control is not delivered at least ten (10) Business Days prior to a
Change of Control, at any time on or after the date which is ten (10) Business
Days prior to a Change of Control) and ending on the date which is ten (10)
Business Days after receipt of a Notice of Change of Control, the Holder may
require the Company to redeem all or a portion of the Principal by delivering
written notice thereof via facsimile and overnight courier (a "Notice of
Redemption Upon Change of Control") to the Company, which Notice of Redemption
Upon Change of Control shall indicate (i) the Conversion Amount that the Holder
is submitting for redemption, and (ii) the Change of Control Redemption Price,
as calculated pursuant to this Section 4(b). Upon the Company's receipt of a
Notice(s) of Redemption Upon Change of Control from any holder of the Other
Notes, the Company shall promptly, but in no event later than two (2) Business
Days following such receipt, notify the Holder by facsimile of

                                       19
<PAGE>

the Company's receipt of such Notice(s) of Redemption Upon Change of Control.
The Company shall deliver the Change of Control Redemption Price simultaneously
with the consummation of the Change of Control. Payments provided for in this
Section 4(b) shall have priority to payments to stockholders in connection with
a Change of Control. For purposes of this Section 4(b), "Change of Control"
means (i) the consolidation, merger or other business combination of the Company
with or into another Person (other than (A) a consolidation, merger or other
business combination in which holders of the Company's voting power immediately
prior to the transaction continue after the transaction to hold, directly or
indirectly, the voting power of the surviving entity or entities necessary to
elect a majority of the members of the board of directors (or their equivalent
if other than a corporation) of such entity or entities, or (B) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company), (ii) the sale or transfer of all or substantially
all of the Company's assets, (iii) a purchase, tender or exchange offer made to
and accepted by the holders of more than 50% of the aggregate voting power of
the outstanding Common Stock; or (iv) any event which would constitute a
Fundamental Change under the Indenture dated December 1, 1999 relating to the
Company's 4% Convertible Subordinated Notes due 2006 or a Change in Control
under the Indenture dated December 28, 1998 relating to the Company's
Convertible Subordinated Debentures due 2018.

          (c)  Purchase Rights. If at any time the Company grants, issues or
               ---------------
sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
Common Stock other than pursuant to a poison pill or shareholder rights plan
(the "Purchase Rights"), then the Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which
such holder could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete conversion of this Note (without taking
into account any limitations or restrictions on the convertibility of this Note)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

     (5)  Limitation on Beneficial Ownership. The Company shall not effect and
          ----------------------------------
shall have no obligation to effect any conversion of this Note, and the Holder
shall not have the right to convert this Note, to the extent that after giving
effect to such conversion, the beneficial owner of such shares (together with
such Person's affiliates) would have acquired, through conversion of this Note
or otherwise, beneficial ownership of a number of shares of Common Stock during
the 60-day period ending on and including the Conversion Date of such conversion
(the "60 Day Period"), that, when added to the number of shares of Common Stock
beneficially owned by such Person (together with such Person's affiliates) at
the beginning of the 60 Day Period, exceeds 9.99% of the number of shares of
Common Stock outstanding immediately after giving effect to such conversion.
For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by a Person and its affiliates shall include the number of
shares of Common Stock issuable upon the conversion of this Note with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) conversion of
the remaining, nonconverted Principal beneficially owned by such Person or any
of its affiliates and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company

                                       20
<PAGE>

(including, without limitation, any warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by such Person or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 5, beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended. For purposes of this Section 5, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company's most recent
Form 10-Q, Form 10-K or other public filing with the SEC, as the case may be,
(2) a more recent public announcement by the Company, or (3) any other notice by
the Company or its transfer agent setting forth the number of shares of Common
Stock outstanding. Upon the written request of the Holder, the Company shall
promptly, but in no event later than two (2) Business Days following the receipt
of such notice, confirm in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to conversions of Notes by the
Holder and its affiliates since the date as of which such number of outstanding
shares of Common Stock was reported.

     (6) Anniversary Redemption at Holder's Election.  On each Holder
         -------------------------------------------
Anniversary Date, the Holder shall have the right, in its sole discretion, to
require that some or all of the Principal be redeemed (a "Holder Anniversary
Redemption") on such Holder Anniversary Date, for an amount in cash (the "Holder
Anniversary Redemption Price") equal to the Principal being redeemed, provided
that, subject to and in accordance with Sections 6(a), 6(c) and 6(d), the
Company may elect to pay some or all of such Holder Anniversary Redemption Price
in shares of Common Stock.  The Holder may exercise its right to Holder
Anniversary Redemption by providing the Company written notice ("Notice of
Holder Anniversary Redemption") at least 92 calendar days prior to the Holder
Anniversary Date, which notice shall state the portion of the Principal that the
Holder has elected to have redeemed pursuant to a Holder Anniversary Redemption.
The Holder's Notice of Holder Anniversary Redemption shall be irrevocable,
unless, after the Holder's delivery of such Notice of Holder Anniversary
Redemption, there is a Change of Control or a public announcement of a pending,
proposed or intended Change of Control and except to exercise the Holder's
rights pursuant to Section 3 and except as otherwise provided herein.
Notwithstanding the above, but subject to Section 5 and Section 14, the Holder
may convert this Note (including Principal amounts with respect to which the
Holder has elected a Holder Anniversary Redemption) into Common Stock pursuant
to Section 2 at any time prior to the redemption of such Principal amount in
accordance with the terms of this Section 6.  If following the Holder's delivery
of a Notice of Holder Anniversary Redemption there is a Change of Control or a
public announcement of a pending, proposed or intended Change of Control, then
at any time after such event or announcement the Holder may revoke such Notice
of Holder Anniversary Redemption with respect to any unconverted or unredeemed
Principal which is subject to such notice by delivering written notice to the
Company of such revocation.  Upon the Company's receipt of such a revocation
notice, the Holder Anniversary Redemption shall be null and void with respect to
any Principal which was the subject of the Notice of Holder Anniversary
Redemption and which has not been redeemed pursuant to Section 6(b) or converted
pursuant to Section 6(c) prior to the Company's receipt of such revocation
notice.

