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Exhibit 10.28    
  

 
 

THE GREENBRIER COMPANIES, INC.
  
    James-Furman Supplemental 1994 Stock Option Plan
  
    Amendment No. 1    
  

        Pursuant to Article VIII of the James-Furman Supplemental 1994 Stock Option Plan (the "Supplemental Plan"), the Stockholders hereby amend the Supplemental
Plan as follows: 

	1.
	Article III
of the Supplemental Plan is amended to read as follows: 

"The
Supplemental Plan shall be effective as of July 8, 1994, the date of its adoption by Stockholders. No Options shall be granted under the Supplemental Plan after July 31, 1994. The
preceding sentence shall not be construed to prevent the Stockholders from extending the term of Options that were granted prior to that date and which remain outstanding under the Supplemental Plan,
regardless of whether the extension of such Options may be deemed a cancellation of outstanding Options and grant of new Options under applicable securities laws. The Supplemental Plan shall remain in
effect until all Options have been satisfied or expired. 

	2.
	Article VI.A.
of the Supplemental Plan is amended to read as follows: 

"A.    Option Period.    The term of each Option shall automatically expire on July 13, 2007 at which date the Options shall
be of no further force or effect." 

        The
Greenbrier Companies, Inc. (the "Company") has caused this Amendment No. 1 to be executed by an authorized officer of the Company solely for the purpose of evidencing
the Company's continuing consent to the provisions of the Supplemental Plan, including the Company's undertaking to process transfers in accordance with the provisions of the Supplemental Plan. Except
as modified by this Amendment No. 1 the Supplemental Plan shall remain in full force and effect. 

Date:
May 20, 2002 

THE
GREENBRIER COMPANIES, INC. 

	By:	 	/s/  LARRY G. BRADY      
Senior Vice President	 	/s/  ALAN JAMES      
 ALAN JAMES
	

 	
 	

 	
 	

/s/  WILLIAM A. FURMAN      
 WILLIAM A. FURMAN

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Exhibit 10.28

THE GREENBRIER COMPANIES, INC. James-Furman Supplemental 1994 Stock Option Plan Amendment No. 1<Page>

                                                                     Exhibit 4.1

                      RESOLUTION OF THE BOARD OF DIRECTORS
                                    APPROVING
                            THE DESIGNATION STATEMENT
                                   RELATING TO
                      SERIES A CONVERTIBLE PREFERRED STOCK

      WHEREAS, the Amended and Restated Certificate of Incorporation of 24/7
Real Media, Inc., a Delaware corporation (the "CORPORATION"), as amended to the
date hereof (the "CERTIFICATE OF INCORPORATION") authorizes the Corporation to
issue a total of 10,000,000 shares of preferred stock, par value $0.01 per share
("PREFERRED STOCK"), which may be divided into one or more classes and/or series
as the Corporation's Board of Directors (the "BOARD") may determine;

      WHEREAS, the Certificate of Incorporation expressly vests in the Board of
Directors the authority to fix the powers, designations, preferences, rights and
qualifications, limitations or restrictions, of the Preferred Stock; and

      WHEREAS, the Board of Directors deems it advisable to designate a series
of the Preferred Stock consisting of Seven Hundred Thousand (700,000) shares
designated as Series A Convertible Preferred Stock;

      NOW, THEREFORE, IT IS HEREBY RESOLVED, that pursuant to Article Fourth of
the Certificate of Incorporation, there be and hereby is authorized and created,
pursuant to the terms of this designation statement (this "DESIGNATION
STATEMENT") a series of Preferred Stock, which series shall have the powers,
designations, preferences, voting rights, relative and other special rights, and
the qualifications, limitations and restrictions set forth below:

      SERIES A CONVERTIBLE PREFERRED STOCK. Seven Hundred Thousand (700,000) of
the authorized shares of Preferred Stock of the Corporation are hereby
designated "Series A Convertible Preferred Stock", $0.01 par value per share
(the "SERIES A PREFERRED STOCK"). The powers, designations, preferences,
relative and other special rights, and the qualifications, limitations and
restrictions and other matters relating to the Series A Preferred Stock are as
follows:

      1.    DEFINITIONS. For purposes of this Designation Statement, the
following definitions apply:

            1.1 "ACQUIRING STOCKHOLDER" shall mean, with respect to a
Combination Transaction, a stockholder or stockholders of the Corporation that
(i) merges or combines with the Corporation in such Combination Transaction or
(ii) owns or controls a majority of another corporation that merges or combines
with the Corporation in such Combination Transaction.

            1.2 "CLOSING DISCOUNTED COMMON STOCK PRICE" shall mean a price per
share of $0.20535.

            1.3 "COMBINATION TRANSACTION" shall mean a reorganization,
consolidation, merger or similar transaction or series of related transactions.

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            1.4 "COMMON STOCK" shall mean the Common Stock, par value $0.01 per
share, of the Corporation.

            1.5 "COMMON STOCK DIVIDEND" shall mean a stock dividend declared and
paid on the Common Stock that is payable in shares of Common Stock.

            1.6 "COMMON STOCK EVENT" shall mean, at any time or from time to
time after the Original Issue Date for the Series A Preferred Stock, (i) the
issue by the Corporation of additional shares of Common Stock in connection with
a Common Stock Dividend or other distribution on outstanding Common Stock, (ii)
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock, or (iii) a combination of the outstanding shares of
Common Stock into a smaller number of shares of Common Stock.

            1.7 "DISTRIBUTION" shall mean the transfer of cash or property by
the Corporation to one or more of its stockholders without consideration,
whether by dividend or otherwise (except a dividend in shares of Corporation's
stock). A Permitted Repurchase (defined below) is not a Distribution.

            1.8 "DIVIDEND ACCRUAL DATE" shall mean the first day of each
calendar month.

            1.9 "DIVIDEND RATE" shall mean a dollar amount per share equal to
six percent (6%) of the Original Issue Price for the Series A Preferred Stock,
per annum, for the Series A Preferred Stock (as adjusted for any stock splits,
stock dividends, recapitalizations or the like, with respect to the Series A
Preferred Stock).

            1.10 "ORIGINAL ISSUE DATE" shall mean the date on which the first
share of Series A Preferred Stock is issued by the Corporation for the Series A
Preferred Stock, and the date on which the first share of Series A-1 Preferred
Stock is issued by the Corporation for the Series A-1 Preferred Stock.

