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                                                                     EXHIBIT 4.2

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Description of capital stock

The following information describes our common stock and preferred stock, and
provisions of our amended and restated articles of incorporation and our bylaws,
all as will be in effect upon the closing of this offering. This description is
only a summary. You should also refer to the amended and restated articles and
bylaws which have been filed with the SEC as exhibits to our registration
statement, of which this prospectus forms a part. The descriptions of our common
stock and preferred stock reflect changes to our capital structure that will
occur upon the closing of this offering in accordance with the terms of the
amended and restated articles.

Upon completion of this offering, our authorized capital stock will consist of
100,000,000 shares of common stock, no par value, and 5,000,000 shares of
preferred stock, no par value.

COMMON STOCK

As of March 31, 2000, there were 7,188,794 shares of our common stock
outstanding and held of record by 96 shareholders. There will be 25,515,430
shares of our common stock outstanding upon the closing of this offering, which
gives effect to the issuance of 5,000,000 shares of common stock offered by us
under this prospectus and the conversion of preferred stock discussed below.

Each share of our common stock has identical rights and privileges in every
respect. The holders of our common stock are entitled to vote upon all matters
submitted to a vote of our shareholders and are entitled to one vote for each
share of common stock held. The holders of our common stock will not have
cumulative voting rights.

Subject to the prior rights and preferences, if any, applicable to shares of our
preferred stock or any series of preferred stock, the holders of our common
stock are entitled to receive such dividends, payable in cash, stock or
otherwise, as may be declared by our board of directors out of any funds legally
available for the payment of dividends.

If we voluntarily or involuntarily liquidate, dissolve or wind-up, the holders
of our common stock will be entitled to receive after distribution in full of
the preferential amounts, if any, to be distributed to the holders of our
preferred stock or any series of preferred stock, all of the remaining assets
available for distribution ratably in proportion to the number of shares of
common stock held by them. Holders of our common stock have no preferences or
any preemptive conversion or exchange rights and there will be no redemption or
sinking fund provisions applicable to our common stock.

PREFERRED STOCK

As of March 31, 2000, there were 13,326,636 shares of preferred stock
outstanding. Upon the closing of this offering, all outstanding shares of
preferred stock will be converted into 13,326,636 shares of our common stock and
will be held of record by 163 shareholders. These shares of preferred stock will
no longer be authorized, issued or outstanding.

Our board of directors is authorized to provide for the issuance of shares of
preferred stock in one or more series, and to fix for each series such rights
and preferences, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences, as shall be provided in a
resolution or resolutions adopted by the board. The rights of the holders of our
common stock will be subject to, and may be adversely affected by, the rights of
holders of any preferred stock that we may issue in the future. Our board of
directors may authorize the issuance of shares of preferred stock with terms and
conditions that could discourage a takeover or other transaction that holders of
some or a

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DESCRIPTION OF CAPITAL STOCK
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majority of shares of our common stock might believe to be in their best
interests or in which holders of common stock might receive a premium for their
shares over the then market price.

REGISTRATION RIGHTS

Pursuant to a registration rights agreement entered into between us and holders
of                shares of common stock issuable upon conversion of our Series
A, Series B and Series C preferred stock, we are obligated, under limited
circumstances and subject to specified conditions and limitations, to use our
reasonable best efforts to register the registrable shares.

We must use our best efforts to register the registrable shares:

+  if we receive written notice from holders of 50% or more of the registrable
   shares requesting that we effect a registration with respect to at least 20%
   of the registrable shares then held by the holders requesting registration;

+  if we decide to register our own securities; or

+  if we receive written notice from any holder or holders of the registrable
   shares requesting that we effect a registration on Form S-3 (a shortened form
   of registration statement) with respect to the registrable shares and we are
   then eligible to use Form S-3 (which at the earliest could occur twelve
   calendar months after the closing of this offering).

However, in addition to certain other conditions and limitations, if requested
by the underwriters to decrease the number of shares registered, we can limit
the number of registrable shares included in the registration. The underwriters
have requested that no registrable shares be registered in this offering. In
addition, the holders of these registration rights have entered into lock-up
agreements and waived their registration rights for a period of 180 days
following this offering.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Our amended and restated articles of incorporation limit the personal liability
of our directors for monetary damages to the fullest extent permitted by the
California General Corporation Law. Under California law, a director's liability
to a company or its shareholders may not be limited:

+  for acts or omissions that involve intentional misconduct or a knowing and
   culpable violation of law;

+  for acts or omissions that a director believes to be contrary to the best
   interests of the company or its shareholders or that involve the absence of
   good faith on the part of the director;

+  for any transaction from which a director derived an improper personal
   benefit;

+  for acts or omissions that show a reckless disregard for the director's duty
   to the company or its shareholders in circumstances in which the director was
   aware, or should have been aware, in the ordinary course of performing the
   director's duties, of a risk of serious injury to the company or its
   shareholders;

+  for acts or omissions that constitute an unexcused pattern of inattention
   that amounts to an abdication of the director's duty to the company or its
   shareholders;

+  under Section 310 of the California General Corporation Law concerning
   contracts or transactions between the company and a director; or

+  under Section 316 of the California General Corporation Law concerning
   directors' liability for improper dividends, loans and guarantees.

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                                                                    EXHIBIT 10.6

                          [DIGITAL IMPACT LETTERHEAD]

May 2, 2000

James Wahlstrom
15981 Grandview Avenue
Monte Sereno, CA  95030

Re:     Employment Agreement

Dear James:

        Digital Impact, Inc. (the "COMPANY") is pleased to offer you the
position of Vice President, Worldwide Field Operations on the terms set forth
below (the "AGREEMENT") beginning May 4, 2000, pending our completion of a
satisfactory review of your references.