     (a) Company Response.  Upon receipt of a Notice of Holder Anniversary
         ----------------
Redemption, the Company shall have the right, in its sole discretion, to require
that some or all

                                       21
<PAGE>

of the Principal set forth in the Notice of Holder Anniversary Redemption be
converted, instead of redeemed, in accordance with Section 6(c) (a "Holder
Anniversary Conversion"); provided that the Conditions to Holder Anniversary
Conversion (as set forth in Section 6(d)) are satisfied. The Company may
exercise its right to require a Holder Anniversary Conversion by providing the
Holder written notice ("Notice of Holder Anniversary Conversion") at least 62
calendar days prior to the applicable Holder Anniversary Date, but not prior to
the Company's receipt of the applicable Notice of Holder Anniversary Redemption.
The Company's Notice of Holder Anniversary Conversion shall be irrevocable. If
the Company has received one or more notices for redemption from holder(s) of
the Other Notes(under provisions of such Other Notes similar to this Section 6)
with respect to the same date as the applicable Holder Anniversary Date, then
the Company shall redeem the Notes and convert the Notes which are the subject
of such notices, pursuant to the provisions of this Section 6 and the
corresponding provisions under the Other Notes, in the same ratio of principal
amount redeemed and principal amount converted. The Notice of Holder Anniversary
Conversion shall state (1) that the Conditions to Holder Anniversary Conversion
are satisfied as of the date of the Notice of Holder Anniversary Conversion, (2)
the portion of the Principal set forth in the Notice of Holder Anniversary
Redemption that the Company has elected to convert pursuant to a Holder
Anniversary Conversion (the "Holder Anniversary Conversion Amount") and (3) the
portion of the Principal set forth in the Notice of Holder Anniversary
Redemption which the Company does not elect to convert pursuant to a Holder
Anniversary Conversion (which amount when added to the Holder Anniversary
Conversion Amount must equal the Principal set forth in the applicable Notice of
Holder Anniversary Redemption) and which therefore shall be redeemed pursuant to
the Holder Anniversary Redemption (the "Holder Anniversary Redemption Amount").
If the Company does not deliver a Notice of Holder Anniversary Conversion to the
Holder in accordance with this Section 6(a), then "Holder Anniversary Redemption
Amount" shall mean all of the Principal set forth in the Notice of Holder
Anniversary Redemption. The Holder Anniversary Redemption Amount (whether set
forth in a Notice of Holder Anniversary Redemption or a Notice of Holder
Anniversary Conversion) shall be redeemed in accordance with Section 6(b).

     (b) Mechanics of Holder Anniversary Redemption.  If the Holder delivers a
         ------------------------------------------
Notice of Holder Anniversary Redemption in accordance with this Section 6, then
the Holder Anniversary Redemption Amount, if any, which remains outstanding on
the respective Holder Anniversary Date shall be redeemed by the Company on such
Holder Anniversary Date, and the Company shall pay to the Holder on the Holder
Anniversary Date, by wire transfer of immediately available funds, an amount
equal to the Holder Anniversary Redemption Price with respect to such Holder
Anniversary Redemption Amount.  If the Company fails to redeem any Holder
Anniversary Redemption Amount which is outstanding on the respective Holder
Anniversary Date by payment to the Holder of the applicable Holder Anniversary
Redemption Price, then in addition to any remedy the Holder may have under this
Note, the Securities Purchase Agreement and the Registration Rights Agreement,
the Holder Anniversary Redemption Price payable in respect of such unredeemed
Holder Anniversary Redemption Amount shall bear interest at the rate of 1.5% per
month, prorated for partial months, until paid in full.  Notwithstanding
anything to the contrary in this Section 6, but subject to Section 5 and Section
13, until the Holder Anniversary Redemption Price (together with any interest
thereon) is paid in full, the Holder Anniversary Redemption Amount (together
with any interest thereon) may be converted by the Holder into shares of Common
Stock pursuant to Section 2(b).  In the

                                       22
<PAGE>

event the Holder delivers a Conversion Notice to the Company after the Holder's
delivery to the Company of a Notice of Holder Anniversary Redemption, such
Conversion Amount shall be deducted, first, from the Principal set forth in the
Notice of Holder Anniversary Redemption, and, second, from the Principal not set
forth in the Notice of Holder Anniversary Redemption, unless the Holder
specifies otherwise in its Conversion Notice. In the event (i) the Holder
delivers a Conversion Notice to the Company after the Holder's receipt of a
Notice of Holder Anniversary Conversion, and (ii) the Conversion Amount is to be
deducted from the Principal set forth in the Notice of Holder Anniversary
Redemption in accordance with the preceding sentence, such Conversion Amount
shall be deducted first from the Holder Anniversary Conversion Amount (and
within such Holder Anniversary Conversion Amount, first from the Holder
Anniversary Conversion Installment (as defined below) relating to the next
Holder Anniversary Conversion Date and then sequentially from the immediately
succeeding Holder Anniversary Conversion Installments) if any, and then second
from the Holder Anniversary Redemption Amount.

     (c) Mechanics of Holder Anniversary Conversion.  If the Company delivers a
         ------------------------------------------
Notice of Holder Anniversary Conversion with respect to a Holder Anniversary
Date in accordance with Section 6(a), then the applicable Holder Anniversary
Conversion Amount, if any, which remains outstanding shall be converted in eight
(8) equal installments each equal to 12.5% of the applicable Holder Anniversary
Conversion Amount (each, a "Holder Anniversary Conversion Installment") on each
Holder Anniversary Conversion Date at the Conversion Rate, as if the Holder had
delivered a Conversion Notice pursuant to Section 2(b) with respect to such
Holder Anniversary Conversion Installment on such Holder Anniversary Conversion
Date but without the Holder being required to actually deliver such Conversion
Notice; provided that the Conditions to Holder Anniversary Conversion are
satisfied (or waived in writing by the Holder) on such Holder Anniversary
Conversion Date.  If the Conditions to Holder Anniversary Conversion are not
satisfied (or waived in writing by the Holder) on such Holder Anniversary
Conversion Date, then at the option of the Holder either (i) the Company shall
redeem all or any part designated by the Holder of the unconverted Holder
Anniversary Conversion Installments on such Holder Anniversary Conversion Date
and the Company shall pay to the Holder on such Holder Anniversary Conversion
Date, by wire transfer of immediately available funds, an amount in cash equal
to the aggregate principal amount of the unconverted Holder Anniversary
Conversion Installments designated by the Holder or (ii) the Company Anniversary
Conversion shall be null and void with respect to all or any part designated by
the Holder of the unconverted Holder Anniversary Conversion Installments and the
Holder shall be entitled to all the rights of a holder of the Notes with respect
to such amount of the Holder Anniversary Conversion Installments designated by
the Holder.  If the Company fails to redeem any such unconverted Holder
Anniversary Conversion Installments (which the Holder has elected to have
redeemed pursuant to the immediately preceding sentence) on such Holder
Anniversary Conversion Date by payment of the applicable amount, then the Holder
shall have the rights set forth in Section 6(b) as if the Company failed to pay
the applicable Holder Anniversary Redemption Price.