            1.11 "ORIGINAL ISSUE PRICE" shall mean $10.00 per share for the
Series A Preferred Stock, and $10.00 per share for the Series A-1 Preferred
Stock (as adjusted for any stock splits, stock dividends, recapitalizations or
the like, with respect to such series of Preferred Stock).

            1.12 "PERMITTED REPURCHASES" shall mean the repurchase by the
Corporation of shares of Common Stock held by employees, officers, directors,
consultants, independent contractors, advisors, or other persons performing
services for the Corporation or a Subsidiary that are subject to restricted
stock purchase agreements, stock option exercise agreements or similar
agreements under which the Corporation has the option to repurchase such shares.

            1.13 "PURCHASED SHARE NUMBER" shall mean the sum of: (A) the number
of shares of Series A Preferred Stock originally issued under the Series A
Purchase Agreement from time to time (not including any shares of Series A
Preferred Stock issued upon conversion of Series A-1 Preferred Stock), plus (B)
the number of Shares of Series A-1 Preferred Stock issued on the Original Issue
Date for the Series A-1 Preferred Stock (the Purchased Share Number shall be
proportionately adjusted for any stock splits, stock dividends,
recapitalizations or the like, with respect to the Series A Preferred Stock).

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            1.14 "SERIES A-1 DESIGNATION" shall mean the resolutions adopted by
the Board authorizing the Series A-1 Preferred Stock, as filed with the Delaware
Secretary of State.

            1.15 "SERIES A-1 PREFERRED STOCK" shall mean the Series A-1
Preferred Stock, par value $0.01 per share, of the Corporation.

            1.16 "SERIES A PURCHASE AGREEMENT" shall mean that certain Series A
and Series A-1 Preferred Stock and Common Stock Warrant Purchase Agreement dated
on or about July 1, 2002 by and among the Corporation and the persons and
entities listed on Exhibit A thereto.

            1.17 "STOCKHOLDER APPROVAL DATE" shall mean the first to occur of:
(i) the first date that shares of Series A-1 Preferred Stock convert into Series
A Preferred Stock; and (ii) the date the Corporation receives a valid
"Redemption Request" (as defined in Section 6.1 of the Series A-1 Designation)
delivered pursuant to Section 6.1 of the Series A-1 Designation.

            1.18 "SUBSIDIARY" shall mean any corporation of which at least fifty
percent (50%) of the outstanding voting stock is at the time owned directly or
indirectly by the Corporation or by one or more of such subsidiary corporations.

      2.    DIVIDEND RIGHTS.

            2.1 CUMULATIVE DIVIDEND PREFERENCE. The holders of the then
outstanding Series A Preferred Stock shall be entitled to receive, when, as and
if declared by the Board, out of any funds and assets of the Corporation legally
available therefor, cumulative dividends at the annual Dividend Rate for the
Series A Preferred Stock, prior and in preference to the payment of any dividend
or other Distribution on the Common Stock (other than a Common Stock Dividend).
Such dividends shall begin accruing on each share of Series A Preferred Stock on
the first Dividend Accrual Date occurring after the date on which such share of
Series A Preferred Stock is issued by the Corporation, and shall accrue on each
subsequent Dividend Accrual Date thereafter until paid, whether or not earned or
declared. For purposes of the preceding sentence, any share of Series A
Preferred Stock that is issued upon conversion of a share of Series A-1
Preferred Stock shall be deemed to have been issued by the Corporation on the
date on which such share of Series A-1 Preferred Stock was issued by the
Corporation. No accumulation of dividends on the Series A Preferred Stock shall
compound or bear any interest. Unless the full amount of any accrued and unpaid
dividends accrued on the Series A Preferred Stock shall have been paid or
declared in full and a sum sufficient for the payment thereof reserved and set
apart, no dividend (other than a Common Stock Dividend) shall be paid or
declared, and no Distribution shall be made, on any Common Stock; PROVIDED,
HOWEVER, that this restriction shall not apply to Permitted Repurchases.
Payments of any accrued dividends to the holders of the Series A Preferred Stock
and the Series A-1 Preferred Stock shall be made pro rata, on an equal priority,
pari passu basis.

            2.2 PARTICIPATION RIGHTS. In the event that the Corporation shall
declare a dividend or other Distribution on the Common Stock out of funds
legally available therefor (other than a Common Stock Dividend), then the
holders of the then outstanding Series A Preferred Stock shall be entitled to a
proportionate share of any such dividend or other

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<Page>

Distribution as though each holder of such Series A Preferred Stock was the
holder of the greatest whole number of shares of Common Stock issuable upon
conversion pursuant to Section 5 of all such shares of Series A Preferred Stock
held by such holder, as of the record date fixed for the determination of
holders of Common Stock entitled to receive such dividend or other Distribution.

            2.3 NON-CASH DIVIDENDS. Whenever a dividend provided for in this
Section 2 shall be payable in property other than cash, the value of such
dividend shall be deemed to be the fair market value of such property as
determined in good faith by the Board, provided that dividends payable in
securities (other than Common Stock Dividends, dividends declared and paid on
the Series A Preferred Stock that are payable in shares of Series A Preferred
Stock, and dividends declared and paid on the Series A-1 Preferred Stock that
are payable in shares of Series A-1 Preferred Stock) shall be valued in the
manner set forth in Sections 3.4(a) and (b) hereof.

            2.4 PAYMENT ON CONVERSION. If the Corporation shall have accrued but
unpaid dividends with respect to any Series A Preferred Stock upon its
conversion as provided in Section 5, then, to the extent such dividends have not
been declared, all such accrued but unpaid dividends on such converted shares of
Series A Preferred Stock shall be cancelled.

      3. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the funds and
assets that may be legally distributed to the Corporation's stockholders (the
"AVAILABLE FUNDS AND ASSETS") shall be distributed to stockholders in the
following manner:

            3.1 LIQUIDATION PREFERENCE. The holders of each share of Series A
Preferred Stock then outstanding shall be entitled to be paid, out of the
Available Funds and Assets, and prior and in preference to any payment or
distribution (or any setting apart of any payment or distribution) of any
Available Funds and Assets on any shares of Common Stock, an amount per share
equal to the Original Issue Price for the Series A Preferred Stock plus all
accrued but unpaid dividends on the Series A Preferred Stock. The Series A-1
Preferred Stock shall rank on parity with the Series A Preferred Stock with
respect to the liquidation, dissolution or winding up of the Corporation. If
upon any liquidation, dissolution or winding up of the Corporation, the
Available Funds and Assets shall be insufficient to permit the payment to
holders of the Series A Preferred Stock and the Series A-1 Preferred Stock of
their full preferential amounts, then all of the Available Funds and Assets
shall be distributed among the holders of the then outstanding Series A
Preferred Stock and the Series A-1 Preferred Stock pro rata, on an equal
priority, pari passu basis, according to their respective liquidation
preferences.