        As Vice President, Worldwide Field Operations, your initial
responsibilities will be to manage Digital Impact's worldwide sales and
services. You will report to me, in my capacity as Chief Executive Officer.

        Your initial annual base salary will be $225,000.00, less applicable
payroll deductions and withholdings. As an exempt employee, and officer of the
Company, you will be paid on a salary, not hourly basis. Therefore, you will be
"exempt" from overtime pay. You will be paid two times per month. Your target
bonus for fiscal year 2001 will be 50% of your base salary, subject to
achievement of performance goals determined in the sole discretion of the
Compensation Committee (the "Committee") of our Board of Directors (the
"Board").

        In addition, the Company will also provide you with sick leave, fifteen
days of paid vacation time, and medical, dental, and other benefits coverage
consistent with Company policy. The Company reserves the right to modify your
job duties, compensation and benefits from time to time, as it deems necessary.

        We will recommend to the committee that you be granted a non-qualified
stock option under the Company's 1998 Stock Plan covering 175,000 shares of the
Company's common stock (the "OPTIONS"). The options will vest over a four-year
period with 6.25% of the Options vesting on the date that is three months
following your date of hire and the remaining Options vesting in equal monthly
installments over the remainder of the four-year vesting period. The per share
exercise price of the Options will be, pursuant to the terms of the 1998 Stock
Plan, the closing price of the Company's common stock on the date of grant.

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        If the Company terminates your employment without Cause (as defined
below) within six months following a Change in Control (as defined below), you
will receive, as severance, continued payment of your base salary and health
care benefits for a period of six months, subject to (i) your execution of a
release of claims against the Company in form and substance satisfactory to the
Company and (ii) your failure to exercise any release revocation rights
available to you under applicable law during any such release revocation period.

        For the purposes of this Agreement, "CAUSE" shall mean misconduct,
including: (i) conviction of any felony or any crime involving moral turpitude
or dishonesty; (ii) participation in a fraud or act of dishonesty against the
Company; (iii) willful breach of the Company's policies; (iv) intentional damage
to the Company's property; (v) material breach of this Agreement or your
Proprietary Information and Inventions Agreement; or (vi) conduct by you which
in the good faith and reasonable determination of the Board demonstrates
unacceptable job performance or gross unfitness to serve; provided, that you
have had fair notice of the act or condition allegedly constituting Cause and do
not substantially cure or mitigate its consequences to the reasonable
satisfaction of the Board within 30 days after the Company notifies you in
writing of such act or condition.

        For purposes of this Agreement, a "CHANGE IN CONTROL" shall mean: (a)
any reorganization, consolidation or merger of the Company in which the Company
is not the surviving corporation or pursuant to which shares of the Company's
voting stock would be converted into cash, securities or other property, in
either case other than a merger of the Company in connection with a
re-incorporation transaction or other merger or reorganization transaction as a
result of which the holders of the Company's voting stock immediately prior to
such transaction have substantially proportionate ownership of voting stock of
the surviving corporation or other surviving entity immediately after the
transaction; (b) the sale (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; (c)
approval by the stockholders of the Company of a plan or proposal for the
liquidation or dissolution of the Company; or (d) any "person" (as defined in
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE Act")) becoming the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 50% or more of the Company's
outstanding voting stock; provided, however, that "person" shall not include
Institutional Venture Partners, Draper Fisher Jurvetson, Draper Richards or any
of their respective affiliates.

        As a Company employee, you will be expected to abide by the Company
rules and regulations, acknowledge in writing that you have read the Company's
Employee Handbook, and sign and comply with a Proprietary Information and
Inventions Agreement which prohibits unauthorized use or disclosure of Company
proprietary information and, which prohibits, without the Company's express
written consent, engagement in any employment or business activity other than
for the Company.

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        Your employment with the Company is at-will. This means that you may
resign your employment at any time simply by notifying the Company. Likewise,
the Company may terminate your employment relationship at any time and for any
reason whatsoever, with or without cause or advanced notice, simply by notifying
you. This at-will employment relationship cannot be changed except in a writing
signed by a duly authorized officer of the Company.

        This Agreement, including the attachments, constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the
Company with respect to the terms and conditions of your employment. This
Agreement is entered into without reliance upon any promise, warranty or
representation, written or oral, other than those expressly contained herein,
and it supersedes any other such promises, warranties, representations or
agreements. It may not be amended or modified except by a written instrument
signed by you and a duly authorized officer of the Company. If any provision of
this Agreement is determined to be invalid or unenforceable, in whole or in
part, this determination will not affect any other provision of this Agreement.
This Agreement shall be construed and interpreted in accordance with the laws of
the State of California.

        As required by law, this offer of employment is subject to satisfactory
proof of your right to work in the United States.

        To indicate your acceptance of our offer under the terms described
above, please sign below and return this letter to Diana Ross, Director of Human
Resources, no later than May 3, 2000. We look forward to your favorable reply,
and to a productive and enjoyable work relationship.

                                       Very truly yours,

                                       Digital Impact, Inc.

                                       By:  /s/ WILLIAM C. PARK
                                            ------------------------------------
                                            Name:  William C. Park
                                            Title: Chief Executive Officer
Agreed and accepted:

/s/ JAMES WAHLSTROM
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James Wahlstrom

Dated:  May 3, 2000

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