     (d) Conditions to Holder Anniversary Conversion.  "Conditions to Holder
         -------------------------------------------
Anniversary Conversion" means the following conditions:  (i) on each day during
the period beginning on the date of the Holder's delivery of a Notice of Holder
Anniversary Redemption but not sooner than 100 days prior to the applicable
Holder Anniversary Date and ending on and including the 41/st/ trading day prior
to the applicable Holder Anniversary Date, but excluding any

                                       23
<PAGE>

day which is not during the Registration Period (as defined in the Registration
Rights Agreement) and excluding any day during an Allowable Grace Period (as
defined in the Registration Rights Agreement), the Registration Statement (as
defined in the Registration Rights Agreement) shall be effective and available
for the sale of no less than the sum of (A) 100% of the number of Conversion
Shares (as defined in the Securities Purchase Agreement) then issuable upon the
conversion of the principal amount then outstanding under the Notes (without
regard to any limitations on conversion herein or elsewhere), including the
Conversion Shares to be issued pursuant to this Holder Anniversary Conversion,
and (B) the number of Conversion Shares outstanding and held by the holders of
the Notes; (ii) on each day during the period beginning on and including the
40th trading day prior to the applicable Holder Anniversary Date and ending on
and including the applicable Holder Anniversary Conversion Date, but excluding
any day which is not during the Registration Period and excluding up to 10 days
during an Allowable Grace Period, the Registration Statement shall be effective
and available for the sale of no less than the sum of (A) 100% of the number of
Conversion Shares then issuable upon the conversion of the principal amount then
outstanding under the Notes (without regard to any limitations on conversion
herein or elsewhere), including the Conversion Shares to be issued pursuant to
this Holder Anniversary Conversion, and (B) the number of Conversion Shares
outstanding and held by the holders of the Notes; (iii) on each day during the
period beginning on the date of the date of the Holder's delivery of a Notice of
Holder Anniversary Redemption and ending on and including the applicable Holder
Anniversary Conversion Date, the Common Stock is designated for quotation on The
Nasdaq National Market or listed on The New York Stock Exchange, Inc. or the
American Stock Exchange and delisting or suspension by such exchanges shall not
have been threatened either (A) by written notice of commencement of proceedings
by such exchanges or (B) by the Company having fallen below the minimum listing
maintenance requirements of such exchanges unless the failure to meet such
criteria would be cured by the issuance of the Conversion Shares pursuant to
such Holder Anniversary Conversion; (iv) during the period beginning on the
Holder's delivery of a Notice of Holder Anniversary Redemption and ending on and
including the applicable Holder Anniversary Conversion Date, there shall not
have occurred a Triggering Event; (v) during the period beginning on the
Issuance Date and ending on and including the 41st trading day prior to the
applicable Holder Anniversary Date, the Company shall have delivered all
Conversion Shares upon conversion of the Notes to the holders of the Notes
within five (5) Business Days (excluding the period of any bona fide dispute
which is subject to and being (or has been) resolved pursuant to, and in
compliance with the time periods and other provisions of, the dispute resolution
provisions of Section 2(d)(iii)) after the Company's receipt of a Conversion
Notice; provided, however, that for purposes of this Section 6 only, the Company
shall be deemed to have satisfied the conditions set forth in this clause (v) if
the Company has failed to deliver Conversion Shares within five (5) Business
Days (excluding the period of any bona fide dispute which is being or has been)
resolved pursuant to, and in compliance with the time periods and other
provisions of the dispute resolution provisions of Section 2(d)(iii)) after the
Company's receipt of a Conversion Notice on not more than two (2) occasions in
the prior two (2) years, (vi) during the period beginning on and including the
40th trading day prior to the applicable Holder Anniversary Date and ending on
and including the applicable Holder Anniversary Conversion Date, the Company
shall have delivered all Conversion Shares upon conversion of the Notes to the
holders of the Notes on a timely basis as set forth in Section 2(d)(ii) of the
Notes; and (vii) the issuance of shares of Common Stock to the Holder on the
applicable Holder Anniversary

                                       24
<PAGE>

Conversion Date pursuant to such Holder Anniversary Conversion is not limited by
the provisions of Section 5, provided that this condition will only be deemed
not to have been satisfied with respect to the portion of the Holder Anniversary
Conversion Amount which can not be converted on the applicable Company
Anniversary Conversion Date (the "Excess Amount") as a result of Section 5,
provided, further that in lieu of converting such Excess Amount the Company
shall redeem such amount on the applicable Holder Anniversary Conversion Date
for an amount in cash equal to the Principal represented by such Excess Amount.

     (7) Anniversary Redemption at the Company's Election.  (a) On each Company
         ------------------------------------------------
Anniversary Date, the Company shall have the right, in its sole discretion, to
require that some or all of the Principal, with respect to which the Company has
not received a Notice of Holder Anniversary Redemption, be redeemed ("Company
Anniversary Redemption"), for an amount in cash equal to the Principal being
redeemed (the "Company Anniversary Redemption Price"), provided that, subject to
and in accordance with Sections 7(a), 7(c) and 7(d), the Company may elect to
pay some or all of such Company Anniversary Redemption Price in shares of Common
Stock, in accordance with Section 7(c) (a "Company Anniversary Conversion");
provided that the Conditions to Company Anniversary Redemption (as set forth in
Section 7(d)) are satisfied or waived in writing by the Holder.  The Company may
exercise its right to Company Anniversary Redemption only by providing the
Holder and each of the holders of the Other Notes written notice ("Notice of
Company Anniversary Redemption") at least 62 calendar days but not more than 91
calendar days prior to the Company Anniversary Date with respect to which the
Company has elected a Company Anniversary Redemption.  The Company's Notice of
Company Anniversary Redemption shall be irrevocable.  If the Company elects a
Company Anniversary Redemption pursuant to this Section 7, then it must
simultaneously take the similar action with respect to the Other Notes.  If the
Company elects a Company Anniversary Redemption (or similar action under the
Other Notes) with respect to less than all of the principal amounts of the Notes
then outstanding (ignoring for such purposes all principal amounts which are the
subject of a Holder Anniversary Redemption or the corresponding provisions under
the Other Notes), the Company shall require redemption of a pro rata principal
amount of the Notes from each holder of the Notes then outstanding (ignoring for
such purposes all principal amounts which are the subject of a Holder
Anniversary Redemption or the corresponding provisions under the Other Notes)
based on each holder's Anniversary Allocation Percentage (as defined below).  If
the Company elects a Company Anniversary Conversion (or similar action under the
Other Notes) with respect to less than all of the principal amounts of the Notes
for which it has elected a Company Anniversary Redemption (or similar action
under the Other Notes), then the Company shall redeem the Notes and convert the
Notes, pursuant to the provisions of this Section 7 and the corresponding
provisions under the Other Notes, in the same ratio of principal amount redeemed
and principal amount converted.  The Notice of Company Anniversary Redemption
shall state (i) that the Conditions to Company Anniversary Redemption are
satisfied as of the date of the Notice of Company Anniversary Redemption, (ii)
the portion of the Principal set forth in the Notice of Company Anniversary
Redemption that the Company has elected to convert pursuant to a Company
Anniversary Conversion in accordance with Section 7(c) (the "Company Anniversary
Conversion Amount") and (iii) the portion of the Principal set forth in the
Notice of Company Anniversary Redemption that the Company has elected to redeem
pursuant to Section 7(b) (the "Company Anniversary Redemption Amount").
Notwithstanding the above, but subject to Section 5 and Section 14, the Holder
may convert this Note (including Principal amounts set forth in the