            3.2 PARTICIPATION RIGHTS. If there are any Available Funds and
Assets remaining after the payment or distribution (or the setting aside for
payment or distribution) to the holders of the Series A Preferred Stock and
Series A-1 Preferred Stock of their full liquidation preference amounts payable
pursuant to Section 3.1 above for the Series A Preferred Stock, and pursuant to
Section 3.1 of the Series A-1 Designation for the Series A-1 Preferred Stock, in
connection with a liquidation, dissolution or winding up of the Corporation,
then all such remaining Available Funds and Assets shall be distributed among
the holders of the then outstanding Common Stock, Series A Preferred Stock and
Series A-1 Preferred Stock pro rata according to the number of shares of Common
Stock held by such holders, where, for this

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purpose: (a) each holder of outstanding Series A-1 Preferred Stock will be
deemed to hold (in lieu of their Series A-1 Preferred Stock), the greatest whole
number of shares of Common Stock issuable upon conversion of the Series A
Preferred Stock issuable upon conversion of all the Series A-1 Preferred Stock
held by such holder, in each case as of the record date fixed for the
determination of holders of Common Stock entitled to receive such distribution,
and assuming for this purpose that the "Automatic Conversion Date" (as such term
is defined in the Board resolutions designating the Series A-1 Preferred Stock
filed with the Delaware Secretary of State pursuant to the Delaware General
Corporation Law) is such record date, and (b) each holder of outstanding Series
A Preferred Stock will be deemed to hold (in lieu of their Series A Preferred
Stock), the greatest whole number of shares of Common Stock issuable upon
conversion of such holder's Series A Preferred Stock pursuant to Section 5, as
of the record date fixed for the determination of holders of Common Stock
entitled to receive such distribution; UNTIL SUCH TIME AS: (x) in the case of
the Series A-1 Preferred Stock, each holder of then outstanding Series A-1
Preferred Stock shall have received, in distributions made in connection with
such liquidation, dissolution or winding up, an aggregate amount per share of
Series A-1 Preferred Stock held equal to three (3) times the Original Issue
Price for the Series A-1 Preferred Stock (such aggregate dollar amount to
include all amounts previously paid to such holder pursuant to the liquidation
preference of the Series A-1 Preferred Stock including without limitation any
dividends paid thereon), and (y) in the case of the Series A Preferred Stock,
each holder of then outstanding Series A Preferred Stock shall have received, in
distributions made in connection with such liquidation, dissolution or winding
up, an aggregate amount per share of Series A Preferred Stock held equal to
three (3) times the Original Issue Price for the Series A Preferred Stock (such
aggregate dollar amount to include all amounts previously paid to such holder
pursuant to the liquidation preference of the Series A Preferred Stock including
without limitation any dividends paid thereon); AFTER WHICH TIME the holders of
then outstanding Common Stock shall be entitled to receive all the remaining
Available Funds and Assets (if any) pro rata according to the number of
outstanding shares of Common Stock then held by each of them.

            3.3 MERGER OR SALE OF ASSETS. Each of the following transactions
shall be deemed to be a liquidation, dissolution or winding up of the
Corporation as those terms are used in this Section 3 (and in the case of a
transaction described in Section 3.3(a) below, the Available Funds and Assets
shall be the consideration paid by the acquiror in such transaction): (a) a
Combination Transaction in which the Corporation is a constituent corporation
if, as a result of such Combination Transaction, the voting securities of the
Corporation that are outstanding immediately prior to the consummation of such
Combination Transaction (OTHER THAN any such securities that are held by an
Acquiring Stockholder) do not represent, or are not converted into, securities
of the surviving corporation of such Combination Transaction (or such surviving
corporation's parent corporation if the surviving corporation is owned by the
parent corporation) that, immediately after the consummation of such Combination
Transaction, together possess at least a majority of the total voting power of
all securities of such surviving corporation (or its parent corporation, if
applicable) that are outstanding immediately after the consummation of such
Combination Transaction, including securities of such surviving corporation (or
its parent corporation, if applicable) that are held by the Acquiring
Stockholder; or (b) a sale of all or substantially all of the assets of the
Corporation (each of the foregoing transactions, a "SALE TRANSACTION").

                                       5
<Page>

            Notwithstanding the foregoing or the provisions of Section 5.7
below, if any of the above described transactions are approved by both: (a) the
vote of the holders of at least a majority of the Series A Preferred Stock then
outstanding, voting as a single class, and (b) a vote sufficient under the
Delaware General Corporation Law, the Certificate of Incorporation (including
this Designation Statement) and the Bylaws of the Corporation to approve such
transaction, THEN the rights of the holders of Common Stock and the Series A
Preferred Stock with respect to such transaction will be governed by the
documents to be entered into in connection with such transaction.

            The Corporation shall not enter into any Sale Transaction that does
not provide for the treatment of the holders of Series A Preferred Stock in a
manner consistent with the provisions of this Section 3 (including, without
limitation, the provisions in the second sentence of this Section 3.3). In the
event that the requirements of the immediately preceding sentence are not
complied with in connection with a Sale Transaction, the Corporation shall
forthwith either: (x) cause the closing of Sale Transaction to be postponed
until such time as such requirements have been complied with, or (y) cancel such
Sale Transaction, in which event the rights, preferences and privileges of the
holders of the Series A Preferred Stock shall revert to and be the same as such
rights, preferrences and privileges existing immediately prior to the latest
date on which the notice referred to in Section 3.5 below with respect to such
Sale Transaction could be given in compliance with the provisions of such
Section 3.5.