                                       25
<PAGE>

Company's Notice of Company Anniversary Redemption) into Common Stock pursuant
to Section 2 at any time prior to the redemption of such Principal amount in
accordance with the terms of this Section 7. "Anniversary Allocation Percentage"
means, with respect to each holder of Notes, the relative percentage based on
the principal amount of the Notes issued to such holder on the Issuance Date
relative to the principal amount of the Notes issued to all such holders on the
Issuance Date.

     (b) Mechanics of Company Anniversary Redemption.  If the Company delivers a
         -------------------------------------------
Notice of Company Anniversary Redemption with respect to a Company Anniversary
Date in accordance with Section 7(a) and pursuant to such notice it has elected
to redeem some or all of the Principal set forth in such Notice of Company
Anniversary Redemption, then the Company Anniversary Redemption Amount, if any,
which remains outstanding on the respective Company Anniversary Date shall be
redeemed by the Company on such Company Anniversary Date, and the Company shall
pay to the Holder on such Company Anniversary Date, by wire transfer of
immediately available funds, an amount equal to the Company Anniversary
Redemption Price with respect to such Company Anniversary Redemption Amount;
provided that the Conditions to Company Anniversary Redemption are satisfied (or
waived in writing by the Holder) on such Company Anniversary Date.  If the
Company fails to redeem any Company Anniversary Redemption Amount which is
outstanding on the respective Company Anniversary Date by payment to the Holder
of the applicable Company Anniversary Redemption Price, then in addition to any
remedy the Holder may have under this Note, the Securities Purchase Agreement
and the Registration Rights Agreement, the Company Anniversary Redemption Price
payable in respect of such unredeemed Company Anniversary Redemption Amount
shall bear interest at the rate of 1.5% per month, prorated for partial months,
until paid in full.  Notwithstanding anything to the contrary in this Section 7,
but subject to Section 5 and Section 14, until the Company Anniversary
Redemption Price (together with any interest thereon) is paid in full, the
Company Anniversary Redemption Amount (together with any interest thereon) may
be converted by the Holder into shares of Common Stock pursuant to Section 2(b).
In the event the Holder delivers a Conversion Notice to the Company after the
Company's delivery to the Holder of a Notice of Company Anniversary Redemption,
such Conversion Amount shall be deducted (1) first, from the Holder Anniversary
Conversion Amount, if any, (and within such Holder Anniversary Conversion
Amount, first from the Holder Anniversary Conversion Installment relating to the
next Holder Anniversary Conversion Date and then sequentially from the
immediately succeeding Holder Anniversary Conversion Installments, (2) second,
from the Company Anniversary Conversion Amount (and within such Company
Anniversary Conversion Amount, first from the Company Anniversary Conversion
Installment (as defined below) relating to the next Company Anniversary
Conversion Date and then sequentially from the immediately succeeding Company
Anniversary Conversion Installments, (3) third, from the Holder Anniversary
Redemption Amount, if any, (4) fourth, from the Company Anniversary Redemption
Amount, if any, and (5) fifth, from the Principal not set forth in the
applicable Notice of Holder Anniversary Redemption or Notice of Company
Anniversary Redemption.  If the Company fails to timely pay any Holder
Anniversary Redemption Price in accordance with this Section 7, then the Company
shall not be permitted to submit another Notice of Company Anniversary
Redemption without the prior written consent of the holders of Notes
representing at least two-thirds (2/3) of the aggregate principal amounts of the
Notes then outstanding.

                                       26
<PAGE>

     (c) Mechanics of Company Anniversary Conversion. If the Company delivers a
         -------------------------------------------
Notice of Company Anniversary Redemption with respect to a Company Anniversary
Date in accordance with Section 7(a) and pursuant to such notice it has elected
to convert some or all of the Principal set forth in such Notice of Company
Anniversary Redemption, then the applicable Company Anniversary Conversion
Amount, if any, which remains outstanding shall be converted in eight (8) equal
installments each equal to 12.5% of the applicable Company Anniversary
Conversion Amount (each, a "Company Anniversary Conversion Installment") on each
Company Anniversary Conversion Date at the Conversion Rate, as if the Holder had
delivered a Conversion Notice pursuant to Section 2(b) with respect to such
Company Anniversary Conversion Installment on such Company Anniversary
Conversion Date but without the Holder being required to actually deliver such
Conversion Notice; provided that the Conditions to Company Anniversary
Redemption are satisfied (or waived in writing by the Holder) on such Company
Anniversary Conversion Date.  If the Conditions to Company Anniversary
Redemption are not satisfied (or waived in writing by the Holder) on such
Company Anniversary Conversion Date, then at the option of the Holder either (i)
the Company shall redeem all or any part designated by the Holder of the
unconverted Company Anniversary Conversion Installments on such Company
Anniversary Conversion Date and the Company shall pay to the Holder on such
Company Anniversary Conversion Date, by wire transfer of immediately available
funds, an amount in cash equal to the aggregate principal amount of the
unconverted Company Anniversary Conversion Installments designated by the Holder
or (ii) the Company Anniversary Redemption shall be null and void with respect
to all or any part designated by the Holder of the unconverted Company
Anniversary Conversion Installments and the Holder shall be entitled to all the
rights of a holder of the Notes with respect to such amount of the Company
Anniversary Conversion Installments designated by the Holder.  If the Company
fails to redeem any such unconverted Company Anniversary Conversion Installments
(which the Holder has elected to have redeemed pursuant to the immediately
preceding sentence) on such Company Anniversary Conversion Date by payment of
the applicable amount, then the Holder shall have the rights set forth in
Section 6(b) as if the Company failed to pay the applicable Holder Anniversary
Redemption Price.