            3.4 NON-CASH CONSIDERATION. If any assets of the Corporation
distributed to stockholders in connection with any liquidation, dissolution, or
winding up of the Corporation are other than cash, then the value of such assets
shall be their fair market value as determined in good faith by the Board,
EXCEPT THAT any securities to be distributed to stockholders in a liquidation,
dissolution, or winding up of the Corporation shall be valued as follows:

                  (a) The method of valuation of securities not subject to
investment letter or other similar restrictions on free marketability shall be
as follows:

                        (i) unless otherwise specified in a definitive
agreement for the acquisition of the Corporation, if the securities are then
traded on a national securities exchange, the Nasdaq National Market or the
Nasdaq SmallCap Market (or a similar national quotation system), then the value
shall be deemed to be the average of the closing prices of the securities on
such exchange or system over the twenty (20) trading day period ending three (3)
trading days prior to the distribution; and

                        (ii) if (i) above does not apply but the securities
are actively traded over-the-counter, then, unless otherwise specified in a
definitive agreement for the acquisition of the Corporation, the value shall be
deemed to be the average of the closing bid prices over the twenty (20) trading
day period ending three (3) trading days prior to the distribution; and

                        (iii) if there is no active public market as
described in clauses (i) or (ii) above, then the value shall be the fair market
value thereof, as determined in good faith by the Board.

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<Page>

                  (b) The method of valuation of securities subject to
investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate) shall be to make an appropriate discount from the market
value determined as above in subparagraphs (a)(i),(ii) or (iii) of this
subsection to reflect the approximate fair market value thereof, as determined
in good faith by the Board.

                  (c) Any determination in good faith by the Board pursuant to
this Section 3.4 shall be conclusive and final and shall be binding on the
Corporation and all stockholders thereof.

            3.5 NOTICE. Written notice of any liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 3, stating the
nature of such liquidation, dissolution or winding up, and specifying the
anticipated effective date of such liquidation, dissolution or winding up, shall
be given in the manner specified in Section 5.12 hereof at least twenty (20)
days prior to, and no more than sixty (60) days prior to, the effective date of
such liquidation, dissolution or winding up.

      4.    VOTING RIGHTS.

            4.1 SERIES A PREFERRED STOCK. Each holder of shares of Series A
Preferred Stock shall be entitled to the number of votes equal to the number of
whole shares of Common Stock into which such shares of Preferred Stock could be
converted pursuant to the provisions of Section 5 below at the record date for
the determination of the stockholders entitled to vote on such matters or, if no
such record date is established, the date such vote is taken or any written
consent of stockholders is solicited.

            4.2 GENERAL. Subject to the other provisions of this Designation
Statement, each holder of Series A Preferred Stock shall have full voting rights
and powers equal to the voting rights and powers of the holders of Common Stock,
and shall be entitled to notice of any stockholders' meeting in accordance with
the bylaws of the Corporation (as in effect at the time in question) and
applicable law, and shall be entitled to vote, together with the holders of
Common Stock, with respect to any question upon which holders of Common Stock
have the right to vote, except as may be otherwise provided by applicable law.
Except as otherwise expressly provided herein or as required by law, the holders
of Series A Preferred Stock and the holders of Common Stock shall vote together
and not as separate classes.

            4.3   BOARD OF DIRECTORS ELECTION AND REMOVAL.

                  (a)   ELECTION OF DIRECTORS. So long as:

                        (i) the total number of outstanding shares of Series A
Preferred Stock (assuming the prior conversion of all then outstanding shares of
Series A-1 Preferred Stock into Series A Preferred Stock) is equal to or greater
than thirty three percent (33%), but less than sixty-seven percent (67%), of the
Purchased Share Number, the holders of the Series A Preferred Stock, voting as a
separate series, shall be entitled to elect one (1) director of the Corporation;
and

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                        (ii) the total number of outstanding shares of Series A
Preferred Stock (assuming the prior conversion of all then outstanding shares of
Series A-1 Preferred Stock into Series A Preferred Stock) is equal to or greater
than sixty-seven percent (67%) of the Purchased Share Number, the holders of the
Series A Preferred Stock, voting as a separate series, shall be entitled to
elect two (2) directors of the Corporation.

            The directors of the Corporation which the holders of Series A
Preferred Stock are entitled to elect pursuant to this Section 4.3 shall be
collectively referred to herein as the "SERIES A DIRECTORS."

                  (b)   QUORUM; REQUIRED VOTE.

                        (i) QUORUM. At any meeting held for the purpose of
electing the Series A Directors, the presence in person or by proxy of the
holders of a majority of the shares of the Series A Preferred Stock then
outstanding shall constitute a quorum for the election of the Series A
Directors.

                        (ii) REQUIRED VOTE. With respect to the election of the
Series A Directors by the holders of the outstanding shares of Series A
Preferred Stock, that candidate or those candidates (as applicable) shall be
elected who either: (i) in the case of any such vote conducted at a meeting of
the holders of the Series A Preferred Stock, receive the highest number of
affirmative votes (on an as-converted basis) of the outstanding shares of such
Series A Preferred Stock; or (ii) in the case of any such vote taken by written
consent without a meeting, are elected by the written consent of the holders of
a majority of outstanding shares of such Series A Preferred Stock.

                  (c) VACANCY. If there shall be any vacancy in the office of a
director elected or to be elected by the holders of the Series A Preferred
Stock, then a director to hold office for the unexpired term of such
directorship may be elected by either: (i) the required vote of holders of the
shares of such Series A Preferred Stock specified in subsection 4.3(b)(ii) above
that are entitled to elect such director, or, (ii) if the vacancy is not due to
the removal of a director, the remaining Series A Director (if any) in office
(provided that if there shall be no Series A Director remaining in office, then
a director to hold office for the unexpired term of such directorship shall be
elected as provided in subsection 4.3(c)(i) above).

                  (d) REMOVAL. Subject to Section 141(k) of the Delaware General
Corporation Law, any director who shall have been elected to the Board by the
holders of the Series A Preferred Stock or by any Series A Director, may be
removed during his or her term of office, without cause, by, and only by, the
affirmative vote of shares representing a majority of the voting power, on an
as-converted basis, of all the outstanding shares of the Series A Preferred
Stock entitled to vote, given either at a meeting of such stockholders duly
called for that purpose or pursuant to a written consent of stockholders without
a meeting, and any vacancy created by such removal may be filled only in the
manner provided in Section 4.3(c).

                  (e) PROCEDURES. Any meeting of the holders of the Series A
Preferred Stock, and any action taken by the holders of the Series A Preferred
Stock by written consent without a meeting, in order to elect or remove a
director under this Section 4.3, shall be held in

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accordance with the procedures and provisions of the Corporation's Bylaws, the
Delaware General Corporation Law and applicable law regarding stockholder
meetings and stockholder actions by written consent, as such are then in effect
(including but not limited to procedures and provisions for determining the
record date for shares entitled to vote).

            4.4 PROTECTIVE PROVISIONS. So long as the total number of
outstanding shares of Series A Preferred Stock (assuming the prior conversion of
all then outstanding shares of Series A-1 Preferred Stock into Series A
Preferred Stock) is equal to or greater than twenty-five percent (25%) of the
Purchased Share Number, the Corporation shall not, without the prior approval,
by vote or written consent, of the holders of a majority of the Series A
Preferred Stock then outstanding, voting as a separate class:

                  (a) amend its Certificate of Incorporation or Bylaws in any
manner that would alter or change the rights, preferences, privileges or
restrictions of the Series A Preferred Stock so as to adversely affect any of
the rights, preferences, privileges or restrictions of such series of Preferred
Stock;

                  (b) reclassify any outstanding shares of capital stock of the
Corporation into shares having rights, preferences or privileges senior to or on
a parity with the Series A Preferred Stock;

                  (c) take any action that authorizes, creates or results in the
issuance of any other equity security, including any other security convertible
into or exercisable for any equity security, having any rights, preferences or
privileges that are senior to or on a parity with the Series A Preferred Stock;

                  (d) increase or decrease (other than pursuant to Section 6.1
below) the total number of authorized shares of Series A Preferred Stock;

                  (e) at any time prior to the two year anniversary of the
Stockholder Approval Date, effect any Combination Transaction if, as a result of
such Combination Transaction, the voting securities of the Corporation that are
outstanding immediately prior to the consummation of such Combination
Transaction (OTHER THAN any such securities that are held by an Acquiring
Stockholder) do not represent, or are not converted into, securities of the
surviving corporation of such Combination Transaction (or such surviving
corporation's parent corporation if the surviving corporation is owned by the
parent corporation) that, immediately after the consummation of such Combination
Transaction, together possess at least a majority of the total voting power of
all securities of such surviving corporation (or its parent corporation, if
applicable) that are outstanding immediately after the consummation of such
Combination Transaction, including securities of such surviving corporation (or
its parent corporation, if applicable) that are held by the Acquiring
Stockholder; PROVIDED, HOWEVER, that no such approval of the Series A Preferred
Stock shall be required pursuant to this Section 4.4(e) in the event that, as of
the date the Corporation becomes a party to a definitive agreement providing for
such Combination Transaction, the fair market value of one share of Common
Stock, valued in accordance with the provisions of Sections 3.4 (a) and (b)
(such price to be proportionately adjusted to reflect Common Stock Events), is
greater than three (3) times the Initial Conversion Price (as defined in Section
5.3 below);

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                  (f) at any time prior to the two year anniversary of the
Stockholder Approval Date, sell, convey or otherwise dispose of all or
substantially all the Corporation's assets in a single transaction or series of
related transactions; PROVIDED, HOWEVER, that no such approval of the Series A
Preferred Stock shall be required pursuant to this Section 4.4(f) in the event
that, as of the date the Corporation becomes a party to a definitive agreement
providing for such sale, conveyance or other disposal of all or substantially
all of the Corporation's assets, the fair market value of one share of Common
Stock, valued in accordance with the provisions of Sections 3.4 (a) and (b)
(such price to be proportionately adjusted to reflect Common Stock Events), is
greater than three (3) times the Initial Conversion Price;

                  (g) at any time prior to the two year anniversary of the
Stockholder Approval Date, take any action to liquidate or dissolve; provided,
HOWEVER, that no such approval of the Series A Preferred Stock shall be required
pursuant to this Section 4.4(g) in the event that, as of the date the
Corporation takes such action to liquidate or dissolve, the fair market value of
one share of Common Stock, valued in accordance with the provisions of Sections
3.4 (a) and (b) (such price to be proportionately adjusted to reflect Common
Stock Events), is greater than three (3) times the Initial Conversion Price;

                  (h) declare or pay any dividends (other than dividends payable
solely in shares of its own Common Stock) on or declare or make any other
distribution, purchase, redemption or acquisition (other than Permitted
Repurchases), directly or indirectly, on account of any shares of Preferred
Stock (other than the Series A Preferred Stock or the Series A-1 Preferred
Stock) or Common Stock now or hereafter outstanding; or

                  (i) take any action to change the authorized number of members
of the Board from eight (8).

      5.    CONVERSION RIGHTS. The outstanding shares of Series A Preferred
Stock shall be convertible into Common Stock as follows:

            5.1   OPTIONAL CONVERSION.

                  (a) At the option of the holder thereof, each share of Series
A Preferred Stock shall be convertible, at any time or from time to time, into
fully paid and nonassessable shares of Common Stock as provided herein.

                  (b) Each holder of Series A Preferred Stock who elects to
convert the same into shares of Common Stock shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or any
transfer agent for the Series A Preferred Stock or Common Stock, and shall give
written notice to the Corporation at such office that such holder elects to
convert the same and shall state therein the number of shares of Series A
Preferred Stock being converted. Thereupon the Corporation shall promptly issue
and deliver at such office to such holder a certificate or certificates for the
number of shares of Common Stock to which such holder is entitled upon such
conversion. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the certificate or
certificates representing the shares of Series A Preferred Stock to be
converted, and

                                       10
<Page>

the person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.