     (d) Conditions to Company Anniversary Redemption.  "Conditions to Company
         --------------------------------------------
Anniversary Redemption" means the following conditions:  (i) on each day during
the period beginning on the date of the Company's delivery of a Notice of
Company Anniversary Redemption and ending on and including the 41st trading day
prior to the applicable Company Anniversary Date, but excluding any day which is
not during the Registration Period (as defined in the Registration Rights
Agreement) and excluding days during an Allowable Grace Period (as defined in
the Registration Rights Agreement), the Registration Statement (as defined in
the Registration Rights Agreement) shall be effective and available for the sale
of no less than the sum of (A) 100% of the number of Conversion Shares (as
defined in the Securities Purchase Agreement) then issuable upon the conversion
of the principal amount then outstanding under the Notes (without regard to any
limitations on conversion herein or elsewhere), including the Conversion Shares
to be issued pursuant to a Company Anniversary Conversion, and (B) the number of
Conversion Shares outstanding and held by the holders of the Notes; (ii) on each
day during the period beginning on and including the 40th trading day prior to
the applicable Company Anniversary Date and ending on and including the
applicable Company Anniversary Conversion Date, with respect to a Company
Anniversary Conversion, or the applicable Company Anniversary Date, with respect
to a redemption pursuant to Section 7(b), but excluding

                                       27
<PAGE>

any day which is not during the Registration Period and excluding up to 10 days
during an Allowable Grace Period, the Registration Statement shall be effective
and available for the sale of no less than the sum of (A) 100% of the number of
Conversion Shares then issuable upon the conversion of the principal amount then
outstanding under the Notes (without regard to any limitations on conversions
herein or elsewhere), including the Conversion Shares to be issued pursuant to a
Company Anniversary Conversion, and (B) the number of Conversion Shares
outstanding and held by the holders of the Notes; (iii) on each day during the
period beginning on the date of the Company's delivery of a Notice of Company
Anniversary Redemption and ending on and including the applicable Company
Anniversary Conversion Date, with respect to a Company Anniversary Conversion,
or the applicable Company Anniversary Date, with respect to a redemption
pursuant to Section 7(b), as the case may be, the Common Stock is designated for
quotation on The Nasdaq National Market or listed on The New York Stock
Exchange, Inc. or the American Stock Exchange and delisting or suspension by
such exchanges shall not have been threatened either (A) by written notice of
commencement of proceeding by such exchanges or (B) by the Company's having
fallen below the minimum listing maintenance requirements of such exchanges
unless the failure to meet such criteria would be cured by the issuance of the
Conversion Shares pursuant to such Company Anniversary Conversion; (iv) on each
day during the period beginning on the date of the Company's delivery of the
Notice of Company Anniversary Redemption and ending on and including the
applicable Company Anniversary Conversion Date, with respect to a Company
Anniversary Conversion, or the applicable Company Anniversary Date, with respect
to a redemption pursuant to Section 7(b), as the case may be, there shall not
have occurred either (A) the consummation of a Change of Control or a public
announcement of a pending, proposed or intended Change of Control which has not
been abandoned or terminated or (B) a Triggering Event; (v) during the period
beginning on the Issuance Date and ending on and including the 41st trading day
prior to the applicable Company Anniversary Conversion Date, with respect to a
Company Anniversary Conversion, or the applicable Company Anniversary Date, with
respect to a redemption pursuant to Section 7(b), as the case may be, the
Company shall have delivered all Conversion Shares upon conversion of the Notes
to the holders of the Notes within five (5) Business Days (excluding the period
of any bona fide dispute which is subject to and being (or has been) resolved
pursuant to, and in compliance with the time periods and other provisions of,
the dispute resolution provisions of Section 2(d)(iii)) after the Company's
receipt of a Conversion Notice; provided, however, that for purposes of this
Section 7 only, the Company shall be deemed to have satisfied the conditions set
forth in this clause (v) if on not more than two (2) occasions in the two (2)
years prior to the Company's delivery of the Notice of Company Anniversary
Redemption the Company has failed to deliver Conversion Shares within five (5)
Business Days (excluding the period of any bona fide dispute which is subject to
and being (or has been) resolved pursuant to, and in compliance with the time
periods and other provisions of, the dispute resolution provisions of Section
2(d)(iii)) after the Company's receipt of a Conversion Notice; (vi) during the
period beginning on and including the 40th trading day prior to the applicable
Company Anniversary Date and ending on and including the applicable Company
Anniversary Date, with respect to a Company Anniversary Conversion, or the
applicable Company Anniversary Date, with respect to a redemption pursuant to
Section 7(b), as the case may be, the Company shall have delivered all
Conversion Shares upon conversion of the Notes to the holders of the Notes on a
timely basis as set forth in Section 2(d)(ii) of the Notes; (vii) with respect
to a Company Anniversary Conversion, the issuance of shares of Common Stock to
the Holder on the applicable Company Anniversary Conversion Date pursuant to
such Company Anniversary Conversion is not limited

                                       28
<PAGE>

by the provisions of Section 5, provided that this condition will only be deemed
not to have been satisfied with respect to the portion of the Company
Anniversary Conversion Amount which can not be converted on the applicable
Company Anniversary Conversion Date (the "Excess Amount") as a result of Section
5, provided, further that in lieu of converting such Excess Amount the Company
shall redeem such amount on the applicable Company Anniversary Conversion Date
for an amount in cash equal to the Principal represented by such Excess Amount
or, if so elected by the Company, the Excess Amount shall not be subject to
either redemption or conversion on such Company Anniversary Date but instead
shall remain outstanding without change to its terms; (viii) the Principal set
forth in the Notice of Company Anniversary Redemption does not exceed the
principal amount remaining after deducting the Principal, if any, set forth in a
Notice of Holder Anniversary Redemption pursuant to Section 6 with respect to
the same date as the applicable Company Anniversary Date; and (ix) the Company
has redeemed and/or converted the Other Notes in compliance with the provisions
in the Other Notes which correspond to this Section 7 with respect to the
applicable Company Anniversary Redemption, subject only to any inability to
convert and any violations in relative ratios of conversions and/or redemptions
resulting solely from the limitations on conversions set forth in Section 5 or
the similar provision in any other Note.

     (8) Certain Trading Restrictions.  In the event of a Holder Anniversary
         ----------------------------
Conversion pursuant to Section 6(c) or a Company Anniversary Conversion pursuant
to Section 7(c), the Holder agrees that, during the Restricted Period (as
defined below), neither such Holder nor any of its affiliates shall, directly or
indirectly, engage in any transaction constituting a "short sale" (as defined in
Rule 3b-3 under the Securities Exchange Act of 1934, as amended) or establish an
open "put equivalent position" (within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended), or publicly announce the Holder's
or any of its affiliates' intention to do any of the foregoing (each a "Short
Sale"); provided, however, that during such Restricted Period the Holder and its
affiliates are entitled to engage in transactions which constitute Short Sales
to the extent that following such transaction the aggregate short position
(including aggregate open "put equivalent positions") of the Holder and its
affiliates does not exceed the sum of (A) the number of shares of Common Stock
issuable upon conversion (which shall be determined as if a Conversion Notice
was delivered) of all the Conversion Amounts (other than 25% of the Holder
Anniversary Conversion Amounts and 25% of the Company Anniversary Conversion
Amounts) represented by the Notes held by the Holder and its affiliates (without
regard to any limitations on conversions), plus (B) during the period beginning
on and including the tenth (10th) trading day immediately preceding a Holder
Anniversary Conversion Date or a Company Anniversary Conversion Date, as
applicable, and ending on and including the date which is the later of (I) such
Holder Anniversary Conversion Date or such Company Anniversary Conversion Date,
as the case may be, and (II) the date on which the Company has delivered all
Conversion Shares relating to the Holder Anniversary Conversion Installment or
Company Anniversary Conversion Installment, as the case may be, being converted
on such Holder Anniversary Conversion Date or Company Anniversary Conversion
Date, respectively, that number of shares of Common Stock equal to the quotient
of (i) 200% of the Conversion Amount represented by the applicable Holder
Anniversary Conversion Installment or applicable Company Anniversary Conversion
Installment, as the case may be, for the Holder and similar amounts with respect
to its affiliates under similar provisions in the Notes held by such affiliates,
divided by (ii) 95% of the lowest Weighted Average Price during the period
beginning on and including the tenth (10/th/) trading day immediately preceding
a Holder Anniversary Conversion

                                       29
<PAGE>

Date or a Company Anniversary Conversion Date, as applicable, and ending on and
including such Holder Anniversary Conversion Date or such Company Anniversary
Conversion Date, as the case may be. Notwithstanding the foregoing, the
restriction on Short Sales set forth in the first sentence of this Section 8
shall not apply (a) on and after the first date during the applicable Restricted
Period on which there shall have occurred a Triggering Event or an event that
with the passage of time and without being cured would constitute a Triggering
Event; (b) on or after the first date during the applicable Restricted Period on
which a Change of Control shall have been consummated or there shall have been a
public announcement of a pending, proposed or intended Change of Control; (c)
with respect to a Short Sale so long as such Buyer delivers a Conversion Notice
within two (2) Business Days of such Short Sale entitling the Holder to receive
a number of shares of Common Stock at least equal to the number of shares of
Common Stock sold in such Short Sale; or (d) on and after the first date on
which the Company shall have breached, and failed to cure such breach within any
applicable cure period, this Note, the Securities Purchase Agreement, the
Registration Rights Agreement or the Security Agreement. For purposes of this
Section 8, "Restricted Period" means the period beginning on and including the
40th trading day prior to a Holder Anniversary Date or a Company Anniversary
Date, as the case may be, with respect to which the Company has elected a Holder
Anniversary Conversion pursuant to Section 6(c) or a Company Anniversary
Conversion pursuant to Section 7(c), and ending on but excluding the earlier of
(x) the first Holder Anniversary Conversion Date or Company Anniversary
Conversion Date, as the case may be, on which the Conditions to Holder
Anniversary Conversion or Conditions to Company Anniversary Redemption,
respectively, are not satisfied (or waived in writing by the Holder), and (y)
the Holder Anniversary Conversion Date or the Company Anniversary Conversion
Date, as the case may be, on which the last portion of the Holder Anniversary
Conversion Installment or Company Anniversary Conversion Installment, as
applicable, was converted or was required to be converted in accordance with
Section 6(c) or Section 7(c), respectively.

     (9) Reservation of Shares.  The Company shall, so long as any of the Notes
         ---------------------
are outstanding, take all action necessary to reserve and keep available out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversions of the Notes, such number of shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all of the principal
amount then outstanding under the Notes; provided that the number of shares of
Common Stock so reserved shall at no time be less than 100% of the number of
shares of Common Stock for which the Notes are at any time convertible (without
regard to any limitations on conversions).  The initial number of shares of
Common Stock reserved for conversions of the Notes and each increase in the
number of shares so reserved shall be allocated pro rata among the holders of
the Notes based on the principal amount of the Notes held by each holder at the
time of issuance of the Notes or increase in the number of reserved shares, as
the case may be.  In the event a holder shall sell or otherwise transfer any of
such holder's Notes, each transferee shall be allocated a pro rata portion of
the number of reserved shares of Common Stock reserved for such transferor.  Any
shares of Common Stock reserved and allocated to any Person which ceases to hold
any Notes shall be allocated to the remaining holders of the Notes, pro rata
based on the principal amount of the Notes then held by such holders.

                                       30
<PAGE>

     (10) Voting Rights.  Holders of the Notes shall have no voting rights,
          -------------
except as required by law, including but not limited to the Delaware General
Corporation Law, and as expressly provided in this Note.

     (11)  Defaults and Remedies.
           ---------------------

          (a) Events of Default. An "Event of Default" is: (i) default in
               -----------------
payment of any principal amount of this Note, the Redemption Price or the
Maturity Date Redemption Price when and as due; (ii) failure by the Company for
thirty (30) days after notice to it to comply with any other material provision
of this Note; (iii) any default in payment of at least $10,000,000 under or
acceleration prior to maturity of any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed of at least $10,000,000 by the Company or for
money borrowed the repayment of at least $10,000,000 of which is guaranteed by
the Company, whether such indebtedness or guarantee now exists or shall be
created hereafter; (iv) if the Company pursuant to or within the meaning of any
Bankruptcy Law (as defined below); (A) commences a voluntary case; (B) consents
to the entry of an order for relief against it in an involuntary case; (C)
consents to the appointment of a Custodian of it or any of its subsidiaries for
all or substantially all of its property; (D) makes a general assignment for the
benefit of its creditors; or (E) admits in writing that it is generally unable
to pay its debts as the same become due; (v) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (1) is for relief
against the Company in an involuntary case; (2) appoints a Custodian (as defined
below) of the Company or any subsidiary for all or substantially all of its
property; or (3) orders the liquidation of the Company or any subsidiary; or
(vi) any Event of Default under the Indenture dated December 1, 1999 for the
Company's 4% Convertible Subordinated Notes due 2006 or the Indenture dated
December 28, 1998 for the Company's Convertible Subordinated Debentures due 2018
 . The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
Within five (5) Business Days after the occurrence of any Event of Default set
forth in clause (iii) or clause (vi) above, the Company shall deliver written
notice thereof to the Holder.