            5.2   AUTOMATIC CONVERSION.

                  (a) At any time after the second anniversary of the
Stockholder Approval Date, the Corporation may cause each share of Series A
Preferred Stock to be automatically converted into fully paid and nonassessable
shares of Common Stock, as provided herein (such conversion, the "AUTOMATIC
CONVERSION"), by delivery of a notice to each registered holder of Series A
Preferred Stock, which notice shall describe the Automatic Conversion and
include a certification by the Corporation's Chief Executive Officer and Chief
Financial Officer that each of the conditions to Automatic Conversion listed in
Sections 5.2(a)(i) to 5.2(a)(iv), inclusive, have been satisfied (the "AUTOMATIC
CONVERSION NOTICE"); PROVIDED, HOWEVER, that the Corporation may not cause an
Automatic Conversion unless each of the following conditions is satisfied: (i)
as of the "Automatic Conversion Date" (as defined below), the Common Stock is
then traded, and was traded during the sixty (60) trading day period ending on
the Automatic Conversion Date, on a national securities exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market (or a similar national quotation
system), (ii) the average of the per share closing prices of the Common Stock on
such exchange or system over the sixty (60) trading day period ending on the
Automatic Conversion Date (such prices to be proportionately adjusted to reflect
Common Stock Events) is greater than three (3) times the Initial Conversion
Price, (iii) a registration statement with respect to the resale of the Common
Stock issuable in the Automatic Conversion to holders of the Series A Preferred
Stock has been filed with the Securities and Exchange Commission, such
registration statement is then in effect, and the Corporation has agreed with
the holders of the Series A Preferred Stock to maintain the effectiveness of
such registration statement for at least 180 consecutive days beginning with the
date of the Automatic Conversion, and (iv) the average daily trading volume of
the Common Stock calculated over such sixty (60) day period equaled or exceeded
200,000 shares (such share amount to be proportionately adjusted to reflect
Common Stock Events). For purposes of this Section 5, the "AUTOMATIC CONVERSION
DATE" shall mean the date on which the Automatic Conversion Notice is, with
respect to each registered holder of Series A Preferred Stock, either: (Y)
delivered to such registered holder by personal delivery, or (Z) delivered to
such registered holder by facsimile transmission to the fascimile address of
such holder appearing on the books of the Corporation (with confirmation of
receipt), and deposited with a recognized express courier for express delivery,
fees prepaid, addressed to such registered holder at the address of such holder
appearing on the books of the Corporation.

                  (b) Upon an Automatic Conversion in accordance with the
procedures specified in Section 5.2(a), and effective as of the close of
business on the Automatic Conversion Date, the outstanding shares of Series A
Preferred Stock shall be converted into Common Stock automatically without the
need for any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; PROVIDED, HOWEVER, that the Corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless the certificates evidencing such shares of Series A Preferred
Stock are either delivered to the Corporation or its transfer agent as provided
below, or the holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the

                                       11
<Page>

Corporation and/or its transfer agent to indemnify the Corporation and/or its
transfer agent from any loss incurred by it in connection with such
certificates. Upon the occurrence of such Automatic Conversion of the Series A
Preferred Stock, the holders of Series A Preferred Stock shall surrender the
certificates representing such shares at the office of any transfer agent for
the Series A Preferred Stock or Common Stock. Thereupon, there shall be issued
and delivered to such holder promptly at such office and in its name as shown on
such surrendered certificate or certificates, a certificate or certificates for
the number of shares of Common Stock into which the shares of Series A Preferred
Stock surrendered were convertible on the Automatic Conversion Date.

            5.3 CONVERSION PRICE. Each share of Series A Preferred Stock shall
be convertible in accordance with Section 5.1 or Section 5.2 above into the
number of shares of Common Stock which results from dividing the Original Issue
Price for the Series A Preferred Stock by the conversion price for the Series A
Preferred Stock that is in effect at the time of conversion (the "CONVERSION
PRICE"). The initial Conversion Price for the Series A Preferred Stock shall be
the Closing Discounted Common Stock Price (the "INITIAL CONVERSION PRICE"). The
Conversion Price of the Series A Preferred Stock shall be subject to adjustment
from time to time as provided below. Following each adjustment of the Conversion
Price, such adjusted Conversion Price shall remain in effect until a further
adjustment of such Conversion Price hereunder.

            5.4 ADJUSTMENT UPON COMMON STOCK EVENT. Upon the happening of a
Common Stock Event, the Conversion Price of the Series A Preferred Stock shall,
simultaneously with the happening of such Common Stock Event, be adjusted by
multiplying the Conversion Price of the Series A Preferred Stock in effect
immediately prior to such Common Stock Event by a fraction, (i) the numerator of
which shall be the number of shares of Common Stock issued and outstanding
immediately prior to such Common Stock Event, and (ii) the denominator of which
shall be the number of shares of Common Stock issued and outstanding immediately
after such Common Stock Event, and the product so obtained shall thereafter be
the Conversion Price for the Series A Preferred Stock. The Conversion Price for
the Series A Preferred Stock shall be readjusted in the same manner upon the
happening of each subsequent Common Stock Event.

            5.5 ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If at any
time or from time to time after the Original Issue Date for the Series A
Preferred Stock the Corporation pays a dividend or makes another distribution to
the holders of the Common Stock payable in securities of the Corporation, other
than an event constituting a Common Stock Event, then in each such event
provision shall be made so that the holders of the Series A Preferred Stock
shall receive upon conversion thereof, in addition to the number of shares of
Common Stock receivable upon conversion thereof, the amount of securities of the
Corporation which they would have received had their Series A Preferred Stock
been converted into Common Stock on the date of such event (or such record date,
as applicable) and had they thereafter, during the period from the date of such
event (or such record date, as applicable) to and including the conversion date,
retained such securities receivable by them as aforesaid during such period,
subject to all other adjustments called for during such period under this
Section 5 with respect to the rights of the holders of the Series A Preferred
Stock or with respect to such other securities by their terms.

                                       12
<Page>

            5.6 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If
at any time or from time to time after the Original Issue Date for the Series A
Preferred Stock the Common Stock issuable upon the conversion of the Series A
Preferred Stock is changed into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification or
otherwise (OTHER THAN by a Common Stock Event or a stock dividend,
reorganization, merger, or consolidation provided for elsewhere in this Section
5), then in any such event each holder of Series A Preferred Stock shall have
the right thereafter to convert such stock into the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the number of shares of Common
Stock into which such shares of Series A Preferred Stock could have been
converted immediately prior to such recapitalization, reclassification or
change, all subject to further adjustment as provided herein or with respect to
such other securities or property by the terms thereof.