          (b) Remedies. If an Event of Default occurs and is continuing, the
              --------
Holder of this Note may declare all of this Note, including all amounts due
hereunder, to be due and payable immediately, except that in the case of an
Event of Default arising from events described in clauses (iv) and (v) of
Section 11(a), this Note shall become due and payable without further action or
notice. In addition to any remedy the Holder may have under this Note and the
Securities Purchase Agreement, such unpaid amount shall bear interest at the
rate of 1.5% per month (prorated for partial months) until paid in full. Nothing
in this Section 11 shall limit any other rights the Holder may have under this
Note and the Securities Purchase Agreement, including Section 3 of this Note.

     (12) Seniority. Payments of principal and other payments due under this
          ---------
Note shall rank senior to the Company's Convertible Subordinated Debentures due
2018 and the Company's 4% Convertible Subordinated Notes due 2006 (and any debt
obligation issued in exchange therefor or in replacement thereof or as repayment
thereof or to provide for the repayment thereof) (collectively, "Indenture
Notes") and shall not be subordinated to any unsecured obligations of the
Company.  For so long as this Note is outstanding, the Company shall not redeem,
purchase or repay any principal of any Indenture Notes in cash, except pursuant
to rights of the holders of the Indenture Notes to require that the Company
redeem, purchase or repay a holder's Indenture Notes, nor shall the Company
exchange any Indenture
<PAGE>

Notes for any debt obligations of the Company which are senior or pari passu to
this Note or which mature prior to December 10, 2003. The Holder of this Note is
entitled to the benefits of the Security Agreement, and in the event of a
transfer of this Note in accordance with the terms hereof and the Securities
Purchase Agreement, the Holder shall be deemed to have assigned its rights under
the Security Agreement.

     (13) Restriction on Redemption and Cash Dividends.  While this Note is
          --------------------------------------------
outstanding, the Company shall not, directly or indirectly, redeem, or declare
or pay any cash dividend or distribution on, its capital stock without the prior
express written consent of the Holder, provided however that the foregoing
restriction shall not apply to a repurchase by the Company of shares issued
under any compensatory stock plan or agreement which has been approved by the
Board of Directors of the Company at the original issuance price in accordance
with its terms.

     (14) Limitation on Number of Conversion Shares.  Notwithstanding anything
          -----------------------------------------
to the contrary contained herein, the Company shall not be obligated to issue
any shares of Common Stock upon conversion of the Notes if the issuance of such
shares of Common Stock would exceed that number of shares of Common Stock which
the Company may issue upon conversion of the Notes without breaching the
Company's obligations under the rules or regulations of the Principal Market, or
the market or exchange where the Common Stock is then traded (the "Exchange
Cap"), except that such limitation shall not apply in the event that the Company
(a) obtains the approval of its stockholders as required by the applicable rules
of the Principal Market (or any successor rule or regulation) for issuances of
Common Stock in excess of such amount, or (b) obtains a written opinion from
outside counsel to the Company that such approval is not required, which opinion
shall be reasonably satisfactory to the holders of Notes representing at least
two-thirds (2/3) of the aggregate principal amounts of the Notes then
outstanding. Until such approval or written opinion is obtained, no purchaser of
the Notes pursuant to the Securities Purchase Agreement (the "Purchasers") shall
be issued, upon conversion of the Notes, shares of Common Stock in an amount
greater than the product of (i) the Exchange Cap amount multiplied by (ii) a
fraction, the numerator of which is the principal amount of the Note issued to
such Purchaser pursuant to the Securities Purchase Agreement and the denominator
of which is the aggregate principal amount of all the Notes issued to the
Purchasers pursuant to the Securities Purchase Agreement (the "Cap Allocation
Amount"). In the event that any Purchaser shall sell or otherwise transfer any
of such Purchaser's Notes, the transferee shall be allocated a pro rata portion
of such Purchaser's Cap Allocation Amount. In the event that any holder of the
Notes shall convert all of such holder's Notes into a number of shares of Common
Stock which, in the aggregate, is less than such holder's Cap Allocation Amount,
then the difference between such holder's Cap Allocation Amount and the number
of shares of Common Stock actually issued to such holder shall be allocated to
the respective Cap Allocation Amounts of the remaining holders of Notes on a pro
rata basis in proportion to the principal amount then outstanding under the
Notes then held by each such holder.

     (15) Vote to Change the Terms of the Notes.  The written consent of the
          -------------------------------------
Company and the holders of not less than two-thirds (2/3) of the principal
amount then outstanding under the Notes shall be required for any change to the
Notes (including this Note) and upon receipt of such consent, each Note shall be
deemed amended thereby.
<PAGE>

     (16) Lost or Stolen Notes.  Upon receipt by the Company of evidence
          --------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and, in the case of loss, theft or destruction, of an
indemnification undertaking by the Holder to the Company in customary form and,
in the case of mutilation, upon surrender and cancellation of this Note, the
Company shall execute and deliver new Note of like tenor and date; provided,
however, the Company shall not be obligated to re-issue a Note if the Holder
contemporaneously requests the Company to convert this Note into Common Stock.

     (17) Remedies, Characterizations, Other Obligations, Breaches and
          ------------------------------------------------------------
Injunctive Relief.  The remedies provided in this Note shall be cumulative and
-----------------
in addition to all other remedies available under this Note, at law or in equity
(including a decree of specific performance and/or other injunctive relief).  No
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy.  Nothing herein shall limit the Holder's
right to pursue actual damages for any failure by the Company to comply with the
terms of this Note.  The Company covenants to the Holder that there shall be no
characterization concerning this instrument other than as expressly provided
herein.  Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder and that the remedy at law for any such
breach may be inadequate.  The Company therefore agrees that, in the event of
any such breach or threatened breach, the Holder shall be entitled, in addition
to all other available remedies, to an injunction restraining any breach,
without the necessity of showing economic loss and without any bond or other
security being required.

     (18) Specific Shall Not Limit General; Construction.  No specific provision
          ----------------------------------------------
contained in this Note shall limit or modify any more general provision
contained herein.  This Note shall be deemed to be jointly drafted by the
Company and all Purchasers and shall not be construed against any person as the
drafter hereof.

     (19) Failure or Indulgence Not Waiver.  No failure or delay on the part of
          --------------------------------
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.

     (20) Notice.  Whenever notice is required to be given under this Note,
          ------
unless otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement.  Any Conversion Notice shall
be faxed (a) separately, via three (3) separate faxes, addressed to the
Company's Chief Financial Officer at (650) 556-2745, Treasurer at (650) 556-2745
and General Counsel at (650) 556-3430, (b) to the Company's outside counsel, via
one (1) fax, addressed to Gordon Davidson, T.J. Hall and David Michaels at (650)
494-1417, and (c) to the Transfer Agent at (781) 575-2804, or to the attention
of such other person and/or at such other facsimile number as the Company may
specify by providing written notice to the Holder five (5) days prior to the
effectiveness of such change.
     (21) Transfer of this Note.  The Holder may assign some or all of its
          ---------------------
rights hereunder without the consent of the Company subject to compliance with
the 1933 Act and which
<PAGE>

assignment does not impair or negate the ability of the Company to rely on the
exemption from registration afforded by Rule 506 of Regulation D under the 1933
Act for the issuance of this Note.

     (22) Payment of Collection, Enforcement and Other Costs.  If: (i) this Note
          --------------------------------------------------
is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding; or (ii) an attorney is
retained to represent the Holder in any bankruptcy, reorganization, receivership
of the Company or other proceedings affecting Company creditors' rights and
involving a claim under this Note, then the Company shall pay the costs incurred
by the Holder for such collection, enforcement or action, including but not
limited to attorneys' fees and disbursements.

     (23) Cancellation.  After all principal and other amounts at any time owed
          ------------
under this Note have been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.

     (24) Note Exchangeable for Different Denominations.  This Note is
          ---------------------------------------------
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Note or Notes containing the same terms and conditions
and representing in the aggregate the Principal, and each such new Note will
represent such portion of such Principal as is designated by the Holder at the
time of such surrender.  The date the Company initially issues this Note will be
deemed to be the "Issuance Date" hereof regardless of the number of times a new
Note shall be issued.

     (25) Waiver of Notice.  To the extent permitted by law, the Company hereby
          ----------------
waives demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or enforcement of this Note
and the Securities Purchase Agreement.

     (26) Governing Law.  This Note shall be construed and enforced in
          -------------
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the laws of
the State of New York, without giving effect to provisions thereof regarding
conflict of laws.

     (27) Reissuance of Notes.  Subject to Section 2(d)(viii), in the event of a
          -------------------
conversion or redemption pursuant to this Note of less than all of the
Principal, the Company shall promptly cause to be issued and delivered to the
Holder, upon tender by the Holder of this Note converted or redeemed, a new Note
of like tenor representing the remaining Principal which has not been so
converted or redeemed.  The date the Company issued this Note shall be the
"Issuance Date" hereof regardless of the number of times a new Note shall be
issued.

     (28) Effect of Redemption or Conversion; No Prepayment.  Upon payment of
          -------------------------------------------------
the Maturity Date Redemption Price, the Redemption Price, the Change of Control
Redemption Price, the Holder Anniversary Redemption Price or the Company
Anniversary Redemption Price, each in accordance with the terms hereof with
respect to any portion of the principal of this Note, or delivery of shares of
Common Stock upon conversion of any portion of the principal of this Note in
accordance with the terms hereof, such portion of the principal of this
<PAGE>

Note shall be deemed paid in full and shall no longer be deemed outstanding for
any purpose. Except as specifically set forth in this Note, the Company does not
have any right, option, or obligation, to pay any portion of the Principal at
any time prior to the Maturity Determination Date.

                           *     *     *     *     *
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Note to be signed by Mark
McEachen, its Executive Vice President and Chief Financial Officer, as of the
8th day of June, 2001.

                                             AT HOME CORPORATION

                                             By:______________________
                                             Name:____________________
                                             Title:___________________

1261232                   [Signature Page to Note]
<PAGE>

                                   EXHIBIT I

                           IMMEDIATE ACTION REQUIRED

--------------------------------------------------------------------------------
FAILURE OF AT HOME            Required Fax Distribution of Conversion Notice
                              ----------------------------------------------
CORPORATION TO PROMPTLY       Chief Financial Officer:  (650) 556-2745
RESPOND TO THIS NOTICE        Treasurer:                (650) 556-2745
MAY RESULT IN SIGNIFICANT     General Counsel:          (650) 556-3430
ADVERSE CONSEQUENCES TO       Transfer Agent:           (781) 575-2303 or
AT HOME CORPORATION                                (781) 575-2550
                              Outside Counsel:          (650) 494-1417*
                              Attn:  Gordon Davidson, T.J. Hall and David
                              Michaels

--------------------------------------------------------------------------------
*Only one fax needs to be sent to Outside Counsel as long as it is addressed to
all three individuals.
--------------------------------------------------------------------------------

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

                              AT HOME CORPORATION
                               CONVERSION NOTICE

Reference is made to the Convertible Note (the "Note") of At Home Corporation, a
Delaware corporation (the "Company"), payable to the undersigned.  In accordance
with and pursuant to the Note, the undersigned hereby elects to convert the
principal amount of the Note indicated below into shares of Series A Common
Stock, par value $0.01 per share (the "Common Stock"), of the Company, as of the
date specified below.

     Date of Conversion:______

     Principal amount to be converted:______

Please confirm the following information:

     Conversion Price:______

     Number of shares of Common Stock to be issued:      ______

     Is the Variable Price being relied on pursuant to Section 2(f)(iii) of the
Note?  (check one)  YES ____    No ____

Please issue the Common Stock, immediately by DWAC if available, into which the
Note is being converted and, if applicable, any check drawn on an account of the
Company in the following name and to the following address:
<PAGE>

     Issue to:______
              ______
     Facsimile Number:______

     Authorization:________
                   By:_____
                   Title:__

     Dated:__

     Account Number  (if electronic book entry transfer):______

     Transaction Code Number (if electronic book entry transfer):______

[NOTE TO HOLDER -- THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT]
<PAGE>

                                 ACKNOWLEDGMENT
                                 --------------

     The Company hereby acknowledges this Conversion Notice and hereby directs
Equiserve Trust Company, N.A. to issue the above indicated number of shares of
Common Stock in accordance with the Transfer Agent Instructions dated June __,
2001 from the Company and acknowledged and agreed to by Equiserve Trust Company,
N.A., by DWAC if available.

                                              AT HOME CORPORATION

                                              By:__________________________
                                              Name:________________________
                                              Title:_______________________

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