            5.7 REORGANIZATIONS, MERGERS AND CONSOLIDATIONS. If at any time or
from time to time after the Original Issue Date for the Series A Preferred Stock
there is a reorganization of the Corporation (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 5) or a merger or consolidation of the Corporation
with or into another corporation (except an event which is governed under
Section 3.3), then, as a part of such reorganization, merger or consolidation,
provision shall be made so that the holders of the Series A Preferred Stock
thereafter shall be entitled to receive, upon conversion of the Series A
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation, or of such successor corporation resulting from such
reorganization, merger or consolidation, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such reorganization,
merger or consolidation. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 5 with respect to the
rights of the holders of the Series A Preferred Stock after the reorganization,
merger or consolidation to the end that the provisions of this Section 5
(including adjustment of the Conversion Price then in effect and number of
shares issuable upon conversion of the Series A Preferred Stock) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable. This Section 5.7 shall similarly apply to successive
reorganizations, mergers and consolidations.

            5.8   SALE OF SHARES BELOW CONVERSION PRICE.

                  (a) ADJUSTMENT FORMULA. If at any time or from time to time
after the Original Issue Date for the Series A Preferred Stock the Corporation
issues or sells, or is deemed by the provisions of this Section 5.8 to have
issued or sold, Additional Shares of Common Stock (as hereinafter defined),
otherwise than in connection with a Common Stock Event as provided in Section
5.4, a dividend or distribution as provided in Section 5.5 or a
recapitalization, reclassification or other change as provided in Section 5.6,
or a reorganization, merger or consolidation as provided in section 5.7, for an
Effective Price (as hereinafter defined) that is less than the Conversion Price
for the Series A Preferred Stock in effect immediately prior to such issue or
sale (or deemed issue or sale), then, and in each such case, the Conversion
Price for such series of Preferred Stock shall be reduced, as of the close of
business on the date of such issue or sale, to the price obtained by multiplying
such Conversion Price by a fraction:

                                       13
<Page>

                        (i) The numerator of which shall be the sum of (A) the
number of Common Stock Equivalents Outstanding (as hereinafter defined)
immediately prior to such issue or sale of Additional Shares of Common Stock
plus (B) the quotient obtained by dividing the Aggregate Consideration Received
(as hereinafter defined) by the Corporation for the total number of Additional
Shares of Common Stock so issued or sold (or deemed so issued and sold) by the
Conversion Price for such series of Preferred Stock in effect immediately prior
to such issue or sale; and

                        (ii) The denominator of which shall be the sum of (A)
the number of Common Stock Equivalents Outstanding immediately prior to such
issue or sale plus (B) the number of Additional Shares of Common Stock so issued
or sold (or deemed so issued and sold).

                  (b)   CERTAIN DEFINITIONS. For the purpose of making any
adjustment required under this Section 5.8:

                        (i) The term "ADDITIONAL SHARES OF COMMON STOCK" shall
mean all shares of Common Stock issued by the Corporation, or deemed issued as
provided in Section 5.8(c) below, whether or not subsequently reacquired or
retired by the Corporation, other than:

                              (A) shares of Common Stock issued or issuable upon
conversion of any outstanding shares of the Series A Preferred Stock, and shares
of Series A Preferred Stock issued or issuable upon conversion of any
outstanding shares of the Series A-1 Preferred Stock;

                              (B) any shares of Common Stock or Preferred Stock
(or options, warrants or rights therefor) granted or issued hereafter to
employees, officers, directors, contractors, consultants or advisers to, the
Corporation or any Subsidiary pursuant to incentive agreements, stock purchase
or stock option plans, stock bonuses or awards, warrants, contracts or other
arrangements approved by the Board;

                              (C) any shares of the Corporation's Common Stock
or Preferred Stock (and/or options or warrants therefor) issued to parties that
are strategic partners investing in connection with a commercial relationship
with the Corporation under arrangements that are, in each case, approved by the
Board;

                              (D) shares of Common Stock or Preferred Stock
issued pursuant to: (i) acquisitions of other corporations or entities by the
Corporation by consolidation, merger, purchase of all or substantially all of
the assets, or other reorganization in which the Corporation acquires, in a
single transaction or series of related transactions, all or substantially all
of the assets of such other corporation or entity or fifty percent (50%) or more
of the voting power of such other corporation or entity or fifty percent (50%)
or more of the equity ownership of such other entity; provided that each such
transaction or series of transactions has been approved by the Board, or (ii)
purchases of less than a fifty percent (50%) equity ownership of other
corporations or entities in connection with joint ventures or other strategic
arrangements or

                                       14
<Page>

other commercial relationships, provided such arrangements are approved in each
case by the Board;

                              (E) shares of Common Stock or Preferred Stock
issuable upon exercise of any options or warrants to purchase any securities of
the Corporation outstanding as of the date of this Designation Statement and any
securities issuable upon the conversion thereof;

                              (F) shares of Common Stock issued pursuant to a
transaction described in Section 5.4 hereof; and

                              (G) any shares of Common Stock or Preferred Stock
(or options, or warrants or rights to acquire the same), issued or issuable
hereafter that are: (i) approved by the Board, and (ii) approved by the holders
of a majority of the outstanding Series A Preferred Stock, voting together as a
single class, as being excluded from the definition of "Additional Shares of
Common Stock" under this subsection 5.8(b)(i).

                        (ii)  The term "AGGREGATE  CONSIDERATION  RECEIVED" by
the Corporation for any issue or sale (or deemed issue or sale) of securities
shall (A) to the extent it consists of cash, be computed at the gross amount of
cash received by the Corporation before deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Corporation in
connection with such issue or sale and without deduction of any expenses payable
by the Corporation; (B) to the extent it consists of property other than cash,
be computed at the fair value of that property as determined in good faith by
the Board of Directors; and (C) if Additional Shares of Common Stock,
Convertible Securities or Rights or Options to purchase either Additional Shares
of Common Stock or Convertible Securities are issued or sold together with other
stock or securities or other assets of the Corporation for a consideration which
covers both, be computed as the portion of the consideration so received that
may be reasonably determined in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities or Rights or Options.

                        (iii) The term "COMMON STOCK EQUIVALENTS OUTSTANDING"
shall mean the number of shares of Common Stock that is equal to the sum of (A)
all shares of Common Stock of the Corporation that are outstanding at the time
in question, plus (B) all shares of Common Stock of the Corporation issuable
upon conversion of all shares of Preferred Stock or other Convertible Securities
that are outstanding at the time in question, plus (C) all shares of Common
Stock of the Corporation that are issuable upon the exercise of Rights or
Options that are outstanding at the time in question assuming the full
conversion or exchange into Common Stock of all such Rights or Options that are
Rights or Options to purchase or acquire Convertible Securities into or for
Common Stock.

                        (iv) The term "CONVERTIBLE SECURITIES" shall mean stock
or other securities ultimately convertible into or exchangeable for shares of
Common Stock.

                        (v) The term "EFFECTIVE PRICE" of Additional Shares of
Common Stock shall mean the quotient determined by dividing the total number of
Additional Shares of Common Stock issued or sold, or deemed to have been issued
or sold, by the

                                       15
<Page>

Corporation under this Section 5.8, into the Aggregate Consideration Received,
or deemed to have been received, by the Corporation under this Section 5.8, for
the issue of such Additional Shares of Common Stock; and

                        (vi) The term "RIGHTS OR OPTIONS" shall mean warrants,
options or other rights to purchase or acquire shares of Common Stock or
Convertible Securities.

                  (c) DEEMED ISSUANCES. For the purpose of making any adjustment
to the Conversion Price of Series A Preferred Stock required under this Section
5.8, if the Corporation issues or sells any Rights or Options or Convertible
Securities and if the Effective Price of the shares of Common Stock issuable
upon exercise of such Rights or Options and/or the conversion or exchange of
Convertible Securities (computed without reference to any additional or similar
protective or antidilution clauses) is less than the Conversion Price then in
effect for a series of Preferred Stock, then the Corporation shall be deemed to
have issued, at the time of the issuance of such Rights, Options or Convertible
Securities, that number of Additional Shares of Common Stock that is equal to
the maximum number of shares of Common Stock issuable upon exercise or
conversion of such Rights, Options or Convertible Securities upon their issuance
and to have received, as the Aggregate Consideration Received for the issuance
of such shares, an amount equal to the total amount of the consideration, if
any, received by the Corporation for the issuance of such Rights or Options or
Convertible Securities, plus, in the case of such Rights or Options, the minimum
amounts of consideration, if any, payable to the Corporation upon the exercise
in full of such Rights or Options, plus, in the case of Convertible Securities,
the minimum amounts of consideration, if any, payable to the Corporation (other
than by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion or exchange thereof; PROVIDED THAT:

                        (i) if the minimum amounts of such consideration cannot
be ascertained, but are a function of antidilution or similar protective
clauses, then the Corporation shall be deemed to have received the minimum
amounts of consideration without reference to such clauses;

                        (ii) if the minimum amount of consideration payable to
the Corporation upon the exercise of Rights or Options or the conversion or
exchange of Convertible Securities is reduced over time or upon the occurrence
or non-occurrence of specified events other than by reason of antidilution or
similar protective adjustments, then the Effective Price shall be recalculated
using the figure to which such minimum amount of consideration is reduced; and

                        (iii) if the minimum amount of consideration payable to
the Corporation upon the exercise of such Rights or Options or the conversion or
exchange of Convertible Securities is subsequently increased, then the Effective
Price shall again be recalculated using the increased minimum amount of
consideration payable to the Corporation upon the exercise of such Rights or
Options or the conversion or exchange of such Convertible Securities.

No further adjustment of the Conversion Price, adjusted upon the issuance of
such Rights or Options or Convertible Securities, shall be made as a result of
the actual issuance of shares of

                                       16
<Page>

Common Stock on the exercise of any such Rights or Options or the conversion or
exchange of any such Convertible Securities. If any such Rights or Options or
the conversion rights represented by any such Convertible Securities shall
expire without having been fully exercised, then the Conversion Price as
adjusted upon the issuance of such Rights or Options or Convertible Securities
shall be readjusted to the Conversion Price which would have been in effect had
an adjustment been made on the basis that the only shares of Common Stock so
issued were the shares of Common Stock, if any, that were actually issued or
sold on the exercise of such Rights or Options or rights of conversion or
exchange of such Convertible Securities, and such shares of Common Stock, if
any, were issued or sold for the consideration actually received by the
Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such Rights or Options,
whether or not exercised, plus the consideration received for issuing or selling
all such Convertible Securities actually converted or exchanged, plus the
consideration, if any, actually received by the Corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion or exchange of such Convertible Securities,
provided that such readjustment shall not apply to prior conversions of
Preferred Stock.

            5.9 CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
readjustment of the Conversion Price for the Series A Preferred Stock, the
Corporation, at its expense, shall promptly cause its Chief Financial Officer to
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and shall
cause such certificate to be delivered to each registered holder of the Series A
Preferred Stock in accordance with Section 5.12.

            5.10 FRACTIONAL SHARES. No fractional shares of Common Stock shall
be issued upon any conversion of Series A Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
Corporation shall pay the holder cash equal to the product of such fraction
multiplied by the closing price of the Corporation's Common Stock (as reported
by a national securities exchange, the Nasdaq National Market, the Nasdaq
SmallCap Market or a similar national quotation system on which the Common Stock
is then traded) on the date of conversion.

            5.11 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.

            5.12 NOTICES. Except as provided in Section 5.2 with respect to the
Automatic Conversion Notice, any notice or certificate required by the
provisions of this Designation Statement to be given to the holders of shares of
the Series A Preferred Stock shall be deemed given upon the earliest of: (i)
actual receipt, (ii) one (1) business day after deposit with a

                                       17
<Page>

recognized express courier, fees prepaid, addressed to each holder of record at
the address of such holder appearing on the books of the Corporation, or (iii)
on the date of transmission by facsimile (with confirmation of receipt), sent to
each holder of record at the fascimile address of such holder appearing on the
books of the Corporation.

            5.13 NO IMPAIRMENT. The Corporation shall not avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Series A Preferred
Stock against impairment.

      6.    MISCELLANEOUS.

            6.1 NO REISSUANCE OF PREFERRED STOCK. No share or shares of Series A
Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.

            6.2 PREEMPTIVE RIGHTS. No stockholder of the Corporation shall have
a right to purchase shares of capital stock of the Corporation sold or issued by
the Corporation except to the extent that such a right may from time to time be
set forth in a written agreement between the Corporation and a stockholder.

            6.3 PREFERRED STOCK WRITTEN CONSENT. Notwithstanding any other
provision of this Designation Statement, with respect to matters involving only
the Series A Preferred Stock and the rights, preferences, privileges and
restrictions granted to and imposed on the Series A Preferred Stock, the holders
of the Series A Preferred Stock may take action without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of majority of the Series A
Preferred Stock then outstanding.

                                       18